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Agencies could lose federal IT funds

Despite a double-digit increase in the federal government's IT budget for 2003, many agencies risk losing the funding because they don't meet security and performance standards.

Despite a double-digit increase in the federal government's information technology budget in 2003, many agencies risk losing the funding because they don't meet security and performance standards, officials say.

Out of 2,900 IT projects included in the federal IT budget in 2003, 400 are on a "watch list" because they haven't satisfied all the requirements the Bush administration is enforcing this year, according to Mark Forman, associate director for IT and e-government at the Office of Management and Budget. Bush unveiled his budget proposal last week.

Laws governing federal IT spending require that projects meet federal information systems security standards, increase agency productivity, result in improved service, and are guided by a management plan for staying on schedule and on budget. The agencies proposing projects on the watch list, which account for $10 billion of the total $52 billion IT budget for 2003, have until October, the beginning of the 2003 fiscal year, to comply with the rules.

"They have to improve the quality of their business case or they won't get the money," Forman said.

There are also concerns over whether the agencies that have received the tens of billions of dollars already invested in IT have actually improved their productivity.

The federal IT budget has steadily climbed over the years, but "IT investments have not produced improvements in productivity or quality in service commensurate with those of commercial firms," states the 2003 budget proposal released earlier this month.

The government is probably more efficient than it would be had it not made the technology investments, Forman said. But most agencies need to do a much better job of aligning IT projects with objectives related to improvements in productivity and in performance of their mission, he said.

Several federal agencies, including the Department of Defense, Department of Energy and Department of the Interior, received poor marks on an agency IT performance report included in the 2003 budget analysis from the OMB.

"Historically, the Interior has made major IT investments without thorough analysis of realistic cost, schedule, and performance goals for new acquisitions. As a result, the Interior put large sums of public funds at high risk for failure," the report states.

A judge ordered the Department of the Interior to shut down a portion of its Web site last year because an investigator found basic security measures, such as passwords, lacking.

Tightening federal IT security is a high priority on the 2003 budget, which proposes boosting funding for information security projects from $2.7 billion in 2002 to $4.2 billion. Projects related to homeland security and the "war on terrorism" are the reason for the overall increase in spending, Forman said.

By enforcing long-standing IT budget rules, Forman hopes to phase out projects that simply automate existing, possibly inefficient, ways of doing business, and to focus on those that provide concrete improvements in service and responsiveness to citizens. For example, one improvement would be slicing the time it takes for state and local governments to get approval for a federal grant from six months to a few days.

Forman does not deny it's a big change.

"You're taking a $2 trillion enterprise that had not been making decisions on the basis of results but on the dynamics of policy," Forman said. "There is a cultural change and training that has to occur."

Analysts are less certain that transformation is in on the horizon.

"There have to be fundamental changes in the way government works and measures these projects, and I haven't seen that happen yet," said Christopher Baum, vice president of electronic government at Gartner. Baum said he believes the government needs a federal chief information officer to centralize its efforts.