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 require-
ments for the Future Years Homeland Security Program 
of the Department, and for other purposes.
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Be it enacted by the Senate and House of Representa-
tives 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 Pres-
idential appointee who reports directly to the Sec-
retary of that department on financial management 
matters. Because the Department of Homeland Se-
curity was only recently created, the provisions en-
acted 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
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agencies, each with its own accounting and financial 
management system. None of these systems was de-
veloped with a view to executing the mission of the 
Department of Homeland Security to prevent ter-
rorist attacks within the United States, reduce the 
Nation’s vulnerability to terrorism, and minimize the 
damage and assist in the recovery from terrorist at-
tacks. 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 com-
prehensively 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 informa-
tion available to agency managers and the Congress. 
Those provisions also specify that agency financial 
management systems must provide for the system-
atic 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
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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 perform-
ance 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), re-
spectively; and 
(2) by inserting after subparagraph (F) the fol-
lowing: 
‘‘(G) The Department of Homeland Security.’’. 
(b) APPOINTMENT OR DESIGNATION OF CFO.—The 
President shall appoint or designate a Chief Financial Of-
ficer 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.
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(c) CONTINUED SERVICE OF CURRENT OFFICIAL.— 
An individual serving as Chief Financial Officer of the De-
partment 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 para-
graph (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
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(B) in section 702 (6 U.S.C. 342) by strik-
ing ‘‘shall report’’ and all that follows through 
the period and inserting ‘‘shall perform func-
tions 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.’’. 
(2) FEMA.—Section 901(b)(2) of title 31, 
United States Code, is amended by striking subpara-
graph (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
RE-
PORTS.—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 per-
formance and accountability report under subsection 
(a) that incorporates the program performance re-
port under section 1116 of this title for the Depart-
ment of Homeland Security;
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‘‘(2) shall include in each performance and ac-
countability report an audit opinion of the Depart-
ment’s internal controls over its financial reporting; 
and 
‘‘(3) shall design and implement Department- 
wide management controls that— 
‘‘(A) reflect the most recent homeland se-
curity 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 REQUIRE-
MENT.—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 Sec-
retary of Homeland Security shall include in the perform-
ance and accountability report for fiscal year 2005 sub-
mitted by the Secretary under section 3516(f) of title 31, 
United States Code, an assertion of the internal controls