While Treasury has established many of the capabilities needed to select,  control, and evaluate its IT investments, the department has significant  weaknesses that hamper its ability to effectively manage its investments. Specifically, the department has executed 19 of the 38 key practices that  the ITIM requires to build a foundation for IT investment management  (Stage 2), including practices needed to ensure that projects support  business needs and that a disciplined process exists for capturing  investment information. In addition, the department has executed 11 of the  27 key practices required to manage investments as a portfolio (Stage 3),  including documenting policies and procedures for conducting  postimplementation reviews. However, Treasury does not have an executive investment review board— a group of executives from IT and business units that is intended to be the  final decision-making authority—that is actively engaged in the investment  management process. In addition, the department  does not have any processes in place for managing its nonmajor  investments, although they represent about 70 percent of the total number  of investments. Until the department addresses these weaknesses, it will not have the  investment management structure needed to effectively assess and  manage the risks associated with its multibillion-dollar portfolio. Treasury Does Not Have a Comprehensive Plan to Guide Its Improvement Efforts

We have previously reported that to effectively implement IT investments  management processes, organizations need to be guided by a plan that (1)  is based on an assessment of strengths and weaknesses; (2) specifies  measurable goals, objectives, and milestones; (3) specifies needed  resources; (4) assigns clear responsibility and accountability for  accomplishing tasks; and (5) is approved by senior-level management. Such a plan is instrumental in helping agencies coordinate and guide  improvement efforts. Treasury has initiated efforts to improve its investment management  process. Until Treasury develops this plan, the  department risks not being able to put in place an effective management  process that will provide appropriate executive-level oversight for  minimizing risks and maximizing returns. (2) Develop and implement policies and procedures to manage nonmajor  investments. Appendix I: Objectives, Scope, and Methodology

The objectives of our review were to (1) assess the Department of the  Treasury’s capabilities for managing its IT investments, (2) determine any  plans Treasury might have for improving those capabilities, and (3)  evaluate the CIO’s role in managing the department’s IT investments.
Why GAO Did This Study

The Department of the Treasury relies extensively on information technology (IT) to carry out its mission. For fiscal year 2007, Treasury requested about $2.8 billion--the third largest planned IT expenditure among civilian agencies. GAO's objectives included (1) assessing Treasury's capabilities for managing its IT investments and (2) determining any plans the agency has for improving its capabilities. GAO used its IT investment management framework (ITIM) and associated methodology to address these objectives, focusing on the framework's stages related to the investment management provisions of the Clinger-Cohen Act of 1996.

What GAO Found

While Treasury has established many of the capabilities needed to select, control, and evaluate its IT investments, the department has significant weaknesses that hamper its ability to effectively manage its investments. Specifically, the department has executed 19 of the 38 key practices that the ITIM requires to build a foundation for IT investment management (Stage 2), including practices needed to ensure that projects support business needs and that a disciplined process exists for capturing investment information. In addition, the department has executed 11 of the 27 key practices required to manage investments as a portfolio (Stage 3), including documenting policies and procedures for conducting postimplementation reviews. However, Treasury does not have an executive investment review board--a group of executives from IT and business units that is intended to be the final decision-making authority--that is actively engaged in the investment management process. In addition, the department does not have any policies and procedures for managing its nonmajor investments, although they represent almost 70 percent of the total number of investments. Until the department addresses these weaknesses, it will not have the investment management structure needed to effectively assess and manage the risks associated with its multibillion-dollar portfolio. To its credit, Treasury has initiated efforts to improve its investment management process. For example, it has recently implemented a process for identifying major projects that should receive additional oversight. However, the department has not developed a comprehensive improvement plan that (1) is based on an assessment of strengths and weaknesses; (2) specifies measurable goals, objectives, and milestones; (3) specifies needed resources; (4) assigns clear responsibility and accountability for accomplishing tasks; and (5) is approved by senior-level management. GAO has previously reported that such a plan is instrumental in helping agencies coordinate and guide improvement efforts. Until Treasury develops this plan and the controls for implementing it, the department risks not being able to put in place an effective management process that will provide appropriate executive-level oversight for minimizing risks and maximizing returns.