Summary
In 2008, the Department of Treasury (Treasury) plans to spend approximately $3 billion on information technology (IT) investments--the third largest planned IT expenditure among civilian agencies. To more effectively manage such investments, in 2005 the Office of Management and Budget required agencies to use earned value management (EVM). EVM is a project management approach that, if implemented appropriately, provides objective reports of project status, produces early warning signs of impending schedule delays and cost overruns, and provides unbiased estimates of a program's total costs. GAO was asked to assess whether the department and its key component agencies (1) have the policies in place to effectively implement EVM and (2) are adequately using EVM techniques to manage critical system investments. GAO compared agency policies to best practices identified in the Cost Assessment Guide and reviewed the implementation of key EVM practices for several investments.
The Department of Treasury's EVM policy is not fully consistent with best practices. Specifically, of seven best practices that leading organizations address in their policies, Treasury's policy fully addresses three, partially addresses three, and does not address the training component. According to the Director for Capital Planning and Investment Control, the department is currently working on revising its policy and according to Deputy Assistant Secretary for Information Systems and Chief Information Officer expects to finalize it by October 2008. Until Treasury develops a comprehensive policy to guide its efforts, it will be difficult for the department to optimize the effectiveness of EVM as a management tool. The department and its bureaus are not fully implementing key EVM practices needed to effectively manage their critical system investments. Specifically, the six programs at Treasury that GAO reviewed were not consistently implementing practices needed for establishing a comprehensive EVM system, ensuring that data from the system are reliable, and using the data to help manage the program. For example, when executing work plans and recording actual costs, a key practice for ensuring that the data resulting from the EVM system are reliable, only two of the six investments reviewed incorporated government costs with contractor costs. These weaknesses exist in part because Treasury's policy is not comprehensive and because the department does not have a process for ensuring effective EVM implementation. Unless the department consistently implements fundamental EVM practices, it may not be able to effectively manage its critical programs.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
David A. Powner
Government Accountability Office: Information Technology
No phone on record
Recommendations for Executive Action
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to define a comprehensive EVM policy that specifies a methodology that standardizes EVM data collection and reporting compliant with the American National Standards Institute (ANSI) standard.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to define a comprehensive EVM policy that specifies a systematic approach to the development and documentation of work breakdown structures including the incorporation of standardized common elements.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to define a comprehensive EVM policy that specifies guidance on conducting surveillance reviews on the government's EVM system.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to define a comprehensive EVM policy that specifies training requirements for relevant personnel.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to implement a process for ensuring effective implementation of EVM throughout the department by establishing a comprehensive EVM system by, among other things, defining the scope of effort using a work breakdown structure that allows for traceability across EVM project management documents.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to implement a process for ensuring effective implementation of EVM throughout the department by establishing a comprehensive EVM system by, among other things, ensuring the development of validated performance measurement baselines that includes planned costs and schedules.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to implement a process for ensuring effective implementation of EVM throughout the department by ensuring that the data resulting from the EVM system are reliable, including executing the work plan and recording both government and contractor costs.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to implement a process for ensuring effective implementation of EVM throughout the department by ensuring that the program management team is using earned value data for decision-making by systematically using EVM performance metrics in making the ongoing monthly decisions required to effectively manage the investment.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To improve Treasury's ability to effectively implement EVM on its IT acquisition programs, the Secretary of Treasury should direct the Assistant Secretary for Management, in collaboration with the Chief Information Officer, to implement a process for ensuring effective implementation of EVM throughout the department by ensuring that the program management team is using earned value data for decision-making by properly documenting updates to the performance measurement baseline as changes to the cost and schedule occur.
Agency Affected: Department of the Treasury
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
