Homeland Security
Overview of Department of Homeland Security Management Challenges Gao ID: GAO-05-573T April 20, 2005The Department of Homeland Security (DHS) plays a key role in coordinating the nation's homeland security efforts with stakeholders in the federal, state, local, and private sectors. While GAO has conducted numerous reviews of specific DHS missions, such as border and transportation security and emergency preparedness, this testimony addresses overall DHS management issues. This testimony addresses (1) why GAO designated DHS's transformation as a high-risk area; and (2) the specific management challenges facing DHS.
GAO designated DHS's transformation as a high-risk area in 2003, based on three factors. First, DHS faced enormous challenges in implementing an effective transformation process, developing partnerships, and building management capacity because it had to transform 22 agencies into one department. Second, DHS faced a broad array of operational and management challenges that it inherited from its component legacy agencies. Finally, DHS's failure to effectively address its management challenges and program risks could have serious consequences for our national security. Overall, DHS has made some progress, but significant management challenges remain to transform DHS into a more efficient organization while maintaining and improving its effectiveness in securing the homeland. Therefore, DHS's transformation remains a high-risk area. DHS faces a number of management challenges to improve its ability to carry out its homeland security missions. Among these challenges are providing focus for management efforts; monitoring transformation and integration; improving strategic planning; managing human capital; strengthening financial management infrastructure; establishing an information technology management framework; managing acquisitions; and coordinating research and development.
GAO-05-573T, Homeland Security: Overview of Department of Homeland Security Management Challenges
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Testimony before the Subcommittee on Management, Integration, and
Oversight, Committee on Homeland Security, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EDT:
Wednesday, April 20, 2005:
Homeland Security:
Overview of Department of Homeland Security Management Challenges:
Statement of Norman J. Rabkin:
Managing Director, Homeland Security and Justice:
GAO-05-573T:
GAO Highlights:
Highlights of GAO-05-573T, a testimony before the Subcommittee on
Management, Integration, and Oversight, Committee on Homeland Security,
House of Representatives:
Why GAO Did This Study:
The Department of Homeland Security (DHS) plays a key role in
coordinating the nation‘s homeland security efforts with stakeholders
in the federal, state, local, and private sectors. While GAO has
conducted numerous reviews of specific DHS missions, such as border and
transportation security and emergency preparedness, this testimony
addresses overall DHS management issues.
This testimony addresses (1) why GAO designated DHS‘s transformation as
a high risk area; and (2) the specific management challenges facing DHS.
What GAO Found:
GAO designated DHS‘s transformation as a high-risk area in 2003, based
on three factors. First, DHS faced enormous challenges in implementing
an effective transformation process, developing partnerships, and
building management capacity because it had to transform 22 agencies
into one department. Second, DHS faced a broad array of operational and
management challenges that it inherited from its component legacy
agencies. Finally, DHS‘s failure to effectively address its management
challenges and program risks could have serious consequences for our
national security. Overall, DHS has made some progress, but significant
management challenges remain to concurrently transform DHS into a more
efficient organization while maintaining and improving its
effectiveness to secure the homeland. Therefore, DHS‘s transformation
remains a high risk area.
DHS faces a number of management challenges to improve its ability to
carry out its homeland security missions. Among these challenges are
· providing focus for management efforts;
· developing an overarching management integration;
· improving strategic planning;
· effectively managing strategic human capital;
· strengthening its financial management infrastructure;
· developing an information technology management framework;
· managing acquisitions; and
· coordinating research and development.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-573T]:
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Norman Rabkin at (202)
512-8777 or rabkinn@gao.gov.
[End of Section]
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to appear before this subcommittee to
address management challenges facing the Department of Homeland
Security (DHS). The department plays a major role in the protection of
the homeland against terrorist and other threats. In addition to
managing its own affairs, the department also has a key role in
implementing the National Strategy for Homeland Security and
coordinating the larger homeland security efforts of the entire nation,
to include other stakeholders in the federal, state, local, and private
sectors. While GAO has conducted numerous reviews of specific DHS
mission areas--including border and transportation security,
information analysis and infrastructure protection, emergency
preparedness and response, and defending against catastrophic threats-
-my statement is limited to overall management issues. These generally
cut across many if not all of the DHS agencies and mission areas. In my
testimony today, I will address two topics:
* Why has GAO designated DHS's transformation as a high-risk area?
* What specific management challenges does the department face?
This testimony continues GAO's long-standing efforts to provide
Congress with information on homeland security strategies and programs.
In February of last year, we testified on the desired characteristics
of national strategies, and whether various strategies--including the
National Strategy for Homeland Security--contained those desired
characteristics.[Footnote 1] In March of last year, we summarized
strategic homeland security recommendations by GAO and selected
congressionally chartered commissions.[Footnote 2] In July of last
year, we reported on GAO recommendations to DHS and the department's
progress in implementing such recommendations.[Footnote 3] In January
of this year, we provided a comprehensive report on DHS and other
federal agency efforts and challenges related to implementing the
National Strategy for Homeland Security.[Footnote 4] And just last
month in March, we reported on DHS progress in management
integration.[Footnote 5] Together, these baseline efforts are intended
to aid congressional oversight in assessing the effectiveness of
federal homeland security activities.
My comments are based on our wide-ranging, completed, and ongoing work,
and our institutional knowledge of homeland security and various
government organizational and management issues. We conducted our work
in accordance with generally accepted government auditing standards.
Summary:
GAO designated DHS's transformation as high-risk in January 2003, based
on three factors. First, DHS faced enormous challenges in implementing
an effective transformation process, developing partnerships, and
building management capacity because it had to transform 22 agencies
into one department. Second, DHS faced a broad array of operational and
management challenges that it inherited from its component legacy
agencies. Finally, DHS's failure to effectively address its management
challenges and program risks could have serious consequences for our
national security. As we reported earlier this year, the implementation
and transformation of DHS remains high-risk.[Footnote 6] Overall, DHS
has made some progress, but significant challenges remain to transform
DHS into a more effective organization with robust planning,
management, and operations while maintaining and improving readiness
for its highly critical mission to secure the homeland. Failure to
effectively carry out its mission continues to expose the nation to
potentially serious consequences.
DHS faces a number of specific management challenges to improving its
ability to carry out its homeland security missions. Among these
challenges are ensuring departmentwide focus on management issues
through the establishment of a Chief Operating Officer or Chief
Management Officer position; coordinating its varied management
processes, systems, and people through the development of an
overarching management integration; improving strategic planning;
effectively managing strategic human capital; strengthening its
financial management infrastructure; developing a comprehensive
strategic management framework that addresses key information
technology disciplines; properly managing acquisitions; and
coordinating research and development among its components and with
other entities.
Background:
In an effort to increase homeland security following the September 11,
2001, terrorist attacks on the United States, President Bush issued the
National Strategy for Homeland Security in July 2002 and signed
legislation creating DHS in November 2002.[Footnote 7] The strategy set
forth the overall objectives, mission areas, and initiatives to prevent
terrorist attacks within the United States, reduce America's
vulnerability to terrorism, and minimize the damage and assist in the
recovery from attacks that may occur. The strategy also called for the
creation of DHS. The department, which began operations in March 2003,
represented a fusion of 22 federal agencies to coordinate and
centralize the leadership of many homeland security activities under a
single department.
Although the National Strategy for Homeland Security indicated that
many federal departments (and other nonfederal stakeholders) will be
involved in homeland security activities, DHS has the dominant role in
implementing the strategy. The strategy identified six mission areas
and 43 initiatives.[Footnote 8] DHS was designated the lead federal
agency for 37 of the 43 initiatives.[Footnote 9] In addition, DHS had
activities underway in 40 of the 43 initiatives.[Footnote 10] In
addition, DHS has the dominant share of homeland security funding.
Figure 1 shows the proposed fiscal year 2006 homeland security funding
for federal departments and agencies, with DHS constituting about 55
percent of the total.
Figure 1: Proposed Fiscal Year 2006 Homeland Security Funding by
Department:
[See PDF for image]
Notes: Budget authority in millions of dollars.
"All other agencies" includes the Departments of Agriculture ($704
million), Veterans Affairs ($299 million), Transportation ($192
million), Commerce ($183 million), and Treasury ($111 million), as well
as the National Science Foundation ($344 million), National Aeronautics
and Space Administration ($205 million), Environmental Protection
Agency ($184 million), Social Security Administration ($178 million),
General Services Administration ($80 million), U.S. Army Corps of
Engineers ($72 million), and several smaller agencies. Numbers may not
total to 100 because of rounding.
[End of figure]
GAO Designated DHS's Transformation As High-Risk:
The November 2002 enactment of legislation creating DHS represented a
historic moment of almost unprecedented action by the federal
government to fundamentally transform how the nation protects itself
from terrorism.[Footnote 11] Rarely in the country's past had such a
large and complex reorganization of government occurred or been
developed with such a singular and urgent purpose. This represented a
unique opportunity to transform a disparate group of agencies with
multiple missions, values, and cultures into a strong and effective
cabinet department whose goals are to, among other things, protect U.S.
borders, improve intelligence and information sharing, and prevent and
respond to potential terrorist attacks. Together with this unique
opportunity, however, came a significant risk to the nation that could
occur if the department's implementation and transformation was not
successful.
GAO designated DHS's transformation as high-risk in January 2003based
on three factors. [Footnote 12] First, DHS faced enormous challenges in
implementing an effective transformation process, developing
partnerships, and building management capacity because it had to
effectively combine 22 agencies with an estimated 170,000 employees
specializing in various disciplines--including law enforcement, border
security, biological research, computer security, and disaster
mitigation--into one department. Second, DHS faced a broad array of
operational and management challenges that it inherited from its
component legacy agencies. In fact, many of the major components that
were merged into the new department, including the Immigration and
Naturalization Service, the Transportation Security Administration,
Customs Service, Federal Emergency Management Agency, and the Coast
Guard, brought with them at least one major problem such as strategic
human capital risks, information technology management challenges, or
financial management vulnerabilities, as well as an array of program
operations challenges and risks. Finally, DHS's national security
mission was of such importance that the failure to effectively address
its management challenges and program risks could have serious
consequences on our intergovernmental system, our citizen's health and
safety, and our economy. Overall, our designation of DHS's
transformation as a high-risk area and its inclusion on the 2003 High-
Risk List was due to the failure to transform the diverse units into a
single, efficient, and effective organization would have dire
consequences for our nation.
Since our 2003 designation of DHS's transformation as high-risk, DHS
leadership has provided a foundation for maintaining critical
operations while undergoing transformation. DHS has worked to protect
the homeland and secure transportation and borders, funded emergency
preparedness improvements and emerging technologies, assisted law
enforcement activities against suspected terrorists, and issued its
first strategic plan. 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,
consolidated 22 different human resources offices to 7, and:
consolidated bank card programs from 27 to 3.
As described in the next section, despite real and hard-earned
progress, DHS still has significant challenges to overcome in all of
its management areas. It is because of these continuing challenges that
we continue to designate the implementation and transformation of DHS
as high-risk.[Footnote 13]
DHS Management Challenges:
DHS faces a number of management challenges to improving its ability to
carry out its homeland security missions. Among these challenges, which
are discussed in more detail in the following sections, are:
* providing focus for management efforts,
* monitoring transformation and integration,
* improving strategic planning,
* managing human capital,
* strengthening financial management infrastructure,
* establishing an information technology management framework,
* managing acquisitions, and:
* coordinating research and development.
Providing Focus for Management Efforts:
One challenge that DHS faces is to provide focus on management efforts.
The experience of successful transformations and change management
initiatives in large public and private organizations suggests that it
can take 5 to 7 years until such initiatives are fully implemented and
cultures are transformed in a substantial manner. Because this
timeframe can easily outlast the tenures of managers, high-performing
organizations recognize that they need to have mechanisms to reinforce
accountability for organization goals during times of leadership
transition.
Focus on management efforts needs to be provided at two levels of
leadership. The first level is that of the political appointees in top
leadership positions. These leaders are responsible for both mission
and management support functions. Although DHS has been operating about
2 years, it has had two Secretaries, three Deputy Secretaries, and
additional turnover at the Undersecretary and Assistant Secretary
levels. The problem of turnover in top leadership is not unique to DHS.
The average tenure of political leadership in federal agencies--
slightly less than 3 years for the period 1990-2001--and the long-term
nature of change management initiatives can have critical implications
for the success of those initiatives. The frequent turnover of the
political leadership has often made it difficult to obtain the
sustained and inspired attention required to make needed changes.
Similarly, the recent turnover in DHS's top leadership raises questions
about the department's ability to provide the consistent and sustained
senior leadership necessary to achieve integration over the long term.
Another level for focus on management efforts is those leaders
responsible for day-to-day management functions. As we have reported, a
Chief Operating Officer (COO)/Chief Management Officer (CMO) may
effectively provide the continuing, focused attention essential to
successfully completing these multiyear transformations in agencies
like DHS.[Footnote 14] At DHS, we have reported that the COO/CMO
concept would provide the department with a single organizational focus
for the key management functions involved in the business
transformation of the department, such as human capital, financial
management, information technology, acquisition management, and
performance management, as well as for other organizational
transformation initiatives.[Footnote 15] We have also recently
testified that a COO/CMO can effectively provide the continuing,
focused attention essential to successfully complete the implementation
of DHS's new human capital system, a large-scale, multiyear change
initiative.[Footnote 16]
The specific implementation of a COO/CMO position must be determined
within the context of the particular facts, circumstances, challenges
and opportunities of each individual agency. As the agency is currently
structured, the roles and responsibilities of the Under Secretary for
Management contain some of the characteristics of a COO/CMO for the
department. According to Section 701 of the Homeland Security Act, the
Under Secretary for Management 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.[Footnote 17] In
addition, the Under Secretary is responsible for the transition and
reorganization process and to ensure an efficient and orderly transfer
of functions and personnel to the Department, including the development
of a transition plan.
Monitoring Transformation and Integration:
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 the initiative provides critical support for the total
integration of the department, including its operations and programs,
to ultimately meet its mission of protecting the homeland. Last week,
we released a report on DHS's management integration efforts to date as
compared against selected key practices consistently found to be at the
center of successful mergers and transformations.[Footnote 18]
Overall, we 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. First, key practices show
that establishing implementation goals and a timeline 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 such a comprehensive strategy to guide the management
integration departmentwide. Specifically, DHS still does not have a
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.
Second, it is important to dedicate a strong and stable implementation
team for the day-to-day management of the transformation, a team vested
with the necessary authority and resources to help set priorities, make
timely decisions, and move quickly to implement decisions. In addition,
this team would ensure that various change initiatives are sequenced
and implemented in a coherent and integrated way. DHS is establishing a
Business Transformation Office, reporting to the Under Secretary for
Management, to help monitor and look for interdependencies among the
individual functional integration efforts. However, this office is not
currently responsible for leading and managing the coordination and
integration that must occur across functions not only to make these
individual initiatives work but also to achieve and sustain the overall
management integration of DHS.
To address this challenge, we recommended, and DHS agreed, that it
should develop an overarching management integration strategy and
provide it's recently established Business Transformation Office with
the authority and responsibility to serve as a dedicated integration
team and also help develop and implement the strategy.
Improving Strategic Planning:
Effective strategic planning is another challenge for DHS. We have
previously identified strategic planning as one of the critical success
factors for new organizations. This is particularly true for DHS, given
the breadth of its responsibility and need to clearly identify how
stakeholders' responsibilities and activities align to address homeland
security efforts. Without thoughtful and transparent planning that
involves key stakeholders, DHS may not be able to implement its
programs effectively. In 2004, DHS issued its first departmentwide
strategic plan. We have evaluated DHS's strategic planning process,
including the development of its first departmentwide strategic plan,
and plan to release a report on our findings within a few weeks. This
report will discuss (1) the extent to which DHS's planning process and
associated documents address the required elements of the Government
Performance and Results Act of 1993 (GPRA) and reflect good strategic
planning practices and (2) the extent to which DHS's planning documents
reflect both its homeland security and nonhomeland security mission
responsibilities.
Managing Human Capital:
Another management challenge faced by DHS is how to manage its human
capital. Our work in identifying key practices for implementing
successful mergers and transformations indicates that attention to
strategic human capital management issues should be at the center of
such efforts. DHS has been given significant authority to design a new
human capital system free from many of the government's existing civil
service requirements, and has issued final regulations for this new
system. We have issued a series of reports on DHS's efforts to design
its human capital system.[Footnote 19] First, we found that the
department's efforts to design a new human capital system was
collaborative and facilitated the participation of employees from all
levels of the department, and generally reflected important elements of
effective transformations. We recommended that the department maximize
opportunities for employees' involvement throughout the design process
and that it place special emphasis on seeking the feedback and buy-in
of front line employees in the field. Second, we found that DHS's human
capital management system, as described in the recently released final
regulations, includes many principles that are consistent with proven
approaches to strategic human capital management. For example, many
elements for a modern compensation system---such as occupational
cluster, pay bands, and pay ranges that take into account factors such
as labor market conditions---are to be incorporated into DHS's new
system. However, these final regulations are intended to provide an
outline and not a detailed, comprehensive presentation of how the new
system will be implemented. Thus, DHS has considerable work ahead to
define the details of the implementation of its system, and
understanding these details is important to assessing the overall
system.[Footnote 20]
Strengthening Financial Management Infrastructure:
DHS faces significant financial management challenges. Specifically, it
must address numerous internal control weaknesses, meet the mandates of
the DHS Financial Accountability Act,[Footnote 21] and integrate and
modernize its financial management systems, which individually have
problems and collectively are not compatible with one another.
Overcoming each of these challenges will assist DHS in strengthening
its financial management environment, improving the quality of
financial information available to manage the department day to day,
and obtaining an unqualified opinion on its financial statements.
DHS's independent auditors were unable to issue an opinion on any of
the department's financial statements for fiscal year 2004. This was a
substantial setback in DHS's financial management progress, compounded
by continued challenges in resolving its internal control weaknesses.
The number of material internal control weaknesses at the department
has increased from 7 as of September 30, 2003 to 10 as of September 30,
2004. With the passage of the Department of Homeland Security Financial
Accountability Act (the Accountability Act), DHS is now subject to the
Chief Financial Officers Act of 1990 (the CFO Act)[Footnote 22] and the
Federal Financial Management Improvement Act of 1996 (FFMIA).[Footnote
23] The Accountability Act also requires that in fiscal year 2005 the
Secretary of Homeland Security include an assertion on internal
controls over financial reporting at the department, and in fiscal year
2006 requires an audit of internal controls over financial reporting.
We will continue to monitor the steps DHS is taking to meet the
requirements of the Accountability Act as part of our audit of the
consolidated financial statements of the United States government.
We reported in July 2004 that DHS continues to work to reduce the
number of financial management service providers and to acquire and
deploy an integrated financial enterprise solution.[Footnote 24] At
that time, DHS reported that it had reduced the number of financial
management service providers for the department from the 19 providers
at the time DHS was formed to 10. DHS planned to consolidate to 7
providers. Additionally, DHS hired a contractor to deploy an integrated
financial enterprise solution. This is a costly and time consuming
project and we have found that similar projects have proven challenging
for other federal agencies. We will therefore continue to monitor DHS's
progress on overcoming this serious challenge.
Establishing an Information Technology Management Framework:
DHS has recognized the need for a strategic management framework that
addresses key information technology disciplines, and has made a
significant effort to make improvements in each of these disciplines.
For example, DHS is implementing its information technology (IT)
investment management structure, developing an enterprise architecture,
and has begun IT strategic human capital planning. However, much
remains to be accomplished before it will have fully established a
departmentwide IT management framework. To fully develop and
institutionalize the management framework, DHS will need to strengthen
strategic planning, develop the enterprise architecture, improve
management of systems development and acquisition, and strengthen
security. To assist DHS, we have made numerous recommendations,
including (1) limiting information technology investments until the
department's strategic management framework is completed and available
to effectively guide and constrain the billions of dollars that DHS is
spending on such investments; (2) taking appropriate steps to correct
any limitations in the Chief Information Officer's ability to
effectively support departmentwide missions; and (3) ensuring the
department develops and implements a well-defined enterprise
architecture to guide and constrain business transformation and
supporting system modernization. The development of this framework is
essential to ensuring the proper acquisition and management of key DHS
programs such as U.S. Visitor and Immigrant Status Indicator Technology
(US-VISIT), Automated Commercial Environment, and Secure
Flight.[Footnote 25] To this end, we have recently reported on key
management challenges and weaknesses for each of the programs that an
effective DHS-wide framework for managing systems investments would be
instrumental in addressing.[Footnote 26]
Managing Acquisitions:
Our work has indicated that managing acquisitions is also a major
management challenge for DHS. The department faces the challenge of
structuring its acquisition organization so that its various
procurement organizations are held accountable for complying with
procurement policies and regulations and ensuring that taxpayer dollars
are well-spent. In addition, the department has in place a number of
large, complex, and high-cost acquisition programs, such as US-VISIT
and the Coast Guard's Deepwater program, which will need to be closely
managed to ensure that they receive the appropriate level of oversight
and that acquisition decisions are made based on the right level of
information. For example, we reported in March 2004 that the Deepwater
program needed to pay more attention to management and contractor
oversight in order to avoid cost overruns.[Footnote 27] We have also
reported on contract management problems at the former Immigration and
Naturalization Service, now a part of DHS, and TSA.[Footnote 28] We
will issue a report at the end of the this month that addresses (1)
areas where DHS has been successful in promoting collaboration among
its various organizations, (2) areas where DHS still faces challenges
in integrating the acquisition function, and (3) the department's
progress in implementing an effective review process for its major,
complex investments.
Coordinating Research and Development:
DHS also faces management challenges in coordinating research and
development (R&D). Our work has recently found that DHS has not yet
completed a strategic plan to identify priorities, goals, objectives,
and policies for the R&D of homeland security technologies and that
additional challenges remain in its coordination with other federal
agencies. Failure to complete a strategic plan and to fully coordinate
its research efforts may limit DHS's ability to leverage resources and
could increase the potential for duplication of research. In addition,
DHS faces challenges with regard to its use of DOE laboratories. These
challenges include the development of a better working relationship
through better communication and the development of clear, well-defined
criteria for designating the DOE laboratories to receive the majority
of DHS's R&D funding. Moreover, DHS faces the challenge of balancing
the immediate needs of the users of homeland security technologies with
the need to conduct R&D on advanced technologies for the
future.[Footnote 29]
Similarly, conducting R&D on technologies for detecting, preventing,
and mitigating terrorist threats is vital to enhancing the security of
the nation's transportation system. In our report on the Transportation
Security Administration's (TSA) and DHS's transportation security R&D
programs, we found that although TSA and DHS have made some efforts to
coordinate R&D with each other and with other federal agencies, both
their coordination with the Department of Transportation (DOT) and
their outreach to the transportation industry have been
limited.[Footnote 30] For example, officials from the modal
administrations of DOT, which continue to conduct some transportation
security R&D, said they had not provided any input into TSA's and DHS's
transportation security R&D project selections. Consequently, DOT's and
the transportation industry's security R&D needs may not be adequately
reflected in TSA's and DHS's R&D portfolios. Therefore, we recommend
that TSA and DHS (1) develop a process with DOT to coordinate
transportation security R&D, such as a memorandum of agreement
identifying roles and responsibilities and designating agency liaisons
and (2) develop a vehicle to communicate with the transportation
industry to ensure that its R&D security needs have been identified and
considered. DHS generally concurred with our report and its
recommendations.
Importance of Focusing on Management Issues:
Given the dominant role that DHS plays in securing the homeland, it is
critical that DHS be able to ensure that its management systems are
operating as efficiently and effectively as possible. While it is
understood that a transformation of this magnitude takes time and that
DHS's immediate focus has been on its homeland security mission, we see
the need for DHS to increase its focus on management issues. This is
important not only to DHS itself, but also to the nation's homeland
security efforts, because, in addition to managing its own
organization, DHS plays a larger role in managing homeland security and
in coordinating with the activities of other federal, state, local, and
private stakeholders. This larger DHS role presents its own unique
challenges.
* For example, DHS faces the challenge of clarifying the role of
government versus the private sector. In April 2002, we testified that
the appropriate roles and responsibilities within and between the
levels of governments and with the private sector are evolving and need
to be clarified.[Footnote 31] New threats are prompting a reassessment
and shifting of long-standing roles and responsibilities. These shifts
have been occurring on a piecemeal and ad hoc basis without the benefit
of an overarching framework and criteria to guide the process.
* As another example, DHS faces a challenge in determining how federal
resources are allocated to non-federal stakeholders. We have long
advocated a risk management approach to guide the allocation of
resources and investments for improving homeland security.[Footnote 32]
Additionally, OMB has identified various tools, such as benefit-cost
analysis, it considers useful in planning such as capital budgeting and
regulatory decisionmaking.[Footnote 33] DHS must develop a commonly
accepted framework and supporting tools to inform cost allocations in a
risk management process. Although OMB asked the public in 2002 for
suggestions on how to adjust standard tools to the homeland security
setting,[Footnote 34] a vacuum currently exists in which benefits of
homeland security investments are often not quantified and almost never
valued in monetary terms.[Footnote 35]
* As a final example, DHS faces a challenge in sharing information
among all stakeholders. DHS has initiatives underway to enhance
information sharing (including the development of a homeland security
enterprise architecture to integrate sharing between federal, state,
and local authorities). However, our August 2003 report noted that
these initiatives, while beneficial for the partners, presented
challenges because they (1) were not well coordinated, (2) risked
limiting participants' access to information, and (3) potentially
duplicated the efforts of some key agencies at each level of
government.[Footnote 36] We also found that despite various
legislation, strategies, and initiatives, federal agencies, states, and
cities did not consider the information sharing process to be
effective.
A well-managed DHS will be needed to meet these larger homeland
security challenges. As DHS continues to evolve, integrate its
functions, and implement its programs, we will continue to review its
progress and provide information to Congress for oversight purposes.
Mr. Chairman, this concludes my prepared statement. I will now be
pleased to respond to any questions that you or other members of the
subcommittee have.
GAO Contacts and Staff Acknowledgments:
For further information about this testimony, please contact Norman J.
Rabkin at 202-512-8777.
Other key contributors to this statement were Stephen L. Caldwell,
Wayne A. Ekblad, Carole J. Cimitile, Ryan T. Coles, Tammy R. Conquest,
Benjamin C. Crawford, Heather J. Dunahoo, Kimberly M. Gianopoulos,
David B. Goldstein, Randolph C. Hite, Robert G. Homan, Casey L.
Keplinger, Eileen R. Larence, Michele Mackin, Lisa R. Shames, and Sarah
E. Veale.
FOOTNOTES:
[1] GAO, Combating Terrorism: Evaluation of Selected Characteristics in
National Strategies Related to Terrorism, GAO-04-408T (Washington,
D.C.: Feb. 3, 2004).
[2] GAO, Homeland Security: Selected Recommendations from
Congressionally Chartered Commissions and GAO, GAO-04-591 (Washington,
D.C.: Mar. 31, 2004).
[3] GAO, Status of Key Recommendations GAO Has Made to DHS and Its
Legacy Agencies, GAO-04-865R (Washington, D.C.: July 2, 2004).
[4] GAO, Homeland Security: Agency Plans, Implementation, and
Challenges Regarding the National Strategy for Homeland Security, GAO-
05-33 (Washington, D.C.: Jan. 14, 2005).
[5] GAO, Department of Homeland Security: A Comprehensive and Sustained
Approach Needed to Achieve Management Integration, GAO-05-139
(Washington, D.C.: Mar. 16, 2005).
[6] GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.:
Jan. 2005).
[7] Homeland Security Act of 2002, Pub. L. No. 107-296 (Nov. 25, 2002).
[8] The six mission areas are Intelligence and Warning, Border and
Transportation Security, Domestic Counterterrorism, Protecting Critical
Infrastructures and Key Assets, Defending Against Catastrophic Threats,
and Emergency Preparedness and Response. Each of these has several
initiatives. For example, under the Border and Transportation Security
mission area, the initiatives include ensuring accountability in border
and transportation security, creating smart borders, and reforming
immigration services.
[9] The strategy itself, or subsequent Homeland Security Presidential
Directives, designated lead agencies for most of the initiatives. In
some cases, agencies shared leadership.
[10] For a more complete analysis of the strategy's mission areas,
initiatives, lead agencies, and implementation, see GAO-05-33.
[11] Pub. L. No. 107-296 (Nov. 25, 2002).
[12] GAO, High-Risk Series: An Update, GAO-03-119 (Washington, D.C.:
Jan. 2003); and Major Management Challenges and Programs Risks:
Department of Homeland Security, GAO-03-102 (Washington, D.C.: Jan.
2003).
[13] GAO, High Risk Series: An Update, GAO-05-207 (Washington, D.C.:
Jan 2005).
[14] On September 9, 2002, GAO convened a roundtable of government
leaders and management experts to discuss the COO concept and how it
might apply within selected federal departments and agencies. See 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).
[15] 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).
[16] GAO, Human Capital: Observations on Final DHS Human Capital
Regulations, GAO-05-391T (Washington, D.C.: March 2, 2005), and GAO,
Human Capital: Preliminary Observations on Final Department of Homeland
Security Human Capital Regulations, GAO-05-320T (Washington, D.C.: Feb.
10. 2005).
[17] 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.
[18] GAO, Department of Homeland Security: A Comprehensive and
Sustained Approach Needed to Achieve Management Integration, GAO-05-139
(Washington, D.C.: Mar. 16, 2005).
[19] GAO, Human Capital: Preliminary Observations on Proposed DHS Human
Capital Regulations, GAO-04-479T (Washington, D.C.: February 25, 2003);
Posthearing Questions Related to Proposed Department of Homeland
Security (DHS) Human Capital Regulations, GAO-04-570R (Washington,
D.C.: March 22, 2004); Additional Posthearing Questions Related to
Proposed Department of Homeland Security (DHS) Human Capital
Regulations, GAO-04-617R (Washington, D.C.: April 30, 2004); Human
Capital: DHS Faces Challenges in Implementing Its New Personnel System,
GAO-04-790 (Washington, D.C.: June 18, 2004); and Human Capital: DHS
Personnel System Design Effort Provides for Collaboration and Employee
Participation, GAO-03-1099 (Washington, D.C.: September 30, 2003).
[20] GAO, Human Capital: Preliminary Observations on Final Department
of Homeland Security Human Capital Regulations, GAO-05-320T
(Washington, D.C.: Feb. 10, 2005).
[21] Pub. L. No. 108-330 (Oct. 16, 2004).
[22] Pub. L. No. 101-576 (Nov. 15, 1990).
[23] Division A, Section 101(f), Title VIII, of Public Law 104-208 is
entitled the Federal Financial Management Improvement Act of 1996.
FFMIA requires the major departments and agencies covered by the CFO
Act to implement and maintain financial management systems that comply
substantially with (1) federal financial management systems
requirements, (2) applicable federal accounting standards, and (3) the
U.S. Government Standard General Ledger at the transaction level.
[24] GAO, Financial Management: Department of Homeland Security Faces
Significant Financial Management Challenges, GAO-04-774 (Washington:
D.C.: July 19, 2004).
[25]For information about the challenges these programs face, see GAO,
Homeland Security: Some Progress Made, but Many Challenges Remain on
U.S. Visitor and Immigrant Status Indicator Technology Program, GAO-05-
202 (Washington, D.C.: Feb. 23, 2005); Information Technology: Customs
Automated Commercial Environment Program Processing, but Need for
Management Improvements Continues, GAO-05-267 (Washington, D.C.: Mar.
14, 2005); and Aviation Security: Secure Flight Development and Testing
under Way, but Risks Should Be Managed as System Is Further Developed,
GAO-05-356 (Washington, D.C.: Mar. 28, 2005).
[26] GAO, Department of Homeland Security: Formidable Information and
Technology Management Challenge Requires Institutional Approach, GAO-
05-702 (Washington, D.C.: Aug. 27, 2004).
[27] GAO, Contract Management: Coast Guard's Deepwater Program Needs
Increased Attention to Management and Contractor Oversight, GAO-04-380
(Washington, D.C.: Mar. 9, 2004).
[28] GAO, Contract Management: INS Contracting Weaknesses Need
Attention from the Department of Homeland Security, GAO-03-799
(Washington, D.C.: Jul. 25, 2003) and Transportation Security Agency:
High-Level Attention Needed to Strengthen Acquisition Function, GAO-04-
544 (Washington, D.C.: May 28, 2004).
[29] GAO, Homeland Security: DHS Needs a Strategy to Use DOE's
Laboratories for Research on Nuclear, Biological, and Chemical
Detection and Response Technologies, GAO-04-653 (Washington, D.C.: May
24, 2004).
[30] GAO, Transportation Security R&D: TSA and DHS Are Researching and
Developing Technologies, but Need to Improve R&D Management, GAO-04-890
(Washington, D.C.: Sep. 30, 2004).
[31] GAO, Homeland Security: Responsibility and Accountability for
Achieving National Goals, GAO-02-627T (Washington, D.C.: Apr. 11,
2002).
[32] GAO, Homeland Security: Key Elements of a Risk Management
Approach, GAO-02-150T (Washington, D.C.: Oct. 12, 2001); and Homeland
Security: A Risk Management Approach Can Guide Preparedness Efforts,
GAO-02-208T (Washington, D.C.: Oct. 31, 2001).
[33] OMB Circulars A-11 and A-94.
[34] OMB, 2003 Report to Congress on Combating Terrorism (Washington,
D.C.: Sept. 2003).
[35] OMB Circular A-11.
[36] GAO, Homeland Security: Efforts to Improve Information Sharing
Need to be Strengthened, GAO-03-760 (Washington, D.C.: Aug. 27, 2003).
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