IIB 

108TH CONGRESS 

2D SESSION H. R. 4259 

IN THE SENATE OF THE UNITED STATES 

JULY 21, 2004 

Received 

SEPTEMBER 7, 2004 

Read twice and referred to the Committee on Governmental Affairs 

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. 
2 

HR 4259 RFS 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

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

5 Security Financial Accountability Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) Influential financial management leadership 

9 is of vital importance to the mission success of the 

10 Department of Homeland Security. For this reason, 

11 the Chief Financial Officer of the Department must 

12 be a key figure in the Department’s management. 

13 (2) To provide a sound financial leadership 

14 structure, the provisions of law enacted by the Chief 

15 Financial Officers Act of 1990 (Public Law 101– 

16 576) provide that the Chief Financial Officer of each 

17 of the Federal executive departments is to be a Pres18 idential appointee who reports directly to the Sec19 retary of that department on financial management 

20 matters. Because the Department of Homeland Se21 curity was only recently created, the provisions en22 acted by that Act must be amended to include the 

23 Department within these provisions. 

24 (3) The Department of Homeland Security was 

25 created by consolidation of 22 separate Federal 
3 

HR 4259 RFS 

1 agencies, each with its own accounting and financial 

2 management system. None of these systems was de3 veloped with a view to executing the mission of the 

4 Department of Homeland Security to prevent ter5 rorist attacks within the United States, reduce the 

6 Nation’s vulnerability to terrorism, and minimize the 

7 damage and assist in the recovery from terrorist at8 tacks. For these reasons, a strong Chief Financial 

9 Officer is needed within the Department both to 

10 consolidate financial management operations, and to 

11 insure that management control systems are com12 prehensively designed to achieve the mission and 

13 execute the strategy of the Department. 

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

15 Financial Officers Act of 1990 require agency Chief 

16 Financial Officers to improve the financial informa17 tion available to agency managers and the Congress. 

18 Those provisions also specify that agency financial 

19 management systems must provide for the system20 atic measurement of performance. In the case of the 

21 Department of Homeland Security, therefore, it is 

22 vitally important that management control systems 

23 be designed with a clear view of a homeland security 

24 strategy, including the priorities of the Department 

25 in addressing those risks of terrorism deemed most 
4 

HR 4259 RFS 

1 significant based upon a comprehensive assessment 

2 of potential threats, vulnerabilities, criticality, and 

3 consequences. For this reason, Federal law should 

4 be amended to clearly state the responsibilities of 

5 the Chief Financial Officer of the Department of 

6 Homeland Security to provide management control 

7 information, for the benefit of managers within the 

8 Department and to help inform the Congress, that 

9 permits an assessment of the Department’s perform10 ance in executing a homeland security strategy. 

11 SEC. 3. CHIEF FINANCIAL OFFICER OF THE DEPARTMENT 

12 OF HOMELAND SECURITY. 

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

14 United States Code, is amended— 

15 (1) by redesignating subparagraphs (G) 

16 through (P) as subparagraphs (H) through (Q), re17 spectively; and 

18 (2) by inserting after subparagraph (F) the fol19 lowing: 

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

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

22 President shall appoint or designate a Chief Financial Of23 ficer of the Department of Homeland Security under the 

24 amendment made by subsection (a) by not later than 180 

25 days after the date of the enactment of this Act. 
5 

HR 4259 RFS 

1 (c) CONTINUED SERVICE OF CURRENT OFFICIAL.— 

2 An individual serving as Chief Financial Officer of the De3 partment of Homeland Security immediately before the 

4 enactment of this Act, or another person who is appointed 

5 to replace such an individual in an acting capacity after 

6 the enactment of this Act, may continue to serve in that 

7 position until the date of the confirmation or designation, 

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

9 United States Code), of a successor under the amendment 

10 made by subsection (a). 

11 (d) CONFORMING AMENDMENTS.— 

12 (1) HOMELAND SECURITY ACT OF 2002.—The 

13 Homeland Security Act of 2002 (Public Law 107– 

14 296) is amended— 

15 (A) in section 103 (6 U.S.C. 113)— 

16 (i) in subsection (d) by striking para17 graph (4), and redesignating paragraph 

18 (5) as paragraph (4); 

19 (ii) by redesignating subsection (e) as 

20 subsection (f); and 

21 (iii) by inserting after subsection (d) 

22 the following: 

23 ‘‘(e) CHIEF FINANCIAL OFFICER.—There shall be in 

24 the Department a Chief Financial Officer, as provided in 

25 chapter 9 of title 31, United States Code.’’; and 
6 

HR 4259 RFS 

1 (B) in section 702 (6 U.S.C. 342) by strik2 ing ‘‘shall report’’ and all that follows through 

3 the period and inserting ‘‘shall perform func4 tions as specified in chapter 9 of title 31, 

5 United States Code, and, with respect to all 

6 such functions and other responsibilities that 

7 may be assigned to the Chief Financial Officer 

8 from time to time, shall also report to the 

9 Under Secretary for Management.’’. 

10 (2) FEMA.—Section 901(b)(2) of title 31, 

11 United States Code, is amended by striking subpara12 graph (B), and by redesignating subparagraphs (C) 

13 through (H) in order as subparagraphs (B) through 

14 (G). 

15 SEC. 4. FUNCTIONS OF CHIEF FINANCIAL OFFICER OF THE 

16 DEPARTMENT OF HOMELAND SECURITY. 

17 (a) PERFORMANCE AND ACCOUNTABILITY RE18 PORTS.—Section 3516 of title 31, United States Code, is 

19 amended by adding at the end the following: 

20 ‘‘(f) The Secretary of Homeland Security— 

21 ‘‘(1) shall for each fiscal year submit a per22 formance and accountability report under subsection 

23 (a) that incorporates the program performance re24 port under section 1116 of this title for the Depart25 ment of Homeland Security; 
7 

HR 4259 RFS 

1 ‘‘(2) shall include in each performance and ac2 countability report an audit opinion of the Depart3 ment’s internal controls over its financial reporting; 

4 and 

5 ‘‘(3) shall design and implement Department6 wide management controls that— 

7 ‘‘(A) reflect the most recent homeland se8 curity strategy developed pursuant to section 

9 874(b)(2) of the Homeland Security Act of 

10 2002; and 

11 ‘‘(B) permit assessment, by the Congress 

12 and by managers within the Department, of the 

13 Department’s performance in executing such 

14 strategy.’’. 

15 (b) IMPLEMENTATION OF AUDIT OPINION REQUIRE16 MENT.—The Secretary of Homeland Security shall include 

17 audit opinions in performance and accountability reports 

18 under section 3516(f) of title 31, United States Code, as 

19 amended by subsection (a), only for fiscal years after fiscal 

20 year 2005. 

21 (c) ASSERTION OF INTERNAL CONTROLS.—The Sec22 retary of Homeland Security shall include in the perform23 ance and accountability report for fiscal year 2005 sub24 mitted by the Secretary under section 3516(f) of title 31, 

25 United States Code, an assertion of the internal controls 
8 

HR 4259 RFS 

1 that apply to financial reporting by the Department of 

2 Homeland Security. 

3 (d) AUDIT OPINIONS OF INTERNAL CONTROLS OVER

4 FINANCIAL REPORTING BY CHIEF FINANCIAL OFFICER

5 AGENCIES.— 

6 (1) IN GENERAL.—Not later than 180 days 

7 after the date of the enactment of this Act, the 

8 Chief Financial Officers Council and the President’s 

9 Council on Integrity and Efficiency established by 

10 Executive Order 12805 of May 11, 1992, shall joint11 ly conduct a study of the potential costs and benefits 

12 of requiring the agencies listed in section 901(b) of 

13 title 31, United States Code, to obtain audit opin14 ions of their internal controls over their financial re15 porting. 

16 (2) REPORT.—Upon completion of the study 

17 under paragraph (1), the Chief Financial Officers 

18 Council and the President’s Council on Integrity and 

19 Efficiency shall promptly submit a report on the re20 sults of the study to the Committee on Government 

21 Reform of the House of Representatives, the Com22 mittee on Governmental Affairs of the Senate, and 

23 the Comptroller General of the United States. 

24 (3) GENERAL ACCOUNTING OFFICE ANAL25 YSIS.—Not later than 90 days after receiving the re-
9 

HR 4259 RFS 

1 port under paragraph (2), the Comptroller General 

2 shall perform an analysis of the information pro3 vided in the report and report the findings of the 

4 analysis to the committees referred to in paragraph 

5 (2). 

6 SEC. 5. FUTURE YEARS HOMELAND SECURITY PROGRAM 

7 AND HOMELAND SECURITY STRATEGY. 

8 Section 874 of the Homeland Security Act of 2002 

9 (6 U.S.C. 112) is amended by striking subsection (b) and 

10 inserting the following: 

11 ‘‘(b) CONTENTS.—The Future Years Homeland Se12 curity Program under subsection (a) shall— 

13 ‘‘(1) include the same type of information, or14 ganizational structure, and level of detail as the fu15 ture years defense program submitted to Congress 

16 by the Secretary of Defense under section 221 of 

17 title 10, United States Code; 

18 ‘‘(2) set forth the homeland security strategy of 

19 the Department, which shall be developed and up20 dated as appropriate annually by the Secretary, that 

21 was used to develop program planning guidance for 

22 the Future Years Homeland Security Program; and 

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

24 allocations included in the Future Years Homeland 
10 

HR 4259 RFS 

1 Security Program correlate to the homeland security 

2 strategy set forth under paragraph (2).’’. 

3 SEC. 6. ESTABLISHMENT OF OFFICE OF PROGRAM ANAL4 YSIS AND EVALUATION. 

5 Section 702 of the Homeland Security Act of 2002 

6 (6 U.S.C. 342) is amended by— 

7 (1) inserting ‘‘(a) In General.—’’ before the 

8 first sentence; and 

9 (2) adding at the end the following: 

10 ‘‘(b) PROGRAM ANALYSIS AND EVALUATION FUNC11 TION.— 

12 ‘‘(1) ESTABLISHMENT OF OFFICE OF PROGRAM

13 ANALYSIS AND EVALUATION.—Not later than 90 

14 days after the date of enactment of this subsection, 

15 the Secretary shall establish an Office of Program 

16 Analysis and Evaluation within the Department (in 

17 this section referred to as the ‘Office’). 

18 ‘‘(2) RESPONSIBILITIES.—The Office shall per19 form the following functions: 

20 ‘‘(A) Analyze and evaluate plans, pro21 grams, and budgets of the Department in rela22 tion to United States homeland security objec23 tives, projected threats, vulnerability assess24 ments, estimated costs, resource constraints, 
11 

HR 4259 RFS 

1 and the most recent homeland security strategy 

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

3 ‘‘(B) Develop and perform analyses and 

4 evaluations of alternative plans, programs, per5 sonnel levels, and budget submissions for the 

6 Department in relation to United States home7 land security objectives, projected threats, vul8 nerability assessments, estimated costs, re9 source constraints, and the most recent home10 land security strategy developed pursuant to 

11 section 874(b)(2). 

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

13 integration of, the planning, programming, and 

14 budgeting system of the Department. 

15 ‘‘(D) Review and ensure that the Depart16 ment meets performance-based budget require17 ments established by the Office of Management 

18 and Budget. 

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

20 development of, the Future Years Homeland 

21 Security Program of the Department, as speci22 fied under section 874. 

23 ‘‘(F) Ensure that the costs of Department 

24 programs, including classified programs, are 

25 presented accurately and completely. 
12 

HR 4259 RFS 

1 ‘‘(G) Oversee the preparation of the annual 

2 performance plan for the Department and the 

3 program and performance section of the annual 

4 report on program performance for the Depart5 ment, consistent with sections 1115 and 1116, 

6 respectively, of title 31, United States Code. 

7 ‘‘(H) Provide leadership in developing and 

8 promoting improved analytical tools and meth9 ods for analyzing homeland security planning 

10 and the allocation of resources. 

11 ‘‘(I) Any other responsibilities delegated by 

12 the Secretary consistent with an effective pro13 gram analysis and evaluation function. 

14 ‘‘(3) DIRECTOR OF PROGRAM ANALYSIS AND

15 EVALUATION.—There shall be a Director of Program 

16 Analysis and Evaluation, who— 

17 ‘‘(A) shall be a principal staff assistant to 

18 the Chief Financial Officer of the Department 

19 for program analysis and evaluation; and 

20 ‘‘(B) shall report to an official no lower 

21 than the Chief Financial Officer. 

22 ‘‘(4) REORGANIZATION.— 

23 ‘‘(A) IN GENERAL.—The Secretary may al24 locate or reallocate the functions of the Office, 
13 

HR 4259 RFS 

1 or discontinue the Office, in accordance with 

2 section 872(a). 

3 ‘‘(B) EXEMPTION FROM LIMITATIONS.— 

4 Section 872(b) shall not apply to any action by 

5 the Secretary under this paragraph.’’. 

6 SEC. 7. NOTIFICATION REGARDING TRANSFER OR RE7 PROGRAMMING OF FUNDS FOR DEPARTMENT 

8 OF HOMELAND SECURITY. 

9 Section 702 of the Homeland Security Act of 2002 

10 (6 U.S.C. 342) is further amended by adding at the end 

11 the following: 

12 ‘‘(c) NOTIFICATION REGARDING TRANSFER OR RE13 PROGRAMMING OF FUNDS.—In any case in which appro14 priations available to the Department or any officer of the 

15 Department are transferred or reprogrammed and notice 

16 of such transfer or reprogramming is submitted to the 

17 Congress (including any officer, office, or Committee of 

18 the Congress), the Chief Financial Officer of the Depart19 ment shall simultaneously submit such notice to the Select 

20 Committee on Homeland Security (or any successor to the 

21 jurisdiction of that committee) and the Committee on Gov22 ernment Reform of the House of Representatives, and to 

23 the Committee on Governmental Affairs of the Senate.’’. 

Passed the House of Representatives July 20, 2004. 

Attest: JEFF TRANDAHL, 

Clerk.