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AN OVERVIEW OF ISSUES AND CHALLENGES FACING 

THE DEPARTMENT OF HOMELAND SECURITY 

FULL HEARING 

OF THE

COMMITTEE ON HOMELAND SECURITY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

FIRST SESSION 

FEBRUARY 7, 2007 

Serial No. 110–2 

Printed for the use of the Committee on Homeland Security 

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


Congress.#13
COMMITTEE ON HOMELAND SECURITY 

BENNIE G. THOMPSON, Mississippi, Chairman 

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 

DONNA M. CHRISTENSEN, U.S. Virgin 

Islands 

BOB ETHERIDGE, North Carolina 

JAMES R. LANGEVIN, Rhode Island 

HENRY CUELLAR, Texas 

CHRISTOPHER P. CARNEY, Pennsylvania 

YVETTE D. CLARKE, New York 

AL GREEN, Texas 

ED PERLMUTTER, Colorado 

VACANCY 

PETER T. KING, New York 

LAMAR SMITH, Texas 

CHRISTOPHER SHAYS, Connecticut 

MARK E. SOUDER, Indiana 

TOM DAVIS, Virginia 

DANIEL E. LUNGREN, California 

MIKE ROGERS, Alabama 

BOBBY JINDAL, Louisiana 

DAVID G. REICHERT, Washington 

MICHAEL T. MCCAUL, Texas 

CHARLES W. DENT, Pennsylvania 

GINNY BROWN-WAITE, Florida 

MARSHA BLACKBURN, Tennessee 

GUS M. BILIRAKIS, Florida 

DAVID DAVIS, Tennessee 

JESSICA HERRERA-FLANIGAN, Staff Director & General Counsel 

TODD GEE, Chief Counsel 

MICHAEL TWINCHEK, Chief Clerk 

ROBERT O’CONNOR, Minority Staff Director 

(II) 

(III) 

C O N T E N T S 

Page 

STATEMENTS 

The Honorable Bennie G. Thompson, a Representative in Congress From 

the State of Mississippi, and Chairman, Committee on Homeland Security: 

Oral Statement ..................................................................................................... 1 

Prepared Statenment ........................................................................................... 2 

The Honorable Peter T. King, a Representative in Congress From the State 

of New York, and Ranking Member, Committee on Homeland Security ........ 3 

The Honorable Marsha Blackburn, a Representative in Congress From the 

State of Tennessee ............................................................................................... 34 

The Honorable Christopher P. Carney, a Representative in Congress From 

the State of Pennsylvania .................................................................................... 43 

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 .................................................................................................... 42 

The Honorable Norman D. Dicks, a Representative in Congress From the 

State of Washington ............................................................................................. 32 

The Honorable Bob Etheridge, a Representative in Congress From the State 

of North Carolian ................................................................................................. 28 

The Honorable Al Green, a Representative in Congress From the State of 

Texas ..................................................................................................................... 45 

The Honorable Jane Harman, a Representative in Congress From the State 

of California .......................................................................................................... 24 

The Honorable James R. Langevin, a Representative in Congress The State 

of Rhode Island ..................................................................................................... 36 

The Honorable Sheila Jackson Lee, a Representative in Congress From the 

State of Texas: 

Oral Statement ..................................................................................................... 46 

Prepared Statement ............................................................................................. 47 

The Honorable Zoe Lofgren, a Representative in Congress From the State 

of California .......................................................................................................... 40 

The Honorable Daniel E. Lungren, a Representative in Congress From the 

State of California ................................................................................................ 38 

The Honorable Michael T. McCaul, a Representative in Congress From the 

State of Texas ....................................................................................................... 26 

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

of Alabama ............................................................................................................ 22 

The Honorable Loretta Sanchez, a Representative in Congress From the 

State of California ................................................................................................ 21 

The Honorable Mark E. Souder, a Representative in Congress From the 

State of Indiana .................................................................................................... 30 

WITNESSES

The Honorable Richard L. Skinner, Inspector General, Department of 

Homeland Security: 

Oral Statement ..................................................................................................... 6 

Prepared Statement ............................................................................................. 8 

Page

IV 

The Honorable David M. Walker, Comptroller General of the U.S. 

Government Accountability Office ...................................................................... 4 

Accompanied by: 

Mr. Norman Rabkin, Managing Director, Homleand Security and Justice, 

Government Accountability Office .................................................................. 42 

APPENDIX

Response to Supplemental Questions from the Committee on Homeland 

Security: 

The Honorable Richard L. Skinner Responses .................................................. 55 

The Honorable David M. Walker with Mr. Norman Rabkin Responses ......... 67 

(1) 

AN OVERVIEW OF ISSUES AND CHALLENGES 

FACING THE DEPARTMENT OF HOMELAND 

SECURITY 

Wednesday, February 7, 2007 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON HOMELAND SECURITY, 

Washington, DC. 

The committee met, pursuant to call, at 1:05 p.m., in Room 311, 

Cannon House Office Building, Hon. Bennie Thompson [chairman 

of the committee] presiding. 

Present: Representatives Thompson, Sanchez, Dicks, Harman, 

Lofgren, Jackson Lee, Christensen, Etheridge, Langevin, Cuellar, 

Carney, Clarke, Green, Perlmutter, King, Lungren, Rogers, 

McCaul, Brown–Waite, Blackburn, Bilirakis, and Davis of Tennessee. 

Chairman THOMPSON. [Presiding.] The Committee on Homeland 

Security will come to order. 

The committee is meeting today to receive testimony on an overview of issues and challenges facing the Department of Homeland 

Security. 

Today we will hear testimony from two distinguished witnesses. 

Combined, they have written hundreds of reports detailing the 

problems and challenges facing the Department of Homeland Security. 

From the outset, it was clear that the transformation of 22 agencies into one unfulfilled department would be a major challenge. 

But we expected that by the fourth year of this endeavor the department would be well on its path to stability. Regrettably, instead, DHS seems to be wandering aimlessly toward an uncertain 

destination. 

Is it because of DHS’s importance to our nation’s security that 

we must now allow basic problems or organizational structure and 

administrative weaknesses to continue to hamper its ability to accomplish its mission? Unfortunately, that is what appears to be 

happening. 

In Hurricane Katrina we saw firsthand that the failure to get 

routine management, procurement and financial assistance under 

control can and does hinder and sometimes even halts the ability 

of this agency to get the job done. The kind of dysfunction that occurred in response to Hurricane Katrina cannot become standard 

practice for this department. 

It will take an aggressive oversight to get DHS on track. Our 

combined efforts—Congress’s, the GAO’s and the inspector genVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
2 

eral’s—are vital if the department is to become the kind of agency 

the American people deserve. 

And that is the purpose of today’s hearing, to have a frank discussion about the areas this committee needs to focus on during 

the 110th Congress. 

Let me just say I am troubled that the department is on GAO’s 

2007 high-risk list, but I have to admit that it comes as no surprise. The department was on the last high-risk list published in 

2005. 

However, I am surprised to learn that the department has not 

even taken the first step to get off the list. They have not provided 

GAO with a complete corrective action plan. 

On Friday, Mr. Chertoff will be here. I intend to ask him when 

corrective action plans will be provided to GAO. I know that writing these plans may be hard, but every journey must start with a 

single step. 

I am concerned that the IG has repeatedly found problems with 

the department’s financial management. This department has 

never produced a clean financial statement. The American taxpayers expect a federal agency to be able to report how it is spending our money. I think we in Congress share that expectation. 

I look forward to hearing the testimony of our witnesses today. 

The chair now recognizes the ranking member of the full committee, the gentleman from New York, Mr. King, for an opening 

statement. 

PREPARED STATEMENT OF THE HONORABLE BENNIE G. THOMPSON, CHAIRMAN, COMMITTEE ON HOMELAND SECURITY

Today we will hear testimony from two distinguished witnesses. Combined, they 

have written hundreds of reports detailing the problems and challenges facing the 

Department of Homeland Security. 

From the outset, it was clear that the transformation of 22 agencies into one unified Department would be a major challenge. But we expected that by the fourth 

year of this endeavor, the Department would be well on the path to stability. Regrettably, instead DHS seems to be wandering aimlessly toward an uncertain destination. 

It is because of DHS importance to our nation’s security that we must not allow 

basic problems of organizational structure and administrative weakness to continue 

to hamper its ability to accomplish its mission. 

Unfortunately, that is what appears to be happening. 

In Hurricane Katrina, we saw first-hand that the failure to get routine management, procurement, and financial systems under control can does hinder and sometimes even halts the ability of this agency to get the job done. The kind of dysfunction that occurred in response to Hurricane Katrina cannot become standard practice for this Department. 

It will take aggressive oversight to get DHS on track. Our combined efforts—Congress, GAO and the Inspector General—are vital if the Department is to become the 

kind of agency the American people deserve. 

And that is the purpose of today’s hearing—to have a frank discussion about the 

areas this Committee needs to focus on during the 110th Congress. Let me just say, 

I am troubled that the Department is on GAO’s 2007 high risk list. But I have to 

admit that it comes as no surprise. The Department was on the last HIGH RISK 

list, published in 2005. However, I am surprised to learn that the Department has 

not even taken the first step to get off the list. They have not provided GAO with 

a complete corrective action plan. On Friday, Mr. Chertoff will be here. I intend to 

ask him when corrective action plans will be provided to GAO. I know that writing 

these plans may be hard, but every journey must start with a single step. 

I am also concerned that the IG has repeatedly found problems with the Department’s financial management. This Department has never produced a clean financial statement. The American taxpayers expect a federal agency to be able to report 

how it is spending our money. I think we in Congress share that expectation. 

3 

Mr. KING. Yes, I thank Chairman Thompson for recognizing me. 

And let me at this first full committee hearing commend him and 

congratulate him on his accession as chairman of the full committee and, as I have done before, pledge him my full cooperation 

and thank him for the extraordinary cooperation that has gone on, 

not just between ourselves and among the members but also between our staffs. 

And I think both of us approach this as being a nonpartisan, bipartisan effort. And while there may be specific policy differences 

as we go forward, I assure him that we will operate in good faith. 

And I know that he has certainly demonstrated that good faith to 

me. 

As far as the hearing today, I think this is a very vital hearing. 

It is a very important hearing, realizing that now this is the fourth 

year of the department and, obviously, I believe more progress 

should have been made. 

At the same time, I believe there has been considerable progress. 

I don’t think it is any accident that we have not been attacked in 

4 years. 

The chairman mentioned Katrina, which obviously was a disaster at many levels: at the local level, at the state level, and indeed, at the federal level, where while the Coast Guard performed 

admirably and the military performed admirably; FEMA did not. 

And I am proud that last year, in a genuine bipartisan effort, we 

were able to restructure and reform FEMA. And thus far, the results are very positive. 

Just last week’s tornado in Florida by all accounts—I was speaking to members of Congress who were involved and some state officials. It appears that FEMA moved quickly, moved effectively and 

that Director Paulson is doing a fine job. But again, the full verdict 

is not in, and more remains to be done. And it is certainly a work 

in progress. 

As far as oversight of the department, obviously that has to be 

done. I believe in the last session at that time Chairman Rogers 

held a number of hearings which were very significant and did expose severe shortcomings within the Department of Homeland Security. So we can either look at the glass as being half full or half 

empty. 

But the bottom line is both the chairman and I strongly believe 

that we have to go forward, we have to have aggressive oversight. 

We have to have aggressive investigations. I look forward to the 

testimony of the witnesses. Both of you have a particularly vital 

role to play. And I can assure you that your recommendations, your 

findings will be taken very seriously on our side of the aisle. And 

I know they will on the majority’s side. 

So with that, I will yield back the balance of my time and look 

forward to the statements of the witnesses. 

Chairman THOMPSON. Thank you very much. 

I, too, want to echo what the ranking member said about the cooperative relationship between Democrats and Republicans on this 

committee. It has been good. 

We all hold our responsibility very seriously. And we look forward to continuing that relationship with the change. And I think 

you will readily be able to see that as time goes on. 

4 

Other members of the committee are reminded that, under committee rules, opening statements may be submitted for the record. 

I now welcome our panel of witnesses. 

Our first witness, Mr. David Walker, began his 15-year term as 

the comptroller general of the United States in 1998. As comptroller general, Mr. Walker is the nation’s chief accountability officer and head of the U.S. Government Accountability Office. 

Our second witness, Mr. Richard Skinner, was confirmed as the 

Department of Homeland Security’s inspector general in 2005. 

Prior to his appointment, Mr. Skinner served as deputy inspector 

general of the department since March of 2003. Truly, he has been 

with the department since its inception and knows it better than 

just about anyone in government. 

Without objection, the witnesses’ full statements will be inserted 

into the record. 

I now ask each witness to summarize his statement for 5 minutes, beginning with Mr. Walker. 

STATEMENT OF HON. DAVID M. WALKER, COMPTROLLER 

GENERAL OF THE UNITED STATES, GOVERNMENT 

ACCOUNTABILITY OFFICE 

Mr. WALKER. Chairman Thompson, Ranking Member King, other 

members of the committee, I appreciate the opportunity to be before you to address the management and programmatic challenges 

relating to the Department of Homeland Security. 

As all of you know, I have spoken extensively about our nation’s 

fiscal challenges and the need for fiscal prudence and stewardship. 

However, irrespective of our fiscal situation, it is very important for 

all departments and agencies, including the Department of Homeland Security, to operate as efficiently and effectively as possible in 

carrying out their mission. 

We first designated at GAO the DHS’s implementation and 

transformation effort as a high-risk area in January of 2003. 

As members of this committee are very familiar with, DHS represented the second largest reorganization in the history of the 

United States government, the first being the creation of the Department of Defense in 1947. This is the 60th anniversary of the 

Department of Defense, and we need to be in a lot better shape in 

Homeland Security after 60 years than DOD is on the management 

side. And let’s hope we can. 

The government pulled together 22 different agencies with different cultures, with different systems, with different traditions, 

with their own problems, and, quite frankly, many, if not most, of 

these agencies were not primarily focused on homeland security before September 11, 2001. So that is a major transformation challenge. 

We continued to have this on our high-risk list in 2005 and 2007, 

which was issued last week, for a variety of reasons. And I will 

summarize a few. 

Although DHS has issued guidance and plans to assist management in the overall integration and transformation effort, it lacks 

a comprehensive and integrated strategy with specific overall goals, 

timelines and an accountability mechanism as well as a team that 

5 

is dedicated full-time to support its overall transformation integration efforts. 

DHS has a strategic plan. However, DHS and its components 

must improve its planning by linking resources, which are limited, 

to its goals and by promoting greater stakeholder involvement to 

ensure that its resources are targeted toward the highest priorities. 

In this regard, DHS also needs to improve its risk assessment 

process because, by definition, there is no such thing as zero risk 

in today’s world, and therefore, choices have to be made about how 

to allocate limited resources to mitigate the most risks. DHS is 

committed to a more risk-based approach, but more progress needs 

to be made. 

DHS has been unable to withstand an audit. It has 10 major internal control weaknesses. And it also has a number of other compliance challenges. 

So these are a few of the challenges, not to mention human capital and acquisition, which obviously are challenges as well. 

From a program standpoint, strengthening cargo and passenger 

screening, visitor tracking and efforts to combat illegal employment 

of non-citizens and non-legal residents is a major challenge. 

The Coast Guard’s asset upgrading is a challenge on the acquisition side. Balancing homeland security and personal privacy is also 

a continuing challenge. Improving our disaster preparedness and 

response efforts continues to be a major challenge in light of 

Katrina, although progress has been made. 

In summary, let me note that some progress clearly has been 

made. But major challenges remain. It is going to take a number 

of years for us to get to where we need to be with regard to the 

Department of Homeland Security. Even in the private sector, it 

takes 5 to 7 years, minimum, to engage in a major transformation 

effort and able to have it stick beyond the current leadership. It is 

going to take longer than that at DHS. 

All the more important to have a strategic integrated plan with 

key metrics and milestones and appropriate accountability mechanisms. It may also be important for DHS to have a chief management official, which it has one now, but might need to be restructured in order to help ensure success going forward. 

Last, let me close by saying that both Rick and I yesterday testified before the Appropriations Homeland Security Subcommittee on 

a similar topic. And one of the issues that we both noted was that 

both of us have a number of frustrations with regard to failure to 

get timely access to documents and individuals at the Department 

of Homeland Security. This is a serious systemic issue. 

I was, however, disappointed by some of our friends in the fourth 

estate, namely the press, because neither Rick nor I mentioned any 

particular person by name. Nor did we mention the relationship of 

any particular persons at DHS with other high ranking officials in 

this administration. This is a serious systemic problem. No one person is to blame. 

But this current situation needs to change. It takes us way too 

long to get information. And there are way too many lawyers involved, which frustrates our access. And if our access is frustrated, 

it means we can’t do the job necessary to support the Congress in 

discharging its constitutional responsibilities. 

6 

1See GAO, ‘‘HOMELAND SECURITY Management and Programmatic Challenges Facing the 

Department of Homeland Security’’, GAO–07–452T, Wednesday, February 7, 2007, at 

www.gao.gov/cgi–bin/gerpt?GAO–07–452T. 

Thank you. 

[The statement of Mr. Walker follows:] 1

Chairman THOMPSON. Thank you very much, Mr. Walker. 

I now recognize Mr. Skinner to summarize his statement for 5 

minutes. 

STATEMENT OF HON. RICHARD SKINNER, INSPECTOR 

GENERAL, DEPARTMENT OF HOMELAND SECURITY 

Mr. SKINNER. Thank you, Chairman Thompson, Ranking Member King and members of the committee. Thank you for having me 

here today. 

Today what I would like to do is just focus on the management 

support activities within FEMA. And that is financial management, 

information technology management, acquisition management and 

grants management. 

Each of these activities transverses everything the department 

does in all of its programs and all of its operations. And each of 

these activities can have a profound and direct impact on the ability for the department to carry out its mission. 

First, there are two important points I would like to make. And 

Dave hit on one of them. And that is the environment in which the 

department was stood up. 

We have to keep in mind that when the department was stood 

up in March of 2003, we brought together 22 disparate agencies 

with their own cultures and ways of doing business. They also 

brought with them their own management challenges, their own 

material weaknesses and their own problems. 

At the same time when we stood up, I believe the department’s 

management support activities were short-changed. That is, while 

we brought in the entire operational assets of these agencies and 

all of their programs on side of the ledger, on the other side of the 

ledger, we did not bring in a proportionate share of management 

support activities to support those programs and activities and operations. 

And to compound matters, the Management Directorate was 

asked to support a new component in the office such as Science and 

Technology and the Intelligence Analysis Directorate and the Infrastructure Protection Directorate. 

We have to remember that this was more than just a merger of 

22 agencies. It was also an acquisition. It was a divestiture. It was 

a startup. 

With regards to the financial management, as you know, there 

were 4 years in a row now we were not able to offer an opinion 

on the department’s financial statements. In essence, for the first 

3 years, we just squandered 3 years. 

The first year we went through the artificial exercise of trying 

to prepare consolidated financial statements when, in fact, we 

didn’t even know what the components’ capabilities were or what 

their systems were capable of producing, let alone what the staff 

resources capabilities were. And we were trying to do this with a 

skeleton staff at headquarters. 

7 

We did the same thing for the second year. The second year we 

went in and started focusing on doing electronic measure or electronic merger of information. But again, this was e-merge. And 

again, we still did not have a real clear understanding what was 

going on within the department at the component level. 

The third year we just ran in place. We had leadership change. 

We had reorganization. 

And then in the fourth year, although we issued a disclaimer, behind the scenes there was considerable improvements. For the first 

time ever, we started delving in and digging down deep down to 

the root causes of our material weaknesses. 

And just recently the department has developed corrective action 

plans. They are going to roll that up into a departmental-wide 

playbook with performance matrix goals and objectives. 

We participated, reviewed that, offered recommendations. And as 

it stands right now, we now have a long-term plan, and we hope 

we can offer an unqualified opinion as soon as 2009. 

With regards to the information technology, there too we have 

some major management challenges, both at the component level 

and at the department-wide level. 

The department has made progress. Although slow, it has made 

progress. We brought in over 2,000 systems. We have now been 

able to reduce those down to 200 systems. As of September 30, 

2006, we have credited and certified 85 percent of those systems. 

But there is still a lot more that we need to do. We still do not 

have a department-wide platform or IT network. We still have to 

remove stovepipes. This is particularly obvious in our intelligence 

activities. We have intelligence functions throughout the department that they can’t talk to one another. And therefore, we can’t 

connect the dots. 

With regards to acquisition management, obviously this is where 

our greatest exposure to fraud, waste and abuse is. The problem 

really dates back government-wide into the 1990s, our shortsighted 

policies reducing the size of the federal workforce. 

On one hand, we were reducing the workforce. Who got hit the 

hardest? Generally the management support activities, particularly 

procurement. On the other side, or on the other hand, we were increasing our procurement activities and our reliance on contractors. 

This is most evident within DHS where our reliance on contractors 

is very, very great. 

If you look at our expenditures last year, over 40 percent of our 

budget, $16 billion, was spent on contracts alone. This compounded 

by the fact—I mean, we are in a catch–22 situation here. We don’t 

have the capability on one hand, the infrastructure, to service all 

of these contracts. Yet we can’t slow them down or we can’t stop 

them because of the urgency of our mission. 

What we have to do is proceed very cautiously on how we are administering these contracts. And we have to find alternative ways 

to ensure that we are getting our dollar’s worth. 

The last thing I wanted to touch upon is grants management. 

And again, this is something I think we need to take in more—and 

this includes Congress—needs to take a close look of how we are 

delivering grants to our state and local partners. 

8 

If you look at our 2008 budget, for example, of all the various 

grant programs we have, my fear is that we have become 

stovepiped and, as a result, we are not as efficient with our dollars 

as we should be. 

The things that I think need to be considered is how we can better involve the states in administering these grants on a state-wide 

basis. And we also have to invest in resources to ensure that we 

can provide oversight for those funds and technical assistance to 

the states. 

And finally, I think it is very important that we have mechanisms in place to evaluate how well we are doing, what is the impact of those grants, what are we receiving for our money. Because 

a lot of money each year is being spent on our grant programs. 

Thank you. That concludes my opening remarks. 

[The statement of Mr. Skinner follows:] 

PREPARED STATEMENT OF THE HONORABLE RICHARD L. SKINNER

Good afternoon, Mr. Chairman and Members of the Committee. I am Richard L. 

Skinner, Inspector General for the Department of Homeland Security (DHS). Thank 

you for the opportunity to discuss the major management challenges facing DHS. 

Since its inception in 2003, DHS has worked to accomplish the largest reorganization of the federal government in more than half a century. This task, creating the 

third largest Cabinet agency with the missions of protecting the country against another terrorist attack, responding to threats and hazards, ensuring safe and secure 

borders, welcoming lawful immigrants and visitors, and promoting the free flow of 

commerce, has presented many challenges to its managers and employees. While 

DHS has made progress, it still has much to do to establish a cohesive, efficient, 

and effective organization. 

The major management challenges that we identify facing DHS represent risk 

areas that we use in setting our priorities for audits, inspections, and evaluations 

of DHS programs and operations. These challenges are included in the department’s 

Performance and Accountability Report, which was issued on November 15, 2006. As 

required by the Reports Consolidation Act of 2000, we update our assessment of 

management challenges annually. Our latest major management challenges report 

covers a broad range of issues, including both program and administrative challenges. In total, we identified nine categories of challenges including Catastrophic 

Disaster Response and Recovery, Acquisition and Contract Management, Grants 

Management, Financial Management, Information Technology Management, Infrastructure Protection, Border Security, Transportation Security, and Trade Operations and Security. A copy of that report is provided for the record. I believe the 

department recognizes the significance of these challenges and understands that addressing them will take a sustained and focused effort. 

Today, I would like to highlight four specific management challenges facing the 

department: 

• Financial management, 

• Information technology management, 

• Acquisition management, and 

• Grants management. 

These areas are the backbone of the department and provide the structure and 

information to support the accomplishment of DHS’ mission. Some aspects of these 

challenges were inherited by the department from their legacy agencies. However, 

the complexity and urgency of DHS’ mission have exacerbated the challenge in 

many areas. 

These management challenges significantly affect the department’s ability to 

carry out its operational programs and provide the services necessary to protect the 

homeland. The department’s senior officials are well aware of these issues and are 

making progress in resolving them. Our oversight in these areas is intended to facilitate solutions. For example, our audits in the area of acquisition management 

have identified past trends and future risk areas. In November, we issued an 

SBInet Risk Advisory report with recommendations for better managing the risks 

associated with this major procurement. Also, during the past year, we issued a series of audits assessing the department’s corrective action plans related to financial 

management improvements. We will continue our intense oversight of these manVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
9 

agement areas to ensure that solutions and corrective measures are identified and 

acted upon. 

FINANCIAL MANAGEMENT 

Financial management has been a major challenge for DHS since its creation in 

2003. In 2006, DHS was again unable to obtain an opinion on its financial statements, and numerous material internal control weaknesses continued to be reported. KPMG, LLP, under contract with the Office of Inspector General (OIG), has 

consistently issued a disclaimer of opinion on DHS’ financial statements. 

DHS’ material internal control weaknesses ranged from financial management 

oversight and reporting at the department level to controls surrounding the recording of individual account balances within DHS bureaus. These control weaknesses, 

due to their materiality, are impediments to obtaining a clean opinion and providing 

positive assurance over internal controls at the department level. Achieving these 

departmental goals is highly dependent upon internal control improvements at the 

United States Coast Guard (USCG), Immigration and Customs Enforcement (ICE), 

the Transportation Security Administration (TSA), and the Office of the Chief Financial Officer. 

To move forward, DHS must develop a comprehensive financial management 

strategy that addresses organizational resources and capabilities, inconsistent and 

flawed business processes, and unreliable financial systems. An initial step in this 

process is to prepare well-developed and comprehensive corrective action plans to 

address known internal control weaknesses. During this past year, the department 

has taken a thoughtful approach to developing such a plan and has begun to implement corrective actions. 

Concurrent with the department’s efforts, we initiated a series of performance audits to assess the effectiveness of DHS’ corrective action plans to address internal 

control weaknesses. Our objective in conducting these performance audits was to determine the thoroughness and completeness of both the overall corrective action 

plan process and individual component plans developed to address specific financial 

control weaknesses. These performance audits are intended to provide ongoing feedback to DHS as it is developing and implementing corrective action plans. 

During fiscal year 2006, we anticipated progress in addressing internal control deficiencies. DHS identified four areas for improvement during the year. However, in 

our corrective action plan audits, we reported that a coordinated, department-wide 

effort to develop corrective action plans did not begin until the third quarter of 2006 

and is now in the process of being finalized. At the component level, we identified 

well-developed corrective action plans at ICE, but significant work remains ahead 

for the Coast Guard. During 2006, ICE began its corrective action plan process early 

and our audit results showed internal control improvements during the fiscal year. 

In addition, the Federal Emergency Management Agency (FEMA) issued approximately 2,700 mission assignments totaling about $8.7 billion to federal agencies to 

help with the response to Hurricane Katrina. FEMA historically has had significant 

problems issuing, tracking, monitoring, and closing mission assignments. FEMA 

guidance on mission assignments is often vague, and agencies’ accounting practices 

vary significantly, causing problems with reconciling agencies’ records to FEMA 

records. FEMA has developed a number of new, predefined mission assignments to 

streamline some of the initial recurring response activities. In addition, FEMA’s Disaster Finance Center is working to find a consensus among other federal agencies 

on appropriate supporting documentation for billings. We are conducting a review 

of mission assignments to DHS agencies and other Inspectors General are reviewing 

mission assignments to their respective agencies. 

INFORMATION TECHNOLOGY MANAGEMENT 

Integrating the information technology (IT) systems, networks, and capabilities of 

the various legacy agencies to form a single infrastructure for effective communications and information exchange remains one of DHS’ biggest challenges. There are 

multiple aspects to achieving such an IT infrastructure, as outlined below. 

Security of Information Technology Infrastructure 

The security of the IT infrastructure is another major management challenge. As 

we reported in September 2006, based upon its annual Federal Information Security 

Management Act evaluation, excluding its intelligence systems, DHS achieved a significant milestone toward strengthening its information security program by implementing a department-wide remediation plan to certify and accredit all operational 

systems by the end of fiscal year 2006. Further, some of the means to assist DHS 

and its components in the implementation of its information assurance program, 

which we identified in our fiscal year 2005 Federal Information Security ManageVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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ment Act report, also have been addressed, such as developing a process to maintain 

a comprehensive inventory. 

However, additional information security audits we conducted this past year 

showed challenges remain in controlling and addressing a number of IT risks and 

vulnerabilities. These audits involved DHS networks, databases, laptops, and Radio 

Frequency Identification systems, as well as of major programs such as the Transportation Workers Identification Credential and United States Visitor and Immigrant Status Indicator Technology. 

Specifically, DHS organizational components, through their Information Systems 

Security Managers, have not completely aligned their respective information security programs with DHS’ overall policies, procedures, and practices. Further, while 

DHS has issued substantial guidance designed to create and maintain secure systems, there exist areas where agency-wide information security procedures require 

strengthening: • Certification and accreditation; • Vulnerability testing and remediation; • Contingency plan testing; • Incident detection, analysis, and reporting; • Security configurations; and • Specialized security training. 

To address these issues, the Chief Information Officer must identify ways to improve the review process and increase the accountability of DHS component organizations. The department also must establish a comprehensive management authority to ensure the confidentiality, integrity, and availability of its vital intelligence 

information. 

Department-wide IT Infrastructure 

Creating an adequate capability for relocating mission-critical information systems to an alternate disaster recovery site in the event of extended service disruptions or emergencies is one concern. The department’s IT infrastructure remains a 

collection of legacy networks, systems, and data centers. Several elements of this IT 

infrastructure do not have the ability to relocate to an alternate site that can be 

used if their primary facility suffers an extended outage or becomes inaccessible. 

However, due to a lack of sufficient funding and an operational program to support 

an enterprise-wide disaster recovery solution, DHS has been hindered in its efforts 

to provide an alternate processing facility. This inability to restore the functionality 

of DHS’ critical IT systems following a service disruption or disaster could negatively affect accomplishment of a number of essential DHS missions, including passenger screening, grants processing, and controlling the flow of goods across U.S. 

borders. 

Similarly, significant resources and oversight are also needed to accomplish the 

major undertakings of upgrading the DHS data communications infrastructure and 

consolidating the various organizations that provide data communications support. 

Currently, the department is in the process of eliminating redundant firewalls, replacing hardware encryption devices, and combining operations centers—activities 

that are essential to supporting the efficient, effective, and secure exchange of mission-critical information both within DHS and with outside stakeholders. 

DHS Component IT Management 

IT management at the subcomponent level remains a major challenge, as demonstrated by our audits and subsequent reports on the IT programs and initiatives 

of selected DHS directorates and organizations. Our November 2006 followup assessment reports that the United States Citizenship and Immigration Services 

(USCIS) has made some progress by placing priority on business transformation, 

taking steps to centralize authority for IT personnel, initiating business process reengineering activities, and upgrading desktops and servers at key field locations. 

However, USCIS remains entrenched in a cycle of continual planning, with limited 

progress toward achieving its long-term transformation goals. Until USCIS addresses this issue, the bureau will not be in a position to manage existing workloads or 

handle the potentially dramatic increase in immigration benefits processing workloads that could result from proposed immigration reform legislation. Similarly, our 

December 2006 followup assessment of FEMA’s efforts to upgrade its principal disaster management system shows that the agency has made progress in meeting 

short-term systems needs; however, more remains to be done to address long-term 

planning and systems integration. 

Our reviews of major IT programs and initiatives of the various components also 

indicate program management problems. For example, in September 2005, we reported that FEMA could benefit from improvements to its 6-year, $1.5 billion program to digitize the maps used to identify flood zones and determine insurance reVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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quirements. Although FEMA is making progress in the flood map modernization 

program, FEMA can better ensure program success by: 

• Reviewing and revising its mapping plan, 

• Enhancing program guidance, 

• Increasing contractor oversight, 

• Improving coordination with stakeholders, 

• Clearly defining requirements and contractor expectations, and 

• Maintaining standard methodologies for mapping system development. 

Similarly, in August 2006, we reported on improvements USCG could make in its 

efforts to design and implement command, control, communications, computers, intelligence, surveillance, and reconnaissance (C4ISR) systems as part of its estimated 

$24 billion Integrated Deepwater System (Deepwater) program. Although the USCG 

has made progress in the program, problems with contract oversight, requirements 

management, systems certification and accreditation, and IT testing place the Deepwater IT acquisition and C4ISR operations at risk. Insufficient C4ISR funding has 

restricted accomplishing the ‘‘system-of-systems’’ objectives that are fundamental to 

ensuring interoperability of Deepwater assets, such as ships and aircraft. Meeting 

the training and IT support needs of Deepwater C4ISR users also is key. 

Information Sharing 

The Homeland Security Act of 2002 makes coordination of homeland security communication with state and local government authorities, the private sector, and the 

public a key DHS responsibility. However, due to time pressures, DHS did not complete a number of the steps essential to effective planning and implementation of 

the Homeland Security Information Network (HSIN)—the sensitive, but unclassified 

system it instituted to help carry out this mission. As such, effective sharing of the 

counter-terrorist and emergency management information critical to ensuring homeland security remains an ongoing challenge for the department. Resources, legislative constraints, privacy, and cultural challenges—often beyond the control of HSIN 

program management—pose obstacles to HSIN’s success. 

On a broader scale, DHS is challenged with incorporating data mining into its 

overall strategy for sharing information to help detect and prevent terrorism. Data 

mining aids agents, investigators, and analysts in the discovery of patterns and relationships from vast quantities of data. The Homeland Security Act authorizes 

DHS to use data mining and tools to access, receive, and analyze information. Our 

August 2006 report on DHS data mining activities identified various stove-piped activities that use limited data mining features. For example, Customs and Border 

Protection performs matching to target high-risk cargo. The United States Secret 

Service automates the evaluation of counterfeit documents. TSA collects tactical information on suspicious activities. ICE detects and links anomalies indicative of 

criminal activity to discover relationships. However, without department-wide planning, coordination, and direction, the potential for integrating advanced data mining 

functionality and capabilities to address homeland security issues remains untapped. 

Hurricane Katrina also highlighted the need for data sharing among federal agencies following a catastrophic disaster. We see a need for data sharing in three areas: 

• Real-time data exchange among agencies would help verify eligibility of applicants for disaster assistance and simplify the application process for victims. 

• Direct access to FEMA data by law enforcement agencies would help identify 

and track convicted sex offenders and suspected felons, and help locate missing 

children. 

• Computer data matching would help to prevent duplicative payments and 

identify fraud. 

FEMA is moving in the right directions on these issues. For example, FEMA has 

granted direct access to its data to the Hurricane Katrina Fraud Task Force for the 

purpose of investigating fraud. However, progress is slow and much remains to be 

done. FEMA and the federal community are not ready to meet the data sharing demands of the next catastrophic disaster. 

Another example of vital information sharing is the National Asset Database. The 

National Infrastructure Protection Plan envisions a comprehensive, national inventory of assets, known as the National Asset Database, to help DHS coordinate the 

effort to protect the nation’s critical infrastructure and key resources. DHS is responsible for integrating efforts to protect the chemical industry; commercial facilities; dams; emergency services; commercial nuclear reactors, materials, and waste; 

information technology; telecommunications; postal and shipping; transportation 

systems; and government facilities. A maturing National Asset Database is essential 

to developing a comprehensive picture of the nation’s critical infrastructure and key 

resources. Management and risk-based resource allocation decisions depend on havVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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ing this comprehensive picture. As we reported in fiscal year 2006, DHS is improving the development and quality of the National Asset Database. We will continue 

to monitor and review how DHS uses the National Asset Database to support its 

risk management framework, how it coordinates infrastructure protection with 

other sectors, and how its pursuit of basic vulnerability assessment standards can 

help develop overarching departmental priorities. 

ACQUISITION AND CONTRACT MANAGEMENT 

Acquisition management is not just awarding a contract, but fulfilling a mission 

need through a thoughtful, balanced approach that considers cost, schedule, and 

performance. The urgency and complexity of DHS’ mission will continue to demand 

rapid pursuit of major investment programs. In 2006, DHS spent about 40% of its 

budget through contracts. 

DHS must have an infrastructure in place that enables it to oversee effectively 

the complex and large dollar procurements critically important to achieving the 

DHS mission. While DHS continues to build its acquisition management capabilities 

in the component agencies and on the department-wide level, the business of DHS 

goes on and major procurements continue to move. We identified significant risks 

and vulnerabilities that might threaten the integrity of DHS’ acquisition management program. In general, DHS needs to improve its major acquisitions planning, 

operational requirements definition, and implementation oversight. 

The prerequisite for effective acquisitions, that is, obtaining the right, cost-effective systems and equipment to accomplish DHS’ missions, is program management. 

Complex and high-dollar contracts require multiple program managers, often with 

varying types of expertise. Several DHS procurements have encountered problems 

because contract technical and performance requirements were not well defined. 

DHS needs: 

• More certified program managers; 

• Comprehensive department-wide standards for program management; 

• A strengthened investment review board process to provide greater independent analysis and review; 

• Better defined technical requirements; and 

• More balance among schedule, cost, and performance when expediting contracts. 

The Office of the Chief Procurement Officer recently established a program management advisory board, established standards for certifying program managers, 

and promoted program management training opportunities. The Office of the Chief 

Procurement Officer is assisting program offices with acquisition planning, including 

templates and one-on-one assistance. 

In their transition into DHS, seven agencies retained their procurement functions, 

including USCG, FEMA, and TSA. The expertise and capability of the seven procurement offices mirrored the expertise and capability they had before creation of 

DHS, with staff size that ranged from 21 to 346 procurement personnel. DHS established an eighth acquisition office, the Office of Procurement Operations, under the 

direct supervision of the Chief Procurement Officer, to service the other DHS components and manage department-wide procurements. Many DHS procurement offices 

reported that their lack of staffing prevents proper procurement planning and severely limits their ability to monitor contractor performance and conduct effective 

contract administration. The fiscal year 2007 DHS Appropriations Act provides over 

400 additional contract specialist positions to alleviate part of the shortfall. Moreover, DHS is planning a contracting fellows program with up to 100 entry-level positions to begin in fiscal year 2008. 

In addition to awarding contracts, the Office of the Chief Procurement Officer 

helps DHS components adhere to standards of conduct and federal acquisition regulations in awarding and administering contracts. This oversight role involves developing department-wide policies and procedures, and enforcing those policies and 

procedures. 

Both our office and the Government Accountability Office have reported that the 

Office of the Chief Procurement Officer needs more staff and authority to carry out 

its general oversight responsibilities. The Government Accountability Office recommended that DHS provide Office of the Chief Procurement Officer sufficient resources and enforcement authority to enable effective, department-wide oversight of 

acquisition policies and procedures. We made a similar recommendation. The DHS, 

in response to our December 2006 report, Major Management Challenges Facing the 

Department of Homeland Security, said that it disseminated the Acquisition Professional Management Directive to identify and certify appropriately trained and experienced program managers, contracting officer’s technical representatives, and auVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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thorized buying agents. It also has certified 348 program managers since 2004, and 

continues to focus on qualifications and placement. 

During fiscal year 2006, the Under Secretary for Management established policies 

for acquisition oversight and directed each of the eight heads of contracting activities to measure and manage their acquisition organizations. Also, the number of 

oversight specialists in the Acquisition Oversight Division is authorized to expand 

to nine during fiscal year 2007. The Office of the Chief Procurement Office has undertaken an outreach program to involve DHS component staff to manage effectively 

and assist in acquisition oversight. 

Common Themes in Our Audits of DHS Contracts 

In prior years, we conducted audits and reviews of individual DHS contracts, such 

as TSA’s screener recruiting and TSA’s information technology services. More recently, we have completed audits relating to the SBInet program, the Coast Guard’s 

Deepwater program, and FEMA contracting. Common themes and risks emerged 

from these audits, primarily the dominant influence of expediency, poorly defined 

requirements, and inadequate oversight that contributed to ineffective or inefficient 

results and increased costs. 

The department continues to pursue high-risk, complex, system-of-systems acquisitions programs, such as SBInet and Deepwater. A performance-based acquisition 

strategy to address the challenges of these programs is, in our opinion, a good one. 

Partnering with the private sector adds fresh perspective, insight, creative energy, 

and innovation. It shifts the focus from traditional acquisition models, i.e., strict 

contract compliance, into one of collaborative, performance-oriented teamwork with 

a focus on performance, improvement, and innovation. Nevertheless, using this type 

of approach does not come without risks. To ensure that this partnership is successful, the department must lay the foundation to oversee and assess contractor performance, and control costs and schedules. This requires more effort and smarter 

processes to administer and oversee the contractors’ work. 

Customs and Border Protection SBInet Program 

On November 2, 2005, DHS announced a multiyear strategy to secure America’s 

borders and reduce illegal immigration, called the Secure Border Initiative (SBI). A 

critical element of the SBI initiative is the acquisition of technology, infrastructure, 

and personnel to gain operational control of the nation’s border—SBInet. The 

SBInet procurement presents a considerable acquisition risk because of its size and 

scope. We see risks and vulnerabilities similar to those identified in previous OIG 

audits and reviews. 

Customs and Border Protection awarded a multiple-year systems integration contract in September 2006 to begin the SBInet multibillion dollar initiative. We have 

monitored the initiation of the SBInet program and provided a risk advisory with 

recommendations to address observed weaknesses in the program. The department 

was fully responsive during our SBInet review, agreed to our recommendations, and 

is planning and pursuing corrective actions. However, the SBInet procurement continues to present a considerable acquisition risk because of its size and scope. 

Our main concern about SBInet is that DHS is embarking on this multibillion dollar acquisition project without having laid the foundation to oversee and assess contractor performance and effectively control cost and schedule. DHS has not properly 

defined, validated, and stabilized operational requirements and needs to do so 

quickly to avoid rework of the contractor’s systems engineering and the attendant 

waste of resources and delay in implementation. Moreover, until the operational and 

contract requirements are firm, effective performance management, and cost and 

schedule control, are precluded. As acknowledged in our report, the department took 

actions to mitigate risk during the course of our review and is planning further actions to establish an effective performance management system for SBInet. 

We also reported that the department does not have the capacity needed to effectively plan, oversee, and execute the SBInet program; administer its contracts; and 

control costs and schedule. The department’s acquisition management function lacks 

the appropriate work force, business processes, and management controls for planning and executing a major acquisition program such as SBInet. Without a preexisting professional acquisition workforce, Customs and Border Protection has had 

to create staffing plans, locate workspace, and establish business processes, while 

simultaneously initiating one of the largest acquisition programs in the department. 

DHS needs to move quickly to establish the organizational capacity to properly oversee, manage, and execute the program. 

Coast Guard’s Deepwater Program 

USCG has also encountered a number of challenges in executing its Deepwater 

Acquisition program despite the expenditure of more than $3 billion over 4 years. 

14 

This is particularly true within the Deepwater surface and air domains. Most recently, we identified management deficiencies and inadequate technical oversight 

related to the acquisition of the National Security Cutter. In this case, the Coast 

Guard did not exercise sufficient oversight authority of the contract with Integrated 

Coast Guard Systems to address design deficiencies. Consequently, the National Security Cutter acquisition is expected to cost more than originally planned and the 

cutters may be subject to operational limitations that affect the ability of the Coast 

Guard to execute its Deepwater mission. 

Similar issues were previously identified related to the 110-foot patrol boat conversion project. This project was curtailed at eight cutters due to design, construction, performance, and cost concerns. In December, the Coast Guard decided to take 

the eight converted cutters out of service due to structural design deficiencies. In 

response to these challenges, USCG accelerated plans to design, construct, and deploy the composite Fast Response Cutter by more than 10 years as a replacement 

for the 110-foot patrol boat. However, an independent analysis has confirmed that 

the Fast Response Cutter design is outside patrol boat design parameters, i.e., too 

heavy, too overpowered, and not streamlined enough to reduce resistance. These 

concerns led to the USCG’s April 2006 decision to suspend work on the Fast Response Cutter until these issues could be resolved or an alternative commercial offthe-shelf design identified. 

In the Deepwater air domain, the HH–65C helicopter and unmanned aerial vehicle acquisitions have encountered schedule delays and cost increases. These Deepwater design, construction, performance, scheduling, and cost issues are expected to 

continue to present significant challenges to USCG’s Deepwater Program in the future. 

The Coast Guard recognizes these challenges and is taking aggressive actions to 

strengthen program management and oversight—such as technical authority designation; use of independent, third party assessments; consolidation of acquisition 

activities under one directorate; and redefinition of the contract terms and conditions, including award fee criteria. Furthermore, and most importantly, the Coast 

Guard is increasing its staffing for the Deepwater program, and reinvigorating its 

acquisition training and certification processes to ensure that staff have the requisite skills and education needed to manage the program. These steps should go 

a long way in improving the management and oversight of the Deepwater program 

as it moves forward. 

FEMA Procurements 

We have also focused substantial work on FEMA contracting and have identified 

numerous problems. FEMA is not well prepared to provide the kind of acquisition 

support needed for a catastrophic disaster. FEMA’s overall response efforts suffer 

from: • Inadequate acquisition planning and preparation for many crucial needs; 

• Lack of clearly communicated acquisition responsibilities among FEMA, other 

federal agencies, and state and local governments; and 

• Insufficient numbers of acquisition personnel to manage and oversee contracts. 

In February 2006, we reported that FEMA purchased mobile homes without having a plan for how the homes would be used. As a result, FEMA now has thousands 

of surplus mobile homes. In September 2006, we reported that FEMA spent $7 million renovating a facility to shelter evacuees. Because there was inadequate planning, the facility was never needed. As a result, the facility was underused and the 

monies spent to renovate were wasted. 

FEMA has already made improvements, such as increasing the number of standby contracts in place and ready to be executed when disaster strikes. Also, DHS created a Disaster Response/Recovery Internal Control Oversight Board to address 

many of the problems. We will soon conduct a review of FEMA’s overall acquisition 

management structure to identify additional improvements that FEMA can make to 

be prepared better for the next catastrophic disaster. We will review organizational 

alignments and leadership, policies and procedures, FEMA’s acquisition workforce, 

and its information management. We are also reviewing FEMA’s system for accounting for property it has purchased for disasters. 

The urgency and complexity of DHS’ mission will continue to demand rapid pursuit of major investment programs. While DHS continues to build its acquisition 

management capabilities in the component agencies and on the department-wide 

level, the business of DHS goes on and major procurements continue to move. Acquisition management will continue to be an intense area of oversight for our office and 

an ongoing focus of our audit efforts. 

Providing Accurate and Timely Procurement Reporting 

15 

In July 2006, we reported on the challenges that DHS faces in planning, monitoring, and funding efforts to ensure the accurate and timely reporting of procurement actions to interested stakeholders. The Executive Branch, the Congress, and 

the public rely upon such procurement information to determine the level of effort 

related to specific projects and also to identify the proportion of government contracts that are awarded to small businesses. Currently, however, DHS has several 

different contract-writing systems that do not automatically interface with its Federal Procurement Data Systems—Next Generation (FPDS–NG)—a government-wide 

procurement reporting system that is accessible by the public. Some of the systems 

may need to be replaced. Additionally, not all DHS procurements are entered into 

FPDS–NG. For example, grants, mission assignments, and purchase card data may 

not be entered into FPDS–NG, resulting in an understatement of DHS’ procurement 

activities. 

DHS has undertaken a number of initiatives to improve its reporting on procurement actions. These initiatives include interfacing the various DHS contract-writing 

systems with FPDS–NG and ensuring that all procurement information is entered 

into FPDS–NG immediately following contract award. Such initiatives will not only 

enable real-time reporting of DHS procurement actions, they also will allow DHS 

to rely on General Services Administration databases to help eliminate contract 

awards to ineligible vendors. The Office of the Chief Procurement Officer has 

worked with each of the DHS components to improve the accuracy, completeness, 

and timeliness of FPDS–NG data entry. DHS’ planned deployment of a single, contract-writing software system should reduce duplicate data entry for each contract 

action. DHS is developing routine reporting for non-FPDS–NG instruments. 

GRANTS MANAGEMENT 

Managing the multitude of grant programs within DHS poses a significant challenge. Further, the grant programs of other federal agencies that assist states and 

local governments in improving their abilities to prepare for, respond to, and recover 

from acts of terrorism or natural disasters compound this challenge. Congress continues to authorize and appropriate funding for individual grant programs within 

and outside of DHS for similar, if not identical, purposes. In total, DHS manages 

more than 80 disaster and nondisaster grant programs. For disaster response and 

recovery efforts, we have identified 36 federal assistance programs that have the potential for duplicating DHS grant programs. DHS must do more to coordinate and 

manage grants that are stove-piped for specific, but often related purposes, to ensure that they are contributing to our highest national preparedness and disaster 

recovery goals, rather than duplicating one another and being wasted on low-priority capabilities. 

Disaster grant awards will be substantially larger than usual with the more than 

$60 billion that Congress appropriated in late fiscal year 2005 for disaster response 

and recovery efforts related to Hurricanes Katrina, Wilma, and Rita. In the Gulf 

Coast states affected by these hurricanes, numerous federal grants from different 

agencies and components of DHS are going to state and local governments, private 

organizations, and individuals for response and recovery from the recent hurricanes, 

as well as for the next disaster or terrorist attack. We are currently reviewing disaster grant activities throughout the Gulf Coast and will continue to give special 

emphasis to Gulf Coast disaster response and recovery grant spending. 

In fiscal year 2007, DHS is expected to award about $3.4 billion in state and local 

preparedness grants. We are reviewing individual states’ management of first responder grants and the effectiveness of DHS’ system for collecting data on state and 

local governments’ risk, vulnerability, and needs assessments. Our audits have reported on the states’ inability to manage effectively and monitor these funds, and 

to demonstrate and measure improvements in domestic security. Our reports also 

pointed out the need for DHS to monitor the preparedness of state and local governments, grant expenditures, and grantee adherence to the financial terms and conditions of the awards. 

DHS faces a challenge in addressing its responsibility to become an efficient and 

effective grants manager. For example, while the Office of Grants and Training is 

tasked with financial and programmatic monitoring and oversight for first responder grants, the Office of Justice Programs with the Department of Justice does 

the accounting for these grants. Given the billions of dollars appropriated annually 

for disaster and nondisaster grant programs, DHS needs to ensure that internal 

controls are in place and adhered to, and grants are sufficiently monitored to 

achieve successful outcomes. 

DHS needs to ensure that, to the maximum extent possible, disaster and homeland security assistance go to those states, local governments, private organizations, 

or individuals eligible to receive such assistance and that grantees adhere to the 

16 

terms and conditions of the grant awards. DHS needs to continue refining its riskbased approach to awarding first responder grants to ensure that areas and assets 

that represent the greatest vulnerability to the public are as secure as possible. It 

must incorporate sound risk management principles and methodologies to successfully prepare for, respond to, recover from, and mitigate acts of terrorism and natural disasters. 

DHS management recognizes these challenges. DHS is planning a study to provide a single grants management system for all nondisaster-related grants. In addition, a risk-based grant allocation process was completed in fiscal year 2006. DHS 

risk analysis was a critical component of the process by which allocations were determined for such programs as the Homeland Security Grant Program, Transit Security Grant Program, Port Security Grant Program, and the Buffer Zone Protection 

Program. 

However, the support for the Gulf Coast hurricanes had a major impact on DHS 

OIG’s nondisaster work, resulting in some delays of audits underway and planned, 

including the area of grants management. This negative impact was reduced as temporary staff were hired and trained, and employees detailed to Gulf Coast Hurricane 

Recovery returned to the Office of Audits. 

CATASTROPHIC DISASTER RESPONSE AND RECOVERY 

In the wake of Hurricane Katrina, Congress responded quickly with funds for immediate relief and recovery efforts. To date, emergency appropriations totaling over 

$85 billion have been made available. Additionally, Congress enacted over $35 billion in mandatory spending/tax bills, bringing total relief dollars to more than $122 

billion. 

[Source: Senate Budget Committee, August 22, 2006] 

Recognizing the need to protect taxpayers’ dollars, the Office of Management and 

Budget, in early September 2005, mandated that the federal agencies involved in 

the disaster response and recovery efforts develop a stewardship plan. The plan sets 

the framework for mitigating risks associated with crisis procurement, managing 

the broad scope of oversight work, and overseeing contracts awarded. 

On the heels of the Office of Management and Budget/Department of Homeland 

Security plan, the Inspectors General (IGs) involved in oversight of disaster relief 

efforts developed a hurricane audit coordination model. The model helped determine 

which recovery activities each of the OIGs would audit and review. 

Moreover, the OIG community was well poised to address the need for oversight, 

as coordination of activities had already been established. Prior to Hurricane 

Katrina, the President’s Council on Integrity and Efficiency (PCIE) and the Executive Council on Integrity and Efficiency (ECIE) established a Homeland Security 

Roundtable, based on their collective experience after the 9/11 attacks. The RoundVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE

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table was a natural focal point around which hurricane recovery oversight revolved. 

And, as Chairman of the PCIE’s Homeland Security Roundtable, I was tasked with 

coordinating its activities. Needless to say, Hurricane Katrina oversight was our 

number one priority last year. 

Through the Roundtable, the OIG community has been successful in addressing 

issues of waste, fraud, and abuse. As of September 30, 2006, through our coordinated activities we have: • Conducted audits or reviews of 835 contracts, including 348 completed and 487 ongoing audits. These 835 contracts had a total contract value of $8.5 billion. Of this amount, auditors reported questioned costs of $53.6 million, of 

which $33.3 million was determined to be unsupported. 

• Reviewed contracts resulting in $80.9 million in taxpayer funds that could 

have been put to better use. 

• Opened 1,756 cases, which resulted in 439 indictments, 407 arrests, and 255 

convictions. 

Additionally, in September 2005, I established the Office of Gulf Coast Hurricane 

Recovery to take the lead in coordinating disaster-related activities. I also appointed 

a separate Special Inspector General for Gulf Coast Recovery. This action allowed 

us to stay current on all disaster relief operations, and provide on-the-spot advice 

on internal controls and precedent-setting decisions. 

In turn, the lesson we learned from our experiences in Katrina oversight is that 

the presence of an office directly responsible for disaster assistance is essential. 

Therefore, in October 2006, we established the Office of Disaster Assistance Oversight (DAO) to take over, on a permanent basis, the work of the Office of Gulf Coast 

Hurricane Recovery. I also appointed a permanent Deputy Inspector General for 

Disaster Assistance Oversight. 

The creation of the DAO has strengthened our ability to react quickly and efficiently to a variety of disasters, and further advance our collaborative efforts with 

other federal IGs. DAO also coordinates the work of the 23 other federal IGs involved in the PCIE Roundtable; actively participates on the Department of Justice’s 

Hurricane Katrina Fraud Task Force; and works closely with state and local auditors and inspectors general, as well as the Government Accountability Office. 

The DAO organizational structure to a great extent mirrors FEMA’s structure 

with offices addressing Response, Recovery, Mitigation, and Acquisition. We have 

three field offices located in Oakland, California, Denton, Texas, and Atlanta, Georgia. Additionally, we have four suboffices co-located or near FEMA’s Transitional 

Recovery Offices, which allow us to work closely with state and local auditors and 

inspectors general, as well as FEMA regional staff, in order to take a hands-on approach to our oversight efforts. With a total staff of 120 personnel exclusively dedicated to disaster oversight, our structure allows us to be efficient and effective, and 

to give counsel to address immediate oversight needs. As we continue into the recovery phase of the disaster, we are changing our oversight focus from immediate recovery to acquisition and contract management. 

Overall, the work completed by the Gulf Coast Hurricane Office and the DAO has 

been successful. However, in order to conduct the needed oversight of FEMA’s readiness, preparation, response, and recovery related to Hurricane Katrina, we have had 

to substantially reallocate our inspectors, auditors, and evaluation resources. 

———————— 

Mr. Chairman, this concludes my prepared statement. I have highlighted four specific management challenges facing the department—financial management, information technology management, acquisition management, and grants management—that are the backbone of the department and provide the structure and information to support the accomplishment of DHS’ mission. While some aspects of these 

challenges were inherited by the department from their legacy agencies, the complexity and urgency of DHS’ mission has exacerbated the challenge in many areas. 

While the department’s senior officials are well aware of these problems and are 

making progress in resolving these issues, we must continue to keep the department 

focused on these challenges. Our continued oversight in these areas is intended to 

facilitate solutions in order to significantly improve the department’s ability to carry 

out its operational programs. 

I will be pleased to answer any questions you or the Members may have. 

Chairman THOMPSON. Thank you very much. 

I thank all the witnesses for their testimony. 

I will remind each member that he or she will have 5 minutes 

to question the panel. 

I will now recognize myself for the beginning of the questions. 

18 

Again, thank you very much for your very thoughtful testimony. 

I guess the first point for both of you gentlemen, Mr. Walker and 

Mr. Skinner, is: Do you presently have the resources necessary to 

do your job effectively? 

Mr. Walker, will you respond? 

Mr. WALKER. I wouldn’t say anything to you I haven’t told the 

appropriators. I do not believe that we have been treated fairly in 

recent years. 

GAO generated a $105 return for every $1 invested in the agency, number one in the world. Second place is $10 to $1. And we 

haven’t kept pace with inflation for the last 4 years. That is not 

in the interest of the Congress or the country. And I am hopeful 

that we can rectify that in our fiscal 2008 budget. 

Chairman THOMPSON. Thank you. 

Mr. Skinner? 

Mr. SKINNER. Chairman Thompson, just like everyone else in 

government and everyone else in DHS, we could always use additional resources. We are stretched very, very, very thin. And as a 

result of the Katrina and the Gulf Coast disasters, which those expenditures are going to exceed probably when it is all over with 

well over $200 billion. 

We had to focus a lot of resources to provide oversight audits, inspections and investigations of activities that are occurring as a result of that very unfortunate event. That has really hurt us because we have had to take over 75 people out of our audit shop, 

investigation shop and reassign them to Gulf Coast operations, 

which is really having a real major effect on our ability to provide 

oversight in other parts of the department. 

Where we are really lacking, if anyone takes a close look at our 

performance plans and the results of our work, is that we are not 

providing the oversight of the billions of dollars that are spent each 

year in the grant arena, for example. It is just simply we don’t 

have the resources to do it. 

Chairman THOMPSON. Thank you. 

Mr. Walker, you talked a little bit about interference with investigations and what have you. I am concerned about that, but I 

want both of you gentlemen to kind of give the committee an example of the kind of interference your staff ran into in trying to get 

information from the department. 

Mr. WALKER. Well, thank you, Mr. Chairman. 

First, I don’t believe I have ever used the word ‘‘interference.’’ 

And that is an example of how there was misreporting of what we 

said yesterday. 

Here is the problem. The problem is, it is my understanding from 

my staff that every document that is to be provided to GAO for review has to be reviewed by the chief counsel’s office. There is no 

reason for that. We have broad-based statutory rights to documents. And I don’t understand why these documents, every document, has to be reviewed by a lawyer. 

Second, it is also my understanding that on a selective basis, not 

on an across-the-board basis, that members of the chief counsel’s 

office—and there are many members of the chief counsel’s office— 

want to sit in on interviews with regard to selected officials. That 

19 

has a chilling effect on the ability of people to speak candidly with 

us. 

My understanding is Rick has had similar problems. But again, 

this is a systemic problem. It is not a particular person. It is something that is systemic. 

Mr. SKINNER. Thank you. Yes, we have had similar problems. 

But they are not the types of problems that GAO is experiencing. 

And ours have been primarily within the area of the Coast Guard. 

And there, because of draft guidelines that have been published, it 

has created a shroud on our interaction. 

If you ask the Coast Guard, if you ask anyone in the Department 

of Homeland Security, they will tell you they cooperate with us. 

Generally speaking, they do cooperate with us. With regards to 

Phil Perry and his office, they have always been supportive of our 

operations. And the news media yesterday really did a disservice 

in the way they interpreted the comments we made yesterday. 

Our problem, for example, at the Coast Guard presumes that 

anytime we want to do an interview, that the supervisor must sit 

in. Anytime we make contact with an individual within the Coast 

Guard, they must report that to their supervisor. Anytime we want 

a document, we must go through the audit liaison officer to get 

that document where it is vetted and reviewed. 

That is very cumbersome. It expends a lot of time, slows down 

our ability to do our job in a timely manner. And it also, like Mr. 

Walker said, it sends a chilling effect among those that we are trying to interact with. 

If they say they want to meet with us privately, which the Coast 

Guard says they can, that also sends a message that we may not 

be a—we, a member of the Coast Guard—is not a team player. So 

therefore, there is a resistance. There is an attitude there that it 

is not wise to meet with the IG privately. 

And then when they do meet with us with their supervisors, they 

are constrained. They are not as open. As a result, we generally 

have to do two interviews, one with the individual with their supervisor and a second interview at night over the telephone back-channel. 

Chairman THOMPSON. One point of reference, is that customary, 

to your knowledge, with other departments within government? 

Mr. WALKER. Well, we deal with every department in government. And, no, it is highly unusual. It is one thing for the general 

counsel’s office to be involved on an exception basis in unusual circumstances. And that is fine, and that is understandable. But to 

be involved with every document is highly unusual. In fact, I think 

it is the only one that I know of in government. 

Chairman THOMPSON. Thank you very much. 

I now yield to the ranking member of the committee for his questions. 

Mr. KING. Thank you, Mr. Chairman. 

My first question would be to Inspector General Skinner. It is 

somewhat parochial, but I think it has an overriding arch to it. 

Back in October of 2005, New York City received credible threats 

about an attack on its subway system. And the police commissioner 

and the mayor increased security on the subways at the time. Simultaneously with that, officials in the Department of Homeland 

20 

Security were downgrading the threat and were trying to minimize 

it, and they were very critical of the mayor and the police commissioner. 

At the same time as that, it turns out that officials within the 

Department of Homeland Security were actually advising their relatives to stay off the subways. This was actually before the threat 

was even announced, which to me, certainly, violated some very 

important procedures as far as leaking classified information. 

I know you conducted an investigation of that. Can you tell us 

what the status of the investigation is, what action was taken 

against those individuals and more importantly than that, what actions has the department taken to ensure that employees of the department realize the absolute necessity of not leaking secret information? And has that been impressed upon the employees in the 

department? 

Mr. SKINNER. Thank you. 

Yes, indeed, we did do an investigation of that incident. And it 

is complete. And we had referred our findings back to the program 

offices with recommendations for disciplinary action. I will have to 

get back to you, Congressman King, on exactly what those actions 

were. I know there were actions under way. I just don’t know what 

they were at this point in time. 

Mr. KING. Is there any way of telling now whether or not this 

was an unusually long period of time that the department has 

taken? Or it is just that you are not aware of it at the time? 

Mr. SKINNER. I am just not aware of the actions on that particular case. 

Mr. KING. Okay, okay. If you could get back to me on that, I 

would certainly appreciate it. 

Mr. SKINNER. I will. 

Mr. KING. Comptroller General Walker, the department has undergone several transformations or reorganizations in the past several years. There was Secretary Chertoff’s second stage review. 

Then last year there was the FEMA reformation and restructuring. 

What impact have those reorganizations had on the department, 

positive and negative? 

And is it early enough yet to determine how effective the FEMA 

reorganization has been, especially in view of how it conducted 

itself, which I believe was in a positive way in the recent tornado 

incident in Florida? 

Mr. WALKER. Well, I think it is too early to tell whether or not 

the reorganization is going to be effective. And obviously, that tornado was a tragic incident in Florida. 

But the scale of that as compared to the scale of a Katrina or 

something is obviously very, very different. 

And frankly, I think we should have expected that people would 

have been overwhelmed with Katrina. But I would have hoped they 

would have done better, and I am sure you do, too. 

Secondly, so with regard to that—I apologize. The first part of 

your question, Mr. King, again, was? 

Mr. KING. Yes, the impact of these reorganizations have on a 

new department. Are there any lessons learned from that? 

Mr. WALKER. Thank you. 

21 

Mr. KING. And do you believe that we should consider more reorganization or let this try to work its way through? 

Mr. WALKER. Any organization, whether you are in the public 

sector, the private sector or the not-for-profit sector, reorganizations are very disruptive. They have an adverse impact on morale. 

It is very important that one step back, look strategically, decide 

how best to align the organization to achieve the objectives, implement it and leave it alone for a period of time. 

The morale at the Department of Homeland Security, based upon 

the latest employee feedback survey, is, I believe, dead-last of all 

the major departments and agencies. 

Now, you can’t say it is because of all these reorganizations. But 

I can tell you, based upon my public-and private-sector experience, 

including running a global operation in the private sector and 

heading three federal agencies, you know, reorganizations may be 

necessary at times but they should be minimized and they are disruptive. 

Mr. KING. Do you believe the department is working effectively 

to further this reorganization now? Or do you feel it has become 

stalemated or stagnant? 

Mr. WALKER. My understanding is we are doing some related 

work. And I would rather wait until that work is done before I end 

up saying anything. 

Mr. KING. My time is running out. Mr. Chairman, I yield back. 

Chairman THOMPSON. Thank you very much. 

We will now hear from the gentlewoman from California, Ms. 

Sanchez. 

Ms. SANCHEZ. Thank you, Mr. Chairman. 

And thank you, both of you gentlemen, for your service to our 

country and for the information you are giving us. 

You know, my background is in strategic management. I used to 

work for Booz–Allen. I was an investment banker. I have international experience. I did a lot of M&A work, more importantly, 

performance audits after M&A work. 

Quite frankly, I voted against creating the Homeland Security 

Department because I know how terrible it can be to get two cultures together, let alone 22, and maybe not the right 22, in an area 

and then not put them together really and take away collective 

bargaining rights from its employees and leaving the situation costneutral, as you alluded to, where they picked up additional responsibilities but weren’t allowed to spend any more. 

And, of course, I think one of the biggest problems we have seen 

is that those who were smart enough or who had been there long 

enough knew they had to get out of those departments. That created voids. And you people came in. They didn’t know how it had 

been run before. Now we hire back contractors in order to come in 

and tell the new people how the job is done. 

We look at the situation of the staffing over at this department, 

and we see that—and we still haven’t gotten back the numbers 

completely. But the fact of the matter is slots are not filled. Lots 

of contracting slots are sitting there. So just the whole issue of people is a big problem. 

But I want to ask a couple of questions with respect to the budget that just came out from the president and the fact that DHS had 

22 

been pushing to get the old hospital in D.C.—I wish Ms. Norton 

was here—to sort of situate its employees in one place and stop 

leasing wherever it is that they all are. And, of course, then you 

do the cost savings analysis that saves over $1 billion a year the 

sooner you get them out of those leased offices. 

But, you know, the drawback is it is up-front money that you 

have to spend in order to get this old hospital refurbished. And, of 

course, I hate to say it without Ms. Norton here because, of course, 

she is very anxious to fill that place up. 

But my question to you is, do you think it would make a difference if we did put these people together in one place and gave 

them the secure lines some of them need and the access some of 

them need? Or do you think that is not going to make any difference, that they are just—and I have said this over and over— 

chaotic and a confused department, which it has been for the last— 

and I have sat on the committee since the inception of that. Or do 

you think it might help? 

Because in the president’s budget, this issue of putting everybody 

in one place has been zeroed out. 

Mr. SKINNER. I really wouldn’t want to speculate that it would 

make things better. But I could say that it would be more efficient 

if we were all together because we spend an inordinate amount of 

time commuting cross-town to meet with one another because we 

are scattered all over town, at the Ronald Reagan Building, up on 

4th and High Street, down on Vermont Avenue and places in Virginia. And it is very inconvenient. And you lose hours a day just 

commuting back and forth for meetings. 

But I wouldn’t want to speculate would it make us a more cohesive, better managed. I don’t think location drives management. I 

think management drives management. 

Ms. SANCHEZ. Okay, that is fair enough. Thank you. 

Do you have a comment on that? 

Mr. WALKER. I think it could help, but I don’t think it is a panacea. I think clearly it could help to improve economy and efficiency. 

Ms. SANCHEZ. Maybe communications? 

Mr. WALKER. Possibly, yes. But it clearly comes down to leadership and performance measurement rewards systems and a variety 

of other things irrespective of where you are. As you know, sometimes you can have everybody in one building but psychologically 

there can be a difference between which floor you are on plus 

which unit you are part of. 

But it wouldn’t hurt. And I think it would help. 

Ms. SANCHEZ. Thank you, Mr. Chairman. I will yield back at this 

point. 

Chairman THOMPSON. Thank you very much. 

The chair will now recognize other members for questions that 

they may wish to ask the witnesses. In accordance with our rules, 

I will recognize members who were present at the start of the hearing based on seniority on the committee alternating between majority and minority. Those members coming in later will be recognized 

in the order of their arrival. 

I now recognize the gentleman from Alabama, Mr. Rogers. 

Mr. ROGERS. Thank you, Mr. Chairman. 

23 

I want to thank the witnesses for being here. I would like to address my questions to Mr. Skinner. 

In the 109th Congress the subcommittee that I chaired held 

three hearings on ISIS. For those who aren’t familiar, that is the 

Integrated Surveillance and Intelligence System. And, it was a real 

disaster. We talked about ways that we could make sure that didn’t 

happen in the future, particularly as we went into this new technology era. And then last September, SBInet was announced. 

And you released a report in November, a management advisory 

report, that raised a lot of concerns about SBInet. I would like to 

ask you, has DHS done much to address the concerns in that management advisory? And if so, what have they done? 

Mr. SKINNER. That is interesting because, as we speak today, we 

are meeting with the SBInet folks to obtain an update exactly 

where they are with regards to implementing the recommendations 

we made there. 

I can say that just from—because we are embedded there. We 

are going to continue to work there because of the major-because 

of the investment that we are putting in this initiative. And I can 

say that we still have significant problems. 

The staffing, the project management team is still not where it 

should be. And our major concern right now is, while they can 

manage the one or two taskings that are out there, we are in the 

process to issue several more taskings between now and this summer. And that is going to stretch them very, very thin to be able 

to manage the taskings that they currently have then be involved 

in the process of initiating new taskings and providing oversight of 

these additional taskings. 

So it is something we need to watch very, very, very closely. It 

is certainly not a best practices, the way we proceeded with SBInet. 

But they did, in fact, take certain safeguards this time, based on 

lessons learned from Deep Water, for example, and they are moving at a slow pace, which is a wise thing to do. 

It is a short-ended contract with exit ramps in case things don’t 

go well. So in their pilot, the Tucson area, as I am sure you are 

aware, before we go spread our wings into other areas. But it is 

something that needs to be watched very, very carefully. 

Mr. ROGERS. I get the impression from the way you described 

that that you see staffing shortage problems. 

Mr. SKINNER. There is. There is. 

Mr. ROGERS. Not just with you, but with DHS. 

Mr. SKINNER. Yes. 

Mr. ROGERS. Okay. 

Mr. SKINNER. I might add very quickly we have got a report coming out on SBInet next week. I would commend it to you. 

And secondly, just a note for the record that I come from Alabama as well. 

Mr. ROGERS. All right. War Eagle. 

[Laughter.] 

I wanted to ask about procurement. As you know, we talked in 

the past about—and you made reference to it in your management 

advisory acquisition and procurement staff shortages. Have you 

seen any relief in this area? 

24 

Mr. SKINNER. I know there is some very aggressive initiatives 

both in our 2007—in the department’s 2007 budget. And you will 

see that as well in the 2008 budget. 

Keep in mind that we inherited a budget in 2003. In 2004, the 

president’s budget was already up on the Hill. So the first time the 

department was able to submit a budget was in 2005. Unfortunately, it was focusing on operational issues in the standup of 

things like the science and technology division. 

In 2006 was the very first time, I believe, or 2007, that we recognize that we have dug a hole for ourselves and we are trying now 

to work our way out of that. It is going to be a long-term effort. 

The department, particularly under the leadership of Elaine 

Duke, is taking some very innovative approaches to do stop gap solutions until we can get fully staffed. And that is trying to recruit 

in-house, doing certification, doing training. 

And it goes beyond just procurement and acquisitions, procurement officers. It is really a program management capability. And 

we need additional training there. You can have the best procurement shop in the world, but if you don’t have good program managers and they are well trained and they are working hand in hand 

with your acquisition officer, a lot of things can go wrong. 

Mr. ROGERS. Right. And a piece of good news, from the chairman’s standpoint. I met with Ms. Duke yesterday, and talked at 

length about what they have been doing. I know the department 

has gotten a black eye for morale. But apparently in procurement 

there is a real good attitude, and they have got a lot of people trying to join that department. But that is a good thing. 

I would ask that after this meeting you are going to have this 

afternoon, if you could give us a report to my staff or to the committee staff about what you learned from DHS’s response to that 

management advisory. 

And last question, how much do you think SBInet is going to 

cost? 

Mr. SKINNER. I don’t know. 

Mr. ROGERS. That is what I thought. 

Thank you, Mr. Chairman. 

Chairman THOMPSON. Good question. 

We will now have questions from the gentlelady from California, 

Ms. Harman. 

Ms. HARMAN. Thank you, Mr. Chairman. And thank you and 

thank the ranking member for holding this hearing. These are two 

witnesses who really know what they are talking about and can be 

very helpful as we try to make our homeland security program 

more effective. 

Unlike Ms. Sanchez, I did support the legislation. And I guess I 

am one of its godmothers, for better or worse. But the goal was not 

to rearrange the deck chairs, but to create one deck, one national, 

integrated strategy for homeland security, which obviously has to 

include risk management, since, as you point out and everyone 

here understands, we can’t protect against everything at all times. 

It is disappointing to hear that, notwithstanding a huge effort by 

many at DHS, we are still slow in reaching success. So my first 

question is, do you think we will ever get there? 

25 

Mr. WALKER. I think ultimately you can. I think from an intellectual standpoint you can say that clearly by pulling the people all 

together under one department with ultimately one chain of command with the ability to hopefully interface more effectively, I 

think you can get there. 

And frankly, let me go back to the Department of Defense—60 

years— 

Ms. HARMAN. Yes. 

Mr. WALKER. And it is a D on economy, efficiency, transparency 

and accountability. 

Ms. HARMAN. But, Mr. Walker, we don’t have 60 years, as you 

well know. 

Mr. WALKER. No, no, we are ahead of the Department of Defense. 

I mean, you were only 4 years, right. 

I mean, and so, can we be successful? Yes, I believe we can. 

Mr. SKINNER. And I agree with Mr. Walker. Absolutely we can 

be successful. But it is going to require transparency, accountability, oversight, and a focused leadership. 

But if we maintain that leadership and maintain our discipline, 

yes, we can be successful. It is not going to be easy, and it is not 

going to be done in a short period of time. 

Ms. HARMAN. On that point, let me just ask a couple of questions 

in combination so that I don’t run out of time. I don’t want to abuse 

the time of other members. 

Number one is whether you can put a timeframe or an approximately timeframe short to long on when we can achieve success. 

Number two is a request, Mr. Chairman. I would like to request 

more specific information on the role of contractors in the Department of Homeland Security. I think it is a staggering statistic that 

40 percent of the budget, $16 billion, if I heard you right, goes to 

outside contractors. And I would like to know what it is that they 

do there so that we can hold them accountable as we are trying to 

hold everyone else accountable. 

Chairman THOMPSON. I agree. 

Mr. SKINNER. Yes, and I will provide you a breakdown of where 

those funds are going. 

Ms. HARMAN. Right. And my other question is, to piggyback on 

the last one, about SBInet. I want to ask about the homeland security information network and how we are doing with that. And specifically, are we reinventing the wheel? 

I mean, there are other information-sharing systems that law enforcement, for example, is comfortable with, like RISNET and LEO 

and LINX, a system I have learned about recently, which is a naval 

criminal investigative services network. 

And I am wondering whether those pre-existing systems were researched before HSIN was developed and would an assessment of 

those networks be useful now in trying to achieve in the shortest 

possible timeframe real full integration so we can share information. 

Mr. SKINNER. I am not sure if they were explored or not. But I 

can say that as a result of our recent work in that area that the 

department, in particular, Charlie Allen, who is running our intelligence analysis shop now, is stepping back and taking a broader 

view of what our options are, reaching out to our partners such as 

26 

the FBI for LEO and the Navy and other areas to see if maybe we 

should just piggyback or work with them hand in hand to ensure 

that communications between the feds and the states and the 

locals. 

Ms. HARMAN. As chairman of the relevant subcommittee here, 

that is a high priority for us, because you can’t share information 

if you don’t have the sharing mechanism, even if you have the will. 

How about an answer on timeframe for achieving a successful integration in this department? 

Mr. SKINNER. Well, again, I don’t know if I want to speculate 

when you talk about integration of the entire department. I can 

give you some timeframes for, for example, in financial management. 

We hope to have the ability to provide the Congress and the public with reliable and timely financial statements that are unqualified, audited opinions no later than 2009. And that would be 3 

years. 

In the IT arena, we are plodding along. But we are looking at 

2008 to build a department-wide platform that is what their outgoal is. Will they reach that? That is a very ambitious goal, to have 

a department-wide network that will support everyone. 

In the area of grants management, I think we are very weak. I 

don’t think we are paying enough attention to what is going on in 

our grants management arena. I think we might be doing a good 

job of developing risk assessments as to how we are going to award 

those funds. But we are doing that in a very stovepipe manner. 

And I think maybe we need to slow up and take a look at what 

we are doing. 

Ms. HARMAN. Right. My time has expired. 

I just, Mr. Chairman, would ask that Mr. Walker answer the 

question about timeframe. 

Mr. WALKER. I can very quickly. Five to 10 years on a consolidated basis, hopefully closer to 5. I am talking about full integration and transformation. 

And quite frankly, as I said before, it is 5 to 7-plus even in the 

private sector. And this is a lot more complicated than that. But 

it is not guaranteed unless they take certain steps. 

Last thing, contractors: We have a major challenge governmentwide with contractors. We are using contractors more than prudently appropriate. There are a lot of circumstances in which we 

clearly should use contractors, and they do a good job for us, and 

it may be necessary. But there are major issues here beyond DHS. 

Chairman THOMPSON. Thank you very much. 

I now recognize the gentleman from Texas, Mr. McCaul. 

Mr. MCCAUL. Thank you, Mr. Chairman. 

Mr. Skinner, I want to direct my questions to you. Last Congress 

we worked very well on the issues related to FEMA fraud, waste 

and abuse issues. However, there was another oversight issue regarding an investigation conducted by your office that did not go 

quite as well. 

As you are aware, last September when I was chairman of the 

Investigations Subcommittee, I requested a briefing from your office on the case involving Border Patrol agents Ramos and 

Compean. I requested that meeting because we were hearing a lot 

27 

of allegations about the innocence, potential innocence. My sole 

goal is to get to the truth of this case. 

Now, I sent you the letter after that meeting requesting a report 

of investigation that I was told that substantiate the assertions 

that were made by members of your staff to several members of 

Congress and committee staff. 

In January of this year, I contacted your office for that document 

again as I had not received it. And I was told by you that, as I was 

no longer chairman, that this request would no longer be honored 

and that I would have to submit my request through the Freedom 

of Information Act. I have to say I think that defies, to some extent, the authority of this committee. 

Be that as it may, as of yesterday I received a production pursuant to the Freedom of Information Act, and I have had a chance 

to review that report. Many of the assertions that your office made 

indeed turned out to be correct. 

However, there are several that I want to entertain that did not, 

in my view, add up. And I want to know specifically what you are 

going to do about this. 

One had to do with the allegation, very inflammatory, by a member of your office that these agents stated on the day of the shooting that they wanted to shoot a Mexican. 

Mr. Skinner, I looked through this entire production, this entire 

report, and nowhere is that statement found in this report. I don’t 

know if it exists in another report. If it does, I would like to see 

that report. 

In addition, we were told that the individuals, the agents, knew 

the drug dealer was unarmed and did not fear for their life at the 

time of shooting. However, as I read the memorandum of activity, 

which is attached to your production, it clearly states that 

Compean said that he began to shoot at Aldrete because of the 

shiny object he thought he saw in his left hand and because 

Aldrete continued to look back toward his direction. 

Compean explained that he thought the shiny object might be a 

gun and that Aldrete was going to shoot at him because he kept 

looking back at him as he ran away from him. It was then that he 

began to shoot. That is according to Compean. That is his statement. 

Obviously, the jury believed differently in the outcome of this 

trial. But the point remains that we were given various representations from your office that we believed in. We certainly believed in 

the good faith of your office. And I believe that these representations became misrepresentations, if not outright false statements to 

members of Congress. 

So specifically, I wanted to hear from you what you intend to do 

to hold your office accountable for these statements that were made 

to members of Congress and to this committee. 

Mr. SKINNER. I would like to make, first, two points. 

Those, say, misrepresentations were made to me as well. 

Secondly, those misrepresentations were not deliberate. Our policy is generally not to brief until an ROI has been prepared. And 

we will only brief if requested by a chair of a committee for the official business of that committee. 

28 

In this case, we agreed to brief on the two individuals that had 

been convicted and sentenced, although our ROI had not been completed. In fact, our report of investigation was not completed until 

late November. 

In preparation for the meeting with you and other members of 

Congress, the individuals that briefed you were briefed telephonically by members of the investigative team. And the characterizations that they received they passed on to you. And they were 

mischaracterizations. 

For example, the briefer from, I believe, Texas told us that—not 

me personally, but to our assistant IG for investigations who subsequently briefed you—that they were out to shoot the Mexican. The 

actual quote was they were out to shoot the alien. It was not a 

Mexican. But that was the characterization that was passed on to 

them. Unfortunately, they repeated that to me, and they repeated 

that to you. 

So far as being in fear of their life, that was a summation of all 

of the evidence that they had gathered from other witnesses. Keep 

in mind we did not investigate two agents, Border Patrol agents 

here that were convicted or that were prosecuted. We conducted an 

investigation of an incident. It was a shooting incident. It involved 

11 Customs and Border Patrol agents. 

When we initiated that investigation, we developed facts surrounding the case. We brought that to the prosecutor. The prosecutor then chose to prosecute two individuals. There were three 

other individuals that are implicated as well. But the prosecutor 

chose not to file charges against them. However, we referred that 

to CBP to the management for administrative action. 

Those three people now have been disciplined; that is, been given 

their notice to terminate employment with CBP. One has already 

resigned. The other two I don’t know what their current status is. 

But it is an unfortunate mischaracterization. I apologize on behalf of our staff for that mischaracterization. But I just wanted to 

make it perfectly clear it was not intentional. They were not trying 

to suggest that this was greater or something more than what it 

was to impress upon you that the conviction was a justified conviction. They were just simply repeating characterizations that were 

passed on to them. 

Ms. SANCHEZ. [Presiding.] The gentleman’s time has expired. 

Mr. Etheridge for 5 minutes, of North Carolina. 

Mr. ETHERIDGE. Thank you, Madam Chairman. 

Let me thank both of you for being here today. 

Let me ask a question because in the ongoing response to Hurricane Katrina—and I ask this question because it may just be January and it is cold as blazes outside right now. For those of us who 

live in North Carolina and in coastal communities, we aren’t too far 

from hurricane season again. I know that may sound strange, but 

we live in that fear. 

And in the ongoing response to Hurricane Katrina and Rita, the 

GAO has identified significant fraud, waste and abuse in the control weaknesses in FEMA’s individual and household programs and 

in the Department of Homeland Security’s purchase card account. 

Can you share with us if FEMA has taken action on the recommendations to address these weaknesses? 

29 

Mr. WALKER. It is my understanding they have taken action on 

some, but not all of those. And I would be happy to provide some 

more information to your office, Mr. Etheridge. 

Mr. ETHERIDGE. Would you, please? Thank you. 

Mr. WALKER. I would be happy to do that. 

Mr. ETHERIDGE. I think that would be helpful. 

Secondly, are efforts being made to determine whether the systems will work in an actual disaster? You know, even though we 

have taken action, have there been any dry runs, so to speak? Because I think that is critical if we are going to—you know, we could 

face another one in the very near future. 

Mr. WALKER. I understand. If I can provide that for the record, 

I would appreciate that. 

Mr. ETHERIDGE. Okay, I appreciate that. 

Mr. WALKER. Because I don’t know the answer. 

Mr. ETHERIDGE. Thank you. 

Several OIG reports have identified problems with TSA screeners 

and TSA airport procedures, as you well know. And I have heard 

from many of my constituents about the inconsistencies that have 

been applied to rules and other issues with passenger screening, 

and, I guess, more particularly and probably more specifically, 

dealing with the hastily applied rule of liquids. 

So in that regard, can you share with us the progress that has 

been made in implementing the provisions of OIG’s regulations and 

what is being done to further ensure consistency and clarity regarding the rules and procedures on these airport screenings? 

I think, you know, that is where the traveling public faces it 

more readily. And we get feedback real quick. 

Mr. SKINNER. I am sure you do. And I travel a lot as well as part 

of my job, and I do personally observe and see these inconsistencies. There is a whole variety of reports that we have issued with 

regard to TSA where they need to tighten up not only their internal controls, but their business processes and the way they do business. 

We are doing a series of audits with regards to TSA right now 

to follow up on the recommendations that we have made over the 

last 2 to 3 years with regards to not only their recruitment, but 

their processes at airports, not only for passengers, but also for 

cargo, checked luggage, that type of thing. 

And if I may, if I can get back, we are looking right now, probably sometime this summer, before we will have a report on two 

or three of these areas that will be? 

Mr. ETHERIDGE. If you would get that back to us, I would appreciate it. 

Mr. SKINNER. I would be happy to. 

Mr. ETHERIDGE. All right. Thank you. 

The final question I have, Madam Chair, is my state of North 

Carolina is a participate in the regional information sharing system or RISS program. Given the problems you mention in your report on I.T. infrastructure and the data system, what is the prognostication for linking the homeland security information network 

to RISS? And are procedures being developed to avoid duplication 

and confusion should this linkage be taking place? 

Did you understand the question? 

30 

Mr. SKINNER. Are you referring to— 

Mr. ETHERIDGE. It is the regional information sharing system, 

okay, the regional information sharing system. And you indicated 

a lot of problems you mentioned in the report in the I.T. information and data system. 

And my question is, what is the prognosis for linking the homeland security network to RISS? And are procedures being developed to avoid duplication and confusion when that linkage takes 

place? 

Mr. SKINNER. Thank you. And may I get back to you on that? 

Mr. ETHERIDGE. You sure may. That would be fine. 

Mr. SKINNER. I am not real familiar—well, familiar with the subject, but not the response or status. 

Mr. ETHERIDGE. That will be fine. Thank you, sir. 

Thank you. 

Ms. SANCHEZ. The gentleman’s time has expired. 

Mr. ETHERIDGE. I yield back. 

Ms. SANCHEZ. Before we go to Mr. Souder for 5 minutes, we 

have, I believe, what is three votes on the floor, the last votes of 

the day, 15-minute votes. So we will do his 5 minutes and then we 

will break. We will go into the votes, and then we will return. 

That is, if our two gentlemen—how long do you all have? We will 

probably be gone for about half an hour at least. 

Mr. WALKER. I have got a meeting on the Senate side at 3:30, 

which I need to do. So I can leave at about 3:20. I can stay here 

until about 3:20. 

Ms. SANCHEZ. Okay. 

And Mr. Skinner? 

Mr. SKINNER. The same. I can stay at your convenience. 

Ms. SANCHEZ. Okay. So we will take the gentleman from Indiana, and then we will break for votes and we will return. 

Mr. SOUDER. Mr. Skinner, I don’t know how to adequately say 

I found your answer to Mr. McCaul completely unsatisfactory, that 

I think this is something that is going to get increasingly embarrassing to the government in all aspects. 

As somebody who initially was fairly calm about this matter and 

the more I read and the more I see the documents and the more 

I see the policies behind the documents, the American people are 

going to question whether we have any commitment whatsoever to 

the border based on the type of spin we have been receiving. 

And I find one of the most amazing things listening at the beginning of the hearing the criticism from both of you about the Coast 

Guard and thinking, you know, there is some truth to this. If you 

have people who can’t talk to the people who are investigating and 

they always want to have their person up higher that want to give 

a report, how are you, as auditors, supposed to do this? Well, how 

are we, as congressmen, supposed to do this? 

If you want to, in effect, say we can’t give you documents, we 

have to have our staff screen with us until we can talk to you, the 

very thing you were complaining about the agencies about you do 

to us. And I am just appalled and embarrassed for you. 

Now, I have some particular questions regarding SBInet. Over in 

government reform we are doing some Iraq investigations. And we 

are all going to be talking with you over the period of time. And 

31 

one of the classic tradeoff challenges is here because as a 

businessperson myself, I understand to get corruption, to get tracking, you have to have information. And too often the agencies are 

getting stonewalled. We don’t have enough staff. 

We were yesterday talking about Iraq where they really needed 

800 accountants, and they had four to 10, and a third of them got 

shot up. How do you do tracking? Because the classic thing here 

on the border on SBInet, which is a huge challenge right now, and 

I know we will be talking more about this over time. And I read 

your statements with it. 

As a practical matter, any effort in any section of this border is 

going to be successful because they are just going to move to another part. And at the same time, by the time we make sure that 

every piece of fence works, every piece of technology works and we 

do all this research and do the accounting with it and make sure 

we have a plan, it is sometimes one of the tradeoffs here. And this 

is what I would like you to address structurally is we shouldn’t 

rush because if we rush, we might make a mistake. 

So we have got a million illegals coming across. We have no idea 

whether terrorists are coming through. We have contraband coming every day and narcotics. We have potential other types of contraband all the time coming across. How do you balance the auditing challenge you have with the need for speed? 

Because to some degree, any fence works temporarily. Anything 

we do works temporarily. That if we sit back and wait and do an 

immigration bill but don’t have any border strategy, we don’t really 

have an immigration bill. Could you talk about that tradeoff that 

you see constantly when you do oversight? 

Mr. SKINNER. That is an extreme challenge. And that is one of 

the things I commented on earlier, is the urgency of our mission 

and balancing that against our infrastructure and our ability to 

support that mission. 

With regards to the SBI and the SBInet initiative, SBInet is only 

one part of a larger initiative. And we have to bring it all together. 

To secure our entire borders nationwide north and south is something that therein lies one of the problems we have right now with 

SBInet, is that we don’t have operational requirements. What do 

we need? 

Like you said, if we secure Tucson, they are going to come in 

through Del Rio. If we secure Del Rio, they are going to come in 

at El Paso. So we have to have an operational plan that is put in 

place with measures and performance matrix that will show us 

when we are going to do it, how much it is going to cost to do it. 

We also have to take into consideration the cost benefit of doing 

all this. Do we want to spend billions of dollars and it is not going 

to work? So it is just a major challenge. 

But when I say proceed with caution, I am talking about proceeding with caution. Find short-term solutions to ensure that if we 

are going to invest $1 billion next year, which the president is asking for in 2008, that we know at the end of the year those monies 

were spent wisely, not necessarily—we still need to proceed, but at 

the same time, we can take some steps to ensure that we have 

oversight. I can assure you our office will continue to provide oversight to the extent we can. 

32 

Mr. WALKER. Mr. Souder, acquisitions and contracting is a highrisk area across government. And it is particularly acute in certain 

departments and agencies. The fact is we are relying on contractors 

in new and unprecedented ways. 

We are also entering into some contracting arrangements such as 

the one with SBInet where we are employing an integrator approach, which means we are providing more flexibility to the contractors. With more flexibility, it means you need to be that much 

more careful about conflicts. You have to be very, very careful to 

define your objectives and to nail down your requirements. 

You have to make sure that you have appropriate interaction and 

oversight as you go along because with more flexibility means more 

risk. There are 15 systemic problems with our acquisition and contracting system in the entire government, which I will be happy to 

provide for the record. 

We need to focus on those because, yes, you need to move expeditiously, but you need to get it right. And all too many cases we 

have gotten it wrong in some cases because we moved too fast. 

Ms. SANCHEZ. Thank you. The gentleman’s time is expired. 

Mr. SOUDER. Thank you. And would you provide the 15 for the 

record? 

Mr. WALKER. I will be happy to do so. 

Ms. SANCHEZ. We will recess. 

Gentlemen, we will probably be gone about 30 minutes or a little 

bit more, depending on the votes. So go grab a Coke or something, 

and we will be back. 

Thank you. We stand in recess. 

[Recess.] 

Mr. DICKS. [Presiding.] You know, in your opening remarks, you 

talked a lot about DHS contractors and that 60 percent—was it 40 

percent or 60 percent of the DHS budget is spent on contractors? 

Mr. SKINNER. Approximately 40 percent in 2006. In prior years 

it has been building. In 2005 I think it was around 25 percent. In 

2004 I believe it was around 25 percent. 

Mr. DICKS. And you are concerned that we don’t have good oversight of these contracts? Or is there competition for these contracts? 

Mr. SKINNER. Not all of them. My primary concern is that we 

don’t have the capacity to provide the oversight that is needed to 

ensure that we are getting what we are paying for. 

Mr. DICKS. Have you investigated any of these contracts, any of 

them specifically? 

Mr. SKINNER. When you say investigate, yes, we have many ongoing investigations on contracts that were let as a result of Hurricane Katrina, Rita and Wilma a couple years ago. We have done 

a lot of work in audits of various contracts to determine whether— 

for example, the contract with Pearson to hire the TSA screeners. 

We have done reviews of the Boeing contract to install electronic 

detection or explosive detection equipment at the airports, those 

type of things. 

Yes, we are actively engaged in reviewing many of the major contracts— 

Mr. DICKS. Do you have enough staff to do your work? 

33 

Mr. SKINNER. We can always use more staff, of course, as I think 

everyone— 

Mr. DICKS. What is your staff? How big is your staff? 

Mr. SKINNER. Currently right now we have approximately, including those resources that are dedicated down in the Gulf Coast, 

somewhere around 550. 

Mr. DICKS. Now, are these all government? Or are some of these 

contractors? 

Mr. SKINNER. Of those, no, those are not contractors. These are 

all government employees. Some of those, approximately 60-plus, I 

believe, are hired on a temporary basis to provide us the coverage 

we need in the Gulf Coast. 

Mr. DICKS. Okay. Now, one of the other issues that you mentioned was there is the concern that you have the DHS on a list 

of—and want to talk about that, Mr. Walker, on the list. And they 

have not done a good job in coming back to you with trying to show 

you that they are working to get off the list. 

There is a number of things that you mentioned in your testimony that the DHS hasn’t done. And you mentioned that some of 

the agencies were on this financial audit list prior to DHS being 

created. Could you tell us which ones and kind of give us a little 

overview on this problem? 

Mr. WALKER. In 2003, we put the DHS integration and transformation effort on our high-risk list. And it has remained on it 

through the two updates in 2005 and 2007. The latest update being 

announced on January 31st. 

We did that because of a number of reasons. One, there were a 

number of major management challenges that existed in a variety 

of these 22 agencies before they were put together. And secondly, 

just the mere undertaking of trying to integrate 22 different agencies with different systems, with different cultures, et cetera, is a 

massive undertaking. 

What I mentioned before was was that while they had made 

some progress, they have got a long way to go and that one of the 

frustrations that we have been having is that we have not been 

getting timely access to records and to individuals. It is one thing 

to understand that there can be delays. 

But it is becoming a systemic problem. And part of which is because how they go about trying to clear the records and different 

safeguards that they have in place that other departments and 

agencies do not. 

Mr. DICKS. Have you talked directly to Mr. Chertoff about this, 

Secretary Chertoff? 

Mr. WALKER. I have spoken with Michael Jackson about it. I 

have not spoken with Secretary Chertoff directly about it. 

Mr. DICKS. Who have Chertoff and Jackson put in charge of coming up with a plan and an approach so they get off this list? Who 

is in charge of that? Is there somebody in charge? Do they have a 

CFO? Obviously, it is Chertoff obviously. But— 

Mr. WALKER. Well, ultimately he is in charge. One would say 

that Deputy Secretary Jackson is really focused more on internal 

matters, more on operational matters. I know that OMB has 

worked with DHS as well as all 27 of the high-risk areas to come 

up with an action plan to get off the list. Some will be able to get 

34 

off a lot quicker than others. It is going to take, I think, a number 

of years for DHS to get off. 

Mr. DICKS. Well, give us for the record a list of the ones that 

were in trouble financially and on your list prior to DHS being created. And if any of them have gotten—well, of course, they couldn’t 

get off because the whole agency now is being evaluated. 

Mr. WALKER. I will be happy to provide it for the record. 

Let me just say this, that there is one area that relates directly 

to the Department of Homeland Security. And that is the overall 

integration transformation effort. There are other areas that relate 

to the Department of Homeland Security indirectly, for example, 

information sharing. They are obviously part of the intelligence 

community. And there are major challenges associated there. 

Mr. DICKS. Ms. Blackburn, please, is recognized for 5 minutes. 

Mrs. BLACKBURN. Thank you, Mr. Chairman. 

Mr. Walker, always good to see you. 

Mr. WALKER. Good to see you. 

Mrs. BLACKBURN. As I read your testimony and prepared for 

today, I noticed that some of the themes that seem to come your 

direction or come up in our conversations are still there. We have 

systemic problems. We lack a comprehensive strategy. They lack a 

comprehensive team. 

There is too much bureaucracy. There are too many lawyers involved in the process. And I thought how amazing it is that we 

hear this from you. We hear it from the inspector general. And we 

are hearing it from our constituents that are trying to deal with 

federal agencies. 

So, therefore, it should tell us that we really have a problem in 

how the federal government is organized. And I appreciate the wisdom that each of you bring to the discussion and hopefully guidance that will help us to reduce some of the bureaucracy and the 

repetitive nature of process that we find. 

Mr. Walker, I have got several questions. I know I am not going 

to get through them. I have actually got eight for you and 16 for 

the inspector general, so I am going to submit some. But I want 

to begin by talking about CIS. And the GAO report mentions that 

CIS has improved their ability to deal with the backlog of immigrant applications. 

But I have read some instances in some reports where federal 

contractors have thousands of applications that are stored and 

where some of them have shredded tens of thousands of applications and some of the paperwork in order to reduce or give the appearance of reducing that backlog. And I would like to have from 

you an awareness of what you have or how you see that situation. 

Mr. WALKER. Well, first, we have done some related work and 

noted some progress there. Candidly, at this hearing I heard for 

the first time assertions that there may have been some destruction in order to reduce the backlog. That is news to me. 

And I think what we need to do is I will go back with our people 

and find out what, if anything, we have heard of that and also try 

to coordinate with Rick Skinner to see whether one of us might 

want to follow up on that without duplicating efforts. 

Mrs. BLACKBURN. I thank you. What are they currently showing 

as their backlog? 

35 

Mr. WALKER. I don’t have the numbers in front of me. I would 

be happy to provide it for the record. 

Mrs. BLACKBURN. You do not? That would be great. 

The other thing that I would like to know about that backlog is 

if they are including the applications that are pending for security 

background clearance and checks or if those have been moved on 

to another agency and figure out how that has fit into that evaluation. Anyway, if we can quantify that number, that would be helpful. 

And then the other thing, if you feel like they have sufficient resources to deal with that—it is a process, more immigration applications if we were to have a temporary guest worker program. 

Mr. WALKER. Right. 

Mrs. BLACKBURN. To talk about a looking forward. One of the 

things we do not ever do is look forward and say in 3 years, 5 

years, 10 years how will we meet these needs and then plan accordingly. And I think that we become so focused on an annual 

budget. 

I have some GIPRA questions, but I will submit those to you. 

Mr. Skinner, the SBInet program, I wanted to see if you see that 

as a high-risk program. And also the timeline that DHS—if they 

are making progress in finalizing their metrics and targets and 

their goals for each of their task orders in that SBInet timeline. 

Mr. SKINNER. Yes, we most certainly do see it as a high-risk 

project. 

Mrs. BLACKBURN. Okay. 

Mr. SKINNER. And each year we publish a document we refer to 

as the 10 management challenges facing the department. And that 

is included in that document as well and will continue to be included in that document so long as the department does not have— 

I mean, until they obtain the capacity to, one, manage an initiative 

like this, a system-to-system type of initiative; two, until they 

clearly define what their operational requirements are; three, until 

they can put a price tag on those operational requirements so that 

we can monitor how we are spending those funds: Do we have cost 

underruns, overruns? 

Mrs. BLACKBURN. Okay. Let me ask you then should they postpone this program until they can address those problem areas, 

major problem areas and establish those metrics. 

Mr. SKINNER. No, I think the approach— 

Mrs. BLACKBURN. They should not? Okay. 

Mr. SKINNER. —that they are taking is a wise one, and that is, 

let’s pilot some of the initiatives we want to do and take lessons 

learned from that before we expand. That will carry us out until 

June. 

They have an aggressive one. They have developed a personnel 

plan. They claim they know what the mix of resources they need 

to manage a project like this. It is approximately somewhere between 290 and 300. 

And, of course, that includes everything from the engineers, I.T. 

types, contractor representatives, contractors themselves and contractor support to help them to help the project integration team 

to provide that oversight. If they cannot build up to that capacity, 

then we will caution them you need to slow down until you can 

36 

build up to that capacity. But right now, no, I would not recommend that we kill a project at this point in time. 

Mrs. BLACKBURN. Thank you. I yield back. 

Mr. SKINNER. Very quickly, we have a report coming out next 

week, Ms. Blackburn, on SBInet next week. So you may want to 

keep your eyes open for that. 

Mrs. BLACKBURN. Okay. Thank you. 

Mrs. CHRISTENSEN. [Presiding.] Thank you. The gentlelady’s time 

is expired. 

We next recognize Mr. Langevin for 5 minutes. 

Mr. LANGEVIN. Thank you, Madam Chair. 

And, gentlemen, thank you for your testimony today. 

Before I get to my questions, I want to comment just on Mr. 

Skinner’s answer. You mentioned Charlie Allen, the work that he 

is doing on information sharing with local law enforcement and 

how they are relooking at that whole information sharing network. 

I think that is so important. 

And I have raised that issue a number of times. I think it is a 

problem with homeland security. It probably made a mistake in the 

way it was trying to create a whole new network. I have met with 

people from, for example, RISNET, the Regional Information Sharing Network, in New England. And that is a tool that law enforcement is already very comfortable with, familiar with. 

And to me it seemed counterintuitive at best, nonsensical at 

worst, to not build on that system, something that law enforcement 

is already working with. So I am glad to hear your answer to Ms. 

Harman’s question with respect to RISNET and just the Regional 

Information Sharing Networks that already exist and how Homeland Security is going to relook at that system. 

But respect to my questions, starting with Mr. Walker, if I could. 

The Bioshield program has experienced varying levels of success 

since its inception 3 years. The program, as you know, though was 

however recently dealt a major blow with the cancellation of the 

contract for next generation anthrax vaccine, which at the time 

was the only major procurement contract under Bioshield. 

Now, this program is obviously too important to fail. And yet as 

it currently operates has not been operating very successfully at 

all. Now, as chairman of the Subcommittee on Emerging Threats, 

Cybersecurity and Science and Technology, I plan to hold several 

hearings to explore how to fix the major problems with Bioshield’s 

operations. 

And, in fact, in order to get the full understanding of the program’s failures, we are probably going to need to do joint hearings 

with other committees tasked with oversight of health and human 

services. And I am fully prepared to do so. 

My question is what do you see are Bioshield’s biggest weaknesses. And do you think the Department of Homeland Security 

and the Department of Health and Human Services are equally responsible for the program’s failures? And what key steps would you 

advise DHS in particular to take to ensure the program’s success? 

Mr. WALKER. Well, we have done some work on this in the past. 

I am familiar with some of it, but not all of it. Clearly, I believe 

that there is a shared responsibility here between DHS, HHS and 

possibly others with regard to this program. We know that we have 

37 

had circumstances in the past where we have relied solely on a 

particular provider in some circumstances. 

I think one of the things that we have to do is we have to define 

what our needs are, and we have to see what we can do in order 

to identify multiple providers hopefully, ideally, domestically, but if 

not, internationally. And I would be happy to find out what else we 

have done and make that available to you. 

Mr. LANGEVIN. Yes, I would like you to do that and paying particularly close attention to Bioshield and maybe some of the successes. I would like to know what progress they are making from 

your perspective, but what we need to do to fix the program. It is 

too important. The results could be in terms of an attack and not 

being able to respond to one adequately would be catastrophic. And 

Bioshield was meant to obviously prevent that from happening. 

Mr. WALKER. I understand. 

Mr. LANGEVIN. Mr. Skinner, last year Congress cut a significant 

portion of the president’s requested budget for the science and technology directorate. And these cuts came largely because of congressional dissatisfaction with the directorate, in part, because of the 

concerns that S&T was nothing more than a hobby shop for program managers rather than a directorate actually serving its customers. 

Now, at the same time, Congress was also concerned about a lack 

of transparent strategic planning at the directorate, inadequate detail in its budget justifications and the directorate’s failure to more 

rapidly develop and adopt technologies for homeland security purposes. Now, Undersecretary Cohen took over the organization August 2006. And since then he has been working to quickly try to 

right the ship, if you will. 

And this committee has held several hearings where the undersecretary has been invited to testify. And by and large, we are 

pleased with his progress. And knowing him from my other work 

on the Armed Services Committee and my work in R&D, I know 

that Secretary Cohen did an outstanding job as head of Office of 

Naval Research. He comes to the table with a lot of credibility. 

But in spite of the changes at the top, serious problems still exist 

within the directorate. So my question to you, Mr. Skinner, is what 

is your office doing to ensure that the problems that existed prior 

to Undersecretary Cohen’s appointment are being addressed. 

And specifically, what is your office doing to oversee S&T’s efforts to develop a mature business model and prudent project management practices? And also, what is your office doing to ensure 

that the undersecretary develops a plan to strengthen workforce recruitment and retention and improve institutional knowledge base 

as well as create a culture of responsibility within the directorate? 

Mr. SKINNER. Thank you. Historically we did not provide the 

oversight of S&T that we should have. And that is because of resource constraints. And I agree with you that historically the S&T, 

I think, has lost its way, so to speak. It took on operational issues 

when it shouldn’t have. It did not reach out to its customers. And 

as a result, it was meandering in the department. 

Since Undersecretary Cohen has come onboard, I have met with 

him on multiple occasions, been briefed on his reorganizational 

structure, his new plan of business, the way he intends to utilize 

38 

the S&T resources and service the department in the states and 

the locals in a research and development environment. 

This year for the very first time we are getting involved in S&T 

activities. Currently we are first going to learn more about how 

S&T is run. So we are serving the S&T operations, working with 

Mr. Cohen to get an understanding what his organizational chart 

is, what his staffing requirements are and where he is going to 

place his priorities and use the monies that are allocated to him. 

From there, we intend to develop a series of audits over the next 

3 years that will focus on those areas that both Mr. Cohen, Secretary Chertoff and our office mutually—and Congress, because we 

always solicit the input from the Congress as well—as to those 

areas that we think would be everyone’s benefit that we provide 

more intense oversight. 

If you look at our 2007 performance plan, which, in essence, is 

an outline of the types of projects we intend to take, we do now 

have a chapter dealing just with S&T activities. 

Mr. LANGEVIN. Okay. Well, I see my time is expired. I look forward to talking to you more about this. It is going to be a theme 

that I am going to question you on when you come before us again. 

I plan to exercise extensive oversight over the S&T Directorate in 

particular because it has problems. So I look forward to further discussions. 

Mr. SKINNER. We look forward to working with you. 

Mr. LANGEVIN. Thank you. 

Mrs. CHRISTENSEN. Thank you. The gentleman’s time is expired. 

And the chair recognizes for 5 minutes Mr. Lungren. 

Mr. LUNGREN. I thank the Madam Chairman. 

I would like to yield my first minute to Mr. McCaul. He had 

some follow-up on his questions earlier. 

Mr. MCCAUL. I want to thank the gentleman for yielding his 

time to me. 

Mr. Skinner, let me first say that I appreciate your honesty in 

response to my question. But the fact remains that members of 

Congress were misled by your office, and members of this committee were misled by your office. Your office is charged with the 

responsibility of holding the Department of Homeland Security accountable. 

My question to you is, what are you going to do to hold your own 

office accountable? 

Mr. SKINNER. The first thing we are going to do is I am now asking my office to go back and reconstruct the series of events that 

led to the misrepresentation at the meeting that those members of 

my staff had with your staff. That is the first thing I want to do. 

The second thing I want to do is look at what processes and internal controls we could put in place to ensure that we don’t repeat 

this mistake again. One of the lessons learned—and because this 

was the first time that we—we generally don’t provide briefings 

prior to the production of a report from which we can read and relate to and provide assurances of its accuracy. 

And one of the things we may have to do is tighten our internal 

controls and our policies with regards to briefing of congressional 

members or for that matter, even departmental staff and leaders 

until our products are finished and we have assurances up the 

39 

chain that the internal controls, checks and balances are in place 

and I have some level of assurances that what we are going to be 

said or responses to questions that we are going to be asked are, 

in fact, accurate and reliable. 

Mr. MCCAUL. Well, let me say we certainly intend to follow-up 

with your office. 

And I would ask that Madam Chair consider holding a hearing 

on this issue. I yield the balance of my time. 

Mr. LUNGREN. Yield back the balance of your time. I appreciate 

that. 

Let me just ask two things, one to Mr. Skinner. And that is you 

have talked about the difficulty with the national security cutter 

program with the Coast Guard. And that is the first major acquisition under the Deep Water Program. 

The Deep Water Program, in my estimation, is absolutely essential for the responsibilities of the Coast Guard going forward. What 

do we need to do to make sure that we don’t fall behind on the 

Deep Water Program, but at the same time, ensure that it is being 

managed properly? What internal changes needed to be made? 

Mr. SKINNER. Yes, and I agree. The Deep Water Program is very 

important, not only to the Coast Guard, but to this country. Because if you look at the status of our Coast Guard fleet, it is in dire 

need of upgrading to meet the missions that lay ahead, particularly 

now after 9/11 and our terrorist mission associated with the Coast 

Guard. 

There is a lot going on now as a result of our report. And Thad 

Allen—I have met with him, and I am sure that he will be providing briefings as time goes on up here in front of this committee. 

But he, in fact, is, one, reorganizing—has reorganized the Coast 

Guard in its acquisition shop so that now we have a place that 

someone can go to—we can go to, one place that someone can be 

held accountable for the program, which did not exist. It was diffused throughout the Coast Guard. Now we have one place to go. 

Secondly, he has provided technical authority to the assistant 

commandant for systems who now can’t override any decisions 

made by the integrator who initially under the original contract 

had that authority. Three, they are rewriting the contract to ensure 

that the Coast Guard now can exercise its authority over the contractor instead of entirely relying totally on the contractor’s specifications or designs. So there is a lot going on there. 

Mr. LUNGREN. Let me ask this question. We have criticized in 

the past the Department of Defense for being too big and so forth. 

But obviously they have enough people to manage programs like 

this. Criticism of the Coast Guard was that they haven’t been in 

this business for 50 years. 

Here we give them a major program. They don’t have the capability of doing it because they don’t have the manpower to do it and 

they don’t have the experience to do it. What do you say to that? 

Mr. SKINNER. That is absolutely true. 

Mr. LUNGREN. How do we repair that? 

Mr. SKINNER. That is an initiative now that the Coast Guard has 

under way to identify what those resources are. As early as 2002 

when the contract was awarded, the IG from the Department of 

Transportation did a survey of their capability to manage someVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6601 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
40 

thing this large, a system-to-system performance-based contract. At 

that time, they were saying you do not have the capacity to manage something like this. 

The Coast Guard disagreed. It is now 4 to 5 years later. The 

Coast Guard recognizes now it does not have that capability. There 

is an aggressive training program—or not necessarily training program, but there is training as well. But there is an aggressive hiring program right now to bring the mix of resources. 

They have also reached out to the chief procurement officer—that 

would be Elaine Duke—to get their input as to how they can organize and put together a meaningful integration, an integrative 

project team. They hope to have something done and reach their 

resource capability this year. It is not something they are talking 

about doing in the outyears. But it is this year they want to have 

those capabilities. 

Mr. LUNGREN. You used the word ‘‘hope.’’ I was hoping that you 

would use the word ‘‘confidence.’’ 

Mr. SKINNER. Well, you know, one of the things—and this is 

something that we are experiencing as well, is it is very difficult 

to get the right people in there. We are competing with the private 

sector. 

And when we say we need to go out and hire 1,000 procurement 

officers, it sounds easy enough until you go out and try to hire 

them. Then when you only get two applications and you are trying 

to hire 1,000, you know you have a problem. We have to be able 

to—and so that is why I say hope. If we can’t hire those types of 

people, then we need to train them in-house. 

Mrs. CHRISTENSEN. The gentleman’s time is expired. 

Mr. LUNGREN. Thank you. 

Mrs. CHRISTENSEN. And I know that the comptroller, Mr. Walker, has to leave shortly. I would like to try to get in at least another member. 

The chair recognizes Ms. Lofgren for 5 minutes. 

Ms. LOFGREN. Thank you, Madam Chairman. And I will make 

my first question to Mr. Walker since I know he has to leave. 

Mr. WALKER. Thank you. 

Ms. LOFGREN. The report reviews the progress of the US–VISIT 

Program, something I am very interested in. And I am concerned 

or interested in whether the additional funds in the proposed 2008 

budget will provide hiring sufficient staff with the necessary skills 

and abilities to implement this program, which hasn’t been as effective as I had hoped so far. 

And I am particularly interested in not only whether the technological deficiencies that have been identified can be addressed with 

what is budgeted and also the exit portion of the system, which the 

secretary has indicated may not be implemented at all. Can you 

advise us on that? 

Mr. WALKER. Yes, we have done work in this area. We are continuing to do work in this area. The exit portion is a challenge. 

There is no question about that. I think the other thing we have 

to keep in mind is the US–VISIT Program works to the extent that 

you have got people going through normal ports of entry who are 

trying to do things above board. 

41 

And I think we have to recognize we have two types of immigration problems and two types of border security problems, one of 

which is where people are coming through official borders where 

we have capabilities, and one of which is where they are not. 

Ms. LOFGREN. Well, we know that. 

Mr. WALKER. And they are very different. 

Ms. LOFGREN. But, for example, we are looking at the visa waiver program, the administration has proposed expanding the visa 

waiver program. The trigger for visa waiver is what is the overstay 

rate. Well, how are you going to know that if you don’t have the 

exit system in place? 

Mr. WALKER. And we clearly need to do something in order to 

keep track of people who are in the country and who have overstayed their visas. That is a major problem. And so, the question 

would be is if this approach isn’t going to work, then what is the 

alternative to this that is being proposed. 

Ms. LOFGREN. Are the funds sufficient to bring up the exit 

phase? 

Mr. WALKER. I haven’t had a chance to look at what funds are 

being proposed by the president in the 2008 budget. We can take 

a look at that. 

Ms. LOFGREN. I would appreciate that. That would be very helpful to me. 

Mr. WALKER. Thank you. 

Ms. LOFGREN. Thank you very much. 

Mr. Skinner, you reported that DHS needs to strengthen its partnerships with other governmental agencies, but also the private 

sector in terms of IT To what extent has the department reached 

out to the technology industry to integrate their concerns, particularly as it relates to protections and controls of our IT infrastructure? 

Mr. SKINNER. It is something that we haven’t done a study on, 

but I tell you that historically we have done a poor job there. And 

the reason— 

Ms. LOFGREN. That is what I hear from the private sector. 

Mr. SKINNER. Yes, I feel comfortable saying that because we do 

talk to the private sector. Cybersecurity is an area that is also of 

interest to us, and it is something that we plan to do. We now have 

now someone that is—after months and months of that job being 

vacant and as a result, we were just meandering. 

Now we have some leadership in there. I think we need to give 

the individual some time to get his feet grounded. And then it is 

time then to evaluate as to what his plans will be. And quite frankly, right now I don’t know what they are. 

Ms. LOFGREN. Well, in addition to his plans—and I haven’t had 

a chance to talk to Greg yet, but hopefully we will soon. I mean, 

I have known him for many years. There is the plan that the administration and Congress have adopted that was drafted years 

ago. 

We might want to revisit whether it is still enough or even if it 

ever was enough. But whether we have implemented what has already been the marching orders in addition to the legislation 

passed and signed by the president in the 108th Congress. Apparently you haven’t looked at that yet. 

42 

Mr. SKINNER. No, we have not. 

Ms. LOFGREN. I don’t know what your workload is, but I would 

find it very useful to have some information on those points. 

Mr. SKINNER. Okay, thank you. And I will try to get that information to you. I have our I.T. guru with me today in anticipation 

of the cybersecurity question. 

Ms. LOFGREN. Very good. 

I yield back. Thank you, Madam Chairman. 

Mr. WALKER. Madam Chair, with your permission, I am more 

than willing to have our managing director for homeland security 

and justice, Norm Rabkin, take my place. I have got a meeting 

with the Senate chair, Joe Lieberman, that I have already pushed 

back an hour, if that is all right. 

Mrs. CHRISTENSEN. Without objection, we would be happy to 

have that— 

Mr. WALKER. He is manager of the Directorate of Homeland Security and Justice. He is very familiar with these issues. Thank 

you very much. 

Mrs. CHRISTENSEN. Thank you. And thank you for your testimony and for staying so long with us. 

And, Mr. Skinner, we hope that you will be able to continue. We 

just have a few more members to ask some questions. 

Mr. SKINNER. Sure, I will be pleased to. 

Mrs. CHRISTENSEN. And so, the chair now recognizes Mr. Dent 

for 5 minutes. 

Mr. DENT. Thank you, Madam Chairman. 

Mr. Skinner, my question is directed to you. Eight Great Lake 

states have pooled their DHS grant funds to obtain the Project 

Athena technology, which utilizes existing technology to perform a 

complete maritime domain awareness, which helps secure the 

northern border. This project has been tested successfully, as I understand it. However, DHS has rejected it. 

Why is DHS rejecting technologies that are already available to 

address pressing security issues in favor of waiting for SIB net 

technologies, which are untested and expensive? And I guess my 

main question is is this an efficient use of resources? And do you 

feel that this is a proper way to proceed? 

Mr. SKINNER. I am not familiar with the project, nor am I familiar with DHS’s objections. But I am certainly concerned if the DHS 

is not taking these types of initiatives into consideration when they 

do their overall assessment of what our border control needs are. 

I will be happy to take a closer look at this, if you suggest. And 

I could have our people meet with your staff to get more background on this. And we can incorporate this into our SBI ongoing 

review. 

Mrs. CHRISTENSEN. Excuse me. Could you just for a minute— 

would the gentleman from GAO restate his name and title for the 

record, please, before we go ahead? 

Mr. RABKIN. My name is Norman Rabkin, R-A-B-K-I-N. I am the 

managing director for homeland security and justice issues at GAO. 

Mrs. CHRISTENSEN. Thanks. 

You may continue, Mr. Dent. Sorry for the interruption. 

Mr. DENT. I am just a bit perplexed as to why this project has 

been rejected. And so, we really would appreciate some follow-up 

43 

from you and the other folks at DHS to help us understand the 

reasoning behind the rejection. 

Mr. SKINNER. Sure. We will be pleased to, sir. 

Mr. DENT. I yield back. 

Mrs. CHRISTENSEN. Thank you. 

The chair now recognizes Mr. Carney for 5 minutes. 

Mr. CARNEY. Thank you, Madam Chair. I appreciate it. 

And, gentlemen, thank you for staying and waiting for the recess 

to end so we can get back from voting. I just have a couple of questions. 

The first deals with the business transformation office. I and I 

think many in the committee have had a difficult time figuring out 

what the Business Transformation Office does. Can you tell me 

what it does? And more importantly, can you tell me what you 

think it ought to be doing? 

Mr. SKINNER. No, I cannot tell you what it does. 

Mr. CARNEY. Why is that? 

Mr. SKINNER. It is just not on my radar screen, quite frankly, at 

this point in time. We are spread so thin that I am trying to focus 

our resources on the big dollar acquisitions, Katrina and some 

major I.T. initiatives that I haven’t taken a look at that part of the 

department. 

Mr. CARNEY. Okay. What was it intended to do? Do you recall? 

Mr. SKINNER. I beg your pardon? 

Mr. CARNEY. What was it intended to do? 

Mr. SKINNER. No, I don’t know. 

Mr. CARNEY. You don’t? Okay. 

Mr. SKINNER. Yes. 

Mr. CARNEY. The second question is—perhaps do you? 

Mr. RABKIN. GAO has done a little bit of work at this. We have 

looked at the extent to which the department has been planning 

and trying to integrate the agencies into a cohesive department. 

The Business Transformation Office had a role in that area. And 

I will be glad to provide more specifics about the results of our 

work. 

Among other things we found, however, that it did not have 

enough authority to carry out any of its plans. And my understanding that it has since been disbanded. 

Mr. CARNEY. Yet it still appears on the organization chart? Is 

that correct? 

Mr. SKINNER. I don’t believe it does. 

Mr. CARNEY. Okay. That the office does not exist any more. Is 

that correct? 

Mr. SKINNER. It doesn’t appear on the organizational chart. That 

is for certain. It may be buried in one of the organizations or in 

the undersecretary of management’s office. 

Mr. CARNEY. Okay, thanks. 

One quick one. As you both know, the department didn’t score 

very well on the last OPM survey. And, you know, we are very familiar with this now. The departments have had similar rankings 

a couple of years ago as well. 

Can you explain why it didn’t improve over 2 years, these 

rankings, you know, and what are we doing to help it improve, especially the morale of the employees? 

44 

Mr. SKINNER. I really don’t want to speculate without knowing 

some real work and doing some follow-up work. But any time you 

have a reorganization like we have just gone through at DHS and 

where we have these very, very different cultures coming together, 

it inherently will create some morale problems as to who is going 

to have primacy or who is going to—the CBP, for example. 

Now, who is going to run the office, someone from Customs or 

someone from INS? Same scenario you have over at ICE. Who is 

going to run the field office, someone from INS or someone from 

Customs? 

And that in turn can, in fact, create some morale problems. We 

have done some work in that area and have observed that in those 

two offices. Throughout the rest of the department, it is hard to say 

without doing some follow-up work and delving into and looking behind the scenes for the questions. 

Mr. CARNEY. Do you know if they looked behind the scenes after 

the 2004 survey? 

Mr. SKINNER. I do not know if they have not. But I do know that 

Secretary Chertoff and Deputy Secretary Michael Jackson and Undersecretary Schneider are all very disturbed by the results of this 

and are going to try to do their best to address this issue because 

it is something that I think they were shocked at when they heard 

it was as low as it was. Incidentally, when you break it out organizationally, the OIG came out pretty high. 

Mr. CARNEY. Okay. 

Mr. Rabkin, any insight into this? 

Mr. RABKIN. One of the limitations of the survey is that there is 

not much of a feedback loop from the people filling out the survey, 

the employees, to the head of the agency. GAO is a smaller agency. 

We weren’t included in the executive branch’s survey. We conduct 

our own survey. 

And we had an 80 percent response rate. And 60 percent of the 

people responding wrote comments directly and confidentially to 

the comptroller general that only he saw. And it enabled him to get 

a good sense as to what the real issues were, both positive and negative. 

And I think that that is important to get. It is hard to do in an 

agency the size of DHS for a hundred and some thousand people 

to write comments to Secretary Chertoff. 

Mr. CARNEY. Sure. 

Mr. RABKIN. It is probably got to be broken up by components. 

But I think it is an important loop. 

Mr. CARNEY. Have redactive results at least been shared with 

the department to give them some indication of strengths and 

weaknesses? 

Mr. RABKIN. Well, I don’t think there was any—I think when the 

survey was done, the people that responded just marked off how 

satisfied they were with various issues, how much they agreed with 

the issues. I don’t think there was an opportunity for them to provide narrative comments. 

Mr. CARNEY. Is that a possibility in the future? 

Mr. RABKIN. That is up to OPM. They run the survey. 

Mr. CARNEY. Thank you. 

Madam? 

45 

Mrs. CHRISTENSEN. Yield back? 

Mr. CARNEY. Yes. 

Mrs. CHRISTENSEN. The chair now recognizes Mr. Green for 5 

minutes. 

Mr. GREEN. Thank you, Madam Chair. 

And I compliment you on the outstanding job that you are doing. 

Because time is of the essence and Mr. Walker is not here, I believe 

Mr. Rabkin, you are the person that I might address my comments 

to. 

If you will kindly turn to page 16 of the report titled, ‘‘Management and Programmatic Challenges Facing the Department of 

Homeland Security.’’ On page 16—and I will give you an opportunity to get there. We are in the first paragraph, actually the first 

complete sentence. 

In addition, TSA has not developed a strategy as required for securing the various modes of transportation. That sentence causes a 

great deal of consternation—as required for securing the various 

modes of transportation. 

Who required that the strategy be developed, sir? 

Mr. RABKIN. My recollection is that there is a congressional mandate that TSA provide the strategies for not just the transportation 

security generally, but for the various modes, aviation, commercial 

vehicles, rail, et cetera. 

Mr. GREEN. And the indication is that the strategy, not the implementation, but just the strategy itself has not been developed. 

Can you explain why we don’t have a strategy developed, please? 

Mr. RABKIN. I really can’t. We have been waiting for them to provide it to us also. You know, I think that is an appropriate question 

to ask the secretary or the assistant secretary for transportation 

security. 

I think it is important for them to identify, as they have for aviation, what the federal role is going to be, what the private sector 

role is going to be, what role technology is going to play in each 

of these various modes of transportation security, how that we are 

going to balance the movement of passengers and commerce with 

the need to provide additional security. Very important policy questions that are being dealt with on an ad hoc basis now. And that 

is why we are looking for the strategy, to lay these things out more 

specifically. 

Mr. GREEN. And is there some timeline that has been at least addressed or talked about with reference to developing this strategy? 

Mr. RABKIN. There was a timeline that—Congress asked for this 

information in a specific time. That has passed. And I am not sure 

what the current expectations are. 

Mr. GREEN. Let me go quickly to one other point. Early on there 

was talk of persons having to have supervisors present when you 

were quizzing witnesses and having to have the general counsel to 

peruse documents before these documents could be accorded you. Is 

this correct? 

Mr. RABKIN. That is right. And with the documents, it is a routine matter that we ask for documents. They are gathered by DHS 

program officials. They flow through their liaisons to their lawyers 

before they are provided to us. In selected cases where we have 

46 

asked to interview agency officials, the office of general counsel has 

had its representatives at those meetings. 

Mr. GREEN. My concern is with getting all of these things done. 

So my question to you is what can we do to assist you in getting 

these done. Obviously not timely, because we have already gone beyond the timeline originally accorded. What can we do? Or is there 

something you would have us do? 

Mr. RABKIN. In the case of the transportation security strategies 

for the modes of transportation, I think that that is an issue that, 

you know, the Congress and this committee can take up with the 

department to explore just what the problem is, whether there is 

a difference of opinion within the administration, whether the administration is trying to work out issues with the private sector 

that plays a significant role in implementing these strategies. 

There could be a number of reasons for that. 

In terms of the access issues, I think that continued support of 

the committee in terms of communications with the department 

and, you know, support of our work is important. And, you know, 

in the end, we are trying to deal with the department as best we 

can balancing, you know, our needs to satisfy you as our client with 

their needs to maintain some control over what they give us. But 

in the end, I think it is— 

Mr. GREEN. Because my time is almost up—I have about 10 seconds—let me just say this. In this post–9/11 era, not having a 

strategy, if something should happen, God forbid that it does. No 

one wants it to happen, but people think that things may happen. 

I think that the American population, the citizenry will find that 

we have not done all that we should do. The people are not going 

to be pleased knowing that a strategy has not been developed, not 

the implementation, just the mere development of the strategy. 

This causes a lot of concern. 

Thank you. I yield back. 

Mrs. CHRISTENSEN. Was that a statement or a question? Thank 

you. Your time is expired. 

The chair next recognizes Congresswoman Sheila Jackson Lee for 

5 minutes. 

Ms. JACKSON LEE. Might I thank the chair very much for her 

leadership and thank Mr. Skinner and the representative from 

GAO for your presence here today. 

Let me suggest that anguish is bipartisan. And I want to pose 

some questions that have been offered by my colleagues on the 

other side of the aisle. I have lived with this Border Patrol debacle 

as well. This is the incident occurring in the state of Texas about 

two Border Patrol agents. I think our record is clear in this committee. 

Last year we offered an amendment over and over again to provide resources, power boats, computers, night goggles for our Border Patrol. There is no questioning of our commitment to the Border Patrol agency. Many of us on this committee, Chairman 

Thompson and others, have walked along the border, Arizona, California, Texas, and we have seen the hard work and the difficult 

work that they have done. 

Here is my frustration. My frustration is that we have erred on 

the side of lacking in giving the agency the kind of professional 

47 

level it needs in terms of funding, in terms of professional development, in terms of promotion. 

And, Inspector Skinner, I would appreciate you speaking to that 

issue. And then I would ask—we know there is now a copy that has 

been made public of this incident. I believe that we have not had 

as full an investigation as we should. 

I believe the Department of Justice should be engaged in that investigation. And maybe this report has a combination of such. But 

before we begin to say what was covered or not, we do know that 

individuals in the line of duty have now been charged criminally. 

That sets a very bad tone for others on the front line. And so, 

it is important that we make sure that every stone needing to be 

turned has been turned to assure the full briefing and the full fairness of the particular individuals involved. 

I happen to be a trained lawyer and served as a municipal court 

judge and understand probable cause. And so, when I hear the representation that prosecutorial discretion, we all know that that is 

not a perfect system. And so, I don’t know whether that was the 

best direction to take. But I do know that our Border Patrol agents 

are suffering from lack of training and let me say lack of professional development and lack of growth. 

My second question is—and I am sorry, you do not have a name 

in front of you, so please excuse me. I know that I didn’t write it 

down. But I want to know whether or not the general counsel and 

the Homeland Security is blocking to the extent of obstruction of 

justice when the comptroller’s office is asking for documents to help 

us understand what is occurring in DHS with respect to contracts, 

with respect to the fraudulent utilization of money or the lack of 

oversight over the huge dollars that have gone out on Katrina. 

And my last point is is that we still have the victims of Katrina 

and Rita suffering. And it seems to appall me that we are now 

going to burden college students and others asking them for reimbursement for mistakes that FEMA has made. 

And I yield to you, Mr. Skinner, on those three points. 

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TEXAS

Mr. Chairman, I thank you for holding this hearing today regarding the enormous 

internal challenges facing the Department of Homeland Security. I would also like 

to welcome the individuals testifying today, Mr. David Walker and the Honorable 

Richard Skinner, to help enlighten us on this important issue. 

Of greatest concern to me is the department’s designation as ‘‘high risk’’ by the 

Government Accountability Office since 2003, and the seemingly minimal progress 

made to correct that ever since. Incredible structural problems exist on every level, 

from financial statements to the management strategy to the integration of personnel. While it appears that some progress may have been made in the establishment of technology standards and the implementation of its human capital system, 

the DHS has not demonstrated sufficient efforts to correct its problems as a whole. 

First and foremost, the DHS has not submitted a comprehensive corrective action 

plan to the GAO—the first and most basic step toward being removed from the 

GAO’s high risk list. In addition, the Department’s operations lack transparency 

and are generally unreceptive to the GAO’s attempts at oversight. This is entirely 

unacceptable and must be corrected. 

Epsecially after FEMA’s embarrassing failures to handle the crises of Hurricanes 

Katrina and Rita, we must see an increase in efforts to correct departmental problems for the future. As the representative of a district providing tens of thousands 

of housing units to Katrina refugees, I am interested in learning about what more 

must be done to correct the continued shortcomings. 

48 

As a Whole, issues regarding the control, coordination, and management of finances are of great concern to me. Department-wide efforts to address these deficiencies began much later last year than anticipated by the Office of the Inspector 

General. Financial oversight should be a top priority for the DHS. We must ensure 

that the American people’s tax dollars are used appropriately and efficiently. 

As chair of the Subcommittee on Transportation Security and Infrastructure Protection, I am most interested in hearing the witnesses’ testimony on these topics. 

I am pleased that the TSA has been successful in implementing the Aviation and 

Transportation Security Act, but further improvements in luggage screening are 

needed. In addition, the management of security in rail and mass transit still requires a great deal of work, and I look forward to hearing the witnesses’ recommendations on this issue. 

Thank you Mr. Chairman, and I yield the balance of my time. 

Mr. SKINNER. Thank you. The first part of your question dealt 

with the equipping our Border Patrol agents so that they can get 

the job done. 

Ms. JACKSON LEE. And the incident that has now found two convicted. Isn’t it more on our side of lack of training, more professional development and a more full investigation? 

Mr. SKINNER. I would welcome any other investigation to look at 

how we conducted our review. I would like to make it perfectly 

clear that we are just an investigative arm. We did not prosecute, 

nor did we influence or were involved in the verdict. 

Ms. JACKSON LEE. That is true. Yes. 

Mr. SKINNER. To set the record straight, we did not investigate 

Compean and Ramos. We investigated like a shooting incident. We 

investigate all shooting incidents. 

Ms. JACKSON LEE. Whether the procedures were correct. 

Mr. SKINNER. Those are the procedures. Those are the requirements. So when we investigated, we investigated this shooting incident. We learned through that investigation that there were 11 

Border Patrol agents involved in this shooting incident. 

We pulled together all the evidence that we had to the best of 

our ability. We brought that to the U.S. attorney. The U.S. attorney reviewed the evidence that we brought to him and made a decision to prosecute two individuals. 

Actually, our investigation demonstrated there were five people 

that were involved in some wrongdoing. The prosecutor opted to investigate two of those based on the evidence we brought to him. In 

the other three cases, we referred that to the department for their 

disciplinary action. Those people have received notices of removal. 

Ms. JACKSON LEE. And you would welcome any other investigation that might put this right, if you will, or might add some more 

light on the subject? 

Mr. SKINNER. Yes, I would welcome anyone to come in and investigate. 

Ms. JACKSON LEE. Well, that is a very positive step forward because I am going to be asking for expanded investigations on this 

issue. 

Mr. SKINNER. Because I am very confident in the work of our 

agents. 

Ms. JACKSON LEE. I had two other questions. I know the chairwoman is indulging me, but if you would. 

Mr. SKINNER. The other dealt with do they need training. 

Ms. JACKSON LEE. Is the general counsel of DHS obstructing justice by denying various agencies information that they need to inVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00052 Fmt 6633 Sfmt 6601 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
49 

vestigate fraud, abuse in terms of the process and the issues that 

we in Congress are concerned about, contractual, if you will, failure 

in our contractual contracts that are being made? 

Mr. SKINNER. Our concern is not with the denying us information. It is the delays that are caused by the general counsel having 

to review the documents before they are released to us. And I realize that in certain situations delay becomes denial. 

And we are trying to be aggressive with the department and our 

clients in keeping them posted here—our clients on the Hill—keeping them posted on the developments. So we are not at the point 

yet to say that we are being denied access. 

We have various methods of legal recourse and a few administrative steps before we get to use them. And we haven’t gotten that 

far yet. It is just getting to the point of being very frustrating. We 

have been dealing with the department on this and haven’t made 

very much progress, which is why we just wanted to bring it to 

your attention. 

Ms. JACKSON LEE. I thank the chair. 

Mrs. CHRISTENSEN. The gentlelady’s time is expired. 

If I have some time left over, I will yield back to you. 

Ms. JACKSON LEE. Thank you. 

Mrs. CHRISTENSEN. My questions are very brief. I am going to 

use up my 5 minutes at this point. 

And I want to thank both agencies for the work that they do and 

the great service that you provide to this committee and I am sure 

other committees so that we are better prepared to provide the 

oversight with which we are charged. 

I will ask Mr. Rabkin first. In Comptroller General Walker’s 

statement, he said that DHS continues to face challenges balancing 

its homeland security mission with its disaster preparedness and 

response mission. And as someone who comes from an area of the 

country that is prone to hurricanes—although most parts of the 

country seem to be these days—because of past experiences we 

have come to rely on FEMA, not only to help us recover, but to prepare for those disaster events. 

Given the experience of the department responding to Hurricane 

Katrina and even Rita, are you familiar with any corrective planning under way in the department that would allow them to more 

effectively balance the security of terrorist prevention mission with 

the disaster preparedness and response mission? 

Mr. RABKIN. I think it is getting to the point where the department—I think most people recognize that to be prepared to respond 

to any kind of hazard requires the same kinds of capabilities and 

capacities in the first responders locally, the state level and the 

federal level. There is very little difference whether a disaster was 

caused by nature or caused by humans. And people who respond 

to that, as I say, need basically the same capabilities. 

And I think FEMA and DHS recognize that, are trying to identify, you know, what level is needed, how people can in regional response can help each other so everybody doesn’t need to have duplicate capabilities that might be inefficient. So I think they are moving in the right direction. I think they have learned a lot of lessons. 

Mrs. CHRISTENSEN. Somewhere in one of the statements—I believe it was still in Mr. Walker’s statement—it spoke to clarifying 

50 

the scope of an authority between certain titles in FEMA in particular, I think. And I remember when I met with the federal coordinated officer and the other person for my region, it was still 

confusing to me and to them. Do you know if they have made any 

progress in clarifying the authority and the responsibility of each 

of those offices, who reports to who and how that is coordinated? 

Mr. RABKIN. Yes, they have. I think that is another one of the 

lessons that FEMA has learned. And they have clarified the responsibilities, both based on the Stafford Act, what is required in 

the Stafford Act in terms of responding to disasters as well as the 

interactions among the federal agencies. You know, whether it is 

going to work or not is another story. But I think at least on paper 

they have recognized the differences. 

Mrs. CHRISTENSEN. Mr. Skinner, just one brief question. Is there 

one financial management system for the entire department? 

Mr. SKINNER. No. 

Mrs. CHRISTENSEN. And why? 

Mr. SKINNER. I believe we have at least seven. 

Mrs. CHRISTENSEN. Is that a goal, to have it all be under one— 

you talked about the difficulty in monitoring their finances. 

Mr. SKINNER. Yes, there was discussions earlier on. And I think 

when they were exploring with e-merge and e-merge II they were 

looking to the feasibility of developing one financial management 

system that can accommodate everyone. I don’t think, quite frankly, it is necessary or needed to invest in the development of one financial system that will cover everyone in the department. 

We have some very good financial systems out there. CBP has 

an excellent financial system that they use. And as a matter of 

fact, they got an unqualified opinion. ICE, the platform on which— 

their financial system is very good. It needs to be tweaked. People 

need to be trained. 

TSA has just transitioned over to the—to use the platform over 

at the Coast Guard. I think with some tweaking we can use that 

system, minimal investment. 

The important thing is to have the capability when these individual components prepare their financial statements that we have 

a capability within the office of the CFO to be able to bring that 

information in and prepare consolidated financial management 

statements and also to prepare financial management data that 

can be used to make informed decisions. That is where we are really lacking right now, is not the need to create one system, it is the 

need to provide the resources to bring it together. 

Mrs. CHRISTENSEN. Thank you. 

At this point, I believe that Congresswoman Jackson Lee had one 

more question. 

Ms. JACKSON LEE. Yes. 

Mrs. CHRISTENSEN. I would recognize you for a second round. 

Ms. JACKSON LEE. I thank the distinguished chairwoman for her 

kindness. And I am just going to pursue the line of questioning 

that I had before because, Mr. Skinner, I had to cut you off, Inspector General, and I had to cut the distinguished gentleman off because of the time. 

I want to make it very clear that this issue of the Border Patrol 

agents is a bipartisan issue. The majority worked very hard to, I 

51 

think, answer the professional development questions in the last 

Congress. And we intend to do it again, which is provide all the 

needs of training, professional development and growth. And that 

is part of what DHS is responsible for. And I would appreciate it 

if you delve into that just a little bit. 

On the other hand, I am going to officially ask that the Department of Justice, which you are not the inspector general for—I am 

going to take your leeway, if you will, certainly not your instruction, but your leeway that we have an additional investigation. And 

the issue, of course, is because you made it very clear. And I am 

glad you put it on the record. 

You did not prosecute. You did not indict. You did an investigation, provided information. And the others who were engaged or involved you decided to handle it administratively, or as I understand it, they will be handled administratively, firing or suspension. 

That was not—the actions that you had were not prosecutorial 

actions. And I think that should be made clear, that DHS was not. 

And so, DOJ has to give us an explanation of why the prosecuting 

attorney moved so quickly on this and did not have either some of 

the relief. For those who are not familiar, it is difficult to understand why this drastic action was taken when there was so much 

hearsay involved in this matter. 

I am going to leave that question. And then I do want to raise 

the question again. And you made the very appropriate civil rights 

phenomena, which is justice delayed is justice denied. I would appreciate the comptroller general and your office getting back to the 

committee to let us know—and you indicated—but quickly when it 

becomes justice denied. 

I am very concerned about that. And I believe with this huge 

mounting bill of fraud and the frustration of the American people 

and their tax dollars being unaccounted for that we really need to 

move quickly to get to the bottom of the massive contracts and as 

well. Because I don’t know why we are so contracted out. I believe 

there are talented public servants who can work for DHS. 

And my last point—and this is a repeat, but I would like you to 

expand on it. There is the desire—because I sound like I may be 

duplicitous in my remarks—to ensure the protection of American 

tax dollars. But there are victims in Hurricane Katrina. 

So rather than going after the big contractual abuses, we are 

now going to try to ask college students to pay back for some 

misstep or mistake that we have made. I would like some explanation as to who are we going after. We have made paper mistakes, as I understand, out of FEMA and DHS. And I understand 

there is some effort to go back and get individual $25 and $500, 

which to me sounds outrageous when we have massive concerns 

about large contractors who are spending huge amounts of money. 

I understand one contractor has $19 million in travel expenses. 

That is ridiculous. One of the programs that needs to be investigated is the road home. But let me just end so that you can answer on making sure that we focus on professional development 

and training for our Border Patrol agents and then to understand 

this situation about trying to get reimbursement from people who 

are already victims. 

52 

And you might be the quickest answer. Will you please advise us 

when it becomes justice denied on this refusal of giving you documents? 

Mr. RABKIN. We certainly will. 

Ms. JACKSON LEE. All right. Thank you. 

Mr. Skinner? 

Mr. SKINNER. The concerns you are raising about the hiring, the 

training— 

Ms. JACKSON LEE. Yes, that is what we should be focused on. 

Mr. SKINNER. That is something that we are also very sensitive 

to. The reason being last year, this year, and next year we will be 

doing tremendous amount of hiring to beef up our capabilities 

along the border with Border Patrol agencies. And therefore, in 

order to ensure that we are doing it right, that we are bringing the 

right types of people to the job, that we are adequately training 

these people to do the job, and that we are adequately equipping 

them to do their job, that is a job that we currently have ongoing. 

And it will be something that will be a continuing process. We 

will probably end up issuing a series of reports over the next 1 to 

2 to 3 years as we build up our capability along the border in addition to the work we are doing with SBInet. 

With regards to the— 

Ms. JACKSON LEE. Alleging that individuals got money fraudulently and seeking to get it reimbursed. Many of these are victims. 

All of this was paperwork, mistakes on behalf of the agency and 

not these individuals. 

Mr. SKINNER. Yes, I agree wholeheartedly. We should not be going after victims. And I don’t care whether it is $200 or $2,000. 

If they are, in fact, eligible for that assistance, there is no reason 

that we should be changing the rules after they receive the money 

and asking for it back. 

I am not aware that FEMA or anyone else is suggesting that we 

go back and seek refunds from those that received it properly, or 

at least thought they were receiving it properly. 

Ms. JACKSON LEE. I think that is the key, thought they were receiving it properly is really where we find some of these victims. 

Mr. SKINNER. Because the process does allow for appeals and allows you to present your case. You are right. We have major procurement fraud out there that needs our attention. 

Ms. JACKSON LEE. Absolutely. 

Mr. SKINNER. I cannot be spending all of our resources, very, 

very limited resources, following up on $2,000 cases for the next 2 

or 3 years. 

Ms. JACKSON LEE. I appreciate that. 

Mr. SKINNER. And we will be focusing on those large public procurement, public corruption type cases, procurement cases where 

there is large dollar value. We will be looking at the actions that 

FEMA has taken to identify those people that may have received 

funds improperly and what procedures they have in place to try to 

obtain refunds for those victims. 

The important thing is that is in the past. And we could spend 

hundreds and hundreds of thousands of dollars trying to recover 

$2,000 or $3,000. What we really need to focus our attention and 

our resources and our finances on are the internal controls to enVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00056 Fmt 6633 Sfmt 6601 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
53 

sure that this does not happen again and that when we give someone a check, we know we are giving it to an eligible recipient. 

Ms. JACKSON LEE. I want to thank the chairwoman for her and 

I want to thank the witnesses for their kind indulgence. I want to 

thank the chairwoman for her indulgence and might offer that we 

have a full committee hearing on these questions of procurement 

and also this whole issue dealing with the Border Patrol agents. I 

thank the gentlelady for her kindness. 

Mrs. CHRISTENSEN. You are very welcome, Congresswoman Jackson Lee. 

Mr. Green, did you have a further question? 

Mr. GREEN. Actually, I will since the offer has been extended. 

Mr. Skinner, with reference to the Border Patrol agents, who 

were the witnesses, if you know, that testified in that case other 

than perhaps the person who was shot? 

Mr. SKINNER. Like I said, when we investigated the incident, we 

identified at least 11 people that were involved, directly, indirectly 

or aware of or should have been involved in that shooting. Those 

individuals, I believe, all became witnesses. Three of those individuals were granted immunity from prosecution—these were CBP 

agents—for their testimony. There may have been others. I don’t 

have a recollection exactly of all the people that provided testimony 

and evidence in that particular trial. 

Mr. GREEN. And you said CEP agents? 

Mr. SKINNER. CBP. I am sorry. Customs and Border. I have been 

cautioned not to use acronyms before. Customs and Border Patrol 

agents. 

Mr. GREEN. And is it your testimony that these witnesses testified on behalf of the defense or the state? 

Mr. SKINNER. I believe these individuals testified for the state for 

the prosecutor. 

Mr. GREEN. Thank you. 

I yield back. 

Mrs. CHRISTENSEN. Thank you. 

I want to take this opportunity to thank the witnesses for their 

valuable testimony and the members for their questions. 

The members of the committee may have additional questions for 

the witnesses in writing. And we ask you to respond expeditiously 

in writing to those questions. 

Hearing no further business, the committee stands adjourned. 

[Whereupon, at 3:55 p.m., the committee was adjourned.] 

(55) 

APPENDIX: RESPONSE TO SUPPLEMENTAL 

QUESTIONS FROM THE COMMITTEE ON 

hOMELAND SECURITY 

RESPONSES FROM THE HONORABLE RICHARD L. SKINNER, INSPECTOR GENERAL

Question 1.: Please explain why DHS has been unable to produce a clean 

financial statement for the entire Department? 

Response: DHS management is unable to assert that the consolidated financial 

statements are reliable, primarily because they are unable to reconcile their intergovernmental accounts, such as Fund Balance with Treasury, or their assets (property, plant and equipment). The American Institute of Certified Public Accountants 

and Government Auditing Standards refer to this situation as a restriction on the 

scope of the audit, and therefore the auditors are unable to render an opinion. In 

addition, the financial statement audit report for 2006 lists several other reasons 

why the department cannot get a clean opinion: 

• DHS’ Office of Financial Management is unable to reconcile legal liability 

• Transportation Security Administration (TSA) is unable to prepare financial 

statements. 

• Federal Emergency Management Agency (FEMA) and the Bureau of Immigrations & Customs Enforcement (ICE) are unable to adequately and accurately 

support obligations and accounts payable. 

Question 2.: In addition to the Department’s problems in carrying out its 

responsibilities in implementing SBInet and the National Security Cutter 

programs, are there any particular programs you would like to bring to our 

attention as likely to present special challenges for DHS? 

Response: Our body of work to date has not identified programs similar to CBP’s 

SBInet and Coast Guard’s Deepwater programs. As our work progresses and similar 

challenges are identified within the department, we will bring those programs to 

your attention. 

Question 3.: Please explain how personnel and morale problems such as 

those highlighted in the recent Office of Personnel Management report, 

which highlighted the morale problems among employees at DHS, have affected DHS’s ability to accomplish its mission. 

Response: In a January 31, 2007, message to all DHS employees, the Deputy 

Secretary wrote to assure all employees that, starting at the top, the leadership 

team across DHS is committed to address the underlying reasons for DHS employee 

dissatisfaction and suggestions for improvement. The Deputy Secretary stated that 

the Under Secretary for Management, Paul Schneider, will join the Secretary and 

Deputy Secretary in evaluating carefully the details of the OPM survey. The first 

steps will be to analyze thoroughly the survey data, including specific attention to 

those government organizations that are recognized for their high performance in 

these areas, and determine the specific steps to improvement. According to the Deputy Secretary, this process will include the leadership team in each operating component and every headquarters unit to discuss details of the survey with our workforce. The Deputy Secretary committed to these tasks with a sense of urgency and 

seriousness. 

DHS OIG has not conducted any work in this area, and cannot report directly on 

the effect that personnel and morale problems have on DHS’ ability to accomplish 

its mission. 

Question 4.: Please provide information regarding investigations of DHS’s 

failure to build internal capacity while outsourcing many of its responsibilities. In particular, please explain the extent to which DHS over-relies on 

contractors to fill employee vacancies. 

56 

Response: We have several ongoing reviews that are looking at DHS’ internal 

contract oversight capacity, and will report on those projects as work is completed. 

We have not conducted any work in the areas of contractors filling employee vacancies, and cannot report directly on the extent that DHS over-relies on contractors 

to fill employee vacancies. 

Question 5.: Please explain any and all concerns regarding DHS’s failure 

to set sufficient requirements for ‘‘solutions based’’ procurement contracts. 

Also, please explain whether there is sufficient monitoring for the contractors who win these awards. 

Response: The common term is a ‘‘performance-based contract,’’ wherein the government describes its needs in terms of what is to be achieved, not how it is to be 

done. One appeal of performance-based contracting is that it allows the government 

to focus on identifying needs, objectives, and constraints and allows private sector 

to focus on developing a business proposal to meet the needs and objectives. The 

contracting approach shifts from looking for the low cost, technically acceptable solution to looking for the best-value solution, which is often more innovative than the 

traditional approach. To determine best value, the government must measure performance trade offs and the cost-effectiveness of the various proposed solutions. 

Oversight in specifications-based (traditional) contracting is a matter of determining whether or not the contractor complies with the explicit terms of the contract. In performance-based contracting, oversight is a matter of determining whether the contractor’s solution, when complete, will meet the mission needs specified 

in the contract. Oversight focuses on program performance and improvement from 

a defined baseline, not contract compliance. 

Performance-based approaches, such as Statements of Objectives, require the government to have stronger management and control capabilities than traditional contracting. Before the government selects a contractor and agrees on compensation, 

the government must be able to articulate program needs. The government must be 

able to evaluate each proposal’s likelihood of achieving the program needs, on time, 

and at a reasonable cost. It is in this area that we have raised concerns regarding 

two major acquisition activities currently underway, Deepwater and SBInet. In 

these cases the projects were initiated without adequate project management capabilities in place. In both cases, management now appears to be moving towards improving their project management capabilities. 

Question 6.: Please provide procedures and studies regarding the adequacy of safeguards DHS has in place to enable small, minority and disadvantaged businesses to have a fair chance in the procurement process. 

Response: We have not conducted any work in the area of small, minority, and 

disadvantaged businesses, and therefore cannot report directly on the safeguards 

DHS has in place to ensure fairness in the procurement process for these businesses. 

Question 7.: How many vacancies does DHS have and does it have sufficient funding to hire the staff it needs? 

Response: We have not conducted reviews of DHS staffing, vacancies, or hiring 

practices. Therefore we cannot report directly on DHS’ funding to fill its vacancies. 

Question 8.: Please provide information regarding any studies that indicate that continuity of employees is an important factor in organizational 

function and institutional memory? Also, please explain the extent to 

which the widespread use of contractors cause continuity problems within 

DHS? 

Response: We have not conducted any work in the area of continuity of employees, institutional memory, or the effect that the use of contractors has on continuity 

problems, and therefore cannot report directly on the importance of these factors on 

organizational function. 

Question 9.: Please provide information regarding the extent to which 

the Directorate of Management needs to be reorganized or even eliminated. 

Response: We have not conducted a review of the Management Directorate, and 

therefore cannot report directly on any reorganization or realignment issues. 

Question 10.: Please provide us with the current functions of the Business Transformation office. Provide examples of models that would be suitable to further DHS’s migration. 

Response: We have not conducted a review of the Business Transformation Office, nor on any models for organization transformation or migration. Therefore, we 

cannot report directly on the suitability of the Business Transformation Office or 

any alternative. 

57 

Question 11.: Why do you think DHS ranked at the bottom of the just-released OPM survey of job satisfaction among federal employees and made 

so little progress in two years since OPM’s previous survey? What does 

DHS need to be doing now so that it improves two years from now? 

Response: Some aspects of the challenges facing DHS were inherited by the department from its legacy agencies. However, the complexity and urgency of DHS’ 

mission have exacerbated the challenge in many areas. These management challenges significantly affect the department’s ability to carry out its operational programs and provide the services necessary to protect the homeland. The department’s 

senior officials have indicated the importance of addressing these challenges and 

have identified plans to address them. 

Question 12.: What steps have FEMA and DHS taken to resolve the problems in FEMA’s automated payment system, which uses out-dated technology and, thus, had limited expansion capability to support catastrophic 

disaster like Katrina? 

Response: We understand that FEMA has contracted for an independent analysis of its financial management system to address the system’s limitations. FEMA 

recently solicited proposals to perform a requirements analysis of the functions and 

associated components of its financial management system and to determine the 

best solution for replacement. The analysis should determine whether one of the 

DHS designated ‘Centers of Excellence’ (Coast Guard, FLETC, Secret Service, or 

CBP) is the best fit, or whether FEMA should have an independent system to support the unique and surge requirements for the disaster assistance missions. The 

contract was awarded the first week of December 2006 and a final recommendation 

should be provided in April 2007. We will monitor FEMA’s progress. 

Question 13.: Please explain the extent to which FEMA has acted on the 

numerous GAO recommendations for addressing significant fraud, waste, 

and abuse in FEMA’s Individuals and Households Program (IHP) and in 

Department of Homeland Security’s purchase card program. 

Response: IHP: FEMA officials agree that more stringent controls are preferable 

on the front end, but contend that the sheer magnitude of the event dictated proceeding in the manner the agency did because there was no time to develop and 

test additional front end controls. FEMA has taken steps to implement new controls 

to limit fraud, waste, and abuse. They have implemented an automated identity and 

occupancy verification system to confirm identity and residency of applicants registering for assistance. They continue to evaluate and strengthen controls pertaining 

to identity, residence type, and cross-disaster applicant checking. 

Other controls implemented include: • Internet registration application that disallows duplicate registrations was 

implemented in October 2005. 

• Identity proofing added to call center registration application in February 

2006. 

• Amended automated scripts ensuring no scripted payments sent to applicants 

who fail identity proofing. 

• All applications taken through call centers from August 2005 until February 

2006 have been sent to contractor for identity proofing to detect potentially 

fraudulent applications and route for recoupment processing. 

• Real-time interaction between FEMA Service Representative and applicant 

during registration to ensure any failed identity check is correct before accepting application. 

• In June 2006, will add verification of occupancy and ownership to registration 

process. 

• Flagging at-risk social security numbers to identify potential fraud. 

• Developing state-of-the-art software to maintain data on applicants in mobile 

homes and communicate real-time to caseworkers and auto-determination system to prevent potential overpayments. 

• System no longer accepts a Post Office Box as address of damaged dwelling. 

Purchase Cards: In July 2006, our office in conjunction with GAO conducted a 

review of control weaknesses regarding purchase chards. We reported a weak control environment and breakdowns in key controls exposed DHS to fraud and abuse 

in its use of the purchase cards and recommended that DHS improve the processes 

and internal controls over its purchase card program. We will continue to monitor 

progress in respect to Purchase Cards. 

Question 14.: Has DHS begun to address any of GAO’s seven recommendations for improving DHS’s oversight of cash advance funding for first responder grants and associated interest liabilities? If so, please explain how 

58 

DHS is addressing these, including the recommendation that urges the Department to identify the significant issues that have resulted in delays in 

the drawdown and disbursement of DHS grant funds? 

Response: The Office of Grants and Training is preparing an action plan to respond to the to the GAO recommendations, however, the response is not yet final. 

While the office is already working on implementing some of the recommendations, 

the pending reorganization may affect the offices assigned responsibility for the recommendations and issues. 

Question 15.: As a result of the creation of Homeland Security in 2003, legacy 

INS and legacy Customs Special Agents were merged to create the U.S. Immigration and Customs Enforcement agency. Customs agents previously enforced over 400 

federal laws and immigration agents enforced laws pursuant to the Immigration 

and Nationality Act (Title 8). It appears that ICE agents are heavily focused on immigrations investigations such as worksite enforcement. What measures are 

being taken to insure a continuity of enforcement from both legacy missions? 

Response: We have not specifically reviewed what measures are being taken to 

insure continuity of enforcement from both legacy missions. However, in our report, 

An Assessment of the Proposal to Merge Customs and Border Protection with Immigration and Customs Enforcement, OIG–06–04, November 2005, we addressed several coordination challenges confronting Customs and Border Protection (CBP) and 

Immigration and Customs Enforcement (ICE). We made 14 recommendations to 

overcome interagency coordination and integration challenges confronting both components. Those recommendations covered four areas, including: 

1. Defining and communicating roles and responsibilities with respect to policy 

and operational coordination between the Department of Homeland Security 

(DHS) headquarters, CBP, and ICE; 

2. Conducting integrated planning and coordination of policies and resources; 

3. Reviewing, developing, and implementing policies and procedures to improve 

and enhance operational coordination between CBP and ICE; and 

4. Providing oversight and implementing metrics and performance measures to 

ensure that the actions and initiatives taken or proposed achieve intended results. 

In April 2006, the DHS Deputy Secretary responded by outlining the activities 

and programs the department intends to implement to address the 14 recommendations we made to improve coordination between CBP and ICE and enhance interoperability at the field level. 

In June 2006, we began a follow-up review of DHS’ progress in addressing coordination challenges between CBP and ICE. DHS has made significant progress toward 

improving coordination and interoperability between the two components. For example, DHS made organizational changes with the department, including creating the 

Offices of Policy, Operations Coordination, and Intelligence and Analysis. Senior officials of CBP and ICE created the ICE-CBP Coordination Council to provide a 

forum to address CBP and ICE policy and operational coordination issues. In addition, the department established the Secure Border Initiative and Border Enforcement Task Forces. 

However, additional work is necessary. Most notably, CBP and ICE can address 

the remaining challenges by placing increased emphasis on (1) improving communication between CBP and ICE headquarters elements and all levels of field personnel; (2) improving intelligence and information sharing; (3) strengthening performance measures; and, (4) addressing ongoing relational issues among some elements of the two components. We anticipate releasing a final report by April 2007. 

Question 16.: What hurdles exist in getting the Transportation Sector 

Specific Plan that was due over two years ago finalized and published? 

Response: We have not conducted any work in the area of the Transportation 

Sector Specific Plan, and therefore cannot report directly on any hurdles to finalizing and publishing the plan. 

Question 17.: In October of last year GAO sent a letter titled Combating Nuclear 

Smuggling: DHS’s Cost-Benefit Analysis to Support the Purchase of New Radiation 

Detection Portal Monitors Was Not Based on Available Performance Data and Did 

Not Fully Evaluate All the Monitors’ Costs and Benefits to the chairmen of both the 

House and Senate appropriations committees. Has there been any activity in the 

Inspector General’s office to look at DNDO’s cost-benefit analysis and if so 

what are you finding? 

Response: We met with Government Accountability Office (GAO) officials in November 2006 to leverage information obtained on previously conducted Domestic 

59 

Nuclear Detection Office (DNDO) work, such as the letter you referenced, and have 

mitigated our review efforts of DNDO for potential overlap with current and future 

GAO engagements. GAO officials said they would be conducting additional work on 

DNDO’s cost-benefit analysis to determine whether it provides a reliable basis for 

making major procurement decisions, such as whether to invest heavily in deploying 

a new portal monitor technology. 

On December 20, 2006, we initiated a review assessing the DNDO’s progress in 

integrating detection and response capabilities. We are examining DNDO programs 

and initiatives to support the integration of domestic nuclear and radiological detection, notification, and response systems, including DNDO’s coordination efforts with 

other federal agencies and state governments. In addition, we will evaluate whether 

DNDO’s programs overlap or duplicate those of other federal agencies with nuclear/ 

radiological detection responsibilities. An evaluation of other governmental and nongovernmental entities with nuclear detection and response responsibilities is not 

within the scope of this review. We anticipate releasing a final report by July 2007. 

Question 18.: As the government agency charged with securing the nation’s critical cyber infrastructure, how is DHS supposed to provide adequate leadership to the nation’s critical infrastructure owners when the 

Department itself continues to receive failing grades on securing its own 

critical infrastructure? 

Response: In September 2006, the first Assistant Secretary for Cyber Security 

and Telecommunications (CS&T) for DHS under the Preparedness Directorate was 

appointed. Under this leadership, the National Cyber Security Division is working 

collaboratively with public and private sector entities to secure the nation’s cyber 

infrastructure. We are currently finalizing our second review of NCSD operations 

and will be issuing our report in May 2007. While CS&T is leading the movement 

in securing the nation’s critical infrastructure, the DHS Chief Information Security 

Officer (CISO) continues to improve DHS’ own critical infrastructure by ensuring 

that its components are complying with FISMA requirements. The CISO continually 

monitors and reports on the status of each component’s FISMA scorecard to ensure 

that all aspects of the information security program are being achieved. 

Question 19.: What steps have the Department taken to resolve flaws in 

the way that FISMA evaluations are performed and what steps remain? 

Response: DHS is developing an information security program that standardizes 

the processes that its components must follow to ensure that all FISMA standards 

and requirements are being met. As illustration, the department first established 

its system inventory and the continued updating of that inventory. Subsequently the 

department undertook the goal to certify and accredit each of its systems. The department is now focusing on the quality of its plan of action and milestones and 

also of the systems certification and accreditations performed. The department continues to mature its security program and to review the quality of all of its FISMA 

processes. 

The OIG has not conducted a complete evaluation of how the department performs its own evaluations of FISMA compliance at the department level and at each 

of its components. The OIG will review the quality of the department’s FISMA processes during its annual FISMA evaluations. 

Question 20.: What is your office doing to ensure that the problems that 

existed with regard to improving laptop computer security, prior to Jay 

Cohen’s appointment as the Science and Technology Directorate UnderSecretary are addressed? Specifically, what is your office doing to oversee 

S&T’s efforts to develop a mature business model and prudent project management practices? 

Response: In June and September 2006, the OIG issued laptop security reports 

to S&T covering their unclassified and classified systems respectively. In those reports we made several recommendations designed to assist S&T in implementing 

adequate and effective security policies and procedures related to the physical security of and logical access to its government-issued laptop computers. S&T has taken 

steps or planned corrective action to address the weaknesses we identified. Through 

our compliance follow-up, we continue to monitor S&T’s progress in implementing 

their open recommendations. We are currently reviewing the final DHS component 

included in our overall audit. A consolidated DHS laptop security report will be 

issued in July 2007 on the status of laptop security Department wide. The significance of laptop security and the need for possible follow-up audits to address this 

area of concern will be discussed during our March 2007 annual planning conference. 

60 

We have combined two reviews from our 2007 performance plan that we are conducting now. We are examining how S&T identifies, prioritizes and determines 

funding for its Research and Development efforts. To understand those processes, 

we are examining how the new organizational structure and business procedures 

guide the Research, Transition, Special Access Program, and HSARPA divisions. We 

are also addressing the allocation of funding between the programs and the rationale underlying the allocation. In addition, we are reviewing the procedures for managing HSARPA projects. We hope to provide useful recommendations to improve any 

S&T processes that appear to be deficient. 

Question 21.: What is your office doing to ensure that Under Secretary 

Cohen develops a plan to strengthen workforce recruitment and retention; 

improve institutional knowledge base; and create a culture of responsibility within the Directorate? 

Response: We intend to conduct a review later this year that will determine: (a) 

S&T’s initiatives to attract and retain employees with the skills necessary to advance the Directorate’s mission; (b) its processes for evaluating the effectiveness of 

its employees; and, (c) the rates at which employees leave the Directorate as compared to other research and development organizations. S&T’s ability to retain its 

workforce will have a direct effect on improving its institutional knowledge base. In 

addition, our ongoing review of the Directorate’s procedures for managing HSARPA 

projects will reflect the responsibility taken by the different layers of management 

for the success of those projects. 

Question 22.: The IG’s office released a report called DHS’ Management of 

BioWatch Program, which mentioned a few problems, especially with the Laboratory 

Response Network that does the analysis of the material gathered in the environmental sensors used by BioWatch. The report stated, however, that DHS was alerted to the problems and that the IG was now satisfied that the labs are functioning 

properly. Can you please quickly outline the problems you found and how 

the problems were addressed? 

Response: We included in our BioWatch report, a recommendation for DHS to 

address and rectify after-action and previous operation findings related to field and 

laboratory activities. DHS’ actions taken and planned should help to reduce the 

number of repeat findings, but our report does not conclude, ‘‘the labs are functioning properly.’’ DHS reported it developed and implemented a protocol to reduce 

deficiencies identified and to ensure that jurisdictions promptly correct identified deficiencies. As a result, we considered the recommendations resolved and closed. 

Our recommendation was based on the need to enhance management controls for 

oversight of the field and laboratory operations, as identified in two DHS reviews 

of BioWatch field operations. The fist conducted in the Spring 2004 and the second 

in the Fall 2005. 

The summary report of the first site round of visits identified procedural deficiency issues in field collection, transport of filters, and laboratory operations that 

needed to be addressed to ensure the effectiveness of BioWatch. Examples of high 

error rates reported related specifically to laboratory operations included the following: 

• Improper transfer of exposed filters. 

• Improper decontamination of the Chain-of-Custody (CoC) bags, inner bags, 

and holders. 

• Procedural errors made in the handoff from the field personnel to the laboratory personnel. 

• Improper quality control of critical reagents, the substances used in detecting 

or measuring a component because of their chemical or biological activity. 

• Improperly conducted Sample Management System (SMS) functions. 

Several of the areas in laboratory operations reported as requiring improvement 

in the first round site visits were also reported in the second round. The summary 

report of the second round included the following suggestions from DHS for laboratory improvement: 

• Establish separate areas for sample receipt, SMS functions (when performed 

at the laboratory), new filter holder assembly, and sample processing. 

• Perform proper decontamination of CoC bags, inner bags, and holders prior 

to filter cutting and transfer, as well as scissors, cassette openers, and hood between samples. 

• Decontaminate bags (containing holders, cassettes, CoC bags, and inner 

bags), DNA extract tubes, and any other materials with bleach prior to removing from the biological safety cabinet and hood. 

61 

• Implement quality assurance and quality control on reagents, including 

plates, strips, and verification panels, upon arrival; and analyze environmental 

laboratory swipes and swabs weekly. 

• Separate new filter holders from exposed holders during sample collection by 

transporting them in separate coolers or containers that can be easily decontaminated. 

Question 23.: Please explain what steps DHS has taken and still needs to 

take to address the findings from your office’s summer 2006 report that 

criticized the Homeland Security Information Network’s (HSIN) rushed deployment schedule for resulting in a system that does not support information sharing effectively, does not fully meet user needs, and consequently 

is not relied upon by State, local, and tribal law enforcement agencies. 

Response: In September 2006, the department outlined several steps that it had 

taken to address our HSIN report recommendations. Specifically, the department’s 

Office of Operations Coordination had held a series of meetings, training sessions, 

conferences, and briefings to clarify and communicate HSIN’s mission and vision to 

users, its relations to other systems, and its integration with related federal systems. Through emergency management exercises, the department had identified 

gaps in HSIN procedures, guidance, and training. Addressing these gaps entailed 

providing users with over-the-shoulder instruction and technical support, and assigning a program manager within the newly established HSIN Joint Program Office responsibility for tracking training and guidance development activities. 

To increase stakeholder involvement, an HSIN Work Group, comprised of a crosssection of DHS personnel, was taking steps to align business processes, coordinate 

requirements, and create cross-functional program governance. Further, an HSIN 

Advisory Committee, with intergovernmental and industry representation, was to 

provide guidance and recommendations to the HSIN program manager. In turn, the 

HSIN program manager would work to ensure that performance metrics were established and used to determine system and information sharing effectiveness. The department did not respond to our recommendation on defining the intelligence data 

flow model for HSIN and providing guidance to system users on what information 

is needed, what DHS does with the information, and what information DHS will 

provide. 

Additionally, in December 2006, the Office of Operations Coordination requested 

that we provide initial comments and feedback on a strategic framework and implementation plan it had developed to outline the HSIN vision, mission, and desired 

outcomes. We found, however, that the draft documents focused primarily on components within DHS with no mention of state, local, tribal, or private industry stakeholders. As such, the documents did not address how all stakeholders, not just DHS 

components, would be involved in the system development lifecycle process. The Office of Operations Coordination did not provide us a copy of the final strategic 

framework and implementation plan. 

Question 24.: In December 2005, your office issued an unclassified summary of 

a report on the Department’s Security Program and Practices for its Intelligence 

Systems (OIG–06–3), in which you recommended that the Department establish a 

single, comprehensive, and inclusive information security program for its intelligence systems. Specifically, you recommended that the Department (1) provide 

adequate security for the information and information systems that support intelligence operations and assets; and (2) ensure the confidentiality, integrity, and 

availability of vital intelligence information. What progress can you report to 

date? 

Response: In September 2005, DHS formally appointed the Assistant Secretary 

for Intelligence and Analysis as the Chief Intelligence Officer for DHS, responsible 

for overseeing the department’s intelligence systems’ security program. In October 

2005, the Office of Intelligence and Analysis (OI&A) was created to assume full responsibility for the information assurance of DHS? Sensitive Compartmented Information (SCI) systems, excluding those of the United States Coast Guard (USCG). 

In March 2006, the Assistant Secretary for Intelligence and Analysis was appointed 

as the Designated Approval Authority (DAA) for DHS’ intelligence systems. In April 

2006, OI&A appointed a Chief Information Officer (CIO). In July 2006, OI&A drafted an Interim DHS Management Directive that delineates the responsibilities for 

the oversight and evaluation of DHS’ IT security program for its intelligence systems. In August 2006, OI&A’s CIO appointed an Information Systems Security 

Manager to oversee the department’s intelligence activities. In October 2006, the Director for Information Sharing and Knowledge Management established an Intelligence Systems Board (ISB) to govern DHS’ intelligence activities. Representatives 

62 

from each DHS component whose systems process intelligence information, including USCG, are members of the ISB. 

More recently, based on our Fiscal Year 2006 review of DHS’ information security 

program and practices for its intelligence systems, we reported that DHS established an IT security program for its intelligence systems. However, challenges remain regarding the full implementation and management of the information security program for the department’s intelligence systems, especially at the component 

level. Our concerns focus on the coordination and management of the security program for the department’s intelligence systems. DHS must address these concerns 

in order to provide adequate security for the information and the information systems that support its intelligence operations and assets and ensure the confidentiality, integrity, and availability of vital intelligence information. Specific DHS component information and issues related to the current state of DHS’ intelligence systems security is classified 

Question 25.: Have you met with Secretary Chertoff to discuss that you 

have encountered problems in gaining access to information and if so, 

what mitigating measures did he recommend to assist your in gaining access to the documents you need? 

Response: As discussed in more detail in our audit, Acquisition of the National 

Security Cutter, OIG–07–23 (January 2007), we prepared, for the Secretary’s signature, a one-page memorandum to all DHS personnel identifying our authorities and 

instructing personnel to cooperate with our office. We also prepared a four-page document providing ‘‘Frequently Asked Questions’’ regarding interactions with our 

auditors and inspectors. Both documents were provided to senior department officials in July 2006, and despite repeated requests and meetings, neither has been 

issued. In October 2006, the Secretary and Deputy Secretary were present at a 

meeting regarding our cutter audit during which the access issue was raised. At 

that time, we were told the access issue was being worked. While our working relationship with the Coast Guard has improved dramatically since the issuance of our 

audit, we believe a permanent, department-wide solution is needed. 

The following questions were asked during the hearing, the Committee requests 

that responses be provided in writing. 

Question 26.: What is the status of the investigation and what action was 

taken against those individuals responsible for leaking secret information 

after the recent leaks regarding an October 2005 subway threat in New 

York City? 

Response: Our investigation is closed. The two department employees resigned, 

one effective December 31, 2006, the other effective June 8, 2006, prior to the initiation of any administrative action. Allegations against both individuals were declined criminally. While both had received a secret briefing, the investigation did not 

disclose that either actually leaked classified information to unauthorized persons. 

Question 27.: What actions has the department taken to ensure that employees of the Department realize the absolute necessity of not leaking secret information after the recent leaks regarding an October 2005 subway 

threat in New York City? 

Response: In accordance with Executive Order 12958, as amended, and 32 CFR 

Part 2001, the Department of Homeland Security (DHS) has established programs 

and safeguards for the identification and protection of classified information. Incidents involving the mishandling or compromise of classified information are promptly and thoroughly investigated to determine the cause, mitigate potential damage, 

and implement measures to prevent recurrence. The Department also has a security 

education, training and awareness program that requires all DHS personnel, including contractors and sub-contactors, receive a security orientation briefing upon initial assignment to the Department. For those personnel who have been granted a 

security clearance a separate security briefing is required prior to being granted access to classified information and thereafter refresher briefings are given each calendar year at approximately 12-month intervals. Included in these briefings are sections that cover an individual’s obligation to protect classified information from unauthorized disclosure and the potential for sanctions should they fail to do so. 

Question 28.: Please provide a report of what was learned from DHS’s response to the management advisory meeting held on the afternoon of February 7, 2007. 

Response: We are proceeding with our ongoing work regarding SBInet, and continue to meet with DHS staff. Our review of the SBInet Baseline is expected to be 

completed by the end of the year. 

63 

Question 29.: Please provide a detailed breakdown of how $16 billion 

(40% of DHS budget) is spent and why it’s better spent on contractors than 

in-house. 

Response: We have not conducted a detailed analysis of DHS spending through 

contracts, and have not made any assessment of contracted work versus work performed in-house. We have several ongoing reviews that are looking at significant 

DHS programs that use contracted resources, such as CBP’s SBInet and Coast 

Guard’s Deepwater Program. In those reports, we questioned the offices’ over-reliance on contractors to perform project oversight functions. 

Question 30.: Several OIG reports have identified problems with TSA screeners 

and TSA airport procedures. What progress has been made in implementing 

OIG’s recommendations and what is being done to further ensure consistency and clarity regarding the rules and procedures on airport screenings? 

Response: As a result of two audits that our office has conducted to test screeners’ ability to detect prohibited items on passengers’ bodies, in their cabin-accessible 

property, and in their checked baggage, we made several recommendations to TSA 

to enhance this aspect of aviation security. We identified four broad areas in which 

TSA could take action to improve screener performance, as measured by detection 

rates: training; equipment and technology; policy and procedures; and supervision. 

TSA has implemented several changes that are responsive to our recommendations, 

and is incrementally working on taking additional actions. In addition, we will 

shortly being starting a new round of penetration testing to determine to what extent TSA’s policies, procedures, training, equipment, and supervision ensure that 

Transportation Security Officers are able to prevent threat items from being introduced into the sterile areas and checked baggage systems of the nation’s airports. 

We also recently completed an audit that tested airport and air carrier employees’ 

ability to prevent unauthorized access to secured areas of the airport. In our report 

we make 10 recommendations to improve access control, but because we have not 

yet issued our report, it is premature for us to discuss TSA’s response. 

Question 31.: What is the prognosis for linking the Homeland Security 

Network to RISS and are procedures being developed to avoid duplication 

and confusion when that linkage takes place? 

Response: In June 2006, we reported that DHS had made some progress in establishing interoperability between HSIN and similar federal systems, such as the 

Regional Information Sharing Systems (RISS), which is used to facilitate the exchange of critical information across federal, state, and local law enforcement agencies. For example, DHS had begun to allow products to be posted and shared between HSIN and RISSNET, and was working with Department of Justice representatives to achieve complete interoperability in 2006. However, we have performed no 

follow-up work on this issue since the release of our report. 

QUESTIONS FROM THE HONORABLE PETER T. KING, RANKING MINORITY MEMBER

Question 32.: With respect to financial management, your testimony discusses 

the Department’s internal control weaknesses, specifically those at the Coast Guard, 

Immigration and Customs Enforcement, and the Transportation Security Administration. 

• Your testimony notes that the Department has taken steps to address these 

issues. What is the Department doing to resolve the weaknesses? What 

additional steps should the Department take in this area? 

Response: The Department is doing the following to resolve the weaknesses: 

• The Department has developed a corrective action plan to remediate internal 

control weaknesses. 

• The DHS Office of Financial Management, Coast Guard, and Immigration 

and Customs Enforcement have engaged outside contractors to assist in implementation of these corrective action plans. 

• DHS Chief Financial Officer has implemented a rigorous timeline and monitoring of progress to identify problems that need to be addressed by the responsible party. DHS Chief Financial Officer reports this information to the Deputy 

Secretary. 

• These corrective action plans and this process help the DHS Chief Financial 

Officer hold components accountable for meeting corrective action milestones in 

order to remediate internal control weaknesses. 

• The Office of Inspector General initiated a series of performance audits to assess the effectiveness of DHS’ corrective action plans to address internal control 

weaknesses and has provided recommendations for improvement. 

64 

• With regard to additional steps, the Department needs to continue to develop 

CAPS that identify the underlying root causes, develop effective remediation 

plan with measurable milestones, assign accountability for the CAP, and validate the successful implementation of the CAP. 

Question 33.: You note that FEMA has developed new predefined mission assignments for disaster response and recovery, and you are conducting a review of these 

assignments. 

• What has your examination determined thus far? 

• Will these predefined mission assignments help to prevent waste in 

future disasters? 

Response: FEMA issued approximately 2,700 mission assignments totaling approximately $8.7 billion to Federal agencies to help respond to Hurricane Katrina. 

FEMA historically has had significant problems issuing, tracking, monitoring, and 

closing mission assignments. FEMA guidance on the assignments is often vague, 

and agencies’ accounting practices vary significantly, causing problems with reconciling agencies’ records to FEMA records. FEMA has developed a number of new 

pre-defined mission assignments to expedite some of the initial recurring response 

activities. In addition, FEMA’s Disaster Finance Center is working to find a consensus among other Federal agencies on appropriate supporting documentation for 

billings. 

According to FEMA officials, 44 predefined mission assignments have been in established with DOD, including 28 with USACE. In March 2007, FEMA will add 8— 

10 more mission assignments with USDA, EPA, DOT, HHS and HUD. The 

predefined mission assignments shorten the multi-tier MA approval process and 

identify the typical services assigned to each agency. 

We are currently conducting a review of mission assignments to DHS agencies, 

and other Inspectors General are reviewing mission assignments to their respective 

agencies. As with pre-defined standby contracts, pre-defined mission assignments 

will help to mitigate waste. 

Question 34.: Your testimony notes the importance of data mining in terrorism 

detection and prevention. However, you note that many of the data mining activities 

within the Department are stove-piped within each component. 

• What is the Department doing to ensure that this information is 

shared throughout the Department to maximize the effectiveness of 

this information? 

Response: This year, we plan to include in our review access and coordination 

for sharing of information critical in fighting terrorism as they relate to data mining 

activities within the Department. 

About half of the data mining activities reviewed in the ‘‘Survey of DHS Data 

Mining Activities’’ were developed using custom-built systems or proprietary software without regard to technological compatibility and DHS-wide coordination with 

other programs, thereby impeding information sharing. Additionally, some of the 

data mining activities used the same commercial-off—the-shelf products, but did not 

share information. 

Many activities that were reviewed only collected and analyzed small pieces of information for mission-restricted programs, such as screening foreign flight crews or 

ensuring that special interest aliens register with ICE. However, there may be a potential for coordinating data access and mining for cross-cutting functions, such as, 

reporting or analyzing suspicious or criminal activities, assessing risk, targeting 

cargo, and authenticating documents and people. 

QUESTIONS FROM THE HONORABLE MARSHA BLACKBURN, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TENNESSEE

Question 35.: You noted in your testimony that you believe more data sharing 

is needed between FEMA and law enforcement, especially with respect to identifying and tracking sex offenders and suspected felons. 

• How does FEMA currently collect data on sex offenders and missing 

children? 

Response: FEMA does not collect data specific to sex offenders. Rather, FEMA 

collects information from individuals applying for disaster assistance to facilitate the 

delivery of disaster assistance. The type of information collected by FEMA and contained in FEMA’s disaster assistance recovery files includes the applicant’s name, 

social security number, income information, address of damaged property, current 

address, etc. Law enforcement officials have told us that direct access to this inforVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00068 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
65 

mation following a disaster is needed to identify the whereabouts of registered sex 

offenders and to protect those residing in FEMA shelters and trailer parks. 

In respect to missing children, FEMA collects the names of children living in the 

applicant’s home at the time of the disaster. This information is often needed by 

law enforcement to locate missing children and to reunite them with their families. 

DHS and DOJ recently established an agreement that provides law enforcement direct access to FEMA disaster recovery assistance files for the purpose of locating 

missing children displaced due to disasters. However, DHS and DOJ have not established an arrangement that provides law enforcement direct access to FEMA disaster assistance recovery files to identify the whereabouts of sex offenders and fugitive felons following a disaster. 

• Where is this data stored and what do they usually do with this information? 

Response: Information collected from disaster assistance applicants is stored in 

the National Emergency Management System (NEMIS). The information collected 

from applicants is used to inspect damaged homes, to verify information provided 

by the applicant, to make eligibility determinations regarding the applicant’s request for assistance, and to identify and implement measures to reduce future disaster damage, and for other purposes identified as routine uses, such as disclosing 

information to prevent duplication of benefits. 

• Is it regulatory or statutory authority that is preventing law enforcement access to this database? 

Response: FEMA disaster assistance recovery files are a System of Records protected by the Privacy Act of 1974 (5 U.S.C. 552a.). For law enforcement to have direct access to this information, a routine use needs to be established that allows the 

information to be disclosed and an agreement between DOJ and DHS executed to 

permit direct access. We have recently recommended to the FEMA Undersecretary 

for Federal Emergency Management: (1) Add specific routine uses to the System of 

Records Notice that authorizes the disclosure of FEMA disaster recovery assistance 

files for the purpose of locating registered sex offenders and fugitive felons in the 

aftermath of a disaster. (2) Develop and execute agreements with DOJ, the coordinator for Public Safety and Security under the National Response plan, to provide 

appropriate law enforcement entities direct access to FEMA disaster recovery assistance files for public safety and security efforts, including identifying the whereabouts of registered sex offenders and fugitive felons. 

Question 36.: The Deepwater Program: 

• Who requested the modification of the original designs of the National Security Cutter (NSC)? 

Response: The Coast Guard requested the modification of the original designs of 

the National Security Cutter (NSC). 

• Why were the designs modified? 

Response: According to the Coast Guard, the events of September 11, 2001 forced 

them to reconsider the performance requirements for assets being acquired through 

the Deepwater Program, which included the NSC. As a result, the Coast Guard 

issued a Revised Deepwater Implementation Plan (the Plan) on 25 March 2005. 

Studies were also conducted by several independent organizations such as the 

Brookings Institution and RAND, which identified shortcomings in the original 

Deepwater solution and recommended the Coast Guard investigate how to correct 

them. As a result, during July 2003, the Commandant directed that an internal 

Coast Guard study be conducted to analyze operational capability and force structure gaps, and their impact on mission performance. The resulting review helped 

the Coast Guard revise the performance specifications for a wide array of Deepwater 

assets including the NSC.These revised performance specifications for the NSC included: 

• A larger flight deck to accommodate all variants of DHS and DOD HH60 helicopters; 

• The installation of an anti-terrorism/Force protection Suite to include underwater sonar to allow the cutter to scan ports, approaches, facilities, and 

high value assets for underwater mines and swimmers; 

• An updated weapons and command and control suite; and, 

• Chemical, Biological, Radiological (CBR) capability to allow the NSC to 

remain on scene and operate in Weapons of Mass Destruction scenarios. 

Changes to the original NSC designs began shortly after 9/11, and continue to this 

day. 

66 

• Although your office warned the Department not to begin the production of 

the new NSCs, the Department decided to begin production on 2 of them. Who 

made the decision? 

Response: It was the Coast Guards own subject matter experts and not the OIG 

that warneded Coast Guard not to begin production of NSCs 1 and 2. In a memorandum dated on March 29, 2004 from the Coast Guard’s Assistant Commandant 

for Systems (Admiral Erroll Brown) to the Deepwater Program Executive Officer 

(PEO) Admiral Patrick Stillman, where he expressed concern that there were significant structural problems with the design of the NSC which compromise the safety and the viability of the NSC’s hull. Admiral Brown also requested ‘‘the impending 

Delivery Task Order (DTO) for the production and deployment of the NSC 

(003OBC), be held in abeyance until a solution to the NSC’s structural design issues 

could be resolved. Despite the warning, the Coast Guard authorized $140 million 

to commence the production and deployment of NSC1. By January 2005, the Deepwater PEO had authorized the issuance of DTOs valued at an additional $201 million for long lead items and the construction and deployment of NSC2. It was not 

until March 2005, more than 27 months after first being advised of the NSC design 

deficiencies, did the Deepwater Program Office contract with the U.S. Navy’s Surface Warfare center (Carderock Division) to conduct a fatigue assessment of the 

NSC. 

Who was in charge to exercise technical and management oversight authority over the NSCs? 

Response: For the Coast Guard the authority resided with the Deepwater Program Executive Officer (Rear Admiral Patrick Stillman). For the ICGS/Northrop 

Grumman, the authority resided with the Vice president and General Manager 

(ICGS) and the President, Northrop Grumman Ship Systems. 

• Who made the decision to modify the designs of the 123-foot patrol 

boat? 

Response: To our knowledge, the design of the 123-foot patrol boats was not 

modified. 

• Did any Coast Guard technical experts analyze these modifications 

for structural problems? 

Response: It is our understanding the Coast Guard’s Engineering and Logistics 

Command (ELC) evaluated the 123-foot patrol boat design and (like the NSC) made 

recommendations to the Deepwater PEO. Our review of the construction issues with 

the 123’ foot patrol boat did not include an evaluation of the 123-foot design. Therefore, we do not know the extent to which the ELC’s recommendations were evaluated by the Deepwater program office and incorporated into the 123-foot patrol boat 

design. 

• In your opinion, has Commandant Thad Allen’s efforts to overhaul internal operations will provide greater oversight of Deepwater acquisitions? 

Response: The Coast Guard recognizes these challenges and is taking aggressive 

action to strengthen program management and oversight—such as technical authority designation; use of independent, third party assessments; consolidation of acquisition activities under one directorate; and redefinition of the contract terms and 

conditions, including award fee criteria. Furthermore, and most importantly, the 

Coast Guard is increasing its staffing for the Deepwater program, and reinvigorating its acquisition training and certification processes to ensure that staff have 

the requisite skills and education needed to manage the program. The Coast Guard 

is also taking steps to improve the documentation of key Deepwater related decisions. If fully-implemented, these steps should significantly increase the level of 

management oversight exercised over the air, surface, and C4ISR assets that are 

acquired or modernized under the Deepwater Program. 

Question 37.: What type of cost and manpower are necessary to form a 

coherent IT infrastructure in DHS? Does DHS have competent personnel 

and adequate management plans to accomplish this? 

Response: We have not conducted work in this area in order to answer these 

questions. We plan to address cost and manpower issues as part of a comprehensive 

review of IT management at DHS in fiscal year 2008. 

67 

Response to Supplemental Questions 

for the 

Committee on Homeland Security 

House of Representatives 

Hearing on 

Management and Programmatic Challenges Facing the Department of 

Homeland Security 

February 7, 2007 

RESPONSES FROM THE HONORABLE DAVID M. WALKER, JOINT WITH NORMAN RABKIN

Question 1.: Please explain why DHS has been unable to produce a clean 

financial statement for the entire Department. 

Response: The Department of Homeland Security (DHS) has been unable to obtain a ‘‘clean’’ opinion on its financial statements because of existing financial management systems, controls and reporting problems. DHS management and auditors 

have attributed many of DHS’s difficulties in financial management and reporting 

to the original stand-up of a large, new, and complex executive branch agency without adequate organizational expertise in financial management and accounting. 

GAO identified DHS’s transformation as a high risk area in fiscal year 2003 because 

DHS had to transform 22 agencies into one department and inherited a number of 

operational and management challenges from legacy components. For fiscal year 

2006, DHS only had its Balance Sheet and Statement of Custodial Activity subjected 

to audit. According to DHS’s Inspector General, the Office of Financial Management, 

U.S. Coast Guard (USCG), Transportation Security Administration (TSA), Federal 

Emergency Management Agency (FEMA), Immigration and Customs Enforcement 

(ICE), and the Management Directorate were unable to provide sufficient evidence 

to support account balances presented in these financial statements and collectively 

contributed to the auditors’ inability to render an opinion on them. Further, DHS 

management and three of its major components (USCG, TSA, and ICE) were unable 

to represent that the financial statements were presented in conformity with U.S. 

generally accepted accounting principles. The auditors identified 10 material weaknesses in internal control resulting in an adverse opinion rendered by DHS’s Inspector General on controls over financial reporting and compliance as of September 30, 

2006. The auditors attributed these conditions to a weak internal control environment and entity-level controls such as limited staffing resources and lack of integrated financial processes and systems. 

Question 2.: In addition to the Department’s problems in carrying out its 

responsibilities in implementing SBInet and the National Security Cutter 

programs, are there any particular programs you would like to bring to our 

attention as likely to present special challenges for DHS? 

Response: Given the importance of major information technology (IT) investments to DHS’s transformation efforts, we have recommended that the department 

adopt a strategic approach to managing these investments that is grounded in (1) 

rigorous and disciplined investment management and system acquisition processes 

and (2) a corporate enterprise architecture to ensure that these investments can 

interoperate and are not duplicative. Since making these recommendations, our 

work on individual programs, such as US-VISIT, Secure Flight, and the Automated 

Commercial Environment (ACE), has shown that the department has continued to 

be challenged in its ability to manage its IT investments in such a manner. We have 

ongoing work focusing on both DHS’s corporate approach to IT investment management and its enterprise architecture. 

Question 3.: Please explain how personnel and morale problems such as 

those highlighted in the recent Office of Personnel Management report, 

which highlighted the morale problems among employees at DHS, have affected DHS’s ability to accomplish its mission. 

Response: The Comptroller General convened a forum in September 2002 to 

identify useful practices from major private and public sector mergers, to help federal agencies like DHS merge its various originating components into a unified department. We found that the key to a successful merger and transformation is to 

68 

1GAO, Highlights of a GAO Forum, Mergers and Transformation: Lessons Learned for a Department of Homeland Security and Other Federal Agencies, GAO–03–293SP (Washington, D.C.: 

Nov. 14, 2002) and Results-Oriented Cultures: Implementation Steps to Assist Mergers and Organizational Transformations, GAO–03–669 (Washington, D.C.: July 2, 2003). 2GAO, High-Risk Series: An Update, GAO–07–310 (Washington, D.C.: January 2007). 3 Commercial Activities Panel, Final Report: Improving the Sourcing Decisions of the Government (Washington, D.C.: 2002). 4GAO, Competitive Sourcing: Greater Emphasis Needed on Increasing Efficiency and Improving Performance, GAO–04–367 (Washington, D.C.: Feb. 27, 2004). 5GAO, Homeland Security: Observations on the Department of Homeland Security’s Acquisition Organization and on the Coast Guard’s Deepwater Program, GAO–07–453T (Washington, 

D.C.: February 8, 2007). 

recognize the ‘‘people’’ element and implement strategies to help individuals maximize their full potential in the new organization, while simultaneously managing 

the risk of reduced productivity and effectiveness that often occurs as a result of 

the changes.1 The challenge of implementing and transforming DHS’s 22 agencies 

into a fully functioning department remained as a high-risk area on our January 

2007 update to our high-risk list.2 In particular, we noted that DHS still has not 

developed a DHS-wide transformation strategy that includes a strategic plan that 

identifies specific budgetary, human capital, and other resources needed to achieve 

strategic goals. We currently have ongoing work that addresses a number of human 

capital issues at DHS. This work is being conducted at the request of the Committee 

and we expect to issue our report later this year. 

Question 4.: Please provide information regarding investigations of DHS’s 

failure to build internal capacity while outsourcing many of its responsibilities. In particular, please explain the extent to which DHS over-relies on 

contractors to fill employee vacancies. 

Response: The work of the government is increasingly being performed by contractors, including emergency and large-scale logistics operations such as hurricane 

response and recovery and the war in Iraq. In making sourcing decisions, organizations need to determine whether internal capability or external expertise can more 

effectively meet their needs. The Commercial Activities Panel, chaired by Comptroller General Walker, noted in 2002 that determining whether the public or the 

private sector would be the most appropriate provider of the services the government needs is an important, and often highly charged, question.3 The report also 

stated that determining whether internal or external sources should be used has 

proved difficult for agencies because of systems and budgeting practices that (1) do 

not adequately account for total costs and (2) inhibit the government’s ability to 

manage its activities in the most effective manner possible. 

In prior work examining the competitive sourcing initiatives of selected agencies 

which did not include DHS, we reported that several agencies had developed strategic and transparent sourcing approaches.4 The approaches included the comprehensive analysis of factors such as mission impact, potential savings, risks, current level of efficiency, market conditions, and current and projected workforce profiles. The Congress could continue to monitor DHS’s and other agencies’ reliance on 

contractors to carry out their basic missions. Our ongoing work on several human 

capital issues at DHS should provide some insight on the use of personal service 

contracts at the department. 

Question 5.: Please explain any and all concerns regarding DHS’s failure 

to set sufficient requirements for ‘‘solution based’’ procurement contracts. 

Also, please explain whether there is sufficient monitoring for the contractors who win these awards. 

Response: The Deepwater program has been designated as a performance-based 

acquisition. If performance-based acquisitions are not appropriately planned and 

structured, there is an increased risk that the government may receive products or 

services that are over cost estimates, delivered late, and of unacceptable quality. We 

have found in our reviews of major systems that establishing clear requirements 

ahead of time is critical to mitigating risk.5 Program requirements are often set at 

unrealistic levels, then changed frequently as recognition sets in that they cannot 

be achieved. As a result, too much time passes, threats may change, and/or members of the user and acquisition communities may simply change their minds. The 

resulting program instability causes cost escalation, schedule delays, fewer quantities, and reduced contractor accountability. GAO is presently performing a review 

of how well DHS components are managing performance-based services acquisition. 

In terms of monitoring contractor performance under the Deepwater program, in 

2004, we found that the Coast Guard had not developed quantifiable metrics to hold 

the system integrator accountable for its ongoing performance and that the process 

69 

6GAO, Contract Management: Coast Guard’s Deepwater Program Needs Increased Attention 

to Management and Contractor Oversight, GAO–04–380 (Washington, D.C.: March 9, 2004). 7GAO, Hurricane Katrina: Agency Contracting Data Should Be More Complete Regarding 

Subcontracting Opportunities for Small Businesses, GAO–07–205 (Washington, D.C.: March 1, 

2007). 

by which the Coast Guard assessed performance after the first year of the contract 

lacked rigor.6 We also reported that the Coast Guard had not begun to measure the 

system integrator’s performance on the three overarching goals of the Deepwater 

program—maximizing operational effectiveness, minimizing total ownership costs, 

and satisfying the customers. Coast Guard officials told us that metrics for measuring these objectives had not been finalized; therefore they could not accurately assess the contractor’s performance against the goals. However, at the time, the Coast 

Guard had no time frame in which to accomplish this measurement. According to 

a Coast Guard official, the Coast Guard evaluated the contractor subjectively for the 

first award term period in May 2006, using operational effectiveness, total ownership costs, and customer satisfaction as the criteria. The result was a new award 

term period of 43 of possible 60 months. 

Question 6.: Please provide procedures and studies regarding the adequacy of safeguards DHS has in place to enable small, minority and disadvantaged businesses to have a fair chance in the procurement process. 

Response: We recently reported that, of the prime contracting dollars DHS 

awarded for Hurricane Katrina-related relief activities between August 2005 and 

June 30, 2006, 24 percent of these funds (about $1.6 billion) went to small businesses.7 Of the $1.6 billion DHS awarded directly to small businesses, disadvan- taged businesses received $409 million, women-owned businesses received $243.7 

million, businesses located in historically underutilized business zones 

(‘‘HUBZones’’) received $222.7 million, and veteran-owned businesses received about 

$128 million. 

Our March 2007 report found that subcontracting accomplishment information 

was not consistently available for the DHS prime contracts that were awarded to 

large businesses for activities related to Hurricane Katrina and which should have 

had subcontracting plans. These plans are supposed to identify the types of work 

and the percentage of subcontracting dollars prime contractors expect to award to 

certain categories of small businesses, such as those that are disadvantaged or 

owned by women or service-disabled veterans. We found that DHS’s systems had 

no information on subcontracting plan requirements for 70 percent of the contracting dollars that appeared to meet the criteria for having subcontracting plans. 

Also, for 29 percent of the contracting dollars, DHS’s systems showed that a subcontracting plan was not required. DHS officials indicated that $545 million of these 

funds were miscoded, and should have been coded as having ‘‘no subcontracting possibilities.’’ DHS officials were unable to explain why the remaining $861 million 

were not required to have subcontracting plans. In response to recommendations in 

our report, DHS plans to issue guidance to all acquisition offices reinforcing previously issued guidance regarding the importance of awarding all appropriate contracts to small businesses and encouraging large businesses to subcontract all appropriate work to small businesses. 

Question 7.: How many vacancies does DHS have and does it have sufficient funding to hire the staff it needs? 

Response: According to DHS, it is difficult to quantify the number of vacancies 

in an agency because there is no statutory definition of the term. one measure of 

vacancies is the number of full time equivalents (FTEs) budgeted by an agency that 

are not currently filled. In each fiscal year, each agency allocates a certain number 

of FTEs to each of its components based on budgetary and workload factors. Based 

on data supplied by DHS, in fiscal year 2007 the department was allocated 186,743 

FTEs and, as of January 20, 2007, had 181,089 on board personnel. According to 

DHS, the difference between the enacted FTE’s and on board personnel (5,654) may 

be the best basic currently available indicator for the number of vacancies at DHS. 

We lack sufficient information to judge the sufficiency of DHS’ funding to fill vacancies and DHS reported that it could not respond to this question without first 

exploring the issue with each of its components. The costs associated with filling vacancies depend on variables such as the scarcity and source of skills needed. Previous GAO work has explored the need for increased staffing in various DHS components where DHS staffing shortfalls may affect its ability to fully accomplish its 

mission. As one example, DHS faces challenges in hiring experienced staff to oversee major procurements. The Secure Border Initiative (SBI) program, a comprehensive, multiyear, multibillion dollar program to secure U.S. borders and reduce illegal 

70 

8GAO, Federal Downsizing: Better Workforce and Strategic Planning Could Have Made 

Buyouts More Effective, GAO/GGD–96–62 (Washington, D.C.: Aug. 26, 1996). 9GAO, Human Capital: Effective Use of Flexibilities Can Assist Agencies in Managing Their 

Workforces, GAO–03–2 (Washington, D.C.: Dec. 6, 2002). 10GAO, Human Capital: Insights for U.S. Agencies from Other Countries? Succession Planning 

and Management Initiatives, GAO–03–914 (Washington, D.C.: Sept. 15, 2003) and Human Capital: Selected Agencies Have Opportunities to Enhance Existing Succession Planning and Management Efforts, GAO–05–585 (Washington, D.C.: June 30, 2005). 11Pub. L. No. 107–296, § 701(a) (9). Also, The Homeland Security Act established five directorates within DHS for each of the following areas: (1) management, (2) science and technology, 

(3) information analysis and infrastructure protection, (4) border and transportation security, 

and (5) emergency preparedness and response. The U.S. Secret Service and the U.S. Coast 

Guard were also transferred to DHS, but are not within a directorate. 

immigration, proposed to hire 270 government and contractor personnel in 2007. As 

of February 2007, DHS had hired 124 of the 270. We reported in February of 2007 

that SBI officials had expressed concerns about difficulties in finding an adequate 

number of staff with the required expertise to support the planned activities. As a 

second example, Customs and Border Patrol (CBP) has identified its need to increase the number of Border Patrol Agents by 6,000 by December 2008. For fiscal 

year 2007, CBP budgeted $187,744—which included training costs, equipment, salary and overhead costs—for each new border patrol agent. DHS requested $481.1 

million for 3,000 new Border Patrol Agents in the fiscal year 2008 budget request. 

As the United States intensifies efforts to secure the nation from illegal entrants 

and terrorists, we can expect that both staffing and technological solutions will continue to be proposed and that DHS and Congress will have to consider the associated costs in an environment of competing priorities and resource constraints. 

Question 8.: Please provide information regarding any studies that indicate that continuity of employees is an important factor in organizational 

function and institutional memory. Also, please explain the extent to which 

the widespread use of contractors cause continuity problems within DHS. 

Response: Our work on the private sector’s experience with mergers and acquisitions suggests that over 40 percent of executives in acquired companies leave within 

the first year and 75 percent within the first 3 years. While some turnover is to 

be expected and is appropriate, the new organization must ‘‘re-recruit’’ its key talent 

to limit the loss of needed individuals because they do not see their place in the 

new organization. At the outset of any merger and transformation, new organizations also recognize the value in creating an employee knowledge and skills inventory, which would also help strengthen institutional memory. Valuable information 

resides in the originating organizational components, and when these components 

are combined, these intellectual assets are extremely powerful and beneficial to employees and stakeholders. Knowledge and skills inventories not only capture the intellectual assets of the new organization, but also signals to employees that their 

particular expertise is valued by the organization and foster a knowledge-sharing 

culture. 

We have also discussed the importance of employee continuity in various other reports. For example, we have reported that, while workforce restructuring can have 

benefits for agencies, any downsizing that may occur could lead to such negative effects as the loss of corporate memory and expertise.8 We have also reported that 

the use of human capital flexibilities, such as monetary recruitment and retention 

incentives, can be highly effective in managing agency workforces to help ensure the 

continuity of employees.9 In addition, we have discussed the need for agencies to 

develop a more strategic approach to managing the succession of senior executives 

and other employees with critical skills. For example, we have highlighted instances 

where agencies’ succession planning and management efforts (1) receive active support of top leadership; (2) link to the agencies’ strategic planning; (3) identify talent 

from multiple organizational levels, early in their careers, or with critical skills; (4) 

emphasize developmental assignments for high-potential employees in addition to 

formal training; (5) address specific human capital challenges, such as diversity; and 

(6) facilitate broader transformation efforts.10

While we have not done work that addresses the impact of using contractors on 

continuity problems at DHS, GAO has on-going work on DHS’s reliance on contractors and will be providing an update to committee staff in the near future. 

Question 9.: Please provide information regarding the extent to which 

the Directorate of Management needs to be reorganized or even eliminated. 

Response: The Homeland Security Act of 2002 11 establishes that the Under Secretary for Management is responsible for the transition and reorganization process 

for the department and the Management Directorate is currently responsible for 

71 

12GAO–07–310. 13GAO, Department of Homeland Security: A Comprehensive and Sustained Approach Needed 

to Achieve Management Integration, GAO–05–139 (Washington, D.C.: Mar. 16, 2005). 14GAO, Highlights of a GAO Forum, Mergers and Transformation: Lessons Learned for a Department of Homeland Security and Other Federal Agencies, GAO–03–293SP (Washington, D.C.: 

Nov. 14, 2002) and Results-Oriented Cultures: Implementation Steps to Assist Mergers and Organizational Transformations, GAO–03–669 (Washington, D.C.: July 2, 2003). 

carrying out this function. As it may take several years, as in any merger, for the 

successful implementation of the department, it is critical that DHS have a dedicated team or leader in place to help manage its integration. As the Comptroller 

General has testified, GAO continues to designate the implementation and transformation of DHS as high risk because the department had to transform 22 agencies—several with major management challenges—into one department, and failure 

to effectively address its management challenges and program risks could have serious consequences for our national security. While the protection of the homeland is 

the primary mission of the department, critical to meeting this challenge is the integration of DHS’s varied management processes, systems, and people—in areas such 

as information technology, financial management, procurement, and human capital—as well as in its administrative services. In our recent high-risk report, we reported that DHS has yet to implement a corrective action plan that includes a comprehensive transformation strategy and its management systems—especially related 

to financial, information, acquisition, and human capital management—are not yet 

integrated and wholly operational.12

In 2005, we reported that as it was currently structured, the roles and responsibilities of the DHS Under Secretary for Management contained some of the characteristics of a Chief Operating Officer (COO) or Chief Management Officer (CMO), 

but we suggested that the Congress should consider whether a revised organizational arrangement is needed to fully capture the roles and responsibilities of a 

COO/CMO position, including whether the position contained sufficient authority to 

elevate attention on management issues and transformational change.13

Question 10.: Please provide us with the current functions of the Business Transformation Office. Provide examples of models that would be suitable to further DHS migration. 

Response: At this time, we understand that the DHS Business Transformation 

Office (BTO) has been eliminated. Because no two merger, acquisition, or transformation efforts are exactly alike, the ‘‘best’’ approach for any given effort depends 

upon a variety of factors specific to each context. Our prior work on mergers and 

transformations, undertaken before the creation of DHS, concluded that successful 

transformations of large organizations, even those faced with less strenuous reorganizations than DHS, can take years to achieve and certain key practices and implementation steps should be adopted to ensure successful transformations.14 In our 

2005 review of the integration of DHS, we made recommendations based on these 

key practices to assist DHS in building the infrastructure needed to manage its 

merger or transformation and were particularly important to DHS at this juncture 

in its management integration efforts. 

We recommended that DHS develop an overarching management integration 

strategy for the department that would look across the initiatives within each of the 

management functional units and clearly identify the critical links that must occur 

among these initiatives, among other things. The department should also use this 

strategy to clearly communicate a consistent set of goals and the progress achieved 

internally to all its employees, and externally to key stakeholders, such as the Congress. In addition, we recommended that DHS designate a dedicated implementation team, at the time that the BTO was just forming, for the department’s management integration and provide it with the requisite authority and responsibility to 

help set priorities and make strategic decisions to drive the integration across all 

functions. The dedicated implementation team would also be responsible for working 

with the Undersecretary for Management to develop and implement the overarching 

management integration strategy. While the BTO has been eliminated, we believe 

that it would be helpful for DHS to have a dedicated team or coordinating body to 

help oversee and ensure its management integration and transformation. See questions 22 and 31 for a more detailed discussion of the BTO and COO/CMO, respectively. 

Question 11.: Why do you think DHS ranked at the bottom of the just-released OPM survey of job satisfaction among federal employees and made 

so little progress in two years since OPM’s previous survey? What does 

DHS need to be doing now so that it improves two years from now? 

72 

Response: Seeking and monitoring employee attitudes and taking appropriate 

follow-up actions, is one of the important implementation steps in our work on organizational mergers and transformations. Because people are drivers of any merger 

or transformation, it is vital to monitor their attitudes, through pulse surveys, focus 

groups, or confidential hotlines. While monitoring employee attitudes provides good 

information, it is most important for employees to see that top leadership not only 

listens to their concerns, but also takes actions and makes appropriate adjustments 

in a visible way. We have not been asked by the Congress, to date, to follow-up on 

the OPM survey results at DHS. However, our prior work has shown that if DHS 

does not take appropriate follow-up action on the survey results, negative attitudes 

may translate into actions, such as employee departures, among other things, that 

could have a detrimental effect on the continued implementation and transformation 

of the department. 

Question 12.: What steps have FEMA and DHS taken to resolve the problems in FEMA’s automated payment system, which uses out-dated technology and, thus, had limited expansion capability to support catastrophic 

disasters like Katrina? 

Response: While GAO has not conducted additional work specifically addressing 

the current status of the Federal Emergency Management Agency’s (FEMA) efforts 

to improve its automated payment system, the Department of Homeland Security’s 

Office of Inspector General reviewed FEMA’s Progress in Addressing Information 

Technology Management Weaknesses in December 2006 (OIG–07–17) and reported 

that: 

FEMA has made progress in several areas, particularly short-term adjustments 

to prepare for the 2006 hurricane season. These improvements primarily included 

increasing the National Emergency Management Information System (NEMIS) capacity and online system access and strengthening verification of registration data. 

In addition, FEMA and its program offices specifically addressed our recommendations by documenting training resources, developing a plan to implement its enterprise architecture (EA), gathering requirements for new business tools, and improving configuration management. 

However, despite these positive steps, FEMA has not documented or communicated a strategic direction to guide long-term IT investment and system development efforts. FEMA also has not performed crosscutting requirements gathering to 

determine business needs, which would allow Information Technology Services Division (ITSD) personnel to analyze alternatives to continued development of the complex, custom NEMIS system. We note below several resource challenges for FEMA 

to accomplish these tasks, including personnel needs, time limitations, and funding 

constraints. For example, high-level officials acknowledged the need for personnel 

who can effectively and efficiently manage system development efforts, especially as 

key personnel are allocated to assist in disaster and emergency response activities. 

Further, FEMA officials told us that funding constraints also have prevented the 

creation of sufficient training and testing environments. Therefore, constrained by 

limited resources, FEMA has focused its efforts on preparing for the 2006 hurricane 

season and has made little progress in addressing long-term needs, such as updating strategic plans, defining cross-cutting requirements, and evaluating systems alternatives. 

Question 13.: Please explain the extent to which FEMA has acted on the 

numerous GAO recommendations for addressing significant fraud, waste, 

and abuse in FEMA’s Individuals and Households Program (IHP) and in 

Department of Homeland Security’s purchase card program. 

Response: As part of our audit of the FEMA’s IHP and the DHS’s purchase card 

program, to date we have made 25 recommendations designed to improve the management of these 2 programs. FEMA and DHS fully concurred with 19 recommendations, and substantially or partially concurred with the remaining 6 recommendations. 

With respect to the purchase card program, DHS agreed with all our recommendations and reported taking actions to address them. For example, DHS stated that they had amended their purchase card manual in order to incorporate suggested changes from our recommendations. However, we have not performed testing 

to evaluate the effectiveness of these actions. 

With respect to the IHP, FEMA and DHS concurred with 13 of our recommendations, and substantially or partially concurred with 6. DHS and FEMA also reported 

that they have taken actions, or plan to take actions, to implement many of our recommendations. These actions include implementing identity and address verification 

on all IHP registrations, implementing controls to prevent duplicate IHP registrations using the same social security numbers, and implementing a system change 

73 

15GAO, Homeland Security: Better Management Practices Could Enhance DHS’s Ability to Allocate Investigative Resources, GAO–06–462T (Washington, D.C.: March 28, 2006). 

to prevent individuals from registering for assistance using a Post Office box. However, we have not determined if these actions adequately address all our recommendations, nor have we performed audit or investigative work to test new controls. In addition, in written comments on several of our reports, FEMA has expressed concern and disagreement with some of our findings and statistical projections of overall rates of potentially fraudulent and improper payments. Until FEMA 

recognizes the significant weaknesses in their individual assistance programs, they 

will continue to risk losing billions of taxpayer dollars to fraud, waste, and abuse. 

We are also planning to issue a follow up report to our December 6, 2006 testimony 

which includes additional recommendations to DHS and FEMA on necessary improvements to IHP and the purchase card program. 

Question 14.: Has DHS begun to address any of GAO’s seven recommendations for improving DHS’s oversight of cash advance funding for first responder grants and associated interest liabilities? If so, please explain how 

DHS is addressing these, including the recommendation that urges the Department to identify the significant issues that have resulted in delays in 

the drawdown and disbursement of DHS grant funds. 

Response: We were recently informed by DHS’s Office of the Chief Financial Officer that DHS’s Preparedness Directorate’s Office of Grants and Training, which 

has been responsible for implementing our recommendations, will be merged into 

FEMA and the recommendations will be addressed by appropriate parties under the 

new organizational structure. At this time, DHS plans to provide a response to our 

recommendations by the end of April 2007. 

Question 15.: As a result of the creation of Homeland Security in 2003, legacy 

INS and legacy Customs Special Agents were merged to create the U.S. Immigration and Customs Enforcement agency. Customs agents previously enforced over 400 

federal laws and immigration agents enforced laws pursuant to the Immigration 

and Nationality Act (Title 8). It appears that ICE agents are heavily focused on immigrations investigations such as worksite enforcement. What measures are 

being taken to insure a continuity of enforcement from both legacy missions? 

Response: When ICE was created, it retained responsibility for enforcing the customs and immigration laws that were the purview of its legacy agencies. These include criminal statutes addressing the illegal import and export of drugs, weapons, 

child pornography, stolen antiquities, and other contraband, as well as alien smuggling, human trafficking, and the international laundering and smuggling of criminal proceeds. In March 2006 we testified that ICE’s Office of Investigations (OI) organizational structure and investigative activities reflected those of both its principal legacy agencies—the U.S. Customs Service and Immigration and Naturalization Service. To ensure continuity of enforcement, OI established 3 major investigative divisions—National Security, Finance and Trade, and Smuggling and Public 

Safety—that incorporated the core missions and functions of legacy immigration and 

customs investigations. In June 2006 we reported ICE uses a combination of factors 

to allocate its investigative resources, including whether an investigation indicates 

a potential threat to national security, the execution of special programs run out of 

headquarters divisions and units like Operation Community Shield, which targets 

violent street gang members, and carry-over legacy activities, such as support for 

implementation of the national drug control strategy. Consequently, ICE performs 

a combination of immigration—and customs-related investigations. Though we have 

not assessed ICE’s allocation of investigative resources recently, we found that 

about half of ICE investigative resources were used for drug, financial, and general 

alien investigations in fiscal years 2004 and 2005. The resource use in the other 

case categories pertains to investigations of a variety of customs and immigration 

violations including commercial fraud, general smuggling, human smuggling and 

trafficking, identity fraud, document fraud, and worksite enforcement. None of the 

investigative categories that apply to these violations individually accounted for 

more than 8 percent of investigative resource use during the period under study. 

In most instances these other case categories accounted for 5 percent or less of resource use. In order to guide the allocation of its investigative resources, we recommended that DHS direct ICE to conduct a comprehensive risk assessment to 

identify those violations with the highest probability of occurrence and most significant consequences.15 DHS agreed with our recommendation. 

74 

Question 16.: What hurdles exist in getting the Transportation Sector 

Specific Plan that was due over two years ago finalized and published? 

Response: GAO did not assess whether any hurdles existed or the reasons for 

any delays in DHS’ issuance of the Transportation Sector Specific Plan. We have 

testified that it is important for DHS to finalize and issue the plan and supporting 

plans as soon as possible so that transportation stakeholders understand the federal 

government’s role with respect to security, as well as expectations for them. We also 

testified on the importance of the Transportation Sector Specific Plan and supporting plans being supported by relevant risk assessments conducted or overseen 

by department. 

Question 17.: In October of last year GAO sent a letter titled, Combating 

Nuclear Smuggling: DHS’s Cost-Benefit Analysis to Support the Purchase of 

New Radiation Detection Portal Monitors Was Not Based on Available Performance Data and Did Not Fully Evaluate All the Monitors’ Costs and Benefits to the chairman of both House and Senate appropriations committees. 

Has there been any activity in the Inspector General’s office to look at 

DNDO’s cost-benefit analysis and if so what are you finding? 

Response: We contacted the Director of Border and Transportation Security in 

the DHS Inspector General’s (IG) Office and were told the DHS IG has not examined the Domestic Nuclear Detection Office’s (DNDO) cost-benefit analysis, nor does 

the DHS IG have any plans to examine it. 

Question 18.: As the government agency charged with securing the nation’s critical cyber infrastructure, how is DHS supposed to provide adequate leadership to the nation’s critical infrastructure owners when the 

Department itself continues to receive failing grades on securing its own 

critical infrastructure? 

Response: DHS’s continued shortfalls in fully implementing effective information 

security over its computer systems could limit its credibility in providing leadership 

to the nation’s critical cyber infrastructure owners. DHS needs to lead by example 

and improve its information security. Also, in September 2006, DHS announced the 

appointment of an Assistant Secretary for Cyber Security and Telecommunications 

to better provide this leadership. While filling this leadership position is an important step to enhancing DHS’s visibility to organizations that own and operate our 

nation’s critical infrastructures, DHS needs to improve on its efforts to fulfill its key 

cybersecurity responsibilities. These responsibilities include developing and enhancing national cyber analysis and warning capabilities, providing and coordinating incident response and recovery planning efforts, and identifying and assessing cyber 

threats and vulnerabilities. 

Question 19.: What steps have the Department taken to resolve flaws in 

the way that FISMA evaluations are performed and what steps remain? 

Response: The Department has reportedly increased the percentage of systems 

for which controls had been tested and evaluated. In its Federal Information Security Management Act (FISMA) report for 2004, the department reported that 76 percent of its systems had been tested and evaluated. For 2006, it reported that 88 percent of systems had been evaluated, an increase of 12 percent. However, the department’s Office of Inspector General (OIG) reported in 2006 that only 64 percent of 

the department’s systems it reviewed had undergone such evaluations. In addition, 

the OIG reported weaknesses with the way the department documented control test 

results, residual risks, and contingency plan test results. Thus, DHS needs to take 

steps to test and evaluate the controls of all of its systems and adequately document 

the test results and residual risks. 

Question 20.: What is your office doing to ensure that the problems that 

existed with regard to improving laptop computer security, prior to Jay 

Cohen’s appointment as the Science and Technology Directorate UnderSecretary are addressed? Specifically, what is your office doing to oversee 

S&T’s efforts to develop a mature business model and prudent project management practices? 

Response: Although we have not been specifically requested to review this issue 

at DHS? Science and Technology Directorate, GAO has two on-going governmentwide audits that will address agency controls related to laptop computer security. 

We are assessing federal policies and procedures for protecting personal information 

on one audit and are evaluating the use of encryption technologies at federal agencies on another audit. Both of these audits will address elements of laptop computer 

security and include the Department of Homeland Security. 

75 

16GAO, Human Capital: Key Principles for Effective Strategic Workforce Planning, GAO–04– 

39 (Washington, D.C.: Dec. 11, 2003). 17GAO, Homeland Security: DHS Needs to Improve Ethics-Related Management Controls for 

the Science and Technology Directorate, GAO–06–206 (Washington, D.C.: Dec. 22, 2005). 

Question 21.: What is your office doing to ensure that Under Secretary 

Cohen develops a plan to strengthen workforce recruitment and retention; 

improve institutional knowledge base; and create a culture of responsibility within the Directorate? 

Response: GAO’s work on strategic workforce planning shows that it addresses 

two critical needs, (1) aligning an organization’s human capital program with its 

current and emerging mission and programmatic goals; and (2) developing long-term 

strategies for acquiring, developing and retaining staff to achieve programmatic 

goals.16 While we have not reviewed DHS’s Science and Technology’s Directorate’s 

strategic workforce planning or results-oriented culture, in December 2005, we evaluated the Directorate’s ethics-related management controls , particularly for its employees hired under the Intergovernmental Personnel Act (IPA), and concluded that 

these controls needed strengthening.17 Among other things, we recommended that 

the Undersecretary of the Science and Technology Directorate needed to finalize the 

Directorate’s research and development process and define and standardize the role 

of the IPA portfolio managers in this process, and establish a monitoring and oversight program of ethic-related management controls. Our ongoing work on several 

human capital issues at DHS will also provide information on the use of IPA appointments at the department. 

Question 22.: In GAO–05–139, the GAO recommended that the Department 

‘‘provide its Business Transformation Office (BTO) with the authority and 

responsibility to serve as a dedicated integration team and help develop 

and implement the strategy.’’ 

• Do you believe the Department has done this, and if not what needs 

to be done? 

• What form do you believe a successful BTO in the Department should 

take? 

• In as much specificity as possible, how would you define the mission 

and goals of an effective BTO? 

• We understand that the BTO is being shut down. Do you believe that 

the mission of the BTO can be performed effectively within other parts 

of the Department, or is the Department better served by having these 

functions centralized in one office? 

Response: As discussed in our response to question 10, to our knowledge, DHS 

does not currently have a dedicated integration team nor is the BTO in place to help 

guide its overall implementation and transformation. In addition, while DHS has 

issued guidance and plans to assist its integration efforts, on a function-by-function 

basis (information technology and human capital, for example), it does not have a 

comprehensive strategy, with overall goals and a time line, to guide the management integration departmentwide. 

GAO’s research shows that it is important to dedicate a strong and stable implementation team for the day-to-day management of a merger or organizational transformation. Such a dedicated team should be vested with necessary authority and resources to help set priorities, make timely decisions, and move quickly to implement 

decisions for a successful transformation. In addition, the team ensures that various 

change initiatives are sequenced and implemented in a coherent and integrated 

way. Furthermore, the team monitors and reports on the progress of the integration 

to top leaders and across the organization, enabling those leaders to make any necessary adjustments. Other networks, including a senior executive council, functional 

teams, or cross-cutting teams, can be used to help the implementation team manage 

and coordinate the day-to-day activities of the merger or transformation. The role 

of an integration team is to help monitor the transformation and look for interdependencies among the individual functional integration efforts. The dedicated 

team should report to the highest levels of the organization and have the requisite 

responsibility and authority to set priorities and make strategic decisions for the integration, as well as implement the integration strategy. 

DHS actions, such as management directives clarifying roles for the integration, 

can provide the Under Secretary for Management with additional support. However, 

in our 2005 report, we noted that it was still too early to tell whether the Under 

76 

18GAO–05–139. 19DHS GAO Management Directive #820, June 25, 2003. 

Secretary would have sufficient authority to direct, and make trade-off decisions for 

the integration, and institutionalize it departmentwide.18

In addition to our responses above, as part of our follow-up on recommendations 

made in our March 2005 report on DHS integration, DHS provided us with its Management Directorate Strategic Plan, and a draft plan on its high risk area of the 

implementation and transformation of the department, which contains some information relative to developing an agencywide management integration strategy, but 

there were no timelines and milestones that would allow the completion of this recommendation. To help ensure the completion of the transformation of the department, our research indicates that a dedicated team, such as the Business Transformation Office, can help ensure success. 

Question 23.: It is our understanding that GAO has encountered significant problems obtaining documentation from the Department of Homeland 

Security. During the hearing, it was made clear the DHS is not ‘‘denying’’ 

the delivery of documentation, rather they are ‘‘delaying’’ the delivery of 

documentation. It is unclear to us what is meant by ‘‘delayed.’’ Please provide detailed examples of what GAO considers ‘‘delayed,’’ including examples of documents requested, dates the documents were requested, and the 

dates the documents were received. 

Response: DHS’ process for handling documents and interviews requested by 

GAO has caused inordinate delays. At many federal agencies (and in some cases 

within DHS), we obtain what we need directly from the program officials, often on 

the spot or very quickly after making the request. The program staff keeps the 

agency liaisons informed of interviews and documents provided to us. In contrast, 

the process used in most of our interactions with DHS is overly layered and timeconsuming. We are required to submit requests for documents and interviews to the 

component liaison staff, rather than directly to program officials with whom we 

have met many times. The component liaison often brings in component counsel 

(and sometimes DHS counsel). The result is that on a broad range of our reviews 

our staff end up waiting for weeks or months for information that could be provided 

immediately or at least more quickly. In certain areas, specifically reviews related 

to work on the response to Hurricane Katrina and reviews involving FEMA and 

TSA, component counsel have reviewed virtually every document before it is provided to us. 

These procedures have caused delays which have impeded our ability to meet 

timeframes for reporting to our requesters. DHS often provides information very 

late in the process, when they realize that the absence of specific data in our draft 

report will reflect negatively on their programs. A related problem is that there has 

been a lack of communication. It can take months for DHS to tell us that a document doesn’t exist. All we are told is that the agency is going through its review 

process. 

We need a commitment from DHS that it will streamline its review processes to 

make them more efficient and that it will expedite our requests for documents and 

meetings. It is much more effective when we can deal directly with the program 

staff after we have held our entrance conference at DHS. With regard to component 

counsel review of documents, the original DHS management directive on GAO 19

was set up on the premise that counsel would not review all documents prior to disclosure. Component counsel was to review only a subset of documents to be provided 

to GAO, those identified by the component as potentially being sensitive (a checklist 

provided to the component liaisons identified the areas of sensitivity). To the extent 

that DHS finds it necessary to screen certain sensitive documents, it should do this 

on an exception basis. Other documents should be provided directly to GAO without 

prior review or approval by counsel. If DHS foresees problems providing a document 

(e.g., document doesn’t exist or it raises special sensitivities) it should advise GAO 

up front. 

In conjunction with GAO’s own efforts to obtain access to documents at DHS, congressional action has sometimes helped us to obtain information. These actions can 

include a hearing where questions are asked about the document delays, a letter 

signed from a Member to DHS, or a phone call from a congressional staff member. 

We have generally found that the Department is cooperative on reviews where the 

timing of the release of DHS appropriations is related to the issuance of a GAO review. 

There are numerous instances of DHS delays in responding to GAO document requests. The following are examples involving GAO work for which you are a reVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00080 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
77 

quester. First, in an audit of DHS detention standards for aliens in its custody, we 

have experienced delays with U.S. Immigration and Customs Enforcement (ICE) 

providing necessary information and documentation. There have been multiple incidents during the course of this engagement in which ICE provided only partial information after lengthy delays. Each document, we were told by DHS officials, had 

to go through the ICE legal vetting process. The document requests included the following: 

• On September 27, 2006, GAO requested copies of American Bar Association reviews of ICE detention facilities. The American Bar Association performed the reviews and then provided them to ICE. The ABA indicated to us that they had no 

problem with ICE providing the information to GAO. Despite our requests, ICE still 

has not provided copies of the reviews. 

• In October 2006, GAO requested copies of the latest ICE compliance review for 

the San Diego Correctional Facility; Elizabeth Contract Detention Facility; Denver 

Contract Detention Facility; and the Suffolk County House of Corrections. They 

have yet to be provided, despite our repeated requests for the documents. 

• On September 21, 2006, GAO requested a copy of the detention facility telephone contract. ICE delayed for a month until October 19, 2006, and then sent us 

a document that was almost entirely redacted. The first ten pages of the contract 

were not included and the rest of the contract had been significantly redacted by 

blacking out pertinent information. ICE told GAO the redacted information was 

‘‘privileged,’’ according to its lawyers. After repeated calls and explanations of GAO’s 

authority to access the information, ICE provided the unredacted document. 

• We requested a set of additional documents related to the detention phone contract on November 5, 2006. ICE did not respond to this request for several months. 

Finally, ICE said they had the documents ready for a January 17, 2007, meeting 

with GAO auditors. ICE officials had the documents physically present at the meeting, but would not let GAO have the documents or look at the documents because 

they said they had not yet been vetted through their lawyers (even though more 

than 2 months had passed since the original request). GAO auditors made multiple 

follow-up calls, but ICE delayed another two and a half weeks before providing the 

documents. 

• During a meeting in October 2006, we requested information from the Department of Health and Human Services (HHS) regarding medical treatment of detainees. HHS forwarded their response to DHS who refused to give it to GAO until it 

had gone through the ICE attorneys’ ‘‘approval process.’’ GAO did not get the information until February 9, 2007 (over 3 months later). 

In another review that you joined as a requester, involving terrorist watch lists, 

we experienced numerous delays in receiving requested information from DHS, 

ranging from weeks to months. In one case, we requested the status of DHS implementation of provisions of Homeland Security Presidential Directives 6 and 11 that 

were directed to DHS, including copies of applicable reports that were to be provided to the President. We made this request in May 2006. In August 2006, after 

several follow-up requests, our DHS audit liaison apologized for the difficulty in 

finding someone at DHS to respond to our request. In October 2006, the liaison referred us to the Director of the DHS Screening Coordination Office, who told us the 

required reports had been developed and that she would obtain copies for us. In 

February 2007, DHS finally provided a document that it said was compiled based 

on the reports that it had submitted, excluding information related to other departments and agencies. 

The following questions were asked during the hearing, the Committee 

requests that responses be provided in writing. 

Question 24.: GAO has identified significant fraud, waste and abuse in the control weaknesses in FEMA’s individual and household programs and in the DHS’s 

purchase card account. What action has FEMA taken on the recommendations 

to address these weaknesses? 

Response: As noted in the response to question number 13, DHS stated that they 

had amended their purchase card manual in order to incorporate suggested changes 

from our recommendations. They have also taken other actions, to include implementing identity and address verification on all IHP registrations, implementing 

controls to prevent duplicate IHP registrations using the same social security numbers, and implementing a system change to prevent individuals from registering for 

assistance using a Post Office box. However, we have not determined if these actions adequately address all our recommendations, nor have we performed audit or 

investigative work to test new controls. 

78 

Question 25.: What DHS components had financial management problems 

before they were merged into the Department and what components have 

them now? 

Response: When DHS was created in March 2003 by merging 22 diverse agencies, there were many known financial management weaknesses and vulnerabilities 

in the inherited agencies. For 5 of the agencies that transferred to DHS—Customs 

Service (Customs), Transportation Security Administration (TSA), Immigration and 

Naturalization Service (INS), Federal Emergency Management Agency (FEMA), and 

the Federal Law Enforcement Training Center (FLETC)—auditors had reported 30 

reportable conditions, 18 of which were considered material internal control weaknesses. Further, of the four component agencies—Customs, TSA, INS, and FEMA— 

that had previously been subject to stand-alone audits, all four agencies—systems 

were found not to be in substantial compliance with the requirements of the Federal 

Financial Management Improvement Act of 1996 (FFMIA). 

Some of these components continue to have financial management weaknesses 

today. For example, the Office of Financial Management (OFM), U.S. Coast Guard 

(USCG), TSA, FEMA, Immigration and Customs Enforcement (ICE), and the Management Directorate were unable to provide sufficient evidence to support account 

balances presented in the financial statements and collectively contributed to the 

auditors’ inability to render an opinion. Further, DHS management and three of its 

major components (USCG, TSA, and ICE) were unable to represent that the financial statements were presented in conformity with U.S. generally accepted accounting principles. USCG was previously part of the Department of Transportation and 

its financial statements had never been audited on a stand-alone basis. Those components that attributed to material weaknesses in internal control for the area of 

financial management and oversight in fiscal year 2006 were USCG and OFM. 

Question 26.: We understand that FEMA’s slow payment process for victims during Katrina was the result of poor internal controls and information sharing. What 

steps has the Department taken to resolve those problems and what steps 

remain? 

Response: As noted in the response to question 13 above, FEMA has initiated 

changes that include identity and address verification on all IHP registrations, implementing controls to prevent duplicate IHP registrations using the same social security numbers, and implementing a system change to prevent individuals from registering for assistance using a Post Office box. If implemented and tested prior to 

a disaster, effective internal controls over IHP registrations should not delay providing assistance to individuals quickly. For example, many address and identity 

validation processes can be accomplished almost instantaneously and thus would 

not delay FEMA’s response. 

Question 27.: What are you currently showing as DHS’s applications backlog? Please separately provide the backlog for applications that are pending for security background clearance checks. 

Response: As of January 2007, DHS’ U.S. Citizenship and Immigration Services 

(USCIS) had about 3.4 million applications pending adjudication. However, as defined by USCIS, its backlog of applications constitutes only a portion of the inventory of all pending applications. The Immigration Services and Infrastructure Improvements Act defines backlog as the number of applications that have been pending more than 6 months. However, USCIS’ data systems cannot track the number 

of applications that have been pending for more than 6 months. As a proxy, USCIS 

generally defines backlog as the number of pending applications minus the number 

of applications received during the last 6 months. USCIS also eliminates from its 

backlog estimate applications for which an immigration benefit cannot be granted 

for reasons outside of its control. For example, USCIS does not count applications 

in which the State Department cannot grant a visa because a visa allotment is not 

available and where USCIS is waiting for the results of FBI name checks or additional information from the applicant. In addition, USCIS does not include certain 

asylum applications in its backlog count. Using USCIS’ method for calculating its 

backlog as described above, DHS reported that as of September 2006 its backlog had 

been eliminated. However, USCIS did acknowledge that there were some applications that have been pending more than 6 months. While we do not have any current information on the status of applications awaiting security background clearance checks, as of September 2006, USCIS reported about 157,000 applications were 

awaiting the results of FBI name checks. 

Question 28.: Are efforts being made to determine whether FEMA’s revamped systems will work in an actual disaster? For example, have there 

been dry runs or other simulations? 

79 

Response: FEMA has conducted regional tabletop exercises for the 2006 hurricane season designed to improve understanding of federal, state, and private-sector 

capabilities and expectations, including those for evacuation and mass care. FEMA 

also plans to conduct regional hurricane preparedness exercises prior to 2007 hurricane season. The 2006 exercises did not test the actual deployment and use of new 

communications equipment, surveillance teams, and other changes that FEMA has 

developed since Katrina. 

FEMA has tested some of its newly developed capabilities in some recent, smaller 

disasters, such as Hurricane Ernesto in 2006 and the storms that recently wreaked 

destruction in the Southeast. However, to our knowledge, FEMA has not conducted 

any exercises that have realistically tested its newly developed capabilities in a realistically simulated major disaster. 

Under the Post-Katrina Reform Act, enacted in October 2006, FEMA is to carry 

out a national training program to implement, and a national exercise program to 

test and evaluate the National Preparedness Goal, National Incident Management 

System, and the National Response Plan and other related plans and strategies. 

Such training and exercises could provide FEMA an opportunity to realistic test and 

evaluate the improvements it is working to implement. 

Question 29.: Does DHS have sufficient resources to deal with the immigration applications if we were to have a temporary guest worker program? 

Response: In all likelihood, DHS would need additional resources to implement 

a temporary guest worker program. According to one study, of the estimated 11 million undocumented aliens in the United States in 2005, about 7 million were working. Assuming all or most of the 7 million apply for a temporary worker program, 

this number of applicants would be more than the 6.7 million applications for all 

immigration benefits USCIS completed in fiscal year 2006—in effect doubling 

USCIS’s workload. As it has done in the past, USCIS could hire temporary adjudicators to deal with the expected surge in applications. Under the law, immigration 

benefit application fees are to be set to recover the full cost of providing immigration 

benefits. 

Question 30.: We understand that FEMA’s slow payment process for victims during Katrina was the result of poor internal controls and information sharing. What 

steps has the Department taken to resolve those problems and what steps 

remain? 

Response: As noted in the response to question 13 above, FEMA has initiated 

changes that include identity and address verification on all IHP registrations, implementing controls to prevent duplicate IHP registrations using the same social security numbers, and implementing a system change to prevent individuals from registering for assistance using a Post Office box. If implemented and tested prior to 

a disaster, effective internal controls over IHP registrations should not delay providing assistance to individuals quickly. For example, many address and identity 

validation processes can be accomplished almost instantaneously and thus would 

not delay FEMA’s response. 

QUESTIONS FROM THE HONORABLE PETER T. KING, RANKING MINORITY MEMBER

Question 31.: Mr. Walker, you have said that the Department of Homeland Security and the Department of Defense each should establish a new Deputy Secretary 

position specifically to focus on management and transformation. You also advocated that this position should be filled by longer-term executives to provide for 

greater continuity within the departments. 

A. What is your rationale for creating a new Deputy Secretary position? 

B. Why not simply augment the authorities of the existing Under Secretary for Management within DHS? 

C. Wouldn’t a new Deputy Secretary be another layer of bureaucracy 

which would overlap the role of the existing Deputy Secretary at DHS 

and create confusion within the organization? 

D. Wouldn’t a longer-term executive serving in this new position create 

inherent conflict with changes in leadership of the Department? 

Response: A. DHS faces enormous management and organizational transformation challenges as it continues to simultaneously establish itself, integrate numerous entities and systems, and protect the nation from terrorism. Success would 

not simply result in a collection of components in a new department, but the transformation of the various programs and missions into a high-performing, focused orVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00083 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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20GAO, Highlights of a GAO Forum on High-Performing Organizations: Metrics, Means, and 

Mechanisms for Achieving High Performance in the 21st Century Public Management Environment, GAO–04–343SP (Washington, D.C.: Feb. 13, 2004). 21GAO, Highlights of a GAO Roundtable: The Chief Operating Officer Concept: A Potential 

Strategy to Address Federal Governance Challenges, GAO–03–192SP (Washington, D.C.: Oct. 4, 

2002). 22For example, see GAO–05–139, GAO–04–876R, and GAO–03–102. 23GAO, Chief Operating Officer Concept at DHS, GAO–04–876R (Washington, D.C.: June 28, 

2004). 24GAO, Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned for a Department of Homeland Security and Other Federal Agencies, GAO–03–293SP (Washington, D.C.: 

Nov. 14, 2002). 25GAO–05–139. 26GAO–05–139. 

ganization.20 However, the size, complexity, and importance of DHS’s mission make 

the challenges involved especially daunting. As DHS and other agencies across the 

federal government embark on large-scale organizational change initiatives in order 

to address 21st century challenges, there is a compelling need for a single organizational focus on key management functions, such as human capital, financial management, information technology, and acquisition management, as well as for selected transformation initiatives within the department or agency. A Chief Operating Officer (COO)/Chief Management Officer (CMO) or similar position may effectively provide the continuing, focused attention essential to successfully completing 

these multiyear transformations.21

Establishing a COO/CMO position at DHS—with, importantly, the appropriate 

level of responsibility and authority—could enable the department to address the 

following. 

• Elevate attention on management issues and transformational change. Top 

leadership attention is essential to overcome organizations’ natural resistance 

to change, marshal the resources needed to implement change, and build and 

maintain the organizationwide commitment to new ways of doing business. We 

have previously reported that building an effective DHS will require consistent 

and sustained leadership from top management to ensure the needed transformation of disparate agencies, programs, and missions into an integrated organization.22

• Integrate various key management and transformation efforts. The federal 

government often places management responsibilities, such as information technology, human capital, or financial management, into ‘‘stovepipes’’ and fails to 

design and implement organizational transformation efforts in a comprehensive, 

ongoing, and integrated manner. There needs to be a single point within agencies with the perspective and responsibility—as well as authority—to ensure the 

successful implementation of functional management and, if appropriate, transformation efforts.23

• Institutionalize accountability for addressing management issues and leading 

transformational change. Management weaknesses in some agencies are deeply 

entrenched and longstanding and will take years of sustained attention and 

continuity to resolve. In our previous work, we have noted that the experiences 

of successful transformation initiatives in large private and public sector organizations suggest that it can often take at least 5 to 7 years until such initiatives 

are fully implemented and the related cultures are transformed in a sustainable 

manner.24 In the federal government, the frequent turnover of the political leadership has often made it extremely difficult to obtain the sustained attention 

required to make needed changes. 

B. As currently structured, the roles and responsibilities of the Under Secretary 

for Management at DHS contain some of the characteristics of a COO/CMO position, 

such as elevating, integrating, and institutionalizing responsibility for key functional management initiatives. However, we have previously raised the issue of 

whether or not the Under Secretary has sufficient authority to direct, and make 

trade-off decisions for the management integration initiatives and the institutionalization of them across the department.25 We have also suggested that the Congress 

continue to closely monitor whether additional leadership authorities are needed for 

the Under Secretary, or whether a revised organizational arrangement is needed to 

fully capture the roles and responsibilities of a COO/CMO position, including a performance agreement and term limit.26

C.T1 As we have previously reported, the establishment of a COO/CMO 

position needs to be considered carefully with regard to existing positions 

and responsibilities so that it does not result in unnecessary ‘‘layering’’ in 

81 

27GAO–04–876R. 28GAO–04–343SP. 29GAO, Results Oriented Cultures: Creating a Clear Linkage Between Individual Performance 

and Organizational Success, GAO–03–488 (Washington, D.C.: Mar. 14, 2003). 

a department or agency.27 Under this concept, the COO/CMO provides a 

single organizational focus for key management functions and change efforts. If the current Under Secretary for Management position at DHS were 

elevated to a Deputy Secretary for Management position, the incumbent 

would continue to be responsible for coordinating and integrating key 

management functions, such as human capital, financial management, information, technology, and acquisition management, as well as selected 

transformation initiatives within the department. The existing DHS Deputy 

Secretary position would then have responsibility and authority for all 

mission-related components of the department and the programmatic policies and operations of those components. 

Given the competing demands on deputy secretaries in executive branch departments across the government to help execute the President’s policy and program 

agendas, it is not practical to expect that they will be able to consistently undertake 

this vital integrating responsibility. Moreover, while many deputy secretaries may 

be nominated based in part on their managerial experience, it has not always been 

the case, and not surprisingly, the management skills, expertise, and interests of 

the deputy secretaries have always varied and will continue to vary. As a result of 

short-term priorities and other demands on the time of agency heads and their deputies, they generally do not have the ability to focus enough dedicated attention to 

management issues. Furthermore, top officials in the public sector are typically political appointees who do not stay in their positions long enough to effectively address key transformation initiatives. 

D. In our prior work, we have concluded that sustained leadership drives highperforming organizations to achieve results.28 A long-term executive, such as a 

COO/CMO, could provide the continued focused attention essential to completing organizational transformation regardless of continual changes of the leadership in federal agencies. High turnover among politically appointed leaders can make it difficult to follow through with organizational transformation because the 5 to 7 years 

often needed to complete a transformation can easily outlast the tenures of top political appointees.29 Given the continual turnover in the leadership of federal agencies, 

it is particularly important for appointees and senior career civil servants to develop 

good working relationships from the beginning. People are the primary resource of 

high-performing organizations and they need to be fully engaged for the organization to achieve its mission and strategic goals and to transform successfully. 

QUESTIONS FOR THE RECORD FROM THE HONORABLE MARSHA BLACKBURN

Question 32.: What is CIS’s current backlog? 

• Does CIS count as a part of their backlog any applications pending 

for security background checks or any that are waiting for action from 

another agency? 

• If these were counted, what would be your estimate of CIS’s backlog? 

• In your opinion, does CIS have sufficient resources to process more 

immigration applications if a temporary guest worker program was implemented? 

• What types of risks would this type of program generate? 

Response: As we noted in our response to question 27, as of January 2007, 

USCIS had about 3.4 million applications pending adjudication. However, USCIS 

considers only a portion of its pending applications when computing its backlog and 

does exclude applications for which an immigration benefit cannot be granted for 

reasons outside of its control, such as applications where a visa is not yet available 

or where USCIS is waiting for results of FBI name checks or additional information 

from the applicant. Using USCIS’ method for calculating its backlog, DHS reported 

that as of September 2006 USCIS’ backlog had been eliminated. As we noted in our 

response to question 29, in all likelihood, DHS would need additional resources to 

implement a temporary guest worker program. 

While it is difficult to predict what types of risks this type of program could generate, results from some of our recent work may shed some light on potential risks 

and challenges. In September 2006 we reported on selected other countries’ experience with foreign workers. Experts and government officials noted that it was difficult to successfully ensure foreign workers’ on temporary work permits return to 

their home countries, and as a result, countries we studied estimated that a signifiVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00085 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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30GAO, Results Oriented Government: Improvements to DHS’s Planning Process Would Enhance Usefulness and Accountability, GAO–05–300 (Washington, D.C.: Mar. 31, 2005). 

cant number of immigrants overstayed their work permits, thus lapsing into illegal 

status. In addition, experts suggested that temporary foreign worker programs or 

other initiatives that increase the number of foreign workers legally admitted do not 

help reduce illegal immigration flows but rather help increase immigrant populations in receiving countries, which may encourage further legal and illegal immigration flows. There is a risk that individuals may fraudulently obtain a benefit 

under a temporary worker program. In March 2006, we reported that immigration 

benefit fraud was an ongoing and serious problem, accomplished by applicants submitting fraudulent documents and sometimes facilitated by white collar and other 

criminals. USCIS has not yet implemented some aspects of internal control standards that could further enhance its ability to detect fraud, such as providing adjudicators with the tools needed to better detect fraud and performance goals to measure its benefit fraud activities. In addition, although best practices advise that a 

credible sanctions program is an integral part of fraud control, DHS did not have 

a strategy for sanctioning those that commit fraud, limiting its ability to project a 

convincing message that those who commit fraud face a credible threat of punishment. Lastly, as was the case in 1986 when application processing resources were 

diverted to implement the Immigration Reform and Control Act’s legalization program, there is a risk that application backlogs for other immigration benefits could 

build because USCIS may have to divert resources to implement any new temporary 

worker program. 

Question 33.: Mr. Walker, DHS has implemented many requirements of 

GPRA. What other requirements do they still need to meet? 

Response: The Government Performance and Results Act (GPRA) requires that 

agency strategic plans be updated at least every 3 years. DHS has not yet updated 

its first strategic plan, which was released in February 2004. In 2005, we reported 

that DHS’s strategic plan does not meet the GPRA-required element to describe the 

relationship between annual and long-term goals, but does address the other five 

GPRA-required elements—a mission statement, long-term goals, strategies to 

achieve the goals, external key factors, and program evaluations.30 The linkage between annual and long-term goals is crucial for determining whether an agency has 

a clear sense of how it will assess progress toward achieving the intended results 

of its long-term goals. DHS officials said that because of the limited time available 

to create the strategic plan, they decided not to include a discussion of annual performance goals in order to achieve broad consensus among agency components on 

DHS’s mission and long-term strategic goals and objectives. We recommended that 

DHS’s next strategic plan include such a description. In addition, we recommended 

that DHS’s next strategic plan further develop the GPRA-required elements addressed in its first strategic plan by adopting additional good strategic planning 

practices, including a timeline for achieving long-term goals; a description of the 

specific budgetary, human capital, and other resources need to achieve those goals; 

a schedule of program evaluations planned; and a discussion of strategies to ameliorate the effect of any key external factors. DHS agreed with these recommendations. 

DHS has also developed annual performance plans and performance reports as required by GPRA, but we have not evaluated whether these documents meet GPRA 

requirements. 

Question 34.: What does DHS need to do to be in full compliance with 

FFMIA? 

Response: DHS needs to address its material weaknesses in internal control and 

other reportable conditions reported by its independent auditor that contributed to 

the department’s non-compliance with the Federal Financial Management Improvement Act of 1996 (FFMIA). For example, DHS should conduct an assessment of its 

current financial reporting process, with the goal of reducing complexity, implementing appropriate internal controls, improving financial systems integration and 

automating manual processes. FFMIA requires that agencies covered by the Chief 

Financial Officers Act of 1990 implement and maintain financial management systems that comply substantially with (1) federal financial management system requirements, (2) applicable federal accounting standards, and (3) the U.S. Government Standard General Ledger at the transaction level. FFMIA emphasizes the 

need for agencies to have systems that can generate timely, reliable, and useful information with which to make informed decisions to ensure ongoing accountability. 

According to its independent auditor, DHS and each significant component of the 

department did not fully comply with at least one of the requirements of FFMIA 

in fiscal year 2006. Until DHS addresses the related material weaknesses in interVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00086 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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31 Joint IPTs are ICGS-led with the exception of the Program Management Team, which is 

co-chaired, and the Test and Evaluation IPT which is Coast Guard led. 

nal control and other reportable conditions, the department will not be compliant 

with FFMIA. 

Question 35.: Does DHS have an adequate plan that streamlines coordination between FEMA and state and local governments? 

Response: While the National Response Plan discusses the roles and responsibilities of Federal, state, and local organizations in support of domestic incident management, we have not evaluated the extent to which the National Response Plan 

or other plans streamline coordination between FEMA and state and local governments. We are currently conducting a review of how states collaborate with each 

other—as well as with key federal players such as FEMA—to efficiently deploy 

state, local, and other resources across state lines in response to disasters through 

the Emergency Management Assistance Compact. This work is being conducted at 

the request of the Senate Committee on Homeland Security and Governmental Affairs and we expect to issue our report later this year, at which time we would be 

happy to share our findings with this Committee. 

Question 36.: How many procurement staff are needed to oversee major 

acquisition projects? 

Response: The number of procurement staff needed to oversee major acquisition 

projects generally varies based on the complexity and size for individual projects. 

Procurement and program management staff are involved in oversight activities. 

DHS’ workforce plan for fiscal years 2005—2008 includes a description of initiatives 

to certify and train acquisition workforce professionals including contracting officers, 

contracting officers’ technical representatives, and program managers. In September 

2006, DHS reported on plans for increased staffing of the eight component contracting offices and plans to initiate a program manager needs assessment in the 

near future. 

Question 37.: Who is the primary overseer of Coast Guard acquisitions 

and Deepwater vessel designs? 

Response: The Coast Guard is responsible for establishing, updating and managing system operational requirements; responding to mission demand and environment changes; and operating the system for the Deepwater program. As the systems 

integrator, Integrated Coast Guard Systems (ICGS) is responsible for designing and 

constructing the system, developing associated concepts of operations and logistics 

support plans, and delivering an Integrated Deepwater System that meets system 

performance requirements. The Coast Guard and ICGS both have responsibilities in 

managing the Deepwater acquisition. Central to the management structure of the 

Deepwater program are Integrated Product Teams (IPTs). IPTs are comprised of 

Coast Guard and ICGS members, including subcontractors, who work collaboratively to accomplish a specific objective within the acquisition program. The IPTs 

are ICGS-led.31 IPTs serve as the Coast Guard’s primary tool for managing the program and overseeing the system integrator. We have reported that IPTs have struggled to accomplish their mission. 

More broadly, the proper role of contractors in providing services to the government is currently the topic of some debate. I believe there is a need to focus greater 

attention on what type of functions and activities should be contracted out and 

which ones should not. There is also a need to review the current independence and 

conflict of interest rules relating to contractors. Finally, there is a need to identify 

the factors that prompt the government to use contractors in circumstances where 

the proper choice might be the use of civil servants or military personnel. Possible 

factors could include inadequate force structure, outdated or inadequate hiring policies, classification and compensation approaches, and inadequate numbers of fulltime equivalent slots. 

Question 38.: Besides the lack of procurement staff to conduct oversight, 

what other factors have caused problems in these areas? 

Response: Since it was established in March 2003, DHS has been faced with assembling 22 separate federal agencies and organizations with multiple missions, 

values, and cultures into one cabinet-level department. This mammoth task—one of 

the biggest mergers ever to take place within the federal government—involves a 

variety of transformational efforts, one of which is to design and implement the necessary management structure and processes for acquiring goods and services. To a 

great extent, the various acquisition organizations within the department are still 

operating in a disparate manner, with oversight of acquisition activities left primarily up to each individual organization. DHS’ progress in creating a unified acquiVerDate Nov 24 2008 10:53 May 20, 2009 Jkt 000000 PO 00000 Frm 00087 Fmt 6601 Sfmt 6621 H:\DOCS\110-HRGS\110-2\35261.TXT HSEC PsN: DIANE
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sition organization has been slowed by policy decisions that create ambiguity. An 

October 2004 management directive emphasizes the need for a unified, integrated 

acquisition organization but relies on a system of dual accountability between the 

Chief Procurement Officer and the heads of the department’s organizations to make 

this happen. The Chief Procurement Officer has been delegated the responsibility 

to manage, administer, and oversee all acquisition activity across DHS, but in practice enforcement of these activities is spread throughout the department with unclear accountability. Further, the directive states that the U.S. Coast Guard and 

U.S. Secret Service are statutorily exempt from its application. Although the Homeland Security Act provides that both the Coast Guard and the Secret Service shall 

be maintained as distinct entities within the department, we found no reasonable 

basis to conclude that the directive could not be made applicable to them. Rather, 

it appears to be a policy decision that is likely to hamper efforts to effectively integrate the acquisition function in DHS. 

Question 39.: What would be your recommendations on systems that DHS 

should implement to prevent waste, fraud, and abuse? 

Response: GAO has made numerous specific recommendations to FEMA and 

DHS aimed at improving systems, processes, and internal controls over the IHP and 

purchase card programs. In addition, GAO testified on July 12, 2006 on the elements of a basic framework for fraud prevention, detection, and prosecution related 

to individual disaster assistance programs, and testified again on January 29, 2007 

on fraud prevention as part of the hurricane recovery effort. If DHS and FEMA were 

to implement our specific recommendations and develop a comprehensive fraud prevention framework as outlined in our testimonies, DHS and FEMA should be in a 

position to effectively minimize the risk for fraud, waste, and abuse within the purchase card and individual assistance programs. 

85 

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