To amend title 31, United States Code, to improve the financial accountability requirements applicable to the Department of Homeland Security, to establish requirements for the Future Years Homeland Security Program of the Department, and for other purposes.

Summary: Department of Homeland Security Financial Accountability Act - (Sec. 3) Amends the Chief Financial Officer Act of 1990 and the Homeland Security Act of 2002 to direct the President to appoint a Chief Financial Officer (CFO) for the Department of Homeland Security (DHS), who is to report directly to the Secretary of DHS and to the Under Secretary for Management.

Removes the Federal Emergency Management Agency (FEMA) from the list of agencies required to have a CFO.

(Sec. 4) Amends the Reports Consolidation Act of 2000 to instruct the Secretary of DHS to: (1) submit a specified performance and accountability report, including an audit opinion of DHS internal controls over its financial reporting; and (3) design and implement DHS-wide management controls that reflect the national homeland security strategy of the Homeland Security Act of 2002, and that permit assessment by Congress and DHS managers of DHS performance in executing such strategy.

Requires performance and accountability reports for fiscal years after 2005 to include an assertion of the internal controls that apply to financial reporting by the DHS.

(Sec. 5) Amends the Homeland Security Act of 2002 to require the Future Years Homeland Security Program to: (1) include the same type of information, organizational structure, and level of detail as a certain future years defense program; (2) set forth the homeland security strategy that was used to develop program planning guidance for the Program; and (3) include an explanation of how the resource allocations included in the Program correlate to homeland security strategy.

(Sec. 6) Instructs the Secretary to establish an Office of Program Analysis and Evaluation. Creates the position of Director of Program Analysis and Evaluation.

(Sec. 7) Requires the CFO of DHS to notify simultaneously specified congressional committees whenever appropriations earmarked for DHS are either transferred or reprogrammed.

SECTION 1. SHORT TITLE.

    This Act may be cited as ``Department of Homeland Security 
Financial Accountability Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
        (1) Influential financial management leadership is of vital 
    importance to the mission success of the Department of Homeland 
    Security. For this reason, the Chief Financial Officer of the 
    Department must be a key figure in the Department's management.
        (2) To provide a sound financial leadership structure, the 
    provisions of law enacted by the Chief Financial Officers Act of 
    1990 (Public Law 101-576) provide that the Chief Financial Officer 
    of each of the Federal executive departments is to be a 
    Presidential appointee who reports directly to the Secretary of 
    that department on financial management matters. Because the 
    Department of Homeland Security was only recently created, the 
    provisions enacted by that Act must be amended to include the 
    Department within these provisions.
        (3) The Department of Homeland Security was created by 
    consolidation of 22 separate Federal agencies, each with its own 
    accounting and financial management system. None of these systems 
    was developed with a view to executing the mission of the 
    Department of Homeland Security to prevent terrorist attacks within 
    the United States, reduce the Nation's vulnerability to terrorism, 
    and minimize the damage and assist in the recovery from terrorist 
    attacks. For these reasons, a strong Chief Financial Officer is 
    needed within the Department both to consolidate financial 
    management operations, and to insure that management control 
    systems are comprehensively designed to achieve the mission and 
    execute the strategy of the Department.
        (4) The provisions of law enacted by the Chief Financial 
    Officers Act of 1990 require agency Chief Financial Officers to 
    improve the financial information available to agency managers and 
    the Congress. Those provisions also specify that agency financial 
    management systems must provide for the systematic measurement of 
    performance. In the case of the Department of Homeland Security, 
    therefore, it is vitally important that management control systems 
    be designed with a clear view of a homeland security strategy, 
    including the priorities of the Department in addressing those 
    risks of terrorism deemed most significant based upon a 
    comprehensive assessment of potential threats, vulnerabilities, 
    criticality, and consequences. For this reason, Federal law should 
    be amended to clearly state the responsibilities of the Chief 
    Financial Officer of the Department of Homeland Security to provide 
    management control information, for the benefit of managers within 
    the Department and to help inform the Congress, that permits an 
    assessment of the Department's performance in executing a homeland 
    security strategy.

SEC. 3. CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF HOMELAND SECURITY.

    (a) In General.--Section 901(b)(1) of title 31, United States Code, 
is amended--
        (1) by redesignating subparagraphs (G) through (P) as 
    subparagraphs (H) through (Q), respectively; and
        (2) by inserting after subparagraph (F) the following:
        ``(G) The Department of Homeland Security.''.
    (b) Appointment or Designation of CFO.--The President shall appoint 
or designate a Chief Financial Officer of the Department of Homeland 
Security under the amendment made by subsection (a) by not later than 
180 days after the date of the enactment of this Act.
    (c) Continued Service of Current Official.--An individual serving 
as Chief Financial Officer of the Department of Homeland Security 
immediately before the enactment of this Act, or another person who is 
appointed to replace such an individual in an acting capacity after the 
enactment of this Act, may continue to serve in that position until the 
date of the confirmation or designation, as applicable (under section 
901(a)(1)(B) of title 31, United States Code), of a successor under the 
amendment made by subsection (a).
    (d) Conforming Amendments.--
        (1) Homeland security act of 2002.--The Homeland Security Act 
    of 2002 (Public Law 107-296) is amended--
            (A) in section 103 (6 U.S.C. 113)--
                (i) in subsection (d) by striking paragraph (4), and 
            redesignating paragraph (5) as paragraph (4);
                (ii) by redesignating subsection (e) as subsection (f); 
            and
                (iii) by inserting after subsection (d) the following:
    ``(e) Chief Financial Officer.--There shall be in the Department a 
Chief Financial Officer, as provided in chapter 9 of title 31, United 
States Code.''; and
            (B) in section 702 (6 U.S.C. 342) by striking ``shall 
        report'' and all that follows through the period and inserting 
        ``shall perform functions as specified in chapter 9 of title 
        31, United States Code, and, with respect to all such functions 
        and other responsibilities that may be assigned to the Chief 
        Financial Officer from time to time, shall also report to the 
        Under Secretary for Management.''.
        (2) FEMA.--Section 901(b)(2) of title 31, United States Code, 
    is amended by striking subparagraph (B), and by redesignating 
    subparagraphs (C) through (H) in order as subparagraphs (B) through 
    (G).

SEC. 4. FUNCTIONS OF CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF 
              HOMELAND SECURITY.

    (a) Performance and Accountability Reports.--Section 3516 of title 
31, United States Code, is amended by adding at the end the following:
    ``(f) The Secretary of Homeland Security--
        ``(1) shall for each fiscal year submit a performance and 
    accountability report under subsection (a) that incorporates the 
    program performance report under section 1116 of this title for the 
    Department of Homeland Security;
        ``(2) shall include in each performance and accountability 
    report an audit opinion of the Department's internal controls over 
    its financial reporting; and
        ``(3) shall design and implement Department-wide management 
    controls that--
            ``(A) reflect the most recent homeland security strategy 
        developed pursuant to section 874(b)(2) of the Homeland 
        Security Act of 2002; and
            ``(B) permit assessment, by the Congress and by managers 
        within the Department, of the Department's performance in 
        executing such strategy.''.
    (b) Implementation of Audit Opinion Requirement.--The Secretary of 
Homeland Security shall include audit opinions in performance and 
accountability reports under section 3516(f) of title 31, United States 
Code, as amended by subsection (a), only for fiscal years after fiscal 
year 2005.
    (c) Assertion of Internal Controls.--The Secretary of Homeland 
Security shall include in the performance and accountability report for 
fiscal year 2005 submitted by the Secretary under section 3516(f) of 
title 31, United States Code, an assertion of the internal controls 
that apply to financial reporting by the Department of Homeland 
Security.
    (d) Audit Opinions of Internal Controls Over Financial Reporting by 
Chief Financial Officer Agencies.--
        (1) In general.--Not later than 180 days after the date of the 
    enactment of this Act, the Chief Financial Officers Council and the 
    President's Council on Integrity and Efficiency established by 
    Executive Order 12805 of May 11, 1992, shall jointly conduct a 
    study of the potential costs and benefits of requiring the agencies 
    listed in section 901(b) of title 31, United States Code, to obtain 
    audit opinions of their internal controls over their financial 
    reporting.
        (2) Report.--Upon completion of the study under paragraph (1), 
    the Chief Financial Officers Council and the President's Council on 
    Integrity and Efficiency shall promptly submit a report on the 
    results of the study to the Committee on Government Reform of the 
    House of Representatives, the Committee on Governmental Affairs of 
    the Senate, and the Comptroller General of the United States.
        (3) General accounting office analysis.--Not later than 90 days 
    after receiving the report under paragraph (2), the Comptroller 
    General shall perform an analysis of the information provided in 
    the report and report the findings of the analysis to the 
    committees referred to in paragraph (2).

SEC. 5. FUTURE YEARS HOMELAND SECURITY PROGRAM AND HOMELAND SECURITY 
              STRATEGY.

    Section 874 of the Homeland Security Act of 2002 (6 U.S.C. 112) is 
amended by striking subsection (b) and inserting the following:
    ``(b) Contents.--The Future Years Homeland Security Program under 
subsection (a) shall--
        ``(1) include the same type of information, organizational 
    structure, and level of detail as the future years defense program 
    submitted to Congress by the Secretary of Defense under section 221 
    of title 10, United States Code;
        ``(2) set forth the homeland security strategy of the 
    Department, which shall be developed and updated as appropriate 
    annually by the Secretary, that was used to develop program 
    planning guidance for the Future Years Homeland Security Program; 
    and
        ``(3) include an explanation of how the resource allocations 
    included in the Future Years Homeland Security Program correlate to 
    the homeland security strategy set forth under paragraph (2).''.

SEC. 6. ESTABLISHMENT OF OFFICE OF PROGRAM ANALYSIS AND EVALUATION.

    Section 702 of the Homeland Security Act of 2002 (6 U.S.C. 342) is 
amended by--
        (1) inserting ``(a) In General.--'' before the first sentence; 
    and
        (2) adding at the end the following:
    ``(b) Program Analysis and Evaluation Function.--
        ``(1) Establishment of office of program analysis and 
    evaluation.--Not later than 90 days after the date of enactment of 
    this subsection, the Secretary shall establish an Office of Program 
    Analysis and Evaluation within the Department (in this section 
    referred to as the `Office').
        ``(2) Responsibilities.--The Office shall perform the following 
    functions:
            ``(A) Analyze and evaluate plans, programs, and budgets of 
        the Department in relation to United States homeland security 
        objectives, projected threats, vulnerability assessments, 
        estimated costs, resource constraints, and the most recent 
        homeland security strategy developed pursuant to section 
        874(b)(2).
            ``(B) Develop and perform analyses and evaluations of 
        alternative plans, programs, personnel levels, and budget 
        submissions for the Department in relation to United States 
        homeland security objectives, projected threats, vulnerability 
        assessments, estimated costs, resource constraints, and the 
        most recent homeland security strategy developed pursuant to 
        section 874(b)(2).
            ``(C) Establish policies for, and oversee the integration 
        of, the planning, programming, and budgeting system of the 
        Department.
            ``(D) Review and ensure that the Department meets 
        performance-based budget requirements established by the Office 
        of Management and Budget.
            ``(E) Provide guidance for, and oversee the development of, 
        the Future Years Homeland Security Program of the Department, 
        as specified under section 874.
            ``(F) Ensure that the costs of Department programs, 
        including classified programs, are presented accurately and 
        completely.
            ``(G) Oversee the preparation of the annual performance 
        plan for the Department and the program and performance section 
        of the annual report on program performance for the Department, 
        consistent with sections 1115 and 1116, respectively, of title 
        31, United States Code.
            ``(H) Provide leadership in developing and promoting 
        improved analytical tools and methods for analyzing homeland 
        security planning and the allocation of resources.
            ``(I) Any other responsibilities delegated by the Secretary 
        consistent with an effective program analysis and evaluation 
        function.
        ``(3) Director of program analysis and evaluation.--There shall 
    be a Director of Program Analysis and Evaluation, who--
            ``(A) shall be a principal staff assistant to the Chief 
        Financial Officer of the Department for program analysis and 
        evaluation; and
            ``(B) shall report to an official no lower than the Chief 
        Financial Officer.
        ``(4) Reorganization.--
            ``(A) In general.--The Secretary may allocate or reallocate 
        the functions of the Office, or discontinue the Office, in 
        accordance with section 872(a).
            ``(B) Exemption from limitations.--Section 872(b) shall not 
        apply to any action by the Secretary under this paragraph.''.

SEC. 7. NOTIFICATION REGARDING TRANSFER OR REPROGRAMMING OF FUNDS FOR 
              DEPARTMENT OF HOMELAND SECURITY.

    Section 702 of the Homeland Security Act of 2002 (6 U.S.C. 342) is 
further amended by adding at the end the following:
    ``(c) Notification Regarding Transfer or Reprogramming of Funds.--
In any case in which appropriations available to the Department or any 
officer of the Department are transferred or reprogrammed and notice of 
such transfer or reprogramming is submitted to the Congress (including 
any officer, office, or Committee of the Congress), the Chief Financial 
Officer of the Department shall simultaneously submit such notice to 
the Select Committee on Homeland Security (or any successor to the 
jurisdiction of that committee) and the Committee on Government Reform 
of the House of Representatives, and to the Committee on Governmental 
Affairs of the Senate.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.