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 Home-
land 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 cre-
ated, 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 man-
agers 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 impor-
tant that management control systems be designed with a
clear view of a homeland security strategy, including the prior-
ities of the Department in addressing those risks of terrorism
deemed most significant based upon a comprehensive assess-
ment of potential threats, vulnerabilities, criticality, and con-
sequences. 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 manage-
ment 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 HOME-
LAND SECURITY.
(a) IN GENERAL.—Section 901(b)(1) of title 31, United States
Code, is amended—
(1) by redesignating subparagraphs (G) through (P) as sub-
paragraphs (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 Depart-
ment of Homeland Security under the amendment made by sub-
section (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 Secu-
rity 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 Depart-
ment 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 redesig-
nating subparagraphs (C) through (H) in order as subpara-
graphs (B) through (G).
SEC. 4. FUNCTIONS OF CHIEF FINANCIAL OFFICER OF THE DEPART-
MENT 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 manage-
ment 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 man-
agers within the Department, of the Department’s perform-
ance 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 account-
ability 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 Depart-
ment 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 para-
graph (1), the Chief Financial Officers Council and the Presi-
dent’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 Com-
mittee on Governmental Affairs of the Senate, and the Comp-
troller 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 informa-
tion 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 HOME-
LAND 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 fol-
lowing:
‘‘(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 pro-
gram 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 Depart-
ment, 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 cor-
relate to the homeland security strategy set forth under para-
graph (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 enact-
ment 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 fol-
lowing functions:
‘‘(A) Analyze and evaluate plans, programs, and
budgets of the Department in relation to United States
homeland security objectives, projected threats, vulner-
ability 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 con-
straints, 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 perform-
ance 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 home-
land security planning and the allocation of resources.
‘‘(I) Any other responsibilities delegated by the Sec-
retary 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 Com-
mittee of the Congress), the Chief Financial Officer of the Depart-
ment shall simultaneously submit such notice to the Select Com-
mittee on Homeland Security (or any successor to the jurisdiction
of that committee) and the Committee on Government Reform of