Department of Homeland Security: Opportunities Exist to Strengthen Efficiency and Effectiveness, Achieve Cost Savings, and Improve Management Functions
Published: 2013-04-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since beginning operations in 2003, DHS has become the third-largest federal department, with more than 224,000 employees and an annual budget of about $60 billion. Over the past 10 years, DHS has implemented key homeland security operations and achieved important goals to create and strengthen a foundation to reach its potential. Since 2003, GAO has issued more than 1,300 reports and congressional testimonies designed to strengthen DHSs program management, performance measurement efforts, and management processes, among other things. GAO has reported that overlap and fragmentation among government programs, including those of DHS, can cause potential duplication, and reducing it could save billions of tax dollars annually and help agencies provide more efficient and effective services. Moreover, in 2003, GAO designated implementing and transforming DHS as high risk because it had to transform 22 agencies into one department, and failure to address associated risks could have serious consequences. This statement addresses (1) opportunities for DHS to reduce fragmentation, overlap, and duplication in its programs; save tax dollars; and enhance revenue, and (2) opportunities for DHS to strengthen its management functions.
section_title: What GAO Found
paragraphs: Since 2011, GAO has identified 11 areas across the Department of Homeland Security (DHS) where fragmentation, overlap, or potential duplication exists and 13 areas of opportunity for cost savings or enhanced revenue collections. In these reports, GAO has suggested 53 total actions to the department and Congress to help strengthen the efficiency and effectiveness of DHS operations. In GAOs 2013 annual report on federal programs, agencies, offices, and initiatives that have duplicative goals or activities, GAO identified 6 new areas where DHS could take actions to address fragmentation, overlap, or potential duplication or achieve significant cost savings. For example, GAO found that DHS does not have a department-wide policy defining research and development (R&D) or guidance directing components how to report R&D activities. Thus, DHS does not know its total annual investment in R&D, which limits its ability to oversee components R&D efforts. In particular, GAO identified at least 6 components with R&D activities and an additional $255 million in R&D obligations in fiscal year 2011 by DHS components that was not centrally tracked. GAO suggested that DHS develop and implement policies and guidance for defining and overseeing R&D at the department. In addition, GAO reported that by reviewing the appropriateness of the federal cost share the Transportation Security Administration (TSA) applies to agreements financing airport facility modification projects related to the installation of checked baggage screening systems, TSA could, if a reduced cost share was deemed appropriate, achieve cost efficiencies of up to $300 million by 2030 and be positioned to install a greater number of optimal baggage screening systems. GAO has also updated its assessments of the progress that DHS and Congress have made in addressing the suggested actions from the 2011 and 2012 annual reports. As of March 2013, of the 42 actions from these reports, 5 have been addressed (12 percent), 24 have been partially addressed (57 percent), and the remaining 13 have not been addressed (31 percent). Although DHS and Congress have made some progress in addressing the issues that GAO has previously identified, additional steps are needed to address the remaining areas to achieve associated benefits.
While challenges remain across its missions, DHS has made considerable progress since 2003 in transforming its original component agencies into a single department. As a result, in its 2013 biennial high-risk update, GAO narrowed the scope of the area and changed its focus and name from Implementing and Transforming the Department of Homeland Security to Strengthening the Department of Homeland Security Management Functions. To more fully address this area, DHS needs to further strengthen its acquisition, information technology, and financial and human capital management functions. Of the 31 actions and outcomes GAO identified as important to addressing this area, DHS has fully or mostly addressed 8, partially addressed 16, and initiated 7. Moving forward, DHS needs to, for example, validate required acquisition documents in a timely manner, and demonstrate measurable progress in meeting cost, schedule, and performance metrics for its major acquisition programs. In addition, DHS has begun to implement a governance structure to improve information technology management consistent with best practices, but the structure covers less than 20 percent of DHSs major information technology investments.
section_title: What GAO Recommends
paragraphs: While this testimony contains no new recommendations, GAO previously made about 1,800 recommendations to DHS designed to strengthen its programs and operations. The department has implemented more than 60 percent of them and has actions under way to address others.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our work on opportunities for the  Department of Homeland Security (DHS) to eliminate fragmentation,  overlap, and duplication in its programs; enhance revenue; and improve  management functions at the department. Since beginning operations in  2003, DHS has become the third-largest federal department, with more  than 224,000 employees and an annual budget of about $60 billion. Over  the past 10 years, DHS has implemented key homeland security  operations and achieved important goals to create and strengthen a  foundation to reach its potential. Since 2003, we have made  approximately 1,800 recommendations to DHS across more than 1,300  reports and congressional testimonies designed to strengthen program  management, performance-measurement efforts, and management  processes, and enhance coordination and information sharing, among  other things. DHS has implemented more than 60 percent of these  recommendations and has actions under way to address others.  However, the department has more to do to ensure that it conducts its  missions efficiently and effectively while simultaneously preparing to  address future challenges that face the department and the nation.
On April 9, 2013, we issued our third report in response to the statutory  requirement that we identify and report annually on federal programs,  agencies, offices and initiatives that have duplicative goals or activities.
Since 2011, we have identified 162 areas across the federal government  where Congress or executive branch agencies, including DHS, could take  action to reduce fragmentation, overlap, and duplication or achieve cost  savings to address the rapidly building fiscal pressures facing our nation.We reported that fragmentation among government programs or activities  can be a harbinger of potential overlap or duplication. Reducing or  eliminating fragmentation, overlap, or duplication could potentially save  billions of tax dollars annually and help agencies provide more efficient  and effective services.
Moreover, in February 2013, we reported on DHS’s efforts to address the  high-risk area of Strengthening the Department of Homeland Security  Management Functions. We first designated this area as high-risk in  2003 because DHS had to consolidate 22 agencies—several with major  management challenges—into one department. Further, failure to  effectively address DHS’s management and mission risks could have  serious consequences for U.S. national and economic security.
My statement today is based on these reports and addresses (1)  opportunities for DHS to reduce fragmentation, overlap, and duplication in  its programs; save tax dollars; and enhance revenue, and (2)  opportunities for DHS to strengthen its management functions. For these  past reports, among other things, we analyzed DHS documents, reviewed  and updated our past reports issued since DHS began its operations in  March 2003, and, interviewed DHS officials. More detailed information on  the scope and methodology of our previous work can be found within  each specific report. We conducted this work in accordance with  generally accepted government auditing standards.
subsections: section_title: DHS Can Strengthen the Efficiency and Effectiveness of Its Operations and Achieve Cost Savings by Reducing Fragmented, Overlapping, or Potentially Duplicative Activities
subsections: section_title: Areas of Fragmentation, Overlap, and Potential Duplication at DHS
paragraphs: Since 2011, we have identified 11 areas across DHS where  fragmentation, overlap, or potential duplication exists, and suggested 24  actions to the department and Congress to help strengthen the efficiency  and effectiveness of DHS operations. In some cases, there is sufficient  information available to show that if actions are taken to address  individual issues, significant financial benefits may be realized. In other  cases, precise estimates of the extent of potential unnecessary  duplication, and the cost savings that can be achieved by eliminating any  such duplication, are difficult to specify in advance of congressional and  executive branch decision making. However, given the range of areas we  identified at DHS and the magnitude of many of the programs, the cost  savings associated with addressing these issues could be significant.
In April 2013, we identified 2 new areas where DHS could take actions to  address fragmentation, overlap, or potential duplication. First, we found  that DHS does not have a department-wide policy defining research and  development (R&D) or guidance directing how components are to report  R&D activities. As a result, the department does not know its total annual  investment in R&D, a fact that limits DHS’s ability to oversee components’  R&D efforts and align them with agency-wide R&D goals and priorities.  DHS’s Science and Technology Directorate, Domestic Nuclear Detection  Office, and the U.S. Coast Guard—the only DHS components that report  R&D-related budget authority to the Office of Management and Budget  (OMB) as part of the budget process—reported $568 million in fiscal year  2011 R&D budget authority. However, we identified at least 6  components with R&D activities and an additional $255 million in R&D  obligations in fiscal year 2011 by other DHS components that were not  reported to OMB in the budget process. To address this issue, we  suggested that DHS develop and implement policies and guidance for  defining and overseeing R&D at the department. Second, we reported  that the fragmentation of field-based information sharing can be  disadvantageous if activities are uncoordinated, as well as if opportunities  to leverage resources across entities are not fully exploited. We  suggested that DHS and other relevant agencies develop a mechanism  that will allow them to hold field-based information-sharing entities  accountable for coordinating with each other and monitor and evaluate  the coordination results achieved, as well as identify characteristics of  entities and assess specific geographic areas in which practices that  could enhance coordination and reduce unnecessary overlap could be  adopted. DHS generally agreed with our suggestions and is reported  taking steps to address them. Moving forward, we will monitor DHS’s  progress to address these actions.
Concurrent with the release of our 2013 annual report, we updated our  assessments of the progress that DHS has made in addressing the  actions we suggested in our 2011 and 2012 annual reports.outlines the 2011-2012 DHS-related areas in which we identified   Table 1  fragmentation, overlap, or potential duplication, and highlights DHS’s and  Congress’s progress in addressing them.
In our March 2011 and February 2012 reports, in particular, we suggested  that DHS or Congress take 21 actions to address the areas of overlap or  potential duplication that we found. Of these 21 actions, 2 (approximately  10 percent) have been addressed, 13 (approximately 62 percent) have  been partially addressed, and the remaining 6 (approximately 29 percent)  have not been addressed. For example, to address the potential for  overlap among three information-sharing mechanisms that DHS funds  and uses to communicate security-related information with public transit  agencies, in March 2011, we suggested that DHS could identify and  implement ways to more efficiently share security-related information by  assessing the various mechanisms available to public transit agencies.We assessed this action as partially addressed because TSA has taken  steps to streamline information sharing with public transit agencies, but  the agency continues to maintain various mechanisms to share such  information. In March 2011, we also found that TSA’s security  assessments for hazardous material trucking companies overlapped with  efforts conducted by the Department of Transportation’s (DOT) Federal  Motor Carrier Safety Administration (FMCSA), and as a result,  government resources were not being used effectively. After we  discussed this overlap with TSA in January 2011, agency officials stated  that, moving forward, they intend to only conduct reviews on trucking  companies that are not covered by FMCSA’s program, an action that, if  implemented as intended, we projected could save more than $1 million  over the next 5 years. We also suggested that TSA and FMCSA could  share each other’s schedules for conducting future security reviews, and  avoid scheduling reviews on hazardous material trucking companies that  have recently received, or are scheduled to receive, a review from the  other agency. We assessed this action as addressed because in August  2011, TSA reported that it had discontinued conducting security reviews  on trucking companies that are covered by the FMCSA program.  Discontinuing such reviews should eliminate the short-term overlap  between TSA’s and FMCSA’s reviews of hazardous material trucking  companies.
Although the executive branch and Congress have made some progress  in addressing the issues that we have previously identified, additional  steps are needed to address the remaining areas and achieve associated  benefits. For example, to eliminate potential duplicating efforts of  interagency forums in securing the northern border, in March 2011, we  reported that DHS should provide guidance to and oversight of  interagency forums to prevent duplication of efforts and help effectively  utilize personnel resources to strengthen coordination efforts along the  northern border. Further, the four DHS grant programs that we reported  on in February 2012—the State Homeland Security Program, the Urban  Areas Security Initiative, the Port Security Grant Program, and the Transit  Security Grant Program—have multiple areas of overlap and can be  sources of potential unnecessary duplication. These grant programs,  which FEMA used to allocate about $20.3 billion to grant recipients from  fiscal years 2002 through 2011, have similar goals and fund similar  activities, such as equipment and training, in overlapping jurisdictions. To  address these areas of overlap, we reported that Congress may want to  consider requiring DHS to report on the results of its efforts to identify and  prevent unnecessary duplication within and across these grant programs,  and consider these results when making future funding decisions for  these programs. Such reporting could help ensure that both Congress  and FEMA steer scarce resources to homeland security needs in the   See appendix I, table 4, for a  most efficient, cost-effective way possible.summary of the fragmentation, overlap, and duplication areas and actions  we identified in our 2011-2013 annual reports that are relevant to DHS.
section_title: Opportunities for Cost- Saving and Revenue Enhancements at DHS
paragraphs: Our 2011-2013 annual reports also identified 13 areas where DHS or  Congress should consider taking 29 actions to reduce the cost of  operations or enhance revenue collection for the Department of the  Treasury. Most recently, in April 2013, we identified 4 cost-savings and  revenue enhancement areas related to DHS. Table 2 provides a  summary of the 2011-2012 DHS-related areas in which we identified  opportunities for cost savings or revenue enhancement, as well the status  of efforts to address these areas.
In addition, in April 2013 we also reported on the steps that DHS and  Congress have taken to address the cost savings and revenue  enhancement areas identified in our 2011 and 2012 annual reports. Table  3 provides a summary of the 2011-2012 DHS-related areas in which we  identified opportunities for cost savings or revenue enhancement, as well  the status of efforts to address these areas.
Of the 21 related actions we suggested that DHS or Congress take in our  March 2011 and February 2012 reports to either reduce the cost of  government operations or enhance revenue collection, as of March 2013,  3 (about 14 percent) have been addressed, 11 (about 52 percent) have  been partially addressed, and 7 (about 33 percent) have not been  addressed. For example, in February 2012, we reported that to increase  the likelihood of successful implementation of the Arizona Border  Surveillance Technology Plan, minimize performance risks and help  justify program funding, the Commissioner of CBP should update the  agency’s cost estimate for the plan using best practices. This year, we  assessed this action as partially addressed because CBP initiated action  to update its cost estimate, using best practices, for the plan by providing  revised cost estimates in February and March 2012 for the plan’s two  largest projects. However, CBP has not independently verified its life  cycle cost estimates for these projects with independent cost estimates  and reconciled any differences with each system’s respective life cycle  cost estimate, consistent with best practices. Such action would help CBP  better ensure the reliability of each system’s cost estimate. Further, in  March 2011, we stated that Congress may wish to consider limiting  program funding pending receipt of an independent assessment of TSA’s  Screening of Passengers by Observation Techniques (SPOT) program.  This year, we assessed this action as addressed because Congress froze  the program funds at the fiscal year 2010 level and funded less than half  of TSA’s fiscal year 2012 request for full-time behavior detection officers.
Although DHS and Congress have made some progress in addressing  the issues that we have previously identified that may produce cost  savings or revenue enhancements, additional steps are needed. For  example, in February 2012, we reported that FEMA should develop and  implement a methodology that provides a more comprehensive  assessment of a jurisdiction’s capability to respond to and recover from a  disaster without federal assistance. As of March 2013, FEMA had not  addressed this action. In addition, in the 2012 report, we suggested that  Congress, working with the Administrator of TSA, may wish to consider  increasing the passenger aviation security fee according to one of many  options, including but not limited to the President’s Deficit Reduction Plan  option ($7.50 per one-way trip by 2017) or the Congressional Budget  Office, President’s Debt Commission, and House Budget Committee  options ($5 per one-way trip). These options could increase fee  collections over existing levels from about $2 billion to $10 billion over 5  years. However, as of March 2013, Congress had not passed legislation  to increase the passenger security fee. For additional information on our  assessment of DHS’s and Congress’s efforts to address our previously  reported actions, see GAO’s Action Tracker .
section_title: DHS Needs to Strengthen Its Management Functions
paragraphs: Following its establishment in 2003, DHS focused its efforts primarily on  implementing its various missions to meet pressing homeland security  needs and threats, and less on creating and integrating a fully and  effectively functioning department. As the department matured, it has put  into place management policies and processes and made a range of  other enhancements to its management functions, which include  acquisition, information technology, financial, and human capital  management. However, DHS has not always effectively executed or  integrated these functions.
The department has made considerable progress in transforming its  original component agencies into a single cabinet-level department and  positioning itself to achieve its full potential; however, challenges remain  for DHS to address across its range of missions. DHS has also made  important strides in strengthening the department’s management  functions and in integrating those functions across the department. As a  result, in February 2013, we narrowed the scope of the high-risk area and  changed the focus and name from Implementing and Transforming the  Department of Homeland Security to Strengthening the Department of  Homeland Security Management Functions. Of the 31 actions and  outcomes GAO identified as important to addressing this area, DHS has  fully or mostly addressed 8, partially addressed 16, and initiated 7.  Moving forward, continued progress is needed in order to mitigate the  risks that management weaknesses pose to mission accomplishment and  the efficient and effective use of the department’s resources. For  example:
Acquisition management: Although DHS has made progress in  strengthening its acquisition function, most of DHS’s major acquisition  programs continue to cost more than expected, take longer to deploy  than planned, or deliver less capability than promised. We identified  42 programs that experienced cost growth, schedule slips, or both,  with 16 of the programs’ costs increasing from a total of $19.7 billion  in 2008 to $52.2 billion in 2011—an aggregate increase of 166  percent. We reported in September 2012 that DHS leadership has  authorized and continued to invest in major acquisition programs even  though the vast majority of those programs lack foundational  documents demonstrating the knowledge needed to help manage  risks and measure performance. We recommended that DHS modify acquisition policy to better reflect key program and portfolio  management practices and ensure acquisition programs fully comply  with DHS acquisition policy. DHS concurred with our  recommendations and reported taking actions to address some of  them. Moving forward, DHS needs to, for example, validate required  acquisition documents in a timely manner, and demonstrate  measurable progress in meeting cost, schedule, and performance  metrics for its major acquisition programs.
Information technology management: DHS has defined and begun  to implement a vision for a tiered governance structure intended to  improve information technology (IT) program and portfolio  management, which is generally consistent with best practices.  However, the governance structure covers less than 20 percent  (about 16 of 80) of DHS’s major IT investments and 3 of its 13  portfolios, and the department has not yet finalized the policies and  procedures associated with this structure. In July 2012, we  recommended that DHS finalize the policies and procedures and  continue to implement the structure. DHS agreed with these  recommendations and estimated it would address them by September  2013.
Financial management: DHS has, among other things, received a  qualified audit opinion on its fiscal year 2012 financial statements for  the first time since the department’s creation. DHS is working to  resolve the audit qualification to obtain an unqualified opinion for fiscal  year 2013. However, DHS components are currently in the early  planning stages of their financial systems modernization efforts, and  until these efforts are complete, their current systems will continue to  inadequately support effective financial management, in part because  of their lack of substantial compliance with key federal financial  management requirements. Without sound controls and systems,  DHS faces challenges in obtaining and sustaining audit opinions on its  financial statement and internal controls over financial reporting, as  well as ensuring its financial management systems generate reliable,  useful, and timely information for day-to-day decision making.
Human capital management: In December 2012, we identified  several factors that have hampered DHS’s strategic workforce  planning efforts and recommended, among other things, that DHS  identify and document additional performance measures to assess  workforce planning efforts.recommendations and stated that it plans to take actions to address  them. In addition, DHS has made efforts to improve employee morale,  such as taking actions to determine the root causes of morale   DHS agreed with these  problems. Despite these efforts, however, federal surveys have  consistently found that DHS employees are less satisfied with their  jobs than the government-wide average. In September 2012, we  recommended, among other things, that DHS improve its root cause  analysis efforts of morale issues. DHS agreed with these  recommendations and noted actions it plans to take to address  them.
In conclusion, given DHS’s significant leadership responsibilities in  securing the homeland, it is critical that the department’s programs and  activities are operating as efficiently and effectively as possible; that they  are sustainable; and that they continue to mature, evolve, and adapt to  address pressing security needs. Since it began operations in 2003, DHS  has implemented key homeland security operations and achieved  important goals and milestones in many areas. These accomplishments  are especially noteworthy given that the department has had to work to  transform itself into a fully functioning cabinet department while  implementing its missions. However, our work has shown that DHS can  take actions to reduce fragmentation, overlap, and unnecessary  duplication to improve the efficiency of its operations and achieve cost  savings in several areas. Further, DHS has taken steps to strengthen its  management functions and integrate them across the department;  however, continued progress is needed to mitigate the risks that  management weaknesses pose to mission accomplishment and the  efficient and effective use of the department’s resources. DHS has indeed  made significant strides in protecting the homeland, but has yet to reach  its full potential.
Chairman Duncan, Ranking Member Barber, and members of the  subcommittee, this concludes my prepared statement. I would be pleased  to respond to any questions that members of the subcommittee may  have.
section_title: Contacts and Acknowledgments
paragraphs: For further information regarding this testimony, please contact Cathleen  A. Berrick at (202) 512-3404 or berrickc@gao.gov. In addition, contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this statement. Individuals who made key  contributions to this testimony are Kathryn Bernet, Assistant Director;  Elizabeth Luke; and Meg Ullengren.
section_title: Appendix I: Areas and Actions Identified in 2011-2013 Annual Reports Related to the Department of Homeland Security
paragraphs: This enclosure presents a summary of the areas and actions we identified  in our 2011-2013 annual reports that are relevant to the Department of  Homeland Security (DHS). It also includes our assessment of the overall  progress made in each of the areas and the progress made on each  action that we identified in our 2011 and 2012 annual reports in which  Congress and DHS could take actions to reduce or eliminate  fragmentation, overlap, and potential duplication or achieve other  potential financial benefits. As of April 26, 2013, we have not assessed  DHS’s progress in addressing the relevant 2013 areas. Table 4 presents  our assessment of the overall progress made in implementing the actions  needed in the areas related to fragmentation, overlap, or duplication.  Table 5 presents our assessment of the overall progress made in  implementing the actions needed in the areas related to cost savings or  revenue enhancement.