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) intro-
duced the following bill; which was referred to the Committee on Govern-
ment Reform, and in addition to the Select Committee on Homeland Se-
curity, 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
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 
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 
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. 
(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 
(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; 
‘‘(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 
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 joint-
ly 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 opin-
ions of their internal controls over their financial re-
porting. 
(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 re-
sults of the study to the Committee on Government
Reform of the House of Representatives, the Com-
mittee on Governmental Affairs of the Senate, and 
the Comptroller General of the United States. 
(3) GENERAL
ACCOUNTING
OFFICE
ANAL-
YSIS.—Not later than 90 days after receiving the re-
port under paragraph (2), the Comptroller General 
shall perform an analysis of the information pro-
vided 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 Se-
curity Program under subsection (a) shall— 
‘‘(1) include the same type of information, or-
ganizational structure, and level of detail as the fu-
ture 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 up-
dated 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 ANAL-
YSIS 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 FUNC-
TION.— 
‘‘(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 per-
form the following functions: 
‘‘(A) Analyze and evaluate plans, pro-
grams, and budgets of the Department in rela-
tion to United States homeland security objec-
tives, projected threats, vulnerability assess-
ments, 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, per-
sonnel levels, and budget submissions for the 
Department in relation to United States home-
land security objectives, projected threats, vul-
nerability assessments, estimated costs, re-
source constraints, and the most recent home-
land 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. 
‘‘(D) Review and ensure that the Depart-
ment meets performance-based budget require-
ments 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 speci-
fied 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 Depart-
ment, consistent with sections 1115 and 1116, 
respectively, of title 31, United States Code. 
‘‘(H) Provide leadership in developing and 
promoting improved analytical tools and meth-
ods for analyzing homeland security planning 
and the allocation of resources. 
‘‘(I) Any other responsibilities delegated by 
the Secretary consistent with an effective pro-
gram 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 al-
locate 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 RE-
PROGRAMMING 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 RE-
PROGRAMMING OF FUNDS.—In any case in which appro-
priations 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 Depart-
ment 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 Gov-
ernment Reform of the House of Representatives, and to 
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 
the financial accountability requirements applica-
ble to the Department of Homeland Security, to 
establish requirements for the Future Years 
Homeland Security Program of the Department, 
and for other purposes. 
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