Report: HHS fails to oversee technology investments

Nearly 90 percent of the Health and Human Services Department's discretionary information technology investments lack proper oversight from the department's senior investment board, according to a new report from the Government Accountability Office.

This may leave the department's executives unable to make informed investment decisions in managing an annual IT budget of more than $5 billion, the report (GAO-06-11) stated. The congressional auditors also found that HHS does not continually evaluate the performance of its IT portfolio or conduct post-implementation reviews on the investments.

HHS, the largest federal grant-making agency and the nation's largest health insurer, also lacks a structured mechanism to ensure that its component agencies are aligning their investment processes with the department's, the report said. GAO completed the review for Sen. Charles Grassley, R-Iowa, chairman of the Senate Finance Committee.

HHS has established 63 percent of the foundational practices needed to effectively manage individual IT investments and 30 percent of those needed to manage the investments as a portfolio, GAO said.

But efforts to improve the department's investment management process have been uncoordinated, the congressional auditors said. The department lacks a comprehensive plan that defines and prioritizes desired improvements, GAO stated.

"Such a plan is instrumental in helping HHS to coordinate and guide its improvement efforts and sustain its commitment to the efforts already under way," the report stated. "Without such a plan and procedures for implementing it, the department risks being unable to effectively establish mature investment management capabilities."

The department said in written comments to GAO that the report represents a fair assessment of its progress.

In a related report (GAO-06-12), GAO found that the HHS's Centers for Medicare and Medicaid Services needs to establish essential IT investment management capabilities to better manage its $2.55 billion in IT appropriations.

CMS has established slightly more than half of the foundational practices necessary to manage individual investments and has implemented two of the 27 key practices needed to manage investments as portfolios, GAO reported. Without these practices, the agency's executives cannot be sure that they are minimizing risks and maximizing returns, the report stated.