Department of Homeland Security: Progress Made in Implementation and Transformation of Management Functions, but More Work Remains
Published: 2010-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since 2003, GAO has designated implementing and transforming the Department of Homeland Security (DHS) as high risk because DHS had to transform 22 agencies--several with significant management challenges--into one department, and failure to effectively address its mission and management risks could have serious consequences for national and economic security. This high-risk area includes challenges in management functional areas, including acquisition, information technology, financial, and human capital management; the impact of those challenges on mission implementation; and management integration. GAO has reported that DHS's transformation is a significant effort that will take years to achieve. This testimony discusses DHS's progress and actions remaining in (1) implementing its management functions; (2) integrating those functions and strengthening performance measurement; and (3) addressing GAO's high-risk designation. This testimony is based on GAO's prior reports on DHS transformation and management issues and updated information on these issues obtained from December 2009 through September 2010.
section_title: What GAO Found
paragraphs: DHS has made progress in implementing its management functions, but additional actions are needed to strengthen DHS's efforts in these areas. (1) DHS has revised its acquisition management oversight policies, and its senior-level Acquisition Review Board reviewed 24 major acquisition programs in fiscal years 2008 and 2009. However, more than 40 major programs had not been reviewed, and DHS does not yet have accurate cost estimates for most of its major programs. (2) DHS has undertaken efforts to establish information technology management controls and capabilities, but its progress has been uneven and major information technology programs, such as the SBInet virtual fence, have not met capability, benefit, cost, and schedule expectations. (3) DHS has developed corrective action plans to address its financial management weaknesses. However, DHS has been unable to obtain an unqualified audit opinion on its financial statements, and for fiscal year 2009, the independent auditor identified six material weaknesses in DHS's internal controls. Further, DHS has not yet implemented a consolidated departmentwide financial management system. (4) DHS has issued plans for strategic human capital management and employee development. Further, its scores on the Partnership for Public Service's 2010 rankings of Best Places to Work in the Federal Government improved from prior years, yet DHS was ranked 28 out of 32 agencies on scores for employee satisfaction and commitment. DHS has also taken action to integrate its management functions by, for example, establishing common policies within management functions. The Implementing Recommendations of the 9/11 Commission Act of 2007 required DHS to develop a strategy for management integration. In a 2005 report GAO recommended that a management integration strategy contain priorities and goals. DHS developed an initial plan in February 2010 that identified seven initiatives for achieving management integration. While a step in the right direction, among other things, the plan lacked details on how the initiatives contributed to departmentwide management integration. DHS is working to enhance its management integration plan, which GAO will review as part of the 2011 high-risk update. DHS also has not yet developed performance measures to fully assess its progress in integrating management functions. Since GAO first designated DHS's transformation as high risk, DHS has made progress in transforming into a fully functioning department. However, it has not yet fully addressed its transformation, management, and mission challenges, such as implementing effective management policies and deploying capabilities to secure the border and other sectors. In 2009 GAO reported that DHS had developed a strategy for managing its high-risk areas and corrective action plans to address its management challenges. While these documents identified some root causes and corrective actions, GAO reported that they could be improved by DHS identifying resources needed for implementing corrective actions and measures for assessing progress. This testimony contains no new recommendations.
section_title: What GAO Recommends
paragraphs: GAO has made over 100 recommendations to DHS since 2003 to strengthen its management and integration efforts. DHS has implemented many of these recommendations and is in the process of implementing others.

section_title: Letter
paragraphs: I appreciate the opportunity to appear today to discuss the Department of  Homeland Security’s (DHS) efforts to transform its component agencies  and integrate departmentwide management functions into a single, fully  functioning department. DHS began operations in March 2003 with  missions that included preventing terrorist attacks from occurring within  the United States, reducing the nation’s vulnerability to terrorism,  minimizing damages from attacks that occur, and helping the nation  recover from any attacks. The creation of DHS represented one of the  largest reorganizations and consolidations of government agencies,  personnel, programs, and operations in recent history, initially bringing  together approximately 180,000 employees from 22 originating agencies.  More than 7 years later, DHS is now the third largest federal government  department with more than 200,000 employees and an annual budget of  more than $40 billion. DHS has taken a number of actions to transform its  component agencies and integrate and strengthen its management  functions into an effective cabinet-level department. In addition, DHS has  issued various reports and strategic documents to guide the  implementation of its mission and the integration and strengthening of its  management functions, including a revised strategic plan, the  Quadrennial Homeland Security Review Report, and the Bottom-Up  Review Report. However, we have continued to report that more work  remains to integrate and strengthen DHS’s acquisition, information  technology, financial, and human capital management functions to better  support the department’s ability to fulfill its various missions.
In 2003, we designated the implementation and transformation of DHS as  high risk because it represented an enormous and complex undertaking  that would require time to achieve in an effective and efficient manner,  and it has remained on our high-risk list since. We reported that the  components that became part of DHS already faced a wide array of  existing challenges, and any failure to effectively carry out the  department’s mission would expose the nation to potentially serious  consequences. In designating the implementation and transformation of  DHS as high risk, we noted that building an effective department would  require consistent and sustained leadership from top management to  ensure the transformation of disparate agencies, programs, and missions  into an integrated organization, among other needs. Our prior work on  mergers and acquisitions, undertaken before the creation of DHS, found  that successful transformations of large organizations, even those faced  with less strenuous reorganizations than DHS, can take years to achieve.  We have made over 100 recommendations to DHS over the past 7 years to  strengthen the department’s transformation and its integration and  implementation of management functions. DHS has implemented many of  these recommendations and is in the process of implementing others.
Within the DHS implementation and transformation high risk area, we  identified as at risk the implementation of acquisition, information  technology, financial management, and human capital management  functions; the impact of weaknesses in those management functions on  DHS’s accomplishment of its missions, such as DHS’s deficiencies in  financial management hindering the department’s ability to use reliable  financial data to support day-to-day decision making; and the integration  of management functions within and across the department. In November  2000, we published our criteria for removing any area from the high-risk  list. Specifically, agencies must have (1) a demonstrated strong  commitment and top leadership support to address the risks; (2) the  capacity (that is, the people and other resources) to resolve the risks; (3) a  corrective action plan that identifies the root causes, identifies effective  solutions, and provides for substantially completing corrective measures  near term, including but not limited to, steps necessary to implement  solutions we recommended; (4) a program instituted to monitor and  independently validate the effectiveness and sustainability of corrective  measures; and (5) the ability to demonstrate progress in implementing  corrective measures.
My testimony today discusses DHS’s progress and actions remaining in  implementing its management functions in the areas of acquisition,  information technology, financial, and human capital management;  integrating management functions within and across the department and  strengthening the department’s performance measures; and    addressing our designation of DHS implementation and transformation as  high risk.
My statement is based on our January 2009 high-risk update and GAO  reports on DHS’s management areas, management integration, and  performance measurement. In addition, we obtained updated information  from DHS from December 2009 through September 2010 on its  transformation and management integration efforts and its plans to revise  its departmentwide performance measures through meetings and  communication with DHS officials, including the former and current  Under Secretary for Management and Deputy Under Secretary for  Management. We also reviewed DHS’s initial plan for management  integration. We conducted our work in accordance with generally  accepted government auditing standards. Those standards require that we  plan and perform the audit to obtain sufficient, appropriate evidence to  provide a reasonable basis for our findings and conclusions based on our  audit objectives. We believe that the evidence obtained provides a  reasonable basis for our findings based on our audit objectives.
In summary, DHS has made progress in implementing its management  functions, but additional actions are needed to strengthen DHS’s efforts in  these areas. For example, DHS has revised its oversight policies for  acquisition and information technology management, developed corrective  action plans to address financial management internal control  weaknesses, and developed human capital plans for strategic human  capital management and employee training and development. However,  we identified challenges remaining in DHS’s management areas. For  example, while DHS reviewed 24 major acquisition programs through its  Acquisition Review Board in fiscal years 2008 and 2009, more than 40  major programs had not been reviewed, and DHS does not yet have  accurate cost estimates for most of its major programs. While DHS has  made progress in strengthening its enterprise architecture, the department  has not yet adequately addressed how it determines that its information  technology investments align with that architecture. DHS has also not yet  implemented a consolidated departmentwide financial management  system and, since its establishment, has been unable to obtain an  unqualified audit opinion on its financial statements. DHS has also faced  challenges in identifying and addressing barriers to equal employment  opportunities and improving its foreign language capabilities. DHS has  taken action to integrate its management functions by, for example,  establishing common policies, procedures, and systems within individual  management functions, such as human capital management. The  Implementing Recommendations of the 9/11 Commission Act of 2007 (9/11  Commission Act) required DHS to develop a strategy for management  integration, and in a 2005 report GAO recommended that a management  integration strategy contain such elements such as priorities and  implementation goals. DHS developed an initial plan in February 2010  that identified seven initiatives for achieving management integration.  While a step in the right direction, among other things, we noted that the  plan lacked details on how the initiatives contributed to departmentwide  management integration and linked to the department’s overall strategy  for transformation. DHS is revising the initial management integration plan  and is working to enhance it to include a framework for strengthening  acquisition management.  We will review DHS’s revised management  integration plan as part of our 2011 high-risk update. In addition, since we  first designated the implementation and transformation of DHS as high  risk, the department has made progress in addressing the criteria GAO  established in 2000 for removing agencies from the high-risk list.  Specifically, DHS has developed a strategy for managing its high-risk area  and corrective action plans to address challenges in each of its  management areas. The strategy and plans addressed several of the high- risk criteria, such as identifying some of the root causes of problems and  corrective actions to address the causes, but did not address other  elements, such as the resources needed to implement corrective actions  and measures to assess implementation efforts.
In order to address the high-risk designation, DHS needs to meet our five  high-risk criteria and, within the context of these criteria, address specific  actions and outcomes within its management areas and management  integration and demonstrate measurable, sustainable progress in  implementing those actions. These actions and outcomes include  validating required acquisition documents at each major milestone in the  acquisition review process, implementing information technology  investment management practices that have been independently assessed  as having satisfied the capabilities associated with stage three of our  Information Technology Investment Management Framework, and linking  workforce planning efforts to strategic and program-specific planning  efforts to identify current and future human capital needs, among others.
subsections: section_title: DHS Has Made Progress in Implementing Its Management Functions, but Additional Actions Are Needed to Strengthen These Functions
paragraphs: DHS has made progress in implementing its acquisition, information  technology, financial, and human capital management functions, but  continues to face obstacles and weaknesses in these functions that could  hinder the department’s transformation and implementation efforts. For  example, DHS has faced challenges in implementing acquisition  management controls, a consolidated financial management system, and a  strategic human capital plan, among other things. As DHS continues to  mature as an organization, it will be important that the department  continue to work to strengthen its management functions since the  effectiveness of these functions affects its ability to fulfill its homeland  security and other missions.
Acquisition management. While DHS has made recent progress in  clarifying acquisition oversight processes, it continues to face obstacles in  managing its acquisitions and ensuring proper implementation and  departmentwide coordination. We previously reported that DHS faced  challenges in acquisition management related to acquisition oversight, cost  growth, and schedule delays. In June 2010, we reported that DHS  continued to develop its acquisition oversight function and had begun to  implement a revised acquisition management directive that includes more  detailed guidance for programs to use when informing component and  departmental decision making. We also reported that the senior-level  Acquisition Review Board had begun to meet more frequently and  provided programs decision memorandums with action items to improve  performance. However, while the Acquisition Review Board reviewed 24  major acquisition programs in fiscal years 2008 and 2009, more than 40  major acquisition programs had not been reviewed, and programs had not  consistently implemented review action items identified as part of the  review by established deadlines. DHS acquisition oversight officials raised  concerns about the accuracy of cost estimates for some of its major  programs, making it difficult to assess the significance of the cost growth  we identified. In addition, over half of the programs we reviewed awarded  contracts to initiate acquisition activities without component or  department approval of documents essential to planning acquisitions,  setting operational requirements, and establishing acquisition program  baselines. Programs also experienced other acquisition planning  challenges, such as staffing shortages and lack of sustainment. For  example, we reported that the U.S. Visitor and Immigrant Status Indicator  Technology (US-VISIT) did not sufficiently define what capabilities and  benefits would be delivered, by when, and at what cost, which contributed  to development and deployment delays. In addition, we reported that three  Coast Guard programs we reviewed—Maritime Patrol Aircraft, Response  Boat-Medium, and Sentinel—reported placing orders for or receiving  significant numbers of units prior to completing testing to demonstrate  that what the programs were buying met Coast Guard needs. Our prior  work has found that resolution of problems discovered during testing can  sometimes require costly redesign or rework.
We have made a number of recommendations to DHS to strengthen its  acquisition management functions, such as (1) reinstating the Joint  Requirements Council —the department’s requirements review body—or  establishing another departmental joint requirements oversight board to  review and approve acquisition requirements and assess potential  duplication of effort; (2) ensuring that budget decisions are informed by  the results of investment reviews; (3) identifying and aligning sufficient  management resources to implement oversight reviews throughout the  investment life cycle; and (4) ensuring major investments comply with  established component and departmental review policy standards. DHS  generally concurred with these recommendations and reported taking  action to begin to address some of them, including developing the Next  Generation Periodic Reporting System to capture and track key program  information, and monitoring cost and schedule performance, contract  awards and program risks.
Based on our work on DHS’s acquisition management, we have identified  specific actions and outcomes that we believe the department needs to  achieve to address its acquisition management challenges. We believe that  these actions and outcomes are critical to addressing the underlying root  causes that have resulted in the high-risk designation. In particular, DHS  should demonstrate and sustain effective execution of a knowledge-based  acquisition process for new and legacy acquisition programs by, among  other things, (1) validating required acquisition documents in a timely  manner at each major milestone; (2) establishing and operating a Joint  Requirements Council, or a similar body, to review and validate  acquisition programs’ requirements; (3) ensuring sufficient numbers of  trained acquisition personnel at the department and component levels; and  (4) establishing and demonstrating measurable progress in achieving goals  that improve acquisition programs’ compliance with departmental  policies.
Information technology management. DHS has undertaken efforts to  establish information technology management controls and capabilities,  but in September 2009 we reported that DHS had made uneven progress in  its information technology management efforts to institutionalize a  framework of interrelated management controls and capabilities. For  example, DHS had continued to issue annual updates to its enterprise  architecture that added previously missing scope and depth, and further  improvements were planned to incorporate the level of content, referred  to as segment architectures, needed to effectively introduce new systems  and modify existing ones. Also, we reported that DHS had redefined its  acquisition and investment management policies, practices, and  structures, including establishing a system life cycle management  methodology, and it had increased its acquisition workforce.  Nevertheless, challenges remain relative to, for example, implementing the  department’s plan for strengthening its information technology human  capital and fully defining key system investment and acquisition  management policies and procedures for information technology.  Moreover, the extent to which DHS had actually implemented these  investment and acquisition management policies and practices on major  information technology programs had been inconsistent. For example, our  work showed that major information technology acquisition programs had  not been subjected to executive-level acquisition and investment  management reviews. As a result, we reported that major information  technology programs aimed at delivering important mission capabilities,  such as the Rescue 21 search and rescue system and the Secure Border  Initiative Network (SBInet) virtual border fence, had not lived up to their  capability, benefit, cost, and schedule expectations because of, for  example, deficiencies in development and testing, and lack of risk  management processes and key practices for developing reliable cost and  schedule estimates. We have made a range of recommendations to  strengthen DHS information technology management, such as establishing  procedures for implementing project-specific investment management  policies, and policies and procedures for portfolio-based investment  management. We reported that while DHS and its components have made  progress, more needs to be done before DHS can ensure that all system  acquisitions are managed with the necessary rigor and discipline.
Based on our work, we have identified actions and outcomes that we  believe would help the department address challenges in information  technology management that have contributed to our designation of DHS  implementation and transformation as high risk. For example, DHS  should, among other things, demonstrate measurable progress in  implementing its information technology human capital plan and  accomplishing defined outcomes, including ensuring that each system  acquisition program office is sufficiently staffed. DHS should also establish  and implement information technology investment management practices  that have been independently assessed as having satisfied the capabilities  associated with stage three of our Information Technology Investment  Management Framework. In addition, the department should establish  enhanced security of the department’s internal information technology  systems and networks.
Financial management. DHS has made progress in addressing its  financial management and internal controls weaknesses, but has not yet  addressed all of them or developed a consolidated departmentwide  financial management system. Since its establishment, DHS has been  unable to obtain an unqualified audit opinion on its financial statements  (i.e., prepare a set of financial statements that are considered reliable). For  fiscal year 2009, the independent auditor issued a disclaimer on DHS’s  financial statements and identified eight deficiencies in DHS’s internal  control over financial reporting, six of which were so significant that they  qualified as material weaknesses. Until these weaknesses are resolved,  DHS will not be in position to provide reliable, timely, and useful financial  data to support day-to-day decision making. DHS has taken steps to  prepare and implement corrective action plans for its internal control  weaknesses through the Internal Control Playbook, DHS’s annual plan to  design and implement departmentwide internal controls.
In addition, in June 2007 and December 2009 we reported on DHS’s  progress in developing a consolidated financial management system,  called the Transformation and Systems Consolidation (TASC) program,  and made a number of recommendations to help DHS address challenges  affecting the departmentwide financial management integration. In June  2007, we reported that DHS had made limited progress in integrating its  existing financial management systems, and we made six  recommendations focused on the need for DHS to define a  departmentwide strategy and embrace disciplined processes necessary to  properly manage the specific projects. We followed up on these  recommendation in our December 2009 report and found that DHS had  begun to take actions to implement four of our six 2007 recommendations  but had not yet fully implemented any of them. Specifically, DHS had  made progress in (1) defining its financial management strategy and plan,  (2) developing a comprehensive concept of operations, (3) incorporating  disciplined processes, and (4) implementing key human capital practices  and plans for such a systems implementation effort. However, DHS had  not yet taken the necessary actions to standardize and reengineer business  processes across the department, including applicable internal controls,  and to develop detailed consolidation and migration plans. While some of  the details of the department’s standardization of business processes and  migration plans depend on the selected new financial management system,  DHS would benefit from performing a gap analysis and identifying all of its  affected current business processes so that DHS can analyze how closely  the proposed system will meet the department’s needs. In addition, we  reported that DHS’s reliance on contractors to define and implement the  new financial management system, without the necessary oversight  mechanisms to ensure that the processes were properly defined and  effectively implemented, could result in system efforts plagued with  serious performance and management problems. We reported that these  issues placed DHS at risk for implementing a financial management  system that does not meet cost, schedule, and performance goals. We  recommended that DHS establish contractor oversight mechanisms to  monitor the TASC program; expedite the completion of the development  of the TASC financial management strategy and plan so that the  department is well positioned to move forward with an integrated  solution; and develop a human capital plan for the TASC program that  identifies needed skills for the acquisition and implementation of the new  system. DHS agreed with our recommendations and described actions it  had taken and planned to take to address them, noting, for example, the  importance of being vigilant in its oversight of the program.
Based on our work on DHS’s financial management we have identified  specific actions and outcomes that we believe the department needs to  address to resolve its financial management challenges. Among other  things, DHS should develop and implement a corrective action plan with  specific milestones and accountable officials to address the weaknesses in  systems, internal control, and business processes that impede the  department’s ability to integrate and transform its financial management.  DHS should also sustain clean opinions on its departmentwide financial  statements, adhere to financial system requirements in accordance with  the Federal Financial Management Improvement Act of 1996, and have  independent auditors report annually on compliance with the act.  In  addition, DHS should establish contractor oversight mechanisms to  monitor the contractor selected to implement TASC and successfully  deploy TASC to the majority of DHS’s components, such as the Coast  Guard, the Federal Emergency Management Agency, and the  Transportation Security Administration.
Human capital management. DHS has issued various strategies and  plans for its human capital activities and functions, such as a human  capital strategic plan for fiscal years 2009-2013 that identifies four strategic  goals for the department related to talent acquisition and retention;  diversity; employee learning and development; and policies, programs, and  practices. DHS is planning to issue an updated strategic human capital  plan in the coming months. While these initiatives are promising, DHS has  faced challenges in implementing its human capital functions. For  example, our prior work suggests that successful organizations empower  and involve their employees to gain insights about operations from a  frontline perspective, increase their understanding and acceptance of  organizational goals and objectives, and improve motivation and morale.  DHS’s scores on the 2008 Office of Personnel Management’s Federal  Human Capital Survey—a tool that measures employees’ perceptions of  whether and to what extent conditions characterizing successful  organizations are present in their agency—and the Partnership for Public  Service’s 2010 rankings of the Best Places to Work in the Federal  Government improved from prior years. However, in the 2008 survey,  DHS’s percentage of positive responses was 52 percent for the leadership  and knowledge management index, 46 percent for the results-oriented  performance culture index, 53 percent for the talent management index,  and 63 percent for the job satisfaction index. In addition, in 2010, DHS  was ranked 28 out of 32 agencies in the Best Places to Work ranking on  overall scores for employee satisfaction and commitment.
In addition, our prior work has identified several workforce barriers to  achieving equal employment opportunities and the identification of foreign  language needs and capabilities at DHS. In August 2009 we reported that  DHS had developed a diversity council, among other initiatives, but that  DHS had generally relied on workforce data and had not regularly  included employee input from available sources to identify triggers to  barriers to equal employment opportunities, such as promotion and  separation rates. We also reported that, according to DHS, it had created  planned activities to address these barriers, but modified target  completion dates by up to 21 months and had not completed any planned  activities due to staffing shortages. In June 2010 we reported on DHS’s  foreign language capabilities, noting that DHS has taken limited actions to  assess its foreign language needs and existing capabilities and to identify  potential shortfalls. Assessing hiring needs is crucial in achieving a range  of component and departmentwide missions. As just one example,  employees with documented proficiency in a variety of languages can  contribute to U.S. Immigration and Customs Enforcement’s intelligence  and direct law enforcement operations, but staff with these capabilities  are not systematically identified.
We have made several recommendations to help DHS address weaknesses  concerning equal employment opportunity and assessments of foreign  language needs and capabilities within human capital management. For  example, we recommended that DHS identify timelines and critical phases  along with interim milestones as well as incorporate employee input in  identifying potential barriers to equal employment opportunities. DHS  concurred with our recommendations and reported taking action to  address them, such as revising plans to identify steps and milestones for  departmental activities to address barriers to equal employment  opportunities, and developing a strategy for obtaining departmentwide  employee input. We also recommended that DHS comprehensively assess  its foreign language needs and capabilities and identify potential shortfalls.  DHS concurred with our recommendations and reported taking actions to  address them, such as developing a task force consisting of DHS  components and offices that have language needs in order to identify  requirements and assess the necessary skills.
Based on our work on human capital management at the department, we  have identified various actions and outcomes for DHS to achieve to  address those human capital management challenges that have  contributed to our designation of DHS implementation and transformation  as high risk. The department should, among other things, develop and  implement a results-oriented strategic human capital plan that identifies  the department’s goals, objectives, and performance measures for  strategic human capital management and that is linked to the department’s  overall strategic plan. DHS also needs to link workforce planning efforts to  strategic and program-specific planning efforts to identify current and  future human capital needs, and improve DHS’s scores on the Federal  Employee Viewpoint Survey. In addition, DHS should develop and  implement mechanisms to assess and provide opportunities for employee  education and training, and develop and implement a recruiting and hiring  strategy that is targeted to fill specific needs.
section_title: DHS Has Taken Action to Integrate Its Management Functions and Develop Performance Measures, but Could Strengthen Its Integration and Performance Measurement Efforts
paragraphs: DHS has taken actions to integrate its management functions and to  strengthen its performance measures to assess progress in implementing  these functions, but the department has faced challenges in these efforts.  We have reported that while it is important that DHS continue to work to  implement and strengthen its management functions, it is equally  important that DHS address management integration and performance  measurement from a comprehensive, departmentwide perspective to help  ensure that the department has the structure, processes, and  accountability mechanisms in place to effectively monitor the progress  made to address the threats and vulnerabilities that face the nation.  Management integration and performance measurement are critical to the  successful implementation and transformation of the department.
Management integration. DHS has put in place common policies,  procedures, and systems within individual management functions, such as  human capital, that help to vertically integrate its component agencies.  However, DHS has placed less emphasis on integrating horizontally, and  bringing together its management functions across the department  through consolidated management processes and systems.  In November  2009, we reported that DHS had not yet developed a strategy for  management integration as required by the 9/11 Commission Act and with  the characteristics we recommended in our 2005 report. Specifically, we  recommended that the strategy (1) look across the initiatives within each  of the management functional units, (2) clearly identify the critical links  that must occur among these initiatives, (3) identify tradeoffs and set  priorities, (4) set implementation goals and a time line to monitor the  progress of these initiatives to ensure the necessary links occur when  needed, and (5) identify potential efficiencies, and ensure that they are  achieved. In the absence of a management integration strategy, DHS  officials stated that documents such as management directives and  strategic plans addressed aspects of a management integration strategy  and could help the department to manage its integration efforts. However,  we reported that without a documented management integration strategy,  it was difficult for DHS, Congress, and other key stakeholders to  understand and monitor the critical linkages and prioritization among  these various efforts. We also reported that while DHS increased the  number of performance measures for its Management Directorate, it had  not yet established measures for assessing management integration across  the department. We reported that without these measures DHS could not  assess its progress in implementing and achieving management  integration. We recommended that once a management integration  strategy was developed, DHS establish performance measures for  assessing management integration. DHS stated that the department was  taking actions to address our recommendation.
Since our November 2009 report, DHS has taken action to develop a  management integration strategy. Specifically, DHS developed and  provided us with an initial management integration plan in February 2010.  The initial plan identified seven priority initiatives for achieving  management integration:    Enterprise governance. A governance model that would allow DHS to  implement mechanisms for integrated management of DHS programs as  parts of broader portfolios of related activities.
Balanced workforce strategy. Workforce planning efforts to identify the  proper balance of federal employees and private labor resources to  achieve the department’s mission.
TASC. DHS initiative to consolidate financial, acquisition, and asset  management systems, establish a single line of accounting, and  standardize business processes.
DHS headquarters consolidation. The collocation of the department by  combining existing department and component leases and building out St.  Elizabeths campus in Washington, D.C.
Human resources information technology. Initiative to consolidate,  replace, and modernize existing departmental and component payroll and  personnel systems.
Data center migration. Initiative to move DHS component agencies’ data  systems from the agencies’ multiple existing data centers to two DHS  consolidated centers.
Homeland Security Presidential Directive 12 personal identification  verification cards deployment. Provision of cards to DHS employees and  contractors for use to access secure facilities, communications, and data.
This initial management integration plan contained individual action plans  for each of the seven initiatives. In March 2010, we met with DHS officials  and provided oral and written feedback on the initial plan. We noted that,  for example:  the action plans lacked details on how the seven initiatives contribute to  departmentwide management integration and links to the department’s  overall strategy for transformation;  the performance measures contained in the plans did not identify units of  measure, baseline measurements, or target metrics that would be used to  measure progress;  the impediments and barriers described in the plans did not align with  identified risks and the strategies for addressing these impediments and  barriers; and  the plans did not identify planned resources for carrying out these  initiatives.
DHS officials told us the department is working to enhance its initial  management integration plan to include a framework for strengthening the  department’s acquisition management.  We plan to review the changes  DHS is making to the initial management integration plan as part of our  work for the 2011 high-risk update.
Based on our work and recommendations on management integration, we  have identified specific actions and outcomes for DHS that we believe will  help the department address those management integration challenges  that contributed to our designation of DHS implementation and  transformation as high risk. Specifically, we believe that addressing these  actions and outcomes within the individual management functional areas  of acquisition, information technology, financial, and human capital  management would help DHS to integrate those functions. For example, to  successfully implement the TASC program, the Chief Financial Officer  would need to work with the Chief Procurement Officer to establish  effective mechanisms for overseeing the contractor selected to implement  the TASC program; the Chief Information Officer to ensure that data  conversions and system interfaces occur when required; and the Chief  Human Capital Officer to ensure that relevant personnel at the department  and component levels are trained on use of the TASC program once the  system is implemented. In addition, DHS should revise its strategy for  management integration to address the characteristics for such a strategy  that we recommended in 2005.
Performance measurement. DHS has not yet fully developed  performance measures or put into place structures and processes to help  ensure that the agency is managing for results. Performance measurement  underpins DHS’s efforts to assess progress in strengthening programs and  operations and in implementing corrective actions to integrate and  strengthen management functions. DHS has developed performance goals  and measures for its programs and reports on these goals and measures in  its Annual Performance Report. However, DHS’s offices and components  have not yet developed outcome-based performance measures to monitor,  assess, and independently evaluate the effectiveness of their plans and  performance. We have reported that the lack of outcome goals and  measures hinders the department’s ability to effectively assess the results  of program efforts and whether the department is using its resources  efficiently.
Over the past 2 years, we have worked with DHS to provide feedback on  the department’s Government Performance and Results Act (GPRA)  performance goals and measures through meetings with officials from the  department and its offices and components. Our feedback has ranged  from pointing out components’ limited use of outcome-oriented  performance measures to assess the results or effectiveness of programs  to raising questions about the steps taken by DHS or its components to  ensure the reliability and verification of performance data. In response to  this feedback and its own internal review efforts, DHS took action to  develop and revise its GPRA performance goals and measures for some  areas in an effort to strengthen its ability to assess its outcomes and  progress in key management and mission areas. For example, from fiscal  year 2008 to 2009, DHS reported adding 58 new measures, retiring 18  measures, and making description improvements to 67 existing  performance measures. From fiscal year 2009 to 2010, DHS reported  adding 32 new performance measures, retiring 24 measures, and making  description improvements to 37 existing performance measures. DHS is  continuing to work on developing and revising its performance measures  to improve its focus on assessing results and outcomes and to align its  measures to the goals and objectives established by the Quadrennial  Homeland Security Review. In August and September 2010, we provided  feedback on the department’s proposals for outcome-oriented  performance measures aligned with the Quadrennial Homeland Security  Review’s goals and objectives. We look forward to continuing working  with the department to provide feedback to help strengthen its ability to  assess the outcomes of its efforts.
section_title: DHS Has Taken Actions to Transform into an Integrated Department, but Has Not Yet Fully Addressed Its Transformation Challenges
paragraphs: Since we first designated the implementation and transformation of DHS  as high risk in 2003, the department has made progress in its  transformation efforts in relation to the five criteria we established in  November 2000 for removing agencies from the high-risk list, but has not  yet fully addressed its transformation, management, and mission  challenges, such as implementing effective management policies and  deploying capabilities to secure the border and other sectors. In January  2009, we reported that DHS had developed its Integrated Strategy for  High Risk Management outlining the department’s overall approach for  managing its high-risk areas and the department’s processes for assessing  risks and proposing initiatives and corrective actions to address its risks  and challenges. We also reported that DHS had developed corrective  action plans to address challenges in the areas of acquisition, financial,  human capital, and information technology management. The corrective  action plans addressed some, but not all, of the factors we consider in  determining whether agencies can be removed from our high-risk list.  Specifically, the strategy and corrective action plans identified senior  officials with the responsibility for managing DHS’s transformation high- risk area and for implementing the corrective action plans. The strategy  and plans defined some root causes for problems within management  areas, identified initiatives and corrective actions to address the causes,  and established milestones for completing initiatives and actions, though  we noted that these elements could have been better defined to, for  example, more clearly address the management challenges we have  identified. The strategy also included a framework for DHS to monitor the  implementation of its corrective action plans primarily through various  departmentwide committees  However, we reported that the strategy and corrective action plans did not  contain measures to gauge the department’s progress and performance in  implementing corrective actions, or identify the resources needed by DHS  for carrying out the corrective actions identified. The strategy and  corrective actions plans consistently cited limited resources as a challenge  or constraint in implementing corrective actions. Further, we reported that  required elements in the strategy and corrective action plans could be  strengthened or clarified, including linking initiatives and corrective  actions in the corrective action plans to root causes and milestones. In  addition, we reported that while DHS had developed a framework for  monitoring progress, the department had just begun to implement its  corrective action plans. We recommended that for DHS to successfully  transform into a more effective organization, it needed to (1) revise its  Integrated Strategy for High Risk Management and related corrective  action plans to better define root causes, include resources required to  implement corrective actions, and identify key performance measures to  gauge progress; and (2) continue to identify, refine, and implement  corrective actions to improve management functions and address  challenges. We have identified and communicated to DHS specific actions  and outcomes that we believe the department needs to address within  each of its management areas and for management integration. We believe  that these actions and outcomes will help DHS address our high-risk  criteria by, among other things, identifying root causes for problems  within each management area, developing and implementing corrective  actions to address those root causes, and demonstrating measurable,  sustainable progress in implementing the correction actions.
Since our 2009 high-risk update, DHS has taken actions to address the  high-risk designation. For example, DHS and GAO have held regular, joint  meetings, including periodic meetings that also involve Office of  Management and Budget officials, to discuss the department’s progress in  addressing the high risk designation and its overall transformation efforts.  DHS and GAO have also discussed the department’s planned revisions to  its Integrated Strategy for High Risk Management and corrective action  plans for its management areas. However, as of September 2010, DHS has  not yet provided us with an updated strategy or corrective actions plans to  address the high-risk designation, as promised. DHS officials told us that  the department is currently revising its strategy and will provide us with  the updated strategy in the coming months. We will continue to assess  DHS’s implementation and transformation efforts, including any updated  strategy and corrective action plans, as part of our work for the 2011 high- risk update, which we plan to issue in January 2011.
This concludes my prepared testimony. I would be happy to respond to  any questions that members of the Subcommittee may have.
section_title: Contacts and Acknowledgments
paragraphs: For questions regarding this testimony, please contact Cathleen A. Berrick,  Managing Director, Homeland Security and Justice at (202) 512-3404 or  berrickc@gao.gov, or David C. Maurer, Director, Homeland Security and  Justice at (202) 512-9627 or maurerd@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this testimony. Other key contributors to this statement were  Rebecca Gambler, Assistant Director; Minty Abraham; Labony  Chakraborty; Tara Jayant; Thomas Lombardi; Emily Suarez-Harris; and  Juan Tapia-Videla.
section_title: Related GAO Products
paragraphs: Department of Homeland Security: Assessments of Selected Complex  Acquisitions, GAO-10-588SP (Washington, D.C.: June 30, 2010).
Department of Homeland Security: DHS Needs to Comprehensively  Assess Its Foreign Language Needs and Capabilities and Identify  Shortfalls, GAO-10-714 (Washington, D.C.: June 22, 2010).
Department of Homeland Security: A Comprehensive Strategy Is Still  Needed to Achieve Management Integration Departmentwide,  GAO-10-318T (Washington, D.C.: Dec. 15, 2009).
Financial Management Systems: DHS Faces Challenges to Successfully  Consolidating Its Existing Disparate Systems, GAO-10-76 (Washington,  D.C.: December 4, 2009).
Department of Homeland Security: Actions Taken Toward Management  Integration, but a Comprehensive Strategy Is Still Needed, GAO-10-131  (Washington, D.C.: November 20, 2009).
Homeland Security: Despite Progress, DHS Continues to Be Challenge in  Managing Its Multi-Billion Dollar Investment and Large-Scale  Information Technology Systems, GAO-09-1002T (Washington, D.C.:  September 15, 2009).
Equal Opportunity Employment: DHS Has Opportunities to Better  Identify and Address Barriers to EEO in Its Workforce, GAO-09-639  (Washington, D.C.: August 31, 2009).
High-Risk Series: An Update, GAO-09-271 (Washington, D.C.: January  2009).
Department of Homeland Security: Progress Made in Implementation of  Management Functions, but More Work Remains, GAO-08-646T  (Washington, D.C.: April 9, 2008).
Department of Homeland Security: Progress Report on Implementation  of Mission and Management Functions, GAO-07-454 (Washington, D.C.:  August 17, 2007).
Homeland Security: Departmentwide Integrated Financial Management  Systems Remain a Challenge, GAO-07-536 (Washington, D.C.: June 21,  2007).
Department of Homeland Security: A Comprehensive and Sustained  Approach Needed to Achieve Management Integration, GAO-05-139  (Washington, D.C.: March 16, 2005).
Results-Oriented Cultures: Implementation Steps to Assist Mergers and  Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2,  2003).
Determining Performance and Accountability Challenges and High  Risks, GAO-01-159SP (Washington, D.C. November 2000).
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