SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOCINFORMATION TECHNOLOGY PROCUREMENT PRACTICES AT THE U.S. DEPARTMENT OF AGRICULTURE
WEDNESDAY, MAY 14, 1997
House of Representatives,
Subcommittee on Department Operations,
Nutrition, and Foreign Agriculture,
Committee on Agriculture,
The subcommittee met, pursuant to call, at 9:40 a.m., in room 1300, Longworth House Office Building, Hon. Bob Goodlatte, (chairman of the subcommittee) presiding.
Present: Representatives Smith of Michigan, Thune, Clayton, Berry, and Stenholm (ex officio).
Staff present: Lance Kotschwar, Kevin Kramp, Bryce Quick, Wanda Worsham, clerk; Callista Bisek, Julia Paradis, and Russell Middleton.
OPENING STATEMENT OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
Mr. GOODLATTE. The hearing of the Subcommittee on Department Operations, Nutrition, and Foreign Agriculture to review the information technology procurement practices at U.S. Department of Agriculture will now come to order.
The subject of today's hearing is the management and use of information technology at the U.S. Department of Agriculture. Today we will hear from USDA's Chief Information Officer Anne Thomson Reed regarding the current situation at the Department, and we will also hear from Joel Willemssen from the General Accounting Office, who will summarize several years' worth of GAO reports and studies regarding information technology at USDA, and provide us with an assessment of the current efforts underway at USDA to improve information technology management. For brevity's sake, I will now be referring to information technology simply as I.T.
Page 2 PREV PAGE TOP OF DOC Basically, the continuous criticism can be summarized like this. USDA does not do the required analysis and planning before it spends substantial amounts on automation. An analogy would be auto making. It doesn't make sense to spend millions on building a car assembly line before you even know what type of car you want to build. You first need to know who wants your car, what features they want in a car, and where they want to go with the car.
The timing of today's hearing is important for several reasons: First, Congress will soon be considering the fiscal year 1998 agriculture appropriations bill, for which USDA has requested about $1.2 billion in I.T.-related spending which, by the way, consumes about 6,200 full-time employees. During a time when all Federal agencies, including USDA, are attempting to deliver programs more efficiently, USDA's billion-dollar-plus budget for I.T. certainly needs particular scrutiny, given the less than rave reviews contained in the numerous reports and audits prepared by the GAO and USDA's own Inspector General over the past decade.
Second, USDA is now facing a new and different world, with new and different authorities. In the 104th Congress, we passed a historic farm bill, and a sweeping welfare reform bill, both of which substantially changed the nature of the programs administered by several of the Department's agencies. The need for USDA to evaluate and improve its program delivery methods has never been so great.
Also, USDA has gotten additional legislative direction from Congress regarding how to improve management and administration of its programs. The 103d Congress passed the Government Performance and Results Act, which is designed to make agencies more accountable by requiring annual performance goals that are measurable; and, in the 104th Congress, we passed the Information Technology Management Reform Act of 1996--also known as the Clinger-Cohen Act--which, in addition to requiring each department to have a chief information officer, specifically targets Federal agencies' management of I.T.
It has now been over 3 years since the Results Act was passed, and over 9 months since Clinger-Cohen was enacted, it is now time to determine if USDA is using these authorities in a meaningful way to evaluate its delivery of programs in an efficient manner, especially in light of the sweeping changes made by the farm bill and welfare reform.
Page 3 PREV PAGE TOP OF DOC Third, today's hearing is very timely because of the historical mismanagement of USDA's I.T. budget, which is now measured in the billions of dollars. GAO, along with USDA's Inspector General, the Office of Management and Budget, and others, have repeatedly criticized USDA for its inability to plan for I.T. investments before spending the money. In fact, many of the reports that will be referenced by the GAO today were prepared several years ago, when we had a Republican administration and a Democrat Congress.
If, after hearing today's testimony, we find that USDA's management of I.T. is really no better than it was prior to Clinger- Cohen and the Results Act, then we, as the subcommittee with jurisdiction over Department operations, should begin to explore other legislative alternatives that will result in some long-needed improvements to USDA's I.T. management.
It is unconscionable that, at a time when the beneficiaries of USDA's many programs and functions--from farmers to food stamp recipients to USDA's own county employees--are being asked to tighten their belts and accept less, USDA continues to waste many millions of dollars and ignores sound advice from GAO and other auditors and examiners over the past decade.
On this third reason, I want to be clear, in the current budget environment, waste cannot be tolerated. A dollar wasted on computers is a dollar that could have gone to critical agriculture research or agriculture promotion. The Agriculture Committee has the responsibility to ensure that the Department delivers programs effectively and efficiently. Because USDA has such a poor track record of I.T. management, I think it is likely that there will be a substantial cut in the I.T. funding available in fiscal year 1998, and I also think that a substantial cut in this area is probably justified and long overdue. However, because it is still possible for USDA to continue to spend even a reduced amount of information technology money poorly, I want to determine if there is anything that we can or should do legislatively to improve the Department's management of I.T.
Finally, I want to comment on the issue of I.T. within the bigger picture of how USDA is changing its operations in the field. Farmers and other rural residents everywhere are currently witnessing the closure or relocation of many county offices, and are hearing phrases such as ''consolidation'', ''one-stop shopping'', and ''streamlining'' as being the justification for these changes. These kinds of changes can be good, and can contribute to efficient program delivery. However, about the first time a farmer walks into a new one-stop service center, and finds out that, because NRCS and FSA do not have computer systems that can share information, he has to provide the same information to two different agencies, even though they are located in the same building, he will wonder what the benefit of one-stop shopping is, and so will we.
Page 4 PREV PAGE TOP OF DOC It seems to me that the proper management of information technology is an absolutely necessary prerequisite to any kind of field office consolidation or one-stop service center implementation.
And I'd also like to call to your attention the editorial in Federal Computer Week, and the last paragraph, which asks this question, ''We cannot forget the counsel of one Government executive, who said that, when under the gun, always agree to produce an architecture. 'No one knows what it is, so once it's completed no one will argue', he said proudly.'' We hope that is not the current situation. That is the question we will address today.
At this time, I'd like to recognize the ranking member, Mrs. Clayton, of North Carolina.
OPENING STATEMENT OF HON. EVA M. CLAYTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA
Mrs. CLAYTON. Thank you, Mr. Chairman. Thank you also for calling this hearing and to reiterate that the purview of this committee is indeed oversight, oversight over operation and, therefore, has both the opportunity as well as it has the opportunity to be that for strengthening, identifying problems, making sure we have corrections, but also has the opportunity to overuse its abuse of its power.
Hopefully, this is not an opportunity to scorn, this is not an opportunity to find in the way of dereliction, but it is an opportunity to be honest. And, indeed, if we are to have new technology, we must master that technology. We also must use it wisely, and using it wisely does not necessarily mean only just advocating more money, it means training staff, it means understanding the technology.
I'll be one of the first to confess I am limited in technology, but I happen to be involved with a lot of different agencies, not only in the Federal Government but the State as well.
Page 5 PREV PAGE TOP OF DOC I also know that in this Congress, our profession to have all the new technology is not a reality. I've read the GAO report very scantily. I had an opportunity just to read the report coming from Ms. Reed this morning because it was not received in sufficient time for us to get it, but I do think that this is an opportunity to see how we have not only misused our technology, but to see how we can better use our technology.
Misuse obviously is a fraudulent dereliction, but also not to use it to its full potential is also a missed opportunity. So, we have both the opportunity to correct that which is wrong, and we have the opportunity, if we are good legislators, to move forward to see how this technology can be more friendly used not only by the consumers, but by the staff as well.
Many of the offices I visit are not only with the technology, but they lack the capacity to understand that technology. One, is to design--again, because my background is planning. I've been involved in architecture, and know how they can, indeed, not only design something technologically proficient, but never engage the people who have to use that facility, so that technology is never understood. You spend a lot of money, but you don't spend that money wisely.
So, hopefully, in some of the testimony, we not only will talk about the deficiency in the technology, the misuse of the technology, but how we can better use that technology, make it more simple, and how we can provide better training for those staff in the infrastructure capacity. And, yes, we do have the ability to legislate and to appropriate. Whether your funds will be cut or not, that's a matter of a majority will, and that's a matter for debate, and that's how we go in this legislative process, those who want to reduce the allocation and those who may want to set in to see how we move forward.
So, I look forward to a full discussion and a civil discussion, as we move on. Thank you, Mr. Chairman, for holding this hearing.
Mr. GOODLATTE. Thank you, Mrs. Clayton.
Page 6 PREV PAGE TOP OF DOC If any member has a statement for the record, it may be inserted at this point.
[The statements of Mr. Bishop and Mr. Berry follow:]
STATEMENT OF HON. SANFORD D. BISHOP, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA
I would like to thank Chairman Goodlatte for holding this hearing today, and for his attention to this subcommittee's oversight.
Reading this GAO testimony as it outlines the ongoing problems at the USDA is enough to make anyone disgusted with the tremendous amount of government waste and mismanagement.
However, it is important to recognize that these problems have been snow-balling since the early eighties.
Obviously, I look forward to seeing progress at the USDA on compliance with previous congressional mandates on this subject, as well as strengthened departmental leadership and accountability.
Steps must be taken by the Department to address these concerns with dispatch. If not, Congress, in its oversight responsibilities may be forced to impose a reduction in the Department's information technology appropriation until such time as the Department can demonstrate, to this subcommittee's satisfaction, that it has effectively gotten a handle on these problems.
I am also interested in the proposal to create a chief information officer and to give that officer actual budget authority. I believe that this effort to centralize control and accountability merits further discussion and consideration by this subcommittee.
STATEMENT OF HON. MARION BERRY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARKANSAS
Let me start by thanking the subcommittee chairman, Mr. Goodlatte and the ranking member, Mrs. Clayton, for holding this hearing. I would also like to thank today's panel members for providing us with testimony on an issue which I believe is very important and worthy of public discussion. We all desire to have government which works efficiently and is free of wasteful spending. In light of the GAO report we are discussing today, it appears that USDA has room for improvement in this area. I hope that we on the subcommittee do not content ourselves with laying blame--we must focus on achieving positive results from this hearing.
Page 7 PREV PAGE TOP OF DOC The efforts of the USDA to implement a nationwide integrated computer and telecommunications system have been ongoing for years. I remember the optimism of the folks at USDA when Info Share was begun, and I have shared in some of the disappointment as it failed to meet our expectations. As the GAO report supports, the Department of Agriculture must have these technological advances to carry out its functions in the next century.
I must admit that I am disturbed at some of the findings in the GAO report. I was first shocked simply by the large dollar amounts spent on this endeavor. But I recognize the need for this effort, so had I hoped that we were spending our resources wisely as an investment in the future of American agriculture. According to the GAO, however, we are not. We should expect some mid-course adjustments considering the shifting missions and radical changes such as those in the last farm bill. This expectation takes for granted that a course was laid in advance. The report before us indicates that for many years, USDA has not been able to create a long-range goals for information technology investments, despite the repeated efforts of GAO and Congress.
I look forward to the administration's response to GAO charges that not enough attention was given to long-range planning as the designs for I.T. were made, and to address USDA's failure to meet the Clinger-Cohen requirements. I am also eager to knowing what changes will be forthcoming to give the Chief Information Officer the necessary resources and authority to fulfill her mandate.
Mr. GOODLATTE. We are pleased to welcome our panel of witnesses to the table. Today, we are glad to have with us Mr. Joel Willemssen, who is the Director of Information Resources Management Issues, at the General Accounting Office. Mr. Willemssen is accompanied by Mr. Steve Schwartz, Assistant Director, Information Resources Management Issues at GAO, and Mr. Troy Hottovy, Senior Systems Analyst, Information Resources Management Issues at GAO.
We are also pleased to have with us today Ms. Anne Thomson Reed, Chief Information Officer at USDA, who is accompanied by Mr. Steve Dewhurst, Director of the Office of Budget and Program Analysis.
Page 8 PREV PAGE TOP OF DOC Thank you for joining us here today. Your written statements will be made a part of the record, and we would be pleased to receive your testimony. Mr. Willemssen, you may begin when you are ready.
STATEMENT OF JOEL WILLEMSSEN, DIRECTOR, INFORMATION RESOURCES MANAGEMENT ISSUES, GENERAL ACCOUNTING OFFICE
Mr. WILLEMSSEN. Thank you, Mr. Chairman. Thank you, Congresswoman Clayton, Congressman Berry, thank you for inviting us here today to testify on USDA's management of its I.T. resources.
As requested, after briefly summarizing my statement, I'll discuss the problems that USDA has historically experienced, and then discuss some actions we believe are needed to address those problems.
As shown on this chart over here, USDA spends a large amount of money on I.T., totalling over $1 billion annually. Given the magnitude of this investment, we believe it's imperative that the Department manage these resources effectively, however, our work has shown that USDA has poorly planned and managed I.T., resulting in a loss of taxpayer dollars. Let me highlight just a few examples to demonstrate that point.
In 1994, we reported on the planned $2.6 billion Info Share program, which was intended to meet the needs of the customers of the Farm Service and Rural Development Agencies. However, we found that the project was basically being managed as a vehicle for acquiring new technology rather than as an opportunity for redesigning business processes to better serve customers.
USDA later terminated this project after reportedly spending more than $100 million and having little to show in the way of redesigned processes or benefits to the customer.
The need to streamline also applies to the Department's financial information systems. We reported in 1995 that USDA had over 100 separate financial information systems that often performed overlapping functions. However, the Department had no plan to eliminate or consolidate these, which were costing about $187 million annually to operate and maintain.
Page 9 PREV PAGE TOP OF DOC Ineffective management of the Department's $100-million annual telecommunications investment has also resulted in wasting millions of taxpayer dollars. In 1995, we found that USDA had identified opportunities to consolidate telecommunication resources, but it had not acted on these and was therefore wasting as much as $510 million annually. We also later found that USDA was paying for equipment such as rotary phones and outdated computer modems that it no longer even had, and was not taking sufficient action to address telephone fraud and abuse.
Why have problems such as these occurred? In our view, a major cause is a lack of strong leadership accountability and oversight of the acquisition and use of the Department's I.T.
To overcome these types of problems, we believe USDA must quickly implement recently enacted Federal mandates, in particular the Clinger-Cohen Act. This act, passed by the Congress last year, is aimed at ending the cycle of failed projects by focusing on management accountability and on maximizing the return on I.T. investments.
USDA has begun taking some steps towards implementing the Clinger-Cohen mandate, however, much remains to be done to fully implement the act's provisions. For example, USDA's recently established I.T. Review Board, which was given responsibility for selecting, monitoring, and evaluating Departmentwide technology investments, has not yet adopted procedures on how it will operate.
In addition, under Clinger-Cohen, USDA is required to establish goals for improving agency operations, and to revise processes before acquiring I.T. USDA is still in the early stages of addressing these requirements.
Further, USDA has not yet established specific time frames for developing policies and procedures describing how its Chief Information Officer will carry out her responsibilities, a key requirement of Clinger-Cohen.
In closing, Mr. Chairman, we believe that USDA can no longer afford to continue to operate the way it has in the past. Business-as-usual must end. USDA must address its long-standing problems in managing I.T., and quickly and fully implement the Clinger-Cohen mandate.
Page 10 PREV PAGE TOP OF DOC That concludes a summary of my statement. I'd be pleased to address any questions that you or the other members may have.
[The prepared statement of Mr. Willemssen appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Mr. Willemssen, we will come back to questions.
First, we have Ms. Reed, from the Department of Agriculture. Welcome. Your statement will be made a part of the record, and you are welcome to give any comments you wish to.
STATEMENT OF ANNE THOMSON REED, CHIEF INFORMATION OFFICER, U.S. DEPARTMENT OF AGRICULTURE
Ms. REED. Thank you, Mr. Chairman, members of the committee. I will begin by apologizing for the lateness of your receipt of my testimony. As you are aware, we had relatively short notice for this hearing. I was able to spend significant amounts of time with the Secretary late yesterday afternoon, and we wanted to make sure that his intentions were well reflected in this testimony, so I do apologize for that delay.
It is a privilege to appear before the subcommittee to provide you with a summary of the actions of how we are going to reshape how the Department manages information technology. I have with me Mr. Steve Dewhurst, the Department's budget director. In the interest of time, I will submit a broader statement for the record, but I do want to take this opportunity to provide you with some high level information of the steps that we are taking, and the seriousness of our commitment at the Department to change the way we manage information technology.
Providing information technology to support our diverse business objectives and clientele is a major challenge. Although we do a good job of meeting our mission objectives, we need to look for new approaches in our business processes and do a better job of coordinating and deploying appropriate technology to meet those business needs.
Historically, our decentralized approach to program delivery, technology, and other support functions has been both our greatest strength and our greatest weakness. It has been our strength in terms of placing a maximum amount of decisionmaking closest to our customers and involving our customers in those decisions. It has been our greatest weakness because, although each agency has optimized technology and support functions within their agency, we have not optimized the use of information technology across agency lines or looked for options to centralize some Departmentwide I.T. functions.
Page 11 PREV PAGE TOP OF DOC Information technology management problems at USDA have been long-standing and well documented by both in-house reviews as well as studies by the General Accounting Office. While I might argue with some of the specific details of these reviews, the fact is that they have identified some serious problems, and we must make significant changes in the way we manage this area in the Department. The Secretary and I are committed to make these changes, some of which may cause significant culture shock within the Department. The Secretary has empowered me to get this job done, and he will hold me accountable for getting it done.
I intend to work closely with the Congress as we sort through the options and move forward. I believe most of what we need to do will not require new legislation, only a strong commitment to strengthen management at the Department level. I have that commitment from the Secretary and intend to aggressively pursue this objective. I want to give you an overview of where we are on these issues now, and will continue to update you on this as we develop our complete plans to strengthen this area.
USDA is a complex institution. The Department has been at the forefront of some of the greatest social innovations that have occurred over the past 135 years. We deliver a diverse portfolio of over 200 Federal programs throughout the Nation and the world. The Department delivers about $80 billion in programs a year, at a cost in Federal outlays of about $60 billion. We employ over 110,000 employees. I repeat all of this to illustrate that because of this diversity in programs and our size, the information technology systems must support multiple business needs.
We estimate that we will spend about $1.2 billion in information resources management-related activities in fiscal year 1998. This represents about 1.5 percent of our total USDA budget. About 83 percent is spent in five areas. About 27 percent of our total IRM budget is used by the Food and Consumer Service, the largest IRM user in the Department, to support food stamp and WIC programs delivered by the States.
Page 12 PREV PAGE TOP OF DOC The second largest component is the Forest Service, which accounts for about 23 percent of our funding. With 37,000 employees, who manage 1.2 million acres of land, the Forest Service is the largest USDA organization. The third and fourth largest IRM expenditures are for, respectively, the Farm Service Agency and the Natural Resources Conservation Service. The fifth area is Rural Development which has a large investment in its new centralized system to improve the management of the housing programs and the $34 billion loan portfolio we have for housing programs.
Another significant expenditure is for the National Finance Center. The center provides payroll, personnel and accounting work for USDA, the Departments of Treasury and Commerce, as well as a variety of other Federal agencies and Congress. In fact, our non-USDA clients contribute about $45 million to the operation in addition to the $55 million financed by USDA. The National Finance Center is also responsible for the Thrift Savings Plan for the entire Government, which costs about $35 million.
The other way to look at the Department's IRM expenditure is from the perspective of what is purchased with the money. Approximately 25 percent of the $1.2 billion budgeted is provided to the States by the Food and Consumer Service. About 55 percent supports ongoing efforts, with half of that going to support personnel and the remainder for operations costs, including our communications costs. This leaves just under 20 percent to actually purchase new hardware and software. Much of this hardware and software is purchased for new uses, but much of it replaces existing equipment so that we can continue to deliver our programs.
The Department employs about 6,300 people whose primary duties are related to information technology. About 60 percent of this staff is concentrated in six areas. Our largest IRM employer is the National Finance Center, with approximately 1,600 staff. We have about 175 staff at the National Information Technology Center in Kansas City and Fort Collins, CO. These two centers provide administrative and program support to USDA and other Federal organizations. The Rural Development area has about 260 staff years, including 170 in the St. Louis finance office. The Farm Service Agency has over 600 information technology staff in the Kansas City management office, in St. Louis and at headquarters at Washington. These staff develop and maintain the information technology that supports the farm price support, production and credit programs. Other organizations have I.T. staff at headquarters and in the field. One of the largest, the Forest Service, has over 1100 staff primarily in the regions and the National Forests.
Page 13 PREV PAGE TOP OF DOC The Secretary and I are committed to doing business differently and have begun to put into place a number of management improvements and modernization initiatives that will, I believe, serve us well for the future. I want to highlight a few of those for you, and I think you will agree that we have begun to make some significant progress.
In 1996, the Secretary established my office, and appointed me as the Acting Chief Information Officer. This new position will significantly strengthen the departmental focus on IRM issues and provide better linkage to the program delivery mission areas.
My office has the authority to implement measures to ensure that technology investments are business driven, economical and effective, to coordinate interagency initiatives, and to implement standards which promote information exchange and interoperability.
We are utilizing two new boards to assure information technology decisions are controlled at the highest policy level in the Department, and to prioritize our needs from a programmatic perspective, bringing into play also the best technical solutions that we can afford.
The first of these is the Executive Information Technology Investment Review Board, which includes senior subcabinet program officials. It was established late last year, and is chaired by Deputy Secretary Rominger. I serve as the vice-chair. The primary purpose of this board is to ensure that we deliver substantial business benefits, that we in fact do the planning up front that allows us to be sure that the technology that's delivered is the technology that is required to meet the requirements of our business.
An IRM Council Board, made up of senior IRM officials from across the Department, works with me on technical issues so that today we are now leveraging the best talent from across the Department, and not leaving that talent in ''stove piped'' individual agencies.
We believe that these changes in our decisionmaking structure are key components in moving away from the ''stove pipe'' solutions and systems and moving towards effective, affordable, and interoperable Departmentwide solutions.
Page 14 PREV PAGE TOP OF DOC We have been working to establish an information technology architecture. I also took note of the Federal Computer Week editorial and the cartoon. In fact, I asked them to put a copy on my wall to remind me exactly why it is that I am there and what my objective is, because it is a very graphic portrayal of the Department as we see it today, and it clearly shows us what it is that we need to accomplish.
The architecture that we have developed has three primary focuses. First is what we call the business/data, which really looks at what our strategic mission is in the Department, moves to identify what the core business processes are and, from that, what kinds of information we need in order to deliver service. Only after you have clearly defined these requirements and looked for crosscutting opportunities across the Department can you truly understand where the opportunities are for information technology investments.
The second part of the architecture is the technical standards portion. These are, in effect, the building codes and zoning ordinances that are essential for assuring that we don't end up with a barn that looks like the one in that picture.
The third component of the architecture is telecommunications. We have an objective of establishing a single Departmentwide enterprise network. We have taken to heart the recommendations of GAO in their findings from the telecommunications audits they've done over the last several years, and are moving aggressively to change the way in which we manage telecommunications in the Department; but we are doing it through a process of planning so that we don't fall into exactly the same trap that we've been in in the past by trying to provide a solution by introducing technology without fully understanding what the plan is and how we can best deliver that change.
Our management actions over the past few months are proof of our resolve to make changes in the way we are managing the business. The moratorium that the Deputy Secretary put in place last November on new technology acquisitions has helped to constrain spending while we bring the architecture development together. It has also brought a higher level of focus that technology issues at the agency head and subcabinet levels. This moratorium will continue until new discipline is fully imposed.
Page 15 PREV PAGE TOP OF DOC Other key actions we have taken include the suspension of installation of the modernized telecommunications systems for the field service agencies, except those needed to support the Rural Development Loan Servicing initiative. We did this because we wanted to make sure that we understood the new budget environment and what the implications of that are. While this telephone system is a vast improvement in delivering service to the field, we wanted to make sure that we were making that investment prudently.
We have significantly strengthened oversight capabilities for the service center activities. I now have working with me a senior advisor whose full-time focus is on exactly that.
These management actions alone are major milestones in the evolution of the Department from the old ''stove pipe'' decentralized approach of the past.
A critical element in improving our business and information technology management in USDA is knowing where our programs are going in the future, what business processes are needed to support them, what technology will be available that can be applied to that business, and how we are going to provide it.
Ideally, the legislative and programmatic changes would be stable for at least 5 years, since it takes about that long to effectively change organizational structure, business processes, and technology in a department of our size and diversity. Unfortunately, given the pace of change in recent years, we have not had that luxury. In the past 3 years, we have seen dramatic change resulting from reorganization, streamlining, the farm bill, welfare reform, information technology legislation, and budget changes. In fact, as you know, new information technology legislation is even now being considered. However, the Secretary is committed to putting into place the structure, authority, and accountability necessary to establish modern information systems which can support the accelerating pace of change. I look forward to working with this committee to achieve this goal.
Thank you. Mr. Dewhurst and I are available to take your questions.
Page 16 PREV PAGE TOP OF DOC [The prepared statement of Ms. Reed appears at the conclusion of the hearing.]
Mr. GOODLATTE. Thank you, Ms. Reed. One of the problems I think we have in the Department is a lot of confusion over exactly what control you have over this process, with all of these different agencies within the Department. So, I wonder if you could tell us in precise terms, are you held accountable? What are you held accountable for at the USDA, and has there been a written formal job description of your duties, and what specifically has been spelled out as a repercussion for not achieving the responsibilities of the office?
Ms. REED. I'd have to say that I do not yet have a formal written job description. The Secretary, when he established my office and my position, did issue a Secretary's Memorandum, which I will be happy to submit for the record, which defines in very broad terms that I am responsible for the acquisition, maintenance, and planning of information technology in the Department.
He has not spelled out to me exactly what it means to be held accountable, but I assure you that I understand that to mean that my job rides on my ability to deliver.
Mr. GOODLATTE. And when was this memo given to you by the Secretary?
Ms. REED. On August 8, which was the date of the creation of the Office of the Chief Information Officer.
Mr. GOODLATTE. August 8, 1996?
Ms. REED. That's correct, sir.
Mr. GOODLATTE. And how many staff are currently in your office, and how many of these are in I.T.-related positions?
Ms. REED. In my immediate office, I have an on-board staff of just over 40, I would say, that are associated with the planning and policy side. I also have the National Information Technology Center, which reports to me. It's the operational center which I referred to earlier in my testimony. All told, I have just over 200 people who report to me.
Page 17 PREV PAGE TOP OF DOC Mr. GOODLATTE. And how many of those would you say are in I.T.-related positions?
Ms. REED. Well, almost by definition, I would say every single one of those people are in I.T.-related positions.
Mr. GOODLATTE. How many procurement agents for information technology are employed by USDA?
Ms. REED. I do not have that information. I will be happy to provide that for the record.
[The Department responded as follows:]
USDA has over 1,250 procurement officers (agents) classified in the 1102 procurement analyst, 1105 purchasing agent, or 1106 procurement clerk/procurement technician job series. These officers are able to contract for any number of different types of products and services, and are not generally restricted to procuring information technology.
The number of ''acquisition specialists'' is even higher if the National Performance Review definition of all personnel in the 1101, 1102, 1103, 1105, 1106, 1150 and 1910 job series are counted.
Personnel in other job series, such as Administrative Officer, Telecommunications Specialist, may also have purchasing authority for I.T.-related services such as telephones and telecommunications services. For example, there are now approximately 20 people who can order FTS 2000 network telecommunications services. An additional 40 personnel can order voice lines and calling cards. Because of a new policy implemented at the direction of the Chief Information Officer, this is a drastic reduction from 320 personnel who could order a full range of services prior to May 17, 1997.
With the advent of the USDA Purchase card system, approximately 15,000 credit cards have been issued for purchases of up to $2,500, which can include I.T. products and services. It is therefore not possible to provide the committee with a discrete number of procurement agents devoted strictly to information technology.
Page 18 PREV PAGE TOP OF DOC
Mr. GOODLATTE. I take it there would be people outside of your office that have that authority?
Ms. REED. That's correct.
Mr. GOODLATTE. Is there any move afoot to change that?
Ms. REED. I have been and will continue to work very closely with the senior procurement executive to assure that the procurement policies are consistent with the authorities and responsibilities of the Clinger-Cohen Act. I do not see at the present time any movement to have any of the actual procurement officials report directly to me.
Mr. GOODLATTE. How many computer vendors does the USDA currently contract with?
Ms. REED. I will get back to you, the best I can, with that information. A quite large number, I assure you, for the size of our organization.
[The Department responded as follows:]
There are approximately 300 computer vendors currently providing products and services, including computer hardware and software, operations, maintenance, rentals, consulting and advisory services, to USDA.
Mr. GOODLATTE. Thank you. Well, if you could provide the memorandum from the Secretary, we would very much like to have that.
[The information appears at the conclusion of the hearing.]
Mr. GOODLATTE. Mr. Dewhurst, we've heard a lot of talk about the USDA establishing one-stop service centers, which we understand you have set a December 31, 1997 goal for completing; however, little specifics have been provided as to the mission, function and operation of these centers.
Can you tell us today a precise description of what your vision is for one-stop service in the new service centers?
Page 19 PREV PAGE TOP OF DOC Mr. DEWHURST. Of course, one of the major objectives that was established for the Department under the 1994 reorganization legislation, was the creation of one-stop service centers for our county-based delivery system--that is, our Farm Service Agency programs, the Natural Resources Conservation Service, and our Rural Development programs.
There are essentially three aspects to that effort. One, we were going to reduce the numbers of offices we had in the counties from approximately 3,700 locations to 2,500 locations by the end of the current fiscal year. That, in the sense of getting the office numbers down, is on-track. In fact, we have about 150-or-so left to go, but most of the closings and relocations, in fact, have taken place.
The second aspect of that effort was to create a true one-stop shopping environment. This means that we would have staff in those offices who could provide a full range of services to farmers or other customers who walk through the door. They would have common technology. They could communicate with each other. There would be common phone systems. The offices would have the ability to communicate with each other, so that a customer who might deal normally with Office A could walk into Office B and receive the same level of service he'd get down the road. And there would be what I call sort of a ''triage'' operation in those offices, where anybody who walked through the door with any sort of problem would be greeted by a generalist who could help get them into the right place that they needed to get help.
There is within the Department a service center implementation team. It reports to the chairman of what we call the National Food and Agriculture Committee. That chairmanship rotates but, at this point, the chairman is Paul Johnson, the Chief of the Natural Resources Conservation Service. They are designing these service centers. They are issuing instructions to the field on how the service centers should be organized.
I would be the first to tell you that one of the most serious problems we have with those service centers is the technological problem. We have not gotten our act together as we should in terms of how we're going to organize the technology in those offices.
Page 20 PREV PAGE TOP OF DOC Mr. GOODLATTE. How far along are you on all the things you just described to us that these centers would hope to accomplish? I know you're very far along in terms of closing the offices and consolidating, but in terms of improving service to farmers and others who utilize those offices, where are you?
Mr. DEWHURST. You know, it's an incremental thing, and I'm not sure I can give you a number. Let me just tell you what I do know. The first thing that has to happen, as the GAO says, is some business process reengineering has to be done to organize how those offices function. There are study teams working. They have due dates to produce reports within the next several months, on how to reorganize the business processes in those offices.
There is also a group working on the technology, designing a technology plan to support the business processes. Frankly, I think that's a bit of a ways off, largely because we don't have the resources at the moment for major investments in technology. So, on a scale of 1 to 10, I'd guess that we're at a 6 or a 6.5, but we're not at 10.
Mr. GOODLATTE. Can either of you explain to me how you can ask for $1.3 billion for these functions, when you don't have a clear idea of what you're going to do in terms of the services you're going to offer and, therefore, what technology you're going to use to implement it?
Ms. REED. Well, I would like to remind you that we do have a clarity of vision for a large part of where we're going. You are correct that we are still doing the business process analysis and studying what the best way is to deliver the service in the field service center initiatives, but one of the largest part of our expenditures, over $300 million, I believe, goes to the States in support of the Food Stamp and WIC programs technology. It's well planned out, and it is in support of the new Electronic Benefit Transfer program which brings a greater capacity to us to, one, deliver the service, but also prevent fraud, waste and abuse.
Mr. GOODLATTE. We think that is moving along well, but that still leaves $1 billion.
Page 21 PREV PAGE TOP OF DOC Ms. REED. We have a large investment, as I indicated earlier, in the Forest Service. The Forest Service is instituting a new system which they call the Project 615 system. It is moving the Forest Service into a modern environment. When they introduced the system that they presently have some years ago, it was considered to be quite revolutionary, in that it allowed their 37,000 employees to talk to each other. It was, however, for the time, a proprietary system. What they are moving to is an open system which will allow those 37,000 people to talk not just to each other, but to other of their partners.
Additionally, it provides a capacity for a geospatial technology capacity, which allows the management of land in a new and very highly productive way, so we believe that we are on-track.
Mr. GOODLATTE. Mr. Dewhurst, let me ask you, have you purchased equipment for these centers?
Mr. DEWHURST. Some equipment has been purchased, largely in the telecommunications area.
Mr. GOODLATTE. Is that the LAN/WAN telecommunications system?
Mr. DEWHURST. The wiring, the telephones, that sort of thing. We have not purchased any significant amount of what you would normally recognize as computer hardware at this point.
Mr. GOODLATTE. OK. At this point, I would recognize the gentlewoman from North Carolina.
Mrs. CLAYTON. Thank you. I think I would like to start with Mr. Willemssen. Mr. Willemssen, I think in your testimony you identified a number of areas that obviously needs correcting and has been problematic for a number of years.
I was just wondering if--and you also noted some of the areas that they were proceeding, but hadn't gone far enough. Do you get a sense that they are moving in the right direction to correct these, or do we need to begin to put a halt to this, or are these the things we can correct, if we focus well enough? Are there options for identifying those problems in a systematic way in moving forward, or are you suggesting that we need to scrap this and start all over again? I want to get a sense of your feeling as to where this is going?
Page 22 PREV PAGE TOP OF DOC Mr. WILLEMSSEN. Certainly. We were encouraged by the Department's initial attempt to respond to the Clinger-Cohen mandate, which is aimed at ending the cycle of many of the failed projects that USDA has had. It's now 9 months after the enactment of that act. We are starting to become a little more concerned that we haven't seen the detail yet from the Department on exactly how they are going to implement the act.
One example was brought up earlier, responsibilities of the Chief Information Officer. Yes, there's a one-page memo that lays that out in broad details. We would think at this point in time we would like to see more details on the responsibilities of the Chief Information Officer, and how that position is going to be involved in managing the Department's I.T. resources. To the extent that something like that doesn't exist today, it's important that the Department commit to a deadline when they are going to have something like that in place, and where they can be held to that deadline down the road. Then you will be in a position to ask them if, indeed, they've met that deadline.
We have similar concerns in some of the other areas. For example, the Executive Review Board that was mentioned. We still haven't seen the details on how that board is going to operate. We were encouraged by the Department announcing that it was going to put such a board in place, but we'd like to see how that board is going to operate, and we have not seen that to-date. We would like to see a deadline on when something like that is going to be put in place.
Mrs. CLAYTON. I think you have described really a flawed system, and I gather you're saying it's not yet failed, but there is an opportunity to make that system correct in that area. I think the Department is wise to note that opportunity to improve those areas.
Do you happen to have knowledge of a comparable status of how any other agency, in 9 months, would equal that, or are you only in Agriculture?
Mr. WILLEMSSEN. I have responsibility for most of the civil agencies of the Federal Government, looking at their I.T. programs.
Page 23 PREV PAGE TOP OF DOC Mrs. CLAYTON. Can you give us a model that the Agriculture ought to follow, that is doing outstandingly better?
Mr. WILLEMSSEN. I will give you a model. I will preface my remarks by saying we haven't gone into depth yet on some of the agencies, in particular Clinger-Cohen implementation, but I've personally been encouraged by some of the activities--for example, of the Social Security Administration. They have a fairly strong information technology staff, who has fairly well direct accountability and responsibility for some of their programs.
Mrs. CLAYTON. Do they have timetables? I appreciate timetables. I told you part of my background is planning, having done that for the State of North Carolina. You need timetables, but you also need to have the flexibility if you can't meet a timetable, to go back and make those adjustments. I mean, true integrity of project implementation is to recognize when you get to roadblocks. And I just wanted to know if we had a model that we could show Agriculture how to do it?
Mr. WILLEMSSEN. Hopefully, within the next few months, we will have better information on that, as we go out and look at more of the civil agencies and their implementation of the act, and we'll be able to pinpoint more specifically some of the best that's out there.
Mrs. CLAYTON. Ms. Reed, I wanted to just acknowledge I was the one who brought up by the lateness of your testimony, and I should say I think there was someone else who was supposed to testify. I would appreciate it, obviously, if we had received it earlier. But I understand that this wasn't on your schedule. You were on your way to receive an award down in Florida, so I want to acknowledge, my having brought that up--I want to acknowledge that you being here is certainly out of the ordinary.
Let me just ask you also about the area of where we get a lot of complaint or we are sensitive. To follow up Mr. Dewhurst's observation about the one-stop shop, wherein we now have almost achieved downsizing, putting people in places, and closing offices. Now we are at the process where we're trying to make this technology compatible and talk to each other.
Page 24 PREV PAGE TOP OF DOC And what farmers are telling us, or at least the Farm Service agencies I hear from and some of the others are telling us, is that they don't have the ability, we're making it difficult. And, true enough, this is now all together difficult from what they had before because they used to go to Farmer's Home around the corner or down the road. Now, they are at least in one place, but it is a bit of irony. You've got both these computers here, and you have to tell us this thing, go over here and tell this computer the same thing. I mean, it defies logic, why we ought to have this technology and not have the comparable software that would allow us to extract information one time and put it in the variety of programs so we can make it easy for farmers.
Can you tell me, to your knowledge, is the program purchased and in place--I'm not talking about the technology, I'm not talking about the hardware--the software? And then, second, Ms. Reed, how was this program technology devised? Was there input from people who have to manage this? Mr. Dewhurst, first.
Mr. DEWHURST. You raised a very good question, Congresswoman. What you are really talking about, at least in my view, is this fancy--we call it business process reengineering. The groups we have working at the Department include folks from the operating agencies, folks from the field, folks from Washington.
One of the things they are working most hard on is the very question you raise. What is the commonality of information that all of our various agencies need from a single customer which, if that customer gives that information to one agency, ought to be available to all the others, so that it doesn't have to be repeated over and over again.
That's a tough question to sort out sometimes. Certainly, everybody would agree that the name, address, certain key information about people, is common. And we ought to be able to gather it one time, and not keep asking this person, every time they walk to another counter, to fill out another form. But, obviously, what we would like to do is to go a lot further than that. To the extent that you come into one of those offices and describe your farm, or your operation, or your finances, or----
Page 25 PREV PAGE TOP OF DOC Mrs. CLAYTON. Where are we on that process, that's what I want to know.
Mr. DEWHURST. Well, I don't want to tell you more than I really know. We have people working on it. I have not seen the results of that.
Mrs. CLAYTON. Could you get the committee a status on the programmatic development and how that's being done, what is the timetable, the expectation of that, if you don't have it now.
[The information follows:]
We currently have four business process reengineering (BPR) projects underway for the Service Centers. These are as follows:
Customer Interface BPR Project is reengineering the way in which USDA Service Centers conduct community outreach, provide customers with program information, and refer customers to a subject matter specialist for detailed program and/or technical assistance.
Customer Service-Program delivery BPR Project is reengineering the way in which Service Centers identify the customer's needs, respond to those needs, assist the customer with a program application, process the application, and deliver benefits. This project will also reengineer the way in which Service Centers identify basic customer information by initiating and maintaining business standards between agencies and program areas. A major focus of this project is streamlining and using technology to simplify application processes.
Geospatial Information Services BPR Project is reengineering the way in which USDA provides map-based information to USDA personnel, non-USDA personnel, and customers. The project will encompass all activities required to access, annotate, update, and share map (digital geospatial) information. Voice and textual information communicated in a geospatial context is considered to be within this process. The Customer Service-Program Delivery and the Geospatial Information Services BPR projects have joined in their review and process modeling activities.
Administrative Management BPR Project will reengineer the way in which certain administrative support is provided to the Service Centers. This project will provide recommendations regarding the redesign or improvement of the following functions: Internal and External Hiring; Travel; Fleet Management; Directives.
Page 26 PREV PAGE TOP OF DOCThese BPR projects constitute the first phase of reengineering efforts. There are over 40 programs delivered at the service center level, and these four projects represent some of the major processes. This method of selection is consistent with OMB's guidance to implement projects in ''manageable chunks'' to minimize risk.
The Service Center BPR efforts are guided by a rigorous methodology which includes defining the current environment, obtaining customer and stakeholder input, reviewing best practices of other organizations and analyzing the benefits and costs of recommended alternatives. In establishing the BPR Program, the National Food and Agriculture Council established the Service Center Management Review Board to provide guidance and direction for the BPR initiatives through implementation of recommendations. USDA is currently evaluating strategies to pilot these recommendations.
Plans are to construct a service center ''mock-up site'' on or about September 1, 1997. This site will be where the four BPR projects would be integrated with one another, and the appropriate supporting technology identified. During fiscal year 1998 we will acquire technology to enable pilot testing in a number of operational sites. When the processes have been successfully integrated and tested at the mock-up site, they would be moved to the operational sites. Success there would then support our budget request for a common computing
Mrs. CLAYTON. And, Ms. Reed, if you could respond to the question raised with you?
Ms. REED. As Mr. Dewhurst indicates, the initial work really must be done to understand what the requirements are for the hardware technology. The areas that we're focusing most intensively now on are this common client data information.
Mrs. CLAYTON. Now, did I understand, to Mr. Goodlatte's question, that hardware is being purchased?
Page 27 PREV PAGE TOP OF DOC Mr. DEWHURST. Basic communications hardware is not currently being purchased for the field service centers. The definition of requirements for that hardware is pending the outcome of these studies of the processes and the information requirements.
Mrs. CLAYTON. So you are looking at what functions before you look at what hardware to accommodate those functions?
Ms. REED. That's correct. The existing hardware is, however, problematic. The systems are old. They are incompatible. They are expensive to maintain.
Mrs. CLAYTON. What was the $1.2 billion being spent on?
Ms. REED. I beg your pardon?
Mrs. CLAYTON. You said they have old systems. I mean, what was the new expenditure for?
Ms. REED. The new expenditure, for the Department?
Mr. DEWHURST. The $1.2 billion is a Departmentwide figure.
Mrs. CLAYTON. Is the maintenance ongoing?
Mr. DEWHURST. Of that $1.2 billion, about 14 percent, about $175 million is actually used for the purchase of new equipment. The remaining money is all used for staff, or fixing up the things that you have. Most of this discussion tends to focus on the Farm Service Agency, which is spare enough. The Farm Service Agency represents about 17 percent of that $1.2 billion. They account for about $200 million a year in the Department's IRM.
Mrs. CLAYTON. How much money are you spending to update their program to make it compatible with the others?
Ms. REED. The work that's being done right now is the business process reengineering work.
Mrs. CLAYTON. For the Farm Service Agency?
Ms. REED. For the one-stop field service centers. The only work that they are doing to update their systems right now is with respect to assuring that they can continue to deliver programs in the year 2000. So, it's not hardware or software improvement or enhancement in the sense that we've been talking about, but as you are all aware, the entire Government--in fact, the world--is concerned with how we approach the year 2000. So, they are making some investment in that issue right now.
Page 28 PREV PAGE TOP OF DOC Mrs. CLAYTON. I see my time is expired. Maybe I'll have an opportunity to come back to these questions, but I do think there is an opportunity for us to begin to look at this in a more precise way, to see if we can't identify how we can move forward at least with the new technology.
Mr. GOODLATTE. I thank the gentlewoman. The gentleman from Michigan, Mr. Smith.
Mr. SMITH of Michigan. Mr. Chairman, help me understand where your central computer network, if you will, where your file server is to centered for this information distribution. Is that in St. Louis, or is that in Washington?
Ms. REED. We have, across the Department and serving the multiple agencies, several major centers. There is one in Kansas City. We have the National Finance Center in New Orleans. There is a center in St. Louis. Those are the largest centers that we have. There are others that are somewhat smaller.
Mr. SMITH of Michigan. And so are they all, if you will, hooked together? Can those centers, do those centers talk to each other?
Ms. REED. They do work together in helping to leverage procurement buys, to assure that we are moving towards a consistent and common architecture in those centers, yes.
Mr. SMITH of Michigan. In the Info Share system that we had problems with several years ago--and I think GAO had a 1994 report saying----
Mr. WILLEMSSEN. Yes, sir, August of 1994.
Mr. SMITH of Michigan [continuing]. That system was pretty bad and, Ms. Reed, you were involved at that time. What action did you take then to try to correct the problems that were pointed out by GAO?
Ms. REED. Actually, I took action prior to GAO's pointing out problems. When I first came in, I myself had some serious concerns about not being able to get basic answers to cost, schedule and performance. I worked with the executive committee at that time, to get an external management study done of the project, which revealed much--it came out just prior to the GAO findings--revealed much of the same findings that GAO did and, indeed, some others. So, I took action within the Department to try and understand what the issues were, and to bring us to a decision point where we could act more responsibly in delivering that program.
Page 29 PREV PAGE TOP OF DOC Mr. SMITH of Michigan. So, is it fair to say you finally gave up on the Info Share type concept, with that kind of technology and equipment, or is this a transition into your new venture?
Ms. REED. I believe that the concept is still a valid concept. It's what we're talking about in terms of one-stop shopping and the ability to communicate to serve the customer. But the flaws that were pointed out by GAO are ones that we have been trying to address. We started with the notion that we needed a common computing system, but it's not enough to just put in place a common computing system. That led us to the charge of simply using it as an excuse to buy technology.
What's critical is that we understand not just have those computers being able to talk to each other, but we understand what information is needed to be shared, and that we've changed our management processes so that the people who are serving the customers, whether they are delivering an NRCS program or an FSA program or Rural Development program, are doing that to the maximum extent in an integrated way.
So, it's not just a technology issue which is where we were with Info Share in that early version. We are now understanding far more clearly that we need to invest in understanding what the processes are, and those processes need to be clearly linked to what our strategic direction is and where the farm bill is taking this program area.
Mr. SMITH of Michigan. I was trying to recall what the name of this computer is that can win at chess, but I'm told it can't win at checkers. Do you think sometimes we try to use this new technology to inform too many people, many of which do not need the information that's being transmitted, and so in our zealousness to try to use the capacity--this new technology to its full capacity, I wonder if sometimes our planning might be misled on losing sight of the goals?
Ms. REED. Certainly, sir, you are correct. There is a fine balance between employing what is the latest available technology and understanding what it is that you need in order to actually provide the service or deliver the program. So, there's a constant balancing act that needs to take place there, you are quite correct.
Page 30 PREV PAGE TOP OF DOC Mr. SMITH of Michigan. So, did we learn something from the Info Share experience?
Ms. REED. No question about it, we learned quite a lot. I wish that we hadn't had to learn those lessons in such a painful way, but I assure you that we did.
Mr. SMITH of Michigan. So, would it have made the mistakes that maybe have been made later, a less costly mistake than if we hadn't have gone through the Info Share experience?
Ms. REED. Oh, I certainly hope so. I think we are investing significantly more in the up-front planning. We are engaging directly with the people who are responsible for delivering the service.
In the days of Info Share, the whole problem, if you will, was just handed over to the information technology community to go fix it. Today, we have the program managers, the people who service the public in the field centers, all together engaged in helping to define what their requirements are. So, I think we've clearly learned the need to invest in planning.
Another thing that we have learned is something that the Clinger-Cohen Act also supports. It is, unfortunately, something that a lot of major projects have had to learn. That is, that the strategy which used to be employed, called the ''big'' program strategy, is often ineffective. You need to take manageable sections of the project, break it down, achieve one set of goals and objectives, then stick your head up to see if you are still going in the right direction, and if your program policy requirements are still what they were when you started. So, you plan, you invest. You plan, you invest. You plan, you invest. Rather than a huge--or not so huge amount--planning and a massive amount of investing.
So, I think we have learned some significant lessons in that arena, as well.
Mr. SMITH of Michigan. Mr. Chairman, with your permission, may I ask one last question.
Mr. GOODLATTE. Without objection.
Mr. SMITH of Michigan. I hate to lose the opportunity to ask Mr. Willemssen, or somebody else from GAO, your thoughts and ideas of what this committee might do to take action to help make sure that we at least are part of helping get the Department back on the right track.
Page 31 PREV PAGE TOP OF DOC Mr. WILLEMSSEN. One thing that we would think is critical is that you ask the Department on many of the areas that we've talked about today, to provide you with deadlines on when they are going to be delivering on these items, and then hold them accountable to those deadlines. Then maybe hold another forum such as this, to ask USDA where they are at in meeting its deadlines.
I might point out, on the Info Share project that you brought up earlier, our report on that was 33 months ago. We are encouraged that the Department now is in agreement with us that business processes have to come before information technology. We are discouraged that it's almost 3 years after our report, and we haven't seen the fruits of the ventures that USDA is embarking on.
Ms. REED. If I may comment on that, please, because I think it is very important to realize that in 1996 we had a new farm bill, and that farm bill sets a very different strategic direction for the Department.
I think perhaps we were moving our attempt--one of the flaws that we had in that early Info Share system was in failing to fully appreciate the degree to which the programmatic policy would change. And I think it was important for us to understand that, as an organization, what our strategic direction was going to be. It's not enough just to do business process reengineering, those processes have to be in support of the policies.
So, while he is quite correct that it's been almost 3 years since the report was issued, we've had significant policy redirection, and that must be incorporated into the actions that we take.
Mr. SMITH of Michigan. Well, the farm bill was just passed 12 months ago, but I appreciate what you're saying. Thank you, Mr. Chairman, for your latitude.
Mr. GOODLATTE. The Chair recognizes the gentleman from Arkansas.
Mr. BERRY. It troubles me a lot to look at that chart and see that we've spent that much money over 10 years, and we're still talking about where we're going and what we need to do. And from what we've done here this morning, I don't see any progress that we've made there. We've got to accomplish more than I realize we've accomplished. Can you give me any insight into that?
Page 32 PREV PAGE TOP OF DOC Ms. REED. Let me answer that in two ways. One, is the work that we've been doing over the past months to implement Clinger-Cohen, to build a much stronger planning process in the Department than we have had in the past, the establishment of the executive committees which is a subcabinet committee chaired by the Deputy Secretary to bring serious policy focus to where we are going. This committee will be actively engaged as we go into this 1999 budget process. They have been already actively engaged in advising the Deputy Secretary in the time since we instituted the moratorium. The Deputy Secretary, in this last year, did institute a moratorium to assure that we took the pause that we needed to put in place the planning systems, and to establish the architecture that will prevent more additions to the structure that you see on that caricature there. We are making very strong efforts in that arena from just a process side.
I would also remind you of some of the accomplishments that are happening in a positive way. I spoke earlier about what we're doing with Electronic Benefits Transfer in the Food Stamp Program, and our ability to use technology in support of that.
I will also mention to you how critical the investment that we've made in technology is to our food safety program. As you know, with the recent introduction of the HACCP program, we have changed, dramatically changed, the way we do this, and have moved to a science-based food inspection system. The ability to make that move from a pure process delivery point of view, is closely linked to an investment in information systems that give the inspectors access to that scientific information. In that arena, I think we did have a good sense of the strategic direction, process redesign and delivery of technology to support a very important public policy objective of this administration.
I can give you other specific examples of that, but I think it's important to understand, as I know that you do from your years with the Department, it is a very large and complex place. There are many very positive outcomes from the work that people are putting in. There are other areas where we, quite frankly, need a lot more inspection, a lot more work, a lot more oversight, and I intend to provide that.
Page 33 PREV PAGE TOP OF DOC Mr. BERRY. Well, I certainly appreciate, and always will, the good work that the professionals at the Department of Agriculture do, and certainly I include you all in that. I can't help but recall an experience I had when I was there, where my phone wouldn't work at my desk.
And as I decided, surely at my level I should be able to get my phone fixed, and began to try to pursue that goal, and had any number of people and equipment and folks come into my office, in an attempt to fix that phone system, and I was told that we, at the Department, at that time, spent $485,000 in that one building, we paid that to someone to maintain the telephone system.
And 6 months later I was back in my office, after I left the Department, and that phone still wasn't fixed. And the frustration that I felt was unbelievable. And I have that same sensation this morning, I feel like we still are unable to get the phones fixed. And I guess I would like some assurance, some way or other, that we actually know where the problem is, maybe, and I still don't feel like I have that.
Ms. REED. Well, I'll certainly agree with you that telecommunications, in general and in specific, is an area within the Department that is receiving significant attention from me, as well. From a purely administrative standpoint, as well as the broader development of this enterprise network, there is a great deal of focus being given to it now.
Mr. GOODLATTE. Thank you, Mr. Berry.
We are also joined by the ranking member of the Agriculture Committee, Mr. Stenholm, of Texas.
Mr. STENHOLM. Thank you, Mr. Chairman, and I too commend you for holding this hearing today. Knowing you as I do, you will attempt to direct this committee to work toward some solutions to the problems that have been delineated today.
The GAO report states the concept of one-stop shopping has not been clearly defined, and USDA managers were not performing the key steps necessary to fundamentally improve the way these agencies do business.
Page 34 PREV PAGE TOP OF DOC In my opinion, the reason it has not been clearly defined lies right here in the Agriculture Committee, in the writing of the farm bill. This is not meant as anything except self-criticism, to avoid the tendency that we have to point the fingers at others when we ourselves have failed to do the job.
Now, why do I say this? Because I was chairman of this subcommittee in 1994 when we did USDA reorganization, and we did it bipartisanly; Bob Smith was my ranking member. When we reorganized USDA, we told USDA to do certain things. We found, as Ms. Reed says in the third paragraph of her letter, ''Historically, our decentralized approach to program delivery technology and other support functions has been both our greatest strength and our greatest weakness.'' That's true. We began to reorganize, and as we cut from 42 to 29 agencies, we found there were differences of opinion within the various agencies and within the various support groups of those agencies and within the various thought processes of Members of Congress, and it effectively slowed up the USDA reorganization process.
And then came the 199596 farm bill. Ms. Reed, as you stated very accurately, we made some big changes. And in fact, perhaps the majority of the Congress, would say we no longer need an FSA system. A large number of Members are saying we really don't need that anymore, we've eliminated the farm program. But how does that square with the necessity of information dissemination and the importance of agriculture to our country? How does it square with saying we really do not need to have a centralized information dispensing system, which is what at least part of the Congress has been saying.
And so I am trying to look at this from the perspective of the Department, and if I were sitting where you are sitting, Ms. Reed, I would be pointing a finger at us; we deserve a part of the blame. I've noticed of late, when we started trying to make sure the FSA system worked, many Members of Congress were the first to say, ''Oh, we cannot close offices. Please, we cannot close offices; this costs money.''
Page 35 PREV PAGE TOP OF DOC Mr. Chairman I look forward to working with you. I know where you're coming from, and I believe this committee has a responsibility to give the Department some clear direction of exactly where the Congress wants it to go. We have not done that yet.
We have departments that still would like to maintain a decentralized approach, and we have congressional support for maintaining a such an approach, and yet we criticize the overall Department because they have not centralized. Well, I'd like to see you try a little harder than you've been trying, quite frankly. I'd like to see you bite the bullet and say to these various agencies that keep saying ''No, we can't do that'', ''No, we're going to continue to maintain the separateness in the FSA concept'', I'd like to see you tell those folks that work under you, ''Do it.'' You haven't done that yet because, when you do it, there'll be various Members of Congress that will jump right down your throat for doing it, and I'd like to see you do it. And I'd like to see this committee then have a hearing during which we ask Members of Congress to come before us and say, ''Why aren't you doing this?''
I've been following the budget pretty closely, and we've got a problem. We've got a problem with the appropriators, and it's a fact that there's not enough money to go around to do everything that we need to do, and yet we continue to try to force a square peg into a round whole--we, the Congress, bipartisanly.
You know, I could ask a lot of questions as to why, but I kind of know why, and that's my frustration. As I said, I would love to have seen a stronger hand approach, but I think the first thing we've really got to do, Mr. Chairman, is decide where, as a committee, we want policy to go. I hope nobody is spending money on technology right now because that would contribute to a further waste of money, as Mr. Berry and, you Mr. Chairman, have already stated.
We have wasted a lot of money, and that's inexcusable. And if we're going to avoid that in the future, it is going to be extremely important that we get a clear definition of what it is that we want you to do, and then do it. And I would be the first one to come down around you, like a duck on a junebug, if I felt that in the 199596 farm bill we had given the clear direction of where Agriculture policy should go in answering this. We did not do that. And I say this as one who voted for the bill, but we didn't do that, and it's extremely important that we do it, that we decide whether we want one-stop shopping. I hope the answer is yes because, based on years of testimony, it is clearly the most efficient way to deliver services. I hope we decide to do that. But, to do that, we've got to avoid doing what we did in the 199596 farm bill, which was actually going in and splitting out, as we did with Federal Crop Insurance. We decided it did not belong in FSA, it belonged outside. And oh, how that contributed to an information dilemma, along with a few other things we did. But time is running out now and, with the current budget crunch, we can not afford to continue having charges made by the GAO, many of which are very accurate. Continuing on that track will result in a disaster.
Page 36 PREV PAGE TOP OF DOC Mr. Chairman, with that, I end by saying as I began, I really look forward to working with your subcommittee and being as constructive a part as I can be to helping work this out in a favorable way.
Mr. GOODLATTE. I thank the gentleman for his comments. I think they are sincerely made, and I think there are good points. I would point out that the Congress, of necessity, has to speak with one voice. So, when we have individual Members who complain about decisions that have been made either by the Department or by Congress through legislation, that can't be utilized by the Department as an excuse for not acting because we have to take the step to either say we're not going to close these offices, or we are going to close them, or we are going to consolidate them in this fashion, and we have spoken, maybe not as clearly and precisely as you or I might like, but we have done that. We did pass the Clinger-Cohen Act, which gives a lot of guidance to these folks on the specific issues regarding procurement of this type of technology, and the evidence is not there that that's being followed. We spent $12 billion and don't have very much by way of coordinated computer systems to show for that.
You were very instrumental in reforms that were put forth through the 103d Congress and that the Department implemented regarding reorganizing the Department. If there was guidance needed by the Department, that's been 3 years now. I mean, they could come and ask for clarification of points they don't think have been effectively made. And we're still left with a situation where we've gone forward with, for example, the office consolidation, but we don't have a technology plan to back it up. And one would think that if you were going forward with those changes, that that would be in the lead, or at least parallel, to the implementation of the office closings and the consolidation of that kind of work.
So, yes, the Congress can always step in and give more input, and I think it should, and I look forward to working with you to do that, but I also think that this is a much more systemic problem. It's not new to this administration. It's not something that is in any way partisan. It's been a problem that's been long-standing for quite some time but, with the exception of Ms. Reed who has only been on the job 9 months, I think there's a lot of blame to go around the U.S. Department of Agriculture in the lack of concerted effort to more effectively utilize taxpayer dollars for computer technology.
Page 37 PREV PAGE TOP OF DOC And in that regard, Mr. Willemssen, I wonder--we haven't asked you this, but I wonder if you can put a dollar figure on what portion of the I.T. budget of the Department is waste?
Mr. WILLEMSSEN. Well, I can tell you for those elements that we have reviewed, what we would consider as less than effective spending, in some cases waste. As I pointed out in my statement, in looking at the telecommunications program, we identified at least $5 to $10 million annually that we would consider waste.
We noted that the Info Share program costs were reportedly about $100 million, and we didn't have anything to show for it in terms of either redesigned business processes that better served the customers, or information systems that can now talk to one another and are compatible.
I also pointed out in my statement that there were over 100 financial information systems that often have overlapping functions, and the cost to operate and maintain them is almost $200 million a year.
So, it's hard to give you a single figure for the entire Department, but what I would point out is something similar to what you mentioned, the Department, especially under Clinger-Cohen, has to demonstrate what the benefits are for each of the acquisitions it's making for the $7.9 billion it spent in that time period. That's what we are pushing for, for any expenditure that's made, let's see, on the other side of the ledger, the benefit of that.
I think the Department is hard-pressed right now--hopefully we'll make progress in the future--but the Department is hard-pressed in many of these areas to show what benefits it got for its expenditures. And I think that's the direction we need to head.
Mr. GOODLATTE. Thank you.
Ms. Reed, I understand that in 1994 the FSA spent $125 million to upgrade its mainframe system. As it currently exists, can FSA's mainframe be interconnected with other systems?
Ms. REED. No, sir, it cannot.
Page 38 PREV PAGE TOP OF DOC Mr. GOODLATTE. Can you explain why that is?
Ms. REED. Why the system cannot be interconnected?
Mr. GOODLATTE. Right.
Ms. REED. It is a proprietary system that is--that was similar to many of its era--designed specifically by industry so that it could not. That is no longer the case for most technology.
Mr. GOODLATTE. Was it not foreseeable just 3 years ago, that when you spend $125 million to upgrade a system, that you shouldn't anticipate that you're going to want to communicate with other agencies within the Department?
Ms. REED. Yes,sir, we certainly anticipated that. We also knew at that time that we needed to make the investment in changing our business processes that Mr. Willemssen has just spoken of. We knew, too, at the same time, we needed to be in a position to be able to implement many of the provisions of the farm bill as quickly as possible. We had a situation where the legacy system, as it existed, was extremely expensive and costly to maintain. An analysis was done of a return-on-investment which showed that the return on that investment would more than pay for itself in the time frame before we would be able to deploy a truly modern system that achieves the objectives that we all desire.
Mr. GOODLATTE. How much does it cost each year to maintain FSA's mainframe system?
Ms. REED. Let me get you that number for the record. I don't have it on the top of my head.
[The Department responded as follows:]
The fiscal year 1996 maintenance costs for the FSA upgraded System/36 minicomputers, associated terminals and printers were approximately $6,039,000.
Mr. GOODLATTE. And I'd also like to ask, as it currently exists, will that system be able to utilize the $70 million Voice/LAN/WAN wiring system that you have purchased? Maybe you or Mr. Dewhurst can answer that.
Page 39 PREV PAGE TOP OF DOC Ms. REED. FSA will be able to connect with the telecommunications system.
As it stands, the answer to that is, no, FSA cannot fully use the capacity of the telecommunications, without additional upgrades, which we are not ready to make, given that we need a further definition of full requirements.
Mr. GOODLATTE. Was there a point in going ahead with that $70 million acquisition, without having the capability of utilizing it?
Ms. REED. Yes, sir, I believe so, because it is able to be utilized by the other partner agencies, and will be--even though the particular System 36 technology that is employed by FSA doesn't link, the employees will be able to have, through the telecommunication systems, better access to a shared local capacity to take phones--to present ourselves more as a one-stop shop when people simply call the office.
I also think that most people will agree that a communications infrastructure is foundational, that having it in place is an important first step for us.
Mr. GOODLATTE. Ms. Reed, to followup on that--I know I've gone over my time here. We'll give ample time to the other folks in this second round. Have you seen any sort of analysis from anyone at FSA--and this may be along the lines of some of the questions that Mr. Stenholm was asking--about how its program delivery requirements have changed since we passed the farm bill last year? Do you have the benefit of that analysis as you make your decisions about technology requirements?
Ms. REED. This is something which the Farm Service Agency and Acting Under Secretary Dallas Smith--have been working at very closely. They have done quite a bit of analysis. Yes, that is being fed into the understanding of what the processes are going to be, and what the system needs to be.
Mr. GOODLATTE. And you have had the benefit of that information?
Ms. REED. Yes, sir, I have been presented with that information.
Page 40 PREV PAGE TOP OF DOC Mr. GOODLATTE. Would you share that with us? Is that in the form of memoranda that can be shared with the committee?
Ms. REED. It's been presented to me largely in the form of briefings. Let me get back to you with what available documentation there is.
[The information is on file with the committee.]
Mr. GOODLATTE. I would appreciate that. Let me, just as a last question, ask Mr. Willemssen whether you agree with the assessment by Ms. Reed of the capacity of these various systems that we've talked about, the mainframe system at FSA and whether or not there was a need for the installation of the Voice/LAN/WAN wiring system before the mainframe had been upgraded to handle it?
Mr. WILLEMSSEN. If I may, Mr. Chairman, I'm going to defer to my colleagues on that, who have more detailed information.
Mr. HOTTOVY. On FSA's System 36 system, we took an informal look at some of the analysis that they did on that and, at that time, they were showing that their maintenance costs were going to be extremely high for the upcoming years, and they were demonstrating that they were going to have some return on that investment over the next 2 to 3 years that should be able to pay for that.
As related to the LAN/WAN/Voice, we have not seen any overall cost-benefit analysis, or overall implementation plan that demonstrates that they are going to receive the same benefit there and pay for that investment.
They did need the system, or some kind of telecommunications capabilities for their DLOS system, which is for the Rural Development Agency, but as far as for the Farm Service Agency and the NRCS, which is also located at the centers, there wasn't any analysis to show that there would be a benefit from that, and that it would pay for itself.
Mr. GOODLATTE. Mr. Schwartz?
Page 41 PREV PAGE TOP OF DOC Mr. SCHWARTZ. I have nothing more to add.
Mr. GOODLATTE. Do you have anything, Mr. Willemssen?
Mr. WILLEMSSEN. No.
Mr. GOODLATTE. That completes my questions. I recognize the gentlewoman from North Carolina.
Mrs. CLAYTON. Ms. Reed, in the GAO audit, there were a number of instances that were cited as examples of mismanagement and might have been really cases of fraud, the mismanagement was to that level.
One was an example given of, I guess, the misuse of the telephone, and it was inappropriately accepting collect calls. Is there a systematic way of addressing the misuse of telephones and the misuse of other telecommunication that's in place now, that these things have been identified?
Ms. REED. On that issue, we have worked very, very closely with GSA, which has responsibility Government-wide for telecommunications. We've worked with the telecommunications providers. We have invested significantly in understanding what the source of that problem was, and correcting it.
There is an underlying issue that was really accurately portrayed in some of the previous GAO audits on our telecommunication systems, in our capacity to receive the bills and for managers to understand and analyze and review. That we are addressing, and we have very near completion on a major business process reengineering effort that looks at the entire way in which the Department administers its telecommunications and how we can get the best return and understanding of how we can avoid problems such as the one that you describe. So, we take this issue very, very seriously.
Mrs. CLAYTON. Mr. Willemssen, do you concur that the Department is moving and correcting those identified areas?
Page 42 PREV PAGE TOP OF DOC Mr. WILLEMSSEN. We agree that the Department recognizes the extent of the problem, and is beginning to take action to address it. We have not fully evaluated at this point in time, the effectiveness of those actions.
Mrs. CLAYTON. Well, I just want the record to show that there's some effort, having had this cited, there's not a complete avoidance of the problem.
Mr. WILLEMSSEN. We agree there is some effort.
Mrs. CLAYTON. Thank you.
Ms. Reed, let me ask this question about the hardware. The hardware that you have just purchased in terms of--I guess it's called Voice/LAN wiring system, is that what it's called?
Ms. REED. Voice/LAN/WAN.
Mrs. CLAYTON. Oh, LAN/WAN--excuse me, I apologize. The hardware, which I do not know the name of, let me say. I am troubled by the fact that all the software functions is not known, but you think it has advantage in using. I'm assuming you had to have some assumption that that hardware is expandable and has a capacity to adapt to the systems that would be integrated with, otherwise, you wouldn't have made that purchase. I want to know in what context?
Ms. REED. What we're talking about here essentially is a telephone system. It's not a computer system, in the sense of terminals and a mainframe. It's a telephone system.
Mrs. CLAYTON. That does what?
Ms. REED. It allows for communication between the various agencies that are co-located at the site--so that an outside customer can call one number and be referred to whichever office is appropriate. It allows for communications. Also, one of the most important things that it did, and touching on something that I believe Troy mentioned was one of the impetuses for moving forward with this, was our capacity to implement our Dedicated Loan Originating Service system, a major new effort by the Rural Development community to service our loan portfolio in a new and centralized manner.
Page 43 PREV PAGE TOP OF DOC This system will allow them to communicate into--send their information into that central system. It's really quite substantial. And they, again, went through the process of defining requirements, changing the business process, and critical to their ability to deliver this was the existence of this kind of telecommunication system. They could have approached that in the traditional stove pipe manner. Instead, they worked very closely with the people in Farm Service Administration and in NRCS, to jointly understand not just the current rural development requirements but, to the best we could determine, the future telecommunications requirements are of the other agencies to put together a coordinated project--and it's one of the first major examples of a joint integrated information technology effort at the Department.
Mrs. CLAYTON. I think earlier it was mentioned that you were going to get a copy of your memorandum of, I guess, employment, since it wasn't a job description, but I guess part of the rationale for wanting that information is not only to understand your function--not to micromanage, obviously--but to get a sense of whether you have enough authority, and what your vision is, and how that is structured. Do you feel that you have enough authority to implement what's required to have an efficient program, with all the agencies that you've described and the complexity of Agriculture?
Ms. REED. The Secretary assures me that he will see that I have, from an institutional perspective, all the authority that I need in order to make this happen. From a legislative perspective, I believe that the authorities that existed through the Paperwork Reduction Act and through the Clinger-Cohen Act, actually give the Department and myself the legislative authority that I need to make these changes.
We are looking within the Department--this is part of the discussion we had even last night, though it's been an ongoing discussion--at what kinds of capacities my office needs to actually be able to execute these authorities in an effective and efficient manner.
Mrs. CLAYTON. Do you have plans for the timetable and the mission statement for the implementation of the I.T. system? I know there is an architect and you have a review board, but obviously there has been brought up some deficiencies in that strategy that's minus some timetables, and perhaps you need to revisit the mission. And one example was that, since we have now reorganized the farm services, or we have reorganized Rural Development and the farm loaning programs that you just identified. I'm glad to hear that this new telephone system is using that, but that's an example of new structuring and new organization dictating a new use of technology. There then perhaps needs to be a revisit of all this. I don't think that says anything negative, that's a sense of reality, that technology is fungible, and there is some way you have to begin to understand how they interconnect. So you see a timetable on a new evaluation plan or strategy?
Page 44 PREV PAGE TOP OF DOC Ms. REED. It is clearly a priority of mine now to develop such a timetable. I have laid out a number of the things that I believe need to take place. I will work closely with the Secretary to assure that we develop in short order a timetable, and we'll be happy to share that with you.
[The Department responded as follows:]
The tasks and timetable for USDA implementation of the Clinger-Cohen Act are now being developed by an interagency team. The team's final report will be available in early July 1997, and the timetable will be provided to the committee.
Many tasks are already underway at USDA: a Capital Planning and Investment Control process is being designed; a CIO organization and a permanent CIO are in place; and an I.T. architecture has been drafted.
Mrs. CLAYTON. Thank you, Mr. Chairman.
Mr. GOODLATTE. Thank you. The gentleman from South Dakota, Mr. Thune.
Mr. THUNE. Thank you, Mr. Chairman. I, like many probably, who have read the GAO report, am very troubled by what I see there. And it, I think, takes us back to, in some ways, what we have just recently read about with respect to the Internal Revenue Service, too, and that is that we're spending an enormous sum of money trying to get systemized at the Federal level, and doing an inordinately poor job of using taxpayer resources to do that. And I think we should find that troubling for a number of reasons, and I would like to think that this is the exception and not the rule, and if all Federal agencies are having this sort of experience and record then, frankly, I think we need to do an entire overhaul of how we approach the issue of computerization, information superhighway, and everything. I think there are enormous potentials out there for us, but obviously we are not being very good stewards at this point.
And I would like to, as well, explore a couple of thoughts on that front. I think the point has probably already been made, so I won't dwell on the issue, but it seems to me as well, having in the last few months dealt with the whole issue of potential closure of offices at the field level, those who are actually delivering services and meeting the needs of the farming community, that we have this kind of evidence of what would be apparent mismanagement going on in Washington, that there are some tremendous savings that we could realize if we were doing a better job here, and then we wouldn't have to make those decisions out in the field where we've got people who are actually meeting the needs of the farming community.
Page 45 PREV PAGE TOP OF DOC A couple of questions, if I might. Why are some agencies using their own e-mail systems, when the Department apparently has a single system in place?
Ms. REED. There is not currently a single Department e-mail system. We have linked the e-mail systems of the individual agencies through a new technological capacity so that we are able--to enable the communications of a large number of agencies, particularly in the Washington headquarters arena. Currently each agency substantially has its own system, we've just been able to link those together.
Mr. THUNE. What would you say that USDA might be able to achieve in savings by having a single e-mail system?
Ms. REED. I would have to analyze that and understand--the technology that allows that to be linked is quite effective. To actually answer your question, though, I would have to balance the ongoing cost of maintaining multiple systems against the investment that would be required to put in a whole new system for the entire Department.
Mr. THUNE. And I guess maybe that kind of gets at the question. Let me ask it another way, and maybe you have some information that might shed some light on this. How much additional agency spending for e-mail is occurring because some agencies refuse to get onto a new system? I mean, if you have a system out there, what is it costing to have these duplicate redundant type systems out there? Do you have a feel for that?
Ms. REED. No, sir, I don't.
Mr. THUNE. Do you have the authority to bring these nonconforming agencies to switch them onto an integrated new e-mail system, as the CIO?
Ms. REED. Yes, sir. Should we decide to do that, I have that authority.
Mr. THUNE. Well, it seems to me that that's something that perhaps we ought to look at, and should have sometime ago, but I would suggest that, again, having read the GAO report, that there appears to be a tremendous amount of redundancy and duplication out there that, in the interest of just efficiency of running an agency as large as USDA, that we might take advantage of that authority that you have at your disposal to bring that to pass.
Page 46 PREV PAGE TOP OF DOC One of the benefits I'm told of a Departmentwide e-mail system would be to use it to distribute routine materials, common data. And I think most of us, in our offices, have a system like this. Is the e-mail that currently exists being used for those kinds of activities? Do you have a way of communicating with people in the field in a fashion that allows you to distribute information and receive it with everybody that's out there right now, because of the various systems that exist?
Ms. REED. Not uniformly. We have linked in some of the agencies, complete with their field offices, but not others. Right now, the integrated system, if you care to call it that, is focused predominantly on headquarters, however, there are some linkages to the field with some agencies.
I will say that one of the objectives of the telecommunications system, the LAN/WAN/Voice system that we were speaking of earlier, is to develop an integrated e-mail system for our Farm Service Agency, Rural Development, and NRCS agency. So, we are making some moves towards doing that today.
Mr. THUNE. Do you have an estimate of how much administrative cost might be saved by utilizing a system in this manner? I mean, even what you have out there currently, getting it so that everybody is online?
Ms. REED. I do not currently have that estimate.
[The Department responded as follows:]
I support the need for a common communications infrastructure. However, it is not clear at this time what the most cost effective mechanism is for achieving this goal. Data concerning immediate costs to create a single system and estimated savings are not available.
Mr. THUNE. Well, I appreciate your answers, and would simply add that if there is a way that we could quantify some of those costs, it might give us a much better understanding of what we are dealing with here, but it is pretty clear that we have a problem that needs to be corrected, and it's probably long overdue, and would hope that you would work in a very expeditious fashion to address those issues. I thank you. And thank the Chair.
Page 47 PREV PAGE TOP OF DOC Mr. GOODLATTE. Thank you. The gentleman from Texas.
Mr. STENHOLM. GAO claims that USDA maintains over 100 of these redundant operations in information. Do you agree that we actually have 100 redundant financial management systems?
Ms. REED. We do have a large number of financial systems. I will point out that one of the major initiatives that we have underway at the Department right now is the creation of a foundation financial information system. The Chief Financial Officer has taken the lead and a very aggressive role in developing this single integrated foundation financial information system for the Department.
Mr. STENHOLM. When might we see the result of that so that GAO will stop criticizing you for not doing it?
Ms. REED. The most recent timetable that I have seen for implementation of that project would have, as an initial deployment of the system in some parts of the agencies--we want to do this so that we are sure that, as we deploy it, that it works before we export it Departmentwide--but that initial deployment is scheduled for the 1st of October of this year.
Mr. STENHOLM. GAO claims that the Executive Information Technology Investment Review Board, authorized by the Secretary last July, has met several times since January, but has not yet adopted specific operating procedures. Why has it taken so long, and how long is it going to be before the board will start making a difference?
Ms. REED. The board is already making a difference. It has adopted a charter. That charter defines the scope of its responsibilities, but the GAO is correct that the attachment to that charter which would describe the specific operating procedures has not yet been fully developed. In part, I think that is because we are--this is a new creature. I am working with the members of the board to fully understand how we translate their scope of responsibilities into operating procedures which are productive. The lack of those specific operating procedures has not in any way precluded that board from meeting on a frequent basis and advising the Deputy Secretary and counseling the Deputy Secretary. Most particularly, as I mentioned, we have had an information technology moratorium in effect. That board has played a very strong role in understanding the reasons for that moratorium, whether or not we should continue it, what processes we need to put in place in the Department to move into a more disciplined and new environment. It is actively engaged. It will also be very actively engaged as we move into the 1999 budget review process. That board will play a strong role in helping to define, from a corporate perspective, the Department's investments in information technology.
Page 48 PREV PAGE TOP OF DOC Mr. STENHOLM. GAO claimed that you submitted a draft of your ideas to the board, I believe, the information technology architecture, in February.
Ms. REED. Correct.
Mr. STENHOLM. Has the board acted on your draft recommendation?
Ms. REED. The board itself has not accepted the architecture.
Mr. STENHOLM. Why?
Ms. REED. In part, because they--most specifically because the section of the architecture that deals with business and data is one that they wanted to fully understand what the implications of that were. The architecture was developed at a staff level. It was developed drawing on the information provided through the draft strategic plans, budget documentation, discussions with other folks at a staff level. When this reached the level of the Executive Board, they wanted to spend significant time understanding how that worked and putting their stamp of approval on what it looked like for their specific mission areas, which I think is a very positive role for them to play.
Mr. STENHOLM. So you're satisfied up to this point with your interactions with the board?
Ms. REED. Yes, sir.
Mr. STENHOLM. Mr. Dewhurst, you have a comment?
Mr. DEWHURST. I just might add, I am a member of this board. So, Anne does staff work and presents it to that board. The Deputy Secretary chairs it. The specific question before the board has been whether or not the current moratorium should be lifted, and that question depends on whether we believe the architecture that is in place is adequate to give us the kinds of assurances this committee is talking about.
As Anne said, a lot of us want to take a much harder look at that architecture, and some of us believe it's not quite yet in that shape, doesn't provide enough ground rules or enough assurances to justify lifting the moratorium, so we have not chosen to lift the moratorium at this point in time.
Page 49 PREV PAGE TOP OF DOC Mr. STENHOLM. Final question. You indicated in a response to Mrs. Clayton a moment ago, that you believe you have legislative authority and the support of the Secretary for doing the job. Would you clearly articulate what you believe your job is?
Ms. REED. My job is to provide strategic direction on how we employ information technology in the Department, to cause to come together the right people to make the right kinds of policy decisions about a corporate strategy for investment in information technology that will help move us into an information age. At the same time, I believe that I am responsible for assuring that the systems that we have in place, the acquisitions that we make, we have strong project management in place, we have procedures and processes for defining what appropriate return-on-investment is across the Department, we've developed and fleshed out a capital planning process. I am responsible from soup-to-nuts, through the planning process, through the selection process, the ongoing maintenance and control and, at the end, as GAO pointed out, the evaluation of those systems to assure that, in fact, they did meet their original goals across information technology or the Department.
Mr. GOODLATTE. I thank the gentleman. Ms. Reed, I'd like to ask you about these recommendations from the GAO to achieve savings. It's my understanding that GAO reported in April 1995 that USDA could save $5 to $10 million annually by consolidating and optimizing telecommunication services. Also, GAO reported in September 1995 that millions more could be saved by consolidating or eliminating overlapping some of USDA's more than 100 financial systems.
What specific action has the Department taken to consolidate and optimize telecommunication service?
Ms. REED. With telecommunications, we've had--and I believe if you have an opportunity later to review the report that I submitted with my testimony, I go into some detail in the activities that we're taking right now in telecommunications--but we have a number of different initiatives underway. One is through a major business process, reengineering process, to look at how we administer telecommunications but, in addition, we have had an optimization concentration project underway.
Page 50 PREV PAGE TOP OF DOC I will tell you that this project started shortly after the GAO report. I was not at all satisfied with the outcome, despite attempting to work very closely with each agency. I was not satisfied that we were, in fact, optimizing.
When I set the guidelines for the moratorium that the Deputy Secretary imposed on acquisitions, I imposed a zero-dollar threshold on network equipment. That zero-dollar threshold requires that anytime anyone in the Department needs to install any telecommunications network, they must come to me for approval. When they come in with that request to me, I then have it analyzed against a database that we have that identifies what other equipment exists at that organization and at that location, and disallowing any investment of even the smallest amounts until I am assured that there is optimization and concentration at that site, not leaving it simply to chance for the waiver process to come through. In addition to that, we have identified a series of concentrations of USDA offices and organizations across the country, and have prioritized where we can get the greatest benefit from aggressively moving to optimize in those locations.
We began with the city of Atlanta, and pulling together all of the USDA organizations in that, I will tell you that we started in Atlanta, in part. It is a major concentration for the Department, but it was also spurred by waiver requests that came in from the moratorium. One request came in from an agency. We ran it through the analysis and said, for this building where you want to put this, there are at least two other agencies who have the capacity to provide what you need. You need to get together and work on this. I, quite frankly, was personally appalled that they hadn't gone to the trouble to find that out themselves.
I had a second wave of requests come in within a week of the first one, from a different agency, same location, and this request indicated, yeah, we know the other folks are there, but they won't play with us. I found that to be absolutely unacceptable, and have moved aggressively to institute a concentration optimization of telecommunication in Atlanta. The agencies are on notice that they have an opportunity to develop a combined optimized system themselves. They failed to implement that. And I will bring in a contractor to make it happen, and they know that. We are going to follow that same procedure at a number of cities, several of which we've already begun.
Page 51 PREV PAGE TOP OF DOC Mr. GOODLATTE. Is there a reason why this moratorium authority hasn't been granted to your office permanently?
Ms. REED. I believe that the processes that we are likely to put in place in the Department, while they will not be called a moratorium, we will have a great deal more discipline which, in point of fact, would give me the same access and authority that the moratorium has had. Until we have that, the moratorium will continue.
Mrs. CLAYTON. What specific direction did the Department issue to you in relation to consolidating or eliminating overlapping financial systems?
Ms. REED. The significant focus on that has been through the Chief Financial Officer, who has been working on this for several years now. It is a high interest item of mine, clearly, because we are making this major investment now in a foundation financial information system. I am committed to working with the Chief Financial Officer to assure that that project stands up to all of the tests of any major investment in the Department.
Mr. GOODLATTE. How many of those systems have been eliminated or consolidated?
Ms. REED. Let me get back to you. The foundation system is not yet deployed. It is in the process of development. The beginnings of it--the first wave, if you will, is planned for deployment on October 1 of this year. I will get back to you with the specific information on the schedule of consolidation or elimination of the duplication of the systems.
[The Department responded as follows:]
USDA is in the process of developing its new Foundation Financial Information System which will serve as the Department's core accounting system. FFIS will allow the Department to tie together all of its financial systems into a single, integrated financial management system in accordance with OMB Circular A127, ''Financial Management Systems.'' That circular prescribes the applicable policies and standards to be followed.
On September 30, 1996, USDA submitted its annual Financial Management Status Report and 5 Year Plan to OMB, in which we reported that the Department was down to 67 financial management systems with a total of 1333 applications. During fiscal year 1996, we eliminated three systems and six applications, and identified an additional eight systems and 28 applications for elimination and/or streamlining with the implementation of FFIS.
Page 52 PREV PAGE TOP OF DOCAs the Department continues to implement FFIS, the number of systems which will be eliminated, consolidated or streamlined is likely to increase. We are planning to reengineer several of our existing manual systems to take advantage of FFIS capabilities.
Mr. GOODLATTE. Ms. Reed, how many employees does the Department have?
Ms. REED. Approximately 110,000.
Mr. GOODLATTE. Well, that works out to about $11,000 per employee for the budget for information technology. Is that excessive, $11,000 for each work station in the Department, per year?
Ms. REED. If, in fact, that money was going simply to work stations for those 110,000 employees, I would be troubled. I would remind you that those dollars that are associated with information technology, however, go to support a number of different systems, the largest of which is assisting the States with their WIC program and Food Stamp program.
Mr. GOODLATTE. If you take that out, you're still at $9,000 per employee.
Ms. REED. Remember, it's not just work stations, but this is--any major organization today uses technology as an integral way of delivering program managing information.
Mr. GOODLATTE. Do you have any comparable information from the private sector or other Government agencies, as to what they spend per employee?
Ms. REED. No, sir, I do not. Well, I can certainly--I think I can get that for other Government agencies. I have been in contact with the Gartner Group, who is trying to get that information across both corporate and Federal agencies now but, to my understanding, that information, that kind of analysis has not been available. Not all corporations are willing to share the information that they have on the scope of their investments.
[The Department responded as follows:]
I have contacted the Office of Management and Budget concerning per-employee information technology spending for other Federal agencies. I will provide this information to the subcommittee as quickly as possible.
Page 53 PREV PAGE TOP OF DOC
Mr. GOODLATTE. Following up on a question Mr. Stenholm asked you about the Executive Information Technology Review Board. Who are the members of this board?
Ms. REED. The members of the board, as chaired by the Deputy Secretary. I am the vice-chair. It includes the Under and Assistant Secretaries, the Chief Financial Officer, and the General Counsel.
Mr. GOODLATTE. Do the Under Secretaries attend, or do they appoint subordinates to attend?
Ms. REED. By the charter, it must be attended by either the principal, the Under Secretary or their Deputy Under Secretary or Deputy Assistant Secretary. The Deputy Secretary has been most insistent that that be honored and, to a large degree, it has. The exceptions are when by some chance both the Under Secretary and Deputy is on travel. We have occasionally had an agency administrator attend for them.
Mr. GOODLATTE. And how often has the board met?
Ms. REED. I believe we have met 3 or 4 times.
Mr. GOODLATTE. Mr. Willemssen, let me let you sum up a couple of things in response to these questions. What has been the major cause for the I.T. quagmire that currently exists at the Department?
Mr. WILLEMSSEN. We think the major cause has been a lack of managerial leadership and oversight over the I.T. program. And that is an historical perspective. As I said, we have been encouraged by recent actions of the Department to try to get on top of this, but we do not want to see the momentum stalled, and we fear that that could possibly be the case unless the pressure is continued on the Department.
Mr. GOODLATTE. In that regard, what can this committee do to get the Department on the right track?
Page 54 PREV PAGE TOP OF DOC Mr. WILLEMSSEN. I think it's especially important that you hold the Department to milestones for delivering many of the items that we talked about today. Much of the specificity isn't there yet at the Department on operating procedures and exactly how they are going to implement the Clinger-Cohen Act. Those deadlines should be provided to you, and then I think that the subcommittee has to hold the Department to those deadlines. To the extent that the subcommittee wants to have another forum or hearing such as this to check on the progress, I think that would be in the best interests of both the Department and the subcommittee.
Mr. GOODLATTE. And if they do not achieve those timelines, what do we do then?
Mr. WILLEMSSEN. I think then we've got to look for other ways to accomplish the goals that we've set out, whether they are legislative or managerial. I think then we have to do a tremendous reassessment of where we're at and how we're going to get to where we want to be.
Mr. GOODLATTE. Thank you. Does the gentlewoman from North Carolina have any additional questions?
Mrs. CLAYTON. Yes, I do.
Mr. GOODLATTE. You are recognized.
Mrs. CLAYTON. Thank you. Mr. Willemssen, in your testimony, you suggested that perhaps the Department should not put more into investment in their I.T. system before they really have some reengineering. Could we just examine that? I am assuming you are not suggesting they scrap everything to have reengineering, but that we find a way to integrate the input of that, given that where they have made the investment and the opportunity for expansion, wouldn't USDA be better off focusing its effort on acquiring an open generic technology infrastructure that is flexible enough to accommodate the business of today and tomorrow, rather than starting all over again?
Mr. WILLEMSSEN. I agree with you. What we are trying to emphasize there, though, is that we not have a repeat of the Department of Agriculture going out and acquiring information technology and then figuring out how best to use that to meet the needs of the customer. I think you've heard from the testimony today from USDA that they definitely do not plan to carry out business that way, and they do want to focus on business process redesign and an emphasis on the customer first, and then acquiring information technology to support those redesigned processes. That's something we totally agree with.
Page 55 PREV PAGE TOP OF DOC Mrs. CLAYTON. Would you agree with Ms. Reed's observation that she has sufficient authority to implement the plan that's required?
Mr. WILLEMSSEN. What we would like to see is Ms. Reed exercise as much authority as she thinks she needs. We haven't to-date, in all cases, seen that, so we are encouraged by some of the statements today that those kind of efforts are now going to take place. And if, down the road, we run into legal, bureaucratic, or other obstacles, we'll have to identify them and address them at that point in time. But I think until you have run up against those obstacles, you won't know whether they exist or not. And we are encouraged, therefore, by some of the statements today that Ms. Reed is going to try to do that.
Mrs. CLAYTON. Thank you. Mr. Chairman, my closing comment would simply be, as I stated, this committee has an opportunity in its oversight responsibility to identify problems that can be corrected, and to identify optional alternatives that would best serve for the Department's operation but, hopefully, we have begun that process and that as a result of this hearing, we will hear from the Department that they are moving in a more concise and integrated way, looking at their functions and their mission, and they will get back to us at an appropriate time with a revised strategy plan that has timetables and missions integrated with that. Thank you for holding the hearing.
Mr. GOODLATTE. I thank the gentlewoman for her comment and for her participation, and I recognize the gentleman from South Dakota.
Mr. THUNE. No further questions, Mr. Chairman. Thank you.
Mr. GOODLATTE. I thank you. Ms. Reed, there have been numerous requests for information, or questions that you couldn't quite answer without access to information. We understand that. You've got to consult that computer system, and I hope it works, and I hope you will submit all that information to us. There will probably also be other questions that we may submit to you in writing and, Mrs. Clayton, if you have any such, by all means give them to us and we will include that. And if you would respond to us, or all of the requests for additional information, directly to us, we'll make sure that all of the subcommittee members have that.
Page 56 PREV PAGE TOP OF DOC I must say that I am astonished at the enormity of the waste reported in the USDA's I.T. budget, nearly $2 billion over the last 7 years, according to my calculations. And let me say to the Department that time is up, the clock ran out, the horn sounded, on excuses and promises and happy talk with regard to information technology. I expect and demand accountability for the enormous waste and mismanagement of public resources.
I am not convinced that the USDA is moving with all due haste to properly manage itself in this arena so that the Department can effectively serve our farmers and ranchers and, equally importantly, our taxpayers.
I think Secretary Glickman has made a wise choice in his appointment of Anne Reed as CIO. I look forward to working with her, to even introduce legislation, if necessary, to ensure proper management procedures at the Department.
The Chair would seek unanimous consent to allow the record of today's hearing to remain open for 10 days to receive additional material and supplementary written responses from witnesses to any question posed by a member of the panel. Without objection, it is so ordered, and this hearing of the Department Operations, Nutrition, and Foreign Agriculture Subcommittee is adjourned.
[Whereupon, at 11:45 a.m., the subcommittee was adjourned, subject to the call of the Chair.]
[Material submitted for inclusion in the record follows:]
STATEMENT BY ANNE F. THOMSON REED, ACTING CHIEF INFORMATION OFFICER
Mr. Chairman, members of the committee, it is a privilege to appear before this subcommittee to provide you with a summary of our actions to reshape how the Department of Agriculture manages its information technology. I have with me Steve Dewhurst, the Department's Budget Director. In the interest of time and with the Committee's concurrence, I will give you an overview and submit a more detailed report for the record giving specifics on our major information technology programs and activities.
Page 57 PREV PAGE TOP OF DOCProviding information technology to support our diverse business objectives and clientele is a major challenge. Although we do a good job of meeting our mission objectives, we need to look for new approaches in our business processes and do a better job of coordinating and deploying appropriate technology to meet those business needs.
Historically, our decentralized approach to program delivery, technology, and other support functions has been both our greatest strength and our greatest weakness. It has been our strength in terms of placing a maximum amount of decision making closest to our customers and involving our customers in those decisions. It has been our greatest weakness because, although each agency has optimized technology and support functions within their agency, we have not optimized the use of information technology across agency lines or looked for options to centralize some Departmentwide I.T. functions.
Information Technology (I.T.) management problems at USDA have been long standing and well documented by in-house reviews and studies and reviews by oversight Agencies such as the General Accounting Office. While I can argue with some of the details of these reviews, the fact is that they have identified many serious problems, and we must make significant changes in the way we manage this area in the Department. The Secretary and I are determined to make these changes, some of which may cause significant culture shock within the Department. The Secretary has empowered me to get this job done, and he will hold me accountable for getting it done.
I intend to work closely with the Congress as we sort through the options for moving forward. I believe that most of what we need to do will not require new legislation, only a strong commitment to strengthen I.T. management at the Department level. I have that commitment from the Secretary and intend to aggressively pursue this objective. I want to give you an overview of where we are on these issues now and will continue to update you on this as we develop our complete plans to strengthen this area.
Page 58 PREV PAGE TOP OF DOCUSDA is a complex institution. The Department has been at the forefront of some of America's greatest social innovations that have occurred over the past 135 years. We deliver a diverse portfolio of over 200 Federal programs throughout the Nation and the World. The Department delivers about $80 billion in programs a year at a cost in Federal outlays of about $60 billion. The Department employs over 110,000 employees. I repeat all of this to illustrate that because of this diversity in programs and our size, the information technology systems must support multiple business needs.
We estimate that we will spend about $1.2 billion in information resources management (IRM) related activities in FY 1998. This represents about 1.5 percent of our total USDA budget. About 83 percent is spent in five areas. About 27 percent of our total IRM budget is used by the Food and Consumer Service, the largest IRM user in the Department, to support Food Stamp and WIC programs in the States.
The second largest component is the Forest Service, which accounts for about 23 percent of the spending. With 37,000 employees, who manage 1.2 million acres of land, the Forest Service is the largest USDA organization. The third and fourth largest IRM expenditures are for, respectively, the Farm Service Agency and the Natural Resources Conservation Service. The fifth area is the Rural Development area which has a large investment in its new centralized system to improve the management of the housing programs and the $34 billion loan portfolio we have for housing programs.
Another significant IRM expenditure is for the National Finance Center (NFC). The NFC provides payroll, personnel and accounting work for USDA, the Department's of Treasury and Commerce, as well as a variety of other Federal agencies and the Congress. In fact our non-USDA clients contribute about $45 million to the operation in addition to the $55 million financed by USDA. The NFC also is responsible for the Thrift Savings Plan for the entire government, which costs about $35 million.
Page 59 PREV PAGE TOP OF DOCThe other way to look at the Department's IRM expenditure is from the perspective of what is purchased with the money. Approximately 25 percent of the $1.2 billion budgeted is provided to the States by the Food and Consumer Service. About 55 percent supports ongoing efforts, with half of that going to support 6,300 IRM personnel and the remainder for ''operations'' costs, including our communications costs. This leaves just under 20 percent to purchase computer hardware and software. Of this, about $175 million is for capital purchases of hardware and software. Much of this hardware and software is purchased for new uses, but some replaces existing equipment.
The Department employs about 6,300 people whose primary duties are related to information technology (I.T.). About 60 percent of this staff is concentrated in six areas. Our largest IRM employer is the National Finance Center in New Orleans, with approximately 1,600 staff. About 175 staff are employed at the National Information Technology Center which is located in Kansas City and Fort Collins, Colorado. These two Centers provide administrative and program support to USDA and other Federal organizations. The Rural Development area has about 260 staff years devoted to I.T., including about 170 at the St. Louis Finance Office, providing support to the rural loan programs. The Farm Service Agency has over 600 I.T. staff at its Kansas City management office, in St. Louis, and at headquarters in Washington. These staff develop and maintain the information technology that supports the farm price support, production and credit programs. Other organizations have I.T. staff at headquarters and in the field. One of the largest, the Forest Service, has over 1,100 I.T. staff, primarily in the regions and the National Forests.
USDA Information Management
The Secretary and I are committed to doing business differently and have begun to put into place a number of management improvements and modernization initiatives that will serve us well for the future. I want to highlight some of those for you and I think you will agree that we have come a long way in the past year or so.
New IRM Decision-Making Structure
Page 60 PREV PAGE TOP OF DOCIn 1996, the Secretary established an Office of the Chief Information Officer for USDA and appointed me as Acting Chief Information Officer (CIO). This new position will significantly strengthen the Departmental focus on IRM issues and provide better linkage to the program delivery mission areas. My office has the authority to implement measures to ensure that technology investments are business driven, economical and effective; to coordinate inter-agency IRM projects; and to implement standards to promote information exchange and technical interoperability.
We are utilizing two new boards to assure information technology decisions are controlled at the highest policy level in the Department, are prioritized according to business needs and represent the best technical solutions we can afford.
The Executive Information Technology Investment Review Board (EITIRB), which includes senior subcabinet program officials, was established late last year. Deputy Secretary Rominger chairs this Board and I serve as the vice-chair. The primary purpose of this Board is to ensure that our I.T. investments deliver substantial business benefits and provide a return on the investment for the taxpayer. With the staff support of my office, the Board will not only select the new investment options, but will also monitor and evaluate all technology investments to ensure that they deliver as promised. As required by the Clinger-Cohen Act of 1996, we are establishing a new capital planning and investment control process to establish a systematic approach to this process.
An IRM Council Board, made up of the Senior IRM managers from each mission area, was established to provide technical advice and support to the Office of the CIO, promote technical information exchange and provide technical advice to the Executive Investment Board.
We believe that these changes in our decision-making structure are key components in moving away from ''stove pipe'' solutions and systems and moving towards effective, affordable, and interoperable Departmentwide solutions.
Page 61 PREV PAGE TOP OF DOCEstablishing an Information Systems Technology Architecture
We have also been working to develop an information technology architecture. This architecture provides a framework for building the infrastructure needed to support day-to-day activities and guide the use of technology to support mission delivery. At this point, it is a high level, baseline document which establishes an umbrella beneath which we now need to add more specificity to the three parts---the business/data architecture, the technical standards, and the telecommunications architecture.
The business/data architecture will step down from the strategic missions and objectives to identify the core business processes and information associated with filling those needs. The CIO and the CFO staff are working to ensure that the business/data architecture supports the goals and objectives of the mission area 5-year strategic plans, as well as the annual performance plans.
Part II of the architecture is the technical standards portion. These technical standards will act as the ''building codes'' and ''oning ordinances'', essential for new information system construction arising from business changes and the need to renovate existing USDA processes.
The third component of the architecture is the telecommunications architecture. It establishes a high level USDA telecommunications environment that will be optimized for maximum benefit and cost for the Department as a whole. With this telecommunications architecture as a guide, the existing Departmental and agency networks will evolve to become the USDA Enterprise Network, a completely integrated and efficient telecommunications utility.
Altogether, the decision-making changes, the architecture development, and other improvements we are pursuing will significantly improve the efficiency and effectiveness of our information resources activities in USDA. It will take time to fully and effectively implement the changes we are making. Meanwhile, our old legacy systems are wearing out, maintenance costs are high, programs are being changed, personnel reduced, and customers continue to require service. We will need to make some investments to continue to provide services even as the modernization moves forward. However, I can assure you that each one of these investments will be looked at closely and only be approved if they take us toward where we want to go in the future, are mission critical, or present such a high level of savings or efficiencies that it would be imprudent not to pursue them.
Page 62 PREV PAGE TOP OF DOCManagement Issues
Our management actions over the past few months are proof of our resolve to make changes in the way we are managing this business. The moratorium that the Deputy Secretary put in place last November on new technology acquisitions has not only constrained spending while we bring the architecture development together, it has also brought a higher level of focus on technology issues at the Agency Head and Subcabinet levels. The moratorium will continue until new discipline is imposed.
Other key actions we have taken include the suspension of installation of the modernized voice and data communications systems for the field service agencies, except for those needed to support the Rural Development DLOS initiative. Also, we have strengthened Departmental oversight capabilities for Service Center activities, and initiated an aggressive independent verification and validation process utilizing outside expertise to review key USDA projects and initiatives. Those management actions alone, are major milestones in the evolution of the Department from the old stove pipe, decentralized approach of the past.
A critical element in improving our business and information technology management in USDA is knowing where our programs are going in the future, what business processes are needed to support them, what technology will be available that can be applied to that business, and how we are going to provide it.
Ideally, the legislative and programmatic changes would be stable for at least five years, since it takes about that long to effectively change organizational structure, business processes, and technology in a Department of our size and diversity. Unfortunately, given the pace of change in recent years, we have not had that luxury. In the past 3 years, we have seen dramatic change resulting from reorganization, streamlining, the 1996 farm bill, welfare reform, information technology legislation, and budget changes. In fact, as you know, new information technology legislation is being considered. However, the Secretary is committed to putting into place the structure, authority, and accountability necessary to establish modern information systems which can support the accelerating pace of change. I look forward to working with this committee to achieve this goal.
Page 63 PREV PAGE TOP OF DOCSTATEMENT OF JOEL WILLEMSSEN, GENERAL ACCOUNTING OFFICE
Mr. Chairman and members of the subcommittee: We are pleased to be here today to assist the subcommittee in its oversight of the Department of Agriculture's planning and management of its information technology (I.T.) resources; spending for I.T. resources currently totals over $1 billion annually. As requested, this morning I will discuss the need for USDA to address its long-standing difficulties in managing its substantial investments in information technology, and provide specific examples taken from our reports of USDA's inadequate management of information technology investments that resulted in millions of taxpayer dollars being wasted. In doing so, I will also provide a perspective on what we believe to be a major cause of these problems and discuss recommendations we have made to address these problems. I will then briefly discuss recent legislation that provides a framework for making sound I.T. investments in the future, which was based, in part, on practices we identified that were being followed by leading organizations that have successfully used technology to dramatically improve performance and meet strategic goals. I will also touch briefly on the Department's current moratorium on information technology acquisitions.
The influence of USDA on millions of Americans makes it essential that the Department plan and manage its information technology wisely. USDA's size and complexity, however, make this far from simple. The fourth largest Federal agency, USDA employs over 100,000 individuals in 30 separate component agencies having multiple and sometimes disparate missions. Its responsibilities range from forests and timber to food assistance for the needy and the safety of meat and poultry products for human consumption. In fiscal year 1997 alone, USDA outlays will total about $57 billion. Over the past 10 years, USDA has reported spending about $8 billion on I.T. resources. During this time, as depicted below, USDA has seen its annual I.T. expenditures nearly double, from about $560 million to over $1 billion.
Page 64 PREV PAGE TOP OF DOCTo put this figure in perspective, this $1 billion expenditure equates to spending over $2.7 million every day of the year. Besides purchases of computer hardware, software, and supplies, USDA spends a significant amount annually for services, especially those to support its information technology purchases. These include such items as contractor maintenance on systems or development of computer applications. Another major portion of USDA's I.T. expenditures goes toward personnel; this outlay makes up about 30 percent of the total information technology budget. In fiscal year 1996, USDA reported having about 6,200 full-time-equivalent employees in the I.T. resource area.
Another large portion of USDA's information technology expenditures covers intra-governmental payments, which mostly comprises payments to states for computer systems to administer the food stamp program. USDA's reported fiscal year 1996 spending for major categories is shown below in figure 2.
For fiscal year 1997, USDA plans to increase its I.T. expenditures to about $1.1 billion, and has requested about $1.2 billion for fiscal year 1998.
USDA Does Not Effectively Plan or Manage Its Substantial Investments in Information Technology
Although USDA has reported spending nearly $8 billion on information technology resources over the past 10 years, it has not effectively planned or managed these I.T. investments and, as a result, has wasted millions of dollars. Mr. Chairman, I would now like to highlight a number of specific examples taken from our reports issued during this period, in which we found that USDA had not effectively planned major computer-modernization activities or managed I.T. resources.
In June 1990 we reported that the Forest Service was not ready to procure a $1.2-billion geographic information system because alternatives for integrating this nationwide system into its existing operations had not been adequately analyzed, and system performance needs had not been adequately defined. We concluded an unnecessary risk existed that the proposed system would not be effective and cost-beneficial in meeting the agency's mission needs. The Forest Service took actions to address our concerns and agreed to undertake a pilot program to reduce risk, which it completed last fall. The Forest Service is now preparing to move forward on this procurement.
Page 65 PREV PAGE TOP OF DOCLater, in September 1990, we reported that ineffective project management and oversight contributed to cost growth, schedule delays, and user needs' not being met for USDA's grain and processed commodity inventory systems. Cost estimates grew to almost 9 times the original estimates, from $7 million to $62 million; one system was installed 2 years later than planned, while the other was installed more than 6 years behind schedule.
Then, in October 1991 we reported that the Farmers Home Administration faced unacceptable risks by proceeding with a $520-million project to modernize automated systems for making and collecting loans because project plans were not based on a strategic business plan that articulated how the agency would operate in the future, such as handling the impact of expected changes to loan management operations USDA canceled this procurement after issuance of our report.
Similarly, we testified in June 1992 that restructuring the Department would affect the farm service agencies' automation plans, which included four USDA agencies planning separate information technology modernization projects; together, they planned to spend about $2 billion between 1993 and 1997 on separate I.T. acquisitions.Department of Agriculture: Restructuring Will Impact Farm Service Agencies' Automation Plans and Programs (GAO/T-IMTEC-92-21, June 3, 1992).
At that time, we testified that such investments were unwise given the likelihood of some changes to the USDA field structure and new ways of doing business. The Senate Committee on Agriculture, Nutrition and Forestry agreed, and at its urging, the Department postponed these acquisitions and later established a consolidated, multiagency program. USDA allowed the Federal Crop Insurance Corporation's (FCIC) $62 million I.T. modernization effort to continue on the basis that it was needed to ensure continued delivery of crop insurance to farmers.
We reported in March 1993, however, that FCIC could not demonstrate that its nationwide project was required to meet immediate needs, and that it had not even identified what those needs were.Crop Insurance Program: Nationwide Computer Acquisition Is Inappropriate at This Time (GAO/IMTEC-93-20, Mar. 8, 1993).
Page 66 PREV PAGE TOP OF DOC Uncertainties about FCIC's future, including the restructuring of USDA and reforms in the crop insurance program, created formidable risks for FCIC's planned nationwide computer acquisition project. We therefore recommended that FCIC cancel its nationwide acquisition, which it did, and pursue instead lower risk options to meeting immediate needs once identified. We also recommended that FCIC evaluate the possibility of incorporating its I.T. modernization into USDA's consolidated program, which was just getting underway, and came to be known as Info Share.
However, as you know Mr. Chairman, USDA experienced more than its share of problems with the Info Share program it began in April 1993. This program was the biggest, most costly, and most challenging modernization attempt in USDA's history; it promised to improve operations and delivery of services to customers of farm service and rural development agencies by reengineering business processes and developing integrated information systems. At the time, the Secretary of Agriculture announced that customer services would be improved through ''one-stop'' shopping for farm services.
As we reported in August 1994, the $2.6-billion Info Share program was basically being managed as a vehicle for acquiring new technology, rather than as a true opportunity for reengineering business processes to better serve farm service customers. The concept of one-stop shopping had not been clearly defined and USDA managers were not performing the key steps necessary to fundamentally improve the way these agencies do business. Therefore, we concluded that, unless USDA concentrates on reengineering business processes, the Department risked spending hundreds of millions of dollars to further automate its current way of doing business and not meeting future needs.
Following our report on Info Share, the General Services Administration (GSA) canceled USDA's procurement authority for this project, and the Office of Management and Budget (OMB) placed Info Share on its list of high-risk programs that it kept at the time. However, by that time, as reported by USDA's Office of Inspector General, over $100 million had been spent on the project during fiscal years 1993 and 1994. Although USDA took measures to restart the program by hiring a new program manager and setting up a program office in January 1995, the Inspector General reported 4 months later that a need for strengthened leadership and direction of Info Share at the most senior levels of the Department was clear. After millions more dollars were spent, USDA finally disbanded Info Share in December 1995 and moved the program's key objectives to the Department's service center implementation effort.
Page 67 PREV PAGE TOP OF DOCFor the substantial investment made in Info Share, USDA had little to show in the way of reengineered processes or integrated information systems. Moreover, despite agreeing with our recommendations to refocus Info Share to ensure that business processes were reengineered, USDA continued to request additional funds to acquire new computer systems, without determining how to best deliver services to its customers.
USDA has continued the objectives of Info Share under its service center implementation program; its goal is to restructure operations at 3,700 locations to create a network of about 2,500 ''one-stop'' centers. Unfortunately, even though USDA hopes to have all of these service centers fully operational by the end of this year, the Department has yet to articulate a clear vision of how services are to be delivered in these centers and exactly what ''one-stop'' service entails. While the names of the projects have changed, two facts have remained constant: (1) USDA still has not reengineered business processes or established integrated information systems, and (2) it continues to spend additional millions of dollars on I.T..
The need to streamline and consolidate systems also applies to the Department's financial information. As we reported in September 1995, many of USDA's financial management systems problems would remain unresolved until the Department's systems were brought into compliance with USDA's financial standards. Further, absent from the Department's Financial Information Systems Vision and Strategy was any mention of eliminating or consolidating over 100 separate USDA financial management systems that perform overlapping functions, or of reengineering its financial management processes. Most of these systems are managed by USDA's agencies and its National Finance Center; in fiscal year 1994, USDA spent about $187 million to operate and maintain these over100 separate systems. To our knowledge, USDA still has not implemented our recommendations that it eliminate or consolidate redundant financial management systems across agencies.
Ineffective management of the Department's $100-million annual telecommunications investment has also resulted in wasting millions of taxpayer dollars. As we reported in April 1995, USDA has hundreds of field office sites where multiple USDA agencies, located within the same building, obtain and use separate, and often redundant, telecommunications services. While USDA had identified opportunities to consolidate and optimize telecommunications resources for substantial savings, the Department had not acted on these opportunities and, as a result, at the time of our review, was wasting as much as $5 million to $10 million annually. We noted that USDA's Office of Information Resources Management, which has responsibility for managing the Department's telecommunications, had not effectively carried out its responsibility.
Page 68 PREV PAGE TOP OF DOCUnfortunately, Mr. Chairman, lax Departmentwide leadership and oversight of USDA's telecommunications investments have resulted in even further waste. In September 1995, we reported that USDA was wasting millions of dollars each year paying for unnecessary or unused telecommunications equipment and services because the Department had not cost-effectively managed its telecommunications resources.USDA Telecommunications: Better Management and Network Planning Could Save Millions (GAO/AIMD-95-203, Sept. 22, 1995) and USDA Telecommunications (GAO/AIMD-95-219R, Sept. 5, 1995).
For example, because of breakdowns in management controls, for several years prior to our audit, USDA was paying tens of thousands of dollars annually for leased telecommunications equipment, such as rotary telephones and outdated computer modems, that it no longer even had. In but one of the many cases we identified, a USDA agency had paid a total of about $84,000 over 8 years to lease 16 modems that agency staff told us were long outdated and likely disposed of years earlier. Another USDA agency continued to pay about $500 a month for telecommunications services for an office that had been closed for more than a year, and had paid as much as $6,200 for these services at the time we reported this.
Mr. Chairman, we are convinced that without our reports on these problems, USDA would have continued paying tens of thousands of dollars annually for telephone equipment and services that it no longer needed or could not even locate. Given these serious management weaknesses, we recommended that the Secretary report the Department's management of telecommunications as a material internal control weakness under the Federal Managers' Financial Integrity Act and take other corrective actions, including stopping payments for the unnecessary services and leased equipment.
Unfortunately, USDA problems managing telecommunications do not end there. In April 1996, after we uncovered hundreds of cases of telephone abuse and fraud at the Department, we also reported that USDA lacked adequate controls over the millions of dollars it spends each year on commercial telephone services.USDA Telecommunications: More Effort Needed to Address Telephone Abuse and Fraud (GAO/AIMD-96-59, Apr. 16, 1996).
Page 69 PREV PAGE TOP OF DOC Many of these cases involved inappropriate collect calls made from individuals in 18 correctional institutions, accepted and paid for by USDA, and then possibly transferred to other USDA long-distance lines.
We have made numerous recommendations in our reports to address and help USDA correct the problems it has encountered. However, the Department has not yet fully implemented several of our recommendations, especially those we made over the last 3 years on Info Share, telecommunications, and financial systems. While some actions are underway, we cannot at this time be sure they will fully address all our concerns. In the case of Info Share, for instance, USDA last fall initiated four reengineering efforts for the farm service agencies, but in doing so did not implement our 1994 recommendations to require top-level managers to be directly and personally involved and responsible for directing the activity, or that the Department designate a senior manager to be responsible for managing these efforts.
Perspective on a Major Cause of USDA'S Information Technology PROBLEMS
In light of these numerous examples, you can see Mr. Chairman, that USDA has had a history of I.T. problems dating back to the 1980's. While many factors have contributed to this, a major cause that often surfaced is a lack of strong information resources management (IRM) leadership, accountability, and oversight of the acquisition and use of Departmental I.T. investments. Let me quote from one of our reports:
''USDA needs to better manage its computer and information resources if it is to meet the demands of its users. Restructuring its ADP [automated data processing] organization under a senior official with strengthened authority is a must if USDA is to deal with the many information resources problems it
faces. . . . The existing ADP organization does not provide adequate planning, control, direction, and accountability. . . [and] it has no authority over agency in-house development efforts. . . . For several years problems have been identified in USDA's management and use of information resources. Yet, little has been done to solve these problems.''
Page 70 PREV PAGE TOP OF DOCThis was taken from our June 1981 report on USDA's management leadership over information resources. Unfortunately, many of these statements still apply. While the senior officials at USDA responsible for the Department's I.T. resources have changed over the past 16 years, recurring problems in planning and managing information technology have not, and these problems continue to plague the Department.
Our management review of USDA in 1989 also highlighted the need for strong leadership from top management to overcome serious, long-standing organizational weaknesses. Specifically, while USDA's Office of Information Resources Management had responsibility for Departmentwide planning and management of information technology, it lacked the authority necessary to overcome the problems caused by USDA's traditional approach to managing information resources: Its agencies are independent and their interests parochial in terms of managing these resources. In this 1989 report, we also noted that the budget remained a creature of the individual agencies' priorities and missions, where hundreds of appropriations accounts exist, limiting considerably the Secretary's flexibility.
In July 1991, continuing our series of management reviews at USDA, we noted once again that the agencies within USDA have always defined their own requirements and then planned and implemented systems, with little Departmental oversight or accountability.U.S. Department of Agriculture: Strengthening Management Systems To Support Secretarial Goals (GAO/RCED-91-49, July 31, 1991).
Because of this, we highlighted numerous examples of faulty information systems being developed that did not allow data sharing or provide managers with the information they needed to effectively manage their programs. To overcome these problems, we again recommended that USDA exercise stronger central leadership and oversight to ensure effective systems planning and provide for better accountability over agency expenditures for information technology.
Other oversight agencies have also reported on these problems. For example, the GSA's fiscal year 1994 Information Resources Procurement and Management Review of USDA highlighted the need for the Department to overcome many of the same barriers we have pointed out over the years. Specifically, GSA discussed the need for strong, sustained executive leadership in I.T. planning to overcome the Department's stovepipe approach and for managers at all levels to be accountable for prudent I.T. investing. Likewise, reports issued by USDA's Office of Inspector General, including one in March 1993, also discuss serious problems in planning major I.T. acquisitions because of ineffective and weak central oversight of these activities by the Department.Office of Information Resources Management Departmental Controls Over Major IRM Acquisitions (USDA/OIG Report 58001-1-FM, Mar. 31, 1993).
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Because of the lack of strong IRM leadership, accountability, and oversight, USDA agencies have continued to plan, acquire, and develop separate systems, independently, without considering opportunities to integrate systems and share data. Consequently, over time, the Department has invested hundreds of millions of dollars in hundreds of stovepipe systems--many poorly planned. These are systems that are not interoperable with other agency systems, and actually inhibit the use and sharing of information. In fact, data are often inaccessible and underutilized outside of, and even within, USDA's agencies for identifying problems, analyzing trends, or assessing crosscutting programmatic and policy issues. Even after the Congress passed the 1990 farm bill that specifically required USDA to integrate various databases that relate to agriculture program data, USDA did not do so, and its agencies continue to have separate databases that are not integrated and do not share information.
As a result of this stovepipe approach to planning and managing I.T., we see the Department as data-rich but information-poor. For example, in the fall of 1991, when the Ranking Minority Member of the Senate Agriculture Committee asked three questions on where staff reside under the current structure, how much of the taxpayer dollars are they spending, and what work they perform, the Department could not give accurate information in a timely fashion. Similarly, in 1993 when we requested basic information on major systems under development at USDA, the Department did not have the data readily available, and it took 2 months before USDA supplied the information, after making a special request to the agencies.Information Resources: USDA Lacks Data on Major Computer Systems (GAO/AIMD-94-31, Oct. 21, 1993).
This situation still exists, as we found when preparing for this testimony. Specifically, when we asked the Department for the total number of contracting officers at USDA, the headquarters office responsible for ensuring that these officers are certified did not know either the number of officers or who they were, noting that they delegated these responsibilities to USDA component agencies.However, in our February 1997 report on USDA's contracting activities we obtained information on contracting personnel at a number of the component agencies. See USDA Procurement: Information on Activities During Fiscal Year 1996 (GAO/RCED-97-61R, Feb. 18, 1997).
Page 72 PREV PAGE TOP OF DOCRecent Legislation Aims to Strengthen Leadership and Improve Investment Decision-Making
After a decade of poor information technology planning and program management by Federal agencies, as just described for USDA, the Congress enacted the Clinger-Cohen Act of 1996 which, in part, seeks to strengthen executive leadership in information management and institute sound capital investment decision-making to maximize the return on information systems investments. It is important to note that just as technology is most effective when it supports defined business needs and objectives, Clinger-Cohen will be more powerful if it can be integrated with the objectives of broader governmentwide management reform legislation that USDA is also required to implement.
One such reform is the Paperwork Reduction Act of 1995 (PRA), which emphasizes the need for an overall information resources management strategic planning framework, with I.T. decisions linked directly to mission needs and practices. Another reform is the Chief Financial Officers Act of 1990, which requires that sound financial management practices and systems essential for tracking program costs and expenditures be in place. Still another reform is the 1993 Government Performance and Results Act (GPRA), which focuses on defining mission goals and objectives, measuring and evaluating performance, and reporting results. Together, Clinger-Cohen and these other laws provide a powerful framework under which Federal agencies, such as USDA, have the best opportunity to improve the management and acquisition of information technology.
A USDA that works better and costs less in the 21st century must have efficient and effective information systems. We believe that, if properly and fully implemented, the requirements of Clinger-Cohen and PRA should help the Department make real change and improve the way it acquires I.T. and manages these investments. These acts emphasize
involving senior executives in information management decisions, establishing senior-level chief information officers (CIO), tightening controls over technology spending, redesigning inefficient work processes, and using performance measures to assess technology's contributions to achieving mission-related results.
Page 73 PREV PAGE TOP OF DOCAs we have long recognized in many of our past reports on USDA, executive leadership is critical for improving the management of technology, and both PRA and Clinger-Cohen make agency heads directly responsible for establishing goals for using information technology to improve the effectiveness of agency operations and services to the public, measuring the actual performance and contribution of technology in supporting agency programs, and including with their agencies' budget submissions to OMB a report on their progress in meeting operational improvement goals through technology.
USDA has begun taking steps toward meeting the Clinger-Cohen mandates. As I will discuss, however, much remains to be done by USDA to fully implement the act's various provisions. The Department still has not developed a project plan outlining critical tasks, resource needs, and specific time frames and milestones for full implementation; this will be an important step in guiding the Department's effort to implement the Clinger-Cohen provisions, as the actions that remain will be neither easy nor quick. They will require a significant amount of time and commitment by many at the Department, particularly USDA's most senior managers.
I would now like to briefly discuss the specific provisions of the Clinger-Cohen Act and the steps that USDA has taken to start meeting the provisions of the act; I will then provide our observations on the implementation challenges facing the Department.
Capital Planning and Investment Control
Under this section of the Clinger-Cohen Act, USDA is required to design and implement a process for maximizing the value and assessing and managing the risks of information technology acquisitions. This process is supposed to be integrated with the processes for making budgetary, financial, and program management decisions, and include criteria to be applied in considering whether to undertake a particular investment in information systems. Moreover, the process is to provide for (1) identifying information systems investments that would result in shared benefits or reduced costs for other government agencies, (2) identifying quantifiable measurements of benefits and risks of proposed investments, and (3) the means for senior management to obtain information on the progress of information systems investments.
Page 74 PREV PAGE TOP OF DOCWhile USDA has begun to act in this area, it is still designing the specific elements and criteria for its capital planning and investment control process. In light of this, and because no specific time frames or milestones yet exist, it is unclear at this time precisely how the Department's process will operate, or when the Department will be ready to fully implement it.
Part of USDA's overall capital planning and investment control process will include its Executive Information Technology Investment Review Board, which the Secretary authorized last July. It was given responsibility for selecting, monitoring, and evaluating Departmentwide technology investments; members include the Department's most senior program officials. The board first met this past January and has met several times since then, but has not yet adopted specific operating procedures, including how and to what extent it will be involved in evaluating and approving ongoing and planned I.T. programs.
This past February, we issued a comprehensive guide for agencies such as USDA to use in assessing how well they are selecting and managing their information technology resources.Assessing Risks and Returns: A Guide for Evaluating Federal Agencies' IT Investment Decision-making (GAO/AIMD-10.1.13, February 1997). This guide, based on best practices used by public and private organizations, can be instrumental in helping USDA identify specific areas for improving its investment process to maximize the returns on technology spending while better controlling systems development risks. Officials in USDA's office of the CIO told us that they are using GAO's guide along with other guidance in developing their capital planning and investment control process.
Performance-based and Results-based Management
Under this section of Clinger-Cohen, to implement performance and results-based management for information technology, USDA is required to establish goals for improving the efficiency and effectiveness of agency operations through the effective use of information technology, and to report to the Congress on its progress in achieving these goals. USDA is also required to revise mission-related and administrative processes before making significant investments in information technology, and to ensure that performance measures are prescribed for gauging how well the technology supports USDA programs. USDA is also in the early stages of addressing these requirements, and it is still unclear at this time how the Department will fully implement all of them. From our perspective, these requirements may be the most difficult and time-consuming to implement and will demand full commitment and involvement from senior managers for USDA's mission areas.
Page 75 PREV PAGE TOP OF DOCIn establishing the mission-based goals and performance measures for I.T. investments, USDA will need to make sure that these are aligned with the long-term strategic goals and performance measures it is currently developing under GPRA. In a February 1997 report to the House Agriculture Committee, we discussed the status of USDA's actions to meet the GPRA requirements and noted that it planned to consult with the Congress some time this spring after its draft Departmentwide strategic plan has been reviewed by OMB and the Secretary.USDA Management: Progress in Meeting GPRA's Requirements (GAO/RCED-97-65R, Feb. 26, 1997).
Revising mission-related processes can achieve dramatic changes in overall performance and customer satisfaction when the processes are fundamentally redesigned to achieve more effective and efficient program results. It is a formidable undertaking and entails difficult, strenuous work because it requires an organization's managers and employees to change how they think and work. Historically, however, USDA has not been successful in obtaining the necessary commitment and involvement from senior managers in revising mission-related processes. For example, as previously mentioned, despite the importance of senior management involvement to fundamentally improve the way the agencies do business, Departmental managers were not directly and personally involved and responsible under Info Share. Now, 2 1/2 years after our report, USDA is starting to move forward with its first projects to revise farm service agency processes; if done right, the Department can make dramatic changes and achieve significant cost savings in how it will operate in the 21st century as it establishes one-stop service centers.
Agency Chief Information Officer
Under this section, to help USDA carry out the new responsibilities discussed in the previous two sections, the Secretary of Agriculture is required to designate a chief information officer. The CIO is to be much more than a senior technology manager. As a top-level executive reporting directly to the agency head, the CIO is supposed to be responsible for achieving mission results through technology by working with senior managers on effective management to achieve the agency's strategic performance goals. Moreover, the CIO is to promote improvements in work processes and develop and implement an integrated, agencywide technology architecture. The CIO is also required to monitor and evaluate the performance of information technology programs, and advise the head of the agency whether to continue, modify, or terminate a program or project. Further, the CIO is responsible for strengthening the agency's knowledge, skills, and capabilities to effectively manage information resources.
Page 76 PREV PAGE TOP OF DOCUSDA has taken steps to begin implementing requirements in this area. In August 1996 the Secretary established a CIO position and designated an acting CIO, who reports to the Secretary. The CIO has been given responsibility for supervising and coordinating the design, acquisition, maintenance, use, and disposal of information technology by USDA agencies, and for monitoring the performance of USDA's information technology programs and activities. However, the Department still has not established specific time frames or milestones for developing policies and procedures describing how the CIO's office will carry out these responsibilities, or specified what the CIO's authorities are for carrying out the mandates of Clinger-Cohen and PRA.
It is to soon to tell whether USDA's CIO will be able to effectively implement the Clinger-Cohen and PRA requirements and direct how various USDA component agencies, which control their own I.T. budgets, will make I.T. investments and carry out their I.T. programs, as well as reengineer business processes before acquiring new technology. The leadership demonstrated by the CIO and the support this official receives from the Secretary will be critical for success. It will be equally important for the Secretary to hold the CIO accountable for the many improvements the Clinger-Cohen Act aims to deliver.
So far, the CIO's office has developed an initial draft version of a high-level information technology architecture. The acting CIO presented this initial version to the review board in February 1997, and the board is still considering it. USDA has still not yet established a specific time frame or milestones for completing its architecture.
In our view, in order to complete a sound and integrated architecture, substantial progress must first be seen in the performance and results-based management area. Without first revising mission-related processes, at least conceptually, USDA risks developing an information systems technology architecture that supports the Department's outdated processes rather than one consistent with any future approach.
Revising mission-related processes may alter the architecture components and severely affect information technology investment decisions. A case in point is the revision of a mission-related loan servicing process at USDA. After our October 1991 report, USDA canceled its $520-million Farmers Home Administration effort to modernize automated systems for its highly decentralized process for making and collecting single-family housing loans. Since then, with pressure from the Congress, USDA has developed and is implementing a new process for servicing these loans centrally, known as the Dedicated Loan Origination and Servicing System. By moving from a highly decentralized to a centralized system, USDA expects to reduce the number of offices necessary for carrying out this process by about two-thirds--from about 2,200 in 1991 to about 800. Revising the loan-servicing process significantly affected the Department's information technology investment decisions, since fewer and different computers and telecommunications equipment were needed for centralized servicing.
Page 77 PREV PAGE TOP OF DOCOnce USDA is ready to implement its architecture, another critical component will be establishing a systematic process for making necessary adjustments to the architecture to reflect internal and external changes. These changes may include elements such as the impact that the fiscal year 1998 budget will have on information technology investment decisions. This is especially true at USDA's Farm Service Agency, since the Department's fiscal year 1998 budget request points out that by the end of 1999, a maximum of 2,000 field office service centers will exist, compared with more than 2,500 today. Other changes will include those opportunities identified through an independent external examination of operational efficiencies and cost savings from further coordinating Farm Service Agency and Natural Resources Conservation Service activities that USDA expects to undertake later this fiscal year. These include alternative means of program delivery, such as centralizing servicing for Agriculture Transition Marketing Act payments. Completing the architecture and keeping it current is especially critical if it is to represent a sound and integrated tool for guiding USDA's investment decisions.
Full and effective implementation of this section of Clinger-Cohen also provides, among other elements, potential benefits from sharing with government entities beyond USDA. For example, USDA's initial version of its information architecture includes an illustration of candidate locations for telecommunications equipment and services based on the locations where major concentrations of USDA personnel work. At many of these locations, however, other Federal agencies, such as the Department of the Interior, already have equipment and services in place that could possibly be shared. If such opportunities to share resources exist and are ignored, the chance to achieve potentially significant savings will be missed.
Constraining Information Technology Spending While Implementing Clinger-Cohen
Finally, Mr. Chairman, a word about the Department's moratorium on significant information technology investments. With the passage of Clinger-Cohen and concerns expressed in Senate and House appropriations and authorization language, the Deputy Secretary last November established a moratorium on all significant information technology investments. This was done to give the Department time to assess its existing and planned I.T. investments and constrain I.T. spending until it develops a Departmentwide information architecture and implementation process. We applaud this action and view it as a responsible beginning toward reigning in what too frequently has been ill-advised information technology spending at USDA.
Page 78 PREV PAGE TOP OF DOCThe acting CIO implemented the moratorium to include I.T. acquisitions over $250,000 and any acquisition of telecommunications equipment regardless of cost, with certain exemptions. These exemptions included renewals of contracts for maintenance and support-services contracts for mission-critical hardware, software, and applications, including those for year2000 compliance.The year-2000 problem is rooted in the way dates are recorded and computed in many computer systems. For the past several decades, systems have typically used two digits to represent the year, such as ''97'' representing 1997, in order to conserve on electronic data storage and reduce operating costs. With this two-digit format, however, the year 2000 is indistinguishable from 1900, 2001 from 1901, and so on. As a result of this ambiguity, system or application programs that use dates to perform calculations, comparisons, or sorting may generate incorrect results when working with the years after 1999. Correcting the problem and achieving year-2000 compliance--defined as the ability of information systems to accurately process date data from, into, and between the twentieth and the twenty-first centuries, including leap year calculations--will not be easy. (USDA plans to spend about $190 million on support services in fiscal year 1997.) We were also told that the moratorium did not include funds that were obligated just prior to its enactment. This is significant, because among others, USDA obligated about $140 million in Commodity Credit Corporation funds at the end of fiscal year 1996, which included about $70 million for telecommunications for service centers.
Then there is the question of waivers. While operating under the moratorium, as of April 23, 1997, agencies had submitted 46 requests for waivers totaling about $82 million. The CIO's office had either fully, partially, or conditionally approved 34 of these waivers, totaling about $33 million, and allowed two others, worth nearly $44 million for maintenance and support services, to move ahead because they were considered to be exempt. For the remaining ten requests, only three--requests totaling $4,400 for telecommunications equipment--were denied; six of the others were still in process, and another was returned because it was incomplete.
Page 79 PREV PAGE TOP OF DOCAt this time, USDA's moratorium officially remains in effect. Initially, USDA planned to lift the moratorium this past February on the basis that it would have completed an information architecture. Since then, however, the Deputy Secretary has continued the moratorium on a month-to-month basis while the Department continues to work on refining the architecture and developing a new Departmental capital planning and investment control process for I.T. investments. While it is unclear when USDA expects to have this process fully established, the Department has been developing an interim, post-moratorium decision-making process for the agencies to follow if the moratorium is lifted before the more detailed and extensive Departmental capital planning and investment control process is established.
Further, on January 27 of this year, the acting CIO suspended telecommunications investments for the service center implementation program, with the exception of those sites implementing centralized rural housing loan servicing or having emergencies, until the Department can assess the impact of the fiscal year 1998 budget on the number of field offices USDA will have. We support this action, which also remains in effect, since it is designed to prevent USDA from acquiring telecommunications equipment for sites that may close.
At this time, USDA is still continuing to experience problems planning and managing I.T. investments. For example, in planning the purchase and installation of telecommunications equipment in the new service centers, USDA did not take appropriate steps to ensure that it met two of its major objectives--reducing telecommunications costs by consolidating lines and improving customer service by being able to transfer calls among agency staff at the service centers. Consequently, these major goals were not met when new telephone systems were initially installed. This past February, USDA began to take remedial action to address these problems by issuing procedures for centers to follow to reduce the number of unnecessary lines. USDA is still working out procedures for how staff will answer and transfer calls.
Page 80 PREV PAGE TOP OF DOCIn summary, Mr. Chairman, a USDA that works better and costs less in the 21st century must have efficient and effective information systems. Yet USDA has a long history of poorly planning and managing I.T. investments with the resulting loss of taxpayer dollars. Given USDA's track record, it would be both appropriate and necessary for the Department to demonstrate to the Congress that measurable progress has been made to effectively implement Clinger-Cohen and other legislative mandates, and strengthen Departmentwide leadership, accountability, and oversight of the acquisition and use of I.T. investments before millions more are spent on additional investments. Until and unless USDA can do so, the Congress may wish to consider reducing or limiting USDA's I.T. funding to only meeting critical information technology needs required to support ongoing operations. Otherwise, USDA risks continuing its legacy of wasting taxpayer dollars on I.T. investments that are poorly planned and managed, and being unable to operate effectively and effectively in the next century.
"The Official Committee record contains additional material here."