Interior watchdog finds $40 million in misclassified IT purchases

The Department of the Interior didn’t classify millions of dollars worth of purchases as IT when it should have, posing acquisition and security risks, the agency’s internal watchdog found.

In a review of roughly 167 purchases totaling $52 million dollars that had been recorded as “other” in the agency’s business management system, the DOI’s Office of Inspector General said it found 98 were not appropriately classified as IT. Those misclassified purchases total nearly $40 million.

“Because the purchases were misclassified, they were not routed as required for IT approval,” Nicki Miller, assistant inspector general for audits, inspections, and evaluations, wrote in a memo to Chief Information Officer Paul McInerny dated Monday. 

“Appropriate IT approval must take place to ensure consistency with bureau acquisition strategies and plans and verify the funds are available,” she said. 

Misclassified purchases that didn’t receive necessary approval included software, landline phones, Wi-Fi, and IT consulting or contractor support, according to a list of the purchases included in the report.

Though the issues represent a fraction of the agency’s estimated $1.9 billion in spending on IT purchases annually, the report indicated they can still pose broader issues.

Failure to classify correctly makes it difficult for the CIO’s office to track IT purchasing accurately, could result in the agency making redundant purchases, and increases the risk of breaches and vulnerabilities if those purchases don’t meet cyber requirements, Miller said. 

As a result, the OIG made several recommendations, including that the CIO’s office develop and provide training on product codes for IT purchase requests, as well as requiring all bureaus that were affected to create a process to review purchase requests classified as “other.”

In a response to the findings  included in the report, McInerny thanked the watchdog for the opportunity to review a draft of the report and agreed with all of the recommended actions.

“The information contained in the report will assist us in successfully moving forward with the improvements to our IT Acquisitions processes throughout the Department,” McInerny said. “The Interior/OCIO leadership understands the importance of strengthening the Department’s oversight over IT spending.”