The division also supports and participates in FASAB, JFMIP, and GASAC. Some of the major accomplishments to date follow.

FASAB was established in October 1990 by the Secretary of the Treasury, the Director of OMB, and the Comptroller General. The nine-member Board was created to consider and recommend accounting principles for the Federal Government. It is expected that during the early part of 1996, FASAB will complete the federal government's first set of comprehensive accounting standards developed with consensus of its members. Implementing these standards will strengthen accountability throughout the federal government.

JFMIP is a joint undertaking of OMB, GAO, the Department of the Treasury, and the Office of Personnel Management to improve financial operations throughout government. The program's most recent accomplishments are the publication of (1) Framework for Federal Financial Management Systems, January 1995, and (2) the Core Financial System Requirements. September 1995.

Audit Oversight and Liaison

In fiscal year 1995, GAO's work focused on improving the effectiveness and usefulness of the intergovernmental audit process and strengthening the financial management and accountability over federal operations. In the intergovernmental area, GAO followed up its comprehensive review of the Single Audit Act of 1984 by assisting (1) the Congress in drafting and obtaining comments on proposed amendments to the act and (2) the Office of Management and Budget in drafting implementing regulations for the amendments. The act governs the audits of approximately $200 billion in federal financial assistance. GAO also assisted the Congress and others in a number of oversight efforts related to the operations of IG offices. Further, GAO provided extensive guidance and technical assistance to federal, state, and local government audit organizations and the public accounting profession on compliance with Government Auditing Standards promulgated by GAO.

GAO performed a number of financial audits and reviews to strengthen the financial management and accountability over federal operations, including, audits of independent counsels and several commissions and federally chartered corporations. GAO also assisted the Congress in drafting legislation to strengthen accountability over commemorative coin recipients. At the request of the majority and minority leadership of the Senate, GAO performed the first-ever audits of the offices of the Secretary of the Senate and the Senate Sergeant at Arms. In addition, GAO audited a number of other legislative branch entities. We also provided support for and performed liaison activities with the National Intergovernmental Audit Forum (NIAF).

During the next 2 years, GAO will continue to assist the Congress in finalizing amendments to the Single Audit Act and in providing oversight regarding IG operations and effectiveness. GAO will continue to perform financial audits of independent counsels, legislative branch organizations (such as the Government Printing Office), and other federal related activities. Also, we will continue to support NAIF through our liaison activities.

Information Resources Management--Policies and Issues

GAO's work in this area continues to focus on strategic, enterprise-level issues designed to increase the control and risk-adjusted return on the government's annual $26 billion investment in information technology and related activities. To support this objective, we promote improved management practices in four areas: strategic information management (SIM), business process reengineering (BPR), information technology (IT) investment, and data and network management.

To date, our work has been instrumental in (1) building and establishing criteria for strategic information management principles and practices and (2) transferring knowledge and techniques to federal agencies and the oversight community. Most notably, we established an integrated set of strategic information

management practices in our report entitled Executive Guide: Improving Mission Performance Through Strategic Information Management and Technology. OMB has incorporated these practices into its latest revision of Circular A-130, "Management of Federal Information Resources," which establishes major governmentwide policies for managing information technology. We have also released our Strategic Information Management Self-Assessment Toolkit for agencies to use in assessing the effectiveness of their existing information management practices. By the end of fiscal year 1995, five federal agencies had completed self-assessments of their existing information management practices. The Internal Revenue Service, for example, used the toolkit to develop an action plan to correct management and technical weaknesses affecting its multibillion dollar Tax Systems Modernization effort.

GAO has helped strengthen the current legislative foundation for information resources management (IRM) by working with the Senate Governmental Affairs Committee to get key strategic information management provisions added to the Paperwork Reduction Act, the primary statute that establishes governmentwide policy for IRM. These new provisions emphasize (1) applying information resources to support the accomplishment of agency missions, (2) managing information systems projects as investments, and (3) integrating agency planning, budgeting, and evaluation processes. The amended act was signed into law on May 22, 1995 (Public Law 104-13). GAO has also worked with OMB in preparing governmentwide executive guidance titled Evaluating Information Technology Investments: A Practical Guide. The guide is designed to assist OMB and agency staff in evaluating the government's portfolio of projects that requires substantial investments in new information technology. The government has realized millions of dollars in quantifiable benefits from agencies that have used the guide to improve their investment decision-making. GAO also is working to establish guidance and criteria for sound management in two other areas. We have released a draft of our Business Process Reengineering Assessment Guide, designed to help GAO, the Inspectors General, and federal executive agencies evaluate opportunities to achieve dramatic improvements in cost and quality by redesigning outmoded work processes with the aid of information technology. We have also developed a draft methodology for evaluating computer-related internal controls. which will serve as a companion to GAO's Financial Audit Manual, thereby bolstering the ability of GAO and the Inspectors General to perform financial statement audits.

To build upon and support GAO's capabilities to evaluate the effectiveness and efficiency of the federal government's use of automated systems we will continue to (1) develop and maintain information resources management methodologies and related training programs, (2) develop and manage a quality assurance program for GAO's automated systems reviews, (3) review governmentwide automated systems projects and selected automated systems, and (4) maintain relationships with relevant external organizations.

Because of the enormous investment and failure of past agency efforts in adapting and procuring complex technology, four multibillion dollar information technology initiatives were added to the high-risk list. IRS Tax Systems Modernization is one and the other three are the Air Traffic Control Modernization, Defense's Corporate Information Initiative, and National Weather Service's Modernization. Over the next couple of years, these initiatives will receive significant attention from the various information resources management issue areas of this division.

Defense Information Systems

The effective and efficient use of information resources is essential to the agencies audited by the Defense Information Systems group--the Department of Defense (DOD), the National Aeronautics and Space Administrations (NASA), the State Department, and the Agency for International Development. These agencies spend about $40 billion annually--75 percent of the federal government's expenditures for computers and software--for everything from automated business and financial systems to computer systems embedded in space and weapons platforms.

This investment in technology is critical if these agencies are to (1) streamline operations and downsize, (2) strengthen financial accountability and control, and (3) maintain world leadership in space and weapons technology. However, the benefits available through the effective use of technology are not being achieved. Automated systems are not being effectively implemented, technology dollars are not being wisely spent, and the military components are still working more independently than need be. This not only increases costs, but undermines the ability of these agencies to effectively and efficiently accomplish their

missions.

Over the past year, our work has heightened the awareness of the Congress and agency managers to the severity of the problems DOD faces. Our accomplishments include the following.

Using our prior Defense Business Operations Fund (DBOF) work as a basis, the National Defense Authorization Act for Fiscal Year 1995 directed the Secretary of Defense to submit to the congressional defense committees a report on the progress made in implementing the September 1993 Defense Business Operations Fund Improvement Plan. In March 1995, we reported that after 3 years of effort, DOD continued to have problems in effectively operating the $77 billion entity and little progress had been made in resolving the long-standing problems that hinder DBOF operations. Specifically, we found that DOD has not (1) developed a process to ensure that DBOF's policies are consistently implemented, (2) improved the accuracy and reliability of DBOF's systems, (3) improved the accuracy of DBOF's monthly financial reports, (4) adequately managed DBOF's cash, and (5) developed performance measures and goals.

Our work on DOD disbursements has helped the Congress better understand the magnitude of the DOD's lack of adequate financial controls over its disbursement operations. For years, DOD had successfully downplayed the seriousness of its disbursing problems until our work disclosed that it continued to have a running balance of billions of dollars of payments to contractors for which it could not adequately account for and report on. After we identified the seriousness of the problem, the Congress enacted legislation to strengthen these payment controls. In addition, DOD has numerous initiatives underway and planned to address our findings, conclusions, and recommendations. When fully implemented, these initiatives will significantly improve its financial management.

Our DBOF, disbursement, and reengineering work were key ingredients of the testimonies presented to the Senate on DOD's efforts to reform its financial management operations. The successful implementation of these reform efforts will be critical in ensuring that every possible defense dollar goes toward maintaining the readiness of the fighting force while reducing the costs of DOD's support operations. The results of our DOD financial management work were highlighted in several congressional committee reports on DOD's fiscal year 1996 budget process.

Our work at the State Department resulted in significant improvements in the agency's information resources management operations. For example, per our recommendation, State has established an executive-level board of senior officials to review proposed information technology investments. State is also initiating a departmentwide planning process to better integrate the IRM planning and budgeting functions.

Our reviews of Defense and governmentwide telecommunications issues were highly influential in improving two major programs. For example, our work on the Defense Information Systems Network (DISN) resulted in DISA taking steps to reassess and to adequately identify its requirements. Further, our testimony on planning for the Post-FATS 2000 acquisition identified eight key issues that GSA needs to address before the final RFPs are released. These issues were widely endorsed by industry and government officials as central to the success of this multibillion dollar program.

DOD's continuing difficulties in managing automated information systems (AIS) were the impetus for our review of AIS management controls and performance measures. We evaluated DOD's report to the Congress which discussed new performance measures. Our review disclosed that the measures were inadequate because they did not effectively measure the benefits--or outcomes--of modernizing, operating, and maintaining AISS. As a result, the committee directed DOD to reevaluate the reported

performance measures and to develop acceptable, precise measures to effectively gauge the benefits, in terms of dollars and contribution to mission performance, of implementing migration systems, establishing data standards, and improving processes.

The Department of Defense continues to have great difficulty in managing the development, acquisition, and support of computers and software embedded in weapons systems. The effectiveness with which DOD manages its $20+ billion annual investment in software often determines the success or failure of today's major weapons acquisition programs. Our work this year on the C-17 aircraft, the B-1B Bomber, and the Comanche helicopter continued to chronicle the software problems plaguing these programs and helped focus congressional and top-DOD management attention on this important but often neglected area.

Our 1994 report on the Navy's TAC-4 computer procurement identified opportunities to significantly improve the acquisition. In following up our report this year, we noted that the contract was awarded in January 1995 at significantly less cost than originally projected. Our overall work on the TAC-4 procurement resulted in increased competition, improved contract administration, and a cost avoidance of more than $900 million over the 6-year life of the contract.

Our recent work on DOD's Depot Maintenance Standard System resulted in adjustments to DOD's migration systems strategy to take advantage of commercial off-the-shelf technology and cut implementation time frames for this important readiness-related program. We are currently working with DOD to evaluate plans for expanding the Automated Systems Demonstration project at WarnerRobbins Air Force Base to other high priority areas in material management and transportation, thereby gaining near-term benefits and return on investment in military readiness areas.

Our review of DOD's administrative travel processes concluded that it was spending about 30 percent of each travel dollar on administrative expenses while well-run organizations spent less than 6 percent. We concluded that DOD's travel processes could be reengineered with a resulting savings of several hundred million dollars per year with increased levels of service for the traveler. DOD now has 30 pilot projects to test new ways of administering travel and expects to have new processes in place over the next 2 years.

During the next fiscal year, we will continue to (1) focus on DOD's efforts to develop business systems that effectively support mission requirements, (2) focus on efforts to improve financial management through DBOF and DFAS operations, and (3) examine the effectiveness of departmentwide technical infrastructure initiatives, such as electronic data interchange and telecommunication network consolidation.

Resources, Community, and Economic Development

The information resources management/resources, community and economic development issue area addresses IRM activities at the key agencies covered by GAO's Resources, Community, and Economic Development Division (RCED)--the Departments of Agriculture (USDA), Commerce, Energy (DOE), Housing and Urban Development (HUD), Interior, Transportation (DOT), and the Environmental Protection Agency (EPA). These IRM activities support over $160 billion in annual program expenditures, and they are indispensable to these agencies' ability to deliver critical government services, such as safe air travel and loan portfolio oversight valued at over $1 trillion.

Our work has assisted the Congress and helped these agencies improve operations, save money, and otherwise address the myriad of difficulties associated with managing highly complex, mission-critical, and technologically advanced information resources. Our accomplishments include the following:

At DOT, our work contributed to the Federal Aviation Administration's (FAA) decision to cancel and redirect billion dollar components of its air traffic control modernization program. Also, our work on FAA's system for identifying and targeting airline and aircraft safety risks and inspections was instrumental in advancing this effort and better ensuring its success. In addition, we were at the forefront in identifying critical technical challenges facing the information superhighway.

Our work helped convince USDA to halt and redirect its Info Share Program, a $2.6 billion effort to modernize and reinvent its farm service and rural development agencies. Other work at USDA yielded an additional $214 million in measurable benefits by identifying unnecessary computer purchases and opportunities to save tens of millions of dollars in telecommunications costs.

Our testimony and reports on the National Weather Service's (NWS) $4.5 billion modernization program has led the Commerce Department to agree to develop a system architecture that should more cost-effectively guide the evolution of the modernization's many systems. Further, our work has contributed to improvements in developing and operating key weather observing systems that are vital to providing accurate and timely weather forecasts and warnings.

At EPA, we were able to convince agency leadership to involve program managers in information technology investment decisions, which should help minimize poorly focused system development projects.

At HUD, we uncovered critical root causes of its long-standing IRM problems and were able to persuade Department leadership to begin implementing many of the best IRM practices GAO found underpinning the success of leading public and private sector organizations.

In response to our work, DOE and its contractors are attempting to resolve software development problems with a new system to track nuclear materials worldwide and improve security of computerized sensitive data.

We are working with agency officials to implement our key open recommendations. These cover a broad cross section of agencies and IRM issues. For example, our report on the $2.6 billion USDA's Info Share Program effort, stated that agency managers were not taking the necessary steps to redesign agency business processes. Instead, the program was being used as a vehicle to buy information technology and further automate the current way of doing business. We, therefore, recommended that the Secretary of Agriculture (1) refocus Info Share to ensure that business process reengineering was properly planned, conducted, and implemented and (2) defer the award of planned nationwide contracts. Although USDA has acted to address our recommendations, some of these actions are not fully responsive. As a result, we are closely monitoring Info Share to ensure that sound business process reengineering principles and practices are not compromised.

Also at USDA, our work showed that efforts to consolidate and optimize telecommunication services had not addressed all savings opportunities, and, as a result, millions of dollars were being wasted each year. We therefore recommended that the Secretary take steps to ensure that these opportunities, where practical and cost-effective, be acted upon.

Our work on the NWS' modernization program noted the lack of an overall systems architecture or "blueprint" to guide the development and evolution of the modernization's many and diverse components. As a result, we recommended that a systems architecture be developed and implemented. NWS agreed with the recommendation and plans to complete the systems architecture in fiscal year 1997. We are continuing to monitor progress on this architecture.

Another of our reports on NWS' modernization program recommended that additional Next Generation Weather Radars not be bought through existing contract options to address possible gaps in radar coverage until NWS first assessed FAA's plans for storing five of these radars. NWS agreed with this recommendation and, at a significantly lower price than the contract option permits, has acquired two of these radars for use as either spare parts or to fill any gaps in coverage that its ongoing study may identify.