STATEMENT OF

SENATOR RICHARD G. LUGAR

March 5, 1997

USDA's Business Plans and Reorganization Management

In June 1992, Senator Leahy and I wrote the late Secretary Madigan that "money invested by USDA in computer technology over the past several years has been spent without a clear understanding of what was being purchased or what was operationally required to increase efficiency within the Department." We closed by asking "with the exception of purchases needed to maintain existing systems, [that] you curtail computer technology purchases until a strategic plan or vision for Department reorganization is completed." The letter followed a hearing in which Senator Leahy stated "GAO portrays USDA as an oversized aging bureaucracy that maintains the status quo, does not work as an integrated unit, and too slowly adapts to the changing needs of our country."

This Committee's interest in USDA management and information technology is long standing and bi-partisan. Unfortunately, so are USDA's problems.

Last year, Congress approved a new farm bill by an historic margin. The seven-year law is as clear and long-term a mandate as USDA is ever likely to get. At first, many in USDA seemed unwilling to accept the new mission. Leadership from USDA's highest levels must overcome this resistance.

In House testimony last week, Secretary Glickman lamented the "stovepipe" mentality that pervades USDA, saying each agency is protective of its own turf and does not have a "USDA spirit." He said it is difficult for the Department to develop compatible, non-duplicative information technology systems and said he "must get a handle on this."

I agree. Later this morning, GAO will testify about a long history of ill-considered or poorly planned information technology purchases that involve nearly $6 billion over the past five years. We only need to read the newspapers to find examples of USDA management problems large and small.

Last year, GAO found that USDA was accepting collect calls from six Virginia correctional institutions and transferring them to offshore "chat" lines of dubious repute. USDA paid all the bills while being able to institute no process to stop the fraud.

Just recently we have learned that some prisoners remain on food stamp rolls after incarceration. It took a GAO audit to expose this fraud, involving over 12,000 inmates and millions of dollars in four states surveyed.

The 1996 farm bill required USDA to prepare a Quarterly Report on CCC expenditures. Last week, USDA officials explained to my staff that the July-September report from last year would not be available until nearly six months after the end of the fiscal year. The reason? Although the amounts and the recipients of CCC checks are automated, the information about why checks were written is not automated but must be reconstructed from paper records by hand. The CCC writes 800,000 checks every quarter. Such a system is bound to raise questions about the reliability of CCC's audited financial statements.

Out in the countryside, there are still communication "fire walls" within the new Field Service Centers. Until January 27 of this year, Field Service Centers were being rewired with new telephone lines. This $75 million initiative was suspended because the President's impending budget would propose the closure of many of these offices due to the reforms of the 1996 farm bill. On August 2, before spending commenced, Pat Roberts and I wrote the Secretary outlining just that concern and suggested that pursuit of this initiative was premature and ill-planned. My staff has visited offices that were recently rewired. They found each agency in the Field Service Centers has maintained its own phone number and in some instances calls cannot be transferred between agencies in the same, newly rewired office.

These problems should be easy to solve with proper planning and investment. Yet they persist even though USDA spends $1.2 billion on technology every year. One has to ask, what has been accomplished by the annual expenditure of over $1 billion since the 1992 letter? And what has changed since the current management team took over?

In comments to the Agriculture Appropriations Subcommittee last week, USDA officials suggested that the new Chief Information Officer (CIO) and investment oversight board demonstrate that USDA has turned the corner with regard to its IT problems. Claiming a similar breakthrough in April of 1993, USDA launched a $2.6 billion initiative to improve operations and acquire integrated information systems called "Info Share." In 1994, GAO stated that "USDA was managing Info Share primarily as a vehicle to acquire new information technology rather than as an opportunity to fundamentally improve business processes." Further, GAO noted that senior officials were not directly involved, USDA was not adequately analyzing its business processes, individual agencies continued to act like autonomous agencies and have a vested interest in continuing to operate according to old procedure. Info Share was abandoned in December 1995.

USDA is currently under a moratorium on purchases of information technology. A new board, the Executive Information Technology Investment Review Board (EITIRB), composed of USDA Under Secretaries and other officials was created last month to evaluate and control IT investments. Ms. Reed, the Chief Information Officer, has completed the first step of a massive undertaking by organizing a draft information technology architecture.

I want to support USDA's efforts. Yet I am not certain that this process can succeed. The CIO lacks the authority necessary to control IT spending and ensure that proper planning takes place. More authority over the purchase of information technology needs to be concentrated in her office. It is now delegated to each agency. She needs the power to evaluate all requests against specific criteria and finally attain some semblance of control over IT spending.

USDA must focus on the strategic business planning necessary to develop a business architecture and lay the groundwork for intelligent procurement and planning. The Department must ask basic questions, make decisions and then move ahead.

I do not want to see USDA repeat the mistakes of Info Share and other failed efforts. This is why I requested in my letter of February 4 to Secretary Glickman that the Department's testimony today focus on precisely how it will ensure that strategic planning to identify core business needs is undertaken before IT investment resumes.

Mr. Secretary, please proceed with your testimony.