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[Senate Report 113-261]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                                 SENATE
 2d Session                                                     113-261
_______________________________________________________________________

                                     

                 DHS OIG MANDATES REVISION ACT OF 2014

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 2651

   TO REPEAL CERTAIN MANDATES OF THE DEPARTMENT OF HOMELAND SECURITY 
                      OFFICE OF INSPECTOR GENERAL

               September 18, 2014.--Ordered to be printed
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota

                  Gabrielle A. Batkin, Staff Director
               John P. Kilvington, Deputy Staff Director
                    Mary Beth Schultz, Chief Counsel
           Jason M. Yanussi, Senior Professional Staff Member
                      Deanne B. Millison, Counsel
               Keith B. Ashdown, Minority Staff Director
         Christopher J. Barkley, Minority Deputy Staff Director
               Andrew C. Dockham, Minority Chief Counsel
         Daniel P. Lips, Minority Director of Homeland Security
                     Laura W. Kilbride, Chief Clerk

113th Congress                                                   Report
                                 SENATE
 2d Session                                                     113-261

======================================================================

 
                 DHS OIG MANDATES REVISION ACT OF 2014

                                _______
                                

               September 18, 2014.--Ordered to be printed

                                _______
                                

 Mr. Carper,  from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 2651]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 2651) to repeal 
certain mandates of the Department of Homeland Security Office 
of Inspector General, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
bill, as amended, do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................1
III. Legislative History..............................................2
 IV. Section-by-Section Analysis......................................3
  V. Evaluation of Regulatory Impact..................................3
 VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............4

                         I. Purpose and Summary

    S. 2651, the DHS OIG Mandates Revision Act, seeks to free 
the Department of Homeland Security's Inspector General from 
the requirement to perform unnecessary and duplicative 
congressionally mandated audits. It would do so by rescinding 
the statutory mandates for certain audits that the Department's 
Inspector General has identified as costly and duplicative. 
Without a congressional mandate, the Inspector General can 
continue to conduct these audits periodically, but at his own 
discretion.

              II. Background and the Need for Legislation

    Congress often includes in statutes directions for Offices 
of Inspectors General (OIG) to perform particular audits. The 
average OIG has approximately thirty percent of its workload 
mandated.\1\ According to the Department of Homeland Security 
OIG (DHS-OIG), however, it faces a work load that is 
approximately 70 percent congressionally mandated, more than 
double the typical amount.\2\
---------------------------------------------------------------------------
    \1\John Roth, Inspector General, Department of Homeland Security, 
statement made to Congressional staff, Department of Homeland Security, 
Office of the Inspector General Budget Briefing (March 11, 2014.)
    \2\Department of Homeland Security, Office of the Inspector 
General, Budget Briefing Power Point, FY 2014 Projected to be Issued 
Reports By Origin, pg. 7 (March 11, 2014).
---------------------------------------------------------------------------
    While congressionally mandated audits can be helpful, they 
also reduce the amount of time, money and resources that an 
office can spend conducting discretionary audits. According to 
the DHS-OIG, discretionary audits are the agency's ``sweet spot 
of oversight'' and provide the maximum impact.\3\ Specifically, 
the DHS IG explained that discretionary audits provide greater 
deterrence, more flexibility and the most value, because they 
allow the agency to identify opportunities for corrections 
before a crisis occurs.\4\
---------------------------------------------------------------------------
    \3\Department of Homeland Security, Office of the Inspector 
General, Budget Briefing Power Point, Audits by Origin (March 11, 
2014).
    \4\Id.
---------------------------------------------------------------------------
    The DHS-OIG worked closely with congressional staff to 
identify several congressionally mandated audits that were 
costly and either duplicative of other reports conducted by 
other entities within the Department or otherwise unnecessary. 
S. 2651 repeals the reporting requirements for several of these 
identified audits in an effort to free the DHS-OIG from these 
unnecessary and burdensome tasks. Rescinding these reporting 
requirements enables the DHS-OIG to conduct more fruitful and 
necessary audits. S. 2651 does not prohibit the DHS-OIG from 
continuing to conduct periodic audits akin to those rescinded 
by the bill, but rather enables the DHS-OIG to do a better job 
of setting priorities and providing more efficient and 
effective reports that will better assist the Department and 
the Congress.

                        III. Legislative History

    Ranking Member Coburn introduced S. 2651 on July 24, 2014. 
The bill was referred to the Committee on Homeland Security and 
Governmental Affairs. Chairman Carper cosponsored the bill.
    The Committee considered S. 2651 at a business meeting on 
July 30, 2014. Ranking Member Coburn and Chairman Carper 
offered a substitute manager's amendment. The amendment 
preserved one of the congressionally mandated reports, The 
Annual Office of National Drug and Control Policy Review, from 
elimination. The amendment was adopted, by unanimous consent. 
Senators present were Senators Carper, Levin, Landrieu, 
McCaskill, Begich, Baldwin, Coburn, Johnson and Ayotte.
    The Committee ordered the bill, as amended, reported 
favorably by voice vote on July 30, 2014. Senator Begich asked 
to be recorded as voting ``no.'' Senators present for the vote 
were Senators Carper, Levin, Landrieu, McCaskill, Begich, 
Baldwin, Coburn, Johnson and Ayotte.

                    IV. Section-by-Section Analysis

    Section 1 provides that the short Title for the Department 
of Homeland Security Office of Inspector General Mandates 
Revision Act of 2014--DHS OIG Mandates Revision Act of 2014.
    Section 2 repeals the requirements for the DHS-OIG to 
conduct three specific audits:
    1. Repeal of DHS-OIG requirement to conduct an annual 
evaluation of the Cargo Inspection Targeting System. The Annual 
Cargo Inspection Report is mandated by The Coast Guard & 
Maritime Transportation Act of 2004\5\ and requires the IG to 
submit a report evaluating cargo inspection tracking systems 
for international intermodal cargo containers. The IG audits 
and reviews cargo security during its normal course of 
business, and determines which aspects to review based on risk, 
referrals, and information discovered during the course of 
other audits.
---------------------------------------------------------------------------
    \5\P.L. 108-293, Sec. 809(g).
---------------------------------------------------------------------------
    2. Repeal of DHS-OIG requirement to conduct an annual 
review of Coast Guard Performance. The Annual United States 
Coast Guard (USCG) Mission Review is mandated by The Homeland 
Security Act of 2002\6\ and is an annual review to assess 
thoroughly the performance by the USCG of all its missions, 
with a particular emphasis on examining the non-homeland 
security missions. The DHS-OIG report does not include any 
additional information to what the USCG reports on their own, 
and the IG does not make any recommendations.
---------------------------------------------------------------------------
    \6\P.L. 107-296, Sec. 888(f).
---------------------------------------------------------------------------
    3. Repeal of DHS-OIG requirement to conduct an annual 
review of grants to states and high risk urban areas. Several 
of the audits identified significant problems with the states' 
and territories' management of the grant funds. However, most 
of the audits resulted in similar findings and recommendations. 
Fraud was not identified in the audits, and most of the 
recommendations were for ways to improve the system and not 
necessarily mismanagement. The DHS-OIG did identify some 
questioned costs, but not to the extent originally expected as 
the grant programs matured. For the audit reports issued in FY 
2011 through 2013, estimated costs were more than $15 million 
to complete and resulted in approximately $19 million in 
questioned costs. However, the majority of those costs have 
since been allowed.

                   V. Evaluation of Regulatory Impact

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rule. The Committee agrees with the Congressional Budget 
Office's statement that the bill contains no intergovernmental 
or private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA) and would impose no costs on state, local, or 
tribal governments.

             VI. Congressional Budget Office Cost Estimate

                                                September 15, 2014.
Hon. Tom Carper, Chairman,
Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2651, the DHS OIG 
Mandates Revision Act of 2014.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark 
Grabowicz.
            Sincerely,
                                             Douglas W. Elmendorf. 
    Enclosure.

S. 2651--DHS OIG Mandates Revision Act of 2014

    S. 2651 would eliminate three annual reports currently 
required of the Department of Homeland Security (DHS) Office of 
Inspector General. The reports include audits or evaluations of 
Coast Guard programs and certain DHS grants.
    Based on information from DHS about anticipated spending on 
these reports, CBO estimates that implementing S. 2651 could 
lower spending by $1 million to $2 million annually, assuming 
that future DHS appropriations are reduced consistent with the 
bill's provisions. Enacting the legislation would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    S. 2651 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Mark Grabowicz. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 2651 as reported are shown as follows (existing law proposed 
to be omitted is enclosed in brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):

                           TITLE 46--SHIPPING

                       CHAPTER 701--PORT SECURITY

SEC. 70101--DEFINITIONS

      46 U.S.C. 70101 note Vessel and Intermodal Security Reports

    [Pub. L. 108-23, title VIII, Sec. 809(g)-(i), (k), Aug. 9, 
2004, 118 Stat. 1087, 1088, provided that:
    ``(g) Evaluation of Cargo Inspection Targeting System for 
International Intermodal Cargo Containers.--Within 180 days 
after the date of the enactment of this Act [Aug. 9, 2004] and 
annually thereafter, the Inspector General of the department in 
which the Coast Guard is operating shall prepare a report that 
includes an assessment of--
          ``(1) the effectiveness of the current tracking 
        system to determine whether it is adequate to prevent 
        international intermodal containers from being used for 
        purposes of terrorism;
          ``(2) the sources of information, and the quality of 
        the information at the time of reporting, used by the 
        system to determine whether targeting information is 
        collected from the best and most credible sources and 
        evaluate data sources to determine information gaps and 
        weaknesses;
          ``(3) the targeting system for reporting and 
        analyzing inspection statistics, as well as testing 
        effectiveness;
          ``(4) the competence and training of employees 
        operating the system to determine whether they are 
        sufficiently capable to detect potential terrorist 
        threats; and
          ``(5) whether the system is an effective system to 
        detect potential acts of terrorism and whether 
        additional steps need to be taken in order to remedy 
        deficiencies in targeting international intermodal 
        containers for inspection.
    ``(h) Action Report.--If the Inspector General of the 
department in which the Coast Guard is operating determines in 
any of the reports prepared under subsection (g) that the 
targeting system is insufficiently effective as a means of 
detecting potential acts of terrorism utilizing international 
intermodal containers, then the Secretary of the department in 
which the Coast Guard is operating shall, within 90 days, 
submit a report to the Committee on Commerce, Science, and 
Transportation of the Senate and the Committee on 
Transportation and Infrastructure [of the] House of 
Representatives on what actions will be taken to correct 
deficiencies identified in the Inspector General Report.
    ``(i) Compliance With Security Standards Established 
Pursuant to Maritime Transportation Security Plans.--Within 180 
days after the date of the enactment of this Act [Aug. 9, 2004] 
and annually thereafter, the Secretary of the department in 
which the Coast Guard is operating shall prepare a report on 
compliance and steps taken to ensure compliance by ports, 
terminals, vessel operators, and shippers with security 
standards established pursuant to section 70103 of title 46, 
United States Code. The reports shall also include a summary of 
security standards established pursuant to such section during 
the previous year. The Secretary shall submit the reports to 
the Committee on Commerce, Science, and Transportation of the 
Senate and the Committee on Transportation and Infrastructure 
of the House of Representatives.
    ``(k) Report and Plan Formats.--The Secretary and the 
Inspector General of the department in which the Coast Guard is 
operating may submit any plan or report required by this 
section in both classified and redacted formats, if the 
Secretary determines that it is appropriate or necessary.'']

           *       *       *       *       *       *       *

                       TITLE 6--DOMESTIC SECURITY

               CHAPTER 1--HOMELAND SECURITY ORGANIZATION 

SEC. 468--PRESERVING COAST GUARD MISSION PERFORMANCE

    [(f) Annual review 
          (1) In general --The Inspector General of the 
        Department shall conduct an annual review that shall 
        assess thoroughly the performance by the Coast Guard of 
        all missions of the Coast Guard (including non-homeland 
        security missions and homeland security missions) with 
        a particular emphasis on examining the non-homeland 
        security missions.
          (2) Report--The report under this paragraph shall be 
        submitted to--
                  (A) the Committee on Governmental Affairs of 
                the Senate;
                  (B) the Committee on Government Reform of the 
                House of Representatives;
                  (C) the Committees on Appropriations of the 
                Senate and the House of Representatives;
                  (D) the Committee on Commerce, Science, and 
                Transportation of the Senate; and
                  (E) the Committee on Transportation and 
                Infrastructure of the House of 
                Representatives.]

           *       *       *       *       *       *       *

                TITLE 6--HOMELAND SECURITY ORGANIZATION

               CHAPTER 1--HOMELAND SECURITY ORGANIZATION

SEC. 612--ACCOUNTABILITY

    (a) Audits of Grant Programs 
          [(3) Office of Inspector General performance audits 
                  (A) In general--In order to ensure the 
                effective and appropriate use of grants 
                administered by the Department, the Inspector 
                General of the Department each year shall 
                conduct audits of a sample of States and high-
                risk urban areas that receive grants 
                administered by the Department to prevent, 
                prepare for, protect against, or respond to 
                natural disasters, acts of terrorism, or other 
                man-made disasters, excluding assistance 
                provided under section 203, title IV, or title 
                V of the Robert T. Stafford Disaster Relief and 
                Emergency Assistance Act (42 U.S.C. 5133,5170 
                et seq., and 5191 et seq.).
                  (B) Determining samples--The sample selected 
                for audits under subparagraph (A) shall be--
                          (i) of an appropriate size to--
                                  (I) assess the overall 
                                integrity of the grant programs 
                                described in subparagraph (A); 
                                and
                                  (II) act as a deterrent to 
                                financial mismanagement; and
                          (ii) selected based on--
                                  (I) the size of the grants 
                                awarded to the recipient;
                                  (II) the past grant 
                                management performance of the 
                                recipient;
                                  (III) concerns identified by 
                                the Administrator, including 
                                referrals from the 
                                Administrator; and
                                  (IV) such other factors as 
                                determined by the Inspector 
                                General of the Department.
                  (C) Comprehensive auditing--During the 7-year 
                period beginning on August 3, 2007, the 
                Inspector General of the Department shall 
                conduct not fewer than 1 audit of each State 
                that receives funds under a grant under section 
                604 or 605 of this title.
                  (D) Report by the Inspector General--
                          (i) In general. The Inspector General 
                        of the Department shall submit to the 
                        appropriate committees of Congress an 
                        annual consolidated report regarding 
                        the audits completed during the fiscal 
                        year before the date of that report.
                          (ii) Contents. Each report submitted 
                        under clause (i) shall describe, for 
                        the fiscal year before the date of that 
                        report--
                                  (I) the audits conducted 
                                under subparagraph (A);
                                  (II) the findings of the 
                                Inspector General with respect 
                                to the audits conducted under 
                                subparagraph (A);
                                  (III) whether the funds 
                                awarded were used in accordance 
                                with the law, program guidance, 
                                and State homeland security 
                                plans and other applicable 
                                plans; and
                                  (IV) the extent to which 
                                funds awarded enhanced the 
                                ability of a grantee to 
                                prevent, prepare for, protect 
                                against, and respond to natural 
                                disasters, acts of terrorism 
                                and other man-made disasters.
                          (iii) Deadline. For each year, the 
                        report required under clause (i) shall 
                        be submitted not later than December 
                        31.
                  (E) Public availability on website--The 
                Inspector General of the Department shall make 
                each audit conducted under subparagraph (A) 
                available on the website of the Inspector 
                General, subject to redaction as the Inspector 
                General determines necessary to protect 
                classified and other sensitive information.
                  (F) Provision of information to 
                Administrator--The Inspector General of the 
                Department shall provide to the Administrator 
                any findings and recommendations from audits 
                conducted under subparagraph (A).
                  (G) Evaluation of grants management and 
                oversight--Not later than 1 year after August 
                3, 2007, the Inspector General of the 
                Department shall review and evaluate the grants 
                management and oversight practices of the 
                Federal Emergency Management Agency, including 
                assessment of and recommendations relating to--
                          (i) the skills, resources, and 
                        capabilities of the workforce; and
                          (ii) any additional resources and 
                        staff necessary to carry out such 
                        management and oversight.
                  (H) Authorization of appropriations--In 
                addition to any other amounts authorized to be 
                appropriated to the Inspector General of the 
                Department, there are authorized to be 
                appropriated to the Inspector General of the 
                Department for audits under subparagraph (A)--
                          (i) $8,500,000 for each of fiscal 
                        years 2008, 2009, and 2010; and
                          (ii) such sums as are necessary for 
                        fiscal year 2011, and each fiscal year 
                        thereafter.]

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