Interim Authorization with a Vendor Carve-Out

An interim authorization can be justified only as a documented, time-limited acceptance of residual risk for mission reasons, not as a way to defer known high findings. Here, benefits interruption is a credible mission impact, so an IATT is defensible if: the authorizing official signs it with a fixed expiration (90 days, maximum 180); compensating controls are in place for each high finding; funding and dated milestones exist; and continuous monitoring is active. For the 22 service accounts, require vaulting or certificate-based authentication within 30 days and inventory/removal of unused accounts. For logging, forward to an agency SIEM or immutable store with one-year retention within 45 days. Require an independent penetration test of the tenant environment. It becomes indefensible if leadership treats 'next budget year' as a date, if there is no compensating control for the service accounts, or if the IATT is renewed without evidence. The authorizing official should also confirm that no acceptable alternative, such as delayed deployment or reduced scope, exists.

A carve-out means the auditor did not opine on the controls in the dedicated region hosting your tenant, so the report provides little or no assurance over your environment. Do not accept it as evidence for the authorization package. Treat the carve-out as a gap and require: a bridge letter covering the period since the report date; the vendor's control matrix mapped to your requirements; a recent independent penetration test summary with scope covering the tenant; configuration attestations; and contractual right-to-audit and notification clauses. If the vendor will not permit an onsite audit, consider a virtual audit, a third-party assessment, or a recognized continuous-monitoring package. Document the residual risk as a finding with an owner and date. The absence of a carve-out in a future report would be the exit criterion. Until then, the agency needs its own monitoring evidence - logs, vulnerability scans, and configuration checks - rather than relying on the vendor's brand name.

The plan should list each finding with risk rating, owner, resources, milestones, compensating controls, and a completion date before the interim authorization expires. Include the 22 service accounts, log retention, and the vendor assurance gap as separate items, because they need different owners. The new 30-day breach notification law changes the timeline: incident response runbooks, vendor contracts, and log retention must support a determination within days, not weeks. Add a plan item for a 30-day notification tabletop with counsel, a vendor notification clause, and retention of logs sufficient to investigate. Update the privacy impact assessment and the system security plan. The interim authorization should not be granted unless the 30-day capability is at least partially in place, because a breach during the interim period would test it immediately. The authorizing official should receive a monthly status report, not an annual one.