FDIC OIG: Audiit Report 05-032 (Table 2) - Follow-up Evaluation of the FDIC's Corporate Planning Cycle, September, 2005

Table 2: Non-CIRC IT Allocation Process and OIG Observations

Budget Send

Budget Receive

October 2004 Planning and Budget Conference

DOF developed the Non-CIRC IT allocation using 2004 IT project data and major IT events budgeted for 2004.

DOF instructions allowed divisions to reallocate funds from their IT allocation to a major expense category within their own operating budget. However, no division could reduce its IT allocation below the baseline level needed by DIT to maintain and operate the division’s existing systems. DIT made an initial estimate of the 2005 maintenance/sustaining base cost for each division, but that estimate could be modified, with notification to DOF, by mutual agreement between DIT and the client division. DOF included an attachment for each division that separately identified maintenance/sustaining base funds and client discretionary funds for the Non-CIRC IT allocation.

DOF included a consolidated Non-CIRC IT allocation for most of the office-level organizations in DIT’s operating budget.

Divisions and DIT worked together to determine maintenance and sustaining base needs and planned IT initiatives. DIT provided estimated IT costs for each project or initiative to the respective division.

The Budget Receive included an attachment entitled, Projected 2005 Non-CIRC Information Technology Initiatives, which listed the proposed IT initiatives to be pursued by each division or office with its 2005 Non-CIRC IT Allocation. This attachment included a signature line as a control to document DIT concurrence with the respective division’s/office’s proposed IT initiatives.

FDIC senior managers reviewed and prioritized a consolidated list of the division’s or office’s proposed Non-CIRC IT allocations and decided which projects and initiatives would be included in the 2005 budget.

OIG Observations

Concerns expressed by divisions and offices included confusion about the process for allocation development, adequacy of the allocation, and the need for better communication between the client division/office, DIT, and DOF prior to transmitting the Budget Send.

Budget Receive documentation showed that two divisions reduced their maintenance/sustaining base cost. Moreover, only 3 of 11 divisions and offices obtained DIT concurrence for proposed IT initiatives.

Although DOF briefed divisional and office deputy directors, there were instances in which divisional budget contacts were not aware of final Non-CIRC IT allocation decisions.

Source: OIG interviews and analysis of planning and budget documentation.