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

Letter

DHS Can Strengthen the Efficiency and Effectiveness of Its Operations and Achieve Cost Savings by Reducing Fragmented, Overlapping, or Potentially Duplicative Activities

Areas of Fragmentation, Overlap, and Potential Duplication at DHS

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.

Opportunities for Cost- Saving and Revenue Enhancements at DHS

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 .

DHS Needs to Strengthen Its Management Functions

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.

Contacts and Acknowledgments

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.

Appendix I: Areas and Actions Identified in 2011-2013 Annual Reports Related to the Department of Homeland Security

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.