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TRANSFORMING THE DEPARTMENT OF

HOMELAND SECURITY THROUGH

MISSION-BASED BUDGETING

HEARING

BEFORE THE

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

JUNE 29, 2005

Serial No. 109–28

Printed for the use of the Committee on Homeland Security 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html
COMMITTEE ON HOMELAND SECURITY 

CHRISTOPHER COX, California, Chairman 

DON YOUNG, Alaska 

LAMAR S. SMITH, Texas 

CURT WELDON, Pennsylvania, 

CHRISTOPHER SHAYS, Connecticut 

PETER T. KING, New York 

JOHN LINDER, Georgia 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

JIM GIBBONS, Nevada 

ROB SIMMONS, Connecticut 

MIKE ROGERS, Alabama 

STEVAN PEARCE, New Mexico 

KATHERINE HARRIS, Florida 

BOBBY JINDAL, Louisiana 

DAVE G. REICHERT, Washington 

MICHAEL MCCAUL, Texas 

CHARLIE DENT, Pennsylvania 

BENNIE G. THOMPSON, Mississippi 

LORETTA SANCHEZ, California 

EDWARD J. MARKEY, Massachusetts 

NORMAN D. DICKS, Washington 

JANE HARMAN, California 

PETER A. DEFAZIO, Oregon 

NITA M. LOWEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

ZOE LOFGREN, California 

SHEILA JACKSON-LEE, Texas 

BILL PASCRELL, JR., New Jersey 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

KENDRICK B. MEEK, Florida 

SUBCOMMITTEE ON MANAGEMENT, INTEGRATION AND OVERSIGHT

MIKE ROGERS, Alabama, Chairman 

CHRISTOPHER SHAYS, Connecticut 

JOHN LINDER, Georgia 

TOM DAVIS, Virginia 

KATHERINE HARRIS, Florida 

DAVE G. REICHERT, Washington 

MICHAEL MCCAUL, Texas 

CHARLIE DENT, Pennsylvania 

CHRISTOPHER COX, California (Ex Officio) 

KENDRICK B. MEEK, Florida 

EDWARD J. MARKEY, Massachusetts 

ZOE LOFGREN, California 

SHEILA JACKSON-LEE, Texas 

BILL PASCRELL, JR., New Jersey 

DONNA M. CHRISTENSEN, U.S. Virgin Islands 

BENNIE G. THOMPSON, Mississippi (Ex Officio)

(II) 
(III)

C O N T E N T S

Page 

STATEMENTS

The Honorable Mike Rogers, a Representative in Congress From the State 

of Alabama, and Chairman, Subcommittee on Management, Integration, 

and Oversight ....................................................................................................... 1 

The Honorable Kendrick B. Meek, a Representative in Congress From the 

State of Florida, and Ranking Member, Subcommittee on Management, 

Integration, and Oversight .................................................................................. 2 

The Honorable Donna Christensen, a Delegate in Congress From the U.S. 

Virgin Islands ....................................................................................................... 36 

The Honorable Charlie Dent, a Representative in Congress From the state 

of Pennsylvania .................................................................................................... 31

The Honorable John Linder, a Representative in Congress From the State 

of Georgia .............................................................................................................. 29

WITNESSES 

PANEL I 

The Honorable David M. Walker, Comptroller General of the United States 

Government Accountability Office: 

Oral Statement ..................................................................................................... 3

Prepared Statement ............................................................................................. 5

PANEL II 

Mr. Jonathan B. Breul, Partner, IBM Business Consulting Services, Senior 

Fellow, IBM Center for The Business of Government: 

Oral Statement ..................................................................................................... 41

Prepared Statement ............................................................................................. 42

The Honorable Maurice P. McTigue, Director, Government Accountability 

Project, Mercatus Center, George Mason University: 

Oral Statement ..................................................................................................... 37

Prepared Statement ............................................................................................. 39

Mr. Carl J. Metzger, Director, Government Results Center, Grant Thornton 

LLP: 

Oral Statement ..................................................................................................... 45

Prepared Statement ............................................................................................. 46

A P P E N D I X 

ADDITIONAL QUESTIONS AND RESPONSES

Questions from Hon. Kendrick B. Meek: 

Mr. Jonathan D. Breul Responses ...................................................................... 57

Hon. Maurice P. McTigue Responses ................................................................. 58

Mr. Carl J. Metzger Responses ........................................................................... 59

(1)

TRANSFORMING THE DEPARTMENT 

OF HOMELAND SECURITY THROUGH 

MISSION-BASED BUGETING 

Wednesday, June 29, 2005

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

SUBCOMMITTEE ON MANAGEMENT, 

INTEGRATION, AND OVERSIGHT, 

Washington, DC. 

The subcommittee met, pursuant to call, at 3 p.m., in room 210, 

Cannon House Office Building, Hon. Mike Rogers [chairman of the 

subcommittee] presiding. 

Present: Representatives Rogers, Linder, Dent, Meek, and 

Christensen. 

Mr. ROGERS. [Presiding.] This meeting of the Subcommittee on 

Management, Integration, and Oversight will come to order. 

I would first like to thank the Comptroller General of the United 

States as well as our other distinguished witnesses for taking time 

out of their busy schedules to join us here today. 

The hearing will focus on the use of mission-based budgeting as 

a way to help transform and strengthen the Department of Homeland Security. Under the Homeland Security Act of 2002, several 

core mission areas were established for the Department’s management effort. 

These missions include preventing terrorist attacks, reducing the 

vulnerability of the United States to terrorism, and minimizing the 

damage from terrorist attacks and assisting in recovery efforts. 

As an agency that began life as a hodgepodge of 22 separate components, DHS would benefit greatly from mission-based budgeting. 

This tool would help focus the Department’s scarce resources on activities in these mission areas. 

It would also help transform the agency into an integrated organization focused on its core mission of homeland security. And finally, it would help ensure one of the Federal Government’s largest 

and most important agencies is spending limited tax dollars wisely. 

We are pleased to have with us today witnesses to discuss the 

Department’s current spending methods and priorities. Our first 

panel will include Hon. David Walker, Comptroller General of the 

United States. 

Mr. Walker has over 20 years of experience working with the 

budget process, and I hope he will shed some light on the best 

ways of prioritizing spending. He also plans to discuss the Depart-
2

ment’s resource management and comment on ways to improve 

overall accountability. 

Our second panel includes several experts on Federal budgeting 

from the private and non-profit sectors. These experts will bring to 

the table lessons learned by other Federal departments that could 

be applied to DHS. 

And, of course, we will look forward to hearing from this panel 

how the Department can transform and integrate itself through 

mission-based budgeting. Once again, I would like to thank the witnesses for joining us today, and I look forward to their testimony 

on an important topic. 

And I now yield to my friend and colleague from Florida, the 

ranking member, Mr. Meek. 

Mr. MEEK. Thank you, Mr. Chairman. I am excited about being 

here once again on our subcommittee that we have here dealing 

with the department that I think is one of the most vital agencies 

and departments of the Federal Government. 

And it goes toward the homeland. It also goes toward the—of 

making sure that we protect the homeland for future generations. 

Mr. Chairman, I must add that every time we have a subcommittee hearing I think it is important that the Department of 

Homeland Security is present, and I know that they are going 

through their 90-day review, and the second phase of the review, 

and I understand Secretary Chertoff is going to be making some 

announcements pretty soon about his review. 

But I think it is important that we continue to do the things that 

we are doing, Mr. Chairman, getting the facts and lining it up so 

when the Department of Homeland Security is ready to start answering some of the tough questions before this committee—not in 

the way of saying they are not doing their job, but just saying that 

they are about finding answers to some of the problems that we are 

actually unveiling, not only within other governmental agencies but 

also as it relates to the private sector that has come forth and 

shared new ideas and concerns. 

And I know that you are in concert in making sure that we make 

this department as tight as possible, especially when we start talking about the taxpayers’ money. 

I also have to point out the fact that we have some good people 

over at the Department of Homeland Security. We know that it has 

its problems—22 legacy agencies that had their issues as it relates 

to management from the forefront and from the beginning. 

But I think, Mr. Comptroller, I am so glad to have you here 

today because, as you are aware, the GAO has designated DHS as 

a high-risk agency, an agency that—noting that DHS faces a number of management challenges to improve its ability to be able to 

carry out its duty as it relates to homeland security agency. 

Amongst those challenges are the need to provide a focus for 

management efforts and the need to improve strategic planning. 

The GAO also went on to note that DHS’s failure to effectively address its management challenges and program risks could have serious consequences for our nation’s security. And that is serious 

business, when we start talking about protecting the homeland. 

Also, as it relates to our second panel, I, too, join in with the 

chairman and thank you for taking time out of your schedule to 
3

come and share best practices that have already been effective in 

other Federal agencies. 

We have a lot to do and a short time to do it. And your testimony 

today is going to be very, very helpful to us, especially after Secretary Chertoff completes his second phase of his review, and start 

coming up with a plan of action so that we can legislate in a way 

that will protect not only the homeland but also protect it for future generations to come. 

Mr. Chairman, I look forward to hearing fruitful and thoughtful 

testimony. Thank you for having this hearing. 

Mr. ROGERS. I thank the gentleman. I would like to remind our 

witness that your entire statement will be put into the record, so 

if you could limit your oral statement to 5 minutes that would give 

us more time for question and answer interaction. 

I call the first panel and recognize Hon. David Walker, Comptroller General of the United States, for your statement. 

STATEMENT OF THE HONORABLE DAVID WALKER 

Mr. WALKER. Thank you, Mr. Chairman, Mr. Meek. It is a pleasure to be before this subcommittee to talk about the Department 

of Homeland Security and how it can use performance budgeting 

and risk management principles in order to maximize program performance in an environment of increasing fiscal constraints. 

If I can, Mr. Chairman, let me offer a proposed definition for mission-based budgeting. I think it is important to not just focus on 

what we call it but what we are trying to achieve. I would offer a 

mission-focused, results-oriented and outcome-based budgeting approach that is designed to maximize value and mitigate risk within 

current and expected resource levels. 

I think all of those dimensions are important. In that regard, as 

you and Mr. Meek know, our nation currently faces serious longrange structural deficits that ultimately we are going to have to address. 

While we have been adding additional resources to homeland security for understandable reasons, it is unrealistic to expect that 

we are going to be able to continue to add resources at the rate of 

increase that we have in recent years. 

Therefore, it is very, very important that we properly allocate 

those resources to achieve the most positive results and mitigate 

the most risk, recognizing that there is no such thing as zero risk 

in today’s world, and yet at the same point in time there are finite 

limits as to how much resources that we have to commit. 

We have done quite a bit of work dealing with the Department 

of Homeland Security in a variety of areas. Mr. Meek is correct in 

saying that we put the Department of Homeland Security’s transformation effort on our high-risk list. However, it is not the entire 

department. 

It is the effort to combine 22 different agencies, many of which 

did not have homeland security as their central mission before September 11, 2001. This involves making sure that they are operating 

as a cohesive and effective whole, consistent with the principle that 

I talked about before. 

Our view is that while the Department of Homeland Security has 

made some progress with regard to strategic planning, and while 
4

it is starting to use risk-based concepts and performance-based approaches to a greater extent than it did prior to the creation of the 

Department, more needs to be done, especially in light of the environment that we are in at the present point in time. 

We believe that, as our latest high-risk series notes, additional 

emphasis has to be taken to employ risk management principles in 

determining how resources will be allocated and to try to achieve 

more specifically defined results or outcomes consistent with the 

missions that are laid out in the statute. 

There are some agencies that are using risk management concepts to a greater extent—for example, the Coast Guard, the Customs and Border Protection Service, TSA, as well as the Customs 

Enforcement Office of Investigations. They have taken some initial 

steps to try to use some of these concepts, but we think much more 

needs to be done. 

Furthermore, I think it is fair to say, Mr. Chairman, that Congress has a critically important role to play, not only with regard 

to the oversight process—and I commend this committee and subcommittee for discharging its related responsibilities—but also with 

regard to the authorizing and appropriations functions. 

As my statement notes approximately 40 percent of the $5.1 billion in statewide homeland security grant funds that were awarded 

for fiscal years 2002 through 2005 were shared equally among the 

50 states, the District of Columbia, the Commonwealth of Puerto 

Rico and certain U.S. territories. 

The remaining amount was distributed according to state populations. Therefore, by definition, during this period of time we were 

not employing a risk-based approach to resource allocation. 

I think it is very important to look for not only ways that the 

Department of Homeland Security can take a more strategic, performance-oriented and risk-based approach to discharging its responsibilities, consistent with the statutory requirements, but I 

think that Congress also has to think about whether and to what 

extent it should be employing different approaches in how those 

funds are allocated in order to achieve the best results, and mitigate the most risk with available resources. After all, the crunch 

is coming from a budget standpoint. 

Thank you, Mr. Chairman. 

[The statement of Mr. Walker follows:]
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Mr. ROGERS. I thank the gentleman. 

At the conclusion of your remarks, you said Congress needs to do 

more. Specifically give me a couple of examples. 

Mr. WALKER. As you know, Mr. Chairman, there is a lot of 

money that is allocated to homeland security, most of which relates 

to the Department of Homeland Security, but not all of it does. 

The example that I include in my testimony on page 15 talks 

about during the period 2002 to 2005, there were certain statewide 

homeland security grant funds, and those funds were not allocated 

based upon any risk-based approach. 

It was more of an equitable distribution of those funds to make 

sure that we spread the money broadly rather than taking a more 

risk-based approach for determining how the money should be allocated. We also need to understand how the money was used and 

whether or not it resulted in mitigation of risk and a positive outcome. 

Mr. ROGERS. So when you say we should do more, are you first 

and foremost recommending that we go completely to risk-based 

distribution? We made a successive approximation this year with 

our authorizing legislation, but you want to see it be 100 percent? 

Mr. WALKER. I think you should do as much as you believe you 

can comfortably achieve, given the fact that the Congress ultimately has to be able to achieve enough consensus to pass the bill. 

As we all know, under the Constitution, every state gets two senators and has a representative number of members in this House, 

and so you may need to have some amount of funds that end up 

getting allocated to each state. However, I think you should maximize the amount of funding that can be allocated based upon risk, 

especially given the fact that funding is likely to become more difficult in the years ahead. 

Mr. ROGERS. I understand that the CIA currently uses missionbased budgeting. Do you know of any other Federal agencies you 

could offer us as good examples of how it works? 

Mr. WALKER. None that I can think of off the top of my head that 

meets the definition that I just said, other than GAO. 

I would also note that we have not done work in the CIA for a 

long time. While they may assert that they use mission-based 

budgeting, I am not sure that, in reality, if you looked at it closely, 

that would be the case. I can’t say one way or the other. 

Mr. ROGERS. You made reference a little while ago about how 

mission-based budgeting could help make sure that we spread 

scarce resources more effectively, and you talked about being able 

to look at the results. 

Is analyzing the results an essential component of mission-based 

budgeting, or is mission-based budgeting going to be primarily beneficial by allowing to conceptually know where we are putting our 

resources? Or do you have to have this results component as well? 

Mr. WALKER. I would respectfully suggest, Mr. Chairman, that 

we need all of the components that I laid out in my proposed definition. I can briefly restate that—I think it needs to be mission-focused, results-oriented, and outcome-based, that is designed to 

maximize value and mitigate risk within current and expected resource levels. 
27

Those all involve tradeoffs. The Government as a whole has a lot 

of very capable people doing a lot of very good work, but in the 

final analysis we have to be able to demonstrate what type of results are being achieved with the resources—both financial, 

human, technological, and others—that are being given, especially 

given increasing budget pressures. 

Mr. ROGERS. If you were to tell somebody in a nutshell—you are 

in rural Alabama, you stop at a gas station, and you are trying to 

tell Joe Blow why mission-based budgeting is beneficial. What 

would be the simple answer as to why we should do it? 

Mr. WALKER. Of course, I was born in Alabama, and I may have 

stopped at that gas station at some point in time, Mr. Chairman. 

Mr. ROGERS. I knew—

Mr. WALKER. But I think the reason that we need to achieve the 

definition that I stated is because we face large and growing structural deficits. We have unlimited demands but limited resources. 

We need to make sure that we are doing everything that we can 

to mitigate as much risk as possible while maintaining economic 

growth—

Mr. ROGERS. What do you mean—

Mr. WALKER. —and minimizing tax burden. 

Mr. ROGERS. —when you say mitigate resources? 

Mr. WALKER. Mitigate risk. 

Mr. ROGERS. OK. 

Mr. WALKER. Mitigate risk. There is no such thing as zero risk 

in today’s world. You could allocate whatever amount of money you 

decided to allocate. We will always have risk. 

Yet at the same point in time, given resource constraints, we 

need to use whatever money that we have in a very targeted fashion, and we need to understand what difference is being made with 

those funds. 

Mr. ROGERS. I thank the gentleman. My time is expired. 

I now yield to my friend and colleague from Florida, Mr. Meek, 

for any questions he may have. 

Mr. MEEK. Mr. Chairman, you were marching down the street 

that most Americans are trying to figure out what we are talking 

about, and what does this really mean. 

And I am glad in your testimony that—most of it you entered for 

the record, but you tried to address some of the finer points of the 

reason why we are having this hearing today. 

And I know that it will even get more crystal when we move to 

the second panel about exactly the benefits of having the Department of Homeland Security being the agency that is responsible for 

prevention and also protection and response. 

It is very difficult to be able to foresee some of the issues that 

the department will be facing. And if they are facing it, then America would be facing it. 

I have a question for you—actually, the question prior to our 

meeting—that I just need an answer to. And we know the department has basically three primary issues here. That is prevention, 

prevent terrorist attacks within the United States, reduce America’s vulnerability to terrorism and minimize the damage from potential attacks and natural disasters, I must add. 
28

Is it fair to say that a comprehensive plan or a strategy that is 

designed to fulfill the mission of each of the prongs of the agency 

as relates to its mission statement, or the reasons why they are in 

business in the first place, before we can arrive at what you may 

call a mission-based budget framework—basically, the question is 

what is the relationship between mission-based budgeting and the 

department’s ability to craft a strategic plan and carry this mission 

out? 

I am trying to figure out how can we actually get the department 

up to a B or a C-plus as it relates to mission-based budgeting. And 

I am asking a question on top of a question—more of a statement, 

because I believe it is a good lead-in. 

When you look at this, and you start looking at the deficit, and 

you start looking, like you say, at future years, the way I see it 

now, as a member of Congress—also, a member of the Armed Services Committee—this is fighting terrorism, the early years. 

And I believe the department is going to continue to grow funding-wise. I think that there is a movement here in Congress to 

make the department more of an assistance to local government 

and state government versus just being a big grant operation and 

continuing to, you know, roll down that avenue, and that is going 

to be very expensive. 

How can we bring it under control as it relates to those mission 

statements that I mentioned, and not knowing what the future 

may hold? 

Mr. WALKER. Well, Mr. Meek, first, I think we have to keep in 

mind that there are several different definitions of mission for the 

Department of Homeland Security. You have several in the statute. 

The three that you mentioned are clearly in the statute. 

There are a number of other areas that are mentioned in the 

statute as well, because the statute also says that the Department 

of Homeland Security is supposed to continue to discharge the responsibilities that the various 22 agencies were discharging prior 

to its creation. 

Therefore, while you might expect that a disproportionate 

amount of their time and attention and resources would be focused 

to the three critical objectives that you talked about, they also need 

to make sure that they define what objectives they are trying to 

achieve with regard to their other missions that existed prior to 

September 11th. 

There is the Homeland Security Act and the National Homeland 

Security Strategy, which covers those three. There is also the DHS 

strategic plan which needs to cover everything that is in the Homeland Security Strategy as well as the Act of 2002. 

As you know, GPRA, the Government Performance and Results 

Act, which was passed in the early 1990’s, provides a framework 

for moving forward here. It provides for strategic planning. It also 

provides for annual performance and plans. It also provides for annual performance and accountability reports. 

In addition to using those existing statutory mechanisms as a 

way to try to bring this alive, I also think we have to look at the 

appropriations process, what type of budgets are being submitted 

as part of the appropriations process, and how we can help assure 

that it is a supplement to, not a substitute for, the information that 
29

the appropriators are used to getting. They need to get appropriate 

information along the lines of what I am talking about to help 

them make more informed decisions in resource allocation and to 

help them understand what is working and what is not working. 

We also have to keep in mind that we should not just look within 

the Department of Homeland Security, but there are other players 

on the field dealing with homeland security, and we can’t forget 

about that. We also need to understand what other players are 

doing to try to achieve these overall objectives, even though they 

may not be within the Department of Homeland Security. 

Mr. MEEK. Just one last question for you, because I know we 

have to get to another member and the second panel. It is going 

to be a serious balancing act. And as we educate ourselves, not only 

as a subcommittee but a committee in general, when you are looking at Department of Homeland Security, you have to look at not 

only the issue of performance but priority, but also politics. 

And all of that comes together, and when it comes together, it 

is really something to deal with, because nine times out of 10 what 

we are trying to avoid is being in shock mode, like we were on 9/

11 without the Department of Homeland Security, looking at the 

needs of the country, looking at making sure that we can be able 

to draft legislation that will be able to have a department that can 

be responsive, not only in a time of emergency and prevention but 

also fiscally responsible in how it deals with its programming and 

also monitor making sure that the people of the United States of 

America is getting its money’s worth, because the confidence of the 

department is at stake not only within but without, outside with 

Americans, how they feel about the department as it goes to protect the homeland, which is its primary mission. 

Mr. WALKER. I think a key point here, real quickly, Mr. Meek, 

is you have got to have a plan. You have got to set priorities. You 

have got to target resources where you think you are going to have 

the maximum positive effect and mitigate the most risk. 

They need to have results-based outcomes that they are focusing 

on, because otherwise if you don’t have that approach, the assumption is that if you give more money, you are going to get more results. That is false. That is not necessarily true. 

We have many Federal Government programs and tax policies 

where we assume that if we do more, we are going to get better 

results, when in reality we don’t even know what results we are 

getting with what we have right now. 

Mr. ROGERS. I thank the gentleman. 

The chair now recognizes the gentleman from Georgia, Mr. Linder, for any questions he may have. 

Mr. LINDER. You said early on that the risk in this Department, 

or the difficulties in this Department, is not the Department itself 

but the effort to combine 22 agencies. Isn’t that the Department? 

Mr. WALKER. That is clearly one of the risks. One of the reasons 

that it is on the high-risk list is because it is an amalgamation of 

22 different entities, with different systems, different cultures, et 

cetera, many if not most of which—in fact, were not primarily focused on protecting the homeland before the creation of this Department. 
30

So, yes, that is the Department, and they are a key player. But 

my only point is there are some things that go well in the Department. I hate to put a department on the high-risk list, because that 

indicts anything and everybody associated with the department. I 

would rather put a program, a function or activity rather than a 

department. 

Mr. LINDER. Have you done any analysis of any parts of the Department yet? 

Mr. WALKER. Oh, we have, Mr. Linder. We are doing work at the 

request of this committee and others all the time with regard to 

homeland security. 

Mr. LINDER. Have you done any analysis of TSA? 

Mr. WALKER. The Transportation Security Administration? Yes, 

we have. We have done quite a bit of work on TSA. 

Mr. LINDER. You constantly talk about measuring risk versus reward, and I am very familiar with your doomsday scenario for 35 

years from now. 

If you have 690 million passenger trips in 2004 on the airlines, 

you spend $5 billion taking away their fingernail clippers, and you 

have nine billion passenger trips on the railroads, and we spend 

$200 million there, is that proportional risk, do you think? 

Mr. WALKER. No, and, frankly, Mr. Linder, as you may or may 

not know, my wife used to be in the airline industry. She is a retiree from Delta Airlines. She was a flight attendant. I think one 

of the things that we need to think about in Government is what 

is the most realistic current and future risk. 

Frankly, a lot of things that we are doing with regard to TSA are 

to prevent past risks rather than necessarily what the most likely 

current and future risks are. 

And by that, I mean, if I can, quickly, what happened on September 11th, to a great extent, was that the terrorists exploited not 

only our system but how pilots and flight attendants had been 

trained. They were trained to be acquiescent. They were trained to 

be able to do whatever the hijacker said, and so were the passengers. 

Fundamental changes have occurred such that the likelihood 

that that would happen again I think is extremely remote, irrespective of what TSA does. 

Mr. LINDER. I agree, and I think Pennsylvania proved that to us. 

What bothers me is we are always fighting the last war, and I 

think it is highly unlikely that airlines will be used in the next 

push. I think it is more likely that it will be something from the 

biological or nuclear area—get a huge, huge bang for the buck. 

And we spend about less than 2 percent of the budget on intelligence to find out if there are people out there looking for this 

stuff, and we spend virtually nothing on biological, which is, frankly, quite, I think, more difficult than nuclear. Is that measuring the 

risks appropriately? 

Mr. WALKER. I think we need to be analyzing current and future 

likely threats and risk. We should be informed by what has happened in the past but not driven by what has happened in the past. 

Quite frankly, Mr. Linder, I believe that many times Washington 

is a lag indicator. Washington tends to respond to what has already 
31

happened and does not do enough to try to anticipate what might 

happen and to allocate time and resources accordingly. 

I believe that any comprehensive threat and risk-based approach 

must do what you are talking about. Let’s look at today and tomorrow—what do we need to do, what resources do we need, who 

needs to do what—rather than necessarily looking backward. 

Mr. LINDER. Thank you. 

Thank you, Mr. Chairman. 

Mr. ROGERS. I thank the gentleman. 

The gentleman from Pennsylvania, Mr. Dent, is recognized. 

Mr. DENT. Thanks, Mr. Chairman. 

I apologize for coming a little late, Mr. Walker, to hear your testimony. Describe for me the difference between performance-based 

budgeting and mission-based budgeting, and what is the difference? 

Mr. WALKER. There is a lot of terminology that is being used, 

and I proposed a definition, Mr. Dent. Call it performance-budgeting and mission budgeting. I think what we need to try to 

achieve is the following. 

We need to have a mission-focused, results-oriented and outcomebased budgeting approach that is designed to maximize value and 

mitigate risk within current and expected resource levels. That 

means results-oriented and risk-based. That is what is important, 

I believe. 

Mr. DENT. And it is my understanding that the CIA uses mission-based budgeting, and what other Federal agencies that you 

are aware of utilize it? 

Mr. WALKER. Other than GAO, I am not aware of any. I will say 

that I have heard, as the chairman mentioned, that CIA asserts 

that they do. I don’t know if they do or not. I cannot attest to that 

because we are not doing work in the Agency, in general, much less 

in this area. 

Mr. DENT. Would the Homeland Security Department—you see 

there would be significant benefits just—is it more beneficial in the 

homeland security area, intelligence area, than perhaps other areas 

of government, mission-based budgeting, or—

Mr. WALKER. My personal view is this ought to be applied 

throughout Government. I think obviously to the extent that you 

are talking about self-preservation, to the extent that you are talking about safety and security in the hierarchy of needs, that is 

most fundamental. 

It is particularly important to the extent that you are talking 

about security and intelligence activities designed to protect our 

national and homeland security. But I think it is a concept that 

ought to apply broadly, including within the Defense Department. 

Mr. DENT. How would this type of budgeting affect the management of DHS, for example? What would be your thoughts on that? 

Mr. WALKER. I think it would help them to focus on trying to 

achieve more demonstrable and positive outcomes given the limitations in resources and other authorities that they have. 

As I mentioned before, I think the Congress has a role to play 

here, too, because the Congress has to think about—to the extent 

that the Congress is appropriating resources to DHS—if you want 

them to employ a risk-based approach, then the resources need to 
32

be overwhelmingly allocated in a way that allows them to allocate 

those resources based upon risk rather than per state, per capita, 

or those types of approaches. 

It may be difficult, but that is inherently contrary to a risk-based 

approach. 

Mr. DENT. Thank you. 

Mr. ROGERS. The chair now recognizes the gentlelady from the 

Virgin Islands, Ms. Christensen. 

Mrs. CHRISTENSEN. Good afternoon. I apologize for being late. 

The time kind of got away from me. 

And if you have answered this question before, I apologize, and 

maybe you might want to elaborate if you started it, but could you 

tell me how mission-based budgeting is one of several tools that 

could be used in creating a budget plan, one of a multifaceted number of tools that—how is it one of those tools that should be used 

in creating a budget plan? 

Mr. WALKER. I think that mission-based budgeting is something 

that needs to be used in concert with a number of other things that 

agencies should be doing now under the Government Performance 

and Results Act. 

For example, have a strategic plan, align the organization to that 

plan, have an annual performance plan, have an annual performance and accountability report. I think that mission-based budgeting has to be informed by those elements and should be used as 

a supplement to, rather than a substitute for, the type of information that the appropriators are accustomed to getting in making 

their annual decisions. 

I know there have been some concerns expressed in the appropriations committees that if they are going to have this kind of information, they would like to have it as a supplement to, not a substitute for, what they are accustomed to getting. They are used to 

dealing with information they have been getting in the past. 

Mrs. CHRISTENSEN. Do you see the new secretary moving in this 

direction? I mean, he talks about redesigning the Department and 

allocating funds according to risks and catastrophic risks rather 

than what you consider more minor events. Do you see him moving 

in this direction? 

Mr. WALKER. Based upon some of his recent statements, he 

seems to conceptually be moving in this direction. But as was mentioned before, he is supposed to be reporting back in the near future as to what the results of his initial due diligence are and what 

specific proposals he has for the way forward for the Department 

of Homeland Security. 

I look forward to receiving those, as I am sure you do as well. 

Mrs. CHRISTENSEN. Yes. You talked about GPRA and the strategic planning process. How important is it for the Department to 

create an auditable financial statement? 

Mr. WALKER. My personal view is that given the amount of 

money involved, which is tens of billions of dollars, the taxpayers 

have a right to have accountability over those funds. 

I don’t believe that audited financial statements are an end in 

and of themselves. I think the taxpayers have a right to that. I also 

believe that it is very, very important that the Department have 
33

a plan, because if you don’t have a plan, you are going nowhere 

fast—

Mrs. CHRISTENSEN. Right. 

Mr. WALKER. —that that plan has to be prepared consistent with 

the principles that I laid out before. That is of primary importance. 

Mrs. CHRISTENSEN. Thank you. 

Mr. ROGERS. There are a couple of things I want to know. First 

of all, why do you think more agencies don’t use mission-based 

budgeting? 

Mr. WALKER. Number one, they are not necessarily familiar with 

the concept. Number two, it is not something that Congress, frankly, has either demanded or, in some cases, even desired. 

I think it is going to take a behavioral change both within the 

executive branch, as well as an openness on behalf of the Congress, 

to use this type of information in order to make resource allocation 

decisions, in considering reauthorization of programs as well as in 

connection with oversight-related activities. 

Mr. ROGERS. Is it your belief there would be institutional reluctance to embrace mission-based budgeting? 

Mr. WALKER. As you know, Mr. Chairman, there is a lot that has 

to be done right now with regard to preparing the strategic plan, 

the annual performance plan, the annual performance accountability report, the annual budget that has to be presented. 

I think a lot of people are looking at this as this is an incremental burden. It may make a lot of sense, but I want to make 

sure that somebody is actually going to use it and it is actually 

going to be meaningful and make a difference with regard to resource allocations. 

That is why I say I think it is not only changing the culture and 

the mindset in the executive branch, I think it is, frankly, to a certain extent, changing the culture and the mindset on Capitol Hill. 

Mr. ROGERS. One of my big frustrations, as I have been working 

on this subcommittee and trying to get information from DHS 

about their expenditures, is that it seems apparent to me—and I 

think the recent Inspector General’s audit demonstrated this—that 

they don’t really seem to know why they are asking for the numbers they are asking for, for particular projects. They can’t justify 

them. 

And my question is, would mission-based budgeting in any way 

remedy that, or is that a separate area? 

Mr. WALKER. It would help to address that issue. 

Mr. ROGERS. How? How would it—

Mr. WALKER. It would help to address the issue because basically 

it gets you to focus on why are we here, why do we exist, what are 

we trying to accomplish, what do we need to do in order to try to 

achieve the desired goals and objectives—meaning in an outcomebased approach—how much in resources do we need in order to try 

to get that done, meaning human resources, financial resources, 

technological capabilities, et cetera, who do we need to partner 

with, both within Government, outside of Government, as a way to 

try to be able to maximize the chance of success. 

I think it is very complementary and very intellectually consistent to trying to achieve and to move in the direction that you 

are talking about. 
34

Mr. ROGERS. Great. In January 2003 the GAO first listed DHS 

on its high-risk list. In that assessment, the GAO identified the following issues: DHS’s annual goals and time frames were vague or 

altogether absent; DHS’s capacity to achieve the stated goals was 

uncertain; and third, DHS’s performance measures and plans to 

monitor, assess, and independently evaluate the effectiveness of 

corrective measures has not been fully developed. 

And my question is, have you observed that DHS is making any 

progress in remedying these shortcomings? 

Mr. WALKER. They are making progress, but they have a ways 

to go before they will be off the high-risk list. In addition to—

Mr. ROGERS. By ways to go, do you mean months, years? 

Mr. WALKER. Well, we update it, as you know, Mr. Chairman, 

every 2 years. While we may end up putting a new area on the 

high-risk list off cycle if it is a particularly acute and large problem, generally speaking we make decisions to put items on every 

2 years and to take them off every 2 years. 

So the earliest that we would be able to consider taking them off 

would be in January of 2007 since we just published our list in 

January of 2005. It is unlikely that they will meet the criteria necessary in order to come off in January of 2007. 

What is important is that they have a plan and be able to break 

it down into key milestones, and to be able to demonstrate that 

they are making significant progress toward getting to where they 

need to be, and some of the concepts we are talking about here are 

integral to that, I think. 

Mr. ROGERS. OK. Why do you think it is unlikely that in 2 years 

they couldn’t right the wrongs that you outlined? They seem pretty 

fundamental. 

Mr. WALKER. I think they can make significant progress within 

2 years, but I think there is a couple of dimensions. One dimension 

is what are they trying to do to achieve their mission as it relates 

to strategic planning, organizational alignment, performance-based 

budgeting concepts, et cetera. 

The second thing is what are they doing to try to integrate and 

transform the 22 different departments and agencies that now comprise the Department of Homeland Security. So they really have 

two massive undertakings that they need to undertake, and they 

need to do it in a coordinated, and hopefully, an integrated manner. 

I think the likelihood that they will be able to get there between 

now and January of 2007 is not great, but not impossible. 

Mr. ROGERS. Great. Thank you. My time is up. 

I yield to the gentleman from Florida, Mr. Meek, for any questions he may have. 

Mr. MEEK. Mr. Walker, I noticed earlier you said that Customs 

and Border Protection and also TSA—and reading the report on 

the 14th page is also mentioning the Coast Guard—have practiced 

what we are talking about here on a limited basis within the Department of Homeland Security. 

I have to go further down the last paragraph on page 14 where 

TSA—they took very limited vulnerability assessments of a selected general aviation airports based on specific security concerns, 

a request by the airport officials at that time. 
35

And they said it was quite costly and also impractical, and due 

to the fact that we have 19,000 general aviation airports nationwide and approximately 4,800 public use general aviation airports, 

I am trying to figure out, especially when you come down to the 

meat of the matter—I don’t know if that is an excuse, saying we 

just don’t want to do this, or is that an accurate statement by TSA, 

or assessment of what—

Mr. WALKER. I think this comes back to the issue that we talked 

about before. One of the things that needs to happen is there needs 

to be a comprehensive threat and risk assessment based upon current and future likely threats, what do we think they are, and 

therefore how do we need to spend our time and allocate our resources. 

For example, to what extent do 19,000 general aviation airports, 

where there is a limit, in general, as to what type of aircraft can 

use those airports—to what extent do they represent the same risk 

as a major commercial airport where you have, a lot bigger aircraft 

that could do a lot more damage, if you will? I mean, those are 

some of the concepts that we need to be thinking about. 

I think we also have to be thinking about how might it be used. 

Is it as a weapon like it was on 9/11, or is it a delivery device to 

deliver some other type of weapon of mass destruction that may 

not be very large? 

This is part of the thinking that has to be done to be able to say 

well, we don’t automatically want to go out and look at all 19,000 

general aviation airports—we need to see how that fits in within 

the overall context of what the most likely threat is, and how do 

we end up allocating our resources. 

You might pick a sample to go to rather than all of them. You 

might have a rotating scheme. Lots of concepts I think should be 

explored. 

Mr. MEEK. You know, Mr. Walker, that goes back to the regional 

planning security group that is there to make these—to rank the 

threat levels not only at the Department of Homeland Security but 

also local law enforcement agencies. 

There is a first responder component to this, too. Just as a last 

question—and I can’t believe that I have so many questions for 

you, because we are all trying to really understand. I am used to 

performance-based budgeting. 

What is the difference between performance-based budgeting and 

mission-based budgeting? You mentioned—I guess it is all the 

same, I say ‘‘tomato,’’ you say ‘‘tomato,’’ kind of thing. 

Mr. WALKER. To be honest with you, Mr. Meek, I am used to performance-based budgeting, too. The mission-based budgeting is a 

relatively new concept to me. To me, in substance, we need to 

achieve what I talked about before, the elements. 

I think when you are talking about performance-based, you are 

talking about results, trying to achieve results. Obviously, you 

want to achieve results consistent with what your mission is. I 

mean, and so to me they are not mutually exclusive. You know, 

they are complementary. 

Mr. MEEK. Okay. That is it for me, Mr. Chairman. It is a component—it is an element of the mission-based budgeting, and I think 

that the members and also those that we want to carry out this 
36

new concept should understand that it is just adding more on to 

performance-based, because the unknown is there, so there has to 

be a mission. 

And we may not accomplish that mission within the time line, 

especially when you start looking at annual budgets. Thank you 

very much for coming before us. 

Mr. WALKER. Thank you. I would respectfully suggest that 

whether it is a strategic plan, whether it is a performance plan, 

whether it is the budget, mission is fundamental. Why are we 

here? What are we trying to achieve? 

But again, the performance part is focusing on results, focusing 

on outcomes—not just efforts, but outcomes and, again, targeting 

resources to where you are likely to do the most good and mitigate 

the most risk. Those are the concepts. 

Mr. ROGERS. I thank the gentleman. 

Ms. Christensen, did you have some additional questions? 

Mrs. CHRISTENSEN. Basically, it is two parts to one question. One 

of the things that we have seen in the department is the inability, 

even after these few years, for the different agencies that have 

been brought together to merge their missions. 

It would seem to me that mission-based budgeting would force 

some of what we have not been able to accomplish in the department to happen. That is one side of it. I wonder if you would comment on that. 

But the other side of it is that many of the agencies have functions within them that are not related to homeland security, and 

I was wondering how mission-based budgeting would affect those 

agencies that have split missions. 

Mr. WALKER. I think it is important to recognize that while the 

three areas that Mr. Meek mentioned before, which were the primary areas under the National Homeland Security Strategy, or the 

things that people normally talk about as being the top priorities 

for the Department of Homeland Security, the statute that created 

the Department of Homeland Security includes a number of other 

elements, mission-oriented elements, including the fact that it was 

expected that they would not diminish their efforts with regard to 

the many other activities that they were engaged in prior to 9/11. 

The Coast Guard, for example, had boating safety and maritime 

rescue operations that they were focused on. 

My view is that mission-based budgeting could help cross the 

silos. To the extent that you have many different entities—and 

there are 22 entities just within the Department of Homeland Security. 

To the extent that you are focusing on a mission, it could help 

you to cross those silos. What different role and responsibility do 

each of these silos have to try and accomplish the mission? How 

do we allocate resources and authorities across those silos? 

I think it also is a concept that should apply in every major department and agency and across departments and agencies as well. 

By the way, the United States does not have a strategic plan. 

The United States does not have an annual performance plan. 

Each department and agency does, but the United States does not. 

And I would respectfully suggest we ought to think about changing 

that. 
37

Mrs. CHRISTENSEN. Could it adversely impact the other missions, 

like—I guess the Coast Guard would be one, because they also 

have rescue and, you know, the other—

Mr. WALKER. Right, search and rescue, and boating safety and—

Mrs. CHRISTENSEN. Right. 

Mr. WALKER. Navigation, and—

Mrs. CHRISTENSEN. You can do both, do the mission-based budgeting within homeland security and—it doesn’t have to adversely 

affect the other—

Mr. WALKER. No, it doesn’t. 

Mrs. CHRISTENSEN. —responsibilities. 

Mr. WALKER. It doesn’t. But on the other hand, choices have to 

be made. Whatever amount of resources and authorities that Congress decides to give the Department of Homeland Security, it is 

going to have to make tough choices in collaboration with the Congress on how to allocate those resources. 

Mrs. CHRISTENSEN. Right. But if the country had a plan, it would 

be easier to do it. 

Mr. WALKER. Plans normally help. 

Mrs. CHRISTENSEN. Yes. Thank you. 

Mr. ROGERS. I would remind the witness that several members 

may have questions that weren’t here today and they may submit 

them to you. We will leave the record open for 10 days for you to 

make any written replies to any questions that may be tendered. 

And I want to thank you for your time, Mr. Walker. It has been 

very beneficial to have you here, and you are excused. 

Mr. WALKER. Thank you, Mr. Chairman, very much. It is good 

to be here. 

Mr. ROGERS. Thank you. 

And I now call up the second panel. 

I want to thank you gentlemen for your time. It is very helpful 

to us. I know you are busy, and I appreciate you being here. 

The chair now recognizes Hon. Maurice McTigue, Distinguished 

Visiting Fellow and Director of the Government Accountability 

Project at the George Mason University’s Mercatus Center, for any 

statement you may have. 

STATEMENT OF THE HONORABLE MAURICE P. McTIGUE 

Mr. MCTIGUE. Thank you, Mr. Chairman, and thank you, members, for the invitation to be here. 

I want to start by making a comment on some of the discussion 

that I heard that preceded the second panel, and that is about how 

you might define mission-based budgeting. 

And I think that I agree very much with what Mr. Walker said. 

But in my view, if you were to apply that to the Department of 

Homeland Security, it would read something like spending money 

first on those things that will do most to accomplish an improvement in the security of the homeland. 

And that is really what you are talking about, concentrating first 

on those things that will make the biggest difference, and then 

later on on the things that make a lesser difference. 

Also, I think when you look at this issue you have to look at here 

is an organization that technically was a merger of a number of 

other organizations that really did have quite disparate functions. 
38

There is a requirement that they carry out those traditional functions as well as accomplish the new function of making the homeland of the United States more safe. 

I think that you need to look at those as two different missions 

for some of those organizations. The Coast Guard has to accomplish 

its traditional mission of search and rescue and protection of the 

coast at the same time that it has to also accomplish its mission 

of protecting the homeland. 

What that really requires, in my view, is that the organizations 

that comprise the conglomerate of the Department of Homeland Security have to take collective responsibility for the security of the 

homeland, also have to accept that resources are going to go to 

those functions that would have the greatest impact on improving 

the security of the homeland and that they would have to go to 

those functions first. 

So it is not all bad news, in my view. The Department of Homeland Security is very new, and if you looked at the private sector, 

mergers take a long time for them to start to really assimilate the 

two cultures—because normally it is only two, and here we are 

looking at 22—assimilate those cultures and start to concentrate 

collectively on what the mission of the new organization is. 

The thing that gives me encouragement about the Department of 

Homeland Security is that I like some of the things that they have 

written into their strategic plaintiff, because, as Mr. Walker said, 

this is looking forward, not looking at the experiences of the past. 

And if I were to put the proposal to somebody hypothetically 

about what would you do if you were asked to take responsibility 

for improving the safety of the homeland, the first thing that you 

would do is that you would identify the threat. And homeland security calls that awareness. 

The second thing that you would do is that you would look to 

defuse that threat, and they call that prevention. The third thing 

you would do is that you would make it harder for people to hurt 

America and American things. And that is protection. 

The fourth, you would stop or diminish the damage whenever an 

attack was to occur. And that is called response. It might mean 

things like shooting down a plane that is over a protected area or 

looks like it is going to try and commit a terrorist act. 

All of these things—and then you have to think about what 

would we do in the case of an attack. And that means putting people’s lives back together, and they call that recovery. 

All of these things have to be accomplished at the same time as 

not damaging the American way of life and the life and liberty of 

Americans to go about their normal business. They call that service. 

And finally, you need to have the capability to accomplish all of 

these tasks, and that is called organizational excellence. So if you 

thought about those things—awareness, prevention, protection, response, recovery, service and organizational excellence—immediately you start to have a framework that says there are some of 

these things we should invest in first and some of them we should 

invest in later. 

While recovery is very important, if you put all of the investment 

in recovery and you didn’t do enough in awareness, what you have 
39

done is increased the risk that an act will be successful, damage 

will occur, but you are going to be good at recovery. 

See, in my view, to the American public, success at the Department of Homeland Security is measured in terms of nothing happening. It is very difficult to measure what caused nothing to happen. So at that level, I think that it is good. 

What is not yet good is being able to identify which actions are 

going to give us the greatest benefit in awareness, which actions 

are going to give us the greatest benefit in terms of prevention. 

And as those start to be identified, then I think the role of Congress in being able to say we should target money at these things 

first will become more apparent and easier. 

Thank you, Mr. Chairman. 

[The statement of Mr. McTigue follows:]

PREPARED STATEMENT OF HON. MAURICE P. MCTIGUE

Mr. Chairman, I am honored to have been invited to testify before you on consideration of the use of prioritization when determining funding allocations for the Department of Homeland Security (DHS.) However, as I ponder the title of this hearing ‘‘mission-based budgeting’’, I come to the conclusion that the title really poses 

the question of whether the budget process can help guarantee the mission of DHS. 

My considered opinion on that question is that a ‘‘mission-based budget’’ can do a 

great deal to move the department towards a central, collective focus of improved 

security for Americans at home. My experience in examining organizational performance also tells me that those organizations with a tight focus on their mission 

are more likely to be successful in achieving their mission. 

Any consideration of performance at DHS must acknowledge some fundamental 

truths. The Department of Homeland Security, created by Executive Order signed 

by the President in January of 2003 is the biggest merger in the history of United 

States government. However, the merger was conducted in a time of urgency and 

the normal organizational preparation that would precede such a merger in the private sector did not occur in the creation of DHS. Instead, 23 significant existing organizations with very disparate activities and cultures were dropped into one single 

corporate body with instructions to sort it out, to make the homeland safe, and continue to do all of the things currently done by each merging organization. In all normal circumstances, it would take years for this huge organization to develop a common culture with collective responsibility for protecting the homeland and an internal acceptance that resources go first to those functions that will make the greatest 

contribution to diminishing the risk to the homeland. 

I would now like to expand on those comments by saying that unless the right 

internal incentives are created then no progress towards a common culture with a 

priority mission of protecting the homeland will be made. In fact, absent the right 

incentives it is probable that in 10 years DHS will still be 23 independent organizations living under the same umbrella with no shared focus on improved security for 

the homeland. The strongest incentives leading to changed culture in organizations 

are those that determine the basis for the allocation of resources. The initiative of 

the committee to give consideration to ‘‘mission-based budgeting’’ is very timely and 

appropriate. 

While it is reasonably easy to accept intellectually and practically that a move towards ‘‘mission-based budgeting’’ is the right thing to do, pondering how to accomplish this initiative is a major challenge, but not impossible. When considering this 

challenge, it is necessary to recognize that each of the component parts of the department have two roles: improving the security of the homeland and accomplishing 

their historic service to the American public. The purpose here is to give priority 

to those functions that will contribute most to the improved security of the homeland while not jeopardizing the traditional services provided. 

In my view, the best way to approach this challenge is to separate the two roles 

and identify improving security of the homeland as the primary role of the Department of Homeland Security (DHS) with traditional services being the responsibility 

of the component parts of DHS. This requires a vision of DHS that resembles a conglomerate with collective responsibility for improving the security of the homeland 

and individual responsibility for accomplishing its traditional functions. Under this 

vision, it is possible to imagine a scenario in which DHS purchased improved security from the various components of the department according to how much im-
40

provement each purchase brings to security of the homeland. The above structure 

would help to create the environment for growing a collective responsibility across 

the department for improved security for the homeland without jeopardizing the 

other traditional functions. 

The next issue is addressing the question of whether this is workable. The key 

to achieving a universally shared commitment across all the components of DHS is 

to articulate goals that spell out a strategy for improved security and can be adopted and supported by each organization yet are unique to the role of the collective 

department. In my view, the department in its current strategic plan has significantly captured this concept. What is now needed is the physical manifestation that 

the goals laid out in the strategic plan will indeed be the basis for management decision-making and will lead to improved security for Americans at home. A major 

reinforcement of those goals would result if Congress were to link its funding priorities to the same goals. 

Considering whether this is a viable proposition requires that we look at those 

strategic plan goals. (Note: currently this strategic plan is under review by the new 

Director but at time of writing I am unaware of whether he has completed that review and released his findings.) (Note: the comments in italics are mine and reflect 

my interpretation of these goals.)

Awareness: 

Identify and understand threats, assess vulnerabilities, determine potential impacts and disseminate timely information to our homeland security partners 

and the American public. 

‘‘Timely knowledge of potential threats.’’

Prevention: 

Detect, deter and mitigate threats to our homeland. 

Eliminating the threat.’’

Protection: 

Safeguard our people and their freedoms, critical infrastructure, property and 

the economy of our Nation from acts of terrorism, natural disasters, or other 

emergencies. 

‘‘Making it harder to do damage to Americans, or to America.’’

Response: 

Lead, manage and coordinate the national response to acts of terrorism, natural 

disasters, or other emergencies. 

‘‘Capability and readiness to eliminate mitigate or diminish the impact of acts 

of terrorism.’’ 

Recovery: 

Lead national, state, local and private sector efforts to restore services and rebuild communities after acts of terrorism, natural disasters, or other emergencies. 

‘‘Rebuilding the lives of Americans and their communities after terrorist acts.’’

Service: 

Serve the public effectively by facilitating lawful trade, travel and immigration. 

‘‘In the face of threat to allow America to enjoy the American way of life.’’ 

Organizational Excellence: 

Value our most important resource, our people. Create a culture that promotes 

a common identity, innovation, mutual respect, accountability and teamwork to 

achieve efficiencies, effectiveness and operational synergies. 

‘‘Having the capability to get the job done.’’ 

While in most organizations I would really consider this to be mainly a values 

statement, in the case of DHS these things can be considered outcomes. It is also 

possible to see that there is a logical progression to these goals. Plus, it is possible 

to determine an order of priorities. For example, it would make little sense to have 

high levels of excellence on recovery if that was achieved at the expense of Awareness, Prevention or Protection. It is also possible to assess which parts of DHS make 

the greatest contributions to Awareness, Prevention, or Protection. However, if it 

were not possible to prevent an attack, it would be strategically irresponsible to consume all the resources for Awareness, Prevention and Protection and then not have 

the capacity to recover from an attack. So what would be necessary would be a strategically weighted approach to investing in improved homeland security that gave 

the greatest weight to those goals that would prevent a terrorist event but also have 

appropriate backup if the primary strategy were to fail for whatever reasons. (Note: 
41

I would recommend separating the goals of Homeland Security from the traditional 

tasks of the component organizations of DHS.) 

Given the above, it is also possible to see a developing culture at DHS that would 

have a collective responsibility for improving the security of the homeland while at 

the same time maintaining individual responsibilities for traditional functions. It is 

also possible to foresee an environment where Congress could clearly indicate its 

priorities by its budget allocations and be able to exercise clear accountability from 

DHS for those priorities. What I am envisioning here is a two-tier system of budget 

allocations. One tier of allocations would specify the improvements expected in each 

of the goal areas in DHS’s strategic plan. A second tier would be organization-specific and would provide for the traditional activities of organizations like FEMA and 

the Coast Guard. While I accept that such an approach is theoretically possible, I 

also recognize that there will be considerable difficulty in physical implementation. 

One of the greatest challenges facing DHS is the difficulty of measuring improved 

security. For example, how do you measure something that did not happen when 

the public expectation of success is that no terrorist events occur on the homeland? 

However, there are many relevant factors that can be measured to allow constructive analysis to determine whether there has been an improvement in the security 

of the homeland. Some of this information would, by its very nature, have to remain 

classified, but improvements in the state of knowledge about terrorist activities 

would certainly be a measure of success against the Awareness Goal. The success 

of actions taken or strategies implemented that defused that risk would also be appropriate measures of success against the Prevention goal. The strategic actions 

taken to protect information, venues, assets and other potential targets can be 

measured as improvements against the Protection goal. Response is about readiness 

and the military have long specialized in measuring their readiness. That knowledge would provide the basis for measuring improvements against the Response 

goal. FEMA has widespread experience in assessing the recovery times and costs 

from disasters which would form the basis of the measures against the Recovery 

Goal. 

Such information allows qualified people to competently advise Congress about 

the existence of strengths and weaknesses in the protection of the homeland, and 

allows for the advisement on where strategic investment by Congress would give the 

greatest gains in security.

Conclusion: 

The question posed by this hearing is, ‘‘Can the security of the American Homeland be improved by taking a strategic approach to funding the department of 

Homeland Security based upon linking funding to advancing the mission of the department?’’ My answer is emphatically, yes! In fact, to do otherwise would be irresponsible and would invoke an avoidable risk that could be eliminated by ‘‘missionbased budgeting’’. However, implementation will not be easy and will require a high 

level of commitment to mission by senior managers at DES over the sectional interests of their own organization.

Mr. ROGERS. I thank the gentleman. 

The chair now recognizes Mr. Jonathan Breul, Partner, IBM 

Business Consulting Services, and Senior Fellow of the IBM Center 

for the Business of Government, for any statement he may have. 

STATEMENT OF JONATHAN B. BREUL, PARTNER, IBM 

BUSINESS CONSULTING SERVICES, SENIOR FELLOW, IBM 

CENTER FOR THE BUSINESS OF GOVERNMENT 

Mr. BREUL. Thank you, Mr. Chairman. 

According to research that we sponsored, there is ample opportunity to use mission and performance information at each stage 

of the budget process. 

Until recently, performance of most public programs and their 

managers have been judged almost exclusively on inputs and activity. Quoting Jonathan Walters, who is one of the folks who has 

done research for us, in a book called ‘‘Measuring Up,’’ he says, 

‘‘Governments have always been really good at measuring one 

thing: spending. What government has been really lousy at is 
42

measuring what was accomplished through the spending and its 

action.’’

With a mission orientation, budgeting can provide much more information to the resource allocation process so that funds are allocated where they are most likely to maximize the achievement of 

mission outcome. 

At the same time, I want to add some caution to that, which is 

that you clearly would not want to establish a mechanistic link between mission outcomes and budget. That is neither possible nor 

desirable. 

The department has been making significant progress in developing its strategic plan and its annual performance accountability 

report. And both of those include specific performance measures to 

assess the results of its activities. 

However, at the moment, there is very little basis for assessing 

the contribution of the budget toward the overall mission goals. 

You won’t find that in the budget submission. 

And as a further example, if you look at the Department’s efforts 

to comply with the Office of Management and Budget’s measurement system linking budgets and performance, something called 

the PART, the Program Assessment Rating Tool, the Department 

has only had limited success, because most of its performance is 

tied to subgoals, activities two or three levels below the mission 

and thus unable to give you an assessment of budget and mission 

in a helpful fashion. 

Many other organizations have attempted to implement missiondriven budgeting. Those that have, indicate that it is much more 

challenging than they had anticipated and that actual implementation is uneven, particularly to start. 

The reasons for those are several. A mission orientation requires 

a much more fundamental approach to thinking and managing. It 

requires thinking about the budget and the management across all 

of the functions of the activity of the organization, not just specific 

pieces. And organizational change of that kind is not easy. 

Second, mission outcomes are much broader in nature than the 

outputs of specific programs. They tend to be much more difficult 

to quantify, even when that is possible and meaningful to do so. 

Nonetheless, there is substantial evidence from many sources 

that it is possible to focus on mission and that it is possible to assess the extent to which mission has been accomplished. 

Mission-oriented budgeting will not be the answer to the vexing 

resource tradeoffs involving political choice, but it does, however, 

offer the promise to modify and inform the policy decisions and the 

resource allocation decision by shifting the focus of the debate 

much more from input, to the question of overall mission accomplishment, which are the crucial questions that are crucial to the 

Department’s success and to the nation’s security. 

[The statement of Mr. Breul follows:]

PREPARED STATEMENT OF JONATHAN D. BREUL

Mr. Chairman and Members of the Committee, thank you for the opportunity to 

discuss transforming the Department of Homeland Security (DHS) through missionbased budgeting. 

I am a Partner in IBM Business Consulting Services and a Senior Fellow with 

the IBM Center for The Business of Government. The IBM Center for The Business 
43

of Government is dedicated to stimulating research and facilitating discussion of 

new approaches to improving the effectiveness of government at all levels in the 

United States and around the world.

Mission Budgeting 

Good government advocates have called for mission-oriented budgeting for decades. The 1949 Hoover Commission called for a shift in budget focus away from the 

inputs of government to its function, activities, costs and accomplishments. According to an October 2003 report from the IBM Center for The Business of Government, there is ample opportunity to use mission and performance information at 

each stage of the budget process—that is, not only in the Office of Management and 

Budget (OMB) and the Congress, but in the agencies and by the audit community 

as well. The report, Performance Budgeting: Opportunities in the Federal Budget 

Process, by Philip G. Joyce, associate professor of public administration at The 

George Washington University, presents a comprehensive view of how performance 

information can be used at various stages and provides a number of specific recommendations designed to sustain progress to date and to further the use of performance information in the federal budget.

DHS is not alone 

All governments are under increasing pressure to produce—and to demonstrate—

results in terms of their mission. Over the last decade, countries around the world 

have undertaken reforms with the aim of improving the relevance and effectiveness 

of public services and the quality of public sector management. A key aspect of most 

reform strategies has been a focus on mission results and outcomes. 

Yet, until recently, the performance of most public programs, and of their managers, has been judged largely on inputs and activities, in particular, how they have 

spent their allocated budget, and perhaps, on activities undertaken and outputs produced. Government too often is preoccupied with process and with following the 

rules, without adequate focus on the benefits that actually arise from public sector 

expenditure and activities. Measures of effectiveness across organizations and functions remains a major challenge not only within DHS, but throughout the public 

sector. As Jonathan Walters notes in Measuring Up: ‘‘Governments have always been 

really good at measuring one thing: spending. . .What government has been really 

lousy at is measuring what was accomplished through that spending and action.’’

What is mission-budgeting? 

With a mission orientation, information about mission (not programs, process or 

activities) can inform the policy debate and help determine the agenda. In this way, 

questions of outcomes, and what forms or approaches are likely to be effective or 

not, would be taken into consideration in the allocation of resources. 

Organizational performance can be tied to mission attainment and communicated 

agency-wide. Performance can be directly linked with the overall mission. Goals, objectives, outputs and outcomes can be tracked at every level so that there can be 

continual assessment and reassessment of the allocation of resources in relation to 

those elements in as close to real time as possible. 

Finally, mission-based budgeting can provide more information to the resource allocation process, so that funds are allocated where they are most likely to maximize 

the achievement of mission outcomes. At a minimum, linking missions to budgeting 

can illustrate what benefits arise from expenditures. However a mechanistic link between mission outcomes and budget allocations is neither possible nor desirable. 

Nonetheless, information about mission can play a significant role in the overall 

budget process.

The Department of Homeland Security 

The terrorist attacks on September 11 drove home the immediate and enduring 

requirement for significant changes in US national security. Asymmetric threats, 

growing dependence (and vulnerability) on information systems, and the need for 

faster cycle-time response put the nation at great risk. 

Three years ago, Congress and the President took on the enormous undertaking 

of creating a new Department whose central mission would be to secure the homeland. Section 101 of the Homeland Security Act set forth prevention of terrorist attacks, vulnerability reduction, and response to and recovery from terrorist attacks 

as the main missions of DHS, along with its inherited non-homeland security-related functions. Currently, however, neither the Department nor Congress can tell 

from budget submissions how much is being allocated for these main mission areas. 

To address this challenge the Department should take steps to measure performance and budget with more of a mission-oriented focus. Only when the Department 

allocates its limited resources based on mission area (prevention, vulnerability reduction, recovery/response, and non-homeland security related functions) will it be 
44

transformed into an integrated, new operation to meet its homeland security missions.

Current situation 

The Department has made significant progress developing a strategic plan and an 

annual performance and accountability report with specific program performance 

measures to assess results of DHS activities in achieving its goals. However, there 

is little basis at present for assessing the contribution of the budget toward the mission goals. Further, nearly a third of the Department’s budget goes to non-homeland 

security functions. 

The Department’s efforts to comply with OMB’s measurement system for linking 

budgets to performance (the Program Assessment Rating Tool, or PART) have met 

with limited success, since DHS ties performance to sub-goals that lie two or three 

levels below these overarching objectives. Congress has fared little better in assessing performance. DHS appears to provide the new Homeland Security appropriations subcommittees with less budget justification detail than other agencies provide 

their subcommittees.

Implemention 

Mission-based budgeting requires a top-down approach. Initially, it can present a 

major challenge, but the potential rewards are great. The move toward missionbased budgeting can begin with any number of actions, including defining, 

prioritizing and selecting mission outcomes, evaluating the strengths and weaknesses of current programs using standardized measures and describing the outcomes of competing mission strategies and engaging stakeholders to evaluate them. 

This blueprint would reflect a rigorous annual program and budget process to 

prioritize operational funding and long term investments in terms of mission as well 

as to ensure that they reflect the Secretary?s priorities and those of the President. 

This could provide an ongoing mechanism to monitor and adjust the implementation 

as well. Finally, it could be a powerful way for the Secretary to flag key issues and 

influence funding decisions and tradeoffs earlier rather than later in the budget 

process. 

There is little point in engaging in such an effort, however, unless it is going to 

be used in some way. Indeed, if staff do not see how a mission-oriented budget can 

be used, this is likely to breed cynicism that can make further efforts to focus on 

mission more difficult. This is why it is absolutely critical to generate buy-in and 

commitment at all levels of the Department, as well as key congressional committees and staff. This can result in change that can represent the most enduring—

and the most significant—form of use, namely in terms of actual day-to-day decision-making and management.

Challenges 

Implementing a mission or outcome-oriented approach has proved deceptively difficult. Countries that have attempted this approach indicate that it has proved to 

be more challenging than they had anticipated, with actual implementation uneven, 

at least initially. Why has an outcome focus proved to be so difficult? 

First, a mission orientation represents a fundamentally different way of thinking 

and of managing, across all aspects of an organization, including how it relates to 

citizens and major stakeholders. In order to be effective, mission-oriented thinking 

needs to be incorporated into the organizational culture at all levels. Organizational 

change of this kind is rarely easy, it always takes time to put into place and to sustain, it is certain to encounter at least some intiial resistance, and it requires an 

array of approaches and supports. 

Second, mission outcomes are longer term in nature than outputs and activities. 

Typically, they are influenced by a variety of factors in addition to the program 

intervention in question. They tend to be far more difficult to quantify than activities and outputs, where it is even possible or meaningful to do so. Given the 

achievement of the mission usually depends in part upon factors beyond the direct 

control of Departmental programs or their managers, a different approach to attribution may be required than with inputs or outputs. This can imply the need for 

to changes to exisiting accountability and reward mechanisms such as the new pay 

for performance system. 

There is, nonetheless, substantial evidence from many sources that it is possible 

to provide for a focus on mission and that it is possible to assess the extent to which 

the mission has been achieved.

Advantages of mission-based budgeting 

There are many positive effects that can occur as a result of a more direct linkage 

between mission and the allocation of resources. First, it can lead to a more efficient 

use of resources, since questions about the success of mission activities are tied to 
45

the allocation of resources. Second, such a linkage can help inform key stakeholders, 

including the Congress, whether taxpayers are receiving sufficient ‘‘value for 

money.’’ Third, when either additions or deletions from the Department’s budget 

need to be made, these can be targeted in a way to optimize mission performance. 

Each of these three effects is important primarily because the resources are 

scarce; therefore the way in which these resources are allocated is crucial to the Department’s effectiveness.

Conclusion 

The Department of Homeland Security is dealing with very real and immediate 

threats and operational responsibilities. Mission-oriented budgeting will not be the 

answer to the vexing resource trade-offs involving political choice. It does, however, 

have the promise to modify and inform policy decisions and resource allocation by 

shifting the focus of debates from inputs to the mission outcomes and results which 

are crucial to the Department?s success and to the nation?s security. 

Thank you again for the opportunity to testify. I look forward to answering your 

questions.

Mr. ROGERS. Thank you, Mr. Breul. 

The chair now recognizes Mr. Carl J. Metzger, director of the 

Government Results Center, for any statement he may have. 

STATEMENT OF CARL METZGER, DIRECTOR, GOVERNMENT 

RESULTS CENTER 

Mr. METZGER. I thank you so much for the honor to testify before 

you, Mr. Chairman and members. I direct an independent non-profit center that for the last 11 years has been helping agencies to 

share the lessons learned and the better practices in managing for 

results. 

The comments that I am going to make are based upon really exposure to those departments and agencies sharing about what they 

are trying to do. I reach roughly 10,000 government officials. We 

hold monthly meetings that bring together easily anywhere from 

80 to 200 of those people, planners, budgeters, et cetera. 

What we have seen is that from that sharing there are some important things that would apply to what the Homeland Security 

Department is trying to do, and all the details of what I have said, 

of course, are in my written statement. I would particularly like to 

emphasize a couple of them. 

First of all, the extraordinary importance of leadership. We have 

seen that where you have top leaders like the deputy secretary or 

an assistant secretary who truly understand the workings of the 

department and how to motivate their people, who understand 

Government’s process to manage for results, those results are 

achieved. Cultures are being transformed. 

I especially have been impressed by the work of Deputy Secretary Designate Lynn Scarlett at Interior for that purpose and Assistant Secretary for Administration and Management Patrick 

Pizzella at the Labor Department. Those two people understand 

what is going on. They motivate their employees. And they get the 

work done. 

Second, the governance process. I think it should be as adaptable 

as possible to the changes going on. At a department such as homeland security, changes, be they politically changes with priority 

changes and all that, may be potentially cataclysmic, as we saw a 

few years ago. 

People have to be expecting that they have to apply those principles of performance budgeting, which I think are really similar in 
46

principle to the mission-based budgeting that you are interested in 

applying here. To us, it seems that the mission budgeting is a simplification of the performance budgeting. 

But the principles for performance-based budgeting are the same 

as described in OMB’s Circular A–11. What is important is that the 

leadership makes the governance process effective and working toward results. It is helpful to have an exemplary department component that you can apply some of these foundational important aspects to. 

For example, total costing. Congress has been interested in total 

costing and especially comparing it with results that might occur 

as a result of some incremental change in the resource allocation. 

Departments where there is a model agency trying to develop 

total costing as a foundation for the managing for results, such as 

the Interior Department’s Fish and Wildlife Service, are picking up 

people understanding what they are doing, and they like to apply 

it department-wide. That is helpful. 

Real involvement of stakeholders and partners for the Homeland 

Security Department is struggling from so much newness and complexity. To become an entity toward these three missions, it is particularly critical to involve key stakeholders and partners in major 

transformations. 

I think Congress in particular should be viewed more as a partner than a stakeholder, because an effective working relationship 

to adjust quickly to the environment has to happen here. The missing elements often in agencies are fully understanding stakeholder 

needs, adjusting to those needs, and successfully communicating an 

agency’s achieved measured outcomes. 

At present, most legislators and their staffers have concluded 

that aligned budget and performance structures work only if performance cost information is credible, compelling, accepted and directly useful for their objectives. 

Supplementing rather than replacing key information used by 

appropriations committees should be the guide. Closing that gap 

can be realized by truly involving Congress early and continuously 

in the dialogue. I believe what you are trying to do here—to simplify in the face of all this complexity—is an admirable thrust toward helping the American public to understand, at least in tune 

with preventing vulnerability reduction and recovery response. 

If we can at least understand our costs, our results, according to 

those three things, and somehow develop a crosswalk toward the 

seven strategic goals in the current homeland security strategic 

plan, this will help. And I hope that we can see the result of Secretary Chertoff’s second review to see how we can make changes 

that will apply the interests that you have. 

Thank you. 

[The statement of Mr. Metzger follows:]

PREPARED STATEMENT OF CARL J. METZGER

Mr. Chairman and Members of the Subcommittee: 

Thank you. It is an honor to testify about our views on Mission-Based Budgeting 

as a mechanism to transform the Department of Homeland Security (DHS). We are 

reasonably familiar with the Department’s historical origins of assimilated disparate 

agencies, legislative foundations, and subsequent Planning, Operations and Reporting. Particularly striking are the monumental management challenges to the new 
47

leadership team of Secretary Michael Chertoff, Deputy Secretary Michael Jackson, 

and Under Secretary for Management Janet Hale and how this new team is wisely 

addressing those challenges initially. The Secretary’s ‘‘second-stage review’’ to take 

a close look at the missions, goal achievement, and gaps between where DHS is and 

wants to be is completing this month. He has clearly articulated that DHS leadership must act jointly to: integrate intelligence, policy and operations across the department so each component is directed from an enterprise-wide perspective with 

a clear focus on prescribed DHS outcomes. Bureaucratic stovepipes must be eliminated and information shared effectively. 

The Department identified in its FY 2004 Performance and Accountability Report 

notable performance highlights in achieving its seventh strategic goal of Organizational Excellence, such as reducing nineteen financial management centers to ten, 

consolidating contracting offices, formulating its first enterprise architecture, and 

establishing a Network Operations Center and an enterprise-wide intranet. 

The motivation of this Subcommittee, as Stakeholders, is to accelerate this improvement process by reforming the way the Department allocates its limited resources based on the three mission areas of prevention, vulnerability reduction, and 

recovery/response plus non-homeland security-related functions. DHS submissions 

in the future will clearly reflect budget, cost, performance and results but will be 

simplified by mission segment. Other than a ‘‘mission’’ orientation, mission-based 

budgeting is not unlike performance-based budgeting that is mandated for all federal agencies by OMB in Circular A–11. DHS would develop recommendations that 

would specify (a) institutional, financial, and productivity goals and (b) funding for 

department-wide priorities. Once approved and implemented, I agree that, first, Departmental leadership would be better able to hold DHS entities accountable for 

achieving and complying with performance expectations and guidelines and, second, 

that American citizens would better understand resource allocation priorities and 

results by the tri-partite mission segmentation of prevention, vulnerability reduction, and response/recovery. 

The non-profit Government Results Center which I direct has for more than eleven years assisted government agencies share lessons learned in performance management, reaching approximately 10,000 officials via e-mails and upwards of 200 

government personnel monthly in free meetings that feature reports by Department 

Leaders and practitioners on various cost, performance, results and integration 

management efforts in the federal government. My comments and suggestions to the 

Subcommittee are based upon our learning about those departments? and agencies? 

better practices toward managing for results. The remarks will be according to the 

following categories: 

• The Extraordinary Importance of Leadership 

• An Adaptable Governance Process 

• Development of an Exemplary Departmental Component 

• Strategically-Aligned, Continuously Improving Culture 

• Benchmark Before DHS Application 

• Real Involvement of Stakeholders and Partners

THE EXTRAORDINARY IMPORTANCE OF LEADERSHIP 

The Interior Department proclaims it is critical to have leadership direction, ownership and support. ‘‘Direction’’ to Interior means both substantive strategic direction on the Agency’s future courses of action, and direction in terms of how the performance (mission)-budget process will be managed, and who is responsible. ‘‘Ownership’’ means that senior leadership actually uses the system to make crucial resource decisions, and they personally identify with its successes and failures—meaning that they have an active hand in designing and tailoring the system to suit their 

needs. . .and not totally delegate to staff. ?Support? means paying more than lip 

service to the system, but truly providing adequate funds and the appropriate intellectual capital. This suggests an ongoing learning process in which decision-makers 

too should be trained to understand and use the system. Managers in the Interior 

Department do not hesitate to commend the Deputy Secretary (Designate), Lynn 

Scarlett, for her in-depth knowledge of the planning, financial and program management, bureau operations, support functions, reporting, and success in motivating 

employees. Every day Ms. Scarlett is personally leading the cultural transformation 

by demonstrating how supervisors must manage strategically, involving subordinates and communicating how an individual employee’s work actually aligns with 

Interior’s strategic goals. 

Similarly, Patrick Pizzella, Assistant Secretary for Administration and Management, exerts extraordinary leadership at the Department of Labor. Because of his 

centralized oversight through his OASAM staff, Mr. Pizzella successfully deploys 

cultural transformation and excellence into Labor’s Administrations. Ten years ago 
48

Labor was not evaluated as a leading Department in results-based management. 

Today Labor IS a recognized leader as judged by OMB and other external reviewers. 

Both Interior and Labor have leaders at the Deputy Secretary or Assistant Secretary level who have accepted top responsibility for performance management integration and the cultural transformation process.

AN ADAPTABLE GOVERNANCE PROCESS 

Governance is critical to transformation in that it provides a clear, transparent 

decision-making process that fosters consistent behavior linked to the missions and 

senior management vision. The goal of governance should be consistent and effective 

oversight for initiatives throughout all phases of their lifecycles. A governance system is necessary to establish enterprise-wide standards for senior leadership, program managers, business sponsors, and support functions. Breeding and nurturing 

an accountability culture takes time and top leadership insistence. Operating divisions must be actively involved in design, implementation and evaluation. Leadership must insist on their organization’s responsiveness to OMB and Congress, working with both as effectively as possible to understand and adjust. Anecdotes abound 

of agencies? dialogue with OMB examiners where initial PART scores for programs 

were very low but through program managers? communications of proven results, 

scores rose dramatically. Listening, understanding, and adjustment are powerful to 

gain satisfaction of stakeholders and partners. 

At the Department of Labor, a management review board shares department-wide 

responsibility for long-term, outcome-oriented results. There is a cross-cutting emphasis by the Board. They focus on goals important to the Department as a whole, 

but provide a framework which maps the cascading responsibilities down to every 

level within the Department. Every SESer, non-SES manager and supervisor has 

managerial and programmatic performance standards to be achieved in a cost-effective manner. There is at least one efficiency measure for every program. A performance-cost model recognizes the importance of both total cost and marginal cost associated with performance improvements. 

NASA has developed a well-integrated system of strategic goals and performance 

goals with total and marginal costs. They relate those goals to the three mission 

areas of Understand & Protect, Explore, and Inspire. An interesting feature of 

NASA’s system is that they keep their performance, cost and accountability system 

tightly linked to their evolving vision, mission and themes. In that sense, they provide an excellent example of an adjustable, mission-based budgeting structure. 

NASA adjusts to political and priority changes. They have adjusted by streamlining 

goals, redesigning and simplifying their budget structure, and reducing the number 

of program areas—with every area relating back to the goals and forward to performance measures. They reduced the number of performance measures in order to 

focus on the critical few that drive the success of their mission. They have allocated 

all costs and budgets to the new structure. Their Integrated Budget and Performance Document aspires to be understandable to the public and used as a key tool 

in managing the agency.

DEVELOPMENT OF AN EXEMPLARY DEPARTMENTAL COMPONENT 

Many departments have selected one component agency to develop an exemplary 

target process and system. The Fish and Wildlife Service at Interior is one example 

of cost and performance integration. The bureau tracks its costs through activitybased costing methodology and through cause-and-effect relationships assigns those 

activity costs to what they term ‘‘critical success factors’’. Critical success factors are 

tied to the bureau’s operational goals. These operational goals are subsequently 

aligned with the Department’s end outcome measures. The two key elements in this 

structure are: (1) proper alignment to Departmental goals in order to support the 

Department in viewing the costs of its strategic objectives; and (2) cause-and-effect 

relationships to enable the bureau to analyze marginal costs and understand how 

changes in outcome targets/measures impact the resources required to achieve them. 

The initiative is promising for establishing a results and accountability culture that 

is complete with shared values and practices for a department-wide application. 

In the mid-1990’s we saw how the pilot Marine Safety and Security Program provided a planning and reporting model for the entire Coast Guard to emulate. In 

turn, Transportation incorporated many of the Coast Guard’s processes and system 

for a department-wide application, and DOT became recognized as a leader to study 

and benchmark.

STRATEGICALLY-ALIGNED, CONTINUOUSLY IMPROVING CULTURE 

Mission-based budgeting is an approach used to allocate an organization’s resources in a cost-effective manner to the primary components of the organization’s 

mission. Do a better job of making wise resource investments based on evaluating 
49

how these investments contribute to the Agency’s mission. These contributions need 

to be spelled out in terms of concrete, measurable outcomes that make a difference 

to the taxpayer, and to America. 

The challenges many observe in achieving ‘‘results-oriented, accountable government’’ are similar, in many respects, to those encountered in implementing missionbased budgeting. These challenges can be grouped into three categories: (1) the 

measurement challenge; (2) the management challenge; and (3) the cultural challenge. The measurement challenge concerns the difficulty of accurately determining 

how dollars drive performance. Measuring the cost of inputs, activities, outputs and 

ultimately outcomes related to missions becomes progressively more complex. As one 

proceeds along this continuum, a larger number of people and institutions contribute to the results, and it becomes harder to attribute given results to any single 

source of effort or dollars. The management challenge is how to allocate dollars to 

missions in the absence of analytically rigorous evidence. Various allocation mechanisms are available, including professional judgment, politically-driven motives, or 

pro rata assignments. But any of these approaches are on shaky analytical footing 

and can be called into question by internal and external stakeholders. Thus, Agency 

administrators must carefully design planning processes that accommodate the 

views of stakeholders. 

The cultural challenge associated with mission-based budgeting or performancebudgeting relates both (a) to the organizational culture of the Agency initiating this 

effort and (b) to the Agency’s Congressional oversight, authorizing and appropriations committees. Agency cultures will need to overcome the ‘stovepipe’ mentality 

that has traditionally dictated that funding is allocated to line organizations based 

on capabilities and input needs. In such traditional organizations, budget linkage 

to missions or outcomes is accomplished through budgetary, strategic plan or performance plan narrative that declares the relationship to exist. True allocation of 

resources to missions or outcomes based on demonstrated performance connections 

is much rarer. However, some Departments, such as Interior and Labor, have demonstrated top leadership commitment to breaking down the stovepipes and not only 

backing, but actively guiding and participating in a strategically-aligned, continuously improving process that analytically allocates dollars to performance outcomes 

in successively more rigorous ways.

BENCHMARK BEFORE DHS APPLICATION 

Since DHS is looking anew at its organizational and budget structure in accord 

with its missions, it would be prudent to identify lessons learned and better practices, at least in other federal departments. The DHS-wide eMerge2 solution has 

begun but is temporarily halted. In addition to the better practices in departments 

and agencies cited above, benchmarking to glean lessons from the Defense Department’s enterprise-wide initiatives makes sense. The DHS at this juncture, is probably more complicated to run, even in comparison with DOD. However, DOD is 

working to evolve an effective bureaucratic discipline to run their enterprise-wide 

systems. 

Benchmarking that DOD evolution as well as financial management, integration 

and budget restructuring efforts in other departments should be helpful to DHS. A 

strong DHS-wide, performance and cost-based management information and decision support system will accelerate the acceptance and use of mission-based budgeting as a legitimate management tool.

REAL INVOLVEMENT OF STAKEHOLDERS AND PARTNERS 

For the DHS who is struggling with so much newness and complexity to become 

an entity united toward three missions, it is particularly crucial to involve key 

stakeholders and partners in major transformations. Congress in particular must be 

viewed as more than a stakeholder. Congress must be a partner to work together 

with DHS on developing an effective working relationship that is capable of adjusting quickly in an environment that is changeable and potentially cataclysmic. In the 

absence of such a partnership, challenges to mission-based budgeting will be exacerbated. The Government Accountability Office recently observed that planning and 

budget structures serve different purposes, and any effort to achieve meaningful 

connections between them highlights tensions between their differing objectives. Appropriations staffers, for example, have a concern that all of this new performancebased budget information will replace some of the workload and output categories 

for which they currently get cost breakdowns. Staffers need that kind of information 

to satisfy their constituents. Restructuring can only take root once support exists 

for the underlying performance goals and metrics. In due course, once the goals and 

underlying information become more compelling and are used by Congress, budget 

restructuring may become a more useful tool to advance both mission-based budgeting and performance budgeting. The budget structure will more likely reflect—
50

rather than drive—the use of performance and cost information in budget decisions. 

The missing elements regularly in agencies are fully understanding stakeholder 

needs, adjusting to those needs and successfully communicating an agency’s 

achieved, measured outcomes. 

At present most legislators and their staffers have concluded that aligned budget 

and performance structures work only if performance-cost information is credible, 

compelling, accepted, and directly useful for their objectives. Many, as in most 

States, use outcome measures as input to policy decisions, but rely on workload and 

output measures to make funding decisions. Supplementing, rather than replacing, 

key information used by appropriations committees should be the guide. Closing 

that gap can be realized by truly involving Congress early in the dialogue. 

Thank you, Mr. Chairman. I hope this testimony will be helpful to the Subcommittee in your deliberations on the most effective way to evaluate, monitor and 

allocate resources for our homeland security.

Mr. ROGERS. Thank you. 

I would like to start off with a few questions. 

Mr. McTigue, you outlined some goals and talked about awareness and prevention being first among those. But then you went on 

to make the point that the desired result is for nothing to happen, 

but that is difficult to measure. 

How do you reconcile going to mission-based budgeting when you 

need results as a component, a measurable result, when you can’t 

measure what didn’t happen? 

Mr. MCTIGUE. I don’t accept that you can’t actually measure it, 

Mr. Chairman. The military, for example, are very, very good at 

doing threat assessments, and they can tell you whether the threat 

assessment is escalating or diminishing. 

The insurance industry is extremely good at looking at demographics and deciding how risk is changing. The banking industry 

is very good at doing the same. 

And within homeland security, I think that it is possible to 

gradually acquire the skill to be able to say we can see an escalation in the threat from this particular quarter or from this possible facility, and we need to do something about it. 

So over time, I think that skill can be built. That would then tell 

you that we need to be putting more resources into awareness, so 

that we become aware of that and we can take action before anything happens. We need to be putting more resources into prevention, because with the knowledge we have to be able to actually do 

something to try and defuse the situation. 

Now, it seems to me that those two things are critical to preventing anything from happening. The others sort of cascade down 

as the event becomes more likely. These are your second, third, 

fourth, and fifth sort of stops to the terrorist act and helping with 

the recovery. 

So, yes, I think that is possible. And I would just add this, Mr. 

Chairman, and that is that if you think about mission-based budgeting and you think about performance-based budgeting, here is a 

comparison. 

If you took the issue of hunger, you could have performancebased budgeting for all of these programs that help to feed hungry 

people. And you might measure them, and you might decide that 

we have been highly successful. But you have done nothing to diminish hunger, because all you have done is you have concentrated 

on programs that feed hungry people rather than looking at what 

caused that hunger and how can we remove the hunger. 
51

With mission-based budgeting, you would focus on what is going 

to gradually eliminate the hunger rather than what is going to 

most effectively feed people. I think that is good. 

I think it is axiomatic in performance-based budgeting that you 

are going to focus on the mission. But there would be a possibility 

that people didn’t, that they just focused on whether or not this 

was going to give you a better performance from this activity. 

Mr. ROGERS. Great. 

Mr. Breul, in your statement, you indicate that neither the Department of Homeland Security nor Congress can tell from the current budget submissions how much is being allocated for the budgetary mission areas of prevention of terrorism, vulnerability reduction and response to and recovery from terrorist attacks. 

Could you elaborate on this statement and explain why it is important to have this information? 

Mr. BREUL. [inaudible] 

Mr. ROGERS. Did you agree with Mr. McTigue’s assessment of the 

measurability of these? 

Mr. BREUL. [inaudible] 

Mr. ROGERS. My time has expired. I now yield to the ranking 

member, Mr. Meek, for any questions he may have. 

Mr. MEEK. Thank you, Mr. Chairman. 

Mr. McTigue, you mentioned an issue of a normal merger in your 

testimony, and you said that it takes time. And I think the reason 

why a number of members of Congress and also the American people, and even some of you in academia—you know, when it comes 

down to protecting the homeland, patience is not necessarily one of 

the great values that we hold. 

How long do you think it will take for us to—as Mr. Breul mentioned just a minute ago, for us to become one? Because we have 

a department that was put together by the Congress, there are a 

lot of kingdoms within the agency we have now. 

How do we get down—have you seen any proposals or have there 

been writings on how we can streamline not only management in 

the Department—and maybe Secretary Chertoff may answer many 

of these questions in the coming days, because I am pretty sure 

that he has some thoughts on this—to be able to get us toward 

mission-based budgeting, because we have the whole issue of attrition, which is just out of control in the Department? 

No one stays long enough to be able to even buy into a concept 

on what we should be doing as it relates to mission-based budgeting, leave alone the other missions that we have. 

Mr. MCTIGUE. Congressman, my response to you would be given 

no change, in 10 years you might be looking at a department that 

looks very much the same as it does today, particularly if the allocation of resources are done as Mr. Breul suggested on a component-by-component basis. 

You could change that if you were to start to think about funding 

the Department of Homeland Security on—we purchase the traditional functions from each of those component agencies, so the 

Coast Guard does its traditional job and so does the Customs do 

its traditional job, and the Secret Service protects the important 

personages, but at the same time you thought about now we also 
52

have to protect the homeland, and these are going to be the most 

important components. 

We want to increase our capability of detecting threats, so we are 

going to charge the homeland with increasing that capability and 

give it some more resources to do that. We are going to increase 

its capability to prevent—in other words, find ways of defusing a 

threat when that exists. 

And as you do that, then I believe that you will tie the Department together, because the incentives created by people having to 

work together will tend to produce a culture that works together. 

While you allow them to work as separate functions, then they will 

never develop a common culture, in my view. 

Mr. MEEK. Thank you. 

This is a question for the entire panel, whoever wishes to respond to it. When you start looking at the Department of Homeland Security and mission-based budgeting—and I asked this, a 

pretty much similar question, I asked the Comptroller—how do you 

balance not only the policy but also the influence from Congress 

and other Governmental figures here in the capital city here in 

Washington, D.C., and politics that goes along with that that can 

very well disrupt mission-based budgeting? 

And, Mr. Breul—am I pronouncing your name correctly, sir? 

Mr. BREUL. Yes. 

Mr. MEEK. Okay. You mention in your statement on page five, 

where you list the advantages of mission-based budgeting—you 

mention first there are many positive effects that incur as a result 

of a more direct link between mission and allocation of resources, 

which makes perfect sense, you know, reading it. 

Also, you go on—I am going to go further. second, such a link can 

help inform stakeholders, including Congress, whether taxpayers 

are receiving sufficient value for their money. Third, you go on to 

say when either additions or deletions from the Department’s budget needs to be made, these can be targeted in a way to optimize 

the mission performance. 

I am going to tell you, I mean, just from a layperson—let’s just 

take off the congressional hat—that makes perfect sense, but how 

we get there is the hard part, and, you know, it is almost like I 

love sausage, but I don’t want to see it made. 

And it is kind of hard to get there, and I know that there is some 

thinking—and I am pretty sure all of you would like for us to take 

our political hat off and do what we have to do on behalf of the 

country, but that is not necessarily the issue here. 

One of my constituents met me once and said—and he was sharing something with me, Mr. Chairman, and he kept going on and 

on and on, and then he said well, you are going to get a chance 

to say something in a minute. 

I am just going to say this before I close, because I would like 

for anyone that wishes to answer the question. This committee was 

put together by House speaker and also the Democratic leader and 

other members of Congress that cared about this subject. 

It is the first time in the history of the country that we have 

really focused enough to learn about what we need to know to be 

able to lead in this area. So this is groundbreaking. 
53

I know this subcommittee is not full right now, but it is going 

into the record. Staff is being educated. We are also being educated 

on what we are supposed to do. We are the stewards of responsibility, I believe. 

And we are going to have to be the interpreters on the floor and 

in other committees about our responsibility, so that means that 

we have to resist certain things just because we can. We can do 

something. We have to resist. And that is a difficult balancing act 

for us. 

And so I am asking those of you that are focusing on the seriousness of the matter to just dive into politics for a minute and talk 

about exactly what you feel that we should do as responsible policymakers to make sure that we can deal with this mission-based 

budgeting, because I am understanding it clearer now as not only 

I read but I am hearing what you are saying, because I believe that 

we cannot afford to continue to give, give, give, give, give money 

to the Department of Homeland Security thinking that that is the 

be-all and the end-all, because it is not. 

And so we have to get to some sort of targeting. When you start 

talking about sending the resources to the place where it needs to 

be, that means there is going to be a U.S. senator or 

congressperson that is going to have to explain why they are not 

getting the homeland security dollars in their district, because no 

one wants to, I guess, blow up an empty field. I don’t know. 

Mr. BREUL. Let me try to give you an answer to that. I think the 

simple answer—and it was suggested by Comptroller General 

David Walker—there is a need for a game plan, which is the strategic plan for the Department. 

The strategic plan will lay out just how the mission is to be 

achieved, and the mission, again, in terms of the Department as a 

whole, so that as you go about making that sausage there is a recipe, there is a plan, and you are not just doing a little of this and 

a little that and making it up as you go along. 

The strategic plan—and it is a statutorily required item at this 

point, based on the Government Performance and Results Act—is 

something the Department and the Secretary are charged with developing. It must be updated every 3 years. 

And importantly, those departmental strategic plans are to be 

developed in discussion with stakeholders, but importantly, from 

your standpoint, in consultation with Congress. 

They are supposed to engage the Congress in a dialogue as to 

what the pieces and elements might be so that all of the elements 

that comprise the mission of that department—those stipulated, 

the three primary ones in the Homeland Security Act, as well as 

the other functions—are accommodated and expressed in a mission 

format that makes sense, so that then they can go about executing 

and you can go about allocating resources in a way that maximizes 

the achievement of that stated mission. 

So there is a means to do it. I think the strategic plan is the 

main tool to do it. 

Mr. MCTIGUE. Congressman Meek, if I could just make a comment as well, before I came to the United States I used to be a 

member of parliament in New Zealand, so I have experience from 

the side of the political battles, which I had to get into to get deci-
54

sions through. I was also a member of cabinet, so I had some experience from that side. 

The chairman asked me earlier on whether or not you could 

measure if the risk was getting greater or less, and I said the answer was yes. Also, as Jonathan Breul said, you can measure 

whether or not your capability of being able to respond to that risk 

has improved or deteriorated. 

What you can also say, using that same kind of analogy, is that 

if we starve this particular issue from resources, then the risk to 

the American people has gone up by 5 percent, 7 percent, or 10 percent. Mr. Senator, do you want to be responsible for that? 

And certainly, as a member of parliament, I didn’t want to be responsible for those things. So I think that you can start to identify 

the consequence of not putting the money in the high priority 

issues. There is a consequence, and it is that the risk to Americans 

gets greater. 

Mr. MEEK. I am sorry. 

Mr. METZGER. Yes, I would like to comment about what an agency is doing. On page three of my written testimony, I referred to 

NASA. They have developed a well integrated system of strategic 

goals and performance goals with total and marginal cost. 

I pick up on Mr. Breul’s comment about the importance of the 

planning. I pick up on my earlier comment about the importance 

of the governance process, because the agency relates those goals 

to their three mission areas of understand and protect, explore and 

inspire. 

Besides those three mission areas, which have subordinate goals 

under them, they have three enabling goals that they spell out. So 

they keep their performance, cost, and accountability system tightly linked to their evolving vision, mission, and themes, as they call 

them. 

In that sense, they provide an excellent example of an adjustable 

mission-based budgeting structure. They adjust to political and priority changes. They adjust by streamlining goals, redesigning and 

simplifying their budget structure, and reducing the number of program areas with every area relating back to the goals and forward 

to performance measures, reduced number of performance measures they do in order to focus on the critical few that drive the success of the missions. 

They allocate all costs and budgets to the new structure. They 

have an integrated budget and performance document that aspires 

to be understandable to the public and, importantly, used as a key 

tool in everyday managing of the agency. 

Mr. MEEK. Well, Mr. Chairman, I just want to—I know we are 

into a close now—thank our panel, and I will definitely save your 

information, so if I need further information—I am glad that you 

mentioned the issue of the homeland security strategic plan. 

I will tell you personally I have been paying close attention to 

the statutory language. We have put components there—that is 

when they came out with the major components that the Department of Homeland Security has to follow. 

Of course, there are about four more than what I have actually 

talked about. But I think that is important, Mr. Chairman, as we 

move on. I know that Mr. Chertoff, due to the age of the Depart-
55

ment—that will be coming back around again, to write a new strategic plan, and I think it is important, and I know that Congress 

will take part in that. 

I don’t know what level of input we will have, but within, that 

is important. But thank you, gentlemen, for your time. 

Mr. ROGERS. I would like to ask Mr. Metzger, in your statement, 

you indicate under a mission-based approach DHS would develop 

recommendations that would specify, A institutional, financial, and 

productivity goals and, B funding for department-wide priorities. 

In your view, would this make DHS more accountable? 

Mr. METZGER. Yes. Could you say which particular page that is 

in the notes? 

Mr. ROGERS. No, I don’t—

Mr. METZGER. OK. Yes. I think the important thing is that 

through the governance process imposed upon by insisting top leadership that the flow downward through to the levels of the managers of the entities, the managers of the programs, the managers 

of the functions, even individual employees, which is what Interior 

does, they will accomplish the alignment—

Mr. ROGERS. Does Interior have mission-based budgeting? 

Mr. METZGER. No. They have performance-based budgeting and 

they have strategic goals, of course, which are the overarching, and 

their annual plan calls for performance goals that are aligned with 

that. 

Mr. ROGERS. What do you think is going to be the institutional 

reaction to this push for mission-based budgeting? 

Mr. METZGER. Well, I think it will be hard in the homeland security case, of course, because they all have their stovepipes that they 

have been accustomed to. This is a major challenge that the Department has, to break those down. 

The only way you are going to get around that, I think, is by 

having the top leaders—and those, of course, would be the secretary, the deputy secretary and the assistant or the under secretary—for management to understand what is going on. 

What is impressive at Interior is that the leaders really understand, have an in-depth knowledge of what is going on. This is very 

hard in a department with 180,000 employees and 22 legacy agencies. But the only way it is going to get done, is if you accelerate 

the process that is of such great interest to the Congress. 

The dialogue between the agency and the Congress, especially at 

this juncture, I think is the most important thing to shortening the 

time frame to have results that are more transparent to the public, 

accepted by the public, accepted by the appropriators, so they understand what is going on, too. 

Dialogue, communications—that is the most important thing that 

the executive agencies can do in getting the sense of ownership, involvement, of the stakeholders. 

And in the DHS case I think they have got to be considered having Congress considered as real partners in all of this and not just 

stakeholders somewhat up here, but really involved, thinking 

through the problems. 

Mr. ROGERS. I would ask you the same question I asked Mr. 

Walker. Why do you think more agencies haven’t already adopted 
56

mission-based budgeting? And I would ask any one of you to take 

that one. 

Mr. METZGER. Well, I would say offhand that homeland security 

is in especially dire need of having simplicity, because of all this 

complexity going on. 

Mr. ROGERS. Organizationally. 

Mr. METZGER. Organizationally. The mission structure would 

help, hopefully, to accelerate the process of change—

Mr. ROGERS. But again, why don’t you think more agencies or departments have this? Nobody else has it other than GAO, and we 

think CIA might. Why do the other agencies not have—

Mr. METZGER. NASA does, as I said. 

Mr. ROGERS. NASA does. 

Mr. METZGER. At least they did when I last checked a year ago. 

But it can be done as in their case. They have a matrix on a single 

page that shows how it does relate the mission, the goals, and the 

themes spread across the top. It is a very impressive one. 

Mr. ROGERS. Mr. Breul? 

Mr. BREUL. Let me venture a guess for you. I mean, part of it 

is that this is tough stuff. Most of the agencies have not wrestled 

with the question of strategic plans and performance missions but 

only in the last 2 years. 

This is a relatively new phenomena and taking it up to the level 

of looking at the mission as a whole is harder to grasp. Frankly, 

the Congress and the appropriations process focuses on the pieces. 

Appropriation breaks down into program and subaccounts and the 

rest, so the process tends to look at the pieces rather than the 

whole. 

But a number of departments are working in this direction. The 

Labor Department is a notable one. I would also point out the Department of Transportation where Deputy Secretary Jackson comes 

from—DOT has four major missions that it poses and imposes on 

all the functions and activities in the department. 

They look to safety, mobility, economic growth and security, and 

they see those as the overarching mission of that department. And 

they have all the program departments look toward those as the 

animating way of moving forward with their mission. 

And I think you will see that department and a few others working in this direction fairly soon. 

Mr. ROGERS. I want to thank all of you for your time. It has been 

very helpful to us as members as well as our staff. 

I would point out to you, the same way I did to Mr. Walker, that 

we have several members who aren’t here that may have questions 

they will submit to you. We are going to leave the record open for 

10 days. If you could make a written response to inquiries they 

might have, that would be helpful. 

And thank you again for your time. And with that, this committee stands adjourned. 

[Whereupon, at 4:34 p.m., the subcommittee was adjourned.] 
(57)

A P P E N D I X 

ADDITIONAL QUESTIONS AND RESPONSES

QUESTIONS FROM HON. KENDRICK MEEK FOR JONATHAN D. BREUL RESPONSES

Question 1.: The inability of the financial systems to interact is the kind 

of problem that was anticipated when 22 different legacy agencies were 

merged together, each with its own budgetary and accounting systems. 

What role should DHS’ Chief Financial Officer (CFO) play in making sure 

that the agency can make the changes that would be required by mission 

based budgeting? 

The Chief Financial Officers Act of 1990 which created the position of a CFO at 

the major departments and agencies sets forth specific authority and details the responsibilities of the major federal agency CFO offices (31 V.S.C. 902). These statutory duties include development and maintenance of systems that provide complete, 

accurate and timely reporting of financial information. 

The Department’s CFO is also tasked with budget formulation, budget execution 

and performance management functions. For these reasons, the CFO should be involved through out the lifecycle of nearly every departmental initiative, from budgeting and funding at the front end through cost management during execution to 

the final accounting and reporting of expenditures. Working with other departmental officials, the CFO should play a major role in making changes required by 

mission-based budgeting.

Question: 2. Because of the non-mission based work that DHS does like 

that of handling natural disasters through Federal Emergency Management Agency (FEMA) is it even possible to successfully do mission-based 

budgeting? 

Yes, it should be possible to successfully do mission-based budgeting. The Government Performance and Results Act of 1993 (GPRA) requires the department to develop a strategic plan, as well an annual performance plan and report. The strategic 

plan should define both the department’s mission and a set of long-range goals and 

objectives for all of the department’s major programs and functions. 

The strategic plan consists of several elements, including a mission statement and 

a set of long-term goals. The mission statement describes the purpose of the agency, 

its raison de ́tre. The long-term goals (called general goals and objectives) not only 

describe how an agency will carry out its mission, but also must cover all the major 

programs and functions of the agency.

Question: 3. In the federal government, the Director of Central Intelligence, and now the Director of National Intelligence (DNI) have used mission-based budgeting to plan budgets and track the assignment and spending of resources among the various intelligence agencies based on its missions for about the last ten years. How easy or hard is it for DHS to do this 

given that unlike the DNI whose primary responsibility is intelligence, 

DHS has a wide range of duties? 

The strategic plan required under the Government Performance and Results Act 

is a means to forge a link between the mission and all of the other major functions 

and activities of the department. GPRA requires agencies to plan and measure performance using the same structures which form the basis for their budget request: 

program activities. This critical design element of GPRA aims at assuring a simple, 

straightforward link among plans, budgets and performance information and the related congressional oversight and resource allocation process. 

Implementing a mission or outcome-oriented approach can nevertheless be difficult. There are a number of reasons why. First, a mission orientation represents 

a fundamentally different way of thinking and of managing, across all aspects of an 

organization, including how it relates to citizens and major stakeholders. Organiza-
58

tional change of this kind is rarely easy. It always takes time to put into place and 

to sustain, it is certain to encounter at least some initial resistance, and it requires 

an array of approaches and supports. Second, mission outcomes are longer term in 

nature than outputs and activities. They tend to be far more difficult to quantify 

than activities and outputs, where it is even possible or meaningful to do so. 

There is, nonetheless, substantial evidence from many sources that it is possible 

to provide for a focus on mission and that it is possible to assess the extent to which 

the mission has been achieved. 

QUESTIONS FROM HON. KENDRICK MEEK FOR HON. MAURICE P. MCTIGUE RESPONSES

Question 1.: The inability of the financial systems to interact is the kind of problem that was anticipated when 22 legacy agencies merged each with its own budgetary and accounting systems. What role should DHS’s Chief Financial Officer 

(CFPP play in making sure that the agency can make the changes that 

would be required by mission budgeting? 

Mr. McTigue’s Response The merger that created the Department of Homeland 

Security (DHS) did not create the problem that the Federal Government has with 

its accounting systems. The problem already existed. The merger placed more urgency on finding a solution to the fact that it was impossible for policy makers to 

compare the cost and efficiency of different activities from different organizations 

because used different systems for recording cost, if indeed cost was identified at 

all. 

The goal should not merely be to integrate the department’s different financial accounting systems for the sake of integration. The goal should be to have a single 

system that actually produces the financial information Congress needs. Thus, it is 

imperative the effort start by defining what information the system is supposed to 

produce, rather than simply starting with or more existing systems and asking how 

they could be combined with the least trouble.

Question 2.: Because of non-mission based work that DHS does like that 

of handling natural disasters through the Federal Emergency Agency 

(FEMA) is it even possible to successfully mission-based funding? 

Mr. McTigue’s Response: The answer to the question is yes, but mission-based 

budgeting requires that funding for the disparate missions of each agency be allocated separately and that the expected results under each mission be made explicit. 

In order to manage multiple missions of DHS as a result of merging 22 major of 

government, it is necessary to think of DHS as a conglomerate that has an overarching responsibility for the security of the homeland. For the overarching mission, 

the department can purchase specific services from each its agencies that will 

produce specific results, measured in increased security for the homeland. At the 

same time, each of these organizations will also be funded separately for their other 

mission responsibilities. 

FEMA, for example, has a disaster response and recovery capability that can be 

employed in response to natural disasters or terrorist such as 9—11. It makes more 

sense to develop and deploy such capabilities in multiple missions than to develop 

separate organizations that would handle response and recovery from natural and 

terrorist-induced disasters. When allocating funding at FEMA, the agency’s multiple 

missions should be identified and separate funding tied to each. 

The budgetary process should separate the multiple missions of each agency and 

apply a different funding formula for each or goal. To do otherwise will only lead 

to confusion for Congress when trying to determine if the organizations are achieving the expectations mission by mission that Congress set for them.

Question 3: In the Federal Government, the Director of the Central Intelligence 

Agency, and now the Director of National Intelligence (DNI) have used missionbased budgeting to plan budgets and track the assignment and spending of resources among the various intelligence agencies based on its missions for about ten 

years. How easy or hard is it for DHS to do this given that, unlike the DNI 

whose primary responsibility is intelligence, DHS has a wide range of duties? 

Response; In my view this is no more difficult for DHS than for any other agency, provided Congress makes its intent clear in the appropriation process. Of course 

that would require a change to the way in which Congress makes appropriation decisions. To begin with, it would Congress to fund outputs instead of inputs and to 

identify the expected result and a linkage to the that occurred in the outcome at 

the time of appropriation. All of these things are possible. 

To address Congress’ needs, it is first necessary to reach a common understanding 

of the purpose of ‘‘mission-based budgeting’’. My definition is: ‘‘Mission-based budg-
59

eting is a process focuses budget decision making on actions necessary to accomplish 

the mission and directs funding to those actions based on a system of prioritization.’’

In order to achieve such a mission-based budgeting system, certain information 

must be known and transparent: 

1. If the mission is to make the homeland more secure, there should be a process that measures increases or decreases in the safety of the homeland. To the 

best of my knowledge, this measure does yet exist. So, the first task is to develop a credible way to measure such increases or decreases. 

2. Funding will go first to activities that will make quickest and greatest contribution to increased security homeland. This presumes that the knowledge exists to what are the greatest threats what are the greatest in the security arrangements. As this may well be information that would quite properly to keep 

not aware if that information exists. 

3. The department should know the costs and benefits—in terms of improved 

security—for each of its activities. I am reasonably certain that this information 

currently does not exist. In order to be able to evaluate this, the department 

must have a financial system that gives a fully attributed cost to all activities 

and is able to link the cost results of each activity expressed in terms of increased security. 

Therefore, the role of a CFO would be to construct department wide systems that 

produce financial information in the form expressed above that is consistent and allows credible comparisons across all units inside DHS. Because this information is 

useless it can be linked into specific improvements in the security of the homeland, 

this task reaches beyond the spectrum of the CFO and requires input and cooperation from the entire management team. 

Finally, Congress should be able to expect a budget request that details each activity seeking funding completely on a cost-to-output basis and assesses how much 

the funding of that activity will increase security of the homeland in terms of a percentage across the entire analysis. For example: the funding of this activity at this 

level will decrease the risk to the homeland by one percentage point. 

With this information, Congress can then very clearly direct funding to those activities that will produce the greatest gains and delay or terminate funding to activities that do not make an acceptable contribution to improved security of the homeland. 

However, even if Congress does not change the way in which it makes appropriations, it is still possible to implement mission-based funding at the agency level. 

This would require the vesting in the Secretary of Homeland Security the authority 

to identify and prioritize the threats to the homeland, to design appropriate responses, and to allocate funds accordingly. 

The same process could be used by the Secretary to allocate the resources required to fund the historic missions of the other organizations inside DHS (for example, natural disaster relief at FEMA). This process would only be possible if Congress granted the Secretary significant flexibility regarding the allocation of funds. 

Much of this prioritizing could indeed be done before the appropriation was finalized 

by Congress so that Congress could see how the allocation would be structured and 

the Secretary would only have to make adjustments for variations in the final funding level for the department after the appropriation was finalized.

QUESTIONS FROM HON. KENDRICK MEEK FOR CARL J. METZGER RESPONSES

Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to reply to your constructive and excellent questions of August 17th. It is an honor to enlarge upon my previous testimony of 29 

June on Mission-Based Budgeting as a mechanism to transform the Department of 

Homeland Security (DHS). I will address your questions in order: 

1. The Role of the Chief Financial Officer (CFO) 

2. Federal Emergency Management Agency (FEMA) 

3. Comparison of the Department of Homeland Security (DHS) and the 

Director of National Intelligence (DNI) 

My comments reflect continuous review since June 29th of published information, 

including the July 14th report by your Committee’s Democrats, Protecting America 

Against Terrorists: The Case for a Comprehensive Reorganization of the Department 

of Homeland Security; Mr. Chertoff’s congressional testimonies and public speeches; 

articles on the Second Stage Review (2SR) that involved over 250 DHS personnel 

and subsequent DHS organizational and policy changes reported in daily, weekly 

and monthly periodicals; Government Accountability Office (GAO) publications on 

the DHS; press reports of the DHS response to acts of terrorism (London) and natural disasters (Hurricane Katrina); and re-reading of the December 13th, 2004 joint 
60

study by the Center on Strategic and International Studies (CSIS) and the Heritage 

Foundation on DHS organization. My comments further are my own and not necessarily those of the Government Results Center’s partner or sponsoring organizations. The Government Results Center is a non-profit, independent research and 

communications organization; our mission is to serve public servants by assisting 

federal agencies share lessons learned and better practices in improving government 

performance and results.

1. The Role of the Chief Financial Officer 

While the survey and consensus-building methodology of the 2SR and DHS consequent leadership decisions on the relative authorities of the DHS Management Directorate compared with other directorates was a laudable decision-making process, 

I have been persuaded by the DHS Inspector General and GAO studies on shortfalls 

in DHS financial, information and procurement management practices. I am also 

aware that Mr. Chertoff believes his oversight of the CFO through the Under Secretary for Management is practical and preferable (statement of July 25). However, 

I agree with the Committee Democrats study that the authority of the Chief Financial Officer (CFO), Chief Information Officer, and Chief Procurement Officer (CPO) 

should be elevated to a level above the other directorates. 

It made sense for DHS initially to bring together carefully but somewhat loosely 

the disparate 22 agencies into one Department with the broad, yet singular mission 

of preparing for and responding to terrorism acts or disasters by assuring no major 

disruption of their traditional individual services to the public. Certainly chaos has 

been successfully avoided. However, at this second stage for planning DHS should 

increase the authority of especially important Department-level management functions over the various directorates. Both financial management and information 

technology and sharing management deserve such immediate attention for purposes 

of accountability reporting and program management. Given the size of the DHS 

budget and extensive use of contractor services, better department-wide procurement management too should be considered. More central management controls will 

accelerate effective performance and results management. It is not advisable to permit audit able financial statements to take the DHS five to seven years to develop 

as forecast in the IG report. Corrective action over internal controls should be accelerated; activity-based or some form of total costing for performance or mission-based 

budgeting should be implemented DHS-wide as soon as practical. For that goal it 

is important that the CFO and CIO offices work together with coordinating oversight of their counter-parts in the directorates. 

I make these comments based upon my fifty years of experience in ninety countries, particularly in program management with major manufacturing corporations 

in the oil and chemical industries and general management with management consulting firms serving U.S. federal and foreign governments.

2. Federal Emergency Management Agency (FEMA) 

This second question suggests handling natural disasters is ‘‘non-mission based’’, 

that DHS is pre-dominantly concerned with homeland security to counter terrorism 

and to allocate its limited resources based on the three mission areas of prevention, 

vulnerability reduction, and response/recovery. In my opinion future government organization will march toward organizing toward effective plans and operations controls over similar and compatible missions and goals. Congress has been hinting at 

that orientation when discussing efficiency and effectiveness improvements in crosscutting programs such as job training or food safety in recent years. 

The point is that it makes sense for a ‘‘non-mission’’ entity such as FEMA to be 

an integral part of DHS resource utilization and funding because FEMA and other 

parts of DHS have similar management objectives. Does FEMA not have the same 

tri-partite concern of prevention, vulnerability reduction, and response/recovery that 

DHS has for its mission segments? Does FEMA management not, such as with Hurricane Katrina in the last few days, engage a multitude of DHS, other federal, state 

and local government agencies and private sector organizations to serve the public 

urgently? Are not terrorist acts as unpredictable as natural disasters? Or their resultant costs unpredictable? FEMA management in principle faces the same event 

occurrence, costs and resource utilization uncertainties as all DHS faces. 

The Coast Guard has successfully for years used scenario planning to assist them 

in developing reasonable strategic plans and performance budgets. Similarly DOD’s 

Quadrennial Defense Reviews and management are based upon a four-part sequence of plan, brief, do and review. Reviews are especially useful and often neglected in agencies, but they are important to the Army (called ‘‘after-action reviews’’) and Air Force (dubbed ‘‘de-briefs’’) as explained in two recent books. DOD 

like DHS is beset by uncertainty but manages to plan, secure funding, execute, and 

review to improve. I believe FEMA may readily fit into a DHS sequence of planning, 
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briefing, doing and review within a mission-based budgeting context, or for that 

matter, within an adjusted strategic goal structure in keeping with the Secretary’s 

six point agenda.

3. Comparison of the Department of Homeland Security (DHS) and the 

Director of National Intelligence (DNI) 

The Director of Central Intelligence/DNI’s use of mission-based budgeting to plan 

budgets and track the assignment and spending of resources among the various intelligence agencies based on its missions over these last ten years has been notable. 

Similarly the Office of National Drug Control Policy (ONDCP) over approximately 

the same time frame has been monitoring goals, strategies and results of over fifty 

law enforcement agencies in drug control. ONDCP has been helpful to the Executive 

Office of the President (EOP) and Congress in that analytical and tracking process 

for drug control. Managing neither intelligence nor drug control has been easy, especially in today’s environment of addressing freedom of information or privacy issues 

within such a free society as ours. There are so many obstacles, checks and balances 

placed on our American government. Harry S. Truman said it best in 1958, ‘‘Whenever you have an efficient government, you have a dictatorship’’. We have to operate 

openly and by consensus, paying attention to a myriad of internal and external 

voices, often in conflict. 

The formation of the DHS in itself from an assortment of 22 agencies was tremendously ambitious, but it was and is necessary to focus properly on the threats 

against us. Convincing taxpayers and our Congress of the need and allocation of 

precious resources is difficult. There is a decided tendency to be reactive rather than 

proactive with insight into relative degrees of risk according to three variables: 

threat, vulnerability, and consequences. Secretary Chertoff recognizes the importance of risk-based planning in the recently-released National Preparedness Goals.

In the same document he expresses the need for state and local partners to receive 

grants to ‘‘build the right capabilities in the right places at the right level’’. Partnerships are deemed truly necessary. Scarcely a week goes by without reading of DHS 

progress or attention in the press: plain-language radio rules, smart ID cards for 

first responders, consolidation of 250 DHS aircraft and 500 pilots into the Customs 

and Border Protection bureau, the DHS IG report on the IT systems? weak access 

controls and a lack of contingency planning, creation of a new DHS Operations Coordination Division, and new DHS assistance to the New York mass transit system 

and selected ports, The GAO is trying to assist DHS through its congressionallyrequested analyses and recommendations. 

Secretary Chertoff in his public appearances stresses the importance of DHS 

being results-oriented, to measure success in terms of the outcomes produced—to be 

network-focused, that is, building teams with partners in all other agencies and the 

private sector. He emphasizes being flexible - to be prepared and to react quickly 

since the enemy reacts rapidly to change. Rigid structures and procedures cannot 

be the way we define our thinking, he says. His approach is managerially sound. 

He has enlisted people and managers in the 2SR, then briefed internally, in Congress, and the public. As an experienced general manager, I would give the Secretary latitude in implementing his re-organization and monitor as constructively as 

possible in the weeks and months ahead. His is a ‘‘hard’’ job. To the extent that 

a simpler, mission-based budgeting framework could be developed to assist him 

makes management sense to me. 

Thank you, Mr. Chairman. I hope my answers to your new questions will be helpful to the Subcommittee in your deliberations on the most effective way to evaluate, 

monitor and allocate resources for our homeland security.

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