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FCW Insider: The future of LOBs

The Bush administration has made a big push for the lines of business, which are essentially shared service centers. But the Government Accountability Office this morning has posted its determination about whether DHS's "use of shared services within the Preparedness Directorate and its compliance with appropriations law and the proper use of the Economy Act."

I'm literally printing it out right now, but if the actual determination is anything like what is below, GAO seems to be saying that shared services violate appropriations rules.

B-308762, Department of Homeland Security's Use of Shared Services within the Preparedness Directorate, September 17, 2007 http://www.gao.gov/decisions/appro/308762.htm

The conference report accompanying the Department of Homeland Security Appropriations Act for fiscal year 2007 directed the Government Accountability Office (GAO) to review the Department of Homeland Security's (DHS) use of shared services within the Preparedness Directorate and its compliance with appropriations law and the proper use of the Economy Act.

In a legal opinion in response to this directive, GAO found that the Preparedness Directorate pooled its appropriations to fund what it refers to as shared services. Pooling funds across appropriations is a form of transfer, and, unless otherwise authorized by law, transfers of funds between agency appropriation accounts are prohibited by law. The Preparedness Directorate had authority, pursuant either to the Economy Act or to the "account adjustment" statute, to pool appropriations to fund shared services. The directorate, however, did not enter into valid Economy Act agreements. In addition, it appears that the directorate did not properly record allocated charges against each of the benefiting appropriations, as required by the account adjustment statute. DHS should adjust the expired fiscal year 2006 directorate appropriations so that each benefiting appropriation is charged for the value received. If any of the appropriations that funded the directorate do not have available unobligated balances to cover the adjustments, the directorate should report an Antideficiency Act violation.


Stay tuned.

Posted on Sep 21, 2007 at 12:17 PM


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