Department of Homeland Security 

Office of Inspector General 

Audit of the Department of Homeland Security's 
 

Handling of Conference Fees for the Process Control 
 

Systems Forum
 


OIG-10-104 July 2010 
Office ofInspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

Homeland 

Security 

JUL 2 7 2010 

MEMORANDUM FOR:	 The Honorable Rand Beers 

Under Secretary 

National Protection and Programs Directorate 

The Honorable Dr. Tara O'Toole 

Under Secretary 

Science and Technology Directorate 

~./~_--£ cJ: 0 

FROM: -~[cnaf(rL. Skinner 

Inspector General 

SUBJECT:	 Final Letter Report: Audit ofthe Department ofHomeland 

Security's Handling ofConference Fees for the Process 

Control Systems Forum (PCSF) 

We audited the Department of Homeland Security's (DHS) Handling of Conference Fees 

for the Process Control Systems Forum in fiscal years 2005 to 2007. Our objective was 

to determine whether a violation of the Miscellaneous Receipts Statute (31 U.S.C. § 

3302) or the Anti-Deficiency Act (31 U.S.c. §§ 1341 and 1517(a» occurred from the 

receipt of conference registration fees. 

DHS violated the Miscellaneous Receipts Statute by improperly augmenting its 

appropriations with the conference fees collected in fiscal years 2005 to 2007 and not 

remitting those fees to the U.S. Treasury general fund as required. However, DHS did 

not violate the Anti-Deficiency Act because appropriated funds available from the years in 

question are sufficient to cover DHS' remittance of the conference fees to the U.S. 

Treasury Account. 

This report contains one recommendation. Your office concurred with the 

recommendation and has taken action to resolve the recommendation. We consider the 

recommendation resolved and open and will close it when implementation is complete. 

Consistent with our responsibility under the Inspector General Act of1978, as amended, 

we are providing copies of our report to appropriate congressional committees with 

oversight and appropriation responsibility over the Department of Homeland Security. 

The report will be posted on our website. 
oversight and appropriation responsibility over the Department of Homeland Security. 

The report will be posted on our website. 

Should you have any questions, please call me, or your staff may contact Anne L. 

Richards, Assistant Inspector General for Audits, at (202) 254-4100. 
Background 

As part of DHS’ Science and Technology Directorate, the Homeland Security Advanced 

Research Projects Agency has an essential role in engaging the private sector, the 

academic community, and others in innovative technology design, rapid prototyping, 

prototype systems engineering, and development of new homeland security technologies. 

During August 2004, the Homeland Security Advanced Research Projects Agency 

requested support for the creation and management of a Process Control Systems Forum 

(PCSF) to address problems with security and reliability in process control systems and 

supervisory control/data acquisition. The Science and Technology Directorate awarded a 

contract to a private contractor on October 13, 2004. 

The original contract, covering 1 year with 2 additional option years, was awarded under 

an interagency agreement with the Department of Interior for management of the annual 

Forums for FYs 2005 through 2007. On June 27, 2006, a modification to the contract 

transferred Forum responsibility to the National Protection and Program Directorate 

(NPPD). Nonetheless, PCSF funding continued to be provided from Science and 

Technology’s appropriation for Research, Development, Acquisition, and Operations. 

In 2008, the NPPD Director of Budget and Financial Services raised concerns that 

conference fees were being inappropriately collected for the PCSF that fiscal year and 

canceled DHS’ sponsorship. On August 27, 2008, the Director notified the DHS Chief 

Financial Officer of a potential Anti-Deficiency Act violation related to conference fees 

previously collected for the PCSF in FYs 2005 to 2007. The Anti-Deficiency Act (31 

U.S.C. § 1341 and 31 U.S.C. § 1517 (a)) prohibits a government officer or employee 

from making or authorizing an expenditure from, or creating or authorizing an obligation 

under, any appropriation or fund in excess of the amount available in the appropriation or 

fund unless authorized by law. Additionally, the Miscellaneous Receipts Statute (31 

U.S.C. § 3302(b)) requires all funds received for the government from any source to be 

deposited into the miscellaneous receipts account of the U.S. Treasury without deduction 

for any charge or claim if the retention of the money is not authorized or exceeds 

authorized levels. 

The Office of the Chief Financial Officer performed a preliminary investigation and on 

November 25, 2008, referred the matter to the Office of Inspector General for review. 

We performed our audit to determine whether the department violated the Miscellaneous 

Receipts Statute (31 U.S.C. § 3302) or the Anti-Deficiency Act by collecting conference 

registration fees for the Process Control Systems Forum in FYs 2005 to 2007. 

Results of Audit 

DHS violated the Miscellaneous Receipts Statute by improperly augmenting its 

appropriations with the conference fees collected in FYs 2005 to 2007 and not remitting 

those fees to the U.S. Treasury general fund as required. However, DHS did not violate 

the Anti-Deficiency Act because appropriated funds available from those years are 

sufficient to cover DHS’ remittance of the conference fees to the U.S. Treasury Account. 

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Miscellaneous Receipts Statute 

The department violated the Miscellaneous Receipts Statute (31 U.S.C. § 3302(b)) in FYs 

2005 through 2007 by collecting conference fees and not remitting the fees to U.S. 

Treasury General Fund as required. The Science and Technology Directorate used its 

Research, Development, Acquisition and Operations appropriation to fund the cost of the 

Process Control Systems Forum for FYs 2005 to 2007. The directorate charged 

conference fees to cover related costs, such as hotel charges, food, and light refreshments. 

Table 1 lists the amount of conference registration fees the department collected for the 

Process Control Systems Forum during the 3-year period. 

Table 1 

Fiscal Year Total Fees 

Collected 

2005 $23,370 

2006 $50,925 

2007 $137,150 

Total $211,445 

When the contractor collected the fees from conference attendees and used those fees to 

offset conference expenses, an unauthorized augmentation of DHS’ appropriations 

occurred for each of the 3 years in question. 

While there are some instances in which an event planner may retain personal 

convenience fees from conference attendees for meals and not violate the Miscellaneous 

Receipts Statute, that is not the case here. The contractor did not collect the fees for its 

own use, but on behalf of the government. Without specific statutory authority, neither 

DHS nor the contractor acting on its behalf was permitted to collect conference fees from 

its attendees to defray the official costs of conferences. As a result, the department 

remains responsible for remitting to the Treasury the fees it inappropriately collected for 

the PCSF. Officials responsible for the PCSF during FYs 2005 through 2007 are no 

longer employed at DHS; however, department officials currently responsible for the 

PCSF said that the previous managers may not have been aware that collecting 

conference fees without statutory authority to do so was a violation of the Miscellaneous 

Receipts Statute. 

Anti-Deficiency Act 

DHS did not violate the Anti-Deficiency Act because appropriated funds available from 

those years are sufficient to cover DHS’ remittance of the conference fees to the U.S. 

Treasury account. Table 2 shows the amounts available from Science and Technology’s 

Research, Development, Acquisitions and Operations appropriations for the 3 years. 

Because the appropriations are no-year funds, they remain available for obligation in 

succeeding fiscal years until the amounts are exhausted. 

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Table 2 

Fiscal Year Appropriation 

2005 $1,046,864,000 

2006 $1,420,997,000 

2007 $838,109,000 

Since the conference fees collected each year are less than the available appropriations 

for each year, Science and Technology will not encounter a deficit when it remits the 

total $211,445 to the Treasury. 

We identified one other potential funding issue. The hotels provided receptions at night 

at the conclusion of the conferences, at which food and beverages were served. If the 

cost of the receptions was not included as part of a nonseparable fee for the entire 

conference, and if DHS reimbursed employees not in travel status for their conference 

registration fees, Science and Technology may have committed an Anti-Deficiency Act 

violation. We did not determine whether Science and Technology made any such 

reimbursements. However, we note the issue for any further action Science and 

Technology may wish to take. 

New Legislation 

During the course of our audit, the DHS Appropriations Act for FY 2010, Pub. L. No. 

111-83, § 554, was enacted, giving DHS the authority to collect conference fees in 

advance either directly, or by contract, from nonfederal participants for the conferences, 

seminars, exhibitions, or similar meetings it conducts. The fees must be credited to the 

appropriation or account from which the costs of the conference are paid. When the total 

amount of fees collected exceeds actual costs, the excess amount must be deposited to the 

U.S. Treasury. Although DHS now has the authority to collect conference fees, the 

department did not have this authority in FYs 2005 to 2007. Therefore, the department 

must return all conference fees previously collected to the U.S. Treasury account. 

Recommendation 

We recommend that the Under Secretary for the National Protection and Programs 

Directorate and the Under Secretary for the Science and Technology Directorate remit to 

the U.S. Treasury Fund the $211,445 collected in conference registration fees for the 

Process Control Systems Forum in FYs 2005 through 2007. 

Management Comments and OIG Analysis 

We obtained written comments on a draft of the report from the Under Secretary for 

Science and Technology, on behalf of the department for both the National Protection 

and Programs Directorate and the Science and Technology Directorate. We have 

included a copy of the comments in appendix B. The Under Secretary concurred with the 

recommendation. 

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Appendix A 

Purpose, Scope, and Methodology 

To accomplish our audit objective, we reviewed DHS policies, procedures, and 

documentation regarding managing conferences and collecting registration fees. We also 

examined prior DHS, Government Accountability Office, and Department of Defense 

audit reports addressing these issues. We reviewed pertinent laws and regulations; 

conducted analysis related to interagency agreements, contracts, and records of receipts; 

and conducted interviews with officials of DHS’ National Protection and Program 

Directorate, Science and Technology Directorate, and Office of the Chief Financial 

Officer. Our Office of Counsel assisted our audit by providing us with legal opinions on 

the conference fees collected for the Process Control Systems Forum for the 3 years in 

question. 

We conducted this performance audit between March and October 2009 under the 

authority of the Inspector General Act of 1978, as amended, and according to generally 

accepted government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We believe the evidence 

obtained provides a reasonable basis for our findings and conclusions based on our audit 

objectives. 

We appreciate the efforts by DHS management and staff to provide the information and 

access necessary to accomplish this review. 

4
 

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Homeland

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June 8. 2010

MEMORANDUM FOR, Anne L. Richards

Assistant Inspector General for Audits

FROM, Ta"O'TOOle,M.D.. M.P.f1.~ 0

Under Secretary for Science and Technology

'U

SUBJECL Draft Leifer Report: Audil ofIhe Department ofHomeland

Security's Handling ofConferellce Feesfor the Process

Control Systems Forum - FOR OFFICIAL USE ONLY (FOUO)

Thank you for the opportunity to review and comment on OIG Draft Leiter Report: Audit ofthe

Department ofHomeland Security's Handling ofConference Feesfor the Proce.u Control

Systems Forum - FOUo. I am providing this response on behalfofthe Department - for both

the National Protection and Programs Directorale and Science and Technology Directorale. The

Depanmenl has no comments on the content ofthe draft report. We agree with the

recommendalion. The Science and Technology Directorate intends to remit $211 ,445 collected

in conference registration fees to the U.S. Treasury Fund.

If you have Ilny furthcr questions, please feel free to contact Leslie Tomaselli in my Office of the

Executive Secretary. (202) 254-6714.

Cc: Rand Beers. Under Secretary, National Protection and Programs Directorate

Appendix B 

Management Comments to the Draft Letter Report 

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Appendix C 

Major Contributors to this Report 

John McCoy, Director, Financial Management 

Maryann Pereira, Audit Manager 

Frank Lucas, Project Lead 

Nancy Pergolizzi, Auditor 

Jason Kim, Auditor 

James Bess, Independent Referencer 

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Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Under Secretary, Management 

DHS Audit Liaison 

National Protection and Program Directorate, Audit Liaison 

Science and Technology Directorate Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

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ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4100, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal or noncriminal 

misconduct relative to department programs or operations: 

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DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

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