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	<title> - NO COMPUTER SYSTEM LEFT BEHIND: A REVIEW OF THE FEDERAL GOVERNMENT'S D+ INFORMATION SECURITY GRADE</title>
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	[House Hearing, 109 Congress]
	[From the U.S. Government Publishing Office]





	NO COMPUTER SYSTEM LEFT BEHIND: A REVIEW OF THE FEDERAL GOVERNMENT'S D+
	INFORMATION SECURITY GRADE

	=======================================================================

	HEARING

	before the

	COMMITTEE ON
	GOVERNMENT REFORM

	HOUSE OF REPRESENTATIVES

	ONE HUNDRED NINTH CONGRESS

	FIRST SESSION

	__________

	APRIL 7, 2005

	__________

	Serial No. 109-13

	__________

	Printed for the use of the Committee on Government Reform


	Available via the World Wide Web: http://www.gpo.gov/congress/house
	http://www.house.gov/reform


	______

	U.S. GOVERNMENT PRINTING OFFICE
	20-562 WASHINGTON : 2005
	_____________________________________________________________________________
	For Sale by the Superintendent of Documents, U.S. Government Printing Office
	Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
	Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001

	COMMITTEE ON GOVERNMENT REFORM

	TOM DAVIS, Virginia, Chairman
	CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
	DAN BURTON, Indiana TOM LANTOS, California
	ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
	JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
	JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
	GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
	MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
	STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
	TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
	CHRIS CANNON, Utah WM. LACY CLAY, Missouri
	JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
	CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
	MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
	DARRELL E. ISSA, California LINDA T. SANCHEZ, California
	GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland
	JON C. PORTER, Nevada BRIAN HIGGINS, New York
	KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of
	LYNN A. WESTMORELAND, Georgia Columbia
	PATRICK T. McHENRY, North Carolina ------
	CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont
	VIRGINIA FOXX, North Carolina (Independent)
	------ ------

	Melissa Wojciak, Staff Director
	David Marin, Deputy Staff Director/Communications Director
	Rob Borden, Parliamentarian
	Teresa Austin, Chief Clerk
	Phil Barnett, Minority Chief of Staff/Chief Counsel


	C O N T E N T S

	----------
	Page
	Hearing held on April 7, 2005.................................... 1
	Statement of:
	Crandlemire, Bruce N., Assistant Inspector General for Audit,
	U.S. Agency for International Development; John Streufert,
	Acting Chief Information Officer, U.S. Agency for
	International Development, accompanied by Mark Norman,
	USAID OIG; Melinda Dempsey, USAID OIG; Philip M. Heneghan,
	USAID; Frank Deffer, Assistant Inspector General for
	Information Technology, U.S. Department of Homeland
	Security; Steve Cooper, Chief Information Officer, U.S.
	Department of Homeland Security, accompanied by Edward G.
	Coleman, DHS OIG; Ted Alves, Assistant Inspector General
	for IT and Financial Management, U.S. Department of
	Transportation; Daniel Matthews, Chief Information Officer,
	U.S. Department of Transportation, accompanied by Rebecca
	Leng, DOT OIG; Ed Densmore, DOT OIG; Nate Custer, DOT OIG;
	Vicki Lord, DOT OCIO; and Dr. Dan Mehan, CIO, FAA.......... 71
	Alves, Ted............................................... 105
	Cooper, Steve............................................ 99
	Crandlemire, Bruce N..................................... 71
	Deffer, Frank............................................ 89
	Matthews, Daniel......................................... 124
	Streufert, John.......................................... 79
	Wilshusen, Greg, Director, Information Security Issues, U.S.
	Government Accountability Office; and Karen S. Evans,
	Administrator, Office of E-Government and Information
	Technology, U.S. Office of Management and Budget........... 22
	Evans, Karen S........................................... 52
	Wilshusen, Greg.......................................... 22
	Letters, statements, etc., submitted for the record by:
	Alves, Ted, Assistant Inspector General for IT and Financial
	Management, U.S. Department of Transportation, prepared
	statement of............................................... 107
	Cooper, Steve, Chief Information Officer, U.S. Department of
	Homeland Security, prepared statement of................... 102
	Crandlemire, Bruce N., Assistant Inspector General for Audit,
	U.S. Agency for International Development, prepared
	statement of............................................... 74
	Cummings, Hon. Elijah E., a Representative in Congress from
	the State of Maryland, prepared statement of............... 17
	Davis, Chairman Tom, a Representative in Congress from the
	State of Virginia, prepared statement of................... 4
	Deffer, Frank, Assistant Inspector General for Information
	Technology, U.S. Department of Homeland Security, prepared
	statement of............................................... 91
	Evans, Karen S., Administrator, Office of E-Government and
	Information Technology, U.S. Office of Management and
	Budget, prepared statement of.............................. 54
	Matthews, Daniel, Chief Information Officer, U.S. Department
	of Transportation, prepared statement of................... 126
	Ruppersberger, Hon. C.A. Dutch, a Representative in Congress
	from the State of Maryland, prepared statement of.......... 12
	Streufert, John, Acting Chief Information Officer, U.S.
	Agency for International Development, prepared statement of 81
	Wilshusen, Greg, Director, Information Security Issues, U.S.
	Government Accountability Office, prepared statement of.... 24


	NO COMPUTER SYSTEM LEFT BEHIND: A REVIEW OF THE FEDERAL GOVERNMENT'S D+
	INFORMATION SECURITY GRADE

	----------


	THURSDAY, APRIL 7, 2005

	House of Representatives,
	Committee on Government Reform,
	Washington, DC.
	The committee met, pursuant to notice, at 10 a.m., in room
	2154, Rayburn House Office Building, Hon. Tom Davis (chairman
	of the committee) presiding.
	Present: Representatives Davis, Duncan, Cummings,
	Ruppersberger, and Norton.
	Staff present: Ellen Brown, legislative director and senior
	policy counsel; Robert Borden, counsel/parliamentarian; Rob
	White, press secretary; Victoria Proctor, senior professional
	staff member; Jamie Hjort, professional staff member; Chaz
	Phillips, policy counsel; Teresa Austin, chief clerk; Sarah
	D'Orsie, deputy clerk; Kristin Amerling, minority deputy chief
	counsel; Karen Lightfoot, minority communications director/
	senior policy advisor; Nancy Scola, minority professional staff
	member; Earley Green, minority chief clerk; and Jean Gosa,
	minority assistant clerk.
	Chairman Tom Davis. Good morning. The committee will come
	to order.
	I would like to welcome everyone to today's hearing on
	implementation of FISMA, the Federal Information Security
	Management Act of 2002.
	We rely heavily on information technology and the Internet
	to support our economy, our national security and government
	operations. For instance, e-commerce is more popular than ever;
	Christmas 2004 saw record high consumer demapped on retail Web
	sites. IT systems are used to operate and protect our critical
	infrastructures. And in the Federal Government, electronic
	government initiatives create efficiencies, save taxpayers time
	and money, and help eliminate redundant processes.
	Given the interconnectivity of systems, all it takes is one
	weak link to break the chain. All users, whether they are at
	home or at school or at work, need to understand the impact of
	weak security and the measures that should be taken to prevent
	cyber attacks.
	Everyone must protect his or her cyberspace, and of course,
	that includes the government. Therefore, it is critical that
	the Federal Government adequately protect its systems to ensure
	the continuity of operations, and to maintain public trust.
	This is particularly true of agencies such as the Internal
	Revenue Service, the Social Security Administration and the
	Department of Veterans Affairs that maintain citizens' personal
	information in their systems. Recent failures by the Bank of
	America and Choice Point have focused the spotlight on identity
	theft. Successful FISMA implementation is important because a
	similar event could occur in the government.
	Like the private sector, agencies are not immune to the
	loss of personal information. Threats to government systems
	could result in identity theft and subsequent financial damage
	and frustration, as well as diminished trust in government IT
	capabilities and electronic government programs.
	Every day Federal information systems are subjected to
	probes or attacks from outside sources. Cyber attacks are
	evolving and becoming more sophisticated. Therefore, a
	government information security management program must be
	comprehensive, yet flexible enough to adapt to the changing
	cyber threat environment. It is a matter of good management and
	good business practice, but it is also a matter of national
	security. FISMA provides that structure by requiring that each
	agency create a comprehensive risk-based approach to agency-
	wide information security management.
	OMB performs an important role in the information security
	management process by encouraging agencies to adopt a new
	approach to security. In the past, information security was
	often seen as an afterthought, more of a crisis response than a
	management tool. OMB is helping to alter that perspective. It
	holds the agencies responsible for protecting Federal systems
	through business case evaluations so that agencies can better
	fulfill their missions. OMB requires agencies to address their
	security deficiencies before they are permitted to spend money
	on IT upgrades or new IT projects.
	I support this action because it forces agencies to
	concentrate on security before adding new layers of systems to
	their architecture and potentially complicating their security
	concerns.
	I'm also pleased that OMB has identified a sixth line of
	business, cyber security. Laws like FISMA and the Clinger-Cohen
	amendment require every agency to think about and invest in
	information security. However, each agency does it differently.
	The reason FISMA grades show the Federal Government still has a
	long way to go when it comes to information security. As with
	the other five lines of business, the goal of the cyber
	security line of businesses is to use business principles and
	best practices to identify common solutions for business
	processes and/or technology-based shared services for
	government agencies. The intended result is better, more
	efficient and consistent security across the Federal Government
	for the same amount of dollars, if not less. And at the end of
	the day, it's not how much money you spend, though, it's how
	well you spend it.
	To help us gauge the agencies information security
	progress, FISMA requires the CIOs and IGs to submit reports to
	Congress and OMB. The committee enlists GAO's technical
	assistance to prepare the annual scorecard. This year the
	government made a slight improvement, receiving a D+. The
	overall government score is two points above last year, but
	needless to say, this isn't impressive. Progress is slow. Our
	objective today is to find out how the government can improve,
	and why some agencies can show remarkable improvement while
	others appear to flounder.
	We will hear from the IGs and CIOs of two agencies that
	improved their scores this year, Department of Transportation
	and the U.S. Agency for International Development. We will also
	hear from the IG and the CIO of the Department of Homeland
	Security, a poor performer again this year. I think it is worth
	noting that DHS has cyber security responsibilities for the
	Nation, and must work with the private sector regularly on
	these issues. Given this role, DHS needs to have its house in
	order and should become a security leader among agencies. What
	is holding them up? Well, the DHS witnesses will discuss the
	unique challenges that they face in a large and relatively new
	agency, and what actions they are taking to improve their
	information security, giving us a better understanding of their
	difficulties.
	In addition, we're concerned about how well the CIO and IG
	offices communicate about issues such as their interpretations
	of the OMB reporting requirements. Disagreements on
	interpretation may impact their respective reports and make it
	difficult for us to get an accurate picture of the agency's
	information security progress. This also raises questions about
	the clarity of the guidance, and whether agencies respond to
	OMB about the guidance during the comment period so their
	comments and concerns are adequately addressed in the final
	version.
	We will examine whether the IGs need a standardized
	information security audit framework similar to that used for
	financial management systems. Also, we need to address whether
	agencies need additional guidance, procedures or resources to
	improve their information security and fully comply with FISMA.
	Panel one witnesses from GAO and OMB will focus on
	information security from the government-wide perspective.
	Panel two is comprised of agency representatives and will focus
	on the agency-level perspective on implementation of FISMA.
	We'll hear from the IGs and CIOs at USAID, DHS, and the
	Department of Transportation. GAO will join panel two for the
	question-and-answer period.
	[The prepared statement of Chairman Tom Davis follows:]

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	Chairman Tom Davis. I now recognize our distinguished
	ranking member, Mr. Waxman, for his opening statement.
	Mr. Ruppersberger. I'm not Mr. Waxman, I'm a little bit
	larger than Mr. Waxman.
	Chairman Tom Davis. Well, when he comes, we will recognize
	him. In the meantime, we're very pleased to recognize from
	Baltimore City, Mr. Ruppersberger, who I will be happy to
	recognize.
	Mr. Ruppersberger. Well, first, thank you for calling this
	hearing today on OMB's report to Congress on the Federal
	Information Security Management Act.
	According to the report, the U.S. Agency for International
	Development and the Department of Transportation received the
	highest grades of all 24 agencies reviewed. I hope that during
	today's hearing, we will be able to pull out some best
	practicing and tangible suggestions from those agencies as to
	how the other 22 can improve their grades. It is disappointing
	and unacceptable that our government agencies' overall grade is
	a D+, however, I'm encouraged by the few successes that will be
	discussed here today.
	The F grade for the Department of Homeland Security is
	totally unacceptable because of the high stakes involved and
	their mission to protect our national security. Last week, the
	President's Commission on the Intelligence Capabilities of the
	United States issued their report regarding WMDs. In the
	report's postscript the Commission identified security,
	counterintelligence, and information assurance as crucial
	issues in the intelligence community and the Director of
	National Intelligence in the next few years to come.
	The Commission acknowledges that they only scratched the
	surface of the problem, and the Commission recommends early
	action to define new strategies for managing security in the
	21st century, security that includes information assurance,
	which is why we're all here today.
	This recommendation from the Commission will be a
	beneficial step in the process for the Department of Homeland
	Security and other security offices to improve their
	infrastructure security and their information and cyber
	security efforts.
	The good news is that the Justice Department improved the
	most, going from an F last year to a B- this year. Currently,
	as graded, the FBI is evaluated within the overall grade given
	to Justice. Based on the FBI's mission regarding national
	security interests, I believe they should be graded separately
	from the Department of Justice.
	Again, according to the President's Commission, further
	reforms are also necessary in the FBI's information technology
	infrastructure which remains a persistent obstacle for
	successful execution of the FBI's national security mission.
	If we look at the problem as a national security issue in
	addition to a general information security issue, I think we
	will be able to come together to find solutions that will work
	across all agencies. I know there is always a tradeoff between
	the cost of implementing a security measure and the potential
	risks if we do not. I feel that projecting our citizens and the
	government from information security breaches is worth the cost
	that will be incurred to set up appropriate security measures.
	I am concerned about all of these issues, but I think if we get
	past the grades and use this hearing and OMB's report as a
	guide, I think we will be able to quickly improve information
	security government-wide.
	We're here today to point out a problem and to see what we
	can do to fix it. These failing grades are unacceptable. We
	need to learn from those agencies who are doing well so that we
	can improve individual agency's scores and the government-wide
	score.
	Thank you, Mr. Chairman.
	[The prepared statement of Hon. C.A. Dutch Ruppersberger
	follows:]

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	Chairman Tom Davis. Thank you very much. I do not see Mr.
	Waxman, even though he is in my script.
	The gentleman from Maryland, any opening statement?
	Mr. Cummings. Yes, thank you very much.
	Mr. Chairman, I, too, thank you for calling this important
	hearing on the effectiveness of the Federal Government's
	ongoing attempt to strengthen the security and reliability of
	its information and information systems.
	Decades ago, the necessity of such a hearing would have
	been questionable as information technology and the Internet
	were not as prevalent nor as indispensable in the Federal
	Government as they are today. In the 21st century, one need not
	look very far to see how ambiguous information technology and
	the Internet have become in the day-to-day operations of the
	Federal Government. Communications now travel as fast and as
	far as the Internet allows. The electronic processing of
	information allows delivery of services to function with
	unprecedented ease and accuracy. The sharing of information
	intergovernmentally and across sectors can permit the Federal
	Government to operate with renewed effectiveness.
	However, with all the advantages that accompany the Federal
	Government's information technology capabilities, there still
	exist critical areas of concern. The terms ``computer virus,''
	``worm'' and ``hacker'' are now part of the modern day lexicon
	for good reason. Given the sensitivity of personal and
	confidential data found in Federal information systems in
	agencies such as the Internal Revenue Service and the
	Department of Defense, the potential exists for cyber criminal,
	terrorist or foreign nation to wreak havoc.
	The American people are acutely aware that such
	vulnerabilities could not only result in identity theft and a
	loss of privacy, but also endanger our economy and undermine
	our national security.
	Due to these concerns, information security has become a
	top governmental priority. To that end, Congress passed the
	Federal Information Security Management Act [FISMA], in 2002.
	This legislation established a comprehensive framework to
	safeguard the Federal Government's information and information
	systems.
	Agencies are mandated to implement an information security
	program, which includes performing risk assessments, accounting
	for utilized information systems, and developing procedures to
	ensure the accessibility and continuity of information.
	Agencies must also furnish the Office of Management and Budget
	with an annual report on the effectiveness of their program.
	These agency reports form the basis of the Government Reform
	Committee's Federal computer security report card.
	Specifically, the FISMA report for 2004 acknowledges some
	improvements and perennial challenges in this area.
	It states that agencies have made substantial progress in
	the certification and accreditation of systems, the
	incorporation of built-in security costs, the annual testing of
	system controls, the development of contingency plans to ensure
	operational continuity, and the implementation of security
	configuration requirements. This progress is commendable,
	however, given that the 2004 government-wide grade for
	information security is a D+, information technology is too
	early to celebrate. Critically important agencies such as the
	Department of Homeland Security, the Department of Health and
	Human Services and the Department of Veteran Affairs all
	received Fs.
	I would argue no one here would be satisfied if their child
	brought home these grades from school. How can we afford to
	have a lower standard for the Federal Government? The American
	people demand excellence, and Cs, Ds and Fs in securing the
	Federal Government's information just won't do.
	Today's hearing will serve as an avenue to identify what
	needs to occur to assist Federal agencies in realizing the
	goals of FISMA. I hope the witnesses will provide insight to
	help Congress determine whether agencies require additional
	guidance in order to meet FISMA requirements, the
	responsibilities of agency Inspectors General in this process,
	and the need to possibly provide increased flexibility in
	assessing agency compliance with FISMA mandates.
	With that, Mr. Chairman, I again thank you for calling the
	hearing, and I yield back.
	[The prepared statement of Hon. Elijah E. Cummings
	follows:]

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	Chairman Tom Davis. Well, thank you very much.
	For our first panel we have Greg Wilshusen, who is the
	Director of Information Security Issues, at the Government
	Accountability Office, who is no stranger to this committee.
	And we have Karen Evans, who is the Administrator of the Office
	of E-Government and Information Technology at the Office of
	Management and Budget. I'm not sure if this is your first time
	in a full committee, you have done a lot in the subcommittee,
	but we welcome you, we're happy to hear from you, and we
	appreciate the job that you are doing.
	You know it is our policy to swear witnesses in, so would
	you rise and raise your right hands.
	[Witnesses sworn.]
	Chairman Tom Davis. Thank you very much.

	STATEMENTS OF GREG WILSHUSEN, DIRECTOR, INFORMATION SECURITY
	ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND KAREN S.
	EVANS, ADMINISTRATOR, OFFICE OF E-GOVERNMENT AND INFORMATION
	TECHNOLOGY, U.S. OFFICE OF MANAGEMENT AND BUDGET

	STATEMENT OF GREG WILSHUSEN

	Mr. Wilshusen. Mr. Chairman, and members of the committee,
	I am pleased to be here today to discuss Federal efforts to
	implement requirements of the Federal Information Security
	Management Act of 2002 [FISMA]. This act requires each agency
	to develop, document, and implement an agency-wide information
	security program that provides security for the information and
	information systems that support the operations and assets of
	the agency, including those provided and/or managed by another
	agency or contractor. Agency programs are to include eight
	components, such as periodic assessment of risks and periodic
	testing and evaluation of controls. FISMA also requires OMB,
	Federal agencies and Inspectors General [IGs], to report each
	year on efforts to implement these programs.
	Mr. Chairman, my bottom-line message today is that
	continued efforts are needed to sustain progress made by the
	agencies in implementing the requirements of FISMA.
	In my testimony today, I will note areas where agencies
	have made significant progress and those areas where challenges
	remain. In addition, I will discuss opportunities for improving
	the annual FISMA reporting process.
	Our reviews of information security controls at Federal
	agencies have found that significant information security
	weaknesses continue to place a broad array of Federal
	operations and assets at risk of misuse and disruption. As a
	result, we continue to designate Federal information security
	as a government-wide high risk area in our recent update to
	GAO's high-risk series.
	In its fiscal year 2004 report to the Congress, OMB noted
	that the 24 major Federal agencies continued to make
	significant progress in implementing key information security
	requirements. For example, OMB reported that the percentage of
	Federal information systems that have been certified and
	accredited rose 15 points to 77 percent. Systems certification
	and accreditation is a process by which agency officials
	authorize systems to operate. It is to include a security of
	the management, operational and technical security controls in
	the system.
	However, OMB, the agencies, and IGs also reported several
	areas where implementing effective information security
	practices remains a challenge. For example, seven IGs assessed
	the quality of their agency's certification and accreditation
	processes as poor. As a result, agency reported performance
	data may not accurately reflect the status of the agency's
	efforts to implement this requirement.
	As another example, 43 percent of Federal systems did not
	have a tested contingency plan. These plans provide specific
	instructions for restoring critical systems, business
	processes, and information in the event of a disruption of
	service. The testing of contingency plans is essential to
	determine whether the plans will function as intended. Without
	testing, agencies can have only minimal assurance that they
	will be able to recover mission-critical systems and processes
	in the event of an interruption.
	Opportunities exist to improve the annual FISMA reporting
	process. For example, in the absence of an independent
	verification of agency-reported data, having a senior agency
	official attest to the accuracy of data could provide
	additional assurance.
	In addition, performance measurement data do not indicate
	the relevant importance or risk of the systems for which FISMA
	requirements have been met. Reporting performance data by
	system risk would provide better information about whether
	agencies are prioritizing their information security efforts
	according to risk.
	Finally, developing and adopting a commonly accepted
	framework for conducting the annual IG reviews mandated by
	FISMA could help to ensure consistency and usefulness of these
	reviews.
	Mr. Chairman, this concludes my opening statement. I will
	be happy to answer any questions you or the members of the
	committee may have.
	[The prepared statement of Mr. Wilshusen follows:]

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	Chairman Tom Davis. Thank you. We do have a number of
	questions.
	Ms. Evans, thanks for being with us.

	STATEMENT OF KAREN S. EVANS

	Ms. Evans. Good morning, Mr. Chairman, and members of the
	committee. Thank you for inviting me to speak about the status
	of the Federal Government's efforts to safeguard our
	information and systems.
	In March 2005 OMB issued our second annual report on
	implementing the Federal Information Security Management Act
	[FISMA]. We continue to believe FISMA provides a sound
	foundation for improving and maintaining a strong Federal
	information technology security program. In short, FISMA is
	working. Results are apparent. Agencies and Inspectors General
	are becoming more acclimated to its requirements, and new
	technical guidelines from the National Institute of Standards
	and Technology are coming online to promote further progress.
	We see no need at this time to revise it in any significant
	way, in fact, substantial revision could delay additional
	progress.
	Across the Federal Government, most agencies have shown
	substantial progress in improving their information security
	programs. In addition, for the first time agencies reported the
	degree to which they've implemented security configurations for
	operating systems and software applications. We found that all
	agencies have begun developing and implementing security
	configuration policies for at least some of their operating
	systems.
	While progress has been made, deficiencies in agency
	security procedures and practices remain. Two common
	deficiencies noted by the agency's Inspector Generals include
	weaknesses in agency-wide plans of actions and milestones, and
	the lack of quality in some of the agencies' certification and
	accreditation processes.
	In addition, we have identified other areas of concern;
	they include overall inconsistency in agency and government-
	wide FISMA implementation, self and IG evaluations. Potentially
	unnecessary duplication of effort and resources across the
	government, ensuring adequate security of contractor-provided
	services, and a transition to Internet protocol version 6.
	While we believe FISMA itself, along with the implementing
	guidance from OMB, NIST, and the national security authorities
	are sufficiently comprehensive and detailed to address these
	concerns at a policy level. Consistent implementation is
	difficult and requires considerable expertise and resources at
	the agency.
	I would like to answer directly one of the questions asked
	in your invitation letter, whether there is a need for the
	Inspector General auditing framework similar to that used in
	financial audits. We have found the IG's analysis extremely
	valuable in gaining additional insight into the agency's IT
	security programs and operations. Much of the analysis in our
	annual report comes from the IG's findings, but at the same
	time, like agency CIOs and operational program officials, IGs
	have varying capacities in the areas of resource available and
	security expertise.
	And across the IG community, there are differing
	methodologies and perspectives on what comprises a sound
	security program, including the proper way to implement FISMA.
	Therefore, to the extent that an IG framework would promote
	greater consistency, we would support it; but we do note a few
	concerns; first and foremost, we strongly believe that the work
	of the IG should, to the maximum extent practical, be
	integrated with and not separate from agency IT security
	programs; and second, we're concerned with the adoption of a
	strict and specific review requirement for FISMA purposes if
	they would, in any way, limit the essential interaction needed
	between IGs and CIOs.
	In addition to ongoing discussions to promote consistency
	in oversight and reporting, we have asked the IGs to
	participate in the newly formed IT security line of business.
	We expect this line of business will not only lead to a de
	facto IG and CIO reporting framework, but more importantly, a
	stronger Federal Government-wide IT security program.
	While the task force performs its work, OMB will continue
	to use our existing oversight mechanisms to improve agency and
	government-wide IT security performance. Information technology
	security is one of the No. 1 critical components that agencies
	must implement in order to achieve green for the e-government
	initiative of the President's management agenda. If the
	security criteria are not successfully met, agencies cannot
	move forward regardless of their performance against the other
	criteria.
	In conclusion, over the past year agencies have made
	significant progress in closing the Federal Government
	information technology security performance gaps.
	I would like to acknowledge the significant work of the
	agencies and the IGs in conducting the annual reviews and
	evaluations. While notable progress in resolving IT security,
	weaknesses have been made, problems continue, and new threats
	and vulnerabilites continue to materialize. To address these
	challenges OMB will continue to work with the agencies, GAO and
	Congress to promote appropriate risk-based and cost-effective
	IT security programs, policies and procedures to adequately
	secure our operations and assets. But again, we believe FISMA
	is more than adequate in its current form to support all the
	needed improvement efforts. I would be glad to take any
	questions at this time.
	[The prepared statement of Ms. Evans follows:]

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	Chairman Tom Davis. Well, thank you both.
	Ms. Evans, what changes or improvements is your office
	proposing for the 2005 FISMA guidance? And do you plan to issue
	new updated guidance regarding your circular A-130?
	Ms. Evans. We are working right now with the IG community
	and NIST, CNSS and GAO to revise the reporting requirements.
	It's going to be similar to last year. We are going to focus
	this year more on performance metrics, and we are we going to
	include a new reporting requirement this year dealing with
	privacy of the information that the agencies are collecting.
	Chairman Tom Davis. Well, some agencies have expressed
	concern that the term ``system'' is not well defined; for
	instance, how should an agency classify a state system that
	contains Federal data? Does OMB plan to address this in the new
	guidance?
	Ms. Evans. The definition of a system--and I want to answer
	this question both from my past experience as an agency CIO,
	and now as the policy official.
	The reason why I believe that we have allowed the
	definition to be the way that it is is that it provides maximum
	flexibility. So as agencies would potentially view this as
	ambiguous, we view it from a policy perspective as giving the
	agencies flexibility that they need to be able to determine and
	analyze what risk is appropriate for assets within their
	control that they have that they are responsible for.
	So there is an ambiguous nature to the definition of
	system, but we look at it as it allows the flexibility for the
	agency to define that so that they can then go forward and
	implement the management policies and procedures they need in
	order to deal with that.
	You could do something very small and say one piece--there
	could be an application on one piece that has enormous risk
	that it would impose if it was connected to a network; you may
	determine that should be called a system, and go through the
	full certification and accreditation for that. And a system
	could be as huge as a network, where the whole department's
	network, that can constitute a system because there are certain
	rules of engagement that you would want to have, rules of
	behavior on that system before you would go forward and allow
	other resources to be connected to it. So we don't necessarily
	want to go down and be so proscriptive in our definitions as to
	restrict the ability of the agency to be able to go forward and
	determine what is the best posture for them.
	Chairman Tom Davis. But you could have agencies defining it
	differently, basically.
	Ms. Evans. They may, and that is why the evaluation that is
	being done by the IG, the independent evaluation coming in,
	looks at how they apply that definition, how they have a
	methodology within their department to see if the thought
	process that they put behind it to determine it is sound to
	address the risk.
	Chairman Tom Davis. OK. Mr. Wilshusen, what do agencies
	have to do to get information security removed from the GAO
	high-risk list? This is, as you know, the list was expanded to
	include cyber security--well, cyber critical infrastructure
	protection. Information security has been on the list since
	1997. Can you briefly discuss what you think needs to be done
	to get this off the high-risk list?
	Mr. Wilshusen. Well, first of all, what they need to do--
	and where we have consistently found on our review--is to
	implement at each agency an effective agency-wide information
	security program, such as those principles and requirements
	embodied in FISMA. And we have found that many of the agencies
	have not done that. This in turn has allowed and has resulted
	in many of their systems being insecure.
	Chairman Tom Davis. Now why don't they do that? Is it lack
	of money, they've got so many priorities at this point this is
	just one, without additional resources, that they're reluctant
	to do?
	Mr. Wilshusen. It is probably a couple of issues. Certainly
	the emphasis and level of attention since the passage of FISMA
	has helped and has improved both awareness and accountability
	of the highest levels of each of the agencies, and that has
	been a positive thing. But in many cases it's primarily
	management issues, even though security has technical aspects
	to it. Many of the findings and issues that we identify are the
	result of management issues where certain requirements are just
	not being implemented.
	Chairman Tom Davis. OK. Thank you very much. I'm going to
	have some more questions, but Mr. Ruppersberger is going to get
	a turn here.
	Mr. Ruppersberger. Well, after looking at the reports and
	the grades, I see that some agencies have improved. Is there
	any effort to have a departmental roundtable to share best
	practices? I mean, what we are really here for today is to try
	to get us to a level where we are going to be a lot more
	efficient, and we have to find a way to do this. And it seems
	to me, when you have agencies that are doing well and agencies
	that aren't doing well, let's look at it and share information.
	Could either one of you address that issue?
	Ms. Evans. Yes, sir, I would be glad to.
	There is actually two efforts underway. One the chairman
	already noted, which is the cyber security line of business.
	This is an interagency government-wide task force that OMB has
	brought together under the leadership of the Department of
	Homeland Security as well as it is being co-chaired by NSA. And
	what we are doing there is looking at all of the issues. There
	are four particular areas that we are looking at, like
	training, like management practices of framework, those types
	of activities which get to the heart of your question, what is
	working, and what can we take that is working within the
	agencies and move it out government-wide?
	The one thing that when we set up this task force is,
	because of the way FISMA is set up and the way that a cyber
	security program should work, a good IT program should work
	within a department is you still have to look at the risk. Each
	department may have a different level of risk, so you can't
	necessarily think that one size would fit all. But that is what
	the security line of business is looking at.
	Also, on the CIO council, the Department of Justice Vance
	Hitch, is our cyber security liaison; he works very closely
	with our Best Practices Committee on topics, and topics such as
	security have always been on the forefront to bring together
	the appropriate groups so that we can share best practices. And
	then also, there is a newly named forum that we are--the CIO
	council is co-chairing with Congressman Davis' staff, which is
	the Chief Information Security Officers Forum.
	So we are trying to bring it together at multiple levels
	within an organization, and across the government as a whole,
	so that practices can be identified----
	Mr. Ruppersberger. Let me ask you this question: So much of
	whatever we do in management, managing large organizations,
	whatever, is accountability, and also giving the resources to
	the people that we want to perform the mission. How about the
	issue of maybe a government-wide audit standard? Do you think
	that would help in this situation? It seems that we need a
	standard for all of our agencies. Now we have different
	missions and different areas that we move into. What do you
	think of that issue?
	Ms. Evans. Well, I believe, through the President's
	management agenda, that we have added specific criteria into
	the score card under e-government, so we are holding the
	agencies accountable for their performance.
	Mr. Ruppersberger. But these failing grades are just not
	acceptable.
	Ms. Evans. I believe that the progress and the way that we
	are measuring progress--we have the same goals in mind, both
	the committee as well as the administration. How we are
	measuring progress may be a little bit different based on what
	the rating factors are based on what the committee has. You are
	specifically asking me about an auditing standard, and FISMA
	specifically makes a difference between audit and evaluation.
	And we really think that it's more of an evaluation because
	this really needs to be a collaborative effort within the
	entire department, because as you are talking about it, it is a
	management issue as well. If it turns into an audit situation,
	our concern is is that there won't be as much exchange, that it
	is more an evaluation----
	Mr. Ruppersberger. That's a good point. I'm near the end of
	my 5 minutes, I want to keep moving down another area.
	I am very concerned about the issue of the failing grade
	with Homeland Security, and I guess it is your turn, Mr.
	Wilshusen. Why do you feel at this point that Department of
	Homeland Security has a failing grade? What can we do to move
	that to another level to get them a lot more proficient in this
	subject matter today?
	Mr. Wilshusen. Well, first of all, Homeland Security does--
	and I guess you will talk to the CIO and IG on the next panel
	as well, but they have had a number of challenges that they
	need to overcome just in the creation of the department to----
	Mr. Ruppersberger. No question.
	Mr. Wilshusen. And that has been pretty much a key factor
	in some of the challenges that they face. However, at the same
	time, only just recently have they established key positions
	within that department in terms of having a chief information
	security officer, and they have identified key individuals to
	be responsible for information security. But it will take quite
	a bit of an effort for them to kind of meld different systems
	to make sure there is appropriate accountability, and the
	alignment of the information security program at the department
	level with different operating entities. Right now there is
	apparently quite a bit of autonomy between the two.
	Mr. Ruppersberger. And we can develop that in the next
	panel also, I see my time is up.
	Chairman Tom Davis. Ms. Norton.
	Ms. Norton. Thank you, Mr. Chairman.
	I'm sorry I was detained and I did not hear the entire
	testimony, but what concerns me is the unevenness among the
	agencies. Mr. Ruppersberger asked about homeland security and
	there may be some reason why they haven't gotten most of their
	act together, but some of these agencies you would expect to do
	better, you would expect the Department of State to do better,
	you would expect the Nuclear Regulatory Agency not to go down.
	And I note that the agencies look like they are in charge
	of this entire process. They are required to take the steps to
	do the inventory of their systems. And apparently in the
	survey, 70 percent of them said they wanted greater guidance in
	meeting the requirements. The report cards signify nothing, if
	not the need for greater guidance. I'm wondering if too much of
	this is left to agencies who have no expertise here either in
	choosing consultants in security aspects of computer systems;
	in fact, no agency really does have that expertise. I'm
	wondering if simply saying to the agencies, do this, has been
	sufficient, particularly when they themselves say they want
	greater guidance in meeting the requirements. And I suppose the
	obvious question is, do you agree, and where would such
	guidance come from? Are any steps being taken to offer greater
	guidance, given the rather pathetic reports that are indicated
	in the Federal computer security report card?
	Ms. Evans. First off, what we are trying to do from an
	administration perspective is avoid being very, very
	proscriptive in the policy because what we want to avoid is
	people just going down and cranking through--mechanically
	cranking through and getting checkmarks because you really want
	the practice to be engrained, and we were talking about
	management practices.
	So in order to meet what we are hearing from the agencies
	about additional guidance, we did take that to heart, and that
	is why the cyber security line of business was announced. They
	are looking at very specific areas, and we are bringing in the
	expertise in order to complement the team that has been put
	together government-wide. There will be recommendations that
	come out of that task force, specifically about how to identify
	problems, how to move forward, how to make sure that we have
	consistent and measurable types of statistics, how to do good
	certification and accreditation, and how to achieve the things
	that they are being measured upon, because I do agree with you,
	you just can't say, here are the requirements, go out and do
	it, and not provide the help and assistance that they need,
	especially when they are asking for it.
	So the products that will come out of the cyber security
	line of business we are very hopeful will address the issue of
	giving further guidance, without issuing new policies.
	Ms. Norton. I don't understand what you mean about policy--
	being proscriptive as to policy. As I understand it, they want
	greater guidance in meeting the requirements and a
	clarification of FISMA's assessment guidelines. I don't see
	where there is policy proscription involved in that.
	Mr. Wilshusen. One of the sources that the agencies can
	look to is NIST. Since FISMA was enacted, it placed
	specifically a responsibility to NIST in preparing and
	providing guidance and requirements to agencies and
	implementing the various aspects of FISMA. Over the last
	several--2 years, NIST has come out with guidance, and indeed
	they are going to be coming out with some additional guidance
	in different areas going forward.
	Ms. Norton. Well, they can look to that, and they could
	have looked to that all along, I take it.
	Mr. Wilshusen. Over the last couple of years they have
	issued new guidance.
	Ms. Norton. Well, all I can say is if the agency--if this
	large percentage of the agencies that is, a super majority say
	we need greater guidance, it does seem to me that whatever is
	in place is insufficient, and that the responsibility of the
	administration centrally is to assure that they get that
	guidance so that these pathetic grades do not come before the
	committee again.
	Thank you very much, Mr. Chairman.
	Chairman Tom Davis. Thank you very much.
	The gentleman from Tennessee.
	Mr. Duncan. Well, thank you, Mr. Chairman.
	I remember when we passed the one agriculture bill, farm
	bill a few years ago, 2 or 3 years ago, the Wall Street Journal
	had an editorial--and the bill was called the Farm Security
	Act--and it said any time we have the word ``security'' in a
	bill, we ought to give it 4 times the scrutiny because they
	were putting the word ``security'' in every bill, and we were
	going to great, great expense, and not getting a lot of bang
	for the buck, so to speak.
	And then I have also read and heard that every computer
	system is obsolete the day it's taken out of the box now
	because the technology is moving so fast. So the concerns I
	have--and I know Governor Gilmore from Virginia, who chaired
	the President's Commission on Security and Terrorism, he said--
	in his cover letter to the President, he said we must resist
	the urge to try to achieve total and complete computer because
	he said it's not attainable, and if we aren't careful, we will
	drain our resources from other things that are achievable.
	So I guess the two concerns I have is, No. 1, the cost of
	some of these things, because what I read repeatedly, I
	remember the FBI came up with a computer system that we spent
	hundreds of millions on, and then they said it was a disaster
	after we had paid for it. So what do we do on the cost of some
	of these things? Are we looking at those costs and what we are
	getting for our money so we don't just go ridiculously
	overboard? And second, are we settling for a Mercedes instead
	of constantly seeking to get Rolls Royces in regard to these
	systems?
	You've always got these companies that want to sell you
	more and better and newer, and I'm just wondering are we using
	a little common sense in regard to some of these things?
	Mr. Wilshusen. Well, certainly you are absolutely right,
	there is no way to provide absolute assurance that you are
	going to prevent any particular security infractions or
	violations and the like. You can never give 100 percent
	assurance that you are going to be able to thwart all security
	threats.
	What you have to do, and what FISMA requires, is that you
	have a risk-based program and process in which you assess the
	risk to your systems, and then come up with cost-effective
	measures to protect against those particular risks. And
	certainly, that is one of the key underpinnings of any
	information security program is having it based on risk.
	Mr. Duncan. All right.
	Yes, ma'am.
	Ms. Evans. As far as your question about evaluating the
	cost based on the cyber security program, every agency is
	required, as they bring forth their IT investments, to ensure
	that the cyber security aspect, the risk associated with
	implementing that system, is addressed, and the costs are
	included in the cost of that business case coming forward.
	So they have to look at how to secure the system against
	the benefits that they are going to achieve for implementing
	that system to ensure that there is an adequate return on
	investment as they go forward.
	So the business case process does get to your other concern
	about ensuring that cost is being adequately addressed as they
	go forward.
	Mr. Duncan. Well, I just don't want to see us go
	ridiculously overboard on the costs, or in any other direction,
	and have to buy new computer systems at hundreds of millions or
	even billions of dollars worth of cost just because somebody
	comes up with a little better system the next year than we had
	the year before. I mean, we just can't afford to keep doing
	that. And then have us read and hear at hearings and read in
	the paper that systems that some department or agency bought 1
	year, as soon as it's taken--as soon as it's put on line, it's
	not what it was promised to be. So I just hope you will take
	those considerations--those concerns into consideration.
	Thank you very much, Mr. Chairman.
	Chairman Tom Davis. Thank you very much. Let me do a couple
	of followups.
	The annual scorecard reflects that many of the larger
	agencies have--consistently are poor performers, it may be
	because of the complexity of their system. Has OMB identified a
	trend here?
	Ms. Evans. We have gone through and looked at the issues
	associated with the larger agencies. I think it does get back
	to some of the other high level issues that have been raised by
	the committee themselves, which is proper attention from
	management and ensuring that the priorities are established
	within the Department to be able to move forward. And a lot of
	it has to do with the leadership aspect of giving the proper
	attention to the program.
	So the way that we are trying to address that, again, is
	back to the accountability issue, putting the proper tools in
	place, working with the agencies, but using the President's
	management agenda to hold the cabinet secretaries accountable
	for their performance in this area.
	Chairman Tom Davis. And CIOs could be great, but if the
	cabinet secretaries aren't paying attention, or the managers,
	it makes it a lot tougher, doesn't it?
	Ms. Evans. Right. So we are trying to make sure--the
	administration is trying to make sure--and is making sure
	through the President's management agenda--that the cyber
	security aspect of anything that they do is brought to the
	level of the attention of the Deputy Secretary and the
	Secretary, who are responsible for the overall programs of
	their department.
	Chairman Tom Davis. Let me just talk about the
	certification and accreditation, this C and A process, so to
	speak. I know that one of OMB's objectives in its plan of
	action is having all the systems C and A'd. But many IGs are
	reported on a very inconsistent quality of agencies C and A
	process. If the number of certified and accredited systems is
	increased, but there is a question about the quality of the
	processes, should we question the value of that information?
	And I will ask Mr. Wilshusen to also respond.
	Ms. Evans. Well, I was going to say the shorter answer is
	yes, you should question the quality of that based on the IG's
	finding; and that gets back to making sure that we provide
	better guidance where the agencies are asking for that, and
	working with the IG community and working with the CIOs as to
	having a good credible certification and accreditation program
	so that it does insert the discipline of always constantly
	looking at the risk.
	Mr. Wilshusen. And I would agree, you certainly do need to
	question those statistics.
	You know, just looking at what the agencies have reported
	in terms of 77 percent of all the systems have been certified
	and accredited, but one of the key aspects of that is to have a
	testing contingency plan that you need in order to be certified
	and accredited, and yet the agencies are also reporting that
	only 57 percent of their systems have testing contingency
	plans. So just that, in and of itself, shows that there is some
	question about the reliability of that data.
	Chairman Tom Davis. We are going to hear Daniel Matthews,
	who is the DOT's CIO, suggest in his testimony eliminating
	timing differences between the IG and the agency reports in
	order to create a common point in time for measuring the status
	of an agency's IT security program. I can see the merit of that
	change; I would appreciate any comments either of you might
	have on that.
	Mr. Wilshusen. OK. In terms of having an as-of date, what
	that would typically allow would allow the IGs to be able to
	perhaps verify the information that the agencies are reporting
	on their report cards in their performance measures, if that is
	the goal of having such an as-of date. Similar to like on the
	financial statement report where we have the end of the fiscal
	year, and then the IGs have another 45 days to make the report
	on it. But other than that, you know, I'm not sure what the
	benefit would be.
	Chairman Tom Davis. All right.
	Ms. Evans. I was going to say, I concur with that. And we
	are just--we would proceed with caution on an as-of date
	because we want to make sure that interaction between the IGs
	and the CIOs for their programs are ongoing, even while they
	are still doing this annual reporting as well. So there is
	nothing wrong with getting an as-of date in order to have
	consistency for reporting, as long as the other goals are met.
	Chairman Tom Davis. OK. Thank you very much.
	Mr. Ruppersberger.
	Mr. Ruppersberger. I just have one question of you, Ms.
	Evans.
	The Federal Information Security Management Act extends a
	requirement from the Paperwork Reduction Act that agencies
	develop detailed inventories of their systems, and this seems
	to be a requirement that agencies have a struggle with. One
	official from the Department of Energy recently remarked that
	unless that agency overhaul gets decentralized structure, poor
	assessment under FISMA were guaranteed for years to come.
	Do you think that there are ways that FISMA's inventory
	requirement could be changed to address such concerns, without
	compromising security?
	Ms. Evans. That is an issue that we are attempting to
	address with the change in the scorecard criteria as well.
	Chairman Davis brought up the fact that we are saying all
	systems need be to certified and accredited. At the heart of
	that requirement is getting to how agencies are identifying
	their inventory.
	What we intend, and the issue that we brought forward to
	the Interagency Task Force is to get a best practice or lessons
	learned from the agencies that are scoring really well on how
	they got a handle on their inventory process, and be able to
	apply that out to the agency.
	If at the end of that task force effort that is not
	possible, then we will look at other alternatives and make
	recommendations or changes to address the inventory issue.
	Mr. Ruppersberger. OK. And for 2004, three agencies did not
	submit independent IG reports to OMB for their annual report.
	Can you explain why agencies are not complying with the IG
	independent evaluation, and if they're not, what
	recommendations will you have so that we make sure they do?
	Mr. Wilshusen. Well, one I think was in the case where
	they--I think that was from the previous year, when DOD and VA
	did not submit their report.
	Mr. Ruppersberger. And that is not an issue now?
	Mr. Wilshusen. Not as much this year, I don't think.
	Mr. Ruppersberger. Well, you say not as much though; if
	it's not, let's talk about----
	Mr. Wilshusen. OK. I'm sorry, right. No, I don't think that
	was a major issue.
	Mr. Ruppersberger. For any of the agencies.
	Mr. Wilshusen. That's correct.
	Mr. Ruppersberger. OK. That's good news then.
	Chairman Tom Davis. Anyone else with questions? Anything
	you would like to add to clarify anything?
	Ms. Evans. Well, the only thing, sir, I would like to add
	is that we appreciate the focus of the committee on this issue
	because, as you know, it is a continuing priority for the
	administration in that we want to continue to make sure that
	cyber security is at the forefront of everything that we do.
	You have to have this going forward and manage the risk as we
	continue to take more and more information and move more and
	more--and deploy more and more in technology. So thank you for
	your oversight.
	Chairman Tom Davis. And thanks for what you're doing. I'll
	just say, all you need is a bad adverse cyber event and
	everybody is going to be all over this thing and asking the
	questions that we're asking now, why wasn't this done. And I'm
	not sure who the fall guy will be, but it ain't gonna be me.
	And the difficulty in the private sector in many ways are
	ahead of us because they always are looking at the downside,
	they have to look at that. In government, many times the
	managers will take the risk that it won't happen on my watch,
	and they will go ahead with some of their other priorities; and
	yet we know we're talking so people out there--for their
	reasons are trying get in. So we appreciate your efforts on
	this, and the CIO's efforts. I think a lot of this depends on
	how close our CIOs are working with the agency heads at the end
	of the day.
	The other thing is, I think ultimately these FISMA report
	cards are going to have to be tied to funding because sometimes
	that's the only thing people understand, you can preach, you
	can give them boxes to check, but if you tie it to funding,
	that really gets their attention, and that may have to be the
	next step if we continue to see the occurrences we do with some
	of these report cards.
	We're going to hear from some very good CIOs in the next
	panel that have just very difficult jobs. These are difficult
	jobs in some of these agencies where you are putting a lot of
	their elements together, some of them that have been not
	working well for a long time, but we'll get to that.
	Anything you want to add?
	Mr. Wilshusen. Right. And I would just like to also express
	my appreciation for these oversight hearings because this
	certainly does help to hold the agencies accountable for
	implementing information security, and also with light comes
	heat, and heat usually brings action. And hopefully the
	increase of attention that this committee brings will help to
	improve that as well----
	Chairman Tom Davis. And a lot of times we're just
	oversight; in this case we have jurisdiction as well. The FISMA
	came out of this committee. We do share oversight
	responsibilities with the Commerce Committee and with the
	Homeland Security Committee on which I serve. And that's good,
	I think we want everybody looking at this. I want to see more
	focus on this from more committees and more questions answered,
	that's what gets agency heads' attention.
	But Ms. Evans, we appreciate your efforts on this.
	Sometimes you're the voice out there in the wilderness crying,
	but I know you have--your bosses are behind what you're doing
	and everything as well, and we want to make sure you have the
	tools to get the job done.
	Thank you very much. We will take about a 2-minute recess
	and set up for the next panel.
	[Recess.]
	Chairman Tom Davis. We are now going to move to our second
	panel, and it is a distinguished panel indeed. We appreciate
	having everybody back. Mr. Wilshusen, who is here to stay on to
	answer questions but doesn't need to be sworn in again. We have
	Bruce Crandlemire, who is the Assistant Inspector General for
	Audit, U.S. Agency for International Development. John
	Streufert, the Acting Chief Information Officer of the U.S.
	Agency for International Development. Mr. Frank Deffer, who is
	the Assistant Inspector General for Information Technology,
	Department of Homeland Security. Steve Cooper, no stranger to
	this committee, the Chief Information Officer, Department of
	Homeland Security. Ted Alves, the Assistant Inspector General
	for IT and Financial Management, Department of Transportation.
	Daniel Matthews, the Chief Information Officer, Department of
	Transportation.
	It is our policy that we swear all the witnesses in, so if
	you could just rise and raise your right hands. Can we identify
	the folks in the back who will be answering questions, too?
	Mr. Wilshusen. Ms. Melinda Dempsey, USAID. Mark Norman, who
	is the Audit Manager who has all the detail knowledge.
	Chairman Tom Davis. Great. Thank you.
	Mr. Crandlemire. Phil Heneghan, the Information Systems
	Security Officer, USAID.
	Mr. Deffer. Edward Coleman, my Security Director.
	Chairman Tom Davis. Excellent.
	Mr. Alves. Rebecca Leng, Deputy Assistant Director.
	Mr. Matthews. This is Ed Densmore, Director of IT Security,
	Department of Transportation, and Dr. Dan Mehan who is the CIO
	of the Federal Aviation.
	Chairman Tom Davis. You have enough help there, don't you?
	And how about in the back? I just need to make sure the
	clerk gets everybody down for the record.
	OK. Thank you.
	[Witnesses sworn.]
	Chairman Tom Davis. Thank you all very much for being here.
	We've got a 5-minute rule we try to follow. The goal is to get
	out of here about noon, so it will be 5 minutes apiece. So that
	leaves us time for questions and we'll be fine.
	Your entire statement is in the record, so it will be based
	on that.
	Mr. Crandlemire, we will start with you, and thank you for
	being with us today.

	STATEMENTS OF BRUCE N. CRANDLEMIRE, ASSISTANT INSPECTOR GENERAL
	FOR AUDIT, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT; JOHN
	STREUFERT, ACTING CHIEF INFORMATION OFFICER, U.S. AGENCY FOR
	INTERNATIONAL DEVELOPMENT, ACCOMPANIED BY MARK NORMAN, USAID
	OIG; MELINDA DEMPSEY, USAID OIG; PHILIP M. HENEGHAN, USAID;
	FRANK DEFFER, ASSISTANT INSPECTOR GENERAL FOR INFORMATION
	TECHNOLOGY, U.S. DEPARTMENT OF HOMELAND SECURITY; STEVE COOPER,
	CHIEF INFORMATION OFFICER, U.S. DEPARTMENT OF HOMELAND
	SECURITY, ACCOMPANIED BY EDWARD G. COLEMAN, DHS OIG; TED ALVES,
	ASSISTANT INSPECTOR GENERAL FOR IT AND FINANCIAL MANAGEMENT,
	U.S. DEPARTMENT OF TRANSPORTATION; DANIEL MATTHEWS, CHIEF
	INFORMATION OFFICER, U.S. DEPARTMENT OF TRANSPORTATION,
	ACCOMPANIED BY REBECCA LENG, DOT OIG; ED DENSMORE, DOT OIG;
	NATE CUSTER, DOT OIG; VICKI LORD, DOT OCIO; AND DR. DAN MEHAN,
	CIO, FAA

	STATEMENT OF BRUCE N. CRANDLEMIRE

	Mr. Crandlemire. Thank you, Mr. Chairman, and other
	committee members, for the opportunity to provide testimony for
	the U.S. Agency for International Development's compliance with
	FISMA. As you requested, my testimony will focus on the state
	of information security at USAID and the methodology with which
	we used to perform our audit in 2004. In addition, I will
	discuss the need for standardized FISMA auditing framework and
	possibly what guidance would be needed for agencies to fully
	comply with FISMA.
	USAID has made many positive strides over the last several
	years in addressing information security weaknesses. In
	particular, USAID has made several improvements in response to
	audits performed by my office and in turn substantially
	improved its computer security program.
	In 1997, the Office of Inspector General identified
	information security as a material weakness at USAID; USAID
	information technology officials agreed with our conclusion and
	included it in USAID's annual report as required by FMFIA. At
	that time, USAID did not have an organizational structure that
	clearly delegated information security responsibilities,
	policies that provided for an effective information security
	program, or key management processes to ensure that security
	requirements were met. These material weaknesses remained
	outstanding for several years until fiscal year 2004, when
	USAID concluded, and we agreed, that information security was
	no longer a material weakness at the agency.
	In the recent 2 years, the most significant changes are an
	appointment of an information security officer and the
	implementation of a centralized information security framework.
	Under this framework, USAID centrally manages its Windows 2000
	domain servers, firewalls, and virus scan software for most of
	USAID's networks; instituted a process to assess information
	system security for the purchase of capital assets; and is
	continually updating its information security policies and
	procedures.
	The agency has also identified several technological
	changes to improve its computer security. For example, they
	deployed Windows 2000, which has allowed the agency to lock
	down and configure security settings and incorporate many
	security improvements in comparisons with Windows 98. They have
	installed operating network sensors to detect unauthorized
	attempts to access our network. They run daily scans of its
	worldwide network to proactively identify potential
	vulnerabilities. They have also implemented a tips of the day
	program, which is an automated security awareness program that
	provides reminders to all system network users each day as a
	prerequisite to sign into the network.
	Through these systemwide information technology and network
	changes, information security and information security
	awareness at USAID locations around the world have been
	significantly increased.
	Although USAID has made substantial progress in improving
	security, information security weaknesses still remain. As
	reported in our 2004 FISMA audit report, the agency had not
	developed a disaster recovery program for its three major
	systems and had not tested the disaster recovery programs in
	two other systems.
	The OIG methodology for assessing USAID information
	security into FISMA was to conduct an audit as opposed to an
	evaluation. For fiscal year 2004, our audit field work was
	conducted from August 19th to October 6th and involved over 600
	hours. In addition, as part of our financial statement audit,
	we incorporated about 2,800 staff hours as part of our general
	control work. This work complemented our FISMA work.
	To perform the audit, we interviewed USAID officials to
	discuss their answers to the OMB questionnaire, and then we
	tested the support for the answers. For each of USAID's 49
	answers to the questionnaire, we determined whether the
	agency's answer was supported by source documentation.
	I am going to move now to the need for an Inspector General
	auditing framework for information security. In our opinion,
	since the OIG input to the FISMA process is used to upgrade
	security among civilian agencies, there is an implicit
	assumption that there must be a defined common set of
	attributes to facilitate meaningful comparisons of independent
	evaluation or audits performed by each IG.
	Further, the establishment of these attributes or common
	security auditing framework should be developed on a
	collaborative basis among the IG community, OMB, and the
	Government Accountability Office. This framework also should
	address the resources needed to carry out the development and
	implementation of the framework along with congressional
	support for such an initiative.
	I have just a couple comments on the existing process. I
	think the agencies and the IGs need more time to prepare or
	more time to respond to the annual FISMA questionnaire. Since
	2002, the time between the issuance of the guidance until the
	time we actually start--we actually have to report in has
	gotten less. In 2002, it was 76 days, and this last year it was
	only 44 days. We need more time so we can more efficiently use
	our audit resources.
	That concludes my statement.
	[The prepared statement of Mr. Crandlemire follows:]

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	Chairman Tom Davis. Thank you very much.
	Mr. Streufert, thanks for being with us.

	STATEMENT OF JOHN STREUFERT

	Mr. Streufert. Thank you, Mr. Chairman, and members of the
	committee. I want to thank you for the opportunity to testify
	on the status of our FISMA implementation and our security
	program. We submitted detailed information in response to your
	questions. What I would like to do in my oral remarks is
	address the 10 reasons that helped us improve our IT scores
	during the past period.
	No. 10, our industry partnerships. USAID has teamed with
	industry both in services and in our tools to increase
	performance. There has been a commitment to continuous
	improvement that has now spread over a 2-year period.
	No. 9, managing risk. Our agency information system
	security officer defined risk as critical. We want to be
	compliant with the rules but make sure that compliance does not
	overshadow our responsibility to attend to threats and impact
	on our business results.
	No. 8, central administration. USAID IT security sensitive
	settings have been drawn from 80 countries and 20 time zones to
	be administered centrally at AID headquarters. This would not
	have happened without executive support at all levels. We have
	one organization and one approach when it comes to security.
	Continuous awareness. As Bruce mentioned, we have a product
	called tips of the day implemented worldwide where 135,000
	instances of training and awareness came into effect. Our
	awareness also includes the followup on every action item we
	have of a finding of a security improvement.
	Item 6, rules of behavior. The agency has defined that the
	use of the network and our systems is a privilege and not a
	right. Though our employees have overwhelmingly supported IT
	security for the imperative it is, a handful of employees who
	have violated IT rules of behavior have been submitted for
	disciplinary action and, where warranted, recommended for
	removal for the reasons of that improper conduct.
	Continuous measurement. USAID has 15,000 devices connected
	to it worldwide, 5,000 software tools and packages, 8 major
	applications and 3 what we call general support systems against
	which our disciplines are applied. These devices are centrally
	checked worldwide 10 times a month for among 33,000 possible IT
	security weaknesses using the same tool that protects worldwide
	international credit card transactions. We felt that the most
	sophisticated tool was in fact important for our purposes.
	Management accountability, to refer to an item one of the
	members drew attention to. We give the boss of our 90 technical
	managers worldwide a grade of A to F once a month, because it
	is their business at risk in addition to ours collectively.
	Regions and bureaus who represent these 90 technical managers
	and their bosses receive grades A through F for all their
	reporting units, which has created a competition for
	excellence. Our managers have performed this work in harm's
	way, Afghanistan, Iraq, and other hardship posts, and among
	operating environments where power and other circumstances such
	as interrupted telecommunication lines have made it difficult.
	Notwithstanding these difficulties and including setting up for
	tsunami relief, we have been able to implement a security
	program and found significant benefits for it.
	Item No. 3, correlation of threats. We have found it
	essential to install sensors throughout our networks to capture
	those critical events and submit them to a statistical
	correlation so that we may find whether systematic attacks in
	fact are occurring which otherwise would be hidden from visual
	inspection.
	Item No. 2, continuous audit review. We have forged over
	the past 7 years a partnership with our Inspector General who
	has in fact audited every significant IT initiative of our
	organization for the past 7 years. We have come to learn that
	the harshest criticism from our auditors and others, GAO and
	externally, is a source for building on strength, and we have
	chosen to respond to those items of improvement in just that
	way.
	Last and perhaps most importantly, our Administrator Andrew
	Natsios defined IT security as critical to success of the
	agency. He has defined the need to improve management systems
	across the board, and information technology was one of those
	areas of improvement. In each of the cases where a critical
	issue was facing the agency in the area of IT security, when we
	carried it forward to him we received his full support. We
	believe the correct decisions were made, which in fact has been
	critical to the success of our organization and our security
	effort.
	Thank you very much.
	[The prepared statement of Mr. Streufert follows:]

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	Chairman Tom Davis. Thank you very much.
	Mr. Deffer.

	STATEMENT OF FRANK DEFFER

	Mr. Deffer. Thank you, Mr. Chairman, and members of the
	committee, for the opportunity to be here today to discuss the
	status of FISMA implementation in the Department of Homeland
	Security.
	Mr. Chairman, I would note at the outset that we in the
	Inspector General's office have developed an effective working
	relationship with the DHS CIO and his staff in order to
	facilitate FISMA compliance at DHS.
	As we reported last year, DHS has made significant progress
	in developing and implementing its information security program
	at the headquarters level. For example, DHS developed the
	necessary plans such as the information security program
	management plan to provide the foundation for an agencywide
	program. Based on our review of those plans, DHS has
	established an adequate structure, blueprint, and process to
	implement and manage its program. Also, the Department has
	developed an adequate process to report security weaknesses in
	its plan of action and milestones, or POA&M, and has adopted an
	enterprise management tool, trusted agent FISMA, to collect and
	track data related to all POA&M activities.
	Even with these efforts, however, there are a number of
	factors that are hindering further progress. Specifically, one
	of the impediments to implementing DHS's program is that the
	CIO is not a member of the department's senior management team.
	Therefore, the CIO does not have the authority to strategically
	manage agencywide IT programs, systems, or investments.
	Furthermore, there is no formal reporting relationship between
	the DHS CIO and the component CIOs or between the DHS CISO and
	the department security managers.
	Also, DHS does not have an accurate and complete system
	inventory. An initial attempt at developing an inventory in
	2003 did not provide an accurate picture of DHS's information
	systems. In September 2004, DHS began a second effort using an
	outside contractor to establish a system inventory.
	Finally, while DHS has developed an adequate process to
	report security weaknesses in its POA&M, DHS components have
	not established verification processes to ensure that all IT
	security weaknesses are included. Overall, DHS is on the right
	track to create and maintain an effective program. However, the
	Department and its components still have much work to do to
	become fully FISMA compliant.
	Mr. Chairman, as you know, annual information security
	evaluations began 4 years ago with the Government Information
	Security Reform Act [GISRA]. And I would say that, after being
	involved in four of these efforts, two at the State Department
	OIG, and using a different approach each time, it is becoming
	clear that a more standard approach is needed, perhaps similar
	to that used in financial audits. This standard framework would
	ensure--help ensure that all IGs review and report on the same
	information across all agencies. Currently, each IG performs
	its FISMA evaluation based on its interpretation of FISMA and
	OMB guidance. A standard audit framework should allow OMB and
	Congress to more effectively and objectively determine the
	status of information security across the entire Federal
	Government.
	Finally, let me say a few words about what additional
	guidance or procedures are needed to help improve FISMA
	compliance. OMB issues annual guidance to agencies and IGs to
	promote consistent reporting across government and to ensure
	that agencies comply with FISMA. But this guidance needs to be
	clearer. For example, organizational components in DHS have
	struggled with the definition of a system for FISMA reporting.
	This has hindered DHS's ability to develop a reliable
	inventory.
	Another area of concern is how security of systems is
	measured by the FISMA metrics. OMB asks the agencies and IGs
	for the number of systems that have been reviewed, certified,
	and accredited, but treats all systems the same. That is,
	systems are not differentiated between routine or mission
	critical. For example, an agency may have certified and
	accredited 80 percent of its systems, but it could still be
	seriously at risk if its mission critical systems are those
	that have not been certified and accredited.
	Mr. Chairman, this concludes my prepared statement. I
	appreciate your time and attention, and welcome any questions
	from you or members of the committee.
	[The prepared statement of Mr. Deffer follows:]

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	Chairman Tom Davis. Thank you very much.
	Mr. Cooper, I understand that you announced today, at least
	from reading the trade press, that you are leaving your post.
	Mr. Cooper. I did.
	Chairman Tom Davis. I just want to say--well, I hope this
	isn't your last time before the committee; we may bring you
	back as a consultant, but we appreciate the job that you have
	done.
	Mr. Cooper. Thank you.
	Chairman Tom Davis. You have been steadfast in coming
	before us and offering your ideas, and we consider you a
	valuable asset to the committee. Thanks for being with us.

	STATEMENT OF STEVE COOPER

	Mr. Cooper. Thank you, Mr. Chairman, and members of the
	committee. It is my pleasure to appear before the committee
	again, and I wish to thank the chairman and the members for
	providing me the opportunity to update you on our efforts and
	progress in integrating and securing information systems within
	the Department of Homeland Security.
	I would like to begin by acknowledging the important role
	that our Inspector General plays in the Department. We have
	established an extremely effective and collaborative
	partnership with our Inspector General, and especially with
	respect to the development and operations of information
	technologies and support of the critical missions of the
	Department. The IG has been an important and independent voice
	as the Department formulates a strategy for building a robust
	and effective information security program.
	Mr. Deffer has provided what I believe to be an accurate
	and detailed assessment of our progress to date and rather than
	repeat what has been already said I would like to focus my
	remarks on the future.
	The DHS Information Security Program is structured around
	compliance with FISMA as well as OMB and NIST guidance. I want
	to stress that we are not proud of our failing grade. We have
	done much, and much needs to be done. Specifically, we have
	implemented and continue to implement a number of security
	performance metrics to address the issues represented by the
	FISMA grade.
	I fully understand that the success of the Department is
	dependent upon our ability to protect sensitive information
	used to secure the homeland, and to this end, the Department's
	Information Security Program has been designed to provide a
	secure and trusted computing environment based upon sound risk
	management principles and program planning. The development of
	a formal trust model within this program will eliminate
	institutional barriers that regularly divide organizations and
	will enable disparate agencies to more effectively share
	information within this common trusted framework. We have
	implemented a digital dashboard that provides us for the first
	time with the status of security performance based upon
	computed FISMA metrics, and we have implemented a security
	performance scorecard.
	Three key Information Security Program initiatives under
	way for over a year now are beginning to provide tangible
	results. As these three efforts converge, together they will
	pave the way for real and measurable security improvements in
	the near future. These include, first, completing a
	comprehensive baseline inventory for defining accreditation
	boundaries and assigning responsibilities for security controls
	for appropriate program officials throughout the Department;
	second, fielding a robust set of automated enterprise security
	management tools to optimize our security processes; and,
	third, implementing a comprehensive and repeatable set of
	metrics for holding program officials accountable.
	The baseline systems inventory project now under way has
	already identified a significant number of legacy systems that
	were not previously identified in our initial systems inventory
	that we did during the standup of the Department. At one of the
	organizational elements, this most recent system inventory
	project has now identified 106 information systems programs
	compared to the 5 that were previously identified at standup.
	In response to this legacy issue, the Department is
	developing a comprehensive remediation plan for completing all
	the required certification and accreditations by the end of
	fiscal year 2006. Related to these actions, we have implemented
	a department plan of action and milestones process and an
	enterprised system to manage that plan of action. Evidence that
	DHS is successfully institutionalizing this process is
	demonstrated by the fact that our initial fiscal year 2003
	program and milestones contained less than 100 line items,
	meaning task activities that we identified that we needed to
	do, while our current plan now contains several thousand line
	items and activities.
	Furthermore, we have implemented a certification and
	accreditation tool that will ensure C&A equality and map that
	certification and accreditation testing to our established
	policies. The C&A and remediation plan will include a
	prioritized list of systems to be certified based upon the
	system's security impact level, which means the systems with
	higher security impact levels will be the first systems that we
	will accredit if not already accredited. This remediation plan
	will identify a variety of funding alternatives for completing
	all certifications and accreditations, and our new automated
	security management tools are already designed to streamline
	this process. Use of this tool has now been mandated for all
	activity initiated after April 10th.
	This aggressive remediation effort will provide a sound
	baseline of secure systems with appropriate controls in place.
	However, we must continue to improve our security posture
	throughout the life cycle of each and every system or
	application in use in the Department. For this reason, we are
	continuing to refine the program so that we will remain
	relevant for the future. Program enhancements currently under
	way include developing a communications plan for our
	information security program, to include a Web-based
	information security portal that will improve the availability
	of information security data to all DHS employees, including
	those who do not have access to DHS Online; and, publishing an
	updated Information Security Program strategic plan outlining a
	revised vision for the future of the program based on lessons
	learned over the past 2 years.
	Finally, to sustain a viable and healthy information
	systems program and security program, I know that we must have
	strong support throughout the Department. Through the DHS Chief
	Information Officers' Council, I will work with each member to
	ensure that we not only continue to improve our security
	posture through periodic program reviews, but that we also
	implement new and improved measures wherever appropriate.
	Thank you, and I look forward to your questions.
	[The prepared statement of Mr. Cooper follows:]

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	Chairman Tom Davis. Thank you very much.
	Mr. Alves.

	STATEMENT OF TED ALVES

	Mr. Alves. Thank you. Thank you, Mr. Chairman, and members
	of the committee for the opportunity to testify on the progress
	the Department of Transportation has made and the challenges it
	faces implementing FISMA.
	This committee has been a driving force behind improvements
	made over the last several years in protecting Federal
	information and information systems. I also want to take this
	opportunity to compliment OMB, NIST, and GAO for the leadership
	roles they have played in this effort.
	With an annual IT budget of about $2.7 billion, the
	Transportation Department maintains over 480 systems to carry
	out the Department's mission. For example, the Department
	operates financial systems that process over $35 billion in
	grants to States and local governments, and the Federal
	Aviation Administration relies on about 100 systems to provide
	safe and efficient air traffic control 24 hours a day.
	As you requested, I will discuss the progress
	Transportation has made and the challenges it faces to
	strengthen information security practices, the need for a
	framework to guide Inspector General FISMA audits, and the
	approach we take to audit computer security issues.
	The commitment to improve information security begins at
	the top, and we attribute much of the Department's progress
	over the last 2 years to the support provided by Secretary
	Mineta. In early 2003, the Secretary appointed a Chief
	Information Officer and significantly strengthened his roles
	and responsibilities. Since then, the CIO has played a much
	more prominent role in managing IT issues in all DOT component
	agencies.
	Key improvements the Department has made include the
	following four areas. First, the CIO invigorated the Investment
	Review Board, which now considers security issues when
	reviewing the major systems.
	Second, the Department enhanced its ability to protect
	systems from internal and external attacks by, among other
	things, establishing an incident response center to prevent,
	detect, and analyze intrusions from the Internet.
	Third, the Department increased the number of certified and
	accredited systems from 33 percent to over 90 percent by
	dedicating resources to do the reviews and by closely
	monitoring progress.
	And fourth, the Department significantly strengthened
	background checks on contractor personnel.
	Notwithstanding this progress, DOT still faces challenges
	to secure its systems. These include: The Department needs to
	enhance security over air traffic control systems. We have
	reported that security deficiencies affect en route computer
	systems which control high altitude traffic. Because the issues
	are sensitive, we can only cover two issues today.
	First, FAA certified that en route systems were secure, but
	the review was limited to a developmental system. FAA has
	agreed to review operational systems deployed at the 20 en
	route centers.
	Second, FAA agreed to identify a contingency plan to
	restore air service in the event of a prolonged en route center
	disruption.
	We recently expressed concern about FAA's progress
	correcting these deficiencies to the FAA Administrator, the
	Office of the Secretary, and the CIO, and we are working
	closely with those officials to ensure continued progress.
	The Department needs to improve the security certification
	process. We also found some deficiencies in the quality of
	certification reviews, including inadequate risk assessments,
	lack of evidence that tests had been performed, and in one case
	a test item failed when we retested it. The Department also
	needs to continue its focus on emerging threats.
	The fact that you raised the question of whether a
	framework is needed to help standardize IG FISMA reports
	suggests that the current framework does not fully meet
	oversight requirements. This issue is being addressed by the
	President's Council on Integrity and Efficiency, a group of
	Presidentially appointed IGs, but they have not yet reached a
	consensus. We think a broader discussion involving the key
	players, congressional staff, OMB, GAO, and the IG community
	could help forge a consensus among all interested parties. The
	IG community would benefit from better understanding how our
	FISMA reports are used by oversight organizations; oversight
	organizations would benefit from understanding the challenges
	the IG community faces addressing computer security issues at
	agencies with very different system risks and missions.
	Regarding our approach to meet FISMA requirements, each
	year we do detailed tests on a subset of systems to answer
	OMB's specific questions such as the number of systems with
	contingency plans. We also perform computer security audits
	focused on specific systems of security issues. We use all of
	this work to reach conclusions about the status of DOT's
	Information Security Program when preparing our annual FISMA
	report.
	Mr. Chairman, this concludes my oral testimony. I would be
	happy to answer any questions.
	[The prepared statement of Mr. Alves follows:]

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	Chairman Tom Davis. Thank you very much.
	Mr. Matthews, last but not least here.

	STATEMENT OF DANIEL MATTHEWS

	Mr. Matthews. Thank you, Mr. Chairman, and members of the
	committee. I thank you for the opportunity to appear here today
	to discuss the Department of Transportation's implementation of
	the Federal Information Security Management Act of 2002
	[FISMA].
	I serve as the Department's CIO, and I also currently serve
	as the vice chair of the CIO Council. The DOT Office of the
	Chief Information Officer has operational responsibility for
	the departmental network and communications infrastructure as
	well as providing shared services for the Office of the
	Secretary and the operating administrations currently engaged
	in the Department's information technology services
	consolidation.
	FISMA compliance at DOT is moving from the intensity of the
	past year's implementation activities to a more operational
	mode. Our system inventory is mature, our certification and
	accreditation methodology is defined, and we have begun
	oversight of the remediation of weaknesses identified over the
	course of the last 2 years. Additionally, we have been in the
	process of making assessments of the Department's ongoing
	security posture. Securing the IT assets of the Department of
	Transportation is a critical responsibility that falls to the
	CIO's office.
	In striving to secure those assets, many people from
	various areas must pull together. The strides the Department
	has made over the past year occurred in large measure because
	of the support of Secretary Norman Y. Mineta. His leadership
	and guidance combined with each and every modal administrator's
	commitment are critical to the Department's success.
	We are pleased to have achieved an A-minus rating on the
	FISMA scorecard, and we note that DOT relied on teamwork across
	the agency, the establishment, refinement, and validation of
	our system inventory, good communications, comprehensive
	training, and the support of the Inspector General throughout
	the year. This last point is critical. With our Inspector
	General, who is engaged, involved, and informed throughout the
	process, DOT makes sure that it approaches FISMA requirements
	appropriately and the end products and results are supportable.
	The teamwork for FISMA compliance was established through
	the acceptance of a single departmentwide methodology in lieu
	of individual approaches established by each operating
	administration. That methodology allowed us to focus and work
	collectively on a single plan in which all participants had
	confidence. This gave us the benefit of synergy, an end greater
	than the sum of its individual parts.
	If we endeavor to proceed using agency unique approaches,
	some agencies may have been successful and some may have
	faltered. With the support of an industry-recognized security
	subject matter expert from Titan Corp., along with agencywide
	buy-in and acceptance, DOT was able to reduce overall
	certification and accreditation schedules, manpower
	requirements and costs. More importantly, DOT was able to
	ensure accuracy, consistency, and completeness of each
	accreditation package.
	The strides made over the last year to comply with FISMA
	requirements were impressive. DOT has accredited over 90
	percent of all operational IT systems, established a program to
	ensure security as part of every system's development life
	cycle, significantly reduced vulnerabilities of public facing
	systems, and improved training and communications at all levels
	of the organization.
	Moving forward, DOT is using metrics to gauge FISMA's
	implementation and compliance throughout the Department. This
	point is important. DOT recognizes that plans of actions and
	milestones, POA&Ms, are established from the certification and
	accreditation process required by FISMA and are reviewed by the
	Inspector General. DOT uses these POA&Ms as a mechanism to
	ensure we mitigate the risks and remediate vulnerabilities
	identified during the CNA process knowing full well that the
	actions taken prescribed in the POA&M will specifically improve
	DOT's overall security posture.
	To address the steps DOT is taking to further strengthen IT
	security, we are coordinating and cooperating with DHS on cyber
	exercises, we are addressing the critical need for enterprise-
	wide vulnerability management, we are implementing baseline
	security configuration standards for critical software, and we
	are consolidating IT services.
	More needs to be done. The FAA's National Air Space System
	is part of the national critical infrastructure program. I am
	working directly with the FAA senior leadership and the
	Inspector General to ensure FAA secures and protects the
	important NAS systems and telecommunications infrastructure.
	Ensuring the FAA constructs are measurable plans of actions in
	conjunction with its POA&Ms, audit reports, and IG findings,
	with follow through to complete its commitments is fundamental
	to DOT's ability to maintain current FISMA scorecard ratings.
	I have included in my statement some specific observations
	and suggestions for creation of an ``as of date'' and believe
	that existing FISMA guidance is adequate but have some
	additional comments. I look forward to answering your
	questions. And, again, I thank you for this opportunity.
	[The prepared statement of Mr. Matthews follows:]

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	Chairman Tom Davis. Thank you very much.
	I think a recurrent theme both with DOT and USAID is that
	you are getting support at the top, that this comes--it is not
	just generated from the CO, it is top down, it is holding
	people accountable. Great stories. I hope we can learn from
	that.
	Mr. Cooper, let me start with you because your department
	is great but it is down. I don't hold you accountable. You are
	one of the best CIOs in the business, and we are sorry to see
	you going. But I wonder if we could talk about, you also, as
	you could see from some of the early comments from our members,
	the area everybody wants to focus on. Homeland security is a
	hot topic. It is an area where the systems need to be up. It is
	a very difficult job given the type of systems you inherited
	when we merged the departments. I think we can--that is a
	given; this was a very, very, very tough job. But we are a long
	way from where we need to be. We are seeing improvement, and I
	appreciate your opening statement.
	What are the major obstacles you would put together that
	Homeland Security faces uniquely versus some of the other
	agencies that make it so difficult?
	Mr. Cooper. OK. Let me try to answer that question
	directly, very specifically and very candidly.
	Chairman Tom Davis. This is the last bite I get at you.
	Mr. Cooper. No, that is all right. I am happy to come back.
	And let me also try to put it within the context of the FISMA
	scorecard, because I think this will be extremely helpful, I
	hope, to the committee as well as to members of the audience
	and interested parties and my colleagues.
	The first thing that we face as the Department of Homeland
	Security is the fact that we have inherited a huge amount from
	our legacy environments. Now, that translates to the inventory
	in the FISMA scorecard. This is not a defense. We are not where
	we need to be. But the scoring in the scorecard, we get minus
	10 points against our total score until we can actually certify
	that we have inventoried 95 percent of the systems and
	applications that are in the Department. And here's what we're
	learning and here's what we found. Meaning no disrespect to my
	colleagues on the panel, DOT has identified 480, I think Dan
	said 480 significant applications or the ones that they have
	identified and accredited. And, again, no offense to AID, but I
	think you guys have nine. We have over 3,600.
	So there's a simple fact, it's a numbers game. All right?
	We move from 34 percent of that initial 3,600 to 68 percent.
	Now, the scorecard doesn't reflect the progress. 68 percent I
	admit is still a failing grade. But we know what we need to do,
	we are working with our IG, we have demonstrated that our
	certification and accreditation process is sound. We need to
	stay the course and apply it. We have committed to completing
	100 percent certification and accreditation by fiscal year
	2006.
	Another major area. Configuration management addresses the
	different parts and pieces in the FISMA scorecard. Now, what
	that translates to is how many different operating systems or
	platforms or environments does the Department have? We have
	everything that's listed in the scorecard. But I--and I am the
	one that can be held accountable. I made a tactical and
	conscious decision that we were not going to put significant
	effort into the configuration management aspect of all of the
	listed platforms for the following reason: We are also
	undergoing a major IT infrastructure transformation program. We
	are consolidating those operating platforms and the operating
	systems and the associated applications, and we are eliminating
	some of those. Therefore, I made a decision that said don't put
	any energy into publishing guidelines within the Department in
	our Information Security Program around configuration
	management for those platforms and operating systems that we
	are going to retire. I am the person, I am accountable. But it
	reflects in our score because we then don't--we legitimately
	don't have anything in that area.
	Another thing, final thing we did very quickly. The
	training of all DHS employees in information assurance and
	information security management is an extremely high value
	activity. It scores very few points on the scorecard. But we
	consciously made a decision, again. We have trained almost 100
	percent of all of our employees across the Department. That's
	180,000 people, and we accomplished that in the past 2 fiscal
	years.
	So those are very specific examples in the framework of the
	scorecard that I think help reveal some of the complexities
	that we're facing but also significant progress.
	Chairman Tom Davis. What are the most difficult parts of
	all the disparate systems that you have? You know, what are the
	most dysfunctional or most vulnerable areas that you have at
	DHS?
	Mr. Cooper. That's a tough question in that I'm not sure I
	want to put any parts of the Department on the spot.
	Chairman Tom Davis. Well, but you inherited legacy systems
	and some of these. Like we know, the old INS system just wasn't
	working. Now, we've got new--I mean, this is something that
	this committee has talked about and everything else. I am not
	trying to go out to tell terrorists where we are vulnerable or
	something. But within those confines you have some old legacy
	systems that you haven't been able to move forward on as
	quickly as others and stuff like that. Give me a priority list,
	in other words.
	Mr. Cooper. OK. I'm going to share at least the part that
	we've identified.
	Chairman Tom Davis. You're leaving now. I can't do
	anything.
	Mr. Cooper. That's true.
	Chairman Tom Davis. You are under oath, too.
	Mr. Cooper. They can fire me early, I guess.
	Chairman Tom Davis. But we will hire you. We will pick you
	up if you need it.
	Mr. Cooper. Here's what we found. And, again, please
	understand, I offer this in a very constructive way. It's not
	meant to be critical.
	Chairman Tom Davis. Absolutely.
	Mr. Cooper. One of the areas that we have found a little
	bit more challenged is in some of the legacy INS, Immigration
	and Naturalization Services, and Citizenship and Immigration
	Services, as those two entities exist now. But in fact those
	were more or less, I won't say truly combined, but they were
	all under the auspices of an organizational structure inside
	the Department of Justice that pretty much operated from the
	same or similar platforms. Now, we have broken them apart, so
	to speak. But in breaking them apart, we actually don't have
	all of the IT infrastructure and skills and personnel and
	everything fully in place yet.
	Now, again, plans are in place, we are making good
	progress, but it remains a challenge because we just don't have
	quite enough of the resources in the timeframe we would like to
	have to finish a lot of the certification and accreditation,
	some of the securing activities that we need to do.
	Our Customs and Border Protection environment has actually
	made very, very good progress in a lot of areas, and what we
	are doing is drawing upon the positive skills and the positive
	performance in CBP to now reach over and assist ICE and CIS. So
	we figured out ways that we can actually leverage where we have
	good stuff going on and address some of the challenge areas.
	Chairman Tom Davis. How many incidents--well, we don't
	really get the level of incident reporting. Am I right? We
	don't get the incident reporting that we'd like to get that we
	feel is accurate. Is that fair?
	Mr. Wilshusen. Well, OMB reported that in their 2004 report
	on FISMA that they felt that the reporting was sporadic from
	the different agencies, and they had questions and concerns
	about that.
	Chairman Tom Davis. Well, let me just go with each agency
	and ask the CIO or IG or which office; but start with AID. Are
	you getting a lot of incidents of penetrations every year, and
	do you test yourself? Do you hire people who come in and try to
	penetrate? That was inarticulate, but I think you understand.
	Mr. Streufert. We're initiating some internal testing, and
	we're constantly monitoring for intrusions, and I think that
	the most constructive part of that is that we are tracking
	precisely those patterns and trying to assess who's at us. So,
	from an internal purpose, we are doing well.
	Chairman Tom Davis. Is that reported up the food chain in
	terms of who we think is going after you?
	Mr. Streufert. We make every effort that we possibly can,
	and the comments that we collect internally on this topic are
	some of the descriptions that come out from elsewhere at
	varying degrees of descriptions, some general, some specific.
	And so we think an area of potential improvement is having a
	matching of a good taxonomy externally against what we are
	actually seeing, and we think that this will improve over time.
	Chairman Tom Davis. Let me ask Homeland Security. What are
	you seeing in that area? I don't want you to give away the
	store, but----
	Mr. Cooper. No. First of all, we see hundreds of thousands
	of attempts on an annual basis. We actually identified 214
	incidents. We reported 100 percent of the 214 both to the IG
	and up through US-CERT that passes over to OMB.
	Chairman Tom Davis. Do you have a good idea of who the
	people are that are trying to get in?
	Mr. Cooper. Yes, we do, partly because of the link into the
	intel environment and everything. So, yes, we do. We believe
	this is an area and it actually is represented in our scorecard
	where we are in very good shape.
	Chairman Tom Davis. And it helps you also target your
	resources when you know who is coming after you. Doesn't it?
	Mr. Cooper. Absolutely.
	Chairman Tom Davis. And how about Transportation?
	Mr. Matthews. Mr. Chairman, last year we had over 3,000
	incidents and reported them. We do track individuals, Web
	sites, IP addresses that are coming toward the Department as
	well as other information. We routinely----
	Chairman Tom Davis. One of them gets through and really
	gets into the system, they could run you amuck. Couldn't they?
	They could really destroy you?
	Mr. Matthews. Absolutely, no doubt, if somebody penetrates
	the shield, indeed they can run amuck. You know, TOPOFF III is
	currently going on, and when I'm sitting watching what we're
	doing in TOPOFF III I'm constantly reminded that if someone did
	a concerted effort and went after the communications of the
	Federal Government, its ability to respond could be impacted.
	Chairman Tom Davis. And it helps. I mean, I think it's
	reassuring to us to know that at least you have a pretty good
	idea of who is after you.
	Mr. Matthews. Yes.
	Chairman Tom Davis. And that helps you, doesn't it, in
	terms of where you spend your resources? It may or may not help
	your report card, but it helps you in terms of where you spend
	your resources?
	Mr. Matthews. Absolutely 100 percent. We work hand in glove
	with the IG to do the forensics and pursue and prosecute those
	individuals as well.
	Chairman Tom Davis. Mr. Alves, do you agree with that?
	Mr. Alves. Yes, I do. The Department of Transportation has
	made really significant progress in this area over the last
	couple of years, and whenever there is an intrusion they let us
	know immediately. We do some of the penetration testing
	ourselves.
	Chairman Tom Davis. Some of them are yours.
	Mr. Alves. To test the system and make sure that it's
	secure.
	Chairman Tom Davis. And Mr. Cooper, let me just ask you.
	The fact that you have an idea in most of these cases, I
	gather, who is coming, allows you to expend resources in those
	areas, maybe to the detriment of other areas but at least it
	allows you to give appropriate prioritization, and that ought
	to give the committee some assurance that you're on top of it.
	Mr. Cooper. Yes, sir. In this case, we do. And in this
	case, because of the capability within the Department, we work
	very closely with our Homeland Security Operations Centers, we
	work very closely with our Intelligence Analysis and
	Infrastructure Protection Directorate, and actually share. All
	of the key members of my team are cleared to the highest
	levels, and so we actually use a lot of the classified
	information to help us address risks, threats, and
	vulnerabilities.
	Chairman Tom Davis. OK. You feel--well, we'll have another
	conversation later. But thank you again. My 10 minutes is up.
	Mr. Ruppersberger.
	Mr. Ruppersberger. OK. Mr. Deffer, in your testimony you
	mentioned that FISMA does not differentiate between routine or
	mission critical systems.
	Mr. Deffer. Correct.
	Mr. Ruppersberger. And you continue to say that the agency
	might still be at risk if its security, a vast majority of its
	systems yet is left vulnerable, the most mission critical ones.
	Can you explain how your department has balanced meeting its
	FISMA obligations with protecting its most critical systems?
	Mr. Deffer. Well, I think the Department has sort of--
	they've made an effort to get their systems certified and
	accredited. I don't know if they've--Mr. Cooper talked about
	this, trying to get them on a risk based methodology to certify
	and accredit those systems that are high priority. But the
	numbers don't tell us which systems that have been certified
	and accredited are really that important. We don't know
	whether--has their network been certified and accredited? I
	don't know. But, you know, their training management system
	FLETC may have been certified and accredited, and that's a good
	thing, but it's probably not as important as the network or
	other critical applications.
	Mr. Cooper. If I may kind of clarify. We have made a very
	conscious and deliberate decision to go after our mission
	critical systems first. So we are taking a risk-based
	prioritization approach to what we accredit.
	The good news that I can share with the committee is that
	the 68 percent that are now accredited include almost every one
	of our major mission critical systems, and we are getting to
	some that doesn't mean they're not important but lesser impact
	or risk by not accrediting them right away. That is the
	approach we're taking.
	Mr. Ruppersberger. I would like more, a little bit more
	about the questions that the chairman asked you, and I was
	going to ask you more questions but you answered some of them.
	One of the questions was, when do you expect that the
	Department of Homeland Security will come up to where they need
	to be? And you mentioned that your goal was 2006. Do you feel
	that you are on time for that goal at this point?
	Mr. Cooper. Yes, we do.
	Mr. Ruppersberger. And what is it, the end of the year,
	beginning of the year? Where are we?
	Mr. Cooper. By the end of fiscal year 2006 we expect to
	complete almost 100 percent of those items represented by the
	scorecard. Now, here's what is going to happen though, and we
	will see whether or not I'm a good prognosticator.
	Unfortunately, the way that we are going at this and the way
	that the scoring works in the scorecard, I think what we are
	going to do is we are going to jump. We may indeed be--I'm
	hoping we will get to a D in fiscal year 2005. I am being very
	candid here. Because we lose 10 points off of our total score
	because of this 95 percent requirement for inventory. And we
	will not complete 95 percent of our full inventory by the end
	of fiscal year 2005. We are going to be very, very close, but I
	am not sure we'll trip it. We are going to basically lose 20
	points of our score because of the configuration management
	approach that I explained to you. If you deduct those 30 points
	from the score and we do everything else, that's 70, which puts
	us at 70 percent, which may creep us into a D.
	What I think is going to happen is we are probably going to
	be, I hope, at a D; and then in 2006, as we complete all this
	stuff, we are going to jump significantly up. So you are going
	to kind of see, unfortunately, not much in the score, and then
	we will be there.
	Mr. Ruppersberger. There is no question the Department of
	Homeland Security has a lot of administrative issues that they
	have to deal with, you know, inheriting all these different
	agencies, you know, pulling them together, the funding issues.
	I mean, it's a very difficult job, as you know, and I
	understand that. Do you feel that the system that's being used
	now and the standards for grading are just more of a
	bureaucratic type of system of holding people accountable based
	on Homeland Security and all the issues you have, do you think
	it's fair? And what would you do to change that system based on
	where you are now and to get to the end game? Because it's
	not--the grade is a standard, but bottom line, we want to get
	to where you can provide the best national security for our
	country.
	Mr. Cooper. Exactly. Bob West, who is our Chief Information
	Security Officer, and I believe very strongly that the criteria
	are very sound. We have no issue with the criteria. Now, Bob
	and I both will grumble to you and complain about the negative
	points that kind of in this last go-round were assessed, but we
	understand them and we'll live with them. What becomes most
	important I think is how a department like the Department of
	Homeland Security kind of prioritizes and applies these
	criteria. And you've heard, I've explained the approach that we
	took, I've explained a little bit of why. I believe very
	strongly that if the committee will allow us to stay the
	course, and with support of our new Secretary and Deputy
	Secretary, the Department of Homeland Security will indeed
	arrive rather quickly, although it may be fiscal year 2006, at
	precisely where the intent of the committee and the scorecard
	and FISMA represent.
	Mr. Ruppersberger. Do you feel that you have the money or
	the resources to deal with the problem.
	Mr. Deffer. I think applied in a prioritized approach, yes.
	Now any time--again, you know, I may get beaten up, it's OK,
	the worst they can do is fire me. Any time we have additional
	funding and resource we can move faster. But we believe that
	within the funding and resource that we have, we absolutely are
	on track to succeed.
	Mr. Ruppersberger. I don't know if you can answer the
	question--I may go back to Mr. Wilshusen, who is still at the
	panel. I am concerned a little bit about what is happening with
	respect to Justice, and especially FBI within Justice. We know
	some of the issues, that FBI is having a hard time in their
	technology area. And it seems to me we have other groups--we
	talked about this in the first panel, I know CIA and NSA are
	doing very well. And we cannot afford to have our FBI that is
	so important to our national security, especially domestic
	security, not be where they need to be.
	Can you discuss some of these issues--well, I'm going to
	ask you the question basically. You said that Immigration was
	under Justice, and now they also have some issues that you are
	dealing with because they are now under Homeland Security. I'm
	concerned that we need to really refocus and prioritize in
	those arenas, especially FBI. You are doing Immigration. But
	how can, with the problems that the FBI is having, how can we
	now have a grading system where the Justice Department went
	from I think a D or an F to a B+ or B-? Could you explain that?
	Mr. Deffer. Well, I can offer a couple of thoughts. I'm not
	sure I can actually explain it. But one of the things that
	works to----
	Mr. Ruppersberger. And I'm going to ask you to answer this,
	too, Mr. Wilshusen.
	Mr. Deffer. One of the things that works to any
	department's advantage is if you have less things to do and
	less things to accredit and certify, then within the same
	resource base you can accomplish a lot more.
	Justice lost, if you will, a significant portion of what
	represented the legacy systems that weren't accredited at one
	point in time. We inherited them all. So I think that they----
	Mr. Ruppersberger. Good news for them, bad news for you,
	right?
	Mr. Deffer. Exactly. And that's one sense.
	Now the other thing that I would offer--and again, the
	right person to really talk to is Zal Azmi, who is the CIO at
	the FBI, an extremely competent professional. Zal and I have
	talked a couple different times about information assurance,
	some of the challenges that we are sharing in exchanging
	information and working together, our respective agencies.
	I believe that under Zal they do have the proper talent and
	approach, I can't really speak to the timing.
	Mr. Ruppersberger. Do you know if they are getting the
	resources to do the job, based on your conversations about it?
	Mr. Deffer. Zal and I have talked about a number of
	vacancies, key vacancies that Zal is working on to fill. I
	think that as he fills those he will be able to pick up speed.
	Mr. Ruppersberger. I think that is a very high priority, I
	would think.
	Do you want to address that issue, also, Mr. Wilshusen?
	Mr. Wilshusen. Sure. The key thing in terms of FBI and DOJ
	having an increased score this year was basically because of
	what they had reported on their FISMA report to OMB and to
	Congress. That score was based upon an analysis of what they
	had reported.
	Mr. Ruppersberger. Are you aware of the problems with
	respect to the FBI?
	Mr. Wilshusen. I am aware with regard to issues related to
	DCF a Trilogy----
	Mr. Ruppersberger. Their technology issue.
	Mr. Wilshusen [continuing]. That they had developed that or
	were in the process of developing it, and it has since been
	terminated. At least the operational pilots have been
	terminated.
	Mr. Ruppersberger. Do you feel they have a plan to move
	forward in what needs to be done to be brought up to speed?
	Mr. Wilshusen. I don't know that because we haven't looked
	at that, but we have received a request to take a look at that.
	Mr. Ruppersberger. We sure don't want to criticize the FBI.
	What we want to do is give the FBI all the resources they need
	to fix this problem. And again it seems to me--and we alluded
	to this in the first panel--when you have systems that work--
	and again, I can say this, I'm on the House Select Intelligence
	Committee, I know NSA's systems are doing well. We need to make
	sure we pull together, find out what is working and not
	working, and move forward. If it's a resource problem, we have
	to fix it. If it's a money problem, we have to fix it.
	My time is up. Thank you for being here today.
	Chairman Tom Davis. Well, we've kept you a long time. We
	appreciate everything. Anybody want to add anything, add in
	anything they said along the way?
	I think it has been very helpful to the committee as we
	move forward. I want to just thank every one of you for being
	here. I want to congratulate both AID and Transportation on
	your improvements this year. I think you've talked about this
	is really a team effort, it is not the CIO.
	Mr. Cooper, thank you. It has been a good explanation for
	us. We wish you the best of luck as you move forward and
	appreciate the job you have done.
	Thank you very much. The hearing is adjourned.
	[Whereupon, at 12:03 p.m., the committee was adjourned.]
	[Additional information submitted for the hearing record
	follows:]

	[GRAPHIC] [TIFF OMITTED] T0562.106

	[GRAPHIC] [TIFF OMITTED] T0562.107

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