H. R. 4259

One Hundred Eighth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Tuesday,

the twentieth day of January, two thousand and four

An Act

To amend title 31, United States Code, to improve the financial accountability

requirements applicable to the Department of Homeland Security, to establish

requirements for the Future Years Homeland Security Program of the Department,

and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as ‘‘Department of Homeland Security

Financial Accountability Act’’.

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Influential financial management leadership is of vital

importance to the mission success of the Department of Homeland Security. For this reason, the Chief Financial Officer of

the Department must be a key figure in the Department’s

management.

(2) To provide a sound financial leadership structure, the

provisions of law enacted by the Chief Financial Officers Act

of 1990 (Public Law 101–576) provide that the Chief Financial

Officer of each of the Federal executive departments is to

be a Presidential appointee who reports directly to the Secretary

of that department on financial management matters. Because

the Department of Homeland Security was only recently created, the provisions enacted by that Act must be amended

to include the Department within these provisions.

(3) The Department of Homeland Security was created

by consolidation of 22 separate Federal agencies, each with

its own accounting and financial management system. None

of these systems was developed with a view to executing the

mission of the Department of Homeland Security to prevent

terrorist attacks within the United States, reduce the Nation’s

vulnerability to terrorism, and minimize the damage and assist

in the recovery from terrorist attacks. For these reasons, a

strong Chief Financial Officer is needed within the Department

both to consolidate financial management operations, and to

insure that management control systems are comprehensively

designed to achieve the mission and execute the strategy of

the Department.

(4) The provisions of law enacted by the Chief Financial

Officers Act of 1990 require agency Chief Financial Officers

to improve the financial information available to agency managers and the Congress. Those provisions also specify that
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agency financial management systems must provide for the

systematic measurement of performance. In the case of the

Department of Homeland Security, therefore, it is vitally important that management control systems be designed with a

clear view of a homeland security strategy, including the priorities of the Department in addressing those risks of terrorism

deemed most significant based upon a comprehensive assessment of potential threats, vulnerabilities, criticality, and consequences. For this reason, Federal law should be amended

to clearly state the responsibilities of the Chief Financial Officer

of the Department of Homeland Security to provide management control information, for the benefit of managers within

the Department and to help inform the Congress, that permits

an assessment of the Department’s performance in executing

a homeland security strategy.

SEC. 3. CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF HOMELAND SECURITY.

(a) IN GENERAL.—Section 901(b)(1) of title 31, United States

Code, is amended—

(1) by redesignating subparagraphs (G) through (P) as subparagraphs (H) through (Q), respectively; and

(2) by inserting after subparagraph (F) the following:

‘‘(G) The Department of Homeland Security.’’.

(b) APPOINTMENT OR DESIGNATION OF CFO.—The President

shall appoint or designate a Chief Financial Officer of the Department of Homeland Security under the amendment made by subsection (a) by not later than 180 days after the date of the enactment

of this Act.

(c) CONTINUED SERVICE OF CURRENT OFFICIAL.—An individual

serving as Chief Financial Officer of the Department of Homeland

Security immediately before the enactment of this Act, or another

person who is appointed to replace such an individual in an acting

capacity after the enactment of this Act, may continue to serve

in that position until the date of the confirmation or designation,

as applicable (under section 901(a)(1)(B) of title 31, United States

Code), of a successor under the amendment made by subsection

(a).

(d) CONFORMING AMENDMENTS.—

(1) HOMELAND SECURITY ACT OF 2002.—The Homeland Security Act of 2002 (Public Law 107–296) is amended—

(A) in section 103 (6 U.S.C. 113)—

(i) in subsection (d) by striking paragraph (4), and

redesignating paragraph (5) as paragraph (4);

(ii) by redesignating subsection (e) as subsection

(f); and

(iii) by inserting after subsection (d) the following:

‘‘(e) CHIEF FINANCIAL OFFICER.—There shall be in the Department a Chief Financial Officer, as provided in chapter 9 of title

31, United States Code.’’; and

(B) in section 702 (6 U.S.C. 342) by striking ‘‘shall

report’’ and all that follows through the period and

inserting ‘‘shall perform functions as specified in chapter

9 of title 31, United States Code, and, with respect to

all such functions and other responsibilities that may be

assigned to the Chief Financial Officer from time to time,

shall also report to the Under Secretary for Management.’’.
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(2) FEMA.—Section 901(b)(2) of title 31, United States

Code, is amended by striking subparagraph (B), and by redesignating subparagraphs (C) through (H) in order as subparagraphs (B) through (G).

SEC. 4. FUNCTIONS OF CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF HOMELAND SECURITY.

(a) PERFORMANCE AND ACCOUNTABILITY REPORTS.—Section

3516 of title 31, United States Code, is amended by adding at

the end the following:

‘‘(f) The Secretary of Homeland Security—

‘‘(1) shall for each fiscal year submit a performance and

accountability report under subsection (a) that incorporates

the program performance report under section 1116 of this

title for the Department of Homeland Security;

‘‘(2) shall include in each performance and accountability

report an audit opinion of the Department’s internal controls

over its financial reporting; and

‘‘(3) shall design and implement Department-wide management controls that—

‘‘(A) reflect the most recent homeland security strategy

developed pursuant to section 874(b)(2) of the Homeland

Security Act of 2002; and

‘‘(B) permit assessment, by the Congress and by managers within the Department, of the Department’s performance in executing such strategy.’’.

(b) IMPLEMENTATION OF AUDIT OPINION REQUIREMENT.—The

Secretary of Homeland Security shall include audit opinions in

performance and accountability reports under section 3516(f) of

title 31, United States Code, as amended by subsection (a), only

for fiscal years after fiscal year 2005.

(c) ASSERTION OF INTERNAL CONTROLS.—The Secretary of

Homeland Security shall include in the performance and accountability report for fiscal year 2005 submitted by the Secretary under

section 3516(f) of title 31, United States Code, an assertion of

the internal controls that apply to financial reporting by the Department of Homeland Security.

(d) AUDIT OPINIONS OF INTERNAL CONTROLS OVER FINANCIAL

REPORTING BY CHIEF FINANCIAL OFFICER AGENCIES.—

(1) IN GENERAL.—Not later than 180 days after the date

of the enactment of this Act, the Chief Financial Officers

Council and the President’s Council on Integrity and Efficiency

established by Executive Order 12805 of May 11, 1992, shall

jointly conduct a study of the potential costs and benefits of

requiring the agencies listed in section 901(b) of title 31, United

States Code, to obtain audit opinions of their internal controls

over their financial reporting.

(2) REPORT.—Upon completion of the study under paragraph (1), the Chief Financial Officers Council and the President’s Council on Integrity and Efficiency shall promptly submit

a report on the results of the study to the Committee on

Government Reform of the House of Representatives, the Committee on Governmental Affairs of the Senate, and the Comptroller General of the United States.

(3) GENERAL ACCOUNTING OFFICE ANALYSIS.—Not later than

90 days after receiving the report under paragraph (2), the
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Comptroller General shall perform an analysis of the information provided in the report and report the findings of the

analysis to the committees referred to in paragraph (2).

SEC. 5. FUTURE YEARS HOMELAND SECURITY PROGRAM AND HOMELAND SECURITY STRATEGY.

Section 874 of the Homeland Security Act of 2002 (6 U.S.C.

112) is amended by striking subsection (b) and inserting the following:

‘‘(b) CONTENTS.—The Future Years Homeland Security Program

under subsection (a) shall—

‘‘(1) include the same type of information, organizational

structure, and level of detail as the future years defense program submitted to Congress by the Secretary of Defense under

section 221 of title 10, United States Code;

‘‘(2) set forth the homeland security strategy of the Department, which shall be developed and updated as appropriate

annually by the Secretary, that was used to develop program

planning guidance for the Future Years Homeland Security

Program; and

‘‘(3) include an explanation of how the resource allocations

included in the Future Years Homeland Security Program correlate to the homeland security strategy set forth under paragraph (2).’’.

SEC. 6. ESTABLISHMENT OF OFFICE OF PROGRAM ANALYSIS AND

EVALUATION.

Section 702 of the Homeland Security Act of 2002 (6 U.S.C.

342) is amended by—

(1) inserting ‘‘(a) In General.—’’ before the first sentence;

and

(2) adding at the end the following:

‘‘(b) PROGRAM ANALYSIS AND EVALUATION FUNCTION.—

‘‘(1) ESTABLISHMENT OF OFFICE OF PROGRAM ANALYSIS AND

EVALUATION.—Not later than 90 days after the date of enactment of this subsection, the Secretary shall establish an Office

of Program Analysis and Evaluation within the Department

(in this section referred to as the ‘Office’).

‘‘(2) RESPONSIBILITIES.—The Office shall perform the following functions:

‘‘(A) Analyze and evaluate plans, programs, and

budgets of the Department in relation to United States

homeland security objectives, projected threats, vulnerability assessments, estimated costs, resource constraints,

and the most recent homeland security strategy developed

pursuant to section 874(b)(2).

‘‘(B) Develop and perform analyses and evaluations

of alternative plans, programs, personnel levels, and budget

submissions for the Department in relation to United

States homeland security objectives, projected threats,

vulnerability assessments, estimated costs, resource constraints, and the most recent homeland security strategy

developed pursuant to section 874(b)(2).

‘‘(C) Establish policies for, and oversee the integration

of, the planning, programming, and budgeting system of

the Department.
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‘‘(D) Review and ensure that the Department meets

performance-based budget requirements established by the

Office of Management and Budget.

‘‘(E) Provide guidance for, and oversee the development

of, the Future Years Homeland Security Program of the

Department, as specified under section 874.

‘‘(F) Ensure that the costs of Department programs,

including classified programs, are presented accurately and

completely.

‘‘(G) Oversee the preparation of the annual performance plan for the Department and the program and

performance section of the annual report on program

performance for the Department, consistent with sections

1115 and 1116, respectively, of title 31, United States

Code.

‘‘(H) Provide leadership in developing and promoting

improved analytical tools and methods for analyzing homeland security planning and the allocation of resources.

‘‘(I) Any other responsibilities delegated by the Secretary consistent with an effective program analysis and

evaluation function.

‘‘(3) DIRECTOR OF PROGRAM ANALYSIS AND EVALUATION.—

There shall be a Director of Program Analysis and Evaluation,

who—

‘‘(A) shall be a principal staff assistant to the Chief

Financial Officer of the Department for program analysis

and evaluation; and

‘‘(B) shall report to an official no lower than the Chief

Financial Officer.

‘‘(4) REORGANIZATION.—

‘‘(A) IN GENERAL.—The Secretary may allocate or

reallocate the functions of the Office, or discontinue the

Office, in accordance with section 872(a).

‘‘(B) EXEMPTION FROM LIMITATIONS.—Section 872(b)

shall not apply to any action by the Secretary under this

paragraph.’’.

SEC. 7. NOTIFICATION REGARDING TRANSFER OR REPROGRAMMING

OF FUNDS FOR DEPARTMENT OF HOMELAND SECURITY.

Section 702 of the Homeland Security Act of 2002 (6 U.S.C.

342) is further amended by adding at the end the following:

‘‘(c) NOTIFICATION REGARDING TRANSFER OR REPROGRAMMING

OF FUNDS.—In any case in which appropriations available to the

Department or any officer of the Department are transferred or

reprogrammed and notice of such transfer or reprogramming is

submitted to the Congress (including any officer, office, or Committee of the Congress), the Chief Financial Officer of the Department shall simultaneously submit such notice to the Select Committee on Homeland Security (or any successor to the jurisdiction

of that committee) and the Committee on Government Reform of
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the House of Representatives, and to the Committee on Governmental Affairs of the Senate.’’.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.