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entitled 'Veterans Affairs: Continued Focus on Critical Success Factors 
Is Essential to Achieving Information Technology Realignment' which was 
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Report to Congressional Requesters: 

United States Government Accountability Office: 

GAO: 

June 2007: 

Veterans Affairs: 

Continued Focus on Critical Success Factors Is Essential to Achieving 
Information Technology Realignment: 

GAO-07-844: 

GAO Highlights: 

Highlights of GAO-07-844, a report to congressional requesters. 

Why GAO Did This Study: 

The Department of Veterans Affairs (VA) spends nearly $1 billion yearly 
to support its information technology (IT) needs; yet it has 
encountered persistent challenges in managing IT projects. In October 
2005, VA initiated a realignment to centralize its IT management 
program that it plans to complete by July 2008. GAO was requested to 
determine (1) whether the department’s realignment plan includes 
critical factors for successful implementation and (2) how the 
centralized management approach is to ensure that the chief information 
officer (CIO) is accountable for the department’s entire IT budget. To 
do so, GAO identified critical success factors, analyzed realignment 
and budget documents, and held discussions with VA officials. 

What GAO Found: 

VA’s plans for realigning the management of its IT program include 
elements of several factors that GAO identified as critical to the 
department’s implementation of a centralized structure; additional 
departmental actions could increase assurance that the realignment will 
be completed successfully (see table). Since undertaking the 
realignment, VA has concentrated its efforts on transferring 
approximately 6,000 staff to the CIO’s authority and on creating a new 
organizational structure. It has also taken certain actions to 
establish an IT governance plan, identify workforce management 
responsibilities, and increase communication about the realignment with 
staff. However, it has not yet created a knowledge and skills inventory 
to help determine proper roles for all employees in the new 
organization, established governance boards to manage resources, or 
dedicated an implementation team to manage change and track the 
progress of the realignment with performance metrics. As a result, the 
department risks jeopardizing the success of its efforts and may not 
realize the long-term benefits of the realignment. 

Table: Summary of VA's Actions Addressing Critical Success Factors: 

Critical success factor: Ensuring commitment from top leadership; 
Addressed: yes; 
Progress: Secretary approved the new IT organization structure and the 
transfer of employees. 

Critical success factor: Establishing a governance structure to manage 
resources; 
Addressed: partially; 
Progress: Secretary approved the IT governance plan but VA has not 
established IT governance boards or process descriptions for centrally 
managing IT. 

Critical success factor: Linking IT strategic plan to organization 
strategic plan; 
Addressed: no; 
Progress: VA has not yet updated its IT strategic plan to reflect the 
new organization but has established a date by which it intends to 
update the plan. 

Critical success factor: Using workforce strategic management to 
identify proper roles for all employees; 
Addressed: partially; 
Progress: VA has identified workforce management responsibilities but 
has not established a knowledge and skills inventory. 

Critical success factor: Communicating change to all stakeholders; 
Addressed: partially; 
Progress: VA has addressed staff concerns about the realignment through 
memorandums and conferences but has not fully staffed offices that will 
facilitate communication. 

Critical success factor: Dedicating an implementation team to manage 
change; 
Addressed: no; 
Progress: VA does not plan to establish a realignment implementation 
team. 

Source: GAO. 

[End of table] 

Within the new structure, the CIO is to have responsibility for 
ensuring that there are fiscal controls over the IT appropriation and 
for overseeing capital planning processes, budget execution, and 
financial management programs. According to the department, it plans to 
establish the CIO’s control by (1) designating organizations with 
specific roles and responsibilities for controlling the budget to 
report directly to the CIO; (2) implementing a governance structure 
that assigns budget oversight responsibilities to specific governance 
boards; and (3) developing and implementing IT portfolio management and 
financial management processes. While these measures show the potential 
for establishing control of the budget, VA has not yet fully 
implemented them or committed to a time frame for doing so. Thus, their 
effectiveness in ensuring the CIO’s accountability for the budget has 
not yet been established. 

What GAO Recommends: 

GAO is making several recommendations to VA, including that it dedicate 
an implementation team to manage change, expedite development of 
performance metrics, and establish a schedule for implementing 
management processes. Commenting on a draft of this report, VA 
generally concurred with GAO’s recommendations and described actions to 
address them. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-844]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Valerie C. Melvin at 
(202) 512-6304 or melvinv@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

VA Realignment Plans Include Critical Success Factors: 

Centralized Control of IT Budget Has Not Yet Been Clearly Established: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Veterans Affairs: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Summary of VA's Actions Addressing Critical Success Factors: 

Figures: 

Figure 1: Office of Information and Technology Organizational Chart: 

Figure 2: Timeline of Key Events for VA IT Realignment: 

Abbreviations: 

CIO: chief information officer: 

DAS: deputy assistant secretary: 

IT: information technology: 

IV&V: independent verification and validation: 

VA: Department of Veterans Affairs: 

VBA: Veterans Benefits Administration: 

VHA: Veterans Health Administration: 

United States Government Accountability Office: 
Washington, DC 20548: 

June 15, 2007: 

The Honorable Bob Filner: 
Chairman: 
The Honorable Steve Buyer: 
Ranking Member: 
Committee on Veterans' Affairs: 
House of Representatives: 

The use of information technology (IT) is crucial to helping the 
Department of Veterans Affairs (VA) effectively serve our nation's 
veterans--the department expends about $1 billion annually in support 
of its IT program. Nonetheless, VA has encountered persistent 
challenges in managing its IT projects. For example, in 2004, after 
spending almost $250 million over 5 years, the department experienced a 
highly publicized failure on an initiative to replace its financial 
management system. According to VA's Inspector General, this failure 
was the result of issues related to managing and monitoring the 
implementation of the system. We previously reported[Footnote 1] that a 
contributing factor to VA's challenges in managing projects was the 
department's decentralized management structure, in which its 
administrations[Footnote 2] and headquarters offices[Footnote 3] 
controlled a majority of the department's IT budget. 

To provide greater authority and accountability over its resources, in 
October 2005, the department initiated a realignment of its IT program. 
The goals were to centralize IT management under the department-level 
Chief Information Officer (CIO) and standardize operations and the 
development of systems across the department using new management 
processes based on industry best practices. Completion of the 
realignment is scheduled for July 2008. 

Given the importance of information technology for supporting VA's 
mission, you requested that we review the department's effort to 
realign its IT program. Specifically, our objectives were to determine 
(1) whether the department's realignment plan includes critical factors 
for successful implementation of a centralized management approach and 
(2) how the centralized management approach is to ensure that the CIO 
is accountable for the department's entire IT budget, including those 
funds that previously had been controlled by its administrations. 

In conducting this review, we obtained and analyzed relevant documents 
from VA, its realignment contractor, and the independent verification 
and validation contractor supporting the initiative. To assess the 
realignment, we identified critical success factors by reviewing 
relevant GAO products and researching industry best practices on 
organizational transformations. In addition, we conferred with a 
leading provider of research and analysis on the IT industry to obtain 
its input on the relevance and soundness of factors we identified for 
consideration in our assessment of the realignment effort. We then 
assessed whether the department's realignment documentation identified 
actions that reflected these factors and held periodic meetings with 
realignment team members, including contractors, to discuss whether and 
how these factors were being considered in the department's realignment 
plans and actions. To determine how the centralized management approach 
will ensure that the CIO is accountable for the entire IT budget, we 
reviewed documentation and plans that addressed budget oversight and 
execution under the new organization. To supplement our analysis, we 
met with officials in VA's Office of Information and Technology who are 
responsible for managing and executing the budget. We conducted our 
study from June 2006 through May 2007 in accordance with generally 
accepted government auditing standards. For more details on our scope 
and methodology, see appendix I. 

Results in Brief: 

VA's plans for realigning the management of its IT program include 
elements of several of the six factors we identified as critical for 
the department's implementation of a centralized management structure; 
additional departmental actions could increase assurance that the 
realignment will be completed successfully. Since undertaking the 
realignment in October 2005, VA has concentrated its efforts on 
transferring approximately 6,000 staff to the CIO's office and on 
creating a new centralized organizational structure. The department has 
also approved its IT governance plan to address how the Office of 
Information and Technology will manage resources; however, it has not 
yet established the boards that are to provide governance over the 
centralized structure. In addition, the department has identified the 
responsibilities for managing its workforce within its new structure 
but has not yet established a knowledge and skills inventory to help 
determine the proper roles for all employees in the new organization. 
Further, while VA has highlighted the importance of managing change in 
its realignment documentation, it has not dedicated an implementation 
team to manage the realignment and track its progress through the use 
of performance metrics. As a result, the department may jeopardize the 
success of its efforts and may not realize the long-term benefits of 
the realignment. 

Within the realigned structure, VA plans to ensure that the CIO will be 
accountable for the entire IT budget through three primary measures. 
First, the new centralized organization includes positions for two new 
deputy assistant secretaries who are to be responsible for the 
development of VA's annual IT budget and for tracking actual 
expenditures against the budget. Second, the new governance plan calls 
for the establishment of CIO-level governance boards, which are to 
oversee both the development and approval of the budget and monitor its 
execution. Third, implementation of two new IT management processes-- 
portfolio management and financial management--are to be used to 
establish control over the budget. While these measures show the 
potential for establishing the CIO's control of the budget, VA has 
neither fully implemented them nor committed to a time frame for doing 
so. Thus, their effectiveness in ensuring accountability for the budget 
has not yet been established. 

To address the critical success factors for implementing a centralized 
management structure and to ensure that the CIO has control of the IT 
budget, we are recommending that the Secretary of Veterans Affairs take 
actions in several areas, including dedicating an implementation team 
to manage change, expediting development of performance metrics to 
track the progress of the realignment, and establishing governance 
boards to provide oversight of the centralized structure. 

In providing written comments on a draft of this report, the Deputy 
Secretary of Veterans Affairs generally concurred with the report's 
findings and recommendations. (The department's comments are reproduced 
in app. II.) The comments described actions that begin to address our 
recommendations. Among its actions, the department proposed to manage 
its change to a centralized structure without a separate dedicated 
implementation team; however, we continue to believe that a dedicated 
implementation team is crucial to the department's ability to ensure 
that the realignment is successfully completed. Establishing such a 
team, as well as properly implementing our other recommendations, 
should help ensure that the IT realignment is successfully 
accomplished. 

Background: 

VA's mission is to promote the health, welfare, and dignity of all 
veterans in recognition of their service to the nation by ensuring they 
receive medical care, benefits, social support, and lasting memorials. 
Its three major components, the Veterans Benefits Administration (VBA), 
the Veterans Health Administration (VHA), and the National Cemetery 
Administration are primarily responsible for carrying out this mission. 
Over time, the use of information technology has become crucial to the 
department's effort to provide benefits and services, with its budget 
for IT exceeding $1 billion annually. 

In reporting on VA's IT management over the past several years, we have 
highlighted[Footnote 4] challenges the department has faced in 
achieving its "One VA" vision,[Footnote 5] including that information 
systems and services were highly decentralized and that its 
administrations controlled a majority of the IT budget. For example, 
according to an October 2005 memorandum from the former CIO to the 
Secretary of Veterans Affairs, the CIO had direct control over only 3 
percent of the department's IT budget and 6 percent of the department's 
IT personnel. In addition, in the department's fiscal year 2006 IT 
budget request, the Veterans Health Administration was identified to 
receive 88 percent of the requested funding, while the department was 
identified to receive only 4 percent. We have previously pointed out 
that, given the department's large IT funding and decentralized 
management structure, it was crucial for the department CIO to ensure 
that well-established and integrated processes for leading, managing, 
and controlling investments were followed throughout the department. 

Further, a contractor's assessment of VA's IT organizational alignment, 
issued in February 2005, noted the lack of control for how and when 
money is spent.[Footnote 6] The assessment found that project managers 
within the administrations had the ability to shift money to support 
individual projects. Also, according to the assessment, the focus of 
department-level management was only on reporting expenditures to the 
Office of Management and Budget and Congress, rather than on managing 
these expenditures within the department. 

Centralized IT Organization: 

In response to the challenges that we and others noted, the department 
officially began its effort to provide the CIO with greater authority 
over IT in October 2005. At that time, the Secretary issued an 
executive decision memorandum granting approval for the development of 
a new IT management structure for the department. According to VA, its 
goals in moving to centralized management are to provide the department 
better oversight over the standardization, compatibility, and 
interoperability of IT systems, as well as better overall fiscal 
discipline for the budget. 

By July 2006, the department's realignment contractor began work to 
assist with the realignment effort. The Secretary approved the 
department's new organization structure in February 2007. As noted in 
figure 1, the new structure includes the Assistant Secretary for 
Information and Technology (who serves as VA's CIO), the CIO's 
Principle Deputy Assistant Secretary (DAS), and five Deputy Assistant 
Secretaries. The five Deputy Assistant Secretaries are new senior 
leadership positions within the Office of Information and Technology 
created to assist the CIO in overseeing functions such as cyber 
security, IT portfolio management, systems development, and IT 
operations. 

Figure 1: Office of Information and Technology Organizational Chart: 

[See PDF for image] 

Source: VA. 

[End of figure] 

The department has also identified the offices that will report to the 
Deputy Assistant Secretaries. For example, the Asset Management Office 
will report to the Deputy Assistant Secretary for Information 
Technology Resource Management and is charged with providing staff with 
the software and hardware needed to do their jobs in the most cost- 
effective manner. 

In addition, the Secretary approved an IT governance plan in April 2007 
that is intended to enable the Office of Information and Technology to 
centralize its decision making. The plan describes the relationship 
between IT governance and departmental governance and the approach the 
department intends to take to enhance governance. Figure 2 shows a 
timeline of the realignment effort. 

Figure 2: Timeline of Key Events for VA IT Realignment: 

[See PDF for image] 

Source: GAO analysis of VA data. 

[End of figure] 

IT Management Processes: 

As the foundation for its realignment, VA plans to implement improved 
management processes in five key areas: enterprise management, business 
management, business application management, infrastructure, and 
service support. These processes[Footnote 7] were recommended by the 
department's realignment contractor and were based on industry best 
practices.[Footnote 8] According to the contractor, they are a key 
component of the realignment effort as the Office of Information and 
Technology moves to a process-based organization. By implementing these 
improved processes, VA expects to correct deficiencies it has 
encountered as a result of its decentralized management approach. 
Proper implementation should result in institutionalizing best 
management practices that will be sustained regardless of future 
leadership changes at the department. According to the contractor, with 
a system of defined processes, the Office of Information and Technology 
could quickly and accurately change the way IT supports the department. 
The contractor also noted that failure to include such processes in the 
realignment would introduce the risk that any progress in completing 
the realignment would be the result of trial and error. 

Successful Organization Transformations Are Based on Critical Success 
Factors: 

We have reported in the past[Footnote 9] on key factors that are needed 
in order to successfully transform an organization to be more results 
oriented, customer focused, and collaborative in nature. We reported 
that conducting large-scale change management initiatives are not 
simple endeavors and require the concentrated efforts of both 
leadership and employees to realize intended synergies and to 
accomplish new organizational goals. We also noted that there are a 
number of key practices that can serve as the basis for federal 
agencies to transform their cultures in response to governance 
challenges, such as those that an organization like VA might face when 
transforming to a centralized IT management structure. 

Among the significant factors we identified as critical for ensuring 
the success of VA's move to centralized management are: 

* ensuring commitment from top leadership, 

* establishing a governance structure to manage resources, 

* linking the IT strategic plan to the organization strategic plan, 

* using workforce strategic management to identify proper roles for all 
employees, 

* communicating change to all stakeholders, and: 

* dedicating an implementation team to manage change. 

VA Realignment Plans Include Critical Success Factors: 

VA's plans for realigning the management of its IT program include 
elements of several of the six factors that we identified as critical 
to the department's implementation of a centralized management 
structure (see table 1). Additional departmental actions could increase 
assurance that the realignment will be completed successfully. Without 
further action to fully address the factors we have identified, the 
risk to successfully centralizing the IT operations increases and the 
long-term benefits of the realignment may not be realized. 

Table 1: Summary of VA's Actions Addressing Critical Success Factors: 

Critical success factor: Ensuring commitment from top leadership; 
Addressed: yes; 
Progress: Secretary approved the new IT organization structure and the 
transfer of employees. 

Critical success factor: Establishing a governance structure to manage 
resources; 
Addressed: partially; 
Progress: Secretary approved the IT governance plan but VA has not 
established IT governance boards or process descriptions for centrally 
managing IT. 

Critical success factor: Linking IT strategic plan to organization 
strategic plan; 
Addressed: no; 
Progress: VA has not yet updated its IT strategic plan to reflect the 
new organization but has established a date by which it intends to 
update the plan. 

Critical success factor: Using workforce strategic management to 
identify proper roles for all employees; 
Addressed: partially; 
Progress: VA has identified workforce management responsibilities but 
has not established a knowledge and skills inventory. 

Critical success factor: Communicating change to all stakeholders; 
Addressed: partially; 
Progress: VA has addressed staff concerns about the realignment through 
memorandums and conferences but has not fully staffed offices that will 
facilitate communication. 

Critical success factor: Dedicating an implementation team to manage 
change; 
Addressed: no; 
Progress: VA does not plan to establish a realignment implementation 
team. 

Source: GAO. 

[End of table] 

Top Leadership Has Committed to the Realignment: 

It is important that an organization's top leadership supports and 
sustains major change initiatives through to completion. We have 
testified that top leadership involvement for making management 
improvements is critical to overcoming an organization's natural 
resistance to change, marshaling the resources needed to improve 
management, and building and maintaining organizationwide commitment to 
new ways of doing business.[Footnote 10] In addition, in reporting on 
the results of a forum to identify useful practices and lessons learned 
from major private-and public-sector organizational transformations, we 
noted that a key factor for successful organizational transformation 
was ensuring that top leadership drives the effort. 

The department has addressed this critical success factor through 
multiple actions. For example, in February 2007, the Secretary approved 
a new organization structure for centralized IT management. This 
structure was recommended by the realignment contractor following its 
review of the department's strategic business objectives, existing 
organization structure, and business processes and will serve as the 
framework for organizing the IT workforce under the centralized model. 
The structure assigns roles and responsibilities for IT management that 
VA expects will provide the Office of Information and Technology 
leadership the organizational stature and credibility to deal 
effectively with the administrations on IT matters. 

Another example of the Secretary's commitment to the realignment came 
through approval of the transfer of IT personnel to the Office of 
Information and Technology. Previously these personnel had been 
assigned to the administrations (e.g., VHA and VBA) and staff offices. 
The movement of these personnel should enable the CIO to improve 
control over IT development and operations in the department. 

Governance Structure to Manage Resources Not Yet Complete: 

A governance structure should ensure suitable stakeholder participation 
in the change initiative and reflect clearly defined stakeholder roles, 
responsibilities, and decision-making authority. When an organization 
is considering a major change initiative, it must ensure there is an 
established governance structure in place that provides for the 
effective use and oversight of resources during and after the change. 
According to VA's independent verification and validation contractor, 
two critical aspects of governance are (1) the inclusion of relevant 
stakeholders in the development of any new processes resulting from the 
initiative and (2) holding these parties accountable for execution of 
their responsibilities throughout the entire life cycle of the 
initiative. We have reported that organizations need to establish a 
governance structure that represents the entire stakeholder community 
and reflects clearly defined roles, responsibilities, and decision- 
making authority among the different levels of leadership.[Footnote 11] 

VA has partially addressed this critical success factor. In particular, 
while the governance plan for centralized management has been approved 
by the Secretary, the department has not yet established boards 
necessary to provide governance over the centralized structure and 
processes that are being developed. One of these boards--the Business 
Needs and Investment Board--is to provide investment control for the 
department's IT projects. According to VA officials, this board had not 
been established because some of the positions on the board had not yet 
been filled by permanent staff. 

In addition, the documentation that the department provided to us lacks 
detailed descriptions of how the new organization would support a 
completed, centralized IT governance process. Until the department 
establishes the elements needed to provide governance over its new IT 
structure and processes, the department cannot provide assurance that 
implementation of centralized management will be successful. 

IT Strategic Plan Is to Be Updated to Reflect New Organization: 

Our November 2002 report noted that organizations attempting a 
transformation needed to establish a coherent mission with integrated 
strategic goals and align the transformed organization to support those 
goals.[Footnote 12] For example, if an organization's strategic goal is 
top-quality medical care, IT strategic goals and the related 
transformation should be aligned to support that goal. 

An IT strategic plan should define, in cooperation with the relevant 
stakeholders, how IT will contribute to the enterprise's strategic 
objectives and related costs and risks. Industry documentation further 
notes that planning helps ensure that leadership understands the link 
between an organization's direction and how IT is aligned to meet the 
organization's goals. According to this documentation, an organization 
and its strategies should be integrated, clearly linking enterprise 
goals and IT goals, and recognize opportunities as well as current 
limitations. Further, integration of enterprise and goals should be 
broadly communicated throughout the organization to ensure that all 
users and stakeholders have a clear sense of what the organization is 
attempting to accomplish. 

However, VA has not addressed this critical success factor because it 
has not yet updated an IT strategic plan to reflect the goals of the 
new centralized structure. According to department officials, a draft 
version of an updated IT strategic plan is expected to be completed by 
June 30, 2007. Additionally, this plan is expected to support the 
department's strategic plan, which includes the goals of each of the 
department's administrations. Until the IT strategic plan is updated, 
the department will have neither a clear link between the department's 
strategic plan and the IT strategic plan nor assurance that the 
realignment will meet the goals in these plans. 

IT Workforce Aligned under CIO, but Staff Roles Have Yet to Be Defined: 

Workforce strategic management is necessary to ensure that an 
organization has the personnel resources capable of developing and 
delivering the services required of the organization. We have 
previously reported that success in major change initiatives is more 
likely when the best individuals are selected for each position based 
on their competencies rather than on where they work.[Footnote 13] That 
is, the new organization needs to avoid a situation where key personnel 
are selected on the basis of an understanding that each of the 
originating components gets its "turn" in the selection process. Such 
an approach not only undermines the quality of the selections but also 
raises questions about top leadership's ability and commitment to 
creating a new, integrated organization. 

We have also reported that it is important to establish an 
organizationwide knowledge and skills inventory to exchange knowledge 
among transforming organizations. Valuable information resides in the 
organizational components of transformations, and when these components 
are combined, these intellectual assets are extremely powerful and 
beneficial to employees and stakeholders. Knowledge and skills 
inventories not only capture the intellectual assets of the new 
organization but also signal to employees that their particular 
expertise is valued by the organization.[Footnote 14] In addition, 
industry documentation notes that workforce strategic management should 
be supported by well-defined personnel competencies, staffing of 
appropriate roles, training, and related factors necessary for high 
performance. 

The department has taken steps to partially address this critical 
success factor. As stated previously, the department has aligned almost 
all of its IT workforce under the CIO, having transferred approximately 
6,000 personnel from the administrations to the CIO's office. In 
addition, the department has identified the responsibilities for 
workforce strategic management within its new organizational structure-
-the Assistant Secretary for Information Technology has responsibility 
for workforce planning; the Deputy Assistant Secretary for Information 
Technology Resource Management has responsibility for ensuring the 
alignment of IT workforce skills with IT goals and objectives; and the 
Human Resources and Training Management Office has responsibility for 
developing and executing the human capital plan that supports the IT 
strategy. 

Nonetheless, key tasks remain to be completed in order for this 
critical factor to be fully addressed. For example, department 
officials indicate that VA is currently assessing the roles and 
responsibilities of the approximately 6,000 staff that have been 
permanently assigned to the Office of Information and Technology, but 
the department has not yet established a knowledge and skills inventory 
to determine what skills are available in order to decide the proper 
roles for all employees within the new organization. Also, the 
department has not yet developed policies and procedures to centrally 
manage the IT personnel, assessed personnel requirements, defined 
training requirements, or created career and training paths and 
requirements for the personnel. Until the department completes these 
important tasks, the success of the realignment is at risk because IT 
personnel may be situated in inappropriate positions within the 
department or they may lack adequate training to fulfill their job 
requirements. 

Certain Actions Have Been Taken to Address Communication: 

Any major change initiative should be supported by an effective 
communication strategy that shares expectations, reports on progress, 
and articulates the mission, service objectives, and policies and 
procedures. Our 2002 report on transformations noted that such 
communication should reach out to employees, customers, and 
stakeholders, engaging them in a two-way exchange.[Footnote 15] 
Furthermore, communication should provide for feedback about progress 
and concerns from stakeholders that will result in meaningful 
improvement in the transformation. 

The department has partially addressed this critical factor for 
successful implementation of its new structure. In particular, VA has 
taken actions to improve communication for the realignment by 
addressing staff concerns. During our site visits to two VA medical 
centers, communication of realignment goals and activities had been a 
concern for IT staff. The staff at these locations reported they had 
difficulty communicating directly with VA headquarters staff 
responsible for the realignment to obtain responses to issues. In 
addition, the department's realignment contractor reported in its 
survey of 167 VA facilities that 47 percent of VA facility staff wanted 
to see more information about the realignment and 23 percent of VA 
facility CIOs reported little opportunity for feedback from the VA 
field sites. 

In response to these concerns, the department distributed policy 
memoranda on changes resulting from the realignment and requested 
employee input on the realignment through a forum on the VA Web site. 
In addition, the department held conferences for Office of Information 
and Technology management and staff (which included sessions with the 
VA CIO) to communicate the goals and activities of the realignment. 
Nonetheless, further action could help ensure sustained communication 
throughout the realignment effort. Specifically, while the department 
has identified the Business Relationship Management Office as the 
single point of contact between the Office of Information and 
Technology and the administrations, it has not yet staffed this office. 
According to the department, it has concentrated its efforts to date on 
transferring staff to the CIO's office and on creating a new 
organizational structure. However, the performance of the Business 
Relationship Management Office in communicating the needs of the 
administrations to the Office of Information and Technology will be 
critical to the success of the realignment. Until this office is fully 
staffed, VA increases the risk that communication across the department 
will be inadequate, jeopardizing user and stakeholder support for the 
initiative. 

VA Has Not Dedicated an Implementation Team to Manage the Realignment: 

We reported in 2003 that a dedicated implementation team that is 
responsible for the day-to-day management of a major change initiative 
is critical to ensure that the project receives the focused, full-time 
attention needed to be sustained and successful.[Footnote 16] 
Specifically, the implementation team is important to ensuring that 
various change initiatives are implemented in a coherent and integrated 
way. The team must have the necessary authority and resources to set 
priorities, make timely decisions, and move quickly to implement the 
transformation. In addition, the implementation team can assist in 
tracking implementation goals for a change initiative and identifying 
performance shortfalls or schedule slippages. It is important for the 
team to use performance metrics to provide a succinct and concrete 
statement of expected performance versus actual performance. Because of 
its close involvement with the change initiative, the implementation 
team can also suggest corrections to remedy any problems. 

The department has not addressed this critical success factor because 
it has not dedicated an implementation team to manage the realignment 
effort and track its progress. At the conclusion of our review, staff 
from the IT realignment office, which was responsible for overseeing 
the realignment, had been reassigned to other areas of responsibility 
within the department's new structure. In addition, the Director of the 
Realignment Office told us that multiple offices will assume 
responsibility for managing the realignment through July 2008. For 
example, the Office of Quality and Performance Management will oversee 
process implementation across the Office of Information and Technology, 
and the Office of Oversight and Compliance Management will assess 
whether the department is complying with the new processes. However, 
there is no one entity currently responsible for managing the 
realignment. 

In addition, according to the Director of the Realignment Office, the 
department has developed performance metrics to measure progress on the 
implementation of the new management processes. However, metrics have 
not yet been developed to assess progress in implementing key 
milestones of the realignment. He noted that the department planned to 
develop performance metrics for tracking the progress of the 
realignment and that these metrics would be finalized by mid-June 2007. 

Also, the department expects to implement the new IT management 
processes incrementally by July 2008, but it has missed key 
implementation dates for these processes. Implementation of the first 9 
of 36 processes was to begin in March 2007; however, as of early May 
2007, the department had only begun pilot testing two of the new 
processes.[Footnote 17] With the dissolution of the IT Realignment 
Office in June, and the absence of any one entity currently dedicated 
for managing the realignment, it is less likely that VA will be able to 
ensure that the realignment is managed effectively throughout its 
implementation. 

Centralized Control of IT Budget Has Not Yet Been Clearly Established: 

Within VA's new centralized management structure, the CIO is expected 
to be responsible for ensuring that there are fiscal controls over the 
department's IT appropriation and for overseeing capital planning and 
execution. These responsibilities are consistent with the Clinger-Cohen 
Act of 1996,[Footnote 18] which requires federal agencies to develop 
processes for the selection, control, and evaluation of major systems 
initiatives. According to the department, it plans to establish the 
CIO's control over the IT budget by (1) designating organizations with 
specific roles and responsibilities for controlling the budget to 
report directly to the CIO, (2) implementing an IT governance structure 
that assigns budget oversight responsibilities to specific governance 
boards, and (3) developing and implementing IT portfolio management and 
financial management processes in the new organization. While these 
measures show the potential for establishing the CIO's control of the 
budget, the department has not yet fully implemented them; thus, their 
effectiveness in ensuring accountability for the budget has not yet 
been established. 

Deputy Assistant Secretaries to Control Aspects of IT Budget: 

As one measure to establish CIO control within the new organization, 
two deputy assistant secretaries under the CIO are expected to have 
responsibility for managing and controlling different aspects of the IT 
budget. Specifically, the Deputy Assistant Secretary for IT Enterprise 
Strategy, Policy, and Programs is to have responsibility for the 
creation, implementation, and control of an integrated IT portfolio, 
and for the design, development, and implementation of a portfolio 
management process. In addition, the Deputy Assistant Secretary for 
Information Technology Resource Management is to have responsibility 
for managing budget execution and compliance, including tracking actual 
expenditures against the budget. 

However, as of May 2007, the deputy assistant secretary positions had 
been filled with acting officials,[Footnote 19] and department 
officials could not provide a date for when permanent appointees would 
be named to these positions. In addition, while these offices had been 
identified in the new organization structure, VA had not determined 
when personnel would be staffed to the offices and would assume their 
budget oversight responsibilities. Until these positions are filled 
with permanent appointees, the department cannot ensure their 
effectiveness in managing and controlling the IT budget. 

IT Governance Plan Identifies Boards to Assist in Management of IT 
Budget: 

As a second measure, the IT governance plan, which was approved by the 
Secretary in April 2007, describes VA's approach to enhancing 
governance, including management of the IT budget. The plan states that 
the decision to undertake IT investments requires adherence to the 
governance process to assure that investments align with the 
department's strategic plan. In addition, it states that investment 
governance decisions should address how the department will program and 
budget resources against the IT business plan, meet customer demands, 
and allocate funding according to the needs and requirements of the 
administrations and staff offices. According to the plan, two 
governance boards are to have responsibility for overseeing the 
development and approval of the budget and monitoring budget execution: 

* The Business Needs and Investment Board is to provide departmentwide 
investment control for the IT programs. Its responsibilities are to 
include reviewing investments, formulating and approving budgets, 
determining the source and amount of funding for IT projects, and 
monitoring budget execution. This board is to be chaired by the 
Principle Deputy Assistant Secretary of the Office of Information and 
Technology, and its membership is to include senior representatives of 
the administrations and staff offices, resource management offices, and 
selected IT service managers. 

* The IT Leadership Board is to develop and approve the departmentwide 
IT budget based on information submitted to it by the Business Needs 
and Investment Board. This board is to be chaired by the CIO, and 
membership is to include key executive leaders in the Office of 
Information and Technology, administrations, and staff offices. 

In addition to these two governance boards, the Strategic Management 
Council is to be responsible for making decisions on the overall level 
of IT spending and priorities for the department and for approving 
budgets. The Strategic Management Council was in place prior to the 
realignment effort and the governance plan noted that it would be 
included as part of the governance structure. It is chaired by the 
Deputy Secretary, and its membership includes senior department 
leadership. As an example of the planned interaction between the 
boards, the Business Needs and Investment Board is to ensure that the 
administrations and staff offices' requirements have been identified, 
documented, justified, scoped, planned, and prioritized and that funds 
have been allocated. This information is to be forwarded with all other 
prioritized requirements to the IT Leadership Board for review and 
endorsement and then sent on to the Strategic Management Council for 
departmentwide approval. 

As of early May 2007, however, VA officials stated that neither the 
Business Needs and Investment Board nor the IT Leadership Board had 
been established. VA officials also could not provide a date for when 
they would be set up. Until the governance boards are in place with the 
Strategic Management Council, the department will lack a complete 
governance model for the new organization. 

Two New Management Processes Are to Address IT Budget: 

As a third measure to establish the CIO's control over the IT budget, 
VA plans to implement processes that specifically address portfolio 
management and financial management. As noted earlier in this report, 
it is crucial for the CIO to ensure that well-established and 
integrated processes are in place for leading, managing, and 
controlling VA's IT resources. These two processes represent how the 
CIO organization intends to carry out its responsibilities for the 
development and control of the budget. Specifically, the IT portfolio 
management process is to address how the CIO will manage the 
department's investment portfolio to achieve strategic objectives and 
allocate funding. The process is to include steps VA will take to 
identify, select, initiate, manage, and control its projects. According 
to the realignment assistance contractor, implementation of this 
process should help VA make better investment decisions and gain better 
control over its projects. 

The financial management process, according to its charter, will 
address how the CIO organization plans to manage IT investment 
programs,[Footnote 20] address costs and benefits of investments, and 
provide a formal budgeting process for managing the IT portfolio 
against the budget. According to the realignment assistance contractor, 
implementation of this process should provide the CIO with accurate 
cost information to support IT investment decisions and justify 
expenditures, and enable this official to ensure that the Office of 
Information and Technology operates in a cost-effective manner by 
providing a sound basis for cost-benefit analyses. 

While the department had identified individuals who would be 
responsible for implementing these two processes, an official in the 
realignment office told us that the schedule for implementing the 
processes had not been established. The official stated that VA 
nonetheless expected to complete implementation of all management 
processes and meet the July 2008 target date for full implementation of 
the realignment. However, the absence of a schedule to implement these 
two processes increases the risk that they will not be implemented in a 
timely manner, thus reducing their effectiveness in contributing to 
improved IT budget accountability and oversight. 

Conclusions: 

The department has taken various actions that address several of the 
factors we identified as critical to its realignment, including 
establishing a new organizational structure, approving its governance 
plan, and transferring IT staff to the CIO's authority. While these are 
positive steps, the department has much work to complete in order to 
ensure the success of its efforts. For example, the department has not 
yet developed detailed IT governance process descriptions to address 
the management of IT resources, established a knowledge and skills 
inventory to determine the proper roles for employees transferred to 
the new organization, or identified the personnel requirements, career 
paths, and training requirements for these employees. Further, the 
department has not fully staffed offices necessary for supporting the 
new structure, identified an implementation team that will be 
responsible for managing the change to the new management structure, or 
developed performance metrics to assess progress in implementing key 
milestones of the realignment. The department's continued focus on 
ensuring that these important actions are taken is essential to 
successfully achieving and realizing the benefits of the realignment. 

While department officials and realignment documents identified three 
measures of the realignment that are to provide the CIO with control 
over the IT budget, VA has yet to identify how and when this control 
will be achieved. Specifically, the department has not yet staffed with 
permanent appointees the two deputy assistant secretary positions that 
will have responsibility for IT budget management and control, 
established the two governance boards that are to have IT budget 
oversight responsibility, or developed a schedule for implementation of 
the IT portfolio management and financial management processes. Without 
showing how and when such controls will be in place, it remains unclear 
if VA's actions will result in optimizing its IT investment management 
process to provide the CIO with full control over the budget. 

Recommendations for Executive Action: 

To ensure that VA's IT realignment is successfully accomplished, we 
recommend that the Secretary of Veterans Affairs direct the Chief 
Information Officer to take the following six actions: 

* Develop detailed IT governance process descriptions that address how 
the department will manage IT resources within the centralized 
organization. 

* Establish a knowledge and skills inventory to determine what skills 
are available in order to decide the proper roles for all employees 
transferred to the new organization. 

* Assess personnel requirements under the centralized management model, 
including career paths and appropriate training requirements. 

* Fully staff all offices necessary for supporting the new 
organizational structure. 

* Dedicate an implementation team responsible for change management 
processes throughout the transformation to a centralized IT structure. 

* Expedite the development of performance metrics to track the progress 
of the realignment. 

In addition, to ensure that centralized control of the IT budget is 
established, we recommend that the Secretary of Veterans Affairs direct 
the Chief Information Officer to take the following three actions: 

* Establish milestones to permanently staff the deputy assistant 
secretary position for IT Enterprise Strategy, Policy, and Programs and 
the deputy assistant secretary position for IT Resource Management. 

* Commit to a date for establishing the Business Needs and Investment 
Board and the IT Leadership Board. 

* Establish a schedule for the implementation of the IT portfolio 
management and financial management processes. 

Agency Comments and Our Evaluation: 

In providing written comments on a draft of this report, the Deputy 
Secretary of Veterans Affairs agreed with our findings and generally 
concurred with our recommendations. (The department's comments are 
reproduced in app. II.) The comments described actions planned that 
respond to our recommendations: for example, developing and 
implementing an IT career management program that includes a knowledge 
and skills inventory for Office of Information and Technology 
employees, and fully implementing the IT governance plan by October 
2007. In addition, the comments provided further information on the 
department's actions taken since receiving our draft report, such as 
the establishment of the Business Needs and Investment Board that is a 
key component of the IT governance process; establishment of offices 
responsible for ensuring compliance with IT policies, directives and 
core IT processes; and filling a senior executive position in the 
Office of Information and Technology. If the actions that the 
department has planned to undertake are properly implemented, they 
should help ensure that the IT realignment is successfully 
accomplished. 

Although the department concurred with all our recommendations, it 
provided an alternative approach to dedicating an implementation team 
responsible for change management processes throughout the 
transformation to a centralized IT structure. Its written comments 
indicated that change management would be the responsibility of two 
organizations in the new structure. However, in our view, having a 
dedicated implementation team, responsible for day-to-day management of 
major change initiatives, is crucial to VA's ability to ensure that the 
IT realignment is fully and successfully implemented in a coherent, 
integrated, and coordinated manner. The approach articulated in the 
department's comments does not make clear how progress will be 
monitored, schedule slippages or shortfalls identified, and solutions 
to problems developed and implemented. Without having a dedicated 
implementation team, as we recommend, the department may increase the 
risk to the success of the realignment. 

We are sending copies of this report to the Chairman and Ranking Member 
of the Committee on Veterans' Affairs, House of Representatives. We are 
also sending copies to the Secretary of Veterans Affairs and 
appropriate congressional committees. We will also make copies 
available to others on request. In addition, the report is available at 
no charge on GAO's Web site at http://www.gao.gov. 

If you and your staff have any questions about this report, please 
contact me at (202) 512-6304 or melvinv@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Major contributors to this report are 
listed in appendix III. 

Signed by: 

Valerie C. Melvin: 
Director, Human Capital and Management Information Systems Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

To determine whether the Department of Veterans Affairs (VA) 
realignment plan includes critical factors for successful 
implementation of a centralized management approach, we obtained and 
analyzed realignment documents from VA, its realignment contractor, and 
the independent verification and validation (IV&V) contractor. These 
documents included the realignment contract request for quotes and 
memorandums signed by the Secretary and Deputy Secretary relating to 
approval of the permanent assignment of operations and maintenance and 
development staff to the Office of Information and Technology. The 
documents also included the establishment of the VA single information 
technology (IT) leadership authority. We also obtained and analyzed the 
realignment contractor's performance work statement, which detailed the 
work the contractor was to perform. In addition, we reviewed other 
contractor deliverables, such as process charters for the new IT 
management processes, the "to be" organization structure transition 
plan, and the transition management plan. VA also provided IV&V 
contractor documents that assessed each of the realignment contract 
deliverables. We reviewed these documents to identify problems and 
concerns raised by the IV&V contractor. 

To identify factors critical to the success of the centralization 
effort, we reviewed GAO products relevant to organizational 
transformation. We also reviewed industry best practices documentation, 
such as the IT Governance Institute's Control Objectives for 
Information and related Technology 4.0, to identify industry standard 
success factors for IT organizations. To validate the success factors, 
we met with IV&V contractor officials to elicit their input on the 
relevance and soundness of factors we identified for consideration in 
our assessment of the realignment effort. IV&V contractor officials 
concurred that the factors we developed are critical to VA's successful 
IT realignment. In addition, we compared documents obtained from VA and 
realignment contractor officials against these factors to determine the 
level to which the critical success factors were included. We also 
conducted monthly meetings with the VA realignment team and the 
realignment contractor to determine whether these critical success 
factors were being considered in the implementation of the realignment. 

We visited the VA medical center and a benefits administration office 
in Baltimore and a VA medical center in Philadelphia to become familiar 
with the methodology that the realignment contractor was using to 
assess VA's readiness for the realignment. We observed teams from the 
realignment contractor as they gathered information that would be used 
to create a baseline of IT activities and a transition plan for the 
department. We selected these locations due to the schedule 
availability of the department and the contractor and because they are 
representative of VA facilities. 

To determine how the centralized management approach will ensure that 
the CIO is accountable for VA's entire IT budget, including those funds 
that previously had been administered by its administrations, we 
reviewed VA and realignment contractor documentation and plans that 
specifically address IT budget oversight and execution under the 
realignment. These documents included roles and responsibilities for 
those VA organizations listed in the single IT leadership organization 
structure that are to have responsibility for IT portfolio and 
financial management, the IT Governance Plan, and the IT Portfolio 
Management and Financial Management Process Design and Implementation 
Plans. To supplement our analysis, we met with officials in VA's Office 
of Information and Technology who are responsible for managing and 
executing the IT budget. We conducted our work in VA offices in 
Washington, D.C., and at VA facilities in Baltimore and Philadelphia 
from June 2006 through May 2007 in accordance with generally accepted 
government auditing standards. 

[End of section] 

Appendix II: Comments from the Department of Veterans Affairs: 

The Deputy Secretary Of Veterans Affairs: 
Washington: 

June 8, 2007: 

Ms. Valerie C. Melvin: 
Director, Human Capital and Management Information Systems Issues: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Ms. Melvin: 

The Department of Veterans Affairs (VA) has reviewed the Government 
Accountability Office's (GAO) draft report: Veterans Affairs: Continued 
Focus on Critical Success Factors is Essential to Achieving Information 
Technology Realignment (GAO-07-844), and generally agrees with its 
findings. The GAO report recognizes that the Information Technology 
(IT) Realignment Program is an ongoing program that will conclude July 
2008. It correctly acknowledges the work VA has accomplished to date 
and the continuing work that needs to be accomplished. 

The IT Realignment Program is an immense task, and the Department has 
laid a solid foundation for success. We have approved the VA Chief 
Information Officer as the single IT leadership authority for all IT 
activities within VA; approved the new organizational structure for the 
Office of Information and Technology; approved an IT Governance Plan; 
and developed 36 core IT processes that represent proven best business 
practices. We are now implementing these IT processes in order to be 
fully transitioned by July 2008. 

Although we have made significant progress to date, VA acknowledges 
that there are difficult challenges ahead of us. VA's leadership 
remains committed to the IT Realignment Program and fully expects to 
achieve all IT realignment objectives and goals on schedule by July 
2008. 

I appreciate your independent analysis of the progress of VA's IT 
Realignment Program to date and your recommendations to increase its 
chances of success. The enclosure outlines each of the GAO's 
recommendations in detail and provides an update of our continued 
progress since you provided us with your draft report. 

Sincerely, 

Signed by: 

Gordon H. Mansfield: 

Enclosure: 

Department of Veterans Affairs (VA) comments to Government 
Accountability Office (GAO) draft report Veterans Affairs: Continued 
Focus on Critical Success Factors is Essential to Achieving Information 
Technology Realignment (GAO-07-844): 

To ensure that VA's IT realignment is successfully accomplished, GAO 
recommends that the Secretary of Veterans Affairs direct the Chief 
Information Officer to take the following six actions: 

* Develop detailed IT governance process descriptions that address how 
the department will manage IT resources within the centralized 
organization: 

Concur - The Information Technology (IT) Governance Plan approved by 
the Secretary April 12, 2007, establishes the processes, 
responsibilities, and authorities required to manage the Department of 
Veterans Affairs (VA) IT resources under a centralized organization. 
The VA Chief Information Officer (CIO) has taken steps to establish the 
necessary governance boards approved in the IT Governance Plan. The 
Business Needs and Investment (BNI) Board convened on May 30, 2007. The 
Planning, Architecture, Technology, and Services (PATS) Board convened 
the week of June 4, 2007. The IT Leadership Board (ITLB) will convene 
in mid-June. These boards, in conjunction with the Strategic Management 
Council (SMC) constitute the decision making structure needed to 
centrally manage IT resources. The IT governance plan will be fully 
implemented over the next 4 months during the development of the VA IT 
fiscal year (FY) 2009 budget. After the completion of the current 
budget submission process, VA's CIO will assess the IT governance 
procedures and make adjustments as required. 

* Establish a knowledge and skills inventory to determine what skills 
are available in order to decide the proper roles for all employees 
transferred to the new organization: 

Concur - A key component of the IT Realignment Program is the 
development and implementation of an IT Human Resources Management Plan 
and a Career Management Program. The Human Resources Management Plan 
and its related processes will dictate the human resources management 
administrative activities OI&T will use. The Career Management Program 
is a component of the IT Human Resources Plan. It will guide the career 
progression of IT personnel throughout their career in VA. 
Additionally, it will contain the knowledge and skills inventory to 
ensure that OI&T personnel are capable of delivering the services VA 
requires. The Human Resources Management Plan and a Career Management 
Program will be implemented fully by July 2008. 

* Assess personnel requirements under the centralized management model, 
including career paths and appropriate training requirements. 

Concur - This is a key component of the IT Career Management Program 
OI&T is developing. The OI&T has already established an office that is 
responsible for refining the human resource management core IT process. 
The IT Career Management Program is on schedule to be implemented by 
July 2008. 

* Fully staff all offices necessary for supporting the new 
organizational structure. 

Concur - Staffing of the new OI&T organization is a complex issue 
involving numerous critical sub-tasks. First, OI&T needs to determine 
its personnel requirements; second, funded FTE positions need to be 
allocated based on required capability; third, vacancies need to be 
filled within funding constraints; and fourth, physical space needs to 
be obtained to house the additional staff. The CIO has taken steps to 
ensure that all offices will meet minimum staffing requirements. IT 
personnel are being reassigned and hired as quickly as possible to meet 
minimum organizational requirements. This critical factor will be 
considered successfully achieved once key leadership is in place and 
OI&T is staffed at 95 percent of funded allocations. VA anticipates 
meeting this goal by July 2008. 

* Dedicate an implementation team responsible for change management 
processes throughout the transformation to a centralized IT structure. 

Concur in principle - In October 2005, VA developed a change management 
strategy and implemented change management processes for the IT 
Realignment Program across the Department. VA embraced an innovative 
approach to achieve its goals and objectives by July 2008. 
Specifically: 

* The IT Realignment Office was the initial catalyst that directed 
change management during Phase 1 of the transformation. 

* During Phase 1, VA approved its OI&T structure, the IT Governance 
Plan, and the 36 core IT processes. Additionally, VA consolidated all 
IT activities and personnel under the VA CIO. 

* At the start of Phase 2 in June 2007, the VA CIO integrated the IT 
Realignment Office into the new OI&T organization. This approach 
requires key OI&T leaders to implement and direct the change management 
associated with the 36 core IT processes. 

* Additionally, the CIO has established a Process Improvement Office 
under the Quality and Performance Office that will spearhead IT 
processes improvement within VA: 

* To ensure continuity of the change management processes, the current 
Director of the IT Realignment Office has been designated as the 
Executive Director, IT Organizational Management. He will advise and 
assist the CIO during the final transformation to a centralized IT 
structure. 

VA leadership remains committed to this strategy and anticipates 
achieving all IT Realignment objectives and goals by July 2008. A 
separate dedicated implementation team responsible for change 
management throughout the transformation is not required. 

* Expedite the development of performance metrics to track the progress 
of the realignment. 

Concur - VA has already initiated action to meet this critical success 
factor. The CIO has established (1) Oversight and Compliance Management 
and (2) Quality and Performance offices that will develop, manage and 
ensure compliance with IT policies, directives and the 36 core IT 
processes the OI&T is implementing. Key OI&T leaders are responsible 
for developing performance metrics and for implementing each of the 36 
core IT processes. The 36 core processes will be implemented by July 
2008. 

In addition, to ensure that centralized control of the IT budget is 
established, GAO recommends that the Secretary of Veterans Affairs 
direct the Chief Information Officer to take the following three 
actions: 

* Establish milestones to permanently staff the Deputy Assistant 
Secretary position for IT Enterprise Strategy, Policy, and Programs and 
the Deputy Assistant Secretary position for IT Resource Management. 

Concur - The CIO initially filled these two positions with acting 
members of the Senior Executive Service to provide immediate leadership 
to these organizations. The Deputy Secretary approved a selection for 
the Deputy Assistant Secretary for IT Resource Management position on 
May 30, 2007, and directed that the second senior management position 
be established, announced and competitively bid. It is estimated that a 
permanent selection of an individual for this second position will be 
made by September 30, 2007. 

* Commit to a date for establishing the Business Needs Investment Board 
and the IT Leadership Board. 

Concur - The CIO has already established the governance boards approved 
in the IT Governance Plan. The Business Needs and Investment (BNI) 
Board convened on May 30, 2007. The Planning, Architecture, Technology 
and Services (PATS) Board held its initial meeting June 5 and will 
continue meeting through June 12. The IT Leadership Board (ITLB) will 
convene June 23. These boards, in conjunction with the SMC constitute 
the decision making structure to centrally manage IT resources. 

* Establish a schedule for the implementation of the IT Portfolio 
Management and Financial Management processes. 

Concur - This recommendation is already being addressed as part of the 
IT Process Implementation Program. The IT Portfolio Management and 
Financial Management processes have been developed and assigned to the 
Deputy Assistant Secretary for IT Resource Management for 
implementation. With the establishment of the BNI Board and PATS Board, 
the major decision-making aspects of these two processes will be fully 
exercised over the next 4 months during the development of the VA IT FY 
2009 budget. After the completion of the current budget submission 
process, VA's CIO will assess these two IT processes and make 
adjustments as required. 

The CIO has taken two additional steps to ensure successful 
implementation of these processes. First, he established a Quality and 
Performance Office to oversee the implementation all 36 core IT 
processes and to measure performance standards for these processes. 
Second, he established the Office of Oversight and Compliance to ensure 
VA compliance with these processes. 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Valerie C. Melvin, (202) 512-6304 or melvinv@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, major contributors to this 
report were Barbara Oliver, Assistant Director; Nabajyoti Barkakati; 
Jacki Bauer; Neil Doherty; Nancy Glover; B. Scott Pettis; J. Michael 
Resser; and Eric Trout. 

[End of section] 

(310760): 

FOOTNOTES 

[1] GAO, Veterans Affairs: The Role of the Chief Information Officer in 
Effectively Managing Information Technology, GAO-06-201T (Washington, 
D.C.: Oct. 20, 2005); and Veterans Affairs: The Critical Role of the 
Chief Information Officer Position in Effective Information Technology 
Management, GAO-05-1017T (Washington, D.C.: Sept. 14, 2005). 

[2] The VA comprises three administrations: the Veterans Benefits 
Administration (VBA), the Veterans Health Administration (VHA), and the 
National Cemetery Administration (NCA). 

[3] The headquarters offices include the Office of the Secretary, six 
Assistant Secretaries, and three VA-level staff offices. 

[4] GAO-06-201T and GAO-05-1017T. 

[5] The One VA vision is to create versatile new ways for veterans to 
obtain services and information by streamlining interactions with 
customers and integrating IT resources to enable VA employees to help 
customers more quickly and effectively. 

[6] Gartner Consulting, OneVA IT Organizational Alignment Assessment 
Project "As-Is" Baseline (McLean, Virginia; Feb. 18, 2005). 

[7] For example, some of the processes are risk management, IT 
architecture management, workforce management, and change management. 

[8] Specifically, these processes are derived from the IT Governance 
Institute's Control Objectives for Information and related Technology 
(CobiT®) and Information Technology Infrastructure Library (ITIL) as 
configured by the Process Reference Model for IT (PRM-IT) from a VA 
contractor. 

[9] GAO, Results-Oriented Cultures: Implementation Steps to Assist 
Mergers and Organizational Transformations, GAO-03-669 (Washington, 
D.C.: July 2, 2003); and Highlights of a GAO Forum: Mergers and 
Transformation: Lessons Learned for a Department of Homeland Security 
and Other Federal Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 
2002). 

[10] GAO-05-1017T. 

[11] GAO, Health Information Technology: HHS Is Taking Steps to Develop 
a National Strategy, GAO-05-628 (Washington, D.C.: May 27, 2005). 

[12] GAO-03-293SP. 

[13] GAO-03-293SP. 

[14] GAO-03-669. 

[15] GAO-03-293SP. 

[16] GAO-03-669. 

[17] The two processes are (1) risk management and (2) solution test 
and acceptance. 

[18] 40 U.S.C. §§ 11311-11313. 

[19] Currently, the titles for these positions are deputy CIO for IT 
Resource Management and deputy CIO for IT Enterprise Strategy, Policy, 
Plans, and Programs, pending congressional approval of the Senior 
Executive Service deputy assistant secretary positions. 

[20] According to the process charter, these programs encompass cost, 
benefits, prioritization within budget, a formal budgeting process and 
management against the budget. 

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