Summary

The Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system is intended to automate the filing, analysis, and dissemination of information submitted to the Securities and Exchange Commission (SEC) by entities trying to raise capital. Although EDGAR software development was to be essentially complete by late 1990 at a total cost of $51.5 million, the project is now three years behind schedule and is nearly $20 million over budget. The upshot is that SEC is still struggling today with requirements for a system that was conceived more than a decade ago. The absence of an effective way to analyze and prioritize EDGAR's system requirements has led to their uncontrolled growth. As of February 1992, the requirements had climbed from the original 350 to nearly 1,000 and could increase even more. The problem began when SEC accepted incomplete requirements documents from the contractor, who SEC asked to define user requirements and provide hardware and software to meet them. As development proceeded, SEC staff continually added or changed requirements. SEC top management did not intervene to deal with this growth, and the EDGAR steering committee never met after the contract was awarded. Although SEC has established a change control board to review and approve functional changes to EDGAR, the board lacks representation from key system users, calling into question the board's ability to resolve the user requirements issue.

GAO found that: (1) SEC efforts to develop the EDGAR system have been marked by significant cost overruns and schedule delays; (2) the developing contractor's description of the system's user requirements was incomplete; (3) SEC has no active top management mechanism for overseeing EDGAR, including controlling the growth of EDGAR system requirements; and (4) SEC is establishing a high-level committee to oversee EDGAR development.