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Homeland Security

Computer Security: Weaknesses Continue to Place Critical Federal 
Operations and Assets at Risk (05-APR-01, GAO-01-600T). 	 
This testimony discusses GAO's analysis of security audits at	 
federal agencies. The widespread interconnectivity of computers  
poses significant risks to federal computer systems and the	 
operations and the infrastructures they support. GAO's		 
evaluations show that federal computer systems are riddled with  
weaknesses that continue to put critical operations and assets at
risk. These weaknesses covered six major areas of general control
(1) security program management, (2) access controls, (3)	 
software development and change controls, (4) segregation of	 
duties, (5) operating systems controls, and (6) service 	 
continuity. Weaknesses in these areas placed a broad range of	 
critical operations and assets at risk for fraud, misuse, and	 
disruption. Federal agencies have taken steps to address these	 
problems and many have good remedial efforts underway. However,  
these efforts will not be fully effective and lasting unless they
are supported by a strong agencywide security management	 
framework. Establishing such as management framework requires	 
that agencies take a comprehensive approach that involves both	 
(1) senior agency program managers who understand which aspects  
of their missions are the most critical and sensitive and (2)	 
technical experts who know the agencies' systems and can suggest 
appropriate technical security control techniques.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-600T					        
    ACCNO:   A00746						        
    TITLE:   Computer Security: Weaknesses Continue to Place Critical 
             Federal Operations and Assets at Risk                            
     DATE:   04/05/2001 
  SUBJECT:   Computer security					 
	     Computer software					 
	     Information resources management			 
	     Information systems				 
	     ILOVEYOU Computer Virus				 
	     Melissa Computer Virus				 
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For Release on Delivery Expected at 9: 30 a. m. EDT Thursday, April 5, 2001
COMPUTER SECURITY Weaknesses Continue to Place Critical Federal Operations
and Assets at Risk
Statement of Robert F. Dacey Director, Information Security Issues Testimony
Before the Subcommittee on Oversight and Investigations, Committee on Energy
and Commerce, House of Representatives
United States General Accounting Office
Page 1 GAO- 01- 600T
Mr. Chairman and Members of the Subcommittee: I am pleased to be here today
to discuss our analysis of information security audits at federal agencies.
As with other large organizations, federal agencies rely extensively on
computerized systems and electronic data to support their missions.
Accordingly, the security of these systems and data is essential to avoiding
disruptions in critical operations, data tampering, fraud, and inappropriate
disclosure of sensitive information.
Today, I will summarize the results of our analysis of information security
audits performed by us and by agency inspectors general since July 1999 at
24 major federal departments and agencies. In summarizing these results, I
will discuss the types of pervasive weaknesses that we and agency inspectors
general have identified. I will then describe the serious risks that these
weaknesses pose at selected individual agencies of particular interest to
this subcommittee, and the major common weaknesses that agencies need to
address. Finally, I will describe the management improvements that are
needed to resolve these weaknesses and the significant challenges that
Dramatic increases in computer interconnectivity, especially in the use of
the Internet, are revolutionizing the way our government, our nation, and
much of the world communicate and conduct business. The benefits have been
enormous. Vast amounts of information are now literally at our fingertips,
facilitating research on virtually every topic imaginable; financial and
other business transactions can be executed almost instantaneously, often on
a 24- hour- a- day basis; and electronic mail, Internet web sites, and
computer bulletin boards allow us to communicate quickly and easily with a
virtually unlimited number of individuals and groups.
In addition to such benefits, however, this widespread interconnectivity
poses significant risks to our computer systems and, more important, to the
critical operations and infrastructures they support. For example,
telecommunications, power distribution, water supply, public health
services, and national defense- including the military's warfighting
capability--- law enforcement, government services, and emergency services
all depend on the security of their computer operations. The speed and
accessibility that create the enormous benefits of the computer age
likewise, if not properly controlled, allow individuals and organizations to
inexpensively eavesdrop on or interfere with these operations from remote
locations for mischievous or malicious purposes, including fraud or
sabotage. Background
Page 2 GAO- 01- 600T
Reports of attacks and disruptions abound. The March 2001 report of the
“Computer Crime and Security Survey,” conducted by the Computer
Security Institute and the Federal Bureau of Investigation's San Francisco
Computer Intrusion Squad, showed that 85 percent of respondents (primarily
large corporations and government agencies) had detected computer security
breaches within the last 12 months. Disruptions caused by virus attacks,
such as the ILOVEYOU virus in May 2000 and 1999's Melissa virus, have
illustrated the potential for damage that such attacks hold. 1 A sampling of
reports summarized in Daily Reports by the FBI's National Infrastructure
Protection Center 2 during two recent weeks in March illustrates the problem
Hackers suspected of having links to a foreign government successfully broke
into the Sandia National Laboratory's computer system and were able to
access sensitive classified information.( Source: Washington Times, March
16, 2001.)
A hacker group by the name of “PoizonB0x” defaced numerous
government web sites, including those of the Department of Transportation,
the Administrative Office of the U. S. Courts, the National Science
Foundation, the National Oceanic and Atmospheric Administration, the
Princeton Plasma Physics Laboratory, the General Services Administration,
the U. S. Geological Survey, the Bureau of Land Management, and the Office
of Science & Technology Policy. (Source: Attrition. org., March 19, 2001.)
The “Russian Hacker Association” is offering over the Internet
an e- mail bombing system that will destroy a persons “web
enemy” for a fee. (Source: UK Ministry of Defense Joint Security
Coordination Center)
Two San Diego men allegedly crashed a company's computer system by rerouting
tens of thousands of unsolicited e- mails through its servers. (Source:
ZDNet News, March 18, 2001.)
1 Critical Infrastructure Protection: “ILOVEYOU” Computer Virus
Highlights Need for Improved Alert and Coordination Capabilities (GAO/ T-
AIMD- 00- 181, May 18, 2000); Information Security: “ILOVEYOU”
Computer Virus Emphasizes Critical Need for Agency and Governmentwide
Improvements (GAO/ T- AIMD- 00- 171, May 10, 2000); Information Security:
The Melissa Computer Virus Demonstrates Urgent Need for Stronger Protection
Over Systems and Sensitive Data (GAO/ T- AIMD- 99- 146, April 15, 1999). 2
In its Daily Reports, the National Infrastructure Protection Center states
that these summaries are for
information purposes only and do not constitute any verification of the
information contained in the reports or endorsement by the FBI.
Page 3 GAO- 01- 600T
Government officials are increasingly concerned about attacks from
individuals and groups with malicious intent, such as crime, terrorism,
foreign intelligence gathering, and acts of war. According to the FBI,
terrorists, transnational criminals, and intelligence services are quickly
becoming aware of and using information exploitation tools such as computer
viruses, Trojan horses, worms, logic bombs, and eavesdropping sniffers that
can destroy, intercept, or degrade the integrity of and deny access to data.
As greater amounts of money are transferred through computer systems, as
more sensitive economic and commercial information is exchanged
electronically, and as the nation's defense and intelligence communities
increasingly rely on commercially available information technology, the
likelihood that information attacks will threaten vital national interests
increases. In addition, the disgruntled organization insider is a
significant threat, since such individuals often have knowledge that allows
them to gain unrestricted access and inflict damage or steal assets without
a great deal of knowledge about computer intrusions.
Since 1996, our analyses of information security at major federal agencies
have shown that federal systems were not being adequately protected from
these threats, even though these systems process, store, and transmit
enormous amounts of sensitive data and are indispensable to many federal
agency operations. In September 1996, we reported that serious weaknesses
had been found at 10 of the 15 largest federal agencies, and we concluded
that poor information security was a widespread federal problem with
potentially devastating consequences. 3 In 1998 and in 2000, we analyzed
audit results for 24 of the largest federal agencies: both analyses found
that all 24 agencies had significant information security weaknesses. 4 As a
result of these analyses, we have identified information security as a high-
risk issue in reports to the Congress since 1997- most recently in January
2001. 5
3 Information Security: Opportunities for Improved OMB Oversight of Agency
Practices (GAO/ AIMD- 96- 110, September 24, 1996). 4 Information Security:
Serious Weaknesses Place Critical Fedearl Operations and Assets at Risk
(GAO/ AIMD- 98- 92, September 23, 1998); Information Security: Serious and
Widespread Weaknesses Persist at Federal Agencies (GAO/ AIMD- 00- 295,
September 6, 2000).
5 High- Risk Series: Information Management and Technology (GAO/ HR- 97- 9,
February 1, 1997); High- Risk Series: An Update (GAO/ HR- 99- 1, January
1999); High Risk Series: An Update (GAO- 01- 263, January 2001).
Page 4 GAO- 01- 600T
Evaluations published since July 1999 show that federal computer systems are
riddled with weaknesses that continue to put critical operations and assets
at risk. Significant weaknesses have been identified in each of the 24
agencies covered by our review. These weaknesses covered all six major areas
of general controls- the policies, procedures, and technical controls that
apply to all or a large segment of an entity's information systems and help
ensure their proper operation. These six areas are (1) security program
management, which provides the framework for ensuring that risks are
understood and that effective controls are selected and implemented, (2)
access controls, which ensure that only authorized individuals can read,
alter, or delete data, (3) software development and change controls, which
ensure that only authorized software programs are implemented, (4)
segregation of duties, which reduces the risk that one individual can
independently perform inappropriate actions without detection, (5) operating
systems controls, which protect sensitive programs that support multiple
applications from tampering and misuse, and (6) service continuity, which
ensures that computer- dependent operations experience no significant
Weaknesses in these areas placed a broad range of critical operations and
assets at risk for fraud, misuse, and disruption. In addition, they placed
an enormous amount of highly sensitive data- much of it pertaining to
individual taxpayers and beneficiaries- at risk of inappropriate disclosure.
The scope of audit work performed has continued to expand to more fully
cover all six major areas of general controls at each agency. Not
surprisingly, this has led to the identification of additional areas of
weakness at some agencies. While these increases in reported weaknesses are
disturbing, they do not necessarily mean that information security at
federal agencies is getting worse. They more likely indicate that
information security weaknesses are becoming more fully understood- an
important step toward addressing the overall problem. Nevertheless, our
analysis leaves no doubt that serious, pervasive weaknesses persist. As
auditors increase their proficiency and the body of audit evidence expands,
it is probable that additional significant deficiencies will be identified.
Most of the audits covered in our analysis were performed as part of
financial statement audits. At some agencies with primarily financial
missions, such as the Department of the Treasury and the Social Security
Administration, these audits covered the bulk of mission- related
operations. However, at agencies whose missions are primarily nonfinancial,
such as the Departments of Defense and Justice, the audits may provide a
less complete picture of the agency's overall security Weaknesses Remain
Page 5 GAO- 01- 600T
posture because the audit objectives focused on the financial statements and
did not include evaluations of systems supporting nonfinancial operations.
In response to congressional interest, during fiscal years 1999 and 2000, we
expanded our audit focus to cover a wider range of nonfinancial operations.
We expect this trend to continue.
To fully understand the significance of the weaknesses we identified, it is
necessary to link them to the risks they present to federal operations and
assets. Virtually all federal operations are supported by automated systems
and electronic data, and agencies would find it difficult, if not
impossible, to carry out their missions and account for their resources
without these information assets. Hence, the degree of risk caused by
security weaknesses is extremely high.
The weaknesses identified place a broad array of federal operations and
assets at risk of fraud, misuse, and disruption. For example, weaknesses at
the Department of the Treasury increase the risk of fraud associated with
billions of dollars of federal payments and collections, and weaknesses at
the Department of Defense increase the vulnerability of various military
operations. Further, information security weaknesses place enormous amounts
of confidential data, ranging from personal and tax data to proprietary
business information, at risk of inappropriate disclosure. For example, in
1999, a Social Security Administration employee pled guilty to unauthorized
access to the administration's systems. The related investigation determined
that the employee had made many unauthorized queries, including obtaining
earnings information for members of the local business community.
Such risks, if inadequately addressed, may limit government's ability to
take advantage of new technology and improve federal services through
electronic means. For example, this past February, we reported on serious
control weaknesses in the Internal Revenue Service's (IRS) electronic filing
system, noting that failure to maintain adequate security could erode public
confidence in electronic filing, jeopardize the Service's ability to meet
its goal of 80 percent of returns being filed electronically by 2007, and
deprive it of financial and other anticipated benefits. Specifically, we
found that, during the 2000 tax filing season, IRS did not adequately secure
access to its electronic filing systems or to the electronically transmitted
tax return data those systems contained. We demonstrated that unauthorized
individuals, both internal and external to IRS, could have gained access to
these systems and viewed, copied, Risks to Federal
Operations, Assets, and Confidentiality Are Substantial
Page 6 GAO- 01- 600T
modified, or deleted taxpayer data. In addition, the weaknesses we
identified jeopardized the security of the sensitive business, financial,
and taxpayer data on other critical IRS systems that were connected to the
electonic filing systems. The IRS Commissioner has stated that, in response
to recommendations we made, IRS has completed corrective action for all of
the critical access control vulnerabilities we identified and that, as a
result, the electronic filing systems now satisfactorily meet critical
federal security requirements to protect the taxpayer. 6 As part of our
audit follow up activities, we plan to evaluate the effectiveness of IRS's
corrective actions.
I would now like to describe the risks associated with specific recent audit
findings at agencies of particular interest to this subcommittee.
Information technology is essential to the Department of Energy's (DOE)
scientific research mission, which is supported by a large and diverse set
of computing systems, including very powerful supercomputers located at DOE
laboratories across the nation. In June 2000, we reported that computer
systems at DOE laboratories supporting civilian research had become a
popular target of the hacker community, with the result that the threat of
attacks had grown dramatically in recent years. 7 Further, because of
security breaches, several laboratories had been forced to temporarily
disconnect their networks from the Internet, disrupting the laboratories'
ability to do scientific research for up to a full week on at least two
occasions. In February 2001, the DOE's Inspector General reported network
vulnerabilities and access control weaknesses in unclassified systems that
increased the risk that malicious destruction or alteration of data or the
processing of unauthorized operations could occur. 8
In February, the Department of Health and Human Services' Inspector General
again reported serious control weaknesses affecting the integrity,
confidentiality, and availability of data maintained by the department. 9
Most significant were weaknesses associated with the department's Health
Care Financing Administration, which was responsible, during fiscal year
6 Information Security: IRS Electronic Filing Systems (GAO- 01- 306,
February 16, 2001). 7 Information Security: Vulnerabilities in DOE's Systems
for Unclassified Civilian Research (GAO/ AIMD- 00- 140, June 9, 2000).
8 Report on the Department of Energy's Consolidated Financial Statements,
DOE/ IG- FS- 01- 01, February 16, 2001. 9 Report on the Financial Statement
Audit of the Department of Health and Human Services for Fiscal Year 2000,
A- 17- 00- 00014, February 26, 2001.
Page 7 GAO- 01- 600T
2000, for processing more than $200 billion in medicare expenditures. HCFA
relies on extensive data processing operations at its central office to
maintain administrative data, such as Medicare enrollment, eligibility, and
paid claims data, and to process all payments for managed care. HCFA also
relies on Medicare contractors, who use multiple shared systems to collect
and process personal health, financial, and medical data associated with
Medicare claims. Significant weaknesses were also reported for the Food and
Drug Administration and the department's Division of Financial Operations.
The Environmental Protection Agency (EPA) relies on its computer systems to
collect and maintain a wealth of environmental data under various statutory
and regulatory requirements. EPA makes much of its information available to
the public through Internet access in order to encourage public awareness of
and participation in managing human health and environmental risks and to
meet statutory requirements. EPA also maintains confidential data from
private businesses, data of varying sensitivity on human health and
environmental risks, financial and contract data, and personal information
on its employees. Consequently, EPA's information security program must
accommodate the often competing goals of making much of its environmental
information widely accessible while maintaining data integrity,
availability, and appropriate confidentiality. In July 2000, we reported
serious and pervasive problems that essentially rendered EPA's agencywide
information security program ineffective. 10 Our tests of computer- based
controls concluded that the computer operating systems and agencywide
computer network that support most of EPA's mission- related and financial
operations were riddled with security weaknesses.
In addition, EPA's records showed that its vulnerabilities had been
exploited by both external and internal sources, as illustrated by the
following examples.
- In June 1998, EPA was notified that one of its computers was used by a
remote intruder as a means of gaining unauthorized access to a state
university's computers. The problem report stated that vendorsupplied
software updates were available to correct the vulnerability, but EPA had
not installed them.
10 Information Security: Fundamental Weaknesses Place EPA Data and
Operations at Risk (GAO/ AIMD- 00- 215, July 6, 2000).
Page 8 GAO- 01- 600T
- In July 1999, a chat room was set up on a network server at one of EPA's
regional financial management centers for hackers to post notes and, in
effect, conduct on- line electronic conversations.
- In February 1999, a sophisticated penetration affected three of EPA's
computers. EPA was unaware of this penetration until notified by the FBI.
- In June 1999, an intruder penetrated an Internet web server at EPA's
National Computer Center by exploiting a control weakness specifically
identified by EPA about 3 years earlier during a previous penetration of a
different system. The vulnerability continued to exist because EPA had not
implemented vendor software updates (patches), some of which had been
available since 1996.
- On two occasions during 1998, extraordinarily large volumes of network
traffic- synonymous with a commonly used denial- of- service hacker
technique- affected computers at one of EPA's field offices. In one case, an
Internet user significantly slowed EPA's network activity and interrupted
network service for over 450 EPA computer users. In a second case, an
intruder used EPA computers to successfully launch a denial- of- service
attack against an Internet service provider.
- In September 1999, an individual gained access to an EPA computer and
altered the computer's access controls, thereby blocking authorized EPA
employees from accessing files. This individual was no longer officially
affiliated with EPA at the time of the intrusion, indicating a serious
weakness in EPA's process for applying changes in personnel status to
computer accounts.
Of particular concern was that many of the most serious weaknesses we
identified- those related to inadequate protection from intrusions through
the Internet and poor security planning- had been previously reported to EPA
management in 1997 by EPA's inspector general. 11 The negative effects of
such weaknesses are illustrated by EPA's own records, which show several
serious computer security incidents since early 1998 that have resulted in
damage and disruption to agency operations. As a result of these weaknesses,
EPA's computer systems and the operations that rely on them were highly
vulnerable to tampering, disruption, and misuse from both internal and
external sources.
11 EPA's Internet Connectivity Controls, Office of Inspector General Report
of Audit (Redacted Version), September 5, 1997.
Page 9 GAO- 01- 600T
EPA management has developed and begun to implement a detailed action plan
to address reported weaknesses. However, the agency does not expect to
complete these corrective actions until 2002 and continued to report a
material weakness in this area in its fiscal year 2000 report on internal
controls under the Federal Managers' Financial Integrity Act of 1982. 12
The Department of Commerce is responsible for systems that the department
has designated as critical for national security, national economic
security, and public health and safety. Its member bureaus include the
National Oceanic and Atmospheric Administration, the Patent and Trademark
Office, the Bureau of the Census, and the International Trade
Administration. During December 2000 and January 2001, Commerce ‘s
inspector general reported significant computer security weaknesses in
several of the department's bureaus and, last month, reported multiple
material information security weaknesses affecting the department's ability
to produce accurate data for financial statements. These included a lack of
formal, current security plans and weaknesses in controls over access to
systems and over software development and changes. 13 At the request of the
full committee, we are currently evaluating information security controls at
selected other Commerce bureaus.
The nature of agency operations and their related risks vary. However,
striking similarities remain in the specific types of general control
weaknesses reported and in their serious negative impact on an agency's
ability to ensure the integrity, availability, and appropriate
confidentiality of its computerized operations- and therefore on what
corrective actions they must take. The sections that follow describe the six
areas of general controls and the specific weaknesses that were most
widespread at the agencies covered by our analysis.
Each organization needs a set of management procedures and an organizational
framework for identifying and assessing risks, deciding what policies and
controls are needed, periodically evaluating the effectiveness of these
policies and controls, and acting to address any
12 Audit Report on EPA's Fiscal 2000 Financial Statements, Office of the
Inspector General Audit Report 2001- 1- 00107, February 28, 2001. 13
Department of Commerce's Fiscal Year 2000 Consolidated Financial Statements,
Inspector General Audit Report No. FSD- 12849- 1- 0001. While Nature of Risk
Varies, Control Weaknesses Across Agencies Are Strikingly Similar
Security Program Management
Page 10 GAO- 01- 600T
identified weaknesses. These are the fundamental activities that allow an
organization to manage its information security risks cost effectively,
rather than react to individual problems in an ad- hoc manner only after a
violation has been detected or an audit finding reported.
Despite the importance of this aspect of an information security program,
poor security program management continues to be a widespread problem.
Virtually all of the agencies for which this aspect of security was reviewed
had deficiencies. Specifically, many had not developed security plans for
major systems based on risk, had not documented security policies, and had
not implemented a program for testing and evaluating the effectiveness of
the controls they relied on. As a result, agencies
were not fully aware of the information security risks to their operations,
had accepted an unknown level of risk by default rather than consciously
deciding what level of risk was tolerable,
had a false sense of security because they were relying on controls that
were not effective, and
could not make informed judgments as to whether they were spending too
little or too much of their resources on security.
With the October 2000 enactment of the government information security
reform provisions of the fiscal year 2001 National Defense Authorization
Act, agencies are now required by law to adopt the practices described
above, including annual management evaluations of agency security.
Access controls limit or detect inappropriate access to computer resources
(data, equipment, and facilities), thereby protecting these resources
against unauthorized modification, loss, and disclosure. Access controls
include physical protections- such as gates and guards- as well as logical
controls, which are controls built into software that require users to
authenticate themselves through the use of secret passwords or other
identifiers and limit the files and other resources that an authenticated
user can access and the actions that he or she can execute. Without adequate
access controls, unauthorized individuals, including outside intruders and
terminated employees, can surreptitiously read and copy sensitive data and
make undetected changes or deletions for malicious purposes or personal
gain. Even authorized users can Access Controls
Page 11 GAO- 01- 600T
unintentionally modify or delete data or execute changes that are outside
their span of authority.
For access controls to be effective, they must be properly implemented and
maintained. First, an organization must analyze the responsibilities of
individual computer users to determine what type of access (e. g., read,
modify, delete) they need to fulfill their responsibilities. Then, specific
control techniques, such as specialized access control software, must be
implemented to restrict access to these authorized functions. Such software
can be used to limit a user's activities associated with specific systems or
files and to keep records of individual users' actions on the computer.
Finally, access authorizations and related controls must be maintained and
adjusted on an ongoing basis to accommodate new and terminated employees,
and changes in users' responsibilities and related access needs.
Significant access control weaknesses were reported for all of the agencies
covered by our analysis, as evidenced by the following examples:
Accounts and passwords for individuals no longer associated with the agency
were not deleted or disabled; neither were they adjusted for those whose
responsibilities, and thus need to access certain files, changed. At one
agency, as a result, former employees and contractors could and in many
cases did still read, modify, copy, or delete data. At this same agency,
even after 160 days of inactivity, 7,500 out of 30,000 users' accounts had
not been deactivated.
Users were not required to periodically change their passwords.
Managers did not precisely identify and document access needs for individual
users or groups of users. Instead, they provided overly broad access
privileges to very large groups of users. As a result, far more individuals
than necessary had the ability to browse and, sometimes, modify or delete
sensitive or critical information. At one agency, all 1,100 users were
granted access to sensitive system directories and settings. At another
agency, 20,000 users had been provided access to one system without written
Use of default, easily guessed, and unencrypted passwords significantly
increased the risk of unauthorized access. During testing at one agency, we
were able to guess many passwords based on our knowledge of commonly used
passwords and were able to observe computer users' keying in passwords and
then use those passwords to obtain “high level” system
administration privileges.
Page 12 GAO- 01- 600T
Software access controls were improperly implemented, resulting in
unintended access or gaps in access- control coverage. At one agency data
center, all users, including programmers and computer operators, had the
capability to read sensitive production data, increasing the risk that such
sensitive information could be disclosed to unauthorized individuals. Also
at this agency, certain users had the unrestricted ability to transfer
system files across the network, increasing the risk that unauthorized
individuals could gain access to the sensitive data or programs.
To illustrate the risks associated with poor authentication and access
controls, in recent years we have begun to incorporate network vulnerability
testing into our audits of information security. Such tests involve
attempting- with agency cooperation- to gain unauthorized access to
sensitive files and data by searching for ways to circumvent existing
controls, often from remote locations. Our auditors have been successful, in
almost every test, in readily gaining unauthorized access that would allow
intruders to read, modify, or delete data for whatever purpose they had in
mind. Further, user activity was inadequately monitored. At one agency, much
of the activity associated with our intrusion testing was not recognized and
recorded, and the problem reports that were recorded did not recognize the
magnitude of our activity or the severity of the security breaches we
Application software development and change controls prevent unauthorized
software programs or modifications to programs from being implemented. Key
aspects of such controls are ensuring that (1) software changes are properly
authorized by the managers responsible for the agency program or operations
that the application supports, (2) new and modified software programs are
tested and approved prior to their implementation, and (3) approved software
programs are maintained in carefully controlled libraries to protect them
from unauthorized changes and to ensure that different versions are not
Such controls can prevent both errors in software programming as well as
malicious efforts to insert unauthorized computer program code. Without
adequate controls, incompletely tested or unapproved software can result in
erroneous data processing that, depending on the application, could lead to
losses or faulty outcomes. In addition, individuals could surreptitiously
modify software programs to include processing steps or features that could
later be exploited for personal gain or sabotage. Application Software
Development and Change Controls
Page 13 GAO- 01- 600T
Weaknesses in software program change controls were identified for almost
all of the agencies where such controls were evaluated. Examples of
weaknesses in this area included the following:
Testing procedures were undisciplined and did not ensure that implemented
software operated as intended. For example, at one agency, senior officials
authorized some systems for processing without testing access controls to
ensure that they had been implemented and were operating effectively. At
another, documentation was not retained to demonstrate user testing and
Implementation procedures did not ensure that only authorized software was
used. In particular, procedures did not ensure that emergency changes were
subsequently tested and formally approved for continued use and that
implementation of “locally developed” (unauthorized) software
programs was prevented or detected.
Agencies' policies and procedures frequently did not address the maintenance
and protection of program libraries.
Segregation of duties refers to the policies, procedures, and organizational
structure that help ensure that one individual cannot independently control
all key aspects of a process or computer- related operation and thereby
conduct unauthorized actions or gain unauthorized access to assets or
records without detection. For example, one computer programmer should not
be allowed to independently write, test, and approve program changes.
Although segregation of duties alone will not ensure that only authorized
activities occur, inadequate segregation of duties increases the risk that
erroneous or fraudulent transactions could be processed, improper program
changes implemented, and computer resources damaged or destroyed. For
an individual who was independently responsible for authorizing, processing,
and reviewing payroll transactions could inappropriately increase payments
to selected individuals without detection; or
a computer programmer responsible for authorizing, writing, testing, and
distributing program modifications could either inadvertently or
deliberately implement computer programs that did not process transactions
in accordance with management's policies or that included malicious code.
Segregation of Duties
Page 14 GAO- 01- 600T
Controls to ensure appropriate segregation of duties consist mainly of
documenting, communicating, and enforcing policies on group and individual
responsibilities. Enforcement can be accomplished by a combination of
physical and logical access controls and by effective supervisory review.
Segregation of duties weaknesses were identified at most of the agencies
covered by our analysis. Common problems involved computer programmers and
operators who were authorized to perform a variety of duties, thus providing
them the ability to independently modify, circumvent, and disable system
security features. For example, at one data center, a single individual
could independently develop, test, review, and approve software changes for
Segregation of duties problems were also identified related to transaction
processing. For example, at one agency, 11 staff members involved with
procurement had system access privileges that allowed them to individually
request, approve, and record the receipt of purchased items. In addition, 9
of the 11 had system access privileges that allowed them to edit the vendor
file, which could result in fictitious vendors being added to the file for
fraudulent purposes. For fiscal year 1999, we identified 60 purchases,
totaling about $300,000, that were requested, approved, and receipt-
recorded by the same individual.
Operating system software controls limit and monitor access to the powerful
programs and sensitive files associated with the computer systems operation.
Generally, one set of system software is used to support and control a
variety of applications that may run on the same computer hardware. System
software helps control and coordinate the input, processing, output, and
data storage associated with all of the applications that run on the system.
Some system software can change data and program code on files without
leaving an audit trail or can be used to modify or delete audit trails.
Examples of system software include the operating system, system utilities,
program library systems, file maintenance software, security software, data
communications systems, and database management systems.
Controls over access to and modification of system software are essential in
providing reasonable assurance that operating system- based security
controls are not compromised and that the system will not be impaired. If
controls in this area are inadequate, unauthorized individuals might use
system software to circumvent security controls to read, modify, or delete
critical or sensitive information and programs. Also, authorized users of
Operating System Controls
Page 15 GAO- 01- 600T
the system may gain unauthorized privileges to conduct unauthorized actions
or to circumvent edits and other controls built into application programs.
Such weaknesses seriously diminish the reliability of information produced
by all of the applications supported by the computer system and increase the
risk of fraud, sabotage, and inappropriate disclosure. Further, system
software programmers are often more technically proficient than other data
processing personnel and, thus, have a greater ability to perform
unauthorized actions if controls in this area are weak.
The control concerns for system software are similar to the access control
issues and software program change control issues discussed earlier.
However, because of the high level of risk associated with system software
activities, most entities have a separate set of control procedures that
apply to them.
Weaknesses were identified at each of the agencies for which operating
system controls were reviewed. A common type of problem reported was
insufficiently restricted access that made it possible for knowledgeable
individuals to disable or circumvent controls in a variety of ways. For
example, at one agency, system support personnel had the ability to change
data in the system audit log. As a result, they could have engaged in a wide
array of inappropriate and unauthorized activity and could have subsequently
deleted related segments of the audit log, thus diminishing the likelihood
that their actions would be detected.
Further, pervasive vulnerabilities in network configuration exposed agency
systems to attack. These vulnerabilities stemmed from agencies' failure to
(1) install and maintain effective perimeter security, such as firewalls and
screening routers, (2) implement current software patches, and (3) protect
against commonly known methods of attack.
Finally, service continuity controls ensure that when unexpected events
occur, critical operations will continue without undue interruption and that
crucial, sensitive data are protected. For this reason, an agency should
have (1) procedures in place to protect information resources and minimize
the risk of unplanned interruptions and (2) a plan to recover critical
operations, should interruptions occur. These plans should consider the
activities performed at general support facilities, such as data processing
centers, as well as the activities performed by users of specific
applications. To determine whether recovery plans will work as intended,
they should be tested periodically in disaster simulation exercises. Service
Page 16 GAO- 01- 600T
Losing the capability to process, retrieve, and protect information
maintained electronically can significantly affect an agency's ability to
accomplish its mission. If controls are inadequate, even relatively minor
interruptions can result in lost or incorrectly processed data, which can
cause financial losses, expensive recovery efforts, and inaccurate or
incomplete financial or management information. Controls to ensure service
continuity should address the entire range of potential disruptions. These
may include relatively minor interruptions, such as temporary power failures
or accidental loss or erasure of files, as well as major disasters, such as
fires or natural disasters that would require reestablishing operations at a
remote location.
Service continuity controls include (1) taking steps, such as routinely
making backup copies of files, to prevent and minimize potential damage and
interruption, (2) developing and documenting a comprehensive contingency
plan, and (3) periodically testing the contingency plan and adjusting it as
Service continuity control weaknesses were reported for most of the agencies
covered by our analysis. Examples of weaknesses included the following:
Plans were incomplete because operations and supporting resources had not
been fully analyzed to determine which were the most critical and would need
to be resumed as soon as possible should a disruption occur.
Disaster recovery plans were not fully tested to identify their weaknesses.
At one agency, periodic walkthroughs or unannounced tests of the disaster
recovery plan had not been performed. Conducting these types of tests
provides a scenario more likely to be encountered in the event of an actual
The audit reports cited in this statement and in our prior information
security reports include many recommendations to individual agencies that
address specific weaknesses in the areas I have just described. It is each
individual agency's responsibility to ensure that these recommendations are
implemented. Agencies have taken steps to address problems and many have
good remedial efforts underway. However, these efforts will not be fully
effective and lasting unless they are supported by a strong agencywide
security management framework. Improved Security
Program Management Is Essential
Page 17 GAO- 01- 600T
Establishing such a management framework requires that agencies take a
comprehensive approach that involves both (1) senior agency program managers
who understand which aspects of their missions are the most critical and
sensitive and (2) technical experts who know the agencies' systems and can
suggest appropriate technical security control techniques. We studied the
practices of organizations with superior security programs and summarized
our findings in a May 1998 executive guide entitled Information Security
Management: Learning From Leading Organizations (GAO/ AIMD- 98- 68). Our
study found that these organizations managed
their information security risks through a cycle of risk management
activities that included
assessing risks and determining protection needs,
selecting and implementing cost- effective policies and controls to meet
these needs,
promoting awareness of policies and controls and of the risks that prompted
their adoption among those responsible for complying with them, and
implementing a program of routine tests and examinations for evaluating the
effectiveness of policies and related controls and reporting the resulting
conclusions to those who can take appropriate corrective action.
In addition, a strong, centralized focal point can help ensure that the
major elements of the risk management cycle are carried out and serve as a
communications link among organizational units. Such coordination is
especially important in today's highly networked computing environments.
This cycle of risk management activities is depicted below.
Page 18 GAO- 01- 600T
Figure 1: Risk Management Cycle This cycle of activity, as described in our
May 1998 executive guide, is consistent with guidance on information
security program management provided to agencies by the Office of Management
and Budget (OMB) and by NIST. In addition, the guide has been endorsed by
the federal Chief Information Officers (CIO) Council as a useful resource
for agency managers. We believe that implementing such a cycle of activity
is the key to ensuring that information security risks are adequately
considered and addressed on an ongoing basis.
While instituting this framework is essential, there are several steps that
agencies can take immediately. Specifically, they can (1) increase
awareness, (2) ensure that existing controls are operating effectively, (3)
ensure that software patches are up- to- date, (4) use automated scanning
and testing tools to quickly identify problems, (5) propagate their
Central Focal Point Assess Risk
& Determine Needs
Promote Awareness
Monitor & Evaluate Implement
Policies & Controls
Page 19 GAO- 01- 600T
best practices, and (6) ensure that their most common vulnerabilities are
addressed. None of these actions alone will ensure good security. However,
they take advantage of readily available information and tools and, thus, do
not involve significant new resources. As a result, they are steps that can
be made without delay.
Due to concerns about the repeated reports of computer security weaknesses
at federal agencies, in 2000, the Congress passed government information
security reform provisions require agencies to implement the activities I
have just described. These provisions were enacted in late 2000 as part of
the fiscal year 2001 NationalDefense Authorization Act. In addition to
requiring these management improvements, the new provisions require annual
evaluations of agency information security programs by both management and
agency inspectors general. The results of these reviews, which are initially
scheduled to become available in late 2001, will provide a more complete
picture of the status of federal information security than currently exists,
thereby providing the Congress and OMB an improved means of overseeing
agency progress and identifying areas needing improvement.
During the last two years, a number of improvement efforts have been
initiated. Several agencies have taken significant steps to redesign and
strengthen their information security programs; the Federal Chief
Information Officers Council has issued a guide for measuring agency
progress, which we assisted in developing; and the President issued a
National Plan for Information Systems Protection and designated the related
goals of computer security and critical infrastructure protection as a
priority management objective in his fiscal year 2001 budget. These actions
are laudable. However, recent reports and events indicate that they are not
keeping pace with the growing threats and that critical operations and
assets continue to be highly vulnerable to computer- based attacks.
While OMB, the Chief Information Officers Council, and the various federal
entities involved in critical infrastructure protection have expanded their
efforts, it will be important to maintain the momentum. As we have noted in
previous reports and testimonies, there are actions that can be taken on a
governmentwide basis to enhance agencies' abilities to implement effective
information security.
First, it is important that the federal strategy delineate the roles and
responsibilities of the numerous entities involved in federal information
security and related aspects of critical infrastructure protection. Under
current law, OMB is responsible for overseeing and coordinating federal New
Requirements Provide Basis for Improved Management and Oversight
Improvement Efforts Are Underway, but Many Challenges Remain
Page 20 GAO- 01- 600T
agency security; and NIST, with assistance from the National Security Agency
(NSA), is responsible for establishing related standards. In addition,
interagency bodies, such as the CIO Council and the entities created under
Presidential Decision Directive 63 on critical infrastructure protection are
attempting to coordinate agency initiatives. While these organizations have
developed fundamentally sound policies and guidance and have undertaken
potentially useful initiatives, effective improvements are not taking place,
and it is unclear how the activities of these many organizations
interrelate, who should be held accountable for their success or failure,
and whether they will effectively and efficiently support national goals.
Second, more specific guidance to agencies on the controls that they need to
implement could help ensure adequate protection. Currently agencies have
wide discretion in deciding what computer security controls to implement and
the level of rigor with which they enforce these controls. In theory, this
is appropriate since, as OMB and NIST guidance states, the level of
protection that agencies provide should be commensurate with the risk to
agency operations and assets. In essence, one set of specific controls will
not be appropriate for all types of systems and data.
However, our studies of best practices at leading organizations have shown
that more specific guidance is important. In particular, specific mandatory
standards for varying risk levels can clarify expectations for information
protection, including audit criteria; provide a standard framework for
assessing information security risk; and help ensure that shared data are
appropriately protected. Implementing such standards for federal agencies
would require developing a single set of information classification
categories for use by all agencies to define the criticality and sensitivity
of the various types of information they maintain. It would also necessitate
establishing minimum mandatory requirements for protecting information in
each classification category.
Third, routine periodic audits, such as those required in the government
information security reforms recently enacted, would allow for more
meaningful performance measurement. Ensuring effective implementation of
agency information security and critical infrastructure protection plans
will require monitoring to determine if milestones are being met and testing
to determine if policies and controls are operating as intended.
Fourth, the Congress and the executive branch can use of audit results to
monitor agency performance and take whatever action is deemed advisable to
remedy identified problems. Such oversight is essential to
Page 21 GAO- 01- 600T
holding agencies accountable for their performance as was demonstrated by
the OMB and congressional efforts to oversee the year 2000 computer
Fifth, it is important for agencies to have the technical expertise they
need to select, implement, and maintain controls that protect their computer
systems. Similarly, the federal government must maximize the value of its
technical staff by sharing expertise and information. As the year 2000
challenge showed, the availability of adequate technical expertise has been
a continuing concern to agencies.
Sixth, agencies can allocate resources sufficient to support their computer
security and infrastructure protection activities. Funding for security is
already embedded to some extent in agency budgets for computer system
development efforts and routine network and system management and
maintenance. However, some additional amounts are likely to be needed to
address specific weaknesses and new tasks. OMB and congressional oversight
of future spending on computer security will be important to ensuring that
agencies are not using the funds they receive to continue ad hoc, piecemeal
security fixes not supported by a strong agency risk management framework.
Mr. Chairman, this concludes my statement. I would be pleased to answer any
questions that you or other members of the Subcommittee may have at this
If you should have any questions about this testimony, please contact me at
(202) 512- 3317. I can also be reached by e- mail at daceyr@ gao. gov.
(310118) Contact and
*** End of document ***

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