Homeland Security: Proposal for Cabinet Agency Has Merit, But Implementation Will be Pivotal to Success
Published: 2002-06-25T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: Since September 11, the President and Congress have taken aggressive steps to protect the nation, including creating an Office of Homeland Security (OHS); passing new laws, such as the USA Patriot Act and an emergency supplemental spending bill; establishing a new agency to improve transportation security; and working with federal, state, and local governments, private sector entities, non-governmental organizations and other countries to prevent future terrorist acts and to bring those individuals responsible to justice. More recently, Congress and the President have proposed greater consolidation and coordination of various agencies and activities. The President has proposed establishing a Department of Homeland Security (DHS) and has sent draft legislation to Congress. This testimony focuses on two major issues: (1) the need for reorganization and the principles and criteria to help evaluate what agencies and missions should be included in or left out of the new DHS and (2) issues related to the transition, cost, and implementation challenges of the new department.

section_title: Letter
paragraphs: Thank you for the opportunity to appear before the Subcommittee today to  discuss one of the most important issues of our time, the reorganization of  government agencies and the reorientation of their missions to improve our  nation’s ability to better protect our homeland.  It is important to recognize  that this transition to a more effective homeland security approach is part  of a larger transformation that our government must make to address  emerging fiscal, economic, demographic, scientific, technological and  other challenges of the 21st century and to meet the expectations of the  American people for timely, quality and cost-effective public services.
In the nine months since the horrible events of September 11th, the  President and the Congress have responded with important and aggressive  actions to protect the nation – creating an Office of Homeland Security  (OHS), passing new laws such as the USA Patriot Act and an emergency  supplemental spending bill, establishing a new agency to improve  transportation security, and working with unprecedented collaboration  with federal, state and local governments, private sector entities, non- governmental organizations and other countries to prevent future terrorist  acts and to bring to justice those individuals responsible for such terrible  acts.
More recently, the Congress and the President have sought to remedy long- standing issues and concerns in the government’s homeland security  functions by proposing greater consolidation and coordination of various  agencies and activities.  Recent proposals include restructuring the Federal  Bureau of Investigation (FBI) and splitting the enforcement and service  sections of the Immigration and Naturalization Service (INS).   Additionally,  Senator Joseph I. Lieberman and Representative William M. “Mac”  Thornberry have authored legislation designed to consolidate many  homeland security functions.  On June 6th, the President announced a  proposal to establish a Department of Homeland Security (DHS) and on  June 18th transmitted draft legislation to the Congress for its consideration.
In my testimony today, I will focus on two major issues that Congress  should review in its deliberations on creating a new cabinet department  principally dedicated to homeland security:  (1) the need for reorganization  and the principles and criteria to help evaluate what agencies and missions  should be included in or left out of the new DHS; and (2) issues related to  the transition, cost and implementation challenges of the new department.
subsections: section_title: Need, Principles And Criteria For Reorganization
paragraphs: In response to global challenges the government faces in the coming years,  we have a unique opportunity to create an extremely effective and  performance-based organization that can strengthen the nation’s ability to  protect its borders and citizens against terrorism.  There is likely to be  considerable benefit over time from restructuring some of the homeland  security functions, including reducing risk and improving the economy,  efficiency and effectiveness of these consolidated agencies and programs.   Realistically, however, in the short term, the magnitude of the challenges  that the new department faces will clearly require substantial time and  effort, and will take additional resources to make it fully effective.   Numerous complicated issues will need to be resolved in the short term,  including a harmonization of information technology systems, human  capital systems, the physical location of people and other assets, and many  other factors.  Implementation of the new department will be an extremely  complex task and will ultimately take years to achieve.  Given the  magnitude of the endeavor, not everything can be achieved at the same  time.  As a result, it will be important for the new department to focus on a  handful of important things, such as: articulating a clear overarching  mission and core values, developing a national strategy, utilizing strategic  planning to establish desired outcomes and key priorities, and assuring  effective communications systems.  Further, effective performance and  risk management systems must be established, and work must be  completed on threat and vulnerability assessments.
subsections: section_title: Need for Reorganization
paragraphs: GAO and other observers of the federal government’s organization,  performance and accountability for terrorism and homeland security  functions have long recognized the prevalence of gaps, duplication and  overlaps driven in large part by the absence of a central policy focal point,  fragmented missions, ineffective information sharing, and institutional  rivalries.    In recent years, GAO has made numerous recommendations  related to changes necessary for improving the government’s response to  combating terrorism.  Prior to the establishment of the OHS, GAO found  that the federal government lacked overall homeland security leadership  and management accountable to both the President and Congress. GAO  has also stated that fragmentation exits in both coordination of domestic  preparedness programs and in efforts to develop a national strategy.   Based on evaluations prior to September 11th , GAO identified the following  five actions to improve programs to combat terrorism: Create a single high-level federal focal point for policy and coordination,  Develop a comprehensive threat and risk assessment,  Develop a national strategy with a defined end state to measure   Analyze and prioritize governmentwide programs and budgets to  identify gaps and reduce duplication of effort, and  Coordinate implementation among the different federal agencies.
Moreover, in a recent report to Congress on initial concerns about  organizing for homeland security since September 11th, GAO indicated that  a definition of homeland security should be developed, preferably in the  context of the Administration’s issuance of a national strategy for  homeland security, in order to improve the effectiveness and coordination  of relevant programs.
The recent and on-going actions of the Administration to strengthen  homeland security functions, including the proposal for establishing DHS,  should not be considered a substitute for, nor should they supplant, the  timely issuance of a national homeland security strategy.  Based on our  prior work, GAO believes that the consolidation of some homeland security  functions makes sense and will, if properly organized and implemented,  over time lead to more efficient, effective and coordinated programs, better  intelligence sharing, and a more robust protection of our people, borders  and critical infrastructure.  At the same time, the proposed cabinet  department, even with its multiple missions, will still be just one of many  players with important roles and responsibilities for ensuring homeland  security.  At the federal level, homeland security missions will be require  the involvement of the CIA, FBI, the U.S. Marshals Service, the Department  of Defense (DOD), and a myriad of other agencies.   State and local  governments, including law enforcement and first responder personnel,  and the private sector all have critical roles to play.  If anything, the  multiplicity of players only reinforces the recommendations that GAO has  made in the past regarding the urgent need for a comprehensive threat, risk  and vulnerability assessment and a national homeland security strategy  that can provide direction and utility at all levels of government and across  all sectors of the country.
The development and implementation of a national strategy for homeland  security is vital to effectively leveraging and coordinating the country’s  assets, at a national rather than federal level, to prevent and defend against  future terrorist acts.  A national homeland security strategy can help define  and establish a clear role and need for homeland security and its  operational components, to create specific expectations for performance  and accountability, and to build a framework for partnerships that will  support the critical role of coordination, communication and collaboration  among all relevant parties and stakeholders with homeland security  missions.  DHS will clearly have a central role in the success of efforts to  strengthen homeland security, but it is a role that will be made stronger  within the context of a larger, more comprehensive and integrated national  homeland security strategy.
A reorganization of the government’s homeland security functions along  the lines being proposed is a major undertaking and represents one of the  largest potential reorganizations and consolidations of government  agencies, personnel, programs and operations in recent history.  Those  involved in this transition should not underestimate the time or effort  required to successfully achieve the results the nation seeks.  Numerous  comparisons have been made between the proposed DHS and other large- scale government reorganizations, including the creation of DOD, the  Central Intelligence Agency and the National Security Council as part of the  National Security Act of 1947.   Other analogies include the 1953 creation of  the Department of Health, Education and Welfare, the 1966 establishment  of the Department of Transportation (DOT) or the 1977 creation of the  Department of Energy (DOE).   Each of these cabinet level restructurings  involved the transfer and consolidation of disparate functions and the  creation of a new cabinet level structure in the Executive Branch.
Often it has taken years for the consolidated functions in new departments  to effectively build on their combined strengths, and it is not uncommon  for these structures to remain as management challenges for decades.  It is  instructive to note that the creation of DOD, which arguably already had  the most similar and aligned missions and functions among the  reorganizations mentioned, still required Congress to make further  amendments to its organization in 1949, 1953, 1958 and 1986 in order to  improve its structural effectiveness.  Despite these and other changes made  by DOD, GAO has consistently reported over the years that the department   – more than 50 years after the reorganization -- continues to have a number  of serious management challenges.  In fact, DOD has 6 of 22 government  wide high risk areas based on GAO’s latest list.  This note of caution is not  intended to dissuade the Congress from seeking logical and important  consolidations in government agencies and programs in order to improve  homeland security missions.  Rather, it is meant to suggest that  reorganizations of government agencies frequently encounter start up  problems and unanticipated consequences that result from the  consolidations, are unlikely to fully overcome obstacles and challenges,  and may require additional modifications in the future to effectively  achieve our collective goals for defending the country against terrorism.
section_title: Organizational Principles and Criteria
paragraphs: The Congress faces a challenging and complex job in its consideration of  DHS.  On the one hand, there exists a certain urgency to move rapidly in  order to remedy known problems relating to intelligence and information  sharing and leveraging like activities that have in the past and even today  prevent the United States from exercising as strong a homeland defense as  emerging and potential threats warrant.  Simultaneously, that same urgency  of purpose would suggest that the Congress be extremely careful and  deliberate in how it creates a new department for defending the country  against terrorism.  The urge to “do it quickly” must be balanced by an equal  need to “do it right” in order to ensure a consensus on identified problems  and needs, and to be sure that the solutions our government legislates and  implements can effectively remedy the problems we face in a reasonably  timely manner.  It is clear that fixing the wrong problems, or even worse,  fixing the right problems poorly, could cause more harm than good in our  efforts to defend our country against terrorism.
The federal government has engaged in numerous reorganizations of  agencies in our nation’s history.  Reorganizations have occurred at various  times and for various reasons, and have been achieved through executive  order, through recommendations by landmark commissions subsequently  approved by the Congress, such as the Hoover Commission chaired by  former President Herbert Hoover in the late 1940s, and by the Congress  through its committee structure.  The prevailing consensus on  organizational management principles changed considerably during the  course of the 20th century and through the various approaches to  reorganization, but Hoover’s Commission clearly articulated that agencies  and functions of the executive branch should be grouped together based on  their major purposes or missions.  The government has not always  followed Hoover’s lead uniformly, but in recent years most departments  except those serving a specific clientele, such as veterans, generally have  been organized according to this principle.
GAO’s own work on government restructuring and organization over the  years has tended to support the overall tendency to emphasize  consolidations of agencies as ways to improve the economy, efficiency and  effectiveness of government operations.  GAO has previously  recommended that reorganizations should emphasize an integrated  approach, that reorganization plans should be designed to achieve specific,  identifiable goals, and that careful attention to fundamental public sector  management practices and principles, such as strong financial, technology  and human capital management are critical to the successful  implementation of government reorganizations.  Similarly, GAO has also  suggested that reorganizations may be warranted based on the significance  of the problems requiring resolution, as well as the extent and level of  coordination and interaction necessary with other entities in order to  resolve problems or achieve overall objectives.
Of course, there are many lessons to be learned from the private sector,  which over the past 20 years has experienced an extraordinary degree of  consolidation through the merger and acquisition of companies or business  units.  Among the most important lessons, besides ensuring that synergistic  entities can broaden organizational strengths more than limit them, is the  need to pay critical attention to the employees impacted by the  reorganization, and to align the human capital strategies and core  competency components of the organization in order to meet expectations  and achieve results.  GAO has made similar conclusions and  recommendations for the federal government.  These observations are  particularly apt to the proposed structure of DHS, which would combine an  estimated 170,000 employees into a single department, making it the third  largest government department in terms of personnel behind DOD and the  Department of Veterans Affairs.
GAO, based on its own work as well as a review of other applicable studies  of approaches to the organization and structure of entities, has concluded  that Congress should consider utilizing specific criteria as a guide to  creating and implementing the new department.   Specifically, GAO has  developed a framework that will help Congress and the Administration  create and implement a strong and effective new cabinet department by  establishing criteria to be considered for constructing the department  itself, determining which agencies should be included and excluded, and  leveraging numerous key management and policy elements that, after  completion of the revised organizational structure, will be critical to the  department’s success.   The following chart depicts the proposed  framework: With respect to criteria that Congress should consider for constructing the  department itself, the following questions about the overall purpose and  structure of the organization should be evaluated:  Definition:  Is there a clear and consistently applied definition of  homeland security that will be used as a basis for organizing and  managing the new department?
Statutory Basis:  Are the authorities of the new department clear and  complete in how they articulate roles and responsibilities and do they  sufficiently describe the department’s relationship with other parties?
Clear Mission:  What will the primary missions of the new DHS be and  how will it define success?
Performance-based Organization:  Does the new department have  the structure (e.g., COO, etc.) and statutory authorities (e.g., human  capital, sourcing) necessary to meet performance expectations, be held  accountable for results, and leverage effective management approaches  for achieving its mission on a national basis?
Congress should also consider several very specific criteria in its  evaluation of whether individual agencies or programs should be included  or excluded from the proposed department.  Those criteria include the  following:  Mission Relevancy: Is homeland security a major part of the agency or  program mission?  Is it the primary mission of the agency or program?
Similar Goals and Objectives:  Does the agency or program being  considered for the new department share primary goals and objectives  with the other agencies or programs being consolidated?
Leverage Effectiveness:  Does the agency or program being  considered for the new department create synergy and help to leverage  the effectiveness of other agencies and programs or the new department  as a whole?  In other words, is the whole greater than the sum of the  parts?
Gains Through Consolidation:  Does the agency or program being  considered for the new department improve the efficiency and  effectiveness of homeland security missions through eliminating  duplications and overlaps, closing gaps and aligning or merging  common roles and responsibilities?
Integrated Information Sharing/Coordination:  Does the agency  or program being considered for the new department contribute to or  leverage the ability of the new department to enhance the sharing of  critical information or otherwise improve the coordination of missions  and activities related to homeland security?
Compatible Cultures:  Can the organizational culture of the agency or  program being considered for the new department effectively meld with  the other entities that will be consolidated?  Field structures and  approaches to achieving missions vary considerably between agencies.
Impact on Excluded Agencies: What is the impact on departments  losing components to DHS?  What is the impact on agencies with  homeland security missions left out of DHS?
In addition to the criteria that Congress should consider when evaluating  what to include and exclude from the proposed DHS, there are certain  critical success factors the new department should emphasis in its initial  implementation phase.  GAO over the years has made observations and  recommendations about many of these success factors, based on effective  management of people, technology, financial and other issues, especially in  its biannual Performance and Accountability Series on major government  departments.   These factors include the following:  Strategic Planning:  Leading results-oriented organizations focus on  the process of strategic planning that includes involvement of  stakeholders, assessment of internal and external environments, and an  alignment of activities, cores processes and resources to support  mission-related outcomes.
Organizational Alignment: The organization of the new department  should be aligned to be consistent with the goals and objectives  established in the strategic plan.
Communication:  Effective communication strategies are key to any  major consolidation or transformation effort.
Building Partnerships:  One of the key challenges of this new  department will be the development and maintenance of homeland  security partners at all levels of the government and the private sector,  both in the United States and overseas.
Performance Management:  An effective performance management  system fosters institutional, unit and individual accountability.
Human Capital Strategy:  The new department must ensure that that  its homeland security missions are not adversely impacted by the  government’s pending human capital crisis, and that it can recruit, retain  and reward a talented and motivated workforce, which has required  core competencies, to achieve its mission and objectives.  The people  factor is a critical element in any major consolidation or transformation.
Information Management and Technology:  The new department  should leverage state-of-the art enabling technology to enhance its  ability to transform capabilities and capacities to share and act upon  timely, quality information about terrorist threats.
Knowledge Management:  The new department must ensure it makes  maximum use of the collective body of knowledge that will be brought  together in the consolidation.
Financial Management:  The new department has a stewardship  obligation to prevent fraud, waste and abuse, to use tax dollars  appropriately, and to ensure financial accountability to the President,  Congress and the American people.
Acquisition Management:  Anticipated as one of the largest of new  federal departments, the proposed DHS will potentially have one of the  most extensive acquisition requirements in government.  Early attention  to strong systems and controls for acquisition and related business  processes will be critical both to ensuring success and maintaining  integrity and accountability.
Risk Management:  The new department must be able to maintain and  enhance current states of homeland security readiness while  transitioning and transforming itself into a more effective and efficient  structural unit.  The proposed DHS will also need to immediately  improve the government’s overall ability to perform risk management  activities that can help to prevent, defend against and respond to  terrorist acts.
section_title: Homeland Security Reorganization
paragraphs: Prior to the terrorist attacks of September 11th, the United States in recent  years had made what must be characterized as limited progress in  strengthening its efforts to protect the nation from terrorist attacks.  Mainly  through the mechanisms of executive orders and presidential decision  directives (PDD), the President has sought to provide greater clarity and  leadership in homeland security areas.  For instance, PDD 39 in June 1995  assigned the Department of Justice, through the FBI, responsibility as the  lead federal agency for crisis management, and FEMA as the lead federal  agency for consequence management for domestic terrorist attacks.  In  May 1998, PDD 62 established the position of national coordinator for  terrorism within the National Security Council.  PDD 63 emphasized new  efforts to protect the nation’s critical infrastructure from attack.  Through  legislation, the federal government increased the availability of grants for  first responder training and instituted more regular tabletop training  exercises involving state and local governments.
A number of blue ribbon panels or commissions were also convened prior  to September 11th and, after studying the government’s structure and  methods for protecting against terrorism, made many important and timely  recommendations for improving our approach.  Panels led by former  Senators Gary Hart and Warren Rudman, as well as former Virginia  Governor James Gilmore, made sweeping recommendations about  remedying the gaps, overlaps and coordination problems in the  government’s ability to detect, prevent, and respond to terrorist attacks in a  comprehensive manner across both the public and private sectors.  Indeed,  the Hart-Rudman Commission recommended the creation of a new  department to consolidate many of the government’s homeland security  functions.
In recent years, GAO has also issued numerous reports and made many  recommendations designed to improve the nation’s approach to homeland  security.  We summarized our work in a report completed just prior to the  September 11th attacks, in which we found that: (1) overall leadership and  coordination needed to be addressed; (2) limited progress had been made  in developing a national strategy and related guidance and plans; (3)  federal response capabilities had improved but further action was still  necessary; (4) federal assistance to state and local governments could be  consolidated; and (5) limited progress had been made in implementing a  strategy to counter computer-based threats.   We have continued to re- iterate that a central focal point such as OHS be established statutorily in  order to coordinate and oversee homeland security policy within a national  framework.  Today, we re-emphasize the need for OHS to be established  statutorily in order to effectively coordinate activities beyond the scope of  the proposed DHS and to assure reasonable congressional oversight.
As mentioned previously, after the September 11th terrorist attacks,  Congress and the Administration took a number of actions designed to  improve our ability to combat terrorism and protect the nation.  The  President created OHS via executive order.  Congress passed legislation  creating the Transportation Security Administration (TSA) to better secure  transportation and the USA Patriot Act to improve our capabilities to  detect and prevent terrorist acts.  Congress also introduced legislation to  restructure a variety of homeland security related functions, and Senator  Lieberman and Representative Thornberry proposed legislation to create a  new cabinet department to consolidate many homeland security functions.
On June 6th, President Bush announced a new proposal to create a  Department of Homeland Security and submitted draft legislation to  Congress on June 18th.  Like the congressional approaches to creation of a  new department, the President’s plan also reflected many of the recent  commissions’ suggestions and GAO’s recommendations for improved  coordination and consolidation of homeland security functions.  As  indicated by Governor Ridge is his recent testimony before Congress, the  creation of DHS would empower a single cabinet official whose primary  mission is to protect the American homeland from terrorism, including: (1)  preventing terrorist attacks within the United States; (2) reducing  America’s vulnerability to terrorism; and (3) minimizing the damage and  recovering from attacks that do occur.
In our initial review of the proposed DHS, we have used the President’s  draft bill of June 18th as the basis of our comments.  Nevertheless, we  recognize that the proposal has already – and will continue -- to evolve in  the coming days and weeks ahead.  The President’s proposal creates a  cabinet department with four divisions, including:  Information Analysis and Infrastructure Protection  Chemical, Biological, Radiological and Nuclear Countermeasures Additionally, the proposed DHS would be responsible for homeland  security coordination with other executive branch agencies, state and local  governments, the private sector and other entities.  The legislation  transfers to the new department intact the U.S. Secret Service and the U.S.  Coast Guard.  For the organizations transferred to the new department, the  proposed DHS would be responsible for managing all of their functions,  including non-homeland security functions.  In some instances, these other  responsibilities are substantial.  Finally, the proposal would exempt the  new department from certain authorities, including some civil service  protections, the Federal Advisory Committee Act, and procurement laws,  while providing authority to authorize new rules by regulation and to  reprogram portions of departmental appropriations.  The new department’s  Inspector General would be modeled on that office in the Central  Intelligence Agency.
Homeland Security Missions One of the most critical functions that the new department will have is the  analysis of information and intelligence to better foresee terrorist threats to  the United States.  As part of its function, the Information Analysis and  Infrastructure Protection division of the department would assess the  vulnerability of America’s key assets and critical infrastructure, including  food and water systems, agriculture, health systems, emergency services,  banking and finance, communications and information systems, energy  (including electric, nuclear, gas and oil and hydropower), transportation  systems, and national monuments.
The President’s proposal seeks to transfer to the new department the FBI’s  National Infrastructure Protection Center (other than the computer  investigations and operations center), the National Communications  System of DOD, the Commerce Department’s Critical Infrastructure  Assurance Office, the Computer Security Division of the National Institute  of Standards and Technology (NIST), the National Infrastructure  Simulation and Analysis Center of DOE, and the General Services  Administration’s (GSA) Federal Computer Incident Response Center.
The Administration has indicated that this new division would for the first  time merge under one roof the capability to identify and assess threats to  the homeland, map those threats against our vulnerabilities, issue timely  warnings, and organize preventive or protective action to secure the  homeland.  Considerable debate has ensued in recent weeks with respect  to the quality and timeliness of intelligence data shared between and  among relevant intelligence, law enforcement and other agencies.  The  proposal would provide for the new department to receive all reports and  analysis related to threats of terrorism and vulnerabilities to our  infrastructure and, if the President directs, information in the “raw” state  that has not been analyzed.
The agencies and programs included in the Administration’s proposal to  consolidate information analysis functions are clear contributors to the  homeland security mission and, if well coordinated or consolidated, could  provide greater benefits in incident reporting, analysis and warning, and  the identification of critical assets.   Such a critical endeavor, however, will  still require detailed planning and coordination, including a national critical  infrastructure protection strategy, both inside and outside the new  department, to ensure that relevant information reaches the right offices  and officials who can act upon it.  Furthermore, in considering this portion  of the legislation, Congress ought to evaluate whether the new division as  proposed, despite the provision stipulating access, will have sufficient  ability to obtain all necessary information, assistance and guidance to  make decisions in a timely, effective manner.
Within this framework, the Congress will likely need to make trade-off  decisions between concerns over access and utility of information and the  concerns that some Americans may have about civil rights issues  associated with any larger consolidation of domestically-oriented  intelligence operations.  It is also important to note that while certain  cyber/critical infrastructure protection functions are proposed for transfer  into DHS, a significant number of federal organizations involved in this  effort will remain in their existing locations, including the Critical  Infrastructure Protection Board, the Joint Task Force for Computer  Network Operations, and the Computer Investigations and Operations  Section of the FBI.  The homeland security proposal is silent on the  relationship between those entities that will be consolidated and their role  in coordinating with the entities left out of the new department, and  Congress should consider addressing this important issue.  Ultimately, a  greater emphasis on strategic planning and information sharing clearly will  be necessary to resolve the significant shortfalls that the government has  faced in sharing critical intelligence and infrastructure information in order  to better achieve homeland security expectations.  The consolidation of  some intelligence functions into DHS may help solve these problems.
The division of the new department responsible for chemical, biological,  radiological and nuclear countermeasures will consolidate several  important scientific, research and development programs, including the  select agent registration enforcement programs and activities of the  Department of Health and Human Services (HHS), programs at DOE  dealing with chemical and biological national security and non- proliferation supporting programs, the nuclear smuggling programs, the  nuclear assessment program, energy security and assurance activities, and  life science activities of DOE’s biological and environmental research  program related to microbial pathogens.  Also proposed for transfer are the  Environmental Measurements Laboratory, portions of the Lawrence  Livermore National Laboratory, the Plum Island Animal Diseases Center of  the Department of Agriculture (USDA), and DOD’s National Bio-Weapons  Defense Analysis Center, which is not yet operational.
The proposal seeks to remedy the current fragmented efforts of the  government and its private sector partners to counter and protect against  the threat of weapons of mass destruction.  To the extent that this division  would develop or coordinate the development of national policy to  strengthen research and development in the areas of countermeasures to  chemical, biological, radiological and nuclear weapons, such a goal  conforms to previous recommendations we have made.  As with the  information analysis division discussed previously, this division would also  have extensive needs to coordinate with other similar programs throughout  the government – programs which are not included in the new department.   For example, there are civilian applications of defense related research and  development underway at the Defense Threat Reduction Agency (DTRA)  and the National Institutes of Health (NIH) has some on-going  responsibility for bioterrorism research.  Whether such programs ought to  be considered for inclusion in the new department, or whether these issues  can be coordinated simply through improved interaction, are also  questions that should be considered in the larger context of the legislation.   The proposal also calls for transferring elements of the Lawrence  Livermore Lab to the new department.  At this point, without sufficient  additional information, it is not clear what the impact that such a shift  would have on the lab’s overall research program or the significant contract  workforce that is engaged in much of the activities.  Congress may also  need to further explore whether the relationships the proposal would  establish between the new department’s secretary and the Secretary of  HHS will efficiently and effectively result in the desired outcomes for  civilian research, as the nature of the agreements and delegations to  implement such functions are not clear.  Nevertheless, despite some  unresolved ambiguity, it will be important for the Congress to capture the  synergy that potentially can be created by combining compatible research  and development activities.
One of the larger divisions of the new department would handle Border and  Transportation Security, and would include the transfer of the U.S.  Customs Service, INS, the Animal and Plant Health Inspection Service  (APHIS) of USDA, the Coast Guard and TSA, both from DOT, and GSA’s  Federal Protective Service.  The proposal seeks to bring together under one  department all of the border control functions, including authority over the  issuance of visas, in order to consolidate operations for border controls,  territorial waters and transportation systems.  This effort is designed to  balance prevention of terrorist activities against people, food and other  goods, and transportation systems with the legitimate, rapid movement of  people and commerce across borders and around the country.  Under the  proposed transfer, APHIS and Plum Island (as part of the Infrastructure  division) would be moved from USDA, but other units would remain.  In  addition, no Food and Drug Administration (FDA) food safety functions  were identified for transfer.  Thus, the focus appears to be on enhancing  protection of livestock and crops from terrorist acts, rather than on  protecting the food supply as a whole.  In previous reports, GAO has  described our current fragmented federal food supply safety structure and,  in the absence of a single food safety agency, Congress may wish to  consider whether the new department would be able to prevent, detect,  and quickly respond to acts of terrorism in the food supply.  Another issue  that Congress may need to consider is the organizational separation of  facilities management functions and building security responsibilities  contained in the Federal Protective Service’s mission.  Since the provision  of security is a key facilities management function, security needs to be  integrated into decisions about the location, design and operation of  federal facilities.  Moreover, many federal agencies provide their own  building security.  The proposal does not address the coordination or  further consolidation of such functions, and it is also silent on GSA’s role in  leading the Interagency Security Committee, which develops the federal  government’s security policies and oversees the implementation of such  policies in federal facilities.
Finally, the last division, Emergency Preparedness and Response, would  combine the government’s various agencies and programs that provide  assistance, grants, training and related help to state and local governments,  to first responder personnel and support other federal agencies that may  confront terrorist attacks, major disasters and other emergencies.  The  proposal would transfer to the new department the Federal Emergency  Management Agency (FEMA), the Office of Domestic Preparedness and the  Domestic Emergency Support Teams of the Justice Department and  National Domestic Preparedness Office of the FBI, as well as the Strategic  National Stockpile and certain public health preparedness responsibilities  of HHS.  This consolidation would allow the secretary of the new  department to oversee federal government assistance in the domestic  disaster preparedness training of first responders and would coordinate the  government’s disaster response efforts.  Although certain other disaster  response functions are not specifically included in the proposed  department, the DHS secretary would have the authority to call on other  response assets, such as DOE’s nuclear incident response teams.   Additionally, Congress might wish to examine the likely impact of  establishing agreements between the DHS and HHS secretaries that retain  authority for the conduct of certain public health related activities at DHS  but the execution of the activities would be left to HHS.
section_title: Impact on Other Functions
paragraphs: The legislation for the new department indicates that DHS, in addition to its  homeland security responsibilities, will also be responsible for carrying out  all other functions of the agencies and programs that are transferred to it.   In fact, quite a number of the agencies proposed to be transferred to DHS  have multiple functions – they have missions directly associated with  homeland security and missions that are not at all related to homeland  security.  In our initial review of the impacted agencies, we have not found  any missions that would appear to be in fundamental conflict with the  department’s primary mission of homeland security.  However, the  Congress will need to consider whether many of the non-homeland security  missions of those agencies transferred to DHS will receive adequate  funding, attention, visibility and support when subsumed into a department  that will be under tremendous pressure to succeed in its primary mission.   As important and vital as the homeland security mission is to our nation’s  future, the other non-homeland security missions transferred to DHS for  the most part are not small or trivial responsibilities.  Rather, they  represent extremely important functions executed by the federal  government that, absent sufficient attention, could have serious  implications for their effective delivery and consequences for sectors of  our economy, health and safety, research programs and other significant  government functions.  Some of these responsibilities include:  maritime safety and drug interdiction by the Coast Guard,   collection of commercial tariffs by the Customs Service,   regulation of genetically engineered plants by APHIS,   advanced energy and environmental research by the Lawrence  Livermore and Environmental Measurements labs,  responding to floods and other natural disasters by FEMA, and  authority over processing visas by the State Department’s consular  officers.
These examples reveal that many non-homeland security missions are  likely to be integrated into a cabinet department overwhelmingly dedicated  to protecting the nation from terrorism.  Congress may wish to consider  whether the new department, as proposed, will dedicate sufficient  management capacity and accountability to ensure the execution of non- homeland security missions, as well as consider potential alternatives to  the current framework for handling these important functions.
Likewise, Congress may wish to consider the impact that the proposed  transfer of certain agencies and programs may have on their “home”  departments.  Both the Department of the Treasury and the DOT will see  significant reductions in size and changes to their overall departmental  missions, organization, and environments if the legislation is enacted.  As a  result, these changes provide an opportunity for Congress and the  Administration to consider what is the proper role for these and other  federal government entities.  As the impact of reductions of missions and  personnel are contemplated at several cabinet departments, it is  appropriate for Congress to reconsider the relevance or fit of federal  programs and activities.  This process requires that we ask important, yet  sometimes tough questions, such as:  What is the national need?
How important is it relative to other competing needs and available  resources?
What is the proper federal role, if any?
Who are the other key players (e.g., state and local government, non- government organizations, private sector)?
How should we define success (e.g., desired outcomes)?
What tools of government create the best incentives for strong results –  (direct funding, tax incentives, guarantees, regulation, enforcement)?
What does experience tell us about the effectiveness of any current  related government programs?
Based on the above, what programs should be reduced, terminated,  started or expanded?
In fact, given the key trends identified in GAO’s recent strategic plan for  supporting the Congress and our long range fiscal challenges, now is the  time to ask three key questions:  (1) what should the federal government do  in the 21st century? (2) how should the federal government do business in  the 21st century? and (3) who should do the federal government’s business  the 21st century?  These questions are relevant for DHS and every other  federal agency and activity.
As the proposal to create DHS indicates, the terrorist events of last fall  have provided an impetus for the government to look at the larger picture  of how it provides homeland security and how it can best accomplish  associated missions.  Yet, even for those agencies that are not being  integrated into DHS, there remains a very real need and possibly a unique  opportunity to rethink approaches and priorities to enable them to better  target their resources to address our most urgent needs.  In some cases, the  new emphasis on homeland security has prompted attention to long- standing problems that have suddenly become more pressing.  For  example, we’ve mentioned the overlapping and duplicative food safety  programs in the federal government.  While such overlap has been  responsible for poor coordination and inefficient allocation of resources,  these issues assume a new, and potentially more foreboding, meaning after  September 11th given the threat from bio-terrorism.    A consolidated  approach can facilitate a concerted and effective response to new threats.
The federal role in law enforcement, especially in connection with securing  our borders, is another area that is ripe for re-examination following the  events of September 11th.   In the past 20 years, the federal government has  taken on a larger role in financing criminal justice activities that have  traditionally been viewed as the province of the state and local sector.   Given the daunting new law enforcement responsibilities, and limited  budgetary resources at all levels, it is important to consider whether these  additional responsibilities should encourage us to reassess criminal justice  roles and responsibilities at the federal, state and local level.
section_title: Management Concerns
paragraphs: As Congress considers legislation for a new homeland security department,  it is important to note that simply moving agencies into a new government  organizational structure will, by itself, be insufficient to create the dynamic  environment that will be required to meet performance expectations for  protecting and defending the nation against terrorism.  It is critical to  recognize the important management and implementation challenges the  new department will face.  These challenges are already being faced at  TSA, which is under considerable pressure to build a strong workforce and  meet numerous deadlines for integrating technology and security issues.   Moreover, Congress should be aware that some fundamental problems  currently exist with certain of the agencies that are slated to become part  of the new department.  DHS will need to pay special attention to these  agencies to ensure that they can maintain readiness and confront  significant management problems simultaneously.
For example, several of the agencies currently face challenges in  administering their programs, managing their human capital, and  implementing and securing information technology systems.  Absent  immediate and sustained attention to long-standing issues, these problems  are likely to remain once the transfer is complete.  Our past work has  demonstrated that these management challenges exist within INS, APHIS,  and FEMA.  Program management and implementation has been a  particular challenge for INS, which has a dual mission of enforcing laws  regarding illegal immigration and providing immigration and naturalization  services for aliens who enter and reside legally in the U.S.  This “mission  overload” has impeded INS from succeeding at either of its primary  functions.  In 1997, the bipartisan Commission on Immigration Reform  stated that INS’ service and enforcement functions were incompatible and  that tasking one agency with carrying out both functions caused problems,  such as competition for resources, lack of coordination and cooperation,  and personnel practices that created confusion regarding mission and  responsibilities.  For example, INS does not have procedures in place to  coordinate its resources for initiating and managing its programs to combat  alien smuggling.  In several border areas, multiple antismuggling units exist  that operate autonomously, overlap in jurisdiction, and report to different  INS officials.  In addition, INS field officials lack clear criteria on which  antismuggling cases to investigate, resulting in inconsistent decision- making across locations.
Managing human capital also remains a challenge for INS, APHIS, and  FEMA.  For INS, issues in managing its human capital management have  impacted various functions.  Because of cut backs or delays in training, a  large portion of INS’ staff will be relatively inexperienced and inadequately  trained for processing visas for specialty occupations.  Furthermore, while  INS officials believe they need more staff to keep up with the workload,  they could not specify the types of staff needed or where they should be  located because of the lack of a staff allocation model and procedures.   APHIS, one of the three primary agencies responsible for monitoring the  entry of cargo and passengers into the U.S., has struggled to keep pace with  its heavy workload at ports of entry.  These conditions have led APHIS  inspectors to shortcut cargo inspection procedures, thereby jeopardizing  the quality of the inspections conducted.  In addition, APHIS has little  assurance that it is effectively deploying its limited inspection resources  because of weaknesses in its staffing models.  Likewise, FEMA still  struggles with using its disaster relief staff in an effective manner although  it has reported progress in improving its Disaster Field Office operations  through convening a review council to study its operations and the  implementation of corrective actions.
Agencies’ management efforts to implement information technology  systems, as well as utilize and secure the information within these systems,  have also proved challenging.  For example, INS lacks an agencywide  automated case tracking and management system to help it monitor and  coordinate its investigations.  Further, INS’ antismuggling intelligence  efforts have been hampered by an inefficient and cumbersome process for  retrieving and analyzing intelligence information and by the lack of clear  guidance to INS staff about how to gather, analyze, and disseminate  intelligence information.  Within APHIS, no central automated system has  been implemented to allow for agency-wide access to information on the  status of shipments on hold at ports, forcing inspection staff to use a  manual record keeping system that does not reliably track this information.   For FEMA, material weaknesses in its access controls and program change  controls have contributed to deficiencies within its financial information  systems.
section_title: Keys To Successful Implementation
paragraphs: The creation of the Department of Homeland Security will be one of the  largest, most complex re-structurings ever under taken.  The department  and its leaders will face many challenges, including organizational, human  capital, process, technology and environmental issues that must be sorted  out at the same time that the new department is working to maintain  readiness.  Strategic planning will be critical to maintaining readiness,  managing risk, and balancing priorities, and the department’s broad  mission will depend on many partners to ensure success.  Moreover, sound  management systems and practices will be integral to the department’s  ability to achieve its mission effectively and to be held accountable for  results.
subsections: section_title: Strategic Planning
paragraphs: A strategic plan should be the cornerstone of DHS’ planning structure.  It  should clearly articulate the agency’s mission, goals, objectives, and the  strategies the department will use to achieve those goals and objectives.  It  provides a focal point for all planning efforts, and is integral to how an  organization structures itself to accomplish its mission.  In addition, a  comprehensive transition plan that clearly delineates timetables and  resource requirements will be vital to managing this re-organization.  A  consolidation of this magnitude cannot be accomplished in months.  As  shown by past experience, it will take years to truly consolidate the  programs, functions and activities being brought under the umbrella of  DHS.  The President has taken a significant first step by establishing a  transition planning office in the Office of Management and Budget.   Congress should consider requiring a comprehensive transition plan and  periodic progress reports, as part of its oversight of the consolidation  actions.
The magnitude of the challenges that DHS faces calls for comprehensive  and rigorous planning to guide decisions about how to make the  department work effectively and achieve high performance.  Leadership  will be needed to establish long-range plans, to direct and coordinate the  actions of the department’s various interrelated policies and functions, and  to achieve its goals and objectives.  Management also must develop specific  short-range plans to efficiently direct resources among functions and to  assist in making decisions regarding day-to-day operations.  DHS must  define priorities, goals and plans in concert with other agencies, Congress,  and outside interest groups, while also leveraging the potential and  dynamism of its new units.
section_title: Organizational Alignment
paragraphs: Leading organizations start by assessing the extent to which their programs  and activities contribute to meeting their mission and intended results.   An  organization’s activities, core processes, and resources must be aligned to  support missions and help it achieve its goals.   It is not uncommon for new  leadership teams to find that their organization structures are obsolete and  inadequate to modern demands, or that spans of control and field to  headquarters ratios are misaligned, and that changes are required.  For  example, the agencies proposed to be included in DHS have unique field  structures, the integration of which will be a significant challenge given the  natural tension between organizational, functional and geographic  orientations.   Flexibility will be needed to accomplish this difficult  management task, as well as many others.
section_title: Communication/Building Partnerships
paragraphs: The President’s proposal will consolidate many homeland security  functions and activities.  However, the new department ultimately will be  dependent on the relationships it builds both within and outside the  department for its ultimate success.  As we indicated, the recently reported  intelligence sharing challenges provide ample illustration of the need for  strong partnerships and full communication among critical stakeholders.
There is a growing understanding that any meaningful results that agencies  hope to achieve are accomplished through matrixed relationships or  networks of governmental and nongovernmental organizations working  together toward a common purpose.  These matrixed relationships exist on  at least three levels.  First, they support the various internal units of an  agency.  Second, they include the relationships among the components of a  parent department as well as those between individual components and the  department.  Matrixed relationships are also developed externally,  including relationships with other federal agencies, domestic and  international organizations, for-profit and not-for-profit contractors, and  state and local governments, among others.
Internally, leading organizations seek to ensure that managers, teams, and  employees at all levels are given the authority they need to accomplish  their goals and work collaboratively to achieve organizational outcomes.   Communication flows up and down the organization to ensure that line  staff has the ability to provide leadership with the perspective and  information that the leadership needs to make decisions.  Likewise, senior  leadership keeps line staff informed of key developments and issues so that  the staff can best contribute to achieving the organization’s goals.  There is  no question that effective communication strategies are key to any major  consolidation or transformation effort.
Collaboration, coordination, and communication are equally important  across agency boundaries.  However, our work also has shown that  agencies encounter a range of barriers when they attempt coordination.    In our past work, we have offered several possible approaches for better  managing crosscutting programs – such as improved coordination,  integration, and consolidation–to ensure that crosscutting goals are  consistent, program efforts are mutually reinforcing, and where  appropriate, common or complementary performance measures are used  as a basis for management.
The proposed legislation provides for the new department to reach out to  state and local governments and the private sector to coordinate and  integrate planning, communications, information, and recovery efforts  addressing homeland security.  This is important recognition of the critical  role played by nonfederal entities in protecting the nation from terrorist  attacks.  State and local governments play primary roles in performing  functions that will be essential in effectively addressing our new  challenges.  Much attention has already been paid to their role as first  responders in all disasters, whether caused by terrorist attacks or natural  disasters.  State and local governments also have roles to play in protecting  critical infrastructure and providing public health and law enforcement  response capability.  The private sector’s ownership of energy and  telecommunications is but one indicator of the critical role that the  corporate sector must play in addressing threats to our homeland.
Achieving national preparedness and response goals hinge on the federal  government’s ability to form effective partnerships with nonfederal  entities.  Therefore, federal initiatives should be conceived as national, not  federal in nature.  The new department needs to gain the full participation  and buy-in of partners in both policy formulation and implementation to  develop effective partnerships.  DHS will need to balance national interests  with the unique needs and interests of nonfederal partners.  One size will  not, nor should it, fit all.  It is important to recognize both the opportunities  and risks associated with partnerships.  While gaining the opportunity to  leverage the legal, financial and human capital assets of partners for  national preparedness, each of these nonfederal entities has goals and  priorities that are independent of the federal government.  In designing  tools to engage these actors, the department needs to be aware of the  potential for goal slippage and resource diversion.  For instance, in  providing grants to state or local governments for training and equipment,  federal officials should be alert to the potential for these governments to  use grants to substitute for their own resources in these programs,  essentially converting a targeted federal grant into a general revenue  sharing initiative.  Maintenance of effort provisions can be included to  protect against such risk.  Designing and managing the tools of public  policy to engage and work constructively with third parties has become a  new skill required of federal agencies, and one that needs to be addressed  by the new department.
A good illustration of the relevance of partnerships involves the protection  of the nation’s borders against threats arriving aboard shipping cargo. The  Customs Service currently inspects only two percent of the cargo arriving  in American ports and it is probably unrealistic to expect significant  increases in coverage through inspections even with higher numbers of  federal inspectors.  Rather, a more effective strategy calls for the federal  government to work proactively with shipping companies to gain their  active buy-in to self-inspections and more rigorous protection of cargo.   Partnerships with foreign ports are also critical in preventing the shipping  of suspicious items in the first place.  Although critical to national security,  the protection of our ports illustrates the critical role played by  partnerships spanning sectors of the economy and nations.
section_title: Performance Management
paragraphs: A performance management system that promotes the alignment of  institutional, unit and individual accountability to achieve results will be an  essential component for success of the new department.  High-performing  organizations know how the services and functions they deliver contribute  to achieving the results of their organizations. Our work has shown that  there are three characteristics for high-performing, results-oriented  organizations.  These organizations: (1) define clear missions and desired  outcomes; (2) measure performance to gauge progress; and (3) use  performance information as a basis for decision-making.   These  characteristics are consistent with the Government Performance and  Results Act, and should be the guide to developing a strong performance  management system for the new department.
The first step for the department’s leadership will be to define its mission  and desired outcomes.  Activities, core processes and resources will have  to be aligned. This will require cascading the department’s goals and  objectives down through the organization.  Further, an effective  performance management system will require involvement of stakeholders  and a full understanding of the environment in which the department  operates.
A good performance management system fosters both institutional, unit  and individual accountability.  One way to inculcate a culture of excellence  or results-orientation is to align individual employees’ performance  expectations with agency goals and desired outcomes so that individuals  understand the connection between their daily activities and their  organization’s success.  High-performing organization have recognized that  a key element of a fully successful performance management system is to  create a “line of sight” that shows how individual responsibilities  contribute to organizational goals.  These organizations align their top  leadership’s performance expectations with organizational goals and then  cascade performance expectations to lower organizational levels.
section_title: Human Capital Strategy
paragraphs: An organization’s people are its most important asset.  People define an  organization, affect its capacity to perform, and represent the knowledge- base of the organization.  In an effort to help agency leaders integrate  human capital considerations into daily decision-making and in the  program results they seek to achieve, we have recently released an  exposure draft of a model of strategic human capital management that  highlights the kinds of thinking that agencies should apply and steps they  can take to manage their human capital more strategically.   The model  focuses on four cornerstones for effective human capital management – leadership; strategic human capital planning; acquiring, developing, and  retaining talent; and results-oriented organization culture.  The new  department may find this model useful in helping guide its efforts.
One of the major challenges DHS faces is the creation of a common  organizational culture to support a unified mission, common set of core  values, and organization-wide strategic goals, while simultaneously  ensuring that the various components have the flexibility and authorities  they need to achieve results.  When I have discussed the need for  government-wide reforms in strategic human capital management, I have  often referred to a three-step process that should be used in making needed  changes.  This process may be helpful to Congress as it considers the  human capital and other management authorities it will provide the  department.   Like other departments, DHS should be encouraged to make  appropriate use of all authorities at its disposal.  We often find that  agencies are not taking full advantage of the tools, incentives, and  authorities that Congress and the central management agencies have  provided.  DHS will also find it beneficial to identify targeted statutory  changes that Congress could consider to enhance DHS’s efficiency and  effectiveness (e.g., additional hiring and compensation flexibility for  critical skill areas, targeted early out and buyout authority).  In this regard,  Congress may wish to consider the approach it used in forming TSA, which  included provisions for a progress report and related recommendations for  congressional action.
section_title: Information Management and Technology
paragraphs: The new department will face tremendous communications and systems  and information technology challenges.  Programs and agencies will be  brought together in the new department from throughout the government.   Each will bring their communications and information systems.  It will be a  tremendous undertaking to integrate these diverse systems to enable  effective communication and share information among themselves, as well  as those outside the department.  Further, considering the sensitivity of the  data at the proposed department, securing its information systems and  networks will be a major challenge.  Since 1996, we have reported that poor  information security is a widespread federal government problem with  potentially devastating consequences.
Effective leadership and focused management control will be critical to  meeting these challenges.   We recommend that a CIO management  structure as prescribed by the Clinger-Cohen Act of 1996 be established to  provide the leadership necessary to direct this complex, vital function.   Further, it will be critical that an enterprise architecture be developed to  guide the integration and modernization of information systems.   Enterprise architecture consists of models that describe how the enterprise  operates now and how it needs to operate in the future.  Without enterprise  architecture to guide and constrain IT investments, stovepipe operations  and systems can emerge, which in turn lead to needless duplication,  incompatibilities, and additional costs.  By its very nature, the combining of  organizations will result in stovepipes.  It will require strong leadership, re- engineering of business processes to meet corporate goals, and effective  planning to integrate, modernize and secure the new department’s  information systems.
section_title: Knowledge Management
paragraphs: Effective knowledge management captures the collective body of  information and intellect within an organization, treats the resultant  knowledge base as a valued asset, and makes relevant parts of the  knowledge base available to decisionmakers at all levels of the  organization.  Knowledge management is closely aligned with enterprise  architecture management, because both focus on systematically identifying  the information needs of the organization and describing the means for  sharing this information among those who need it.  The people brought  together in the new department will have diverse skills and knowledge.  It  will be critical for the new department to build an effective knowledge  management capability.  Elements involved in institutionalizing this  function include:  Deciding with whom (both internally and externally) to share   Deciding what knowledge is to be share, through performing a  knowledge audit and creating a knowledge map;  Deciding how the knowledge is to be share, through creating  apprenticeship/mentoring programs and communities of practice for  transferring tacit knowledge, identifying best practices and lessons  learned, managing knowledge content, and evaluating methods for  sharing knowledge; and   Sharing and using organizational knowledge, through obtaining  sustained executive commitment, integrating the knowledge  management function across the enterprise and embedding it in  business models, communications strategies, and measuring  performance and value.
section_title: Financial Management
paragraphs: The events of September 11th and the efforts of the Administration and  Congress to protect the country from future terrorist attacks have  generated enormous demands on resources in a short period of time.  The  FY2002 appropriations and the nearly simultaneous transmission of an  emergency supplement and FY2003 budget request were followed shortly  by a second FY2002 supplemental.  This rapid growth in spending for  homeland security has shifted budget priorities in ways that we are only  beginning to understand.  As Congress considers the resource implications  of the proposed Department, both budget and accountability issues need to  be addressed.
It will be important for both OMB and the Congress to develop a process to  track the budget authority and outlays associated with homeland security  through the President’s budget proposals, congressional budget resolution,  and the appropriations process.  A tracking system is vital for Congress to  address the total spending for homeland security as well as to ensure that  the total allocations are in fact implemented subsequently in the  authorization and appropriations process. In addition, DHS must also track  the spending for the non-homeland security missions of the department.
As we have indicated, many important activities relevant to homeland  security will continue to be housed in other agencies outside the  department, such as the protection of nuclear power plants and drinking  water, and require the new department to work collaboratively.  The  proposed legislation addresses this challenge in several instances by  authorizing the new department to transfer and/or control resources for  some of these related programs.  For instance, the department is given  authority to set priorities for research on bioterrorism by the Department  of Health and Human Services, but it is unclear how this will occur.
Although consolidating activities in one department may produce savings  over the longer term, there will be certain transition costs in the near term  associated with setting up the new agency, acquiring space, providing for  new information systems, and other assorted administrative expenses.   Some of these costs, such as developing new systems, may be one time in  nature, while others, such as the overhead necessary to administer the  department will be continuing.  Congress may very well decide that these  new costs should be absorbed from the appropriations of programs and  agencies being consolidated into the department.  Indeed, it appears that  the Administration’s proposal seeks to facilitate this by authorizing the  Secretary to draw up to five percent of unobligated balances from accounts  to be included in the new department after notification to the Congress.   While these transfers may be sufficient to fund the transition, the costs of  the transition should be transparent to Congress up front as it considers the  proposed new department.
The initial estimated funding for the new department is $37.7 billion.  This  estimate reportedly includes the total funds, both for homeland and non- homeland security missions of the incoming agencies and programs.   Agencies and programs migrating to the new department have different  financial systems, as well as financial management challenges.  Further, the  new department would have numerous financial relationships with other  federal departments, as well as state and local government and the private  sector. It will be essential that the department have very strong financial  stewardship to manage these funds.  It is important to re-emphasize that  the department should be brought under the Chief Financial Officers (CFO)  Act and related financial management statutes.  A Chief Financial Officer,  as provided by the CFO Act, would be a significant step to ensuring the  senior leadership necessary to cut across organizational boundaries to  institutionalize sound financial systems and practices and provide good  internal controls and accountability for financial resources.   Systems that  produce reliable financial information will be critical to managing day-to- day operations and holding people accountable.
section_title: Acquisition Management
paragraphs: Sound acquisition management is central to accomplishing the  department’s mission.  While the details are still emerging, the new  department is expected to spend billions annually to acquire a broad range  of products, technologies, and services from private-sector companies.   Getting the most from this investment will depend on how well the  department manages its acquisition activities. Our reports have shown that  that some of the government’s largest procurement operations are not  always particularly well run.   In fact, three agencies with major  procurement operations – DOD, DOE and NASA -- have been on our high- risk list for the last 10 years.
To ensure successful acquisition outcomes, and effectively integrate the  diverse organizational elements that will comprise the new department, we  believe the department needs to adopt a strategic perspective on  acquisition needs, including the establishing a Chief Acquisition Officer.   Key elements of a strategic approach involve leadership, sound acquisition  strategies, and a highly skilled workforce.  Our acquisition best practices  work shows that a procurement executive or chief acquisition officer  plays a crucial role in implementing a strategic approach to acquisition.  At  the leading companies we visited, such officials were corporate executives  who had authority to influence decisions on acquisitions, implement  needed structural process or role changes, and provide the necessary clout  to obtain buy-in and acceptance of reengineering and reform efforts.  Good  acquisition outcomes start with sound acquisition strategies.  Before  committing substantial resources, the department should look across all of  its organizational elements to ensure that requirements are linked to  mission needs and costs and alternative solutions have been considered.   Finally, having the right people with the right skills to successfully manage  acquisitions is critical to achieving the department’s mission.  Many  agencies are experiencing significant skill and experience imbalances.   This will be a particular leadership challenge for the acquisition function.
The administration’s proposal would allow the department to deviate from  the normal federal acquisition rules and laws.  Certainly, there could be  situations where it might be necessary to expedite or streamline  procurement processes so that the department is not handicapped in its  ability to protect American citizens against terrorism.  We support such  flexibilities in these situations.  However, it is not clear from our review of  the administration’s proposal exactly what flexibilities are being requested.   Moreover, depending on how far-reaching such flexibilities go, we are  concerned about whether the department will have an acquisition  workforce with the skills and capabilities to execute the acquisition  function outside of the normal procurement structure.
section_title: Risk Management
paragraphs: A risk assessment is central to risk management and involves the  consideration of several factors.  Generally, the risk assessment process is  a deliberate, analytical approach to identify which threats can exploit  which vulnerabilities in an organization’s specific assets.  The factors to  consider include analyzing the vulnerabilities, identifying and  characterizing the threat, assessing the value of the asset, identifying and  costing countermeasures, and assessing risks.  After these factors are  considered, an organization can decide on implementing actions to reduce  the risk.  It is very difficult to rank threats.  However, it is more  constructive to consider a range of threats and review the vulnerabilities  and criticality of assets when contemplating decisions on resource  allocations toward homeland security.  As a nation, we must be able to  weather a variety of threat-oriented scenarios with prudent planning and  execution.  Therefore it is very important to ensure that the right resources  are applied to the most appropriate areas based on a risk based  management approach.
In summary, I have discussed the reorganization of homeland security  functions and some critical factors for success.  However, the single most  important element of a successful reorganization is the commitment of top  leaders.  Top leadership involvement and clear lines of accountability for  making management improvements are critical to overcoming an  organization’s natural resistance to change, marshalling the resources  needed to improve management, and building and maintaining  organization-wide commitment to new ways of doing business.   Organizational cultures will not be transformed, and new visions and ways  of doing business will not take root without strong and sustained  leadership.   Strong and visionary leadership will be vital to creating a  unified, focused organization, as opposed to a group of separate units  under a single roof.
Madame Chair, this concludes my written testimony.  I would be pleased to  respond to any questions that you or members of the Subcommittee may  have at this time.
section_title: Related GAO Products
subsections: section_title: Homeland Security
paragraphs: Homeland Security: Key Elements to Unify Efforts Are Underway but  Uncertainty Remains (GAO-02-610, June 7, 2002).
National Preparedness: Integrating New and Existing Technology and  Information Sharing into an Effective Homeland Security Strategy  (GAO-02-811T, June 7, 2002).
Homeland Security: Responsibility and Accountability for Achieving  National Goals (GAO-02-627T, April 11, 2002).
National Preparedness: Integration of Federal, State, Local, and Private  Sector Efforts Is Critical to an Effective National Strategy for Homeland  Security (GAO-02-621T, April 11, 2002).
Combating Terrorism: Enhancing Partnerships Through a National  Preparedness Strategy (GAO-02-549T, March 28, 2002).
Homeland Security: Progress Made, More Direction and Partnership  Sought (GAO-02-490T, March 12, 2002).
Homeland Security: Challenges and Strategies in Addressing Short- and  Long-Term National Needs (GAO-02-160T, November 7, 2001).
Homeland Security: A Risk Management Approach Can Guide  Preparedness Efforts (GAO-02-208T, October 31, 2001).
Homeland Security: Need to Consider VA’s Role in Strengthening Federal  Preparedness (GAO-02-145T, October 15, 2001).
Homeland Security: Key Elements of a Risk Management Approach  (GAO-02-150T, October 12, 2001).
Homeland Security: A Framework for Addressing the Nation’s Issues  (GAO-01-1158T, September 21, 2001).
section_title: Combating Terrorism
paragraphs: Combating Terrorism: Intergovernmental Cooperation in the  Development of a National Strategy to Enhance State and Local  Preparedness (GAO-02-550T, April 2, 2002).
Combating Terrorism: Enhancing Partnerships Through a National  Preparedness Strategy (GAO-02-549T, March 28, 2002).
Combating Terrorism: Critical Components of a National Strategy to  Enhance State and Local Preparedness (GAO-02-548T, March 25, 2002).
Combating Terrorism: Intergovernmental Partnership in a National  Strategy to Enhance State and Local Preparedness (GAO-02-547T, March  22, 2002).
Combating Terrorism: Key Aspects of a National Strategy to Enhance  State and Local Preparedness (GAO-02-473T, March 1, 2002).
Combating Terrorism: Considerations For Investing Resources in  Chemical and Biological Preparedness (GAO-01-162T, October 17, 2001).
Combating Terrorism: Selected Challenges and Related  Recommendations (GAO-01-822, September 20, 2001).
Combating Terrorism: Actions Needed to Improve DOD’s Antiterrorism  Program Implementation and Management (GAO-01-909, September 19,  2001).
Combating Terrorism: Comments on H.R. 525 to Create a President’s  Council on Domestic Preparedness (GAO-01-555T, May 9, 2001).
Combating Terrorism: Observations on Options to Improve the Federal  Response (GAO-01-660T, April 24, 2001).
Combating Terrorism: Comments on Counterterrorism Leadership and  National Strategy (GAO-01-556T, March 27, 2001).
Combating Terrorism: FEMA Continues to Make Progress in  Coordinating Preparedness and Response (GAO-01-15, March 20, 2001).
Combating Terrorism: Federal Response Teams Provide Varied  Capabilities: Opportunities Remain to Improve Coordination (GAO-01- 14, November 30, 2000).
Combating Terrorism: Issues in Managing Counterterrorist Programs  (GAO/T-NSIAD-00-145, April 6, 2000).
Combating Terrorism: Need to Eliminate Duplicate Federal Weapons of  Mass Destruction Training (GAO/NSIAD-00-64, March 21, 2000).
Combating Terrorism: Observations on the Threat of Chemical and  Biological Terrorism (GAO/T-NSIAD-00-50, October 20, 1999).
Combating Terrorism: Need for Comprehensive Threat and Risk  Assessments of Chemical and Biological Attack (GAO/NSIAD-99-163,  September 7, 1999).
Combating Terrorism: Observations on Growth in Federal Programs  (GAO/T-NSIAD-99-181, June 9, 1999).
Combating Terrorism: Analysis of Potential Emergency Response  Equipment and Sustainment Costs (GAO-NSIAD-99-151, June 9, 1999).
Combating Terrorism: Use of National Guard Response Teams Is Unclear  (GAO/NSIAD-99-110, May 21, 1999).
Combating Terrorism: Issues to Be Resolved to Improve  Counterterrorism Operations (GAO/NSIAD-99-135, May 13, 1999).
Combating Terrorism: Observations on Federal Spending to Combat  Terrorism (GAO/T-NSIAD/GGD-99-107, March 11, 1999).
Combating Terrorism: Opportunities to Improve Domestic Preparedness  Program Focus and Efficiency (GAO-NSIAD-99-3, November 12, 1998).
Combating Terrorism: Observations on the Nunn-Lugar-Domenici  Domestic Preparedness Program (GAO/T-NSIAD-99-16, October 2, 1998).
Combating Terrorism: Threat and Risk Assessments Can Help Prioritize  and Target Program Investments (GAO/NSIAD-98-74, April 9, 1998).
Combating Terrorism: Spending on Governmentwide Programs Requires  Better Management and Coordination (GAO/NSIAD-98-39, December 1,  1997).
section_title: Public Health
paragraphs: Bioterrorism: The Centers for Disease Control and Prevention’s Role in  Public Health Protection (GAO-02-235T, November 15, 2001).
Bioterrorism: Review of Public Health and Medical Preparedness (GAO- 02-149T, October 10, 2001).
Bioterrorism: Public Health and Medical Preparedness (GAO-02-141T,  October 10, 2001).
Bioterrorism: Coordination and Preparedness (GAO-02-129T, October 5,  2001).
Bioterrorism: Federal Research and Preparedness Activities (GAO-01- 915, September 28, 2001).
Chemical and Biological Defense: Improved Risk Assessments and  Inventory Management Are Needed (GAO-01-667, September 28, 2001).
West Nile Virus Outbreak: Lessons for Public Health Preparedness  (GAO/HEHS-00-180, September 11, 2000).
Need for Comprehensive Threat and Risk Assessments of Chemical and  Biological Attacks (GAO/NSIAD-99-163, September 7, 1999).
Chemical and Biological Defense: Program Planning and Evaluation  Should Follow Results Act Framework (GAO/NSIAD-99-159, August 16,  1999).
Combating Terrorism: Observations on Biological Terrorism and Public  Health Initiatives (GAO/T-NSIAD-99-112, March 16, 1999).
section_title: Aviation Security
paragraphs: Aviation Security: Vulnerabilities in, and Alternatives for, Preboard  Screening Security Operations (GAO-01-1171T, September 25, 2001).
Aviation Security: Weaknesses in Airport Security and Options for  Assigning Screening Responsibilities (GAO-01-1165T, September 21,  2001).
Aviation Security: Terrorist Acts Illustrate Severe Weaknesses in  Aviation Security (GAO-01-1166T, September 20, 2001).
Aviation Security: Terrorist Acts Demonstrate Urgent Need to Improve  Security at the Nation's Airports (GAO-01-1162T, September 20, 2001).
Aviation Security: Long-Standing Problems Impair Airport Screeners'  Performance (RCED-00-75, June 28, 2000).
Aviation Security: Slow Progress in Addressing Long-Standing Screener  Performance Problems (T-RCED-00-125, March 16, 2000).
Aviation Security: Progress Being Made, but Long-term Attention Is  Needed (T-RCED-98-190, May 14, 1998).
Aviation Security: FAA's Procurement of Explosives Detection  Devices (RCED-97-111R, May 1, 1997).
Aviation Security: Commercially Available Advanced Explosives  Detection Devices (RCED-97-119R, April 24, 1997).
Aviation Security: Technology's Role in Addressing Vulnerabilities (T- RCED/NSIAD-96-262, September 19, 1996).
Aviation Security: Urgent Issues Need to Be Addressed (T-RCED/NSIAD- 96-251, September 11, 1996).
Aviation Security: Immediate Action Needed to Improve Security (T- RCED/NSIAD-96-237, August 1, 1996).
section_title: Critical Infrastructure Protection
paragraphs: Critical Infrastructure Protection: Significant Challenges in  Safeguarding Government and Privately Controlled Systems from  Computer-Based Attacks (GAO-01-1168T, September 26, 2001).
Critical Infrastructure Protection: Significant Challenges in Protecting  Federal Systems and Developing Analysis and Warning  Capabilities (GAO-01-1132T, September 12, 2001).
Critical Infrastructure Protection: Significant Challenges in Developing  Analysis, Warning, and Response Capabilities (GAO-01-1005T, July 25,  2001).
Critical Infrastructure Protection: Significant Challenges in Developing  Analysis, Warning, and Response Capabilities (GAO-01-769T, May 22,  2001).
Critical Infrastructure Protection: Significant Challenges in Developing  National Capabilities (GAO-01-323, April 25, 2001).
Critical Infrastructure Protection: Challenges to Building a  Comprehensive Strategy for Information Sharing and Coordination (T- AIMD-00-268, July 26, 2000).
Critical Infrastructure Protection: Comments on the Proposed Cyber  Security Information Act of 2000 (T-AIMD-00-229, June 22, 2000).
Critical Infrastructure Protection: National Plan for Information  Systems Protection (AIMD-00-90R, February 11, 2000).
Critical Infrastructure Protection: Comments on the National Plan for  Information Systems Protection (T-AIMD-00-72, February 1, 2000).
Critical Infrastructure Protection: Fundamental Improvements Needed  to Assure Security of Federal Operations (T-AIMD-00-7, October 6, 1999).
Critical Infrastructure Protection: Comprehensive Strategy Can Draw on  Year 2000 Experiences (AIMD-00-1, October 1, 1999).
section_title: Disaster Assistance
paragraphs: Disaster Assistance: Improvement Needed in Disaster Declaration  Criteria and Eligibility Assurance Procedures (GAO-01-837, August 31,  2001).
Federal Emergency Management Agency:  Status of Achieving Key  Outcomes and Addressing Major Management Challenges (GAO-01-832,  July 9, 2001).
FEMA and Army Must Be Proactive in Preparing States for Emergencies  (GAO-01-850, August 13, 2001).
section_title: Budget and Management
paragraphs: Results-Oriented Budget Practices in Federal Agencies (GAO-01-1084SP,  August 2001).
Managing for Results: Federal Managers’ Views on Key Management  Issues Vary Widely Across Agencies (GAO-010592, May 2001).