Federal Information Security Modernization Act (FISMA)

The Federal Information Security Modernization Act (FISMA) is a piece of law enacted in the United States that establishes a framework of rules and security standards to preserve federal information and procedures. This risk management framework was enacted as part of the Electronic Government Act of 2002, and it has since been revised and changed.

Since 2002, the scope of FISMA has been expanded to include state agencies that administer federal programs and private enterprises and service providers that have a contract with the United States government. Non-compliance may result in reduced federal funds or other consequences.

The Electronic Government Act was enacted to better the administration of electronic government services and procedures and control federal spending on data security. FISMA was one of the most important laws enacted as part of the Electronic Government Act because it established a mechanism for reducing government data security threats while prioritizing cost-effectiveness. 

FISMA, in particular, mandates federal agencies and others to design, record, and implement agency-wide information security strategies. These programs should be capable of safeguarding confidential material. The legislation also delegated some tasks to the National Institute of Standards and Technology (NIST) and the Office of Management and Budget (OMB). Agency officials should conduct annual assessments of an agency's information security program, such as chief information officers and inspector generals, and such reviews should be reported to OMB. The data will subsequently be used by OMB to help in its oversight obligations, as well as to send yearly reports to congress.

The National Institute of Standards and Technology (NIST) is in charge of generating information about standards and recommendations, such as special protection criteria.

What Does FISMA Necessarily Require?

FISMA compliance involves several key components that are designed to ensure the confidentiality, integrity, and availability of federal information and information systems. These components include:

  • Risk Management: Agencies must identify and assess the risks to their information and information systems, and implement measures to mitigate those risks.

  • Security Controls: Agencies must implement a set of baseline security controls to protect their information and information systems from unauthorized access, use, disclosure, interruption, alteration, or destruction.
  • Ongoing Monitoring: Agencies must continuously monitor their information to detect and respond to security incidents and vulnerabilities.
  • Security Assessment and Authorization: Agencies must conduct regular security assessments and obtain authorization for their information systems to operate.
  • Training and Awareness: Agencies must provide training and awareness programs to their employees and contractors to ensure they understand their security responsibilities and the risks associated with federal information.
  • Incident Response: Agencies must have procedures in place to respond to security incidents and minimize the impact of those incidents on their information and information systems.

FISMA Applies to Whom?

FISMA applies to a wide range of entities involved in the collection, storage, and processing of federal information. This includes all federal agencies, as well as any contractors, subcontractors, or other third-party service providers that support the agency's information and information systems.

FISMA also applies to state and local government agencies that receive federal funding or are otherwise involved in federal programs. In addition, private sector organizations that handle federal information or provide services to federal agencies may be subject to FISMA regulations and requirements.

FISMA Compliance

FISMA delegated authority to several entities to maintain data security in the federal government. The legislation mandates that program leaders, as well as the head of each agency, undertake yearly assessments of information security programs with the goal of maintaining risks at or below defined acceptable levels in a cost-effective, timely, and efficient way. The NIST lists several stages toward FISMA compliance:

  • Risk classification. Information systems should be classified according to the goals that offer an adequate level of security. Categorization should be done in the order of risk degree to ensure sensitive information is secure.
  • Determine the bare minimum of baseline controls. Federal systems must meet minimum security standards. Not all security controls must be satisfied, just those that are most relevant to the individual organization and the technologies it employs.
  • Include the policies in the system security policy. An overview of all the systems and information used, as well as the interfaces between systems and networks, should be preserved. Documentation on the minimum controls used to safeguard these systems should also be maintained. Following that, security measures should be installed in suitable information systems.
  • Use a risk assessment method to fine-tune controls. This should be conducted to confirm security controls and decide whether further controls are required. Once the security controls have been established, evaluate their efficacy.
  • In order to get licensure, program officials and agency leaders must undertake annual security evaluations. This serves as a kind of security certification. A system's accreditation will be demonstrated by certification. 
  • Regularly review the security controls. Accredited systems are expected to monitor their systems on a continuous basis. This should allow companies to respond to security problems or data breaches more rapidly. If there are any modifications, the documentation should be revised. Status reporting, system integration, security measures, and any modifications made to a system should all be part of continuous monitoring.

What are the Risks of Non-compliance with FIMSA?

Non-compliance with FISMA can have serious consequences, both for the organizations involved and for the wider public.

One of the most immediate risks of non-compliance is the potential loss of government contracts or funding. Federal agencies are required to ensure that their contractors and service providers comply with FISMA regulations, and failure to do so can result in termination of contracts or loss of funding.

Non-compliance with FISMA can also have reputational risks, particularly in the current digital era where data breaches and cyber attacks are increasingly common. Consumers are becoming more aware of cybersecurity risks and are demanding greater transparency and accountability from the organizations they interact with. A cybersecurity incident that results from non-compliance with FISMA can seriously harm an organization's reputation, leading to loss of customer trust and business opportunities.

In addition, it can also have legal and regulatory consequences, including fines and penalties for failing to protect sensitive information. This can be particularly costly for organizations that handle large volumes of personal or sensitive data, such as healthcare providers or financial institutions.

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