Department of Homeland Security
A Comprehensive and Sustained Approach Needed to Achieve Management Integration Gao ID: GAO-05-139 March 16, 2005The creation of the Department of Homeland Security (DHS) represents one of the largest reorganizations of government agencies and operations in recent history. Significant management challenges exist for DHS as it merges the multiple management systems and processes from its 22 originating agencies in functional areas such as human capital and information technology. GAO was asked to identify opportunities for DHS to improve its management integration.
GAO found that while DHS has made some progress in its management integration efforts, it has the opportunity to better leverage this progress by implementing a comprehensive and sustained approach to its overall integration efforts. GAO assessed DHS's integration efforts to date against three of nine key practices consistently found to be at the center of successful mergers and transformations: setting implementation goals and a time line to build momentum and show progress, dedicating an implementation team to manage the transformation, and ensuring top leadership drives it. While there are other practices critical to successful mergers and transformations--including using the performance management system to define responsibility and assure accountability for change--GAO selected these three key practices because they are significant to building the infrastructure needed for DHS at this early juncture in its management integration efforts. Establishing implementation goals and a time line is critical to ensuring success and could be contained in an overall integration plan for a merger or transformation. DHS has issued guidance and plans to assist its integration efforts, on a function-by-function basis (information technology and human capital, for example); but it does not have a comprehensive strategy, with overall goals and a time line, to guide the management integration departmentwide. GAO's research shows that it is important to dedicate a strong and stable implementation team for the day-to-day management of the transformation. DHS has established a Business Transformation Office (BTO), reporting to the Under Secretary for Management, to help monitor and look for interdependencies among the individual functional integration efforts. However, the role of the BTO could be strengthened so that it has the requisite responsibility and authority to help the Under Secretary set priorities and make strategic decisions for the integration, as well as implement the integration strategy. The current responsibilities of the Under Secretary contain some of the characteristics of a COO/CMO. GAO has reported that such a position could help elevate, integrate, and institutionalize DHS's management initiatives. Recent DHS actions, such as management directives clarifying roles for the integration, can provide the Under Secretary additional support. However, it is still too early to tell whether the Under Secretary will have sufficient authority to direct, and make trade-off decisions for the integration, and institutionalize it departmentwide. The Congress should continue to monitor whether it needs to provide additional leadership authorities to the Under Secretary, or create a new position that more fully captures the roles and responsibilities of a COO/CMO.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-05-139, Department of Homeland Security: A Comprehensive and Sustained Approach Needed to Achieve Management Integration
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Report to Congressional Requesters:
March 2005:
Department of Homeland Security:
A Comprehensive and Sustained Approach Needed to Achieve Management
Integration:
GAO-05-139:
GAO Highlights:
Highlights of GAO-05-139, a report to congressional requesters:
Why GAO Did This Study:
The creation of the Department of Homeland Security (DHS) represents
one of the largest reorganizations of government agencies and
operations in recent history. Significant management challenges exist
for DHS as it merges the multiple management systems and processes from
its 22 originating agencies in functional areas such as human capital
and information technology. GAO was asked to identify opportunities for
DHS to improve its management integration.
What GAO Found:
GAO found that while DHS has made some progress in its management
integration efforts, it has the opportunity to better leverage this
progress by implementing a comprehensive and sustained approach to its
overall integration efforts. GAO assessed DHS's integration efforts to
date against three of nine key practices consistently found to be at
the center of successful mergers and transformations: setting
implementation goals and a time line to build momentum and show
progress, dedicating an implementation team to manage the
transformation, and ensuring top leadership drives it. While there are
other practices critical to successful mergers and transformations--
including using the performance management system to define
responsibility and assure accountability for change--GAO selected these
three key practices because they are significant to building the
infrastructure needed for DHS at this early juncture in its management
integration efforts.
Establishing implementation goals and a time line is critical to
ensuring success and could be contained in an overall integration plan
for a merger or transformation. DHS has issued guidance and plans to
assist its integration efforts, on a function-by-function basis
(information technology and human capital, for example); but it does
not have a comprehensive strategy, with overall goals and a time line,
to guide the management integration departmentwide.
GAO's research shows that it is important to dedicate a strong and
stable implementation team for the day-to-day management of the
transformation. DHS has established a Business Transformation Office
(BTO), reporting to the Under Secretary for Management, to help monitor
and look for interdependencies among the individual functional
integration efforts. However, the role of the BTO could be strengthened
so that it has the requisite responsibility and authority to help the
Under Secretary set priorities and make strategic decisions for the
integration, as well as implement the integration strategy.
The current responsibilities of the Under Secretary contain some of the
characteristics of a COO/CMO. GAO has reported that such a position
could help elevate, integrate, and institutionalize DHS's management
initiatives. Recent DHS actions, such as management directives
clarifying roles for the integration, can provide the Under Secretary
additional support. However, it is still too early to tell whether the
Under Secretary will have sufficient authority to direct, and make
trade-off decisions for the integration, and institutionalize it
departmentwide. The Congress should continue to monitor whether it
needs to provide additional leadership authorities to the Under
Secretary, or create a new position that more fully captures the roles
and responsibilities of a COO/CMO.
What GAO Recommends:
GAO recommends that the Secretary of DHS: (1) develop an overarching
management integration strategy, and (2) provide its Business
Transformation Office (BTO) with the authority and responsibility to
serve as a dedicated integration team and help develop and implement
the strategy. GAO also suggests that Congress monitor (1) the progress
of DHS's management integration, for example, by requiring the
department to periodically report the status of its efforts; and (2)
whether senior leadership has the authority to elevate, integrate, and
institutionalize its management integration and reassess whether to
create a new Chief Operating Officer (COO) or Chief Management Officer
(CMO) position to more effectively drive this integration. DHS
generally agreed with the report's recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-05-139.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Eileen R. Larence at
(202) 512-6510 or larencee@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Selected Key Mergers and Transformation Practices Can Help Guide DHS in
Taking a Comprehensive and Sustained Approach to its Management
Integration Efforts:
Conclusions:
Recommendations for Executive Action:
Matters for Congressional Consideration:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Homeland Security:
Related GAO Products:
Figures:
Figure 1: DHS Organizational Structure, as of December 2004:
Figure 2: Key Practices and Implementation Steps for Mergers and
Organizational Transformations:
Abbreviations:
BTO: Business Transformation Office:
BTS: Border & Transportation Security Directorate:
CAO: Chief Administrative Officer:
CBP: Customs & Border Protection:
CFO: Chief Financial Officer:
CHCO: Chief Human Capital Officer:
CIO: Chief Information Officer:
CIS: Citizenship and Immigration Services:
CMO: Chief Management Officer:
COO: Chief Operating Officer:
CPO: Chief Procurement Officer:
DHS: Department of Homeland Security:
EPR: Emergency Preparedness & Response Directorate:
FPS: Federal Protective Service:
ICE: Immigration & Customs Enforcement:
IG: Inspector General:
INS: Immigration & Naturalization Service (legacy):
IT: Information Technology:
OMB: Office of Management and Budget:
Letter March 16, 2005:
The Honorable Tom Davis:
Chairman:
Committee on Government Reform:
House of Representatives:
The Honorable Jon C. Porter:
Chairman:
Subcommittee on the Federal Workforce and Agency Organization:
Committee on Government Reform:
House of Representatives:
The Honorable Jo Ann Davis:
House of Representatives:
The creation of the Department of Homeland Security (DHS) represents
one of the largest reorganizations and consolidations of government
agencies, personnel, programs, and operations in recent history. As
DHS's Under Secretary for Management has stated, the implementation of
the department is at once a full-scale government divestiture, merger,
acquisition, and start-up. DHS faces significant management and
organizational transformation challenges as it works to protect the
nation from terrorism and simultaneously establish itself. It must
integrate approximately 180,000 employees from 22 originating
agencies,[Footnote 1] consolidate multiple management systems and
processes, and transform into a more effective organization with robust
planning, management, and operations. For these reasons, in January
2005, we continued to designate the implementation and transformation
of the department as high risk.[Footnote 2] DHS's Inspector General
also reported, in December 2004, that integrating DHS's many separate
components into a single, effective, efficient and economical
department remains one of its biggest challenges.[Footnote 3]
Furthermore, DHS must continue to meet these daunting challenges while
transitioning to new leadership.
DHS has an overall vision to become a fully integrated and unified
department, adhering to the former Secretary's high-level vision of
"One DHS, One Fight." While the protection of the homeland is the
primary mission of the department, critical to meeting this challenge
is the integration of DHS's varied management processes, systems, and
people--in areas such as information technology, financial management,
procurement, and human capital--as well as in its administrative
services. The integration of these various functions is being executed
through DHS's management integration initiative. The success of this
initiative is important since it provides critical support for the
total integration of the department, including its operations and
programs, to ultimately meet its mission of protecting the homeland.
This report focuses on the progress DHS has made on this functional or
management integration.
Specifically, we sought to identify opportunities for DHS to improve
these management integration efforts. To address our objective, we
assessed DHS's efforts to date against selected key practices we have
reported are consistently found to be at the center of successful
mergers and organizational transformations. These practices were
identified to assist DHS in its consolidation before the department was
created and were based on useful practices and lessons learned from
major private and public sector organizational mergers, acquisitions,
and transformations.[Footnote 4] We selected three of these nine
practices as criteria for this review because they are significant to
building the infrastructure needed to manage any merger or
transformation and are particularly important to DHS at this early
juncture in its management integration efforts:
* Setting implementation goals and a time line to build momentum and
show progress from day one. A merger or transformation is a substantial
commitment that could take years before it is completed, and therefore
must be carefully and closely managed. As a result, it is essential to
establish and track implementation goals and use a time line to
pinpoint performance shortfalls and gaps and suggest midcourse
corrections.
* Dedicating an implementation team to manage the transformation
process. Dedicating a strong and stable implementation team with the
responsibility for the transformation's day-to-day management is
important to ensuring that it receives the focused attention needed to
be successful.
* Ensuring top leadership drives the transformation. Sustained and
consistent leadership can help provide the long-term attention required
to effectively address significant management challenges and
transformational needs.
We focused our review primarily on the management integration
activities of DHS's Management Directorate because the Homeland
Security Act of 2002 establishes that the Under Secretary for
Management is responsible for the transition and reorganization process
for the department.[Footnote 5] We did not include an assessment of the
mission or program integration efforts of DHS in this review primarily
because GAO has additional work under way on these efforts. To address
our objective, we reviewed key transition, management integration, and
planning and policy documents, and met with the chiefs of staff or
directors of operations for the five directorates[Footnote 6] in DHS,
as well as the U.S. Secret Service, the U.S. Coast Guard, the Bureau of
Citizenship and Immigration Services, and other DHS offices. Within the
Management Directorate, we reviewed documents from and met with the
Under Secretary for Management, the Chief Financial Officer, the Chief
Procurement Officer, the Chief Human Capital Officer, the Chief
Information Officer, and the Chief Administrative Officer. We also
examined reports from GAO, DHS's Inspector General, and others that
addressed the integration of departmentwide management functions, such
as the development of an integrated departmental financial management
system, information technology, and others. A more detailed discussion
of our scope and methodology is in appendix I.
We conducted our work from April 2004 through February 2005 in
accordance with generally accepted government auditing standards.
Results in Brief:
Recently, DHS has made some progress in addressing its departmentwide
management integration through the issuance of guidance and plans to
assist the integration of each individual management function within
the department, as well as the establishment of a Business
Transformation Office (BTO), which it began in October 2004. However,
DHS has the opportunity to better leverage these initial efforts by
implementing a more comprehensive and sustained approach
departmentwide. In particular, more closely adhering to the following
three select key practices that have consistently been found to be at
the center of successful mergers, acquisitions, and transformations
would help DHS establish the management infrastructure needed to
integrate the total department and achieve its critical mission of
protecting the homeland:
Setting Implementation Goals and a Time Line: DHS Has Issued Some
Guidance and Plans to Help Its Management Integration Efforts, But
Needs an Overarching Strategy to Integrate Across Management Functions
and to Identify Critical Interdependencies, Interim Milestones, and
Possible Efficiencies:
DHS has issued some guidance and plans to assist each management
function, such as information technology or human capital, in its own
consolidation and integration, but does not have a comprehensive
strategy, with overall goals and a time line, to guide the management
integration across functions and departmentwide. Such a strategy is
important because the pace and type of changes implemented in one
function can be critical to successful change in another function. For
example, integrating the disparate financial management systems DHS
inherited depends on the integration of its many information technology
systems. But DHS does not have a master blueprint with implementation
goals, time lines, and interim milestones that identifies and manages
these critical interdependencies and possible efficiencies across
functions. DHS has the opportunity to build the individual functional
plans into such a comprehensive strategy.
Dedicating an Implementation Team: DHS's Business Transformation Office
Could Be Strengthened to Serve as a Dedicated Team to Help Set
Priorities and Make Strategic Decisions for Management Integration and
to Implement the Comprehensive Integration Strategy:
In October 2004, DHS established a BTO within its Management
Directorate to help monitor and look for interdependencies among its
discrete management integration efforts. The establishment of this
office could help DHS further coordinate its integration efforts.
However, the BTO is not responsible for leading and managing the
coordination and integration that must occur across functions for DHS
to achieve its critical mission. DHS could strengthen the role of the
BTO by giving it more than a monitoring role, but also the
responsibility and authority it needs to help the Under Secretary for
Management create and implement the overarching management integration
strategy, help set priorities, and make strategic decisions that will
drive DHS's integration across the department.
Ensuring Top Leadership Drives the Transformation: Continued Monitoring
Is Needed to Ensure Senior DHS Leadership Elevates, Integrates, and
Institutionalizes Its Management Initiatives:
As it is currently structured, the roles and responsibilities of the
Under Secretary for Management contain some of the characteristics of a
Chief Operating Officer (COO) or Chief Management Officer (CMO), such
as elevating, integrating, and institutionalizing responsibility for
key functional management initiatives. However, the use of clearly-
defined, results-oriented performance agreements and setting a term
appointment of not less than 5 years, are other important mechanisms to
help ensure accountability and sustainability for these initiatives. In
October 2004, DHS issued management directives to clarify
accountability for the integration of the functions across the
department. For example, the financial management directive established
that the department's Chief Financial Officer (CFO) is accountable for
consolidating and integrating financial systems across the department,
but must work with the multiple CFOs who directly report to their
respective agency and component heads in the other four DHS
directorates to do so. The directives and the recent establishment of
the BTO could strengthen the role and responsibilities of the
Undersecretary for Management in DHS's management integration efforts.
But it is still too early to tell whether these recent initiatives will
provide the Under Secretary with sufficient authority to direct, and
make trade-off decisions for the management integration initiatives and
the institutionalization of them across the department. The Congress
should continue to closely monitor whether additional leadership
authorities are needed for the Under Secretary, or whether a revised
organizational arrangement is needed to fully capture the roles and
responsibilities of a COO/CMO position, including a performance
agreement and term limit.
In order to provide a comprehensive approach to its management
integration efforts, we recommend that the Secretary of DHS direct the
Under Secretary for Management, working with others, to (1) develop an
overarching management integration strategy for the department, with
implementation goals and a time line; and (2) provide DHS's recently
established BTO in its Management Directorate, with the appropriate
authority and responsibility to help set priorities and make strategic
decisions for the department's management integration efforts, as well
as serve as a dedicated implementation team. One of BTO's
responsibilities should be to help develop and implement the
overarching management integration strategy. In addition, the Congress
may wish to continue to monitor the progress of DHS's management
integration, for example, by requiring the department to periodically
report on the status of its efforts, to determine whether DHS has (1)
implemented a departmentwide integration strategy; and (2) provided the
BTO with sufficient authority to serve as a dedicated implementation
team to lead and sustain the integration of the department. Finally,
Congress may also wish to consider whether the Under Secretary for
Management has the authority to elevate attention on management issues
and transformational change, integrate various key management and
transformation efforts, and institutionalize accountability for
addressing management issues and leading transformational change, as
the department's management integration moves forward. If necessary,
Congress may want to reassess whether it needs to statutorily adjust
existing positions, or create a new COO/CMO position, with provisions
for a term limit and performance agreement, that has the necessary
responsibilities and authorities to more effectively drive the
integration.
In commenting on a draft of this report, DHS generally agreed with the
report's recommendations. DHS also provided some additional information
on the planned responsibilities and role of the BTO. For example, the
department commented that the BTO is establishing an integrated project
plan/integration strategy and anticipates it will be released by June
2005.
Background:
The creation of DHS is an historic opportunity for the federal
government to fundamentally transform how the nation will protect
itself from terrorism and other threats. Not since the creation of the
Department of Defense in 1947 has the federal government undertaken an
organizational merger of this magnitude. Enacted on November 25, 2002,
the Homeland Security Act established DHS by merging 22 disparate
agencies and organizations with multiple missions, values, and
cultures. On March 1, 2003, DHS officially began operations as a new
department. DHS is now the third largest federal government agency with
an anticipated budget of $40.7 billion for fiscal year 2005 and an
estimated 180,000 employees.
In accordance with section 1502 of the Homeland Security Act, the
President provided a DHS reorganization plan to appropriate
congressional committees specifying the agencies that would integrate
into DHS, along with an overall organizational structure, but the plan
did not specify how the integration of these agencies and employees
would occur.[Footnote 7] Section 701 of the Homeland Security Act gave
the Under Secretary for Management at DHS the responsibility for the
management and administration of the department, including the
transition and reorganization process, among other things.[Footnote 8]
As seen in figure 1, the Chief Financial Officer (CFO), the Chief
Information Officer (CIO), the Chief Human Capital Officer (CHCO), the
Chief Procurement Officer (CPO), and the Chief Administrative Officer
(CAO) are all housed within the Management Directorate.[Footnote 9]
Figure 1 shows the organizational structure of the department, as of
December 2004.
Figure 1: DHS Organizational Structure, as of December 2004:
[See PDF for image]
[End of figure]
Selected Key Mergers and Transformation Practices Can Help Guide DHS in
Taking a Comprehensive and Sustained Approach to its Management
Integration Efforts:
DHS would have the comprehensive and sustained approach to its
management integration efforts that it needs over the long term to
successfully transform the agency, if it more closely adhered to three
selected key practices that we have found consistently at the center of
successful mergers, acquisitions, and transformations. Otherwise, the
department runs the risk of not establishing and maintaining the
management infrastructure needed to steer the integration of the
department and ultimately to help meet its critical mission of
protecting the homeland.
We identified these key practices through a forum the Comptroller
General convened in September 2002, as DHS was being created, to help
DHS merge its various originating components into a unified
department.[Footnote 10] The forum was designed to identify and discuss
useful practices and lessons learned from major private and public
sector organizational mergers, acquisitions, and transformations. In
July 2003, we further identified implementation steps for the nine key
practices raised at the forum.[Footnote 11] These key practices and
implementation steps are shown in figure 2.
Figure 2: Key Practices and Implementation Steps for Mergers and
Organizational Transformations:
Practice: Ensure top leadership drives the transformation;
Implementation steps:
* Define and articulate a succinct and compelling reason for change;
* Balance continued delivery of services with merger and transformation
activities.
Practice: Establish a coherent mission and integrated strategic goals
to guide the transformation;
Implementation steps:
* Adopt leading practices for results-oriented strategic planning and
reporting.
Practice: Focus on a key set of principles and priorities at the outset
of the transformation;
Implementation steps:
* Embed core values in every aspect of the organization to reinforce
the new culture.
Practice: Set implementation goals and a time line to build momentum
and show progress from day one;
Implementation steps:
* Make public implementation goals and time line;
* Seek and monitor employee attitudes and take appropriate follow-up
actions;
* Identify cultural features of merging organizations to increase
understanding of former work environments;
* Attract and retain key talent;
* Establish an organizationwide knowledge and skills inventory to allow
knowledge exchange among merging organizations.
Practice: Dedicate an implementation team to manage the transformation
process;
Implementation steps:
* Establish networks to support implementation team;
* Select high-performing team members.
Practice: Use the performance management system to define the
responsibility and assure accountability for change;
Implementation steps:
* Adopt leading practices to implement effective performance management
systems with adequate safeguards.
Practice: Establish a communication strategy to create shared
expectations and report related progress;
Implementation steps:
* Communicate early and often to build trust;
* Ensure consistency of message;
* Encourage two-way communication;
* Provide information to meet specific needs of employees.
Practice: Involve employees to obtain their ideas and gain ownership
for the transformation;
Implementation steps:
* Use employee teams;
* Involve employees in planning and sharing performance information;
* Incorporate employee feedback into new policies and procedures;
* Delegate authority to appropriate organizational levels.
Practice: Build a world-class organization;
Implementation steps:
* Adopt leading practices to build a world-class organization.
Source: GAO.
[End of table]
To assess DHS's progress to date in integrating its management
functions, we determined that three of the nine practices were
especially important to ensure the agency has the management
infrastructure it needs this early in the process to manage and sustain
its integration: (1) an overarching integration strategy, with
implementation goals and a time line that links its various individual
management integration initiatives; (2) a dedicated implementation team
with the responsibility and authority to drive the department's
management integration; and (3) committed and sustained leadership. DHS
has opportunities to more fully implement each of these practices and
increase its ability to successfully integrate.
DHS Has Issued Some Guidance and Plans to Help Its Management
Integration Efforts, But Needs an Overarching Strategy to Integrate
Across Management Functions and to Identify Critical Interdependencies,
Interim Milestones, and Possible Efficiencies:
We have reported that a merger or transformation is a substantial
commitment that could take years before it is completed, and therefore
must be carefully and closely managed and monitored to achieve success.
Establishing implementation goals and a time line is critical to
ensuring success, as well as pinpointing performance shortfalls and
gaps and suggesting midcourse corrections. Such goals and time lines
could be contained in an overall integration plan for a merger or
transformation effort. It is important to note that such a plan
typically goes beyond what is contained in an agency strategic plan,
and provides more specific operational and tactical information to
manage a sustained effort. For example, as required by the Government
Performance and Results Act of 1993, a strategic plan generally
contains the high-level goals and mission for an agency based on its
statutory requirements, while an integration strategy would provide the
activities and time lines needed, along with assigned responsibilities,
for accomplishing the goals of an organizational merger or
transformation.[Footnote 12] Finally, another element essential to
executing a merger or transformation is to make the implementation
goals and time lines public, so that employees, customers, and
stakeholders are aware of what is to be accomplished and when.
Our prior work shows that DHS needed to carefully plan and manage its
integration, and a study commissioned by DHS underscored that the
department should use an overall integration strategy to help
accomplish this. For example, prior to the establishment of the
department, we identified a number of management challenges that DHS
might face as it moved forward in its integration, such as the
establishment of a comprehensive planning and management focus and the
need for a results-oriented approach to ensure accountability and
sustainability.[Footnote 13] In December 2002, we recommended that
careful and thorough transition planning would be critical to the
successful creation of DHS and that the importance of the transition
efforts to implement the new homeland security could not be
overemphasized.[Footnote 14] Specifically, we recommended to OMB that
in developing an effective transition plan for DHS, it should ensure
that the plan incorporates the key practices we identified as being
found at the center of successful mergers and transformations. In July
2004, we reported on the merger of the Federal Protective Service (FPS)
into DHS and recommended that FPS develop an overall transformation
strategy for how it will carry out its expanding mission, as well as
meet other challenges it faces.[Footnote 15] DHS agreed with our
recommendation. Moreover, in early 2003, DHS recognized the challenges
it faced and commissioned a comprehensive management study to help the
department create an operating structure that integrates the
department's components and to facilitate a DHS-wide integration plan
linked to core missions and capabilities, among other things.[Footnote
16] This management study also recommended that DHS develop a
comprehensive integration plan with major milestones defined,
encompassing all of the department's integration initiatives including
functional management and mission integration activities.
Early on, the department made some progress in consolidating the
processes and systems of each individual function in areas such as
information technology, financial management, procurement, and human
capital. For example, according to DHS's performance and accountability
report for fiscal year 2004 and updated information provided by DHS
officials, the department has accomplished the following activities as
part of its integration efforts:
* reduced the number of financial management service centers from 19 to
8,
* consolidated acquisition support for 22 legacy agencies within 8
major procurement programs,
* reduced the number of its payroll systems from 8 to 2, and expects to
be using one single payroll system by the beginning of fiscal year 2006,
* consolidated 22 different human resource offices to 7,
* consolidated 271 processes associated with administrative services
down to 103,
* consolidated bank card programs from 27 to 3, and:
* realigned more than 6,000 support services employees (both government
and contractor) from the legacy U.S. Customs Service and the legacy
Immigration and Naturalization Service (INS) to support the 68,000
employees of the U.S. Customs and Border Protection (CBP), Immigration
and Customs Enforcement (ICE), and Citizenship and Immigration Services
(CIS) organizations.
In addition to improving the effectiveness of the department, according
to DHS, these consolidation activities are aimed at realizing the
efficiencies and economies of scale envisioned by the President and the
Congress in creating DHS, by eliminating overlap and redundancies in
these processes, systems, and services. The DHS IG reported in December
2004 that while DHS has made notable progress in integrating its many
separate components in one department, structural and resource problems
continue to inhibit progress in certain support functions.[Footnote 17]
For example, while the department is trying to create integrated and
streamlined support service functions, most of the critical support
personnel are distributed throughout the various components and are not
directly accountable to the management chiefs. We have also identified
areas of concern with some of these efforts and have made a number of
recommendations to make these support functions more effective and
efficient. (See app. II for a list of GAO reports on these individual
consolidation efforts.) For example, we reported that DHS intends to
acquire and deploy an integrated financial enterprise solution and
reports that it has reduced the number of it legacy financial
systems.[Footnote 18] While DHS has established an office within the
Management Directorate to manage its financial enterprise solution
project, we concluded that the acquisition is in the early stages and
continued focus and follow through will be necessary for it to be
successful.
DHS has issued some guidance to help each management function integrate
its portion of the disparate processes and functions inherited when the
22 organizations merged into DHS. According to DHS officials, the
following plans and documents were helping to provide overall guidance
for these functional integration efforts.
* Strategic Plan: According to several senior DHS officials, the CFO,
CIO, and the staff officer to the Deputy Secretary, the agency's
strategic plan, issued in February 2004, was the primary guidance being
used for DHS's management integration. The DHS strategic plan describes
the department's vision, mission, core values, and guiding principles
to achieve its mission of protecting the homeland.[Footnote 19] In
addition, one of its seven strategic goals, organizational excellence,
acknowledges the need to integrate the systems, processes, and services
the department inherited to improve efficiency and effectiveness.
* Draft Paper on the 21st Century Department: In April 2004, the Under
Secretary for Management also developed a draft 21st century paper to
provide more details as to how DHS would achieve its strategic goal of
organizational excellence. The draft paper summarizes DHS's plans for
its management integration within three primary areas: (1) human
capital, (2) information technology, and (3) business transformation,
including the support areas of procurement and acquisition,
administrative services, and financial management and
budgeting.[Footnote 20] The draft paper describes key integration
initiatives it will take within each key area with short-term
milestones, dates, and possible obstacles. For example, the paper
discusses DHS plans to implement the Maximizing Results, Rewarding
Excellence (MAXHR) initiative, the department's new human resources
management system, and the Electronically Managing Enterprise Resources
for Government Efficiency and Effectiveness (eMerge2) initiative. The
latter uses a consolidated departmentwide solution approach to
integrate DHS's financial and administrative systems, including
accounting, acquisition, budgeting, and procurement.
* Management Directives: At the request of the Secretary and the Deputy
Secretary, in October 2004, each of the five DHS management chiefs
issued a management directive that, among other things, provides
standard definitions of each of their respective roles and
responsibilities, as well as a general description of how other
directorates and agencies will support them. Specifically, the
directives discuss the concept of dual accountability for both mission
accomplishment and functional integration as the shared responsibility
of the heads of DHS's individual agencies or components and the
management chiefs. Each directive also discusses how the management
chief, along with the heads of the directorates, agencies and others,
will annually recommend and establish integration milestones for the
consolidation of the chief's function and the development of
performance metrics for the respective function.
While the documents and plans discussed above are being used to help
DHS generally guide its management integration and DHS has made some
progress in addressing integration concerns within each functional
management area, there still is no overarching, comprehensive plan that
clearly identifies the critical links that must occur across these
functions, the necessary timing to make these links occur, how these
critical interrelationships will occur, and who will drive and manage
them. As previously discussed, an agency's strategic plan does not
serve as a tactical or operational integration strategy and does not
include the more detailed blueprints, time lines, and resources needed
for accomplishing the department's management integration. The
department's draft paper also does not have a comprehensive linkage
across all of its functional initiatives with goals, time lines, and
resources needed that would comprise a departmentwide integration
strategy. Nor does it lay out how the integration across these
functions must be managed. For example, to successfully implement DHS's
human capital system, it must coordinate this implementation with IT
modernization. In addition, the majority of the various management
chiefs and senior officials we interviewed did not indicate to us that
this draft paper was being used as an overarching management
integration strategy. Finally, the recently issued management
directives can be helpful in guiding individual functional integration
efforts, as well as increasing departmentwide accountability for
achieving its management integration, but the directives do not serve
as a departmentwide integration strategy.
Some of the plans and directives already issued by DHS could be used as
foundations for building this needed integration strategy. Such a
strategy could also help to ensure that the various functional
initiatives are prioritized, sequenced, and implemented in a coherent
and integrated way, thereby achieving even greater efficiency and cost
savings. Based on our prior work on mergers and transformations, as
well as results-oriented management, such a comprehensive strategy
would involve (1) looking across the initiatives within each of the
stove-piped functional units and clearly identifying the critical links
that must occur among these initiatives; (2) developing specific
departmentwide goals and milestones that would allow DHS to track
critical phases and essential activities; (3) identifying tradeoffs and
setting priorities; and (4) identifying any potential efficiencies that
could be achieved. The institution of a departmentwide management
integration strategy could also provide the Congress, DHS's employees,
and other key stakeholders with transparent information on the
integration's goals, needed resources, critical links, cost savings,
and status, and a way for these parties to hold DHS accountable for its
management integration.
DHS's Business Transformation Office Could Be Strengthened to Serve as
a Dedicated Team to Help Set Priorities and Make Strategic Decisions
for Management Integration and to Implement the Comprehensive
Integration Strategy:
Our research shows that a dedicated team vested with necessary
authority and resources to help set priorities, make timely decisions,
and move quickly to implement decisions is critical for a successful
transformation. In addition, the team ensures that various change
initiatives are sequenced and implemented in a coherent and integrated
way. Furthermore, the team monitors and reports on the progress of the
integration to top leaders and across the organization, enabling those
leaders to make any necessary adjustments. Other networks, including a
senior executive council, functional teams, or cross-cutting teams, can
be used to help the implementation team manage and coordinate the day-
to-day activities of the merger or transformation. The 2003 study
commissioned by DHS also recommended that the department should (1)
establish a leadership team with implementation responsibility for
integration across directorates and be held accountable for
departmentwide performance, and (2) create a dedicated program
management office responsible for the execution of both mission and
management integration efforts.
The Under Secretary for Management had acknowledged the need for a
dedicated program office to help guide the integration of management
functions across the department, but had not created one until October
2004 when funds were appropriated. Specifically, as part of DHS's
fiscal year 2005 appropriation, the conference committee allocated
$920,000 for DHS to establish a BTO, which will include a director and
four additional staff that will report to the Under Secretary for
Management.[Footnote 21] At the time of our review, DHS was still
establishing the office within its Management Directorate and
advertising for the director's position, but had not defined and filled
the staff positions. According to the Acting Chief of Staff to the
Under Secretary for Management, the department intends that the staff
hired for the office will have expertise in program and project
management, quality analysis, and performance and data analysis.
Based on our discussions with this official, and our analysis of
documents describing the role of this office, the purpose of the BTO is
to help monitor and look for interdependencies among the department's
discrete management integration efforts. Another purpose of the BTO is
to communicate the progress of the functional management initiatives
across the department. For example, implementation of eMerge2, the
financial integration solution currently in development, will involve
several management functions, such as budgeting and procurement. The
office is expected to monitor the progress of each management chief's
functional integration efforts relative to individual management
directives described previously, as well as look for continuous
improvement from the services being delivered. According to the Acting
Chief of Staff to the Under Secretary for Management, the BTO is not
responsible for the implementation of such individual initiatives as
eMerge2, or for leading and managing the coordination and integration
that must occur across functions not only to make these individual
initiatives work, but to achieve and sustain overall functional
integration at DHS. Without creating a dedicated team to serve in this
role, it will be more difficult for DHS to coordinate all integration
initiatives across the department and make the tradeoffs necessary to
undertake an integration of the magnitude of DHS.
As mentioned above, networks, including functional teams, can help the
dedicated implementation team ensure that DHS's efforts are coordinated
and integrated. DHS has recently strengthened the role of its
functional councils through its management directives to help
coordinate integration departmentwide. Early on, each management chief,
such as the CIO, CHCO, or CFO established a functional council to
address issues pertaining to the relative function. For example, the
CFO established a Council that includes component or agency CFOs across
DHS and addresses and coordinates departmentwide financial management
issues. The other management chiefs established functional councils
with similar membership drawn from their relative personnel in each
component or agency. Likewise, the Under Secretary for Management has a
respective Management Council that discusses issues of departmentwide
importance, such as training and development programs, but this council
is not dedicated full-time to managing the integration effort across
the agency.
According to senior DHS officials in the Office of the Under Secretary
for Management, the membership of these functional councils had
primarily been serving in an information-sharing role for their
particular management function across the department. The councils also
have been helpful in gaining feedback and buy in from their members on
function-specific issues of importance across DHS, as well as providing
a way to communicate about these issues. More recently, according to
its five management directives, DHS enhanced the role of its functional
councils, to include more decision-making responsibilities, rather than
just serving in an advisory capacity. In general, the councils are now
responsible within each of their individual functional areas for: (1)
establishing a strategic plan, (2) balancing priorities on how to best
capitalize on the respective management function resources, (3)
defining and continuously improving governance structures, processes,
and performance, (4) establishing centers of excellence, boards, and
working groups tied to relevant council priorities, (5) developing and
executing formal communications programs for internal and external
stakeholders, and (6) supporting the respective management chief in the
design, planning, and implementation of an integration plan for the
chief's individual functional area, among other things.
The increased authorities and responsibilities of the functional
councils could help DHS further coordinate the integration of each
individual function across the department, and the recent establishment
of the BTO could also assist DHS in departmentwide integration issues.
However, neither the functional councils or the BTO are currently
serving as a dedicated team to help manage the department's management
integration. The BTO is well-positioned to serve as a dedicated team,
and the role of the office could be strengthened to provide it with the
necessary authority and resources to set priorities and make strategic
decisions to drive the overall integration strategy. The BTO could also
be responsible for leading the development and implementation of the
integration strategy as thus described and communicating the progress
of the integration to top leaders and DHS stakeholders. Such a
dedicated team, as led by a senior leader described below, can provide
the focused, day-to-day management needed for successful integration.
Continued Monitoring Is Needed to Ensure Senior DHS Leadership
Elevates, Integrates, and Institutionalizes Its Management Initiatives:
We have reported that top leadership clearly and personally involved in
the merger or transformation represents stability and provides an
identifiable source for employees to rally around during the tumultuous
times created by such dramatic reorganizations and transformations as
DHS's merger. Leadership must set the direction, pace, and tone for the
transformation and could provide sustained attention over the long
term. As we have previously reported, as DHS and other agencies, such
as the Department of Defense, embark on large-scale organizational
change initiatives to address 21st century challenges, such as national
security concerns--there is a compelling need to elevate, integrate,
and institutionalize responsibility for key functional management
initiatives to help ensure their success.[Footnote 22] We have reported
that creation of a COO or CMO for DHS could help to elevate attention
on management issues and transformational change, integrate various key
management and transformation efforts, and institutionalize
accountability for addressing these issues and leading this
change.[Footnote 23] For example, such an official could provide a
single point of contact to manage the integration of functions that
operate within their own vertical "stovepipes," such as information
technology, human capital, or financial management, in a comprehensive
and ongoing manner. Another potentially important mechanism for such a
position is to use clearly-defined, results-oriented performance
agreements accompanied by appropriate incentives, rewards, and
accountability. To help ensure accountability over the long term,
setting a term appointment of not less than 5 years can help provide
the continuing focused attention essential to successfully completing
multiyear transformations, which can extend beyond the tenure of
political leaders.
The role of the Under Secretary for Management does contain some of the
characteristics of a COO/CMO as we have described, such as integrating
key management and transformation efforts by providing a single point
of contact as the chief integrator of management functions across DHS.
Congress anticipated the difficulty of establishing DHS by creating a
Management Directorate as one of the five major organizational units of
the new department and vesting responsibilities for the transition and
reorganization of the department within the Office of the Under
Secretary for Management. According to section 701 of the Homeland
Security Act, the Under Secretary is responsible for the management and
administration of the Department in such functional areas as budget,
accounting, finance, procurement, human resources and personnel,
information technology, and communications systems. In addition, the
Under Secretary is responsible for the transition and reorganization
process, to ensure an efficient and orderly transfer of functions and
personnel to the Department, including the development of a transition
plan. The Under Secretary also told us that she sees one of her roles
as integrating the various management functions across the department.
Recent initiatives within the Department could help to strengthen the
role and responsibilities of the Under Secretary for Management in
leading DHS's management integration efforts. The management
directives, issued in October 2004, are intended to clarify
accountability for the integration of the functions across the various
directorates. The directives create dual accountability relationships
between the department-level functional chiefs and similar chiefs
within the agencies and components in the four other directorates. For
example, the department CFO within the Management Directorate is
accountable for consolidating and integrating financial systems across
the department and must work with the multiple CFOs for the various
components within the four other directorates and agencies to do so. To
help ensure this collaboration occurs, the department CFO has input to
the agency and component CFOs' daily work and annual performance
evaluations, according to the directive on financial management, but
these CFOs still report to and take direction from their agency or
component head. In addition, the recently established BTO could help
provide the Under Secretary for Management with a team of resources
dedicated to monitoring and assisting with the management integration.
It is still too early to tell, however, whether these initiatives will
provide the Under Secretary for Management with the elevated authority
necessary to integrate functions across the department and
institutionalize this new structure, as envisioned for a COO, CMO, or
similar position. For example, the indirect authority over component
and agency chiefs who are critical to integration, and a BTO that
primarily has a monitoring role, may not provide the authority the
Under Secretary needs to set priorities for, and make trade-off
decisions about resources and investments for integrating these
functions. Likewise, without a comprehensive integration plan, the
Under Secretary does not have a road map to guide and manage all the
players critical to the integration.
Furthermore, without additional mechanisms in place to increase
accountability and sustainability for achieving the results of the
department's integration, DHS may not be successful in realizing the
goals of an improved homeland security function with integrated
management support. For example, as mentioned previously, at the time
of our review, the then Secretary and Deputy Secretary had announced
their intention to leave DHS in early 2005, raising questions about the
agency's ability to provide the consistent and sustained senior
leadership necessary to achieve integration over the long term. Without
a senior leader with a term limit that extends beyond changes in
administration, it may be difficult for DHS to successfully achieve its
management integration. The Congress should continue to closely monitor
whether additional leadership authorities are needed for the Under
Secretary, or whether a revised organizational arrangement is needed to
fully capture the roles and responsibilities of a COO/CMO position,
such as elevating the position, and including a performance agreement
and setting a term limit for it.
Conclusions:
Though national needs suggest a rapid reorganization of homeland
security functions, such dramatic transitions of agencies and programs,
as well as the breadth and scope of management support functions that
need to be incorporated into the new department are likely to take time
to achieve. DHS is engaged in a number of individual efforts and
initiatives as it works to implement its vision of an integrated,
unified department. However, the momentum to create a successful
homeland security function generated by the attacks of 9/11 could be
lost if DHS does not work quickly to put in place some key merger and
transformation practices to be more effective in taking a comprehensive
and sustained approach to its management integration.
First, without a comprehensive strategy addressing all departmental
management integration initiatives, DHS may not be able to establish
the critical links, identify tradeoffs, set priorities, and design the
efficiencies needed to succeed in integrating the functional management
of the department, especially given the long-term fiscal challenges
facing the federal government. Some of the guidance and plans DHS has
already created could be used as a foundation for building such an
integrated strategy. Second, a dedicated implementation team, like the
planned BTO, vested with the responsibility and authority, can be used
to more actively drive the department's integration across functions.
Finally, Congress could continue to monitor DHS's management
integration efforts and whether the current role of the Under Secretary
for Management in driving and sustaining these efforts over the long
term is effective or needs to be enhanced by creating a senior
leadership position, such as a COO/CMO. Without taking these steps, DHS
may have difficulty providing a comprehensive approach and sustaining
its long-term management integration efforts.
Recommendations for Executive Action:
In order to build the management infrastructure needed to help support
the department's integration and transformation, we are making two
recommendations to the Secretary of Homeland Security. We recommend
that the Secretary direct the Under Secretary for Management, working
with others, to:
* develop an overarching management integration strategy for the
department. Such a strategy would, among other things, (1) look across
the initiatives within each of the management functional units; (2)
clearly identify the critical links that must occur among these
initiatives; (3) identify tradeoffs and set priorities; (4) set
implementation goals and a time line to monitor the progress of these
initiatives to ensure the necessary links occur when needed; and (5)
identify potential efficiencies, and ensure that they are achieved. The
department should also use this strategy to clearly communicate a
consistent set of goals and the progress achieved internally to all its
employees, and externally to key stakeholders, such as the Congress;
and:
* designate the planned BTO within DHS's Management Directorate as the
dedicated implementation team for the department's management
integration and provide it with the requisite authority and
responsibility to help set priorities and make strategic decisions to
drive the integration across all functions. The BTO would also be
responsible for helping to develop and implement the overarching
management integration strategy.
Matters for Congressional Consideration:
To help ensure accountability and sustainability for DHS's management
integration over the long term, Congress may wish to continue to
monitor the following:
* the progress of DHS's management integration, for example, by
requiring the department to periodically report on the status of its
efforts, especially to determine whether it has:
* implemented a departmentwide integration management strategy; and:
* provided the BTO with sufficient authority to serve as a dedicated
implementation team to help set priorities and make strategic decisions
to drive integration across all functions, and:
* whether the Under Secretary for Management has the authority to
elevate attention on management issues and transformational change,
integrate various key management and transformation efforts, and
institutionalize accountability for addressing these management issues
and leading this change. If not, the Congress could reassess whether it
needs to statutorily adjust existing positions at DHS, or create a new
COO/CMO position, with provisions for a term limit and performance
agreement, that has the necessary responsibilities and authorities to
more effectively drive the integration.
Agency Comments and Our Evaluation:
In commenting on a draft of this report, DHS generally agreed with the
report's recommendations. DHS also provided additional information on
the planned responsibilities and role of the BTO in departmental
management integration. For example, DHS stated that the BTO is the
dedicated resource for providing guidance for the integration of the
department's management process, such as setting project management
standards and establishing standardized processes for monitoring and
reporting on the progress of DHS's integration initiatives. In
addition, the department commented that the BTO is establishing an
integrated project plan/integration strategy and anticipates it will be
released by June 2005. However, at the time of our review, agency
officials told us that there was not an integration strategy in place
to manage the department's integration.
Based on our work on mergers and transformation practices, we also
recommended that DHS provide the BTO with the appropriate authority and
responsibilities to help set priorities and make strategic decisions
for the department's integration efforts. DHS agreed with our
recommendation and noted that the BTO is to serve as the agent for the
Under Secretary for Management whose role is to lead the transition and
reorganization of the department. The agency stated that the BTO has
been vested with the authorities necessary to ensure an integration
strategy is in place and will be used to advise management on decisions
about, and direction on, integration. We agree that the BTO is well-
positioned to serve as a dedicated integration team, but continue to
believe that the role of the office could be strengthened to provide it
with the necessary authority and resources to set priorities and make
strategic decisions to drive the overall integration strategy. DHS's
more detailed written comments are reprinted in appendix II.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the date of this letter. At that time, we will send copies of this
report to the Ranking Minority Member of the Subcommittee on the
Federal Workforce and Agency Organization, House Committee on
Government Reform and to others and made publicly available at no
charge on GAO's Web site at [Hyperlink, http://www.gao.gov].
If you have further questions about this report, please contact me or
Sarah Veale at (202) 512-6806 or on [Hyperlink, larencee@gao.gov] or
[Hyperlink, veales@gao.gov]. Major contributors to this report included
John W. Barkhamer, Jr., Carole Cimitile, Dewi Djunaidy, Masha Pastuhov-
Pastein, and Amy W. Rosewarne.
Signed by:
Eileen R. Larence:
Director, Strategic Issues:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To identify opportunities for DHS to improve its management integration
efforts, we assessed these efforts by using three of the nine key
practices consistently found at the center of successful mergers,
acquisitions, and transformations.[Footnote 24] We selected three of
these practices as criteria for this review because they are especially
important to ensuring that DHS has the management infrastructure it
needs at this early juncture in its efforts to sustain the integration
of the department. The three selected practices are: ensuring top
leadership drives the transformation, setting implementation goals and
a time line to build momentum and show progress from day one, and
dedicating an implementation team to manage the transformation process.
We assessed the extent to which DHS is using these selected practices
to support its management integration efforts, i.e., the integration of
DHS's varied management processes, systems, and people--in areas such
as information technology, financial management, procurement, human
capital, and administrative services. We focused our review primarily
on the management integration activities of DHS's Management
Directorate because the Homeland Security Act of 2002 establishes that
the Under Secretary for Management is responsible for the transition
and reorganization process for the department. However, we limited the
scope of our review to the integration of management functions at this
time and did not review mission or program integration efforts of the
department primarily because GAO has additional work under way on these
efforts.
We reviewed and analyzed key DHS documents about the department's
management integration, as well as interviewed key senior leaders in
the Management Directorate and operational and program leaders from
across the department. Key DHS documents that we used for our review
include, but were not limited to, memoranda from the then Secretary and
Deputy Secretary, the DHS Strategic Plan, various transition and
integration planning and policy documents, materials from offices
involved with integration efforts, and Departmental Management
Directives that addressed the overall approach that each management
chief was taking to the integration of its relevant management area.
We also asked key senior DHS officials to describe to us DHS's approach
to its management integration, such as whether DHS had a plan for its
integration and if a dedicated team was in place to manage the
integration. Within the Management Directorate, we met with the Under
Secretary for Management, the Chief Procurement Officer, the Chief
Financial Officer, the Chief Administrative Officer, the Chief
Information Officer, and the Chief Human Capital Officer. Other
officials whom we interviewed included chiefs of staff and/or directors
of operations for each of the five directorates, and key senior leaders
from the Secret Service, the Coast Guard, the Bureau of Citizenship and
Immigration Services, the Office of Public Affairs, and the Office for
State and Local Government Coordination and Preparedness. We also
reviewed published assessments on the organization of DHS and
interviewed the authors of these publications to discuss their views on
organizational change at DHS.
We also examined reports from GAO, DHS's Inspector General, and others
that addressed the integration of departmentwide management functions,
such as the development of an integrated departmental financial
management system, and information technology, as well as reports that
focused on the merger of specific agencies or initiatives within the
Department, such as the Federal Protective Service.
We conducted our work from April 2004 through February 2005 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security: Washington, DC 20528:
February 24, 2005:
Ms. Eileen R. Larence:
Acting Director, Strategic Issues:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Ms. Larence:
RE: Draft Report GAO-05-139, Homeland Security: Comprehensive and
Sustained Approach Needed to Achieve Management Integration (GAO Job
Code 450303):
Thank you for the opportunity to review and comment on the subject
draft report. We generally concur with the recommendations and
appreciate the acknowledgement of challenges and progress made in
achieving management integration. The creation of the Department of
Homeland Security (DHS) is the largest reorganization of government
agencies and operations in recent history and significant challenges
exist in merging multiple management systems and processes from 22
legacy agencies. The Department continues to take significant strides
in achieving its management integration goals.
We offer the following comments in response to the two recommendations
made in the report.
Recommendations:
The Secretary direct the Under Secretary for Management, working with
others, to:
* develop an overarching management integration strategy for the
department. Such a strategy would, among other things, (1) look across
the initiatives within each of the management functional units; (2)
clearly identify the critical links that must occur among these
initiatives; (3) identify tradeoffs and set priorities; (4) set
implementation goals and a timeline to monitor the progress of these
initiatives to ensure the necessary links occur when needed; and (5)
identify potential efficiencies, and ensure that they are achieved,
among other things. The department should also use this strategy to
clearly communicate a consistent set of goals and the progress achieved
internally to all its employees, and externally to key stakeholders,
such as the Congress; and:
* designate the planned Business Transformation Office (BTO) within
DHS' Management Directorate as the dedicated implementation team for
the department's management integration and provide it with the
requisite authority and responsibility to help set priorities and make
strategic decisions to drive the integration across all functions. The
BTO would also be responsible for helping to develop and implement the
overarching management integration strategy.
Response:
In October of 2004, the Secretary signed functional integration
management directives for each of the Management directorate functions:
administrative services; finance; human capital; information
technology; and procurement. Also, in Fiscal Year 2005, the Department
created the Business Transformation Office. The BTO has been
established as the dedicated resource for providing guidance,
evaluation, and facilitation for the integration of the Department's
management processes. It is authorized 5 FTEs for FY 2005.
In response to the first recommendation and significant to effectively
carrying out the responsibilities of the BTO is the issuance of an
integration strategy. The BTO is establishing an Integrated Project
Plan/Integration Strategy and anticipates it will be released by June
2005. The Integrated Project Plan/Integration Strategy includes an
Organization Plan defining roles and responsibilities and identifies
key deliverables and milestones. The BTO will establish processes to
ensure that information is current and readily available.
The BTO is setting project management standards based on the accepted
standard methodology from the Project Management Institute's Project
Management Body of Knowledge. The BTO will be leveraging technology for
project management tools and will provide certified project management
expertise in developing project management practices for the Under
Secretary for Management (USM) to track Functional Lines of Business
major initiatives.
The BTO is establishing standardized reporting processes for monitoring
and reporting on the progress of initiatives in three key areas: cost;
schedule; and performance. Also, the BTO will help to establish
priorities and identify gaps and will be responsible for identifying
and managing for the USM the interdependent activities and timelines
between the Lines of Business for major initiatives. The BTO will also
develop and publish a communications strategy for both internal and
external communications.
Additionally, the BTO will evaluate the performance of USM functions in
providing operational support services in a shared environment. The BTO
will also provide organizational development support to USM offices and
departmental offices, proposing process and organizational improvements
in delivering support services; and will manage the Tri-bureau Shared
Services Operations Board and evolve it to the next phase as a fully
functioning shared services delivery model.
The BTO will not be responsible for the actual implementation of the
Line of Business integration plans. The BTO will track and monitor
implementation, and provide corrective action/direction when necessary;
however, each Line of Business is responsible and accountable for
ensuring the plans for their functions are being appropriately
implemented.
With respect to the second recommendation, the Homeland Security Act of
2002 establishes that the Under Secretary for Management is responsible
for the transition and reorganization process for the department. The
BTO serves as the agent for the USM and has been vested by the USM with
the authorities necessary to ensure the Integrated Project
Plan/Integration Strategy is in place and is used to advise management
decisions and direction on integration.
We again thank you for the opportunity to provide comments on this
report.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Acting Director, GAO/OIG Liaison Office:
Office of the Chief Financial Officer:
[End of section]
Related GAO Products:
[End of section]
High-Risk Series: An Update. [Hyperlink,
http://www.gao.gov/cgiin/getrpt?GAO-05-207]
Washington, D.C.: January 2005. For more information on the Department
of Homeland Security's major management challenges, see [Hyperlink,
http://www.gao.gov/pas/2005/dhs.htm]
Department of Defense: Further Actions Are Needed to Effectively
Address Business Management Problems and Overcome Key Business
Transformation Challenges.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-140T]
Washington, D.C.: November 18, 2004.
Homeland Security: Management Challenges Remain in Transforming
Immigration Programs.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-81]
Washington, D.C.: October 14, 2004.
Department of Homeland Security: Formidable Information and Technology
Management Challenge Requires Institutional Approach.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-702]
Washington, D.C.: August 27, 2004.
Homeland Security: Efforts Under Way to Develop Enterprise
Architecture, but Much Work Remains.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-777]
Washington, D.C.: August 6, 2004.
Financial Management: Department of Homeland Security Faces Significant
Financial Management Challenges.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-774]
Washington, D.C.: July 19, 2004.
Homeland Security: Transformation Strategy Needed to Address Challenges
Facing the Federal Protective Service.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-537]
Washington, D.C.: July 14, 2004.
Department of Homeland Security: Financial Management Challenges.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-945T]
Washington, D.C.: July 8, 2004.
Status of Key Recommendations GAO Has Made to DHS and Its Legacy
Agencies.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-865R]
Washington, D.C.: July 2, 2004.
Human Capital: DHS Faces Challenges in Implementing Its New Personnel
System.
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Human Capital: Preliminary Observations on Proposed DHS Human Capital
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Human Capital: DHS Personnel System Design Effort Provides for
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Results-Oriented Cultures: Implementation Steps to Assist Mergers and
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(450303):
FOOTNOTES
[1] DHS was initially created with 22 originating agencies, and the
Plum Island Animal Disease Center was transferred into DHS in June 2003.
[2] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
January 2005).
[3] DHS, Major Management Challenges Facing the Department of Homeland
Security, OIG-05-06 (Washington, D.C.: Dec. 1, 2004).
[4] GAO, Highlights of a GAO Forum, Mergers and Transformation: Lessons
Learned for a Department of Homeland Security and Other Federal
Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002) and GAO,
Results-Oriented Cultures: Implementation Steps to Assist Mergers and
Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2,
2003).
[5] Pub. L. No. 107-296, § 701(a)(9).
[6] The Homeland Security Act established five directorates within DHS
for each of the following areas: (1) management, (2) science and
technology, (3) information analysis and infrastructure protection, (4)
border and transportation security, and (5) emergency preparedness and
response. The U.S. Secret Service and the U.S. Coast Guard were also
transferred to DHS, but are not within a directorate.
[7] The White House, Department of Homeland Security Reorganization
Plan (Washington, D.C.: Nov. 25, 2002).
[8] Other responsibilities of the Under Secretary for Management under
section 701 include financial management, procurement, human resources
and personnel, information technology and communications systems,
facilities and property management, security, performance measurements,
grants and other assistance management programs, internal audits, and
maintenance of immigration statistics.
[9] In addition to reporting to the Under Secretary for Management, the
CFO is also to report to the DHS Secretary on matters of financial
management. See 31 U.S.C. 902(a)(1); Department of Homeland Security
Financial Accountability Act of 2004, Pub. L. No.108-330, § 3(a), (e).
[10] See GAO-03-293SP.
[11] See GAO-03-669.
[12] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June
1996).
[13] GAO, Homeland Security: Proposal for Cabinet Agency Has Merit, But
Implementation Will Be Pivotal to Success, GAO-02-886T (Washington,
D.C.: June 25, 2002); GAO, Homeland Security: Critical Design and
Implementation Issues, GAO-02-957T (Washington, D.C.: July 17, 2002);
See GAO-03-102.
[14] GAO, Homeland Security: Management Challenges Facing Federal
Leadership, GAO-03-260 (Washington, D.C.: Dec. 20, 2002).
[15] GAO, Homeland Security: Transformation Strategy Needed to Address
Challenges Facing the Federal Protective Service, GAO-04-537
(Washington, D.C.: July 14, 2004).
[16] Booz | Allen | Hamilton, Department of Homeland Security
Management Study, (Washington, D.C.: July 8, 2003).
[17] Also see DHS, Office of Inspector General, Major Management
Challenges Facing the Department of Homeland Security, OIG-05-06
(Washington, D.C.: December 2004); DHS, Office of Inspector General,
Review of the Status of Department of Homeland Security Efforts to
Address Its Major Management Challenges, OIG-04-21 (Washington, D.C.:
March 2004).
[18] GAO, Financial Management: Department of Homeland Security Faces
Significant Financial Management Challenges, GAO-04-774 (Washington,
D.C.: July 19, 2004).
[19] Department of Homeland Security (DHS), Securing Our Homeland, U.S.
Department of Homeland Security Strategic Plan (Washington, D.C.:
February 2004).
[20] DHS, Management Directorate, 21st Century Department DRAFT "Themes
and Owners" Paper, April 5, 2004.
[21] See H.R. Conf. Rep. No. 108-774 (2004), accompanying the
Department of Homeland Security Appropriations Act for Fiscal Year
2005, Pub. L. No. 108-334 (Oct. 18, 2004).
[22] GAO, Highlights of a GAO Roundtable: The Chief Operating Officer
Concept: A Potential Strategy to Address Federal Governance Challenges,
GAO-03-192SP (Washington, D.C.: Oct. 4, 2002); GAO, Department of
Defense: Further Actions Are Needed to Effectively Address Business
Management Problems and Overcome Key Business Transformation
Challenges, GAO-05-140T (Washington, D.C.: Nov. 18, 2004).
[23] GAO, The Chief Operating Officer Concept and Its Potential Use as
a Strategy to Improve Management at the Department of Homeland
Security, GAO-04-876R (Washington, D.C.: June 28, 2004).
[24] GAO-03-669.
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