A Report on Statewide Processes Intended to Assist State Entities in Developing Major Information Resources Projects
Report Number 12-047
Of the 15 completed major information resources projects analyzed that began on or after September 1, 2007, 67 percent took longer to implement than originally estimated and 73 percent expended more than the original budget.
Auditors reviewed the State's controls and agencies' processes for developing major information resources projects. Specifically, auditors analyzed 15 completed projects that began on or after September 1, 2007; surveyed 14 project managers at 12 agencies for projects started during or after January 2004; and analyzed 13 Quality Assurance Team reviews of major information resources projects.
Agencies did not always have an effective process in place for the initial planning of their projects. Specifically, some agencies did not consistently:
- Involve all key stakeholders early in the development process.
- Involve their internal audit departments during the development of major information resources projects.
- Use a phased approach when developing and implementing major information resources projects.
The State has controls to provide oversight of and assistance to agencies developing major information resources projects. Some of those controls include:
- The documentation requirements for submitting a Legislative Appropriations Request, including the Information Technology Detail form and the Biennial Operating Plan (see page 4).
- The requirement that agencies comply with the Texas Project Delivery Framework (see page 5) and the State of Texas Contract Management Guide (see page 6).
- Oversight by the Quality Assurance Team (see page 5) and Contract Advisory Team (see page 4).
The State Auditor's Office is a member of the Quality Assurance Team. Other members include a representative from the Legislative Budget Board and a representative from the Department of Information Resources. To ensure that it retains its independence as required by certain auditing standards, the State Auditor's Office delegates its voting authority to the Legislative Budget Board for decisions to approve or not approve the expenditure of appropriated funds for major information resources projects.
Reporting of Projects and Costs
Even though state law and guidance requires agencies to report all major information resources projects and associated costs, some state agencies reviewed:
- Failed to report all major information resources projects to the Quality Assurance Team as required.
- Did not fully complete and submit all deliverables as required by the Department of Information Resources' Texas Project Delivery Framework.
- Omitted the reporting of state staff salaries and benefits in a major information resources project's initial cost estimate and subsequent reports.
In addition, some of the projects reviewed experienced scope expansions. The Summary of Quality Assurance Team Project Reviews Report issued in May 2012 identified scope expansions as one cause of project delays. While some scope expansions may be justified to ensure system functionality or to comply with state and federal requirements, sufficient planning early in a project's development could help agencies better identify system requirements and help reduce the need for scope changes at later stages.
Auditors identified additional weaknesses in the State's processes for developing major information resources projects that should be addressed. Specifically:
- Currently, the State does not require agencies to obtain independent verification and validation services for major information resources projects. Some state governments and federal agencies (see page 9 for more details) require independent verification and validation services to be obtained for major information resources projects to reduce the risk of reworking the project in the later stages at a higher cost.
- There currently is no requirement that agencies respond to the Contract Advisory Team's recommendations for a solicitation that is submitted by an agency for review.
To help address the weaknesses identified above, the Legislature should consider requiring:
- State appropriations for major information resources projects to be subject to the Quality Assurance Team's expressed written approval and notification to the Comptroller of Public Accounts prior to the release of agency funds.
- The Quality Assurance Team to obtain a list of agencies' current information resources projects that are estimated to cost more than $750,000, certified by the agency's executive director and information resource manager.
- Independent verification and validation services to be performed for major information resources projects.
- Agencies to provide written responses to each recommendation provided by the Contract Advisory Team.
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