DHS finds uniting systems difficult

If you want to track just how much the Homeland Security Department is spending on its own systems, take a number and get in line.

With exemptions from two major laws dealing with managing government agencies, DHS is considered a high-risk department, according to the General Accounting Office. It's often hard to determine how DHS is spending money, and the solution may be nowhere in sight, agency officials said.

"Creating strong financial management at DHS is particularly challenging because most of the entities brought together to form the department have their own financial management systems, processes and, in some cases, deficiencies," GAO officials said in a report released Sept. 10 on the challenges DHS is facing in establishing sound financial management.

Adding to its woes, four of the seven major agencies transferring to DHS this year reported 18 material weaknesses in internal controls for fiscal 2002, and five of the seven had financial management systems not subject to the Federal Financial Management Improvement Act (FFMIA) of 1996.

"DHS should not be the only Cabinet-level department not covered by what is the cornerstone for pursuing and achieving the requisite financial management systems and capabilities in the federal government," the GAO report states.

That's just one of the department's many headaches. Auditors found that the Transportation Security Administration did not maintain complete or accurate records of its passenger-screening equipment — most notably its Explosive Detection System.

And a significant amount of assets were not recorded in TSA's financial system, requiring an adjustment of $149 million to the record. Meanwhile, auditors found that one subcontractor involved with hiring airport screeners for $18 million had between $6 million and $9 million in wasteful and abusive spending practices.

Altogether, the department has 83 financial management systems, few of which are integrated. Some are outdated and too expensive to maintain, according to Bruce Carnes, chief financial officer at DHS.

Beginning Oct. 1, the agency is consolidating the number of financial processes from 22 to 10 and shifting the workload to in-house financial support service units, he said. And in November, DHS is supposed to release its fiscal 2003 financial statements, two months ahead of schedule.

Although it's hardly enough to create a seamless system out of countless silos, Carnes said DHS is determined to create a single suite of financial management systems. The objective is to develop the business equivalent of a Global Positioning System, he added.

"Just as we have consolidated border and transportation security functions, merged response activities, integrated terrorist threat intelligence, and coordinated homeland security research and development efforts, I believe we must, with equal vigor, transform our business practices and systems," he said.

Congress takes a tougher view on all of this disorganization. Rep. Todd Platts (R-Pa.), chairman of the House Government Reform Committee's Government Efficiency and Financial Management Subcommittee, said DHS' creation is a "test of our management and leadership."

"DHS must create an entirely new organizational culture with little precedent, performing functions that were practically ignored in the past but have now become a national priority," Platts said.

Nevertheless, he said the agency must do more than just a "bureaucratic reshuffling." It must take advantage of new efficiencies in budgeting, resource allocation and financial management to deal with its problems.

Legislation introduced by Platts would put DHS squarely under the Chief Financial Officers Act and FFMIA. Under these laws, DHS would face tougher scrutiny of its financial management.

The agency would have to obtain opinions on its internal controls and include program performance information in its accountability reports. DHS would also be required to give Congress reliable financial, cost and performance information during the year. But passage of such reforms is not likely this year, according to congressional observers.

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CFO for DHS

Rep. Todd Platts (R-Pa.) has introduced the Department of Homeland Security Financial Accountability Act (H.R. 2886), which would make DHS an agency under the Chief Financial Officers Act.

The act requires the following:

* The president would appoint or designate a chief financial officer for the agency.

* DHS would have to undergo an audit of the financial systems and processes it uses.

* The agency would be required to include program performance information in its performance and accountability reports. n

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