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Homeland Security

Information Security: Serious Weaknesses Put State Department and FAA Operations at Risk

(Statement/Record, 05/19/98, GAO/T-AIMD-98-170).
The Federal Aviation Administration (FAA) was ineffective in all
critical areas included in GAO's computer security review--facilities
physical security, operational systems information security, future
systems modernization security, and management structure and policy
implementation. Because physical security is the agency's first line of
defense against criminal and terrorist attack, the failure to beef up
physical security at air traffic control towers, terminal radar approach
control facilities, and en route centers places property and the safety
of the flying public at risk. Information security safeguards cannot be
fully effective as long as FAA continues to operate with significant
physical security vulnerabilities. Also, because FAA has not assessed
physical security controls at all its facilities since 1993, it does not
know how vulnerable they are. Similarly, FAA does not know how
vulnerable its operational air traffic control systems are and cannot
adequately protect them until it performs the appropriate system risk
assessments and certifies and accredits air traffic control systems.
Moreover, FAA is not effectively incorporating security controls into
new air traffic control systems. Until FAA carries out its computer
security responsibilities, sensitive information is at risk of being
compromised and flight services interrupted.
--------------------------- Indexing Terms -----------------------------
     TITLE:  Information Security: Serious Weaknesses Put State 
             Department and FAA Operations at Risk
      DATE:  05/19/98
   SUBJECT:  Computer security
             Internal controls
             Information resources management
             Information systems
             Confidential communication
             Data integrity
             Air traffic control systems
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================================================================ COVER
For the Committee on Governmental Affairs, U.S.  Senate
For Release on
May 19, 1998
Statement for the Record by Gene L.  Dodaro
Assistant Comptroller General
Accounting and Information Management Division
=============================================================== ABBREV
  ATC -
  CIO -
  FAA -
  IRS -
  NIS -
  OMB -
============================================================ Chapter 0
Mr.  Chairman and Members of the Committee: 
We are pleased to be asked to discuss our work in computer security. 
As requested, our testimony will focus on the results of our recent
reviews of the Department of State and the Federal Aviation
Administration (FAA).  Significant computer security weaknesses at
both these organizations threaten the integrity of their operations,
and we have made numerous specific recommendations for improving
State and FAA's information security posture.  Unfortunately, such
weaknesses are typical at most federal agencies we evaluate. 
However, good management practices and organizational discipline can
do much to mitigate the risks all government agencies face from
security threats.  Accordingly, we will also highlight best practices
we have identified in studying leading organizations that can be used
by all agencies to protect sensitive information and computer
---------------------------------------------------------- Chapter 0:1
The dramatic increase in computer interconnectivity and the
popularity of the Internet are offering government agencies
unprecedented opportunities to improve operations by reducing paper
processing, cutting costs, and sharing information.  At the same
time, however, malicious attacks on computer systems are increasing
at alarming rates and are posing serious risks to key government
operations.  Thus, the ultimate success of agencies' ability to use
interconnected systems to carry out critical governmental functions
depends in large part on their ability to protect the integrity,
privacy, and availability of the data and systems they rely upon. 
This Committee has long been concerned about the need to protect
sensitive information in federal computer systems.  These concerns
are well-founded.  At the request of you, Mr.  Chairman, and Senator
Glenn, we have undertaken a large body of work to address the issue,
including reviews of most of the federal government's largest
departments' and agencies' computer security programs.  In
conjunction with our financial statement audit focus and high-risk
reviews, this work has revealed a disturbing picture of our
government's lack of success in protecting federal assets from fraud
and misuse, sensitive information from inappropriate disclosure, and
critical operations from disruption.  For example: 
  -- In May 1996, we reported that computer hackers had penetrated
     Department of Defense computer systems; obtained and corrupted
     sensitive information; shut down and crashed entire systems and
     networks; and denied service to users who depend on automated
     systems to help meet critical missions, including weapons and
     supercomputer research, logistics, procurement, and military
     health.  Our recommendations focused on the need for Defense to
     assign clear responsibility and accountability for the
     successful implementation of its security program, improve its
     security policies and procedures, increase security awareness,
     and implement more proactive technical protection and monitoring
  -- In September 1996, we reported that, over the previous 2 years,
     serious weaknesses had been reported for 10 of the largest
     federal agencies, concluding that poor information security was
     a widespread federal problem with potentially devastating
     consequences.\2 In that report, we recommended that the Office
     of Management and Budget (OMB) play a more proactive role in
     overseeing agency practices and managing improvements, in part
     through its role as chair of the Chief Information Officers
     (CIO) Council. 
  -- In February 1997, we identified information security across all
     government agencies as a high-risk area.  We found management
     and system controls to be largely inadequate, leaving critical
     operations at many agencies highly vulnerable to unauthorized
  -- In three 1997 reports, we identified a wide range of continuing
     serious weaknesses in Internal Revenue Service (IRS) systems,
     including inadequate controls over employee browsing of taxpayer
  -- In March 1998, in our report on the federal government's
     consolidated financial statements, we emphasized that pervasive
     computer control weaknesses were placing enormous amounts of
     federal assets at risk of fraud and misuse, financial
     information at risk of inappropriate disclosure, and critical
     operations at risk of disruption.\5
Also at your request, we are currently (1) examining computer
security programs at other selected agencies including the National
Aeronautics and Space Administration, (2) developing a comprehensive
and detailed analysis of information security problems at the largest
federal agencies, and (3) producing an updated summary of actions
taken by OMB and the CIO Council to address these problems from a
governmentwide perspective. 
Today, the Committee is releasing the redacted versions of our
reports on computer security at State and FAA.\6 These reviews
resulted in many findings that are too sensitive to discuss in
today's open setting and, accordingly, detailed reports have been
provided to this Committee and to appropriate agency officials under
separate covers.  However, we will describe the types of weaknesses
found and the risks they posed to critical systems and information. 
\1 Information Security:  Computer Attacks at Department of Defense
Pose Increasing Risks (GAO/AIMD-96-84, May 22, 1996). 
\2 Information Security:  Opportunities for Improved OMB Oversight of
Agency Practices (GAO/AIMD-96-110, September 24, 1996). 
\3 High-Risk Series:  Information Management and Technology
(GAO/HR-97-9, February 1997). 
\4 IRS Systems Security:  Tax Processing Operations and Data Still at
Risk Due to Serious Weaknesses (GAO/AIMD-97-49, April 8, 1997);
Financial Audit:  Examination of IRS' Fiscal Year 1996 Administrative
Financial Statements (GAO/AIMD-97-89, August 29, 1997); and Financial
Audit:  Examination of IRS' Fiscal Year 1996 Custodial Financial
Statements (GAO/AIMD-98-18, December 24, 1997). 
\5 Financial Audit:  1997 Consolidated Financial Statements of the
United States Government (GAO/AIMD-98-127, March 31, 1998). 
\6 Computer Security:  Pervasive, Serious Weaknesses Jeopardize State
Department Operations (GAO/AIMD-98-145, May 18, 1998) and Air Traffic
Control:  Weak Computer Security Practices Jeopardize Flight Safety
(GAO/AIMD-98-155, May 18, 1998). 
---------------------------------------------------------- Chapter 0:2
Last year, this Committee asked us to assess whether the State
Department's unclassified automated information systems were
susceptible to unauthorized access.  State relies on a variety of
decentralized information systems and networks to help it carry out
its responsibilities and support business functions, such as
personnel, financial management, medical, visas, passports, and
diplomatic agreements and communications.  The data stored in these
systems, although unclassified, are sensitive enough to be attractive
targets for individuals and organizations seeking monetary gain or
desiring to learn about or damage State operations.  For example,
much of this information deals with employees working for the
department and includes American and Foreign Service National
personnel records, employee and retiree data, and private health
records.  Background investigation information about employees being
considered for security clearances is also processed on State's
unclassified network. 
The potential consequences of misuse of this information are of major
concern.  For example, unauthorized deletion or alteration of data
could enable known criminals, terrorists, and other dangerous
individuals to enter the United States.  Personnel information
concerning approximately 35,000 State employees could be useful to
foreign governments wishing to build personality profiles on selected
employees.  Manipulation of financial data could result in
overpayments or underpayments to vendors, banks, and individuals, and
inaccurate information being provided to agency managers and the
Congress.  Furthermore, the overseas activities of other federal
agencies may be jeopardized to the extent they are supported by State
To determine State's vulnerability to computer attacks, we tested the
department's technical and physical controls for ensuring that data,
systems, and facilities are protected from unauthorized access.  We
designed our tests to simulate two security penetration scenarios: 
(1) an unauthorized individual who has no knowledge of State's
automated information infrastructure (for example, a hacker or
terrorist organization) and (2) a mid-level internal user with
limited access privileges and some specific computer related
information (for example, a State employee) exceeding his or her
limited privileges. 
In simulating these scenarios, we wanted to know whether an
unauthorized user could compromise--that is, improperly access,
modify, disclose, or destroy--sensitive data if he or she
successfully penetrated State's computer resources.  During our
testing, we performed controlled penetration attacks at dial-in
access points, internal network security controls, the department's
Internet gateways, and public information servers.  We also attempted
to gain unauthorized physical access to certain State facilities and
assessed users' awareness by attempting to get them to reveal
sensitive information, such as their passwords.  Such techniques,
sometimes referred to as social engineering, can be used by attackers
to easily bypass an organization's existing physical and logical
security controls. 
Unfortunately, our penetration tests were largely successful.  They
demonstrated that State's computer systems and the information
contained within them are very susceptible to hackers, terrorists, or
other unauthorized individuals seeking to damage State operations or
reap financial gain by exploiting the department's information
security weaknesses.  For example, without any passwords or specific
knowledge of State's systems, we successfully gained access to
State's networks through dial-in connections to modems.  Having
obtained this access, we could have modified, stolen, downloaded, or
deleted important data; shut down services; and monitored network
traffic, such as e-mail and data files. 
In addition, by posing as a trusted inside computer user, we were
able to circumvent State's internal network security controls and
access information and sensitive data that would normally be off
limits to most employees.  For example, after we gained
(administrator) access\7 to host systems on several different
operating platforms, such as UNIX and Windows NT, we viewed
international financial information, travel arrangements, detailed
network diagrams, a listing of valid users on local area networks,
employees' e-mail, performance appraisals, and other sensitive data. 
Our tests also showed that security awareness among State employees
was problematic.  For example, many computer users at State had weak
passwords that were easily guessed, indicating that they were unaware
of, or insensitive to, the need for secure passwords.  One way to
prevent password guessing is to ensure that users choose complex
passwords, such as those composed of alphanumeric, upper- and
lower-case characters.  However, we found no evidence that State was
training its users to employ these techniques.  We also found little
evidence that State was training its users to refrain from disclosing
sensitive information.  For example, we called a user under the
pretense that we were systems maintenance personnel and were able to
convince her to disclose her password. 
We also obtained access to State's networks by breaching physical
security at one facility, and finding user account information and
active terminal sessions in unattended areas.  For example, in
several instances we were able to enter a State facility without
required identification.  In an unlocked office, we found unattended
personal computers logged onto a local area network.  We also found a
user identification and password taped to one of the computers. 
Using these terminals, we were able to download a file that contained
a password list.  This list could have been used later to help hack
into State's systems.  In another unlocked area, we were able to
access the local area network server and obtain supervisor-level
access to a workstation, which would have allowed us to even more
easily circumvent controls and hide any traces of our activities. 
Internet security was the only area in which we found that State's
controls were currently adequate.  We attempted to gain access to
internal State networks by going through and around State's Internet
gateways or exploiting information servers from the outside via the
Internet, but we were not able to gain access to State's systems. 
State's protection in this area was adequate, in part, because the
department currently limits use and access to the Internet.  However,
State officials have been requesting greater Internet access and the
department is considering various options for providing it. 
Expansion of Internet services would provide more pathways and
additional tools for an intruder to attempt to enter unclassified
computer resources and therefore increase the risk to State systems. 
Recognizing this, State conducted an analysis of the risks involved
with increasing Internet use.  However, the department has not yet
decided to what extent it will accept and/or address these new risks. 
Until it does so, State will not be in a good position to expand its
Internet use. 
The primary reason why our penetration tests were successful is that
State, like many federal agencies, lacks the basic building blocks
necessary to effectively manage information security risks.  First,
State did not have a central focal point to oversee and coordinate
security activities.  Computer security responsibilities were
fragmented among three organizations--the Chief Information Office,
Diplomatic Security, and Information Management--none of which had
the authority to effect necessary changes.  Second, State did not
routinely perform risk assessments so that its sensitive information
could be protected based on its sensitivity and criticality to
mission-related operations.  Third, the department's primary
information security policy document was incomplete.  Fourth, State
was not adequately ensuring that computer users were fully aware of
the risks and responsibilities of protecting sensitive information. 
Fifth, the department did not routinely monitor and evaluate the
effectiveness of its security programs, and it did not established a
robust incident response capability. 
A key reason why these critical elements of security were not in
place was that top managers at State had not demonstrated a
commitment to establishing a comprehensive and effective information
security program.  For example, even though State had reported
mainframe computer security to the President and the Congress as a
material weakness under the Federal Managers' Financial Integrity Act
for the past 10 years,\8 the problem had not yet been corrected.  In
addition, information security had often been assigned to low- and
mid-level State employees as a collateral duty.  Finally, State's top
managers had still not developed a comprehensive security plan or
ensured that appropriate resources were devoted to improving computer
In our report being released today, we recommended that State take a
number of actions to address these weaknesses to improve its
information security posture.  For example, we recommended that the
Secretary of State
  -- establish a central information security unit with
     responsibility for facilitating, coordinating, and overseeing
     departmental information security activities;
  -- develop and maintain an up-to-date security plan;
  -- develop policies and procedures that require senior State
     managers to evaluate the risks to their sensitive information
     and systems and determine appropriate solutions;
  -- assign the CIO the responsibility and full authority for
     ensuring that the information security policies, procedures, and
     practices of the agency are adequate; and
  -- defer expansion of Internet usage until State addresses known
     vulnerabilities and provides appropriate security measures
     commensurate with risks associated with the planned level of
     Internet expansion. 
In addition, we provided State with dozens of suggested solutions to
mitigate the specific weaknesses that our tests identified. 
We are pleased to report that in concurring with our recommendations,
State identified a number of actions it is beginning to take to
strengthen its information security program.  For example, State
advised us that its Chief Information Officer is beginning to address
the lack of a central focus for information systems security by
establishing a Security Infrastructure Working Group.  State also
agreed to formalize and document risk management decisions, revise
provisions of the Foreign Affairs Manual related to information
security, and undertake an evaluation of one of its most significant
networks based on our review.  Furthermore, State said it is
implementing a plan to correct the technical weaknesses identified
during our testing.  However, State did not agree with our
recommendation to defer expansion of Internet use until the
department addresses known vulnerabilities.  In explaining its
nonconcurrence, State asserted that expanding Internet usage is a
priority and that the department has a plan to mitigate the risks of
\7 Also known as "superuser" access, obtaining this access level
permits total control of a system's operations and security
functions.  With system administrator rights, one can start up and
shut down a system; add and remove system users; install or delete
system software; and read, modify, or delete all system data. 
\8 The Federal Managers' Financial Integrity Act:  1996 Report to the
President and the Congress (United States Department of State,
December 1996). 
---------------------------------------------------------- Chapter 0:3
Given the paramount need to ensure safe air travel, this Committee
also asked us to review FAA's computer security program.  FAA's air
traffic control (ATC) computer systems provide information to air
traffic controllers and aircraft flight crews to ensure safe and
expeditious movement of aircraft.  Failure to adequately protect
these systems, as well as the facilities that house them, could cause
nationwide disruptions of air traffic or even loss of life due to
To determine whether computer security at FAA is effective, we were
asked to assess (1) whether FAA was effectively managing physical
security at ATC facilities, (2) whether FAA was effectively managing
systems security for its current operational systems, (3) whether FAA
was effectively managing systems security for future ATC
modernization systems, and (4) the effectiveness of its management
structure and implementation of policy for computer security.  We
elected not to perform penetration testing at FAA because, in the
early phases of our work, we already had (1) identified serious
deficiencies in each of the areas we reviewed, (2) found evidence of
ATC systems that had been penetrated and critical ATC data
compromised, and (3) determined that FAA had planned to conduct its
own penetration tests on select ATC systems. 
We found that FAA was not effectively managing physical security at
ATC facilities.  Known weaknesses exist at many facilities.  For
example, at one facility, an FAA inspection report disclosed that
service contract employees were given unrestricted access to
sensitive areas without having appropriate background investigations. 
FAA's assessment of another facility that controls aircraft concluded
that access control procedures were weak to nonexistent and that the
facility was extremely vulnerable to criminal and terrorist attacks. 
Furthermore, we found that FAA did not know if other facilities were
similarly vulnerable because it had not assessed the physical
security controls at 187 facilities since 1993. 
FAA also was ineffective in managing systems security for its
operational systems and was in violation of its own policy.  A review
conducted for FAA's Office of Civil Aviation Security in October 1996
by the Volpe National Transportation Systems Center\9 concluded that
FAA had performed the necessary analysis to determine system threats,
vulnerabilities, and safeguards for only 3 of 90 operational ATC
computer systems, or less than 4 percent.\10 FAA officials told us
that this was an accurate depiction of the current state of
operational systems security.  In addition, only one of the nine
operational ATC telecommunications networks had been analyzed.  Such
poor security management existed despite the fact that FAA's 1994
Telecommunications Strategic Plan stated that "vulnerabilities that
can be exploited in aeronautical telecommunications potentially
threaten property and public safety." FAA's 1997 Telecommunications
Strategic Plan continued to identify security of telecommunication
systems as an area in need of improvement.  Without knowing the
specific vulnerabilities of its ATC systems, FAA cannot adequately
protect them. 
FAA claimed that because current ATC systems often utilize
custom-built, 20-year-old equipment with special purpose operating
systems, proprietary communication interfaces, and custom-built
software, the possibilities for unauthorized access are limited. 
While these configurations may not be commonly understood by external
hackers, one cannot assume that old or obscure systems are, a priori,
secure.  In addition, the certification reports that FAA has done
revealed operational systems vulnerabilities.  Furthermore, archaic
and proprietary features of the ATC system provide no protection from
attack by disgruntled current and former employees who understand
Additionally, FAA had not been effectively managing systems security
for future ATC modernization systems.  FAA had no security
architecture, security concept of operations, or security standards. 
As a result, implementation of security requirements across ATC
development efforts was sporadic and ad hoc.  Of the six current ATC
system development efforts that we reviewed, four had security
requirements, but only two of the four developed their security
requirements based on a risk assessment.  Without security
requirements based on sound risk assessments, FAA cannot effectively
protect future ATC systems from attack.  Further, with no security
requirements specified during systems design, any attempts to
retrofit security features later will be increasingly costly and
technically challenging. 
As FAA modernizes and increases system interconnectivity, ATC systems
will become more vulnerable, placing even more importance on FAA's
ability to develop adequate security measures.  These future
vulnerabilities are well documented in FAA's information security
mission need statement and also in reports completed by the
President's Commission on Critical Infrastructure Protection.  The
mission need statement asserts that "information security is the FAA
mission area with the greatest need for policy, procedural, and
technical improvement.  Immediate action is called for to develop and
integrate information security into ATC systems." The President's
Commission summary report concluded that the future ATC architecture
appeared to have vulnerabilities and recommended that FAA act
immediately to develop, establish, fund, and implement a
comprehensive systems security program to protect the modernized ATC
system from information-based and other disruptions, intrusions, and
attacks.  It further recommended that this program be guided by the
detailed recommendations made in the National Airspace Systems
vulnerability assessment. 
Finally, FAA's management structure and implementation of policy for
ATC computer security was not effective.  Security responsibilities
were distributed among three organizations, all of which have been
remiss in their ATC security duties.  The Office of Civil Aviation
Security was responsible for developing and enforcing security
policy, the Office of Air Traffic Services was responsible for
implementing security policy for operational ATC systems, and the
Office of Research and Acquisitions was responsible for implementing
policy for ATC systems that are being developed.  The Office of Civil
Aviation Security had not adequately enforced FAA's policies that
require the assessment of physical security controls at all ATC
facilities and vulnerabilities, threats, and safeguards for all
operational ATC computer systems.  In addition, the Office of Air
Traffic Services had not implemented FAA policies that require it to
analyze all ATC systems for security vulnerabilities, threats, and
safeguards.  Finally, the Office of Research and Acquisitions had not
implemented the FAA policy that requires it to formulate requirements
for security in specifications for all new ATC modernization systems. 
FAA recently established a central security focal point, the National
Airspace Systems Information Security (NIS) group, to develop
additional security guidance (i.e., a security architecture, a
security concept of operations, and security standards), to conduct
risk assessments of selected ATC systems, to create a mechanism to
respond to security incidents, and to provide security engineering
support to ATC system development teams.  This group has developed an
action plan that describes each of its improvement activities, but it
has not developed detailed plans or schedules to accomplish these
Establishing a central security focal point is a practice employed by
leading security organizations.  However, in order to be effective,
the security focal point must have access to senior executives that
are organizationally positioned to take action and effect change
across organizational divisions.  One approach for ensuring that a
central group has such access at FAA would be to place it under a
Chief Information Officer (CIO) who reports directly to the FAA
Administrator.  This approach is consistent with the Clinger-Cohen
Act,\11 which requires that major federal departments and agencies
establish CIOs who report to the department/agency head and are
responsible for implementing effective information management. 
FAA does not have a CIO reporting to the Administrator.  Although the
NIS group has access to certain key Associate Administrators (e.g.,
the Associate Administrator for Civil Aviation Security and the
Associate Administrator for Research and Acquisitions), it does not
have access to the management level that can effect change across
organizational divisions, especially FAA's Administrator or Deputy
Administrator.  Thus, there is no assurance that the NIS group's
guidance, once issued, will be adequately implemented and enforced,
that results of its risk assessments will be acted upon, and that all
security breaches will be reported and adequately responded to. 
Until existing ATC computer security policy is effectively
implemented and enforced, operational and developmental ATC systems
will continue to be vulnerable to compromise of sensitive information
and interruption of critical services. 
In our report, we recommended that FAA take a number of actions to
improve its information security.  For example, we recommended that
  -- develop and execute a plan to inspect the 187 ATC facilities
     that have not been inspected in over 4 years and correct any
     weaknesses identified;
  -- correct identified physical security weaknesses at inspected
  -- ensure that specifications for all new ATC systems include
     security requirements based on detailed security assessments;
  -- ensure the NIS group establishes detailed plans and schedules to
     develop a security architecture, a security concept of
     operations, and security standards and that these plans are
Finally, we recommended that FAA establish an effective management
structure for developing, implementing, and enforcing ATC computer
security policy.  Given the importance and the magnitude of the
information technology initiative at FAA, we expanded on our earlier
recommendation that a CIO management structure similar to the
department-level CIOs as prescribed in the Clinger-Cohen Act be
established for FAA\12 by recommending that FAA's CIO be responsible
for computer security.  We further recommended that the NIS group
report to the CIO and that the CIO direct the NIS group to implement
its plans. 
In contrast to State, the Department of Transportation's response to
our recommendations was disappointing.  The department only discussed
its efforts for timely corrective actions pertaining to 1 of our 15
recommendations.  It did not state what, if any, specific action it
would take on the remaining 14 recommendations.  This noncommitment
is troubling considering that several of our recommendations are
requesting that FAA adhere to its existing computer security
\9 The John A.  Volpe National Transportation Systems Center, located
in Cambridge, Massachusetts, is a federal government organization
whose principal role is to serve as a national center for
transportation and logistics expertise.  It provides research,
management, and engineering support to the U.S.  Department of
Transportation, other federal agencies, and state and local
\10 Volpe Transportation Systems Center NAS AIS Security Review,
Final Report, October 1, 1996. 
\11 The 1996 Clinger-Cohen Act, Public Law No.  104-106, section
5125, 110 Stat.  684 (1996). 
\12 Air Traffic Control:  Complete and Enforced Architecture Needed
for FAA Systems Modernization (GAO/AIMD-97-30, February 3, 1997) and
Air Traffic Control:  Immature Software Acquisition Processes
Increase FAA System Acquisition Risks (GAO/AIMD-97-47, March 21,
---------------------------------------------------------- Chapter 0:4
Poor computer security is a pervasive problem across government. 
Security problems are often dealt with on an ad hoc basis with too
little attention given to systemic issues and problems that underlie
individual security lapses or breaches.  Frequently, responsibility
for computer security is viewed as burdensome and relegated to (1)
technical staff who do not have the resources or clout to prompt
improvements and/or (2) line staff who lack the training and
experience necessary to fully appreciate and mitigate computer
security risks. 
The problem is further complicated by the complex computing
environment most agencies now must have to meet their operating
needs.  Many agencies have a conglomeration of mainframes, PCs,
routers, servers, software applications, and external connections. 
Because absolute protection over these complex infrastructures is not
feasible, developing effective information systems security involves
an often intricate set of trade-offs between the (1) type and
sensitivity of the information and operations to be protected, (2)
vulnerabilities of the computers and networks, (3) various threats,
including hackers, thieves, disgruntled employees, competitors, and,
in the federal government's case, foreign adversaries and spies, (4)
countermeasures available to combat the problem, and (5) costs.  In
making these trade-offs, agencies must understand the information
security risks to their operations and assets, decide what they are
going to do to defend themselves, and determine what risks they are
willing to accept. 
We have found that many problems contribute to agencies' difficulties
in successfully balancing the trade-offs necessary to establish
effective computer security.  However, an underlying factor is that
senior agency officials have not established a framework for managing
the information security risks associated with their operations.  To
better determine how leading organizations handled these trade-offs,
we undertook a comprehensive study--at this Committee's request--of
eight organizations with superior security programs.  These
organizations--regardless of business type, size, or management
structure--had one overriding tenet:  business "owners," not security
experts, assumed both responsibility and accountability for computer
security.  At the same time, however, security specialists played a
strong educational and advisory role and had the ability to elevate
discussions to higher management levels when they believed that risks
were not being adequately addressed. 
The organizations we studied managed their information security risks
by implementing a continuing cycle of monitoring business risks,
maintaining policies and controls, and monitoring operations.  This
cycle of activity parallels the process associated with managing the
controls associated with any type of program.  As illustrated in the
figure below, all of these activities are coordinated through a
central management office or group who served as consultants and
facilitators to individual business units and senior management. 
   Figure 1:  Risk Management
   (See figure in printed
Each element of the risk management cycle, in turn, has a number of
individual practices that these organizations followed to minimize
   Figure 2:  Sixteen Practices
   Employed by Leading
   Organizations to Implement the
   Risk Management Cycle
   (See figure in printed
We are pleased that the Committee is releasing the executive guide,
which summarizes the results of our study, today.\13 We are equally
pleased that the CIO Council has also endorsed our executive guide
and the 16 practices followed by leading organizations.  We are
working with the Council and the Office of Management and Budget to
encourage agencies to adopt these practices as additional guidance
that can be used to enhance the government's ability to protect
federal assets from fraud and misuse, inappropriate disclosure of
sensitive information, and disruption of critical operations.  And,
of course, we are continuing our work for this Committee to review
agency computer security programs and to identify solutions that
target the underlying causes of security weaknesses.  We are also
working with the CIO Council to develop improved risk assessment
practices and methodologies and have planned a significant amount of
work in this area over the next 3 years. 
\13 Executive Guide:  Information Security Management:  Learning From
Leading Organizations (GAO/AIMD-98-68, May 1998). 
-------------------------------------------------------- Chapter 0:4.1
This completes our testimony. 
*** End of document. ***

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