IB 

Union Calendar No. 307 

108TH CONGRESS 

2D SESSION H. R. 4259 

[Report No. 108–533, Part I] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 4, 2004 

Mr. PLATTS (for himself, Mr. TOM DAVIS of Virginia, Mr. WAXMAN, Mr. 

TOWNS, Mrs. BLACKBURN, Mr. COX, and Mr. TURNER of Texas) introduced the following bill; which was referred to the Committee on Government Reform, and in addition to the Select Committee on Homeland Security, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

JUNE 9, 2004 

Reported from the Committee on Government Reform 

JUNE 9, 2004 

Referral to the Select Committee on Homeland Security extended for a period 

ending not later than June 9, 2004 

JUNE 9, 2004 

The Select Committee on Homeland Security discharged; committed to the 

Committee of the Whole House on the State of the Union and ordered 

to be printed 
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A BILL 

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. 

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 Se-
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1 curity was only recently created, the provisions en2 acted by that Act must be amended to include the 

3 Department within these provisions. 

4 (3) The Department of Homeland Security was 

5 created by consolidation of 22 separate Federal 

6 agencies, each with its own accounting and financial 

7 management system. None of these systems was de8 veloped with a view to executing the mission of the 

9 Department of Homeland Security to prevent ter10 rorist attacks within the United States, reduce the 

11 Nation’s vulnerability to terrorism, and minimize the 

12 damage and assist in the recovery from terrorist at13 tacks. For these reasons, a strong Chief Financial 

14 Officer is needed within the Department both to 

15 consolidate financial management operations, and to 

16 insure that management control systems are com17 prehensively designed to achieve the mission and 

18 execute the strategy of the Department. 

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

20 Financial Officers Act of 1990 require agency Chief 

21 Financial Officers to improve the financial informa22 tion available to agency managers and the Congress. 

23 Those provisions also specify that agency financial 

24 management systems must provide for the system25 atic measurement of performance. In the case of the 
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1 Department of Homeland Security, therefore, it is 

2 vitally important that management control systems 

3 be designed with a clear view of a homeland security 

4 strategy, including the priorities of the Department 

5 in addressing those risks of terrorism deemed most 

6 significant based upon a comprehensive assessment 

7 of potential threats, vulnerabilities, criticality, and 

8 consequences. For this reason, Federal law should 

9 be amended to clearly state the responsibilities of 

10 the Chief Financial Officer of the Department of 

11 Homeland Security to provide management control 

12 information, for the benefit of managers within the 

13 Department and to help inform the Congress, that 

14 permits an assessment of the Department’s perform15 ance in executing a homeland security strategy. 

16 SEC. 3. CHIEF FINANCIAL OFFICER OF THE DEPARTMENT 

17 OF HOMELAND SECURITY. 

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

19 United States Code, is amended— 

20 (1) by redesignating subparagraphs (G) 

21 through (P) as subparagraphs (H) through (Q), re22 spectively; and 

23 (2) by inserting after subparagraph (F) the fol24 lowing: 

25 ‘‘(G) The Department of Homeland Security.’’. 
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1 (b) APPOINTMENT OR DESIGNATION OF CFO.—The 

2 President shall appoint or designate a Chief Financial Of3 ficer of the Department of Homeland Security under the 

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

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

6 (c) CONTINUED SERVICE OF CURRENT OFFICIAL.— 

7 An individual serving as Chief Financial Officer of the De8 partment of Homeland Security immediately before the 

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

10 to replace such an individual in an acting capacity after 

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

12 position until the date of the confirmation or designation, 

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

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

15 made by subsection (a). 

16 (d) CONFORMING AMENDMENTS.— 

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

18 Homeland Security Act of 2002 (Public Law 107– 

19 296) is amended— 

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

21 (i) in subsection (d) by striking para22 graph (4), and redesignating paragraph 

23 (5) as paragraph (4); 

24 (ii) by redesignating subsection (e) as 

25 subsection (f); and 
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1 (iii) by inserting after subsection (d) 

2 the following: 

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

4 the Department a Chief Financial Officer, as provided in 

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

6 (B) in section 702 (6 U.S.C. 342) by strik7 ing ‘‘shall report’’ and all that follows through 

8 the period and inserting ‘‘shall perform func9 tions as specified in chapter 9 of title 31, 

10 United States Code, and, with respect to all 

11 such functions and other responsibilities that 

12 may be assigned to the Chief Financial Officer 

13 from time to time, shall also report to the 

14 Under Secretary for Management.’’. 

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

16 United States Code, is amended by striking subpara17 graph (B), and by redesignating subparagraphs (C) 

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

19 (G). 

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

21 DEPARTMENT OF HOMELAND SECURITY. 

22 (a) PERFORMANCE AND ACCOUNTABILITY RE23 PORTS.—Section 3516 of title 31, United States Code, is 

24 amended by adding at the end the following: 

25 ‘‘(f) The Secretary of Homeland Security— 
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1 ‘‘(1) shall for each fiscal year submit a per2 formance and accountability report under subsection 

3 (a) that incorporates the program performance re4 port under section 1116 of this title for the Depart5 ment of Homeland Security; 

6 ‘‘(2) shall include in each performance and ac7 countability report an audit opinion of the Depart8 ment’s internal controls over its financial reporting; 

9 and 

10 ‘‘(3) shall design and implement Department11 wide management controls that— 

12 ‘‘(A) reflect the most recent homeland se13 curity strategy developed pursuant to section 

14 874(b)(2) of the Homeland Security Act of 

15 2002; and 

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

17 and by managers within the Department, of the 

18 Department’s performance in executing such 

19 strategy.’’. 

20 (b) IMPLEMENTATION OF AUDIT OPINION REQUIRE21 MENT.—The Secretary of Homeland Security shall include 

22 audit opinions in performance and accountability reports 

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

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

25 year 2005. 
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1 (c) ASSERTION OF INTERNAL CONTROLS.—The Sec2 retary of Homeland Security shall include in the perform3 ance and accountability report for fiscal year 2005 sub4 mitted by the Secretary under section 3516(f) of title 31, 

5 United States Code, an assertion of the internal controls 

6 that apply to financial reporting by the Department of 

7 Homeland Security. 

8 (d) AUDIT OPINIONS OF INTERNAL CONTROLS OVER

9 FINANCIAL REPORTING BY CHIEF FINANCIAL OFFICER

10 AGENCIES.— 

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

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

13 Chief Financial Officers Council and the President’s 

14 Council on Integrity and Efficiency established by 

15 Executive Order 12805 of May 11, 1992, shall joint16 ly conduct a study of the potential costs and benefits 

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

18 title 31, United States Code, to obtain audit opin19 ions of their internal controls over their financial re20 porting. 

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

22 under paragraph (1), the Chief Financial Officers 

23 Council and the President’s Council on Integrity and 

24 Efficiency shall promptly submit a report on the re25 sults of the study to the Committee on Government 
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1 Reform of the House of Representatives, the Com2 mittee on Governmental Affairs of the Senate, and 

3 the Comptroller General of the United States. 

4 (3) GENERAL ACCOUNTING OFFICE ANAL5 YSIS.—Not later than 90 days after receiving the re6 port under paragraph (2), the Comptroller General 

7 shall perform an analysis of the information pro8 vided in the report and report the findings of the 

9 analysis to the committees referred to in paragraph 

10 (2). 

11 SEC. 5. FUTURE YEARS HOMELAND SECURITY PROGRAM 

12 AND HOMELAND SECURITY STRATEGY. 

13 Section 874 of the Homeland Security Act of 2002 

14 (6 U.S.C. 112) is amended by striking subsection (b) and 

15 inserting the following: 

16 ‘‘(b) CONTENTS.—The Future Years Homeland Se17 curity Program under subsection (a) shall— 

18 ‘‘(1) include the same type of information, or19 ganizational structure, and level of detail as the fu20 ture years defense program submitted to Congress 

21 by the Secretary of Defense under section 221 of 

22 title 10, United States Code; 

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

24 the Department, which shall be developed and up25 dated as appropriate annually by the Secretary, that 
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1 was used to develop program planning guidance for 

2 the Future Years Homeland Security Program; and 

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

4 allocations included in the Future Years Homeland 

5 Security Program correlate to the homeland security 

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

7 SEC. 6. ESTABLISHMENT OF OFFICE OF PROGRAM ANAL8 YSIS AND EVALUATION. 

9 Section 702 of the Homeland Security Act of 2002 

10 (6 U.S.C. 342) is amended by— 

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

12 first sentence; and 

13 (2) adding at the end the following: 

14 ‘‘(b) PROGRAM ANALYSIS AND EVALUATION FUNC15 TION.— 

16 ‘‘(1) ESTABLISHMENT OF OFFICE OF PROGRAM

17 ANALYSIS AND EVALUATION.—Not later than 90 

18 days after the date of enactment of this subsection, 

19 the Secretary shall establish an Office of Program 

20 Analysis and Evaluation within the Department (in 

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

22 ‘‘(2) RESPONSIBILITIES.—The Office shall per23 form the following functions: 

24 ‘‘(A) Analyze and evaluate plans, pro25 grams, and budgets of the Department in rela-
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1 tion to United States homeland security objec2 tives, projected threats, vulnerability assess3 ments, estimated costs, resource constraints, 

4 and the most recent homeland security strategy 

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

6 ‘‘(B) Develop and perform analyses and 

7 evaluations of alternative plans, programs, per8 sonnel levels, and budget submissions for the 

9 Department in relation to United States home10 land security objectives, projected threats, vul11 nerability assessments, estimated costs, re12 source constraints, and the most recent home13 land security strategy developed pursuant to 

14 section 874(b)(2). 

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

16 integration of, the planning, programming, and 

17 budgeting system of the Department. 

18 ‘‘(D) Review and ensure that the Depart19 ment meets performance-based budget require20 ments established by the Office of Management 

21 and Budget. 

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

23 development of, the Future Years Homeland 

24 Security Program of the Department, as speci25 fied under section 874. 
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1 ‘‘(F) Ensure that the costs of Department 

2 programs, including classified programs, are 

3 presented accurately and completely. 

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

5 performance plan for the Department and the 

6 program and performance section of the annual 

7 report on program performance for the Depart8 ment, consistent with sections 1115 and 1116, 

9 respectively, of title 31, United States Code. 

10 ‘‘(H) Provide leadership in developing and 

11 promoting improved analytical tools and meth12 ods for analyzing homeland security planning 

13 and the allocation of resources. 

14 ‘‘(I) Any other responsibilities delegated by 

15 the Secretary consistent with an effective pro16 gram analysis and evaluation function. 

17 ‘‘(3) DIRECTOR OF PROGRAM ANALYSIS AND

18 EVALUATION.—There shall be a Director of Program 

19 Analysis and Evaluation, who— 

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

21 the Chief Financial Officer of the Department 

22 for program analysis and evaluation; and 

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

24 than the Chief Financial Officer. 

25 ‘‘(4) REORGANIZATION.— 
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1 ‘‘(A) IN GENERAL.—The Secretary may al2 locate or reallocate the functions of the Office, 

3 or discontinue the Office, in accordance with 

4 section 872(a). 

5 ‘‘(B) EXEMPTION FROM LIMITATIONS.— 

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

7 the Secretary under this paragraph.’’. 

8 SEC. 7. NOTIFICATION REGARDING TRANSFER OR RE9 PROGRAMMING OF FUNDS FOR DEPARTMENT 

10 OF HOMELAND SECURITY. 

11 Section 702 of the Homeland Security Act of 2002 

12 (6 U.S.C. 342) is further amended by adding at the end 

13 the following: 

14 ‘‘(c) NOTIFICATION REGARDING TRANSFER OR RE15 PROGRAMMING OF FUNDS.—In any case in which appro16 priations available to the Department or any officer of the 

17 Department are transferred or reprogrammed and notice 

18 of such transfer or reprogramming is submitted to the 

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

20 the Congress), the Chief Financial Officer of the Depart21 ment shall simultaneously submit such notice to the Select 

22 Committee on Homeland Security (or any successor to the 

23 jurisdiction of that committee) and the Committee on Gov24 ernment Reform of the House of Representatives, and to 

25 the Committee on Governmental Affairs of the Senate.’’. 
Union Calendar No. 307 

108TH CONGRESS 

2D SESSION H. R. 4259 

[Report No. 108–533, Part I] 

A BILL 

To amend title 31, United States Code, to improve 

and for other purposes. Homeland Security Program of the Department, establish requirements for the Future Years ble to the Department of Homeland Security, to the financial accountability requirements applicaJUNE 9, 2004 

The Select Committee on Homeland Security discharged; 

the State of the Union and ordered to be printed committed to the Committee of the Whole House on