Selecting  projects involves identifying and analyzing projects’ risks and returns  before committing any significant funds to them and selecting those that  will best support the agency’s mission needs; overseeing projects involves  reviewing the progress of projects against expectations and taking  corrective action when these expectations are not being met. However, while all of the agencies had department- level IRBs, the board membership for two agencies did not include  business unit (i.e., mission) representation. Specifically, 12 of the 24 projects  identified by OMB as being poorly planned in 2007 (accounting for about  $4.9 billion) did not receive a selection review, and 13 of 28 poorly  performing projects in 2007 (amounting to about $4.4 billion) did not  receive an oversight review by the department-level IRB. Furthermore, 6 of  the 11 projects identified as being both poorly planned and poorly  performing, with nearly $3.7 billion in funding in the President’s fiscal year  2008 budget request, received neither a selection review nor an oversight  review. The President’s requested fiscal year 2008 funding for the 28  projects totaled approximately $4.7 billion. Agencies provided several reasons why the 13 projects did not receive  oversight reviews, including some which were not consistent with sound  management practices:    One Defense project’s funding was below the financial threshold required  for a review by the department-level IRB, consistent with the agency’s  guidance. About Half of the Projects That Were Both Poorly Planned and Poorly Performing Received Neither a Selection Review Nor an Oversight Review

Six of the 11 projects that were identified as being both poorly planned  and poorly performing in 2007 did not receive a selection or an oversight  review by the departmental-level IRB. Without consistent involvement of department-level IRBs in selecting and  overseeing projects that have been identified as poorly planned or poorly  performing, agencies incur the risk that these projects will not improve, which  could lead to potentially billions of federal taxpayer dollars being wasted. Conclusions

Department-level investment review boards’ involvement in selecting and  overseeing their agencies’ IT projects is critical to ensuring that these  projects meet mission needs and that federal funds are not wasted. To  their credit, the 24 major federal agencies have established guidance  calling for department-level boards to perform project selection and  oversight reviews. However, department-level boards for two agencies did  not include representation from their business units and therefore did not  have assurance that the board included all of the executives who are in the  best position to make the full range of decisions needed to enable the  agency to carry out its mission most effectively. Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine whether (1) federal  departments/agencies have guidance on the role of their department-level  investment review boards (IRB) in selecting and overseeing information  technology (IT) projects and (2) these boards are performing selection and  oversight reviews of poorly planned and performing projects.
Why GAO Did This Study

The federal government expects to spend about $71 billion for information technology (IT) projects for fiscal year 2009. Given the amount of money at stake, it is critical that these projects be planned and managed effectively to ensure that the public's resources are being invested wisely. This includes ensuring that they receive appropriate selection and oversight reviews. Selection involves identifying and analyzing projects' risks and returns and selecting those that will best support the agency's mission needs; oversight includes reviewing the progress of projects against expectations and taking corrective action when these expectations are not being met. GAO was asked to determine whether (1) federal departments and agencies have guidance on the role of their department-level investment review boards in selecting and overseeing IT projects and (2) these boards are performing reviews of poorly planned and poorly performing projects. In preparing this report, GAO reviewed the guidance of 24 major agencies and requested evidence of department-level board reviews for a sample of 41 projects that were identified as being poorly planned or poorly performing.

What GAO Found

The 24 major federal agencies have guidance calling for department-level investment review boards to select and oversee IT investments. However, while all of the agencies had department-level boards, the board membership for the Departments of Commerce and Labor did not include business unit (i.e., mission) representation as called for by IT investment management best practices. Without business unit representation on their department-level boards, these agencies will not have assurance that the boards include those executives who are in the best position to make the full range of investment decisions necessary for them to carry out their missions most effectively. About half of the projects GAO examined did not receive selection or oversight reviews. Specifically, 12 of the 24 projects GAO reviewed that were identified by OMB as being poorly planned (accounting for $4.9 billion in the President's fiscal year 2008 budget request or two-thirds of the funding represented by the 24 projects) did not receive a selection review, and 13 of 28 poorly performing projects GAO reviewed (amounting to about $4.4 billion or 93 percent of the funding represented by the 28 projects) did not receive an oversight review by a department-level board. Agencies provided several reasons for not performing department-level board reviews, including some which were not consistent with sound management practices. Furthermore, 6 of the 11 projects in the sample identified as being both poorly planned and poorly performing, with over $3.7 billion in funding in the President's fiscal year 2008 budget request, received neither a selection review nor an oversight review. Without consistent involvement of department-level review boards in selecting and overseeing projects that have been identified as poorly planned or poorly performing, agencies incur the risk that these projects will not improve, potentially leading to billions of federal taxpayer dollars being wasted.