GAO Finds 11 Federal Legacy IT Systems Costing $754 Million a Year, the Oldest 60 Years Old

GAO’s latest review of federal legacy IT looked at 11 critical systems across ten agencies. Together they cost about $754 million a year to run. They range from 23 to 60 years old. The Defense Department’s oldest system is 60. A Treasury system, written in COBOL and assembly language, is 59.

Eight of the eleven still run on legacy languages. Several depend on hardware the vendor no longer supports, and on a shrinking pool of staff who know how they work.

A repeat warning

GAO has looked at this before. In 2019 it named ten critical legacy systems most in need of replacement. By its latest count, only three of those ten have been fully modernised. The others have plans, some of them on their second or third timetable.

The pattern is familiar from GAO’s high-risk list, where “improving IT acquisitions and management” has been since 2015. Agencies spend most of their roughly $100 billion annual IT budget operating and maintaining existing systems, leaving a small share for replacement.

The IRS case

The IRS Individual Master File is the clearest example. It holds the tax records of every individual filer and was first built in the 1960s. The IRS has been trying to replace it for decades. Its current programme was meant to retire the core system in the late 2020s. Staff cuts in 2025 and the end of much Inflation Reduction Act modernisation money have pushed that past 2030.

Social Security is in a similar position. Much of its benefit processing still runs on COBOL, and the agency has said it spends a large share of its IT budget keeping old systems running.

Why it’s hard

Legacy systems persist because they mostly work, and replacing them is risky. Large federal IT replacements have a poor record. HealthCare.gov failed at launch in 2013. Defence business system replacements have run years late. A failed rewrite of a payment system can stop benefits or tax refunds.

Funding works against replacement too. Congress appropriates most IT money year by year, while modernisation takes several years. The Technology Modernization Fund was set up in 2017 to bridge that gap with loans to agencies, but its annual funding has been small next to the problem, and Congress has cut it in recent years.

What GAO recommends

GAO’s recommendation is the one it has made since 2016: each agency should have a documented plan for each critical legacy system, with milestones, the work needed, and how old components will be retired. Most agencies have accepted the recommendations. Fewer have finished carrying them out.

The administration’s push to consolidate IT and cut contracts could help or hurt. Fewer, larger contracts may make replacement easier to fund. Fewer staff makes it harder to manage the transition safely.