I got a chance to look through the Government Accountability Office’s latest report recommending that the Office of Management and Budget “needs to improve its guidance on IT investments” in government.

No doubt, the biggest underlying issue driving over investment in federal information technology is redundancy in government.

It causes lots more buying of IT than needed; leads to poor IT project performance because there are not enough qualified project managers to handle the workload; and makes it very hard to secure and protect data.

A couple of key insights that highlight the real issues in federal IT — which one way or another are the result of highly customized siloed systems:

First, GAO found that nearly half of the spending ($35.5B, Figure 3, page 13 from the report is being spent just to manage the complex federal IT environment, characterized by silos of customized client-server systems.

Herein lies the key problem that haunts the current administration’s cost-savings strategy: It is not lack of data, but cost of complexity and no governance structure to reduce the complexity.

This becomes clearer when you look at the fact that there is about $9 billion being devoted to government’s back office operations (for human resources, supply chain management, financial management, and public affairs)–again in siloed, highly customized apps. (GAO just released its review of this problem in DOD).

Less than half of IT funds (about $34 billion) is being spent on mission systems and over $35 billion is being spent just to manage the complexity of these systems. So, that means that somewhere around half of the IT budget is wasteful spending. That’s a big problem.

Second, the real problem of consolidating redundancy has not been addressed by OMB, and cannot be addressed without the Congressional Appropriators changing their behavior that facilitates redundancy. Adding in the other agencies’ data will not change the problem or fix it. Consolidating data centers and cloud first won’t fix this, and indeed their success is constrained by this underlying issue.

The only initiative in the Administration’s 25-point plan to address this is working with the Appropriators.

That said, Senator Tom Coburn‘s efforts and GAO’s reports on redundancy offer some hope for fixing the IT spending issue, as does OMB’s recent focus on shared services, but only if the Appropriators will cooperate with these cost-effectiveness initiatives.

The bigger factor will likely be the looming budget cuts that force all parties to look for ways to cut costs.

Mark Forman was the first Administrator, Office of E-Government and IT, White House Office of Management and Budget during the George W. Bush Administration; a former Partner, KPMG; and is Co-founder, Government Transaction Services and a member of Breaking Gov’s Editorial Advisory Council.