the subcommittee on management investigation and oversight will come to order the subcommittee is meeting today to receive testimony on creating one d h s part one standardizing department of homeland security financial management and good morning employees let me begin by stating that this subcommittee has rules and everyone is expected to follow those rules and one of those rules rule six section subsection d item one states that all testimony will be received no later than forty eight hours in advance of a hearing it appears that the department has had a hard time complying with this rule from time to time i know we we've had a discussion before the hearing started but this will be my last for a warning to the department all testimony will be received forty eight hours in advance of a hearing or it will not be accepted and i'd like to thank mr taylor and his daily for getting their testimony in on time and apologize that they needed to sit here while i admonish the  hearing is the first in a series of hearings the subcommittee of management investigations oversight will conduct regarding the department of homeland security's intention to create one d h s one d h s in part will be achieved by consolidating various operational functions from the legacy agencies into department wide systems it's been six years since the department was established it has yet to implement a department wide integrated financial management system receives billions of taxpayer dollars every year and to date has been unable to account for a majority of their appropriated funding the same way that other partners and agencies can today's hearing will examine the department's myriad financial management systems the steps the department is taking to unify its financial operations into one integrated standardize audits a ball system and best practices that will ensure that apartments accounting methodology will meet existing standards and protocols emerge to the department's initial attempt at financial management consolidation was unsuccessful unfortunately some three years and millions of dollars after the efforts ceased many of the problems experienced as part of emerge two are being experienced but the department's current effort the transformation and systems consolidation or task program the problems include integrating the department's myriad financial systems determining how the department can construct a system that will result in accurate and timely financial data and ascertain how the limited results emerged to fit within the department's current efforts final financial system an accounting system the department has yet to show that it is taking any of these recommendations into consideration today i hope to hear how it apartment will ensure that task is a success including a clear strategy that describes how it will be implemented and links to existing department business processes policies and legacy systems i want to thank the witnesses for their participation and look forward to their testimony will hear from the ranking member the gentleman from for chairman i appreciate very much i'm pleased a sub committee is meeting to consider the department of homeland security's financial management oversight in consolidation efforts the department homeland security currently has thirteen separate financial management systems down from nineteen it inherited when the departing was created in two thousand and three the separate financial systems result in inconsistent data across the department and employer contribute to the department's inability to obtain a clean audit of its financial statement with respect to task the past program i'm interested in learning more about the department's concept of operations and migration strategy i would also like to hear about the department plan for contract oversight this estimated cost of that task contract is four hundred fifty million dollars as well as with other large procurements at the deployment there is the possibility for cost  overruns it is also been just suggested that this estimate understates the total cost of this contract by the time the merge two was cancelled to do bomber had spent fifty two million dollars of the more than two hundred fifty million estimated the project costs while the g a o indicated that ending the program was prudent to cut losses the department was left with little to show after such a large expenditure is my hope that the department will use the lessons learned from emerge to to ensure that the funding for task is spent in the most efficient and effective way possible i will also know that while i'm poor and a consolidate financial system is not a silver bullet to fix the department's financial management issues the department must have strong internal controls in place and provide oversight over its people and process is to ensure compliance with the relevant policies that said i'd like to welcome our witnesses here today i look forward to your insights on all these issues and i want to thank the chairman thank you know you back the balance of my time thank you mr bell rock us seeing that the chairman and ranking member aren't here other members of subcommittee have reminded that under committee rules opening statements may be submitted for the record i want to welcome our witnesses our first witness is mr james l taylor who serves as a deputy inspector general for the department of homeland security mr taylor was selected as a deputy inspector general and october of two thousand and five he previously served as a deputy finance chief financial officer c f o and director for financial management at the department of commerce prior to his work at commerce mr taylor held the position of deputy chief financial officer at the federal emergency management agency fema where he was directly responsible for all financial operations with expenditures of four to ten billion dollars annually our second witness is miss kale daily news daily currently serves as a director for financial management and assurance issues at the government accountability office she is responsible for financial management system ems improper payments contracting cost analysis and health care financial management issues she led geos report on key cock key cases of financial management system modernization failures that highlighted the need to follow discipline processes in software implementation use affective human capital management and employ other i t management practices are third and final witness is missed tell you cheri the acting chief financial officer of the department of homeland security machinery joined the department in two thousand and seven as a director of the office of head of financial management and was responsible for developing department wide financial management policy leading the department's financial audits in preparing department wide financial reports prior to joining the department she served as a deputy chief financial officer for the united states holocaust memorial museum where she oversaw the successful conversion to the museum's new financial management system and instituted processes to obtain several unqualified audit options excuse me several  unqualified opinions on the museum's financials statements without object and the witnesses false statements will be a certain the record i now ask each witness to summarize for five minutes their statements begin chairman mr chairman ranking member the lockers and members of the committee thanks for the opportunity to appear before you today on behalf of the homeland security office of inspector general my testimony today will focus on the financial management challenges facing the department and  components and the progress made so far in addressing these challenges inspectors generals are required by law to annual report of the top management challenges facing the departments or agencies they oversee for d h as the office was better general has consistently place financial management high on that list however mixing financial management and d h s s require more than just focusing on this one area singularly rather d h just needs a continuous efforts to yes financial processes as well as two related areas hundred in addition d h s must strengthen how it manages information technology so it is able to develop and implement integrated systems to support redesigned financial processes finally d h us must address longstanding deficiencies in acquisition management to ensure it can acquire effectively the information technology needed to meet its financial national responsibilities d h s has worked hard to improve financial management of the last six years and  our relationship with the c f those of us in trying to meet these challenges however significant challenges do remain the department has consistently been unable to obtain an unqualified audit pinion or any audit opinion on its financial statements additionally the oh i g has to issue a separate opinion on internal controls d h s is the only federal department that is required to have a separate opinion audit opinion on internal controls that opinion has also been a disclaimer for the last few years in other words departments not yet at a point where any opinion can be rendered on either the partners financial statements or its internal controls or financial reporting obtaining unqualified opinions on financial statements and internal controls should not be the end goal rather should be a milestone in providing management stakeholders with useful timely financial data decision making the annual financial statement audit provides insight into the progress department's making resolving weaknesses and processes and systems and an essential part of the department's efforts to improve on a trip porting is improving the systems which compile and maintain financial information since two thousand and three i t gen controls have been evaluated as part of d h s s financial statement audit this review is included assessing systems are fragmented do not share data actively and over the years or develop security control weaknesses that undermine their overall reliability collectively the i t control weaknesses we identified limited d h s s ability to ensure that critical financial and operational data were maintained in such a manner to ensure competence geology integrity and availability in addition these witnesses negatively impact of the internal controls or d h s s financial reporting in its operation and we consider them to collectively represent material weaknesses d h has recognized the need to improve financial manager processes as well as the systems of support those processes toward that in the h s is moving ahead with the task system already mentioned in a prize wide initiative aimed at modernizing transforming integrating the financial acquisition and asset management capabilities of the h s components task is d h s s third attempt to address comprehensively its longstanding financial management process and systems problems the first known as emerge was cancelled december two thousand and five after d h s s spent millions on what d h s officials had a term in to be a failure the second effort ended after a successful court challenge these failures illustrate a critical need for close c f o c e o cooperation properly identify the requirements for any new system and the need for sound oversight of the process by trained and experienced contracts officers and specialists the latest effort is a high risk initiative that will take years to complete it is now estimated to cost in excess of a billion strategy and embrace disciplined processes to reduce risk in june two thousand and seven d h s officials announced a financial management system strategy called the task program and in january two thousand and nine review challenges to the task program regarding the six recommendations we made in june two thousand and seven our preliminary analysis analysis indicates the d h s s begun to take actions towards implementation of four of the recommendations but all six remain open we do recognize that da just cannot fully implement all of our recommendations until a contract is awarded because of its selected acquisition approach d h s has taken but not completed actions related to the task strategy and plan a concept of operations discipline processes and human capital practices and plans for such a system's implementation d h s s has not taken necessary actions on two remaining recommendations to standardize business processes across the department and to develop detailed consolidation and migration plans i would like to focus on d h as a strategy the strategy being taken by d h s does not appropriately consider whether the acquired system will provide the needed functionality for example the strategy does not require us to perform a gap analysis before the system is selected and to assess the extent to which co based system used in another agency has been customized studies have shown that when an effective gap analysis is not performed program offices and contractors of later discovered that the elected system lacked essential capabilit adding these capabilities later during implementation required expensive custom development and resulted in cost and schedule overruns that could have been avoided while updating the status of the six prior recommendations we also identified two issues that pose  necessary risk to the success of the test program the first issue is significant reliance on contractors to define and implement the program the department plans to have a selected contractor prepare a number of key plans needed to carry out discipline processes and define additional business processes standardize and propose a migration approach however d h has has not developed the necessary contractor oversight mechanisms to ensure that it significant reliance on  contractors does not result in an unfavorable outcome our work on other systems acquisition and implementation effort has shown that placing too much reliance on contractors can result in systems efforts plagued with serious performance and management problems the second issue we identified with that the contractor hired to perform verification and validation functions for tasks was not independent d h as management has agreed and they indicated they have restructured the contract to address our concerns and conclusion the chairman and the other members of the subcommittee six years after the department was established has yet to implement a department wide integrated financial system the open recommendations from our prior report continue to be vital to the success of the task program given the approach d h s s selected it will be paramount the d h has taken steps to minimize risk associated with its strategy and contractor oversight failure to do so could lead to acquiring a system that does not meet thank you again i'd like to apologize to the committee for forgetting my testimony and thank you for your indulgence and thank you chairman carney ranking member and members of the committee for the opportunity to testify before you on the department of homeland security's progress in plans to create one standardizing financial management mission is to lead a unified national effort to secure america this requires a unified department and an integrated approach across  varying operations including financial management as you know one of the secretary's top priorities is to unify the department and to create a calm and common culture one hundred one enterprise a shared vision with integrated results based operations we have many initiatives underway to continue to build the one called share including our commitment to strengthening internal controls and realigning business processes for improved efficienc effectiveness to this and i'd like to thank the congress for an act in the department of homeland security financial accountability act with the passage of the act we launched an ambitious effort to improve financial management and reporting and to build a internal controls are in place and working effectively the foundation for one strategy is to bring together the varying perspectives of d h just components to build a consolidated best practice approach to financial management as an example as financial reporting working groups were established recently to uniformly address financial management and business process challenges financial managers from the components work together to identify common areas of weakness such as accounting for property plant equipment or undelivered orders and instead of components developing individual action plans to address areas of common weaknesses across the department they now work together to find the best solution that can be used by all the components we continue to implement initiatives aimed at increasing financial management competencies this past fall we release the financial management policy manual this online manual provides department why guidance on budget formulation execution financial management accounting and reporting and introduces standardization throughout with a focus on strong internal controls we issued the third edition of the internal control playbook which outlines our strategy and processes to eliminate internal control weaknesses and to build management assurances to further unified financial management practices we are adopting a department wide standard accounting classification structure a common accounting line will improve our ability to capture and report financial information in a consistent and timely manner across the department d h just received a disclaimer of opinion in its fiscal year zero eight financial statements however for the third consecutive year audit results show we continue to make steady progress auditor's noted the department's progress in implementing corrective actions and improving the quality and reliability of our reporting arm all to your corrective action plans lead to reducing the number of material weaknesses from ten to seven to six in the past three years we also reduced the number of disclaimer conditions from ten to six to three in the past three years audit challenges remain but in more focused areas this year we partnered with the united states coast guard transportation security security administration and the federal emergency management agency to address audit disclaimer and material weaknesses condition as we make improvements on our financial reporting and strengthen the skills of our workforce we continue to move forward to consolidate our financial systems bringing forward lessons learned from our previous efforts currently as d h s s thirteen separate financial management systems the system support different process this different business processes numerous accounting lines and have varying levels of systems integration with many still relying on manual processes this often results in inconsistent in financial data his ability to efficiently and effectively manage an oversea our day to day operations and programs relies heavily on our ability to have financial management systems that produce complete reliable timely and consistent financial information for use by d h us managers and leaders although modernization is complex it is a critical element of instituting strong financial management as called for by the c f o act f f m i a the financial accountability act and other financial manager reform legislation as we work to address our financial management challenges challenges an increased transparency in reporting the extraordinary efforts of our dedicated staff at headquarters and in the components to becoming one and i am committed to pursuing financial management success in the department as we continue our progress to building one look forward to working with   now recognize myself for five minutes ms daly let's let's begin with you the news we heard is not good it seems like it especially accountability for taxpayers dollars and we're having a tough time with us from from your opinion you know is the news improving what needs to be done that hasn't been done yet and what sort of timeframe are we looking at for this for improvement for doing things in a standardized way that we have transparency accountability of taxpayers dollars attempts on the department of the department tried to have an integrated financial system it included a lack of identified requirements clear requirements that included a lack of adequate oversight capabilities the trained  contract specialist we talked about and it included as was mentioned by the committee the over reliance on contractors if those three things still exist in the department truly in a high risk environment for being able to plan anything successfully ultimately the solution failed on its inability to be able to integrate everything that is not this that is not the strategy the department is employing currently instead what we are doing is we are acquiring a solution that is thank you mr taylor the department decided that it was going to use commercial off the shelf for cots systems that is a good idea that's usually required by  i was i've been involved in the past and when you do your development you add a level of risk that most agencies are going to find unacceptable so that was not a good idea   agony i guess the department of homeland security is going through now in my own experience the department of commerce we went through this between one thousand nine hundred eighty seven and two thousand and three implementing a from a decentralized approach to a departments and agencies who provide these services so instead of having to do your own implementation you can purchase the support from those organizations instead of having to do this all yourself ok i think we have a problem with the timers here i imagine my time is about up i will recognize the ranking member from florida mr bill rockets or for five minutes and i guess i'll be the official timekeeper here with my twelve year old swiss army watch implement task other than just making me really busy has not had much of an impact or the undersecretary for management has been very engaged and i think is as you may or may not be aware we actually have a dot deputy undersecretary for management as well  engaged as well as very supportive with us when i go back to my my full time job or my regular job i will be on the deputy c f o also and this is clearly very important very important initiative and one that i will be primarily responsible for as we management you know having strong management with the secretary having been a former governor i think that she's a very strong executive leader and i think that she really understands and completely supports the objectives in the goals of my office is to to continue to standardize processes throughout the department and to really make financial management good financial management as basic you know every part of every day you know what it is that we do rather than something that we have to continue continually kind of come up and you know explain the reason why we're not doing very well speak to the total cost of what emerged two was her i know that the department had spent about fifty two million dollars before this before they actually stopped the stop the initiative that so i can take that for the record and possibly get back  o what controls you have in place to make sure the contract doesn't there are no overruns there there are several things that we've got in place currently and i completely agree with both the g a o as well as the i g to be able to say strong contractor oversight is paramount that will be paramount to the success of this initiative and i do believe that that may have been one of the failings also of the merge was the inability of the department to necessarily be able to make sure i had that oversight over the contractors my office in particular has been staffing up very heavily to have a very strong project management office we have worked with the other other large acquisition efforts within the department to be able to really have lessons learn from them to find out how we should structure our p m o office we talked a little bit about some of the other departments that have initiatives underway we've done heavy outreach with them to find out exactly what they not only what the lessons learned from a standpoint of what they've done well but also in particular what they haven't done well so that we can try to avoid those mistakes as well the other thing that we have within the department which is different i think than when we when the emerge an issue to it was was the gun is the stronger oversight throughout v h s for a large acquisition projects we have the management directive one zero two which really governors the acquisition review process where you have disciplined processes including con ops as miss daily  you have required documents that you must you know that the project must be able to have completed get reviewed and to have been accepted through the different chiefs throughout the throughout the department as well as through the deputy secretary and the acquisition community within as well as having a systems engineering lifecycle documentation and process that was really intended to review the acquisition and every step of the process so in other words and before you're able to go to a next particular that you are now recognize as my good friends new jersey mr pascal for five and chairman let me start by saying this that if we do not address the bureaucratic questions in homeland security by the next go around i want to commit to you mr chairman that i will not vote for one dime for the department i want to make it very clear right now and i want to agree with your opening remarks about we've heard a lot of this before is a bureaucracy that has become calmer some and i'm sorry mr talent we cannot make comparison to other departments because this department that we're talking about today has the responsibility as you know better than i know to secure the homeland this is a different you know you comparing apples and oranges and i and i really want us to focus in on the very nature and uniqueness of this department the demands that we place on homeland security are on productive and i can remember secretary shutoff sitting out there telling us enumerating how many committees his folks have to answer questions for it's ridiculous we haven't changed anything about that we're wasting your time most of the time when we fail to see our active in securing the homeland how many committees do you have to answer to mr taylor and you're still counting i'm sure yes sir we're counting on our fingers and toes right now ninety one ninety one committees now ninety one you made your request for the budget was fifty five billion dollars correct me if i'm wrong fifty five plus a lot of miss cherry on that is that correct yes or at the net numbers forty two point eight million we have a very serious problem here this is this is not going to go away with one committee hearing mr chairman i want to thank you for calling the hearing i really hope that people understand the importance of this topic clearly if we did a hearing on terror threats or vulnerabilities to attack would probably get more attention from the media in public and the public but i want to be clear when i say this one of the greatest threats to the nation's security is to be iraq or c itself we're finding an enemy that is not state based they don't have a large bureaucratic infrastructure of multiply layered control their greatest asset is the ability to operate in relative silence and to change direction quickly in order in order to attack our vulnerabilities a bloated homeland security bureaucracy is one i believe of our biggest vulnerabilities after the attacks of september the eleventh two thousand and one members of the congress from both sides of the push the bush administration to create this department i certainly think that was the right decision but if all we have done is to throw over one hundred federal entities together and call it a day well then i believe we've made our nation less safe and more say the whole point of creating a department of homeland security was not only to increase coordination which i think we may be getting better at but also to streamline the process by which a threat reported in the field can quickly and effectively get to higher command to take action this is what this should be all about i'm not convinced that we have cut down on these layers from top to bottom i'm not convinced at all few things make this point more clear than the fact that more than six and a half years after its creation the department of homeland security has yet to implement a department wide integrated financial management system six and a half years later if we can't even keep track of all the billions of dollars in tax payers funds that how can we find the access how can we find the waste time can we possibly get rid of the blow in the end of democracy how can we defend the republic  right if if this was about a specific threat to the homeland c n n would be here and we'd have a lot more coverage but this is actually is what government does you know this is the nuts and bolts stuff that no one pays attention to but is absolutely as important to protecting the homeland as a thing else that we do so we can't underestimate the importance of getting this right so you know we often heard that when in the private sector you would take organizations of the size that comprise now d h s s put them together it would be five to seven year transition to get them into one sort of unit we are at the six and a half folks you know this this is getting it's going to a point where we need to start asking the tough questions about are are we secure more secure than we have been i think we probably are but we've got to solidify we've got to have the foundations in place so to that end you know hearings like this occur the questions like these are asked you know folks like  mr bill rockets and mr pascal and i come and you know we want to make make it better for everyone missionary according to the most recent audit the department has taken very limited action toward within recognized standards and what we will do is based on all the information that we know currently without actually having without actually knowing the actual solution and what we will do is we will work to update all of them once we've actually awarded the really urine test morning express concern about the department's reliance i know you touched on this contract years for the implementation of task in most of the department has not developed contract oversight mechanisms i think the department could take a number of steps that are based on what the software engineering institute has recommended for these types of software and there's a number of tasks that they have plans to do but that we have not been formalized yet and a lot of these are very important i think seen at other agencies is that if these steps are not taken what can happen is the cost and schedule overruns that none of us want to occur  one of the key examples i can give you are things such as having a good testing plan in place what you often see on the system then it gets rolled out is that the people that are for the government are relying on the contractors to develop a good testing plan and the government officials need to understand what are the right testing steps to take so that a good comprehensive test is done that identifies all the defects so those defects can be addressed before they're rolled out those are the types of mechanisms we think would be important for the department to have in place can you comment on that thank you and we're in complete agreement with that i think that we have learned quite a bit since since then we're in complete agreement that we really do need to have strong contractor oversight and you know referring to some of the systems engineering lifecycle stats we are absolutely going to make sure that we incorporate all of them we will be working with a contractor on the testing plans we are not going to hand over simply to the contractor to be would be able to do the work for us it's somewhat different than the f b i net initiative again we're absolutely we will learn from those from the things that we did not do right and that initiative but this is not a development effort that what we are department is doing is we're acquiring an already integrated proven system that's that's working currently in the federal space so we do and we will know a lot about the system and we will not actually be developing the system but we are absolutely committed to being able to use all of those discipline processes such as making sure that you have a strong testing plan working with our science and technology group that has lots of expertise in this particular area and also as we come before acquisition review board having to prove to them before we're able to go on to the next steps that we in fact do you have solid tax plans thank you mr taylor the inspector general has done considerable work and the department financial management and european descent you probably have sufficient personnel and both the financial officers in the procurement offices to provide sufficient oversight over the system a system migration in the contract without any over reliance on contractors it's clear without speaking directly to task because we're working on that right now based on the work we've done previously we have a lot of concern about about that concerns because the component organizations  have skills deficiencies in those procurement as well as financial management so to layer a very comprehensive integration effort on top of that would be posing even more risk so we   i'm honored to have an opportunity to speak to the witnesses and thank you for being here today my concerns probably have been addressed and i apologize because we have a financial services hearing that's taking place and we have mis there and we have a host of others and we're obviously having to deal with some of the great issues of our time but this does not in any way excuse me from the issues that we have to contend with in homeland security they too are amo great issues of our time and i'm concerned about the means by which we can do some of the small things for example we had the tweak card shoot but we did not have a card reader it seems to me that that was something that did not necessitate a real study to know that if you're going to have the card and the reader it would probably be last time i checked we still didn't have a reader that would work with the cards and we're still exploring the possibility of acquiring a reader for cards that we have issued i remember when we had the former secretary here whom i do not in any in any way intend to demean but i do remember his commitments being made about the cards in the readers and we never actually got that done so little things like that leave an indelible memory such that it becomes difficult to to get a grip on how we can do some of these very complicated things if  we don't do these little things so let me ask for fear that i may have missed something we deployed the reader for the twenty cards i can find out for you sir i apologize i don't know that right off the top of my head i will find out and get back to you does it does a representative from g a o know congressman green i'm sorry i'm not aware of this that it's ok all right that's one example let's move to another  one t twenty eight i had the good fortune to be here while we had much said about t twenty eight most of what was said by way of witnesses was good in the sense that t twenty eight was supposed to provide us with a a model a prototype that was to at some point be replicated such that we would have this system that allowed us to have a merging of various security devices as well as something as simple as a fence such that we would be able to monitor our border effectively and that t twenty eight didn't quite work out as build after we would build a lot of money we spent a lot on t twenty eight and it is a little bit disappointing for us not to get the product that we pay for tax payers are demanding people and when we spend their money they'd like to see the results that are promised i'm not going to ask you to give me an update on t twenty i'm merely mentioning these things such that it can be i can provide you examples of how we we clearly can do better with better management better oversight and it is my hope excuse me it is my hope my sincere desire that we find a means by which we can have the g a o which plays an important role in this process g a o provide us with some of the acid tests that we ultimately will have to confront at the genesis of these operations as opposed to what appears from my perch to be an understanding that manifests itself after we get into revelations revelations a bad time to know what's expected of you you ought to know what is rick specks of you somewhere in genesis or  shortly thereafter so that you can perform and and maybe you'll get some sort of heavenly blessing as a result of that performance unfortunately we don't yet it seems to me the marriage between what g a  going to monitor and what the the contractors are going to do by way of performance we don't get that early enough in the process so i my my my hope is that we'll get that done and as a chairman  recommendations have been addressed sooner or later in the past couple of years except for one glaring oversight and that's what we're talking about i just gave one example before about how many committees they have to come before and how many divisions and and the total lack of coordination which does not help our intelligence apparatus one  financial management can you talk specifically towards my point and address how the new initiatives towards financial management will lend themselves to streamlining operations in a department of homeland security yes sir thank you for the question and i'm happy to address that this really this initiative really does speak to the one d h s s issues that i think that you're addressing as far as the bureaucracy i think that we recognize that is something of an issue that could potentially hold us back from operating efficiently and effectiveness effectively and that is something clearly that the secretary in a politician is aware of  several of the things that we're going to be able to do in this initiative that are outside of the actual other financial management initiatives that we have going on that i've mentioned such as the financial management policy manual you know having working groups where we're trying to come up with collective solutions to a common problem some of the things that this solution will do in addition to that will be to standardize business processes throughout the h s there are requirements there are physio standards were called to zero standards which is done by o m b and the g s a with input from the from the agencies that basically talk about best practices on how you do standard business processes throughout the government  and part one of the objectives of the f m l o b initiative of the o m b is to be able to make more standardization in some of those processes that you can standardize throughout the government such as paying a bill the idea that you're going to be paying a bill you really shouldn't be doing it in a bunch of different ways than what we currently have a d h s or you know the different components to pay bills differently and the reason they have to do that is because they maybe have different types of systems some of them have legacy issues that come along with them they have different integration so that in one instance you may have full integration so what you put in your man or you put in an award contract immediately populate your financial system and other components we don't have that what you do is you actually you put something into apartment system and then it's you rely on a manual transfer over into your financial system so the idea that we can have the inner gratian which will really bring about more of that one and the standardization of the processes and what comes along with that or internal controls the idea that you should have strong internal controls as as outlined in as has been validated through our a one twenty three process which is which is the federal government's equivalent to like sarbanes oxley where we go out there well management goes out there how are we doing business currently such as paying a bill and identifying with in each component what should we be doing should we be doing differently such as having addition to these other initiatives that we have ongoing will help bring about standardization in the department thank you mr taylor the g a o has had a management study homeland security made recommendations a serious would seem to me let me ask you this is this department manageable so i believe it is you believe it is my personal opinion i don't have a report to show you from the office says they conclude this is a manageable office we have done work on the organization of the department particularly before the second stage review that was conducted three years ago and we concluded there were inefficiencies that were some of which were addressed in second stage review we think the congress addressed some of the concerns when they mandated of your organization fema and grant programs within the department is department you know perfectly constructed in terms of efficiency is absolutely not but there are there has been progress since six and a half years ago towards making it more manageable so at this point you would say in what you've seen in what done and what the g a o has concluded that the department itself could be organized differently perhaps which is a problem with the results that we've gotten or would you say that like you know joy george kennan used to talk about democracy in that sense it was like a huge dinosaur and that needed to tail whacked once in a while and i think dinosaurs when i think of the homeland security department having been on this in this effort since nine twelve this i in my bone marrow this is important to protecting our neighborhoods i'm not so sure that we've created the right rector said i'm not so sure so i'm listening and reading what you have to missionary how much do you think it's going to cost to actually implement task for the independent government cost estimate is that four hundred fifty million dollars ok is daily care to comment on that our work has not examined the dollars that are associated with this effort yet but we plan to look into that more in our future work for the mr taylor in my testimony sir i mentioned a billion dollars that was a figure that was provided in testimony three weeks ago by the undersecretary for management and i think that includes being from the c f o side originally it depends on how you measure things the core financial system you're talking about  everything including all with all the components efforts depending on how you measure this the undersecretary for management saying it's a billion dollar effort so we're assuming it's a billion dollar effort so more than twice what  thinks prices depending on how you measure it yes or so are you telling me we can't even come up with a consistent definition or consistent measures of what we're trying to  tell you that the office has not been provided with an estimate and the definition of what the estimate includes can the i g s office tell me who is in charge of defining what it is we're trying to do here you know from from from my chair and from everybody in this room how do you get a delta that large rights are and what i can do is i can go back and see what the one billion was referring to but i think mr taylor is exactly right as far as  the question i answer and possibly i didn't answer the question correctly was the was the independent government cost estimate as it relates to migration and operation in which is really within the purview of this particular contract things such that that data center is not included in this number as well we do have a lifecycle cost estimate that we're working on and we are going to be sharing with ms daly as well as mr taylor which i believe again without  cost it includes it includes the implementation and it includes operation and maintenance for for for the for the implemented solution  is four hundred fifty million a reasonable price for what we're getting or i'm not sure i'm still not sure what that includes and so we have to look at what exactly is including a cost estimate which of course we have had a chance to review i  will say that what you're experiencing is the problem with these kinds of initiatives and what happens at the core financial system itself is just a small part of the activity and part of the cost when mr bell rock has asked me about the financial management than the components do they have the kind of resources necessary to carry this out we are concerned because in my personal experience the vast majority of the effort isn't hooking up a new box with new software the vast majority effort is involved in changing a business processes at the get the feature level of component level so that the information coming in makes sense not so that you're just having a really fancy way of computing bad data and that's where the costs are so any these are things that are outside of that four hundred fifty million dollars that i'm talking about because this is stuff that the federal workforce will be responsible for ensuring that we do stay on track so that when we are doing the migrations when we're doing the analysis to be able to determine what our requirements and we do know what our requirements are relative to what the solution is we make sure that we've got strong oversight of that we were standing we've stood up a program management office in my office it has all the different disciplines in it that are required such as change management that has you know we had c p a s we have project managers we have systems engineers we have data warehouse specialist business intelligence specialist so we've got those  we staffed up to be able to have those people within my office and we're working with the larger components to set up project management offices and to the idea to the competencies it'll be critical for them to be able to have their ability to be able to which would limit the risk to the department event of cost overruns if so why would you ultimately decide on the q yes or thank you very much for the question and i appreciate the opportunity to add one other point which i think i have not talked about and  believe your question here kind of leads into the idea that the department is absolutely undertaking a phased approach here so what we are not doing what they had done initially with the emerge where they tried to bring up the entire department all at once with with all these  thousand plus requirements that they gather we are doing this in a very phased approach and so with this contract will allow us to be able to do that service to be able to issue specific task orders so that we can do this within phased approach we have done an awful lot of outreach to agencies to like i said to learn the things that they're done well but also things that they wish that they could have changed and one of the things that we heard was that if you go right out of the box with with a firm fixed price contract there's a high likelihood sir that as they get in there and they start really understanding it and doing that analysis between what is it that you want versus what is it that the solution has in the things that you need to change that basically you end up with a lot of items that are simply out of scope so what you thought that you were getting with your firm fixed price alternately you end up just getting an awful lot of out of scope issues the way that contract is structured allows us to be able to work with the contractor in a phased approach starting with maybe one of the smaller entities and we learn not only does the contractor learn but the agency learns my p m o will be with them every step of the way and what we will do is we will learn and as we build on our knowledge and  well their performance moving even a large organization like them in a phased approach to a centralized system would probably still in the long run be in the best interest of that organization that said depending on how you plan this how you carry it out there migration to task i think it's premature to answer the question sir to be honest i mean because some of the findings are redundant by definition if you have three organizations with the same  three material witnesses then you only have consolidated three so you drop it from that standpoint but what we do is we take the component material witnesses and roll them up into a consolidated so assuming that the system had the proper internal controls and had and did the internal processing the way that they're identified and way planned then they would reduce a lot of the material weakness findings we have anyone else want to comment on that ok thank you very much august we have time for a few more questions  of how many committees these folks have to report and i just think it doesn't make any sense that that point with the leadership and we need to do we've been talking about you know around the edge about it and the other thing is the bureaucracy within the department itself we need to do something about it and and to establish maybe even take another look at how our committee system sets up within the homeland security committees subcommittees whether we are feeding the bureaucracy we started out by wanting to look into the various financial management systems throughout homeland security you need people in the department you're hired within the department have a lot to do about implementing the mission and your background before you come to the department this is unlike h h s and transportation and labor and all of those different departments because we're talking about paramilitary we're talking about security of the nation and the people we attract to the department are going to implement these financial mechanisms and systems but it would seem to me that we should spend a lot more time attracting people who have a background in security in the police in the military because this is the kind of operation that we need to defend the country we're going to debate numbers we're going to debate words which are most of the time meaningless unless we have results how do we best defend the homeland and when i mean to me that the people we hire in the department should have some background some knowledge of how military or civilian police operate and i would hope you would take that message back to the secretary because i have not had any indication so far in the last six months that that is the sense at the centerpiece of the people we're attracting into department you know and i hear all of this stuff mr chairman about quotas make sure we have all everybody's represented in the barman and i put my record up against anybody but if they don't know anything about security  guy's name can be part of this department and i would like to know what they are firing which is just a significant to me as the different financial mechanisms and all of the subdivisions of this the barman i don't want to minimize but i want to prioritize it's a major priority is who is operating so i want to thank the sleep folks for your service to your country did a great job of answering the questions a will adjourn momentarily here we have votes and i think we're at the end of the string on the cars far as the questions go we've seen a theme here we started to talk about task and financial management of the department and  moving in migrating to a different system but it doesn't take to me scrapes of the trial to really expose a lot of underlying problems here and  we are trying to get to an organization that is efficient and agile and we have one that is very inefficient very cumbersome and you know we take a lot on ourselves here in congress to try to get that certainly the subcommittee we try to do that  and i think you been able to determine the passion that many of us have for for this task at hand but you know we need good people focused on the right questions and please i admonish every one of you please let common sense prevail please i want to thank the witnesses for their testimony i imagine we'll see