HHS Needs To Improve Way It Manages IT Investments, GAO says

Nov 28, 2005 (12:11 PM EST)

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A grade of 63 is barely passing by most accounts, and one that the Department of Health and Human Services promises to improve.

According to the auditors at the Government Accountability Office, in a report issued Monday, the HHS has established 63% of the foundation practices that it needs to manage its IT investments individually when judged against GAO's framework for IT investment management, which measures the maturity of an organization's investment management processes. Even worse, GAO contends Health and Human Services has established only 30% of the practices needed to manage its IT investments as a portfolio.

It's a critical problem, considering the department plans to spend more than $5 billion on IT this fiscal year to help manage 300-plus programs.

The department, to its credit, has implemented processes to ensure that projects support business needs and meet users' requirements, established procedures to select investments, and created portfolio selection criteria, but weaknesses remain, GAO says in the 65-page report.

For instance, GAO says, the department's senior investment board doesn't regularly review component agencies' IT investments, leaving close to 90% of its discretionary investments without an appropriate level of executive oversight. The department also doesn't evaluate the performance of its portfolio on a continuing basis or conduct post-implementation reviews. And, it has no structured mechanism in place to assure that its agencies define and implement investment processes aligned with those of the department.

"Until HHS establishes the practices it needs to effectively manage its IT investments, executives cannot be assured that they are appropriately selecting, managing, and evaluating the mix of investments that will maximize returns to the organization, taking into account the appropriate level of risk," GAO IT management issues director David Powner writes in the report issued to Senate Finance Committee Chairman Charles Grassley, R.-Iowa.

Though the department has initiated efforts to improve its investment management practices, it hasn't coordinate these and other efforts that would be needed to address the weaknesses GAO identified in a comprehensive plan to define and prioritize improvements to the IT investment process, the Congressional auditing agency says.

"Without such a plan and procedures for implementing it, the department risks being unable to effectively establish mature investment management capabilities," Powner says. "As a result, executives may not be able to make informed and prudent investment decisions in managing HHS's multibillion-dollar IT budget."

In written comments on a draft of the GAO report, the department mostly concurred with its findings and recommendations, saying it would leverage the report as part of its continuing endeavor to improve its investment management processes.