GAO can't validate OMB's TechStat cost savings claims

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The Office of Management and Budget's estimated governmentwide cost savings from TechStat Accountability Sessions, the oversight program it uses to review agencies' troubled technology investments, could be grossly overstated.

In 2011, OMB reported the federal government had achieved almost $4 billion in life-cycle cost savings through TechStat. However, based on agency documentation, the Government Accountability Office identified less than 1 percent of that figure--$22.2 million in cost savings and avoidances.

"GAO was unable to validate OMB's reported results because OMB did not provide artifacts showing that it ensured the results were valid," write the authors of a June 13 Government Accountability Office report (.pdf).

In November 2012 the number of OMB-led TechStat reviews had significantly diminished and the administration reframed the initiative as an internal, agency-led oversight mechanism. The GAO report finds that, as of April 2013, OMB held 79 TechStats that focused on 55 investments at 23 federal agencies. A sample of four agencies--the Agriculture, Commerce, Health and Human Services and Homeland Security departments--reviewed for the report conducted 37 TechStats covering 28 investments.

The OMB-led TechStats represent approximately 18.5 percent of medium- or high-risk investments across the government, says GAO. At the four agencies reviewed in the report, 33 percent of the investments reviewed through TechStat had a medium- or high-risk CIO rating, according to the report.

"There are multiple high-risk IT investments spending millions of dollars that have not yet been assessed," says GAO.

Auditors found that Commerce and USDA had reviewed all of their high-risk investments and DHS has plans to review its remaining high-risk investments. However, HHS does not have plans to review all of its high-risk investments and OMB has no plans to assess more high-risk IT investments.

Report authors recommend that the Federal Chief Information Officer Steven VanRoekel require agencies to review all IT investment with a moderately high- or high-risk CIO rating on the IT Dashboard, unless there is a clear reason for not doing so. VanRoekel should also require agencies to report to OMB efforts to validate the outcomes, cost savings and cost avoidances from TechStat, which OMB can then summarize in a governmentwide outcome report, say report authors.

The Federal CIO Council should also track TechStat outcomes and to help OMB validate the cost savings it reports to Congress, recommends GAO.

In response to the report, OMB generally agreed with GAO's recommendations. Administration officials did say they are "confident in the agency validation of cost-savings and avoidances through the TechStat sessions," says the report. They added that "it was speculative to conclude that the reported cost savings data were not valid because we could not actually assess these figures."

Report authors note that OMB's response--which came via email and was not documented in the report's appendix--did not include supporting documentation for the cost savings calculations.

For more:
- download the report, GAO-13-524 (.pdf)

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