	Background

To accomplish its mission, HUD administers community and housing  programs that affect millions of households each year. HUD’s Deputy Secretary is responsible for managing the department’s  daily operations, annual operating budget, and approximately 8,700  employees. Key Governance Practices Outlined in GAO’s IT Investment Management Framework

GAO assessed best practices to develop the IT investment management  framework to provide a method for evaluating and assessing how well an  agency is selecting and managing its IT resources. HUD’s IT Governance Activities Do Not Yet Fully Address Key Practices

Since 2011, the department has taken steps to build a foundation for IT  governance, including instituting investment review boards, establishing  elements of a process for selecting investments, and providing  investment oversight. Consistent with the IT investment management framework developed by  GAO and as described previously in this report, HUD’s Office of the CIO  chartered four investment boards in 2011 with defined authorities, roles  and responsibilities, and operations for managing and selecting the  department’s IT projects. However, the department has not ensured that its investment boards are  fully operating according to their designated authority and responsibility. Specifically, according to the department’s investment  review board charters, the Executive Investment Board was to establish  key criteria for these boards to use in identifying (1) which IT projects best  support HUD’s strategic goals and provide value to the department and  (2) which projects were underperforming and should be considered for  termination. However, because the Executive Investment Board has not  met or conducted any business, such criteria were not established. Moreover, HUD has not yet developed all of the policies that support its IT  management framework. However, 3 of the planned policies—for performance, privacy, and risk  management—have not yet been developed, and HUD has not set a time  frame for doing so. Elements of such a process include  key practices, such as those discussed in the IT investment management  framework and cost estimation guidance developed by GAO—practices  for identifying, evaluating, and prioritizing IT proposals for funding. The officials attributed weaknesses in the selection  process to, among other things, efforts to minimize the burden on those requesting funding, which  result in limiting requirements for submitting detailed information to  support project proposals;  lack of an established priority for developing life-cycle cost estimates  for projects (until recently); changes in senior leadership, departmental priorities, and  approaches; lack of departmental oversight of the decision-making process by  senior executives; and reliance on qualitative, judgmental data and inadequate consideration  of key quantitative measures, such as return on investment. Officials from the Office of the CIO attributed weaknesses in oversight to,  among other things, lack of a consistent, enterprise-wide way to collect  and compare actual cost, benefit, schedule, or risk to estimates. We have also reported that it  is important to have assurance that the data collected and reported by  agencies are complete and accurate. HUD’s reported cost savings and operational efficiencies were not  supported by data that were complete, accurate, and consistent. However, the agency’s reported cost savings  associated with deactivated systems were not complete. Additionally, the office  has partially implemented processes for selecting and overseeing  investments. Fully establish a well-defined process that incorporates key practices  for overseeing investments, including (1) monitoring actual project  performance against expected outcomes for project cost, schedule,  benefit, and risk; (2) establishing and documenting cost-, schedule-,  and performance-based thresholds for triggering remedial actions or  elevating project review to higher-level investment boards; and (3)  conducting post-implementation reviews to evaluate results of projects  after they are completed. Further, to establish an enterprise-wide view of cost savings and  operational efficiencies generated by investments and governance  processes, we recommend that the Secretary of Housing and Urban  Development direct the Deputy Secretary and Chief Information Officer to  place a higher priority on identifying governance-related cost savings and  efficiencies and establish and institutionalize a process for identifying and  tracking comprehensive, high-quality data on savings and efficiencies  resulting from IT investments and the IT governance process. Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine (1) to what extent the Department of  Housing and Urban Development (HUD) has implemented key  information technology (IT) governance practices, including effective cost  estimation, and (2) what, if any, cost savings or operational efficiencies  HUD has reported achieving as a result of its IT governance practices. This documentation included HUD’s  IT Governance Policy that called for the establishment of an IT  management framework and four investment review boards; the IT  Management Framework and Governance Concept of Operations that  identified key IT policies and processes to support IT governance and  investment decision making; and charters that established the roles,  responsibilities, authorities, and operations of the department’s  investment review boards.
Why GAO Did This Study

HUD relies on IT to deliver services and manage programs in support of its mission of strengthening communities and ensuring access to affordable housing. However, the department has experienced shortcomings in its IT management capability and limitations in the systems supporting its mission.
A Senate report accompanying HUD's fiscal year 2012 appropriation mandated GAO to evaluate, among other things, the department's institutionalization of IT governance. In response, GAO reported on HUD's IT project management in June 2013.
GAO's objectives for this second review were to determine (1) the extent to which HUD implemented key IT governance practices, including effective cost estimation, and (2) what, if any, cost savings or operational efficiencies HUD has reported achieving as a result of its IT governance practices. To accomplish this, GAO compared HUD's approach to IT governance with best practices and the department's policies and procedures. GAO also analyzed reported cost savings and operational efficiencies, along with any available supporting documentation.

What GAO Found

The Department of Housing and Urban Development (HUD) has partially established elements of key practices for effective information technology (IT) governance, as identified by GAO's IT investment management guide. However, several shortcomings remain:
Investment boards, policies, and procedures were not fully established: HUD chartered four review boards to manage the department's IT investments; however, the executive-level board, which is to be responsible for overall definition and implementation of the investment management process, has never met. Instead, the department's Deputy Secretary makes decisions about which investments to fund. The lack of an operational executive-level board has affected HUD's other active investment boards, which are operating without criteria the executive-level board was to have established for evaluating proposed investments. In addition, HUD has not yet developed all of the policies that it has identified as needed to support its IT management framework. Specifically, the department has not set a schedule for developing policies for IT investment performance, privacy, and risk management. Office of the Chief Information Officer (CIO) officials explained that operating without an executive-level board represents the preferred investment management approach of HUD's Secretary and Deputy Secretary.
Process for selecting investments lacks key elements: HUD has developed elements of a process for selecting investments based on defined criteria; however, it has not fully defined and implemented practices for identifying, evaluating, and prioritizing proposed IT projects for funding, as recommended by GAO's IT investment management guide. CIO officials acknowledged that they have not yet fully developed a standard and well-documented process and attributed weaknesses to a variety of factors, including changes in leadership, priorities, and approaches.
Process for overseeing investments has not been fully developed: The department has not consistently compared the performance of projects to pre-defined expectations, established thresholds to trigger remedial action for underperforming investments, or reviewed projects after implementation to compare actual investment results with decision makers' expectations. These weaknesses were attributed by CIO officials to, among other things, the lack of a consistent, enterprise-wide way to collect and compare actual data with estimates.
Until effective governance practices are institutionalized, there is risk that HUD's investments in IT may not reflect department-wide goals and priorities or effectively support the department's mission.
While HUD has reported governance-related cost savings and operational efficiencies, the data to support such reports were not always accurate, consistent, or substantiated. This is due, in part, to the lack of a department-wide approach, as called for in Office of Management and Budget guidance, to identify and collect cost-savings information. Thus, it is unclear to what extent HUD has realized savings or operational efficiencies from its IT governance.

What GAO Recommends

GAO recommends that HUD ensure that its investment review boards operate as intended and complete and update associated policies; fully establish processes including key elements for selecting and overseeing investments; and fully establish a process for identifying, collecting, and reporting data about cost savings and efficiencies. HUD agreed with GAO's recommendations.