Board Report: 2014-IT-B-003 February 26, 2014
We found that the Board does not have a consistent process to track costs for IT services across Board divisions. Some divisions account for costs using specific IT services accounting classifications, while others use general program categories. We attribute this inconsistency to the Board's decentralized budgeting processes and the absence of policies and procedures for accounting for IT services costs. As a result, the Board cannot readily and accurately measure the cost and performance of IT services across Board divisions, which impacts the Board's ability to comprehensively identify and prioritize areas for achievement of operational efficiencies and cost savings in IT services.
As part of its budgeting process, the Board uses cost centers to group expenses related to the Board's programs. For example, to account for expenses related to its records management program, the Board has established 02031 Records as a cost center. However, costs centers for IT services are not used across divisions in a consistent manner, and the cost centers that the majority of divisions use do not reflect the specific IT service activity being performed. With respect to applications development, different cost centers used by divisions include Research and Information Systems, Information Technology, Application Design & Development, and Applications Analysis. Similarly, we found that costs for other IT services, such as help desk and technical operations, were being tracked by divisions using different cost centers. Table 1 shows the specific cost centers divisions use to track costs for IT services.
| Board division | Cost centers |
|---|---|
| Banking Supervision & Regulation |
|
| Board Members |
|
| Consumer & Community Affairs |
|
| International Finance |
|
| Management |
|
| Reserve Bank Operations & Payment Systems |
|
| Research & Statistics |
|
| Information Technology |
|
Source: OIG compilation of information from Board divisions' annual budget documentation, 2008-2012.
a. The eight Board divisions listed in the table perform IT services internally or provide them to other divisions. The other four Board divisions rely completely on the Division of IT for IT services and are not listed separately in the table.
b. To track costs for IT services it performs, the OIG utilizes a General Program Direction cost center. This approach is consistent with that utilized by the other four divisions that rely completely on the Division of IT for IT services.
We believe that a consistent approach to accounting for IT services expenses across Board divisions could provide key information on areas in which operational efficiencies and cost savings could be achieved. Best practices for IT services management, as outlined in the Information Technology Infrastructure Library (ITIL),1 note the importance of developing a cost model for IT services. Specifically, ITIL states that a cost model for IT services can provide a framework to link costs to specific IT services as well as a standard format by which to analyze and report on IT services to facilitate decision making.
We recommend that the Director of the Division of IT
The Director of the Division of IT agreed with our recommendation and noted that a Board-wide effort to identify IT services provided by all divisions and the expenditures associated with those services will provide a basis for monitoring IT costs centers moving forward.
In our opinion, the corrective actions described by the Director of the Division of IT are generally responsive to our recommendation. We plan to follow up on the planned corrective actions to ensure that our recommendation is fully addressed.
