Combating Terrorism: Determining and Reporting Federal Funding Data
Released: 2006-01-17T00:00:00

Letter

Background

The National Defense Authorization Act for Fiscal Year 1998 (NDAA for FY 1998), as amended by the National Defense Authorization Act for Fiscal Year 1999 (NDAA for FY 1999) required OMB to issue both a classified and an unclassified report on funding to combat terrorism. Under the NDAA reporting requirements, OMB’s annual report addressed funding for combating terrorism without differentiating between homeland security and overseas activities. However, in its 2002 unclassified report, OMB, for the first time, explicitly distinguished between overseas combating terrorism activities coordinated by the National Security Council and homeland security activities coordinated by the President’s Office of Homeland Security.

Section 889 of the Homeland Security Act of 2002 repealed the NDAA reporting requirements in favor of new reporting requirements. In particular, section 889 required the President’s budget to include an analysis of “homeland security funding,” which it defined by reference to OMB’s 2002 report as activities to detect, deter, protect against, and if needed, respond to terrorist attacks occurring within the United States. OMB’s definition of homeland security activities included activities that the agency had not previously treated as combating terrorism.

The 2003 annual report on combating terrorism was the last combating terrorism report issued under the NDAA reporting requirements. OMB’s next report to Congress was published as part of the President’s fiscal year 2005 budget, which was issued in February 2004 and reflected the changes called for in that act for the first time. In its final 2003 unclassified annual report on combating terrorism, OMB categorized the government’s homeland security activities into the six critical mission areas discussed in the National Strategy for Homeland Security.

Seven Agencies Use Different Methodologies to Estimate How Much of the Budget Supports Combating Terrorism Activities

The seven agencies we contacted use different methods to estimate the portion of their authorized funding that supports combating terrorism activities. Although OMB provides guidance to agencies, it does not prescribe a specific methodology for how agencies should determine the portion of their budget authority that relates to combating terrorism activities. One agency we contacted—DOD—reported that OMB determines how much of DOD’s funding relates to combating terrorism. While OMB staff said that they expect most executive agencies to provide them with funding data related to combating terrorism activities, they said that they make these determinations for DOD. DOD officials said that they enter budget data into OMB’s central database and then OMB staff review the data and extract information that they find consistent with OMB’s definition of combating terrorism.

Six of the other seven agencies we reviewed developed their own methodologies using guidance, such as OMB Circular No. A-11, which includes definitions for combating terrorism activities and instructions for submitting information on funding data related to combating terrorism activities to OMB. Because these methodologies involve estimations, some level of professional judgment is inherent throughout the process. To implement these methodologies, agencies first identify their combating terrorism activities and then estimate their related funding levels. (See app. VI for guidance agencies most commonly use to identify combating terrorism activities.)

Officials from two of these six agencies—GSA and DHS—reported that they used methods involving formulas to determine their funding levels that are related to combating terrorism. Officials from GSA told us that they use a formula-driven methodology for estimating its budget authority for the portion of Real Property Activities within its Federal Buildings Fund that relate to homeland security activities. To derive this methodology, GSA officials from its Office of Budget said GSA consulted with OMB and reviewed all activities conducted under the Federal Buildings Fund, looked at historical trends related to homeland security activities associated with the fund, and applied their professional judgment. Figure 1 illustrates GSA’s methodology and demonstrates how the agency applied its methodology in estimating its fiscal year 2006 budget authority for the portion of Real Property Activities within its Federal Buildings Fund that relate to homeland security activities.

Officials from DHS’s component offices with whom we met—Customs and Border Protection, Immigration and Customs Enforcement, the Information Analysis and Infrastructure Protection Directorate, the Office of State and Local Government Coordination and Preparedness (SLGCP), the Transportation Security Administration, USCG, the United States Secret Service (USSS), and the Science and Technology Directorate—told us that they also derived formula-driven methodologies for determining their homeland security funding levels. For example, officials from USSS said that they derived a quantitative methodology for determining the portion of their appropriation for Operating Expenses that relates to homeland security. They said that to develop this methodology, USSS reviewed all of its programs, activities, and related staff hours conducted under its two missions—Protective Services and Investigative Services— to determine those activities that related to homeland security. See figure 2 for the USSS methodology.

USSS officials told us that they discussed their methodology with OMB and received OMB’s approval to implement it. USSS officials told us that they have been using this methodology to estimate the portion of their operating expenses budget authority related to homeland security since 2003.

The other four agencies—DOE, USDA, USACE, and DOJ—reported having methodologies in place to determine their funding levels for combating terrorism activities that are less formula driven. For example, using the definitions contained in OMB Circular No. A-11, a DOE official told us that DOE personnel review the agency’s programs and activities to determine which are related to homeland security or overseas combating terrorism. Then, a DOE official consults with OMB to determine whether OMB would like the agency to make any revisions to the activities it has designated as combating terrorism. Once DOE finalizes its determination that an activity is categorized as a combating terrorism activity, 100 percent of that activity’s budget authority is attributed to combating terrorism. Additionally, officials from the component offices in USDA we met with— the Animal and Plant Health Inspection Service (APHIS) and the Agricultural Research Service (ARS)—told us that they used qualitative methods for determining their homeland security funding levels. For example, APHIS officials said that they developed a set of six questions to determine whether their activities relate to homeland security. In reviewing these activities, APHIS officials told us that if any of the questions in figure 3 apply, they will consider the activity related to homeland security, and then 100 percent of that activity’s budget authority will be attributed to homeland security.

In addition to estimating funding levels for combating terrorism activities, OMB also requires agencies to align their homeland security activities with the critical mission areas in the National Strategy for Homeland Security. Officials at four of the six agencies we visited that estimate their combating terrorism funding levels said that they used their professional judgment to determine which critical mission area best aligns with their homeland security activities by comparing those activities with the definitions of the national strategy’s critical mission areas.

As previously discussed, to estimate funding levels, agencies first identify their combating terrorism activities. Officials at two of the six agencies we contacted said that activities with multiple or dual purposes pose a particular challenge to them when determining their combating terrorism activities because they must apply professional judgment to determine which purpose to emphasize. As a result, determining funding levels for combating terrorism activities and aligning homeland security activities to critical mission areas cannot be precise. For example, as previously noted, GSA officials told us that they conduct upgrades to buildings’ fire alarm enhancement systems that could be used to alert employees to a fire. However, these officials also said the same system could also be used to alert employees to stay in the building in the event of a terrorist attack. Consequently, GSA cannot definitively categorize its fire alarm enhancement systems as a homeland security activity because the efforts within this activity are not exclusively related to homeland security. DHS officials also reported facing similar challenges. For example, SLGCP has multi-use grants that could be used for both combating terrorism and other goals. SLGCP staff cited the fact that the chemical protection suits provided under the Firefighter Assistance Grant program could be used in the field for a fuel spill or for a terrorist incident such as a dirty bomb. Consequently, DHS believes the process of categorizing combating terrorism activities is an estimation exercise, for which the department’s staff must apply their professional judgment.

Furthermore, agency officials at three agencies we visited said that an additional challenge in determining whether an activity should be considered a combating terrorism activity involves interpreting OMB’s combating terrorism definitions. For example, a DOE official told us that it can be problematic to categorize activities that are associated with the Defense Nuclear Nonproliferation Program such as efforts to assist the Russians in converting surplus plutonium into fuel for commercial reactors. After its conversion, this material is no longer suitable for use in a nuclear weapon. Although the argument could be made that the program’s eventual effect may be to take potential ammunition away from future terrorists, the amount spent in Russia for the conversion to fuel of already well protected materials is not reported as combating terrorism. DOE cites this as one example of the fact that the decision of whether an activity is considered combating terrorism or non-combating terrorism is a judgment call based on interpretation of the definition.

Agencies in our review manage the process of estimating funding levels for combating terrorism activities through OMB oversight and supervisory review. According to OMB, the responsibility of ensuring that homeland security activities are properly categorized is a joint effort made by OMB and the agencies involved. For their part, OMB staff perform reviews of activities determined to be related to homeland security to ensure that they are in accordance with the homeland security definition. OMB staff told us that there is no written guidance for such a review. Instead, OMB staff rely on the definition in OMB Circular No. A-11 and their judgment to decide if the activity has been reasonably categorized.

OMB staff said that they currently do not review agency estimates of funding data for overseas combating terrorism activities because OMB is no longer required to report on overseas combating terrorism funding data. Section 889 of the Homeland Security Act of 2002 repealed the NDAA reporting requirements in favor of new reporting requirements. The section 889 reporting requirement applies only to homeland security activities, not overseas activities related to combating terrorism. Although OMB still collects overseas combating terrorism funding data, OMB staff said that they have not reviewed or validated this information since fiscal year 2003. As a result, the overseas combating terrorism data for fiscal years 2004–2006 has not received the same level of scrutiny as the homeland security data. Similarly, without any future legislative action, OMB does not plan to review or validate future funding estimates related to overseas combating terrorism activities. As a result, Congress does not receive reports on both the homeland security and overseas combating terrorism portions of combating terrorism funding.

In addition to reviewing homeland security data, OMB also reports taking steps to ensure that agencies have properly aligned their homeland security activities with the six critical mission areas outlined in the National Strategy for Homeland Security. OMB staff told us that annually, they examine the activities agencies aligned with each critical mission area to ensure consistency across all federal agencies and determine if the activities have been properly aligned based on the definitions of the critical mission areas in the National Strategy for Homeland Security. Such alignments can help inform congressional decision makers about the amount of funding that has been allocated to any one critical mission area.

In addition to undertaking the previously mentioned reviews, each year since 2002, OMB has provided agencies with an opportunity to make changes to the activities they report as homeland security. In fiscal year 2005, OMB formalized this process by asking agencies to complete a form outlining the agency’s proposed changes prior to official submission of annual budget requests. OMB staff said that OMB’s examiners use the definition for homeland security in its Circular No. A-11 to review each agency’s request, and then the examiners discuss the agencies’ request with staff from OMB’s Homeland Security Branch, as well as the agency to decide if the activity has been reasonably categorized.

Officials at all six of the agencies we contacted who make their own determinations of funding related to combating terrorism reported having controls in place to help ensure that the agency’s combating terrorism activities are appropriately identified and categorized as either homeland security or overseas combating terrorism. For example, DHS officials said that DHS budget desk officers within the Chief Financial Officer’s Budget Division review activities its components recommend as combating terrorism and check for activities that may have been categorized incorrectly. Then, another budget desk officer, within the same division, reviews the data for unusual fluctuations or trends. If necessary, the budget desk officer and component representatives are to contact OMB to resolve any potential disagreements. After agencies submit information to OMB, OMB program examiners review the data and approve the activities or request the agencies to make revisions according to their instruction.

Implementation of Three Recommendations Could Provide Additional Information for Budget Decisions and Understanding of Performance

OMB has not implemented three recommendations from our 2002 report that would have and still could provide OMB and Congress with additional information for making budget decisions and help them understand performance results. In our 2002 report, we recommended that OMB require agencies to provide information on obligations in the database used by OMB to produce the President’s annual budget request—and that OMB should include obligations as reported in this database in its annual report on combating terrorism. We made this recommendation to help Congress obtain information on spending that supports the President’s annual budget request related to combating terrorism activities and to provide decision makers with insights as to whether programs are being run according to plans established by their budget projections. Without including obligation data in the Analytical Perspectives, along with funding levels authorized by Congress for agencies’ homeland security activities, it is difficult for decision makers to know (1) how much funding from prior years is still available to potentially reduce new spending requests, (2) whether the rate of spending for a program is slower than anticipated, or (3) what the level of effort (i.e., size of the program) is for a particular year as well as for a program over time.

OMB staff told us that OMB has not substantially changed its position on this recommendation since we published our 2002 report. OMB staff continue to cite the effort required to produce such data. While OMB staff acknowledged that OMB examiners use obligation data in assessing the appropriateness of agency budget requests overall, they have felt that budget authority data provide the most insight into combating terrorism programs and facilitate follow up on areas of concern. OMB staff also said that including obligation information in its funding analysis is not necessary because at the end of the fiscal year, most agencies with homeland security activities have already obligated the majority of their budget authority. However, OMB staff also said that they might consider reporting obligation information for a targeted set of accounts that receive multiyear funding and might carry balances for homeland security programs from year to year, unlike the majority of accounts that receive funding with only 1 year of availability. A conservative analysis suggests that unobligated balances associated with funding for homeland security activities for fiscal years 2002 through 2004 could be between $2 billion and $3.4 billion. Although it would be important to understand how agencies plan to use these balances, information on what funding is unobligated—and in which accounts—is potentially useful for congressional deliberations on the President’s budget request. We recognize that collecting these data would create an additional workload for both OMB and agency budget officials, but we continue to believe that such an effort is warranted for congressional oversight because of the high priority placed on combating terrorism. Therefore, we continue to believe that our prior recommendation on this issue from our 2002 report is relevant and should be implemented.

Similarly, implementation of our 2002 recommendation that OMB direct relevant departments to develop or enhance combating terrorism performance goals and measures and include such measures in the governmentwide plan would assist in determining whether funding increases have improved performance results.

Although three of the seven agencies in our review told us that OMB did not direct them to develop performance measures for combating terrorism, OMB staff said that they are working with agencies on the development of combating terrorism performance measures at the agency level, primarily with DHS. OMB staff also said that they have not yet taken any action to prepare measures on a governmentwide basis. Additionally, OMB has not yet prepared a governmentwide plan that could include such measures related to combating terrorism. OMB staff said that the Homeland Security Council—which provides advice to the President on homeland security issues—DHS, and OMB are coordinating and planning for the future development of governmentwide performance measures related to combating terrorism. However, OMB staff said that they have not yet established a timeline for developing such measures.

Implementation of our 2002 recommendation to include national-level and federal governmentwide combating terrorism performance measures as a supplement to existing strategies and their future revisions would help to assess and improve preparedness at the federal and national levels. As previously discussed, federal governmentwide performance measures related to combating terrorism have not yet been developed. Moreover, there have been no supplements or revisions to the existing national strategies that include federal governmentwide or national-level combating terrorism performance goals and measures. Without goals and measures from the federal and national levels, it is difficult to organize a coordinated and effective combating terrorism effort. Because numerous agencies are responsible for combating terrorism, federal governmentwide performance planning could better facilitate the integration of federal and national activities to achieve federal goals in that they could provide a cohesive perspective on the goals of the federal government. Furthermore, without governmentwide combating terrorism goals and measures, the Administration does not have an effective means of articulating to Congress or the American people the governmentwide accomplishments related to combating terrorism.

While OMB has not yet developed governmentwide performance goals and measures, OMB established a formal assessment tool for the budget formulation process in fiscal year 2002—the Program Assessment Rating Tool to help measure program performance. However, OMB has not yet completed all PART reviews for programs that relate to combating terrorism activities, or done a crosscutting combating terrorism or homeland security PART review that could address the appropriateness of performance measures in the larger context. In our recommendation from an earlier report, we stated that targeting PART could help focus decision makers’ attention on the most pressing policy and program issues. Furthermore, we recommended that such an approach could facilitate the use of PART assessments to review the relative contributions of similar programs to common or crosscutting goals and outcomes.

It is critical that the federal government, as the steward of the taxpayers’ money, ensure that such funds are managed to maximize results.

Governmentwide combating terrorism performance measures that support the national strategies would allow the Administration and Congress to more effectively assess the federal government’s progress in combating terrorism initiatives, and better determine how effectively the government is using valuable resources. Furthermore, they would provide a more effective means of holding agencies accountable for achieving results.

Notwithstanding a lack of progress in developing governmentwide performance measures, some agencies have performance goals and measures that reflect priorities for combating terrorism. Performance measures can provide information on many things, such as outputs, which provide the number of activities, and outcomes, which demonstrate achievement of intended results. Four of the seven agencies we contacted—DHS, DOE, USDA, and DOJ— developed performance measures for combating terrorism activities as part of their efforts under the Government Performance and Results Act of 1993 (GPRA). An example of a DOE output performance measure, designed to help achieve its goal of protecting National Nuclear Security Administration personnel, facilities, and nuclear weapons is as follows: “Replace, upgrade, re-certify 15 percent of emergency response equipment by 2009.”

To help DHS evaluate its efforts related to preventing entry of unauthorized individuals and those that pose a threat to the nation, DHS created the following performance measure: “Determine the percentage of foreign nationals entering the United States who have biometric and biographic information on file prior to entry, including the foreign nationals who are referred for further inspection actions and with fraudulent documents identified.” This is an output-related performance measure that provides information about the number of foreign nationals who enter the country requiring further inspection.

Under GPRA, virtually every executive agency is required to develop strategic plans covering a period of at least 5 years forward from the fiscal year in which it is submitted and to update those plans at least every 3 years. Under this act, strategic plans are the starting point for agencies to set annual performance goals and to measure program performance in achieving those goals. Although GPRA does not specifically require executive agencies to develop strategic plans related to combating terrorism, DOD has initiated efforts to develop strategic plans that incorporate performance measures for combating terrorism. In response to our previous recommendation that DOD develop a framework for the antiterrorism program that would provide the department with a vehicle to guide resource allocations and measure the results of improvement efforts, DOD developed an Antiterrorism Strategic Plan. This preliminary framework includes, among other things, a collective effort to defend against, respond to, and mitigate terrorist attacks aimed at DOD personnel. According to DOD officials, the strategic goals established in DOD’s Antiterrorism Strategic Plan directly align with OMB’s definitions of homeland security and overseas combating terrorism. One of DOD’s strategic goals is to conduct effective antiterrorism training and execute realistic antiterrorism exercises. DOD officials reported that they intend to collect antiterrorism performance data from all DOD components and plan to issue the first performance report on antiterrorism in the second quarter of fiscal year 2006. While we have not yet fully evaluated the effectiveness of this framework or plan, such efforts represent important steps taken by an agency to develop performance measures and, consequently, a results-oriented management framework specifically related to combating terrorism activities.

Currently, because governmentwide performance measures have not been developed, the executive branch does not have a means to effectively measure and link resources expended and performance achieved related to combating terrorism efforts on a governmentwide basis. Without a clear understanding of this linkage, the executive branch and Congress may be missing opportunities to increase productivity and efficiency to ensure the best use of taxpayer funds. Therefore, we continue to believe that our prior recommendations on this issue from our 2002 report are important and should be implemented.

In our 2002 report, we also made recommendations to OMB concerning an analysis of duplication of effort related to combating terrorism activities and the timely reporting of information to support congressional budget deliberations. Our November 2002 report was issued concurrently with the enactment of the Homeland Security Act of 2002, which repealed OMB’s prior reporting requirements, including the duplication analysis, and accelerated the timeline for OMB to report funding data on homeland security activities. The status of these recommendations is discussed further in appendix VII.

Conclusions

Given the recent emphasis on and significance of combating terrorism, Congress should have the best available funding information to assist in its oversight role. Since the enactment of the Homeland Security Act of 2002, OMB has not been required to report on overseas combating terrorism data. Moreover, OMB staff said that funding data for overseas combating terrorism activities do not receive the same level of scrutiny as funding data for homeland security activities. Thus, the quality of the overseas combating terrorism data may degrade over time. Reporting such data along with homeland security funding would greatly improve the transparency of funding attributed to combating terrorism activities across the federal government. Although OMB’s analysis of homeland security funding in the Analytical Perspectives of the President’s budget satisfies the current legal requirements under the Homeland Security Act of 2002, it does not provide a complete accounting of all funds allocated to combating terrorism activities.

Matter for Congressional Consideration

If Congress is interested in receiving data on overseas combating terrorism funding as well as data on homeland security funding, then Congress should consider requiring OMB to report on overseas combating terrorism funding data in the Analytical Perspectives of the President's budget along with homeland security funding.

Agency Comments

We provided a draft of this report to OMB, USDA, DOD, DOE, DHS, DOJ, USACE, GSA, and the National Security Council for review and comment. OMB provided formal written comments on December 21, 2005, which are presented in appendix VIII. OMB said it appreciates the in-depth analyses in the report and the detailed review of the government’s homeland security spending levels, but objected to GAO including information on overseas combating terrorism funding data. OMB questioned the reliability of this information because it has not reviewed agency submissions of overseas combating terrorism data since fiscal year 2003. We believe the overseas combating terrorism data are sufficient for the purposes of this report and therefore have included them in appendix I. As discussed in this report, agencies in our review that provide information on combating terrorism activities—including those with overseas combating terrorism responsibilities—use OMB criteria and their own internal monitoring and review processes to categorize funding by activities. These agencies reported that they have designed controls over the estimation process to help ensure the reliability of the data. However, we agree that OMB’s review would provide an additional level of assurance, which is why we have made this a matter for congressional consideration.

In addition to OMB’s comments, GSA provided formal written comments on a draft of this report on December 2, 2005, which are presented in appendix IX. In commenting on the draft report, GSA noted that it concurred with the contents of the report that discussed GSA. USDA, DOD, DOE, and USACE had no comments on the report. OMB, DHS, and DOJ provided technical and clarifying comments that we incorporated as appropriate. The National Security Council did not provide comments.

We are sending copies of this report to the Senate Committee on Homeland Security and Governmental Affairs; Senate Committee on the Judiciary, Subcommittee on Terrorism, Technology, and Homeland Security; the House Committee on Government Reform; the House Committee on the Judiciary; the Director of the Office of Management and Budget; the Commanding General and Chief of Engineers of the U.S. Army Corps of Engineers; the Secretary of the Department of Agriculture; the Secretary of the Department of Defense; the Secretary of the Department of Energy; the Attorney General; the Administrator of the General Services Administration; the Secretary of Homeland Security; and other interested parties. We will also make copies available to others on request.

In addition, the report will be available on GAO’s Web site at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-8777 or by e-mail at jonespl@gao.gov. GAO contacts and staff acknowledgments are listed in appendix X.

Appendix I: Patterns and Trends in Funding for Homeland Security and Overseas Combating Terrorism Activities

In this report, we use fiscal year 2002 as the base year for analyzing trends in funding for combating terrorism for a number of reasons. Although fiscal year 2001 may seem like the logical starting point, fiscal year 2002 was the first full year in which decision making was informed by the terrorist attacks in the United States. Moreover, to make information comparable for the President’s fiscal year 2004 budget request, the Office of Management and Budget (OMB) restructured fiscal years 2002 and 2003 budget data to reflect changes that occurred with the creation of the Department of Homeland Security (DHS) in 2003. This made fiscal year 2002 the earliest year that OMB’s MAX database captured funding for combating terrorism that is, for the most part, in the current agency, bureau, and account structure. In addition, OMB for the first time required agencies to identify funding for homeland security and overseas combating terrorism separately from other funding in an account. Finally, fiscal year 2002 marked the earliest year in which OMB presented information organized according to the National Strategy for Homeland Security’s six critical mission areas in its Annual Report to Congress on Combating Terrorism (September 2003).

The information for homeland security and overseas combating terrorism (OCT) is shown separately in the following tables. Tables 1 to 3 provide information on homeland security at progressively finer levels of detail. However, none of these tables, or tables 4 and 5 include funding in fiscal years 2004 and 2005 for DHS’ Project BioShield. OMB asserts that including this information can distort year-over-year comparisons. The Homeland Security Appropriations Act of 2004 provided $5.6 billion for this project to develop and procure tools to address public health consequences of terrorism. Pursuant to that act, specific amounts became available in fiscal year 2004 ($0.9 billion) and in fiscal year 2005 ($2.5 billion). Tables 4 and 5 display how OMB and agencies characterize funding according to the six critical mission areas for homeland security.

Unlike the appropriations account structure, which is based in law, mission area categories and activities can be modified to meet changing needs. OMB has stated that “the Administration may refine definitions or mission area estimates over time based on additional analysis or changes in the way specific activities are characterized, aggregated, or disaggregated.” Tables 6 and 7 provide unpublished OMB data on OCT. According to OMB officials, they continue to collect these data from agencies, but do not review agency information since OMB is no longer required to report on overseas combating terrorism funding or activities.

All comparisons or trends are for fiscal years 2002 through 2005. We have included the President’s fiscal year 2006 budget request because it contained the latest data available at the time of this review.

Homeland Security

Homeland security activities are funded in over 200 appropriations accounts in 32 agencies, and the District of Columbia. As shown in table 1, the Departments of Homeland Security, Defense (DOD), Health and Human Services (HHS), Justice (DOJ), and Energy (DOE) account for over 90 percent of governmentwide homeland security funding annually since fiscal year 2003.

As shown in table 2, DHS has received the largest share of funding for homeland security activities. The department’s average annual funding has been $22.1 billion, or about 54 percent of the total amount available annually from fiscal years 2002 through 2005. For fiscal year 2006, the President proposed $27.3 billion for DHS’s homeland security activities, or 55 percent of total spending.

DOD also received a large share of homeland security funding averaging 18 percent annually over the same period, with $9.5 billion requested for fiscal year 2006. Most of DOD’s homeland security funding is for functions related to security at military installations domestically and for research and development of antiterrorism technologies. Homeland security-related funding for DOD is increasing at an annual rate of about 18 percent, over 5 percent more than the rate of increase for DHS.

HHS has had the largest percentage increase since fiscal year 2002, with an average annual rate of about 30 percent. Funding has been provided primarily to improve local response to catastrophic events and for research at the National Institutes of Health to find new ways to detect and combat biological agents.

Table 3 provides homeland security data by agency, bureau, and account.

Trends in the Six Critical Mission Areas of Homeland Security

OMB first started reporting information by the six critical mission areas in its 2003 Report to Congress on Combating Terrorism. See appendix I for definitions of each of the critical mission areas laid out in the National Strategy for Homeland Security. As shown in table 4, the distribution of funding across the six critical mission areas has been fairly consistent during this period.

Table 5 shows which agencies are responsible for activities covered under the six mission areas. According to OMB data, the greatest share of funding between fiscal years 2002 and 2005 has been associated with border and transportation security, followed by funding for protecting critical infrastructure and key assets. According to OMB data shown in table 4, border and transportation security activities’—almost all of which are located in DHS—received between 38 and 41 percent annually of total funding. In fiscal year 2006, the President proposed funding totaling $19.3 billion for these activities, of which $18.2 billion is for activities in DHS. Nearly a third of all homeland security spending for this period has been labeled as protecting critical infrastructure and key assets. For fiscal years 2002 through 2005, DOD generally has received 50 percent or more annually for activities in this critical mission area. DHS and HHS activities are the primary recipients of funding for activities associated with emergency preparedness and response.

Overseas Combating Terrorism

Prior to the September 11 attacks, OMB’s annual report to Congress on combating terrorism made no distinction between domestic and overseas combating terrorism. With the development of policies and definitions to support the newer concept of homeland security and the creation of the Department of Homeland Security, “overseas combating terrorism” became the term used to describe those activities associated primarily with securing U.S. embassies and military facilities overseas and some intelligence efforts. Tables 6 and 7 show funding for overseas combating terrorism activities. For fiscal years 2002 and 2003, these amounts reflect estimates of gross budget authority that agencies attributed to overseas combating terrorism activities and reported to OMB. OMB then reviewed and validated these amounts—along with funding associated with homeland security activities—and published them in its annual report on combating terrorism. However, the Homeland Security Act of 2002 required that only funding related to homeland security activities be reported. Thus, while OMB continues to collect information on funding associated with overseas combating terrorism activities, it reported that the overseas combating terrorism data for fiscal years 2004 through 2006 have not been reviewed or validated. As a result, the overseas combating terrorism data for fiscal years 2004–2006 did not receive the same level of scrutiny as the homeland security data. Nevertheless, on the basis of funding data agencies attributed to overseas combating terrorism, most of that funding was provided to DOD.

As shown in table 7, funding for the Administration’s oversight of the nation’s intelligence programs grew at an average annual rate of 68 percent between fiscal years 2002 and 2005, according to agency data as reported in OMB’s MAX database. The second fastest growing category was for international assistance programs, with an average annual growth rate of 40 percent for the period under review. The latter primarily supports foreign governments’ efforts to combat terrorism and increase law enforcement capability. In contrast to the DOD funding increase for homeland security activities shown in table 1, DOD’s funding for activities defined as overseas combating terrorism has declined an average of 7 percent between fiscal years 2002 and 2005.

Appendix II: The National Strategy for Homeland Security’s Critical Mission Areas

The National Strategy for Homeland Security sets out a plan to improve combating terrorism domestically through the cooperation and partnering of federal, state, local, and private sector organizations on an array of functions. The strategy organizes these functions into six critical mission areas: Intelligence and warning involves the identification, collection, analysis, and distribution of intelligence information appropriate for preempting or preventing a terrorist attack.

Border and transportation security emphasizes the efficient and reliable flow of people, goods, and material across borders while deterring terrorist activity.

Domestic counterterrorism focuses on law enforcement efforts to identify, halt, prevent, and prosecute terrorists in the United States.

Protecting critical infrastructure and key assets stresses securing the nation’s interconnecting sectors and important facilities, sites, and structures.

Defending against catastrophic threats emphasizes the detection, deterrence, and mitigation of terrorist use of weapons of mass destruction.

Emergency preparedness and response highlights damage minimization and recovery from terrorist attacks.

Appendix III: Reporting Changes as a Result of the Homeland Security Act of 2002 and Challenges OMB Reports Continuing to Face

As part of our work, we examined the statutory changes in requirements for reporting combating terrorism activities that occurred as the result of the passage of the Homeland Security Act of 2002. This appendix provides additional background on the act, as well as the challenges OMB continues to face in tracking combating terrorism activities and ensuring the transparency of related funding data.

Enacted on November 25, 2002, the Homeland Security Act of 2002 established the Department of Homeland Security and, among other things, changed OMB’s requirements for reporting funding data related to combating terrorism. Section 889 of the Homeland Security Act of 2002 repealed the NDAA reporting requirements in favor of new reporting requirements. In particular, section 889 required the President’s budget to include an analysis of “homeland security funding,” which it defined by reference to OMB’s 2002 report as activities to detect, deter, protect against, and if needed, respond to terrorist attacks occurring within the United States. OMB's definition of homeland security activities included activities that the agency had not previously treated as combating terrorism. Under section 889, OMB is required to report only on funding for homeland security by agency, budget function (i.e., functions that cover 17 areas of the government such as agriculture and health), and initiative areas. OMB staff said that although they do not report on funding related to overseas combating terrorism data, they still collect it as part of the annual budget. Because there is no longer a requirement to report on overseas combating terrorism funding data, OMB staff said that they are not reviewing the information that agencies provide to them. In addition, the definition of overseas combating terrorism activities in OMB Circular No. A-11 has not changed since 2003. As a result, OMB staff said that data on overseas combating terrorism funding data are not necessarily valid and could be misleading.

In response to section 889’s changes, OMB began showing homeland security funding data by agency, by budget function, by account, and by each of the six critical mission areas established in the National Strategy for Homeland Security in the Analytical Perspectives of the President’s fiscal year 2005 budget. OMB also included narrative descriptions of major activities and the administration’s priorities in this section of the Analytical Perspectives. To present funding data for homeland security activities by critical mission area, OMB included a table for each critical mission area displaying budget authority for 3 fiscal years (prior year, current year, and budget year request).

Section 889 of the Homeland Security Act also required OMB to include the most recent risk assessment and summary of homeland security needs in each initiative area in the President’s annual budget. OMB’s prior reporting requirements required that OMB report on the amounts expended by executive agencies on combating terrorism activities, as well as the specific programs and activities for which funds were expended, while section 889 explicitly mandates a risk assessment and summary of resource needs in each initiative area. According to OMB staff, OMB does not have the expertise or the staff to conduct separate risk assessments, and it relies on the risk assessments of each individual agency to determine areas of high risk in order to meet this requirement.

In addition, section 889 required that OMB include in the President’s annual budget an estimate of the user fees collected by the federal government to help offset expenses related to homeland security activities, such as the Transportation Security Administration’s passenger security fees, which are added to airline passengers’ ticket costs. To meet this requirement, OMB included a table for users’ fees by major cabinet- level department displaying the related budget authority in the Analytical Perspectives that accompanied the President’s fiscal years 2005 and 2006 budgets.

Finally, section 889 of the Homeland Security Act of 2002 accelerated the timeline for reporting funding data by requiring OMB to report funding data in the President’s budget, which must be submitted to Congress by the first Monday in February. Under its previous reporting requirement, OMB was required to issue a separate stand-alone report on combating terrorism to Congress by March 1 of each year. OMB complied with the new timeline for the fiscal years 2005 and 2006 President’s budget.

Despite these changes, OMB staff report still facing challenges in tracking activities related to combating terrorism funding data and ensuring the transparency of related funding data. OMB staff said that the creation of DHS helped minimize the difficulties they face in ensuring the transparency of related funding data and tracking activities related to combating terrorism, since the creation of DHS resulted in approximately 60 percent of homeland security funding being merged into funding for one agency at the time DHS became operational. Although OMB is no longer required to report on funding data related to overseas combating terrorism activities, OMB staff said that many of the difficulties cited in our 2002 report still apply and that they will most likely always face these challenges. For example, OMB staff reported that they are still challenged by the large number of agencies involved in combating terrorism activities. To obtain information needed to fulfill its reporting requirements related to funding data, OMB has to interact with 32 other agencies and the District of Columbia that have responsibilities to combat terrorism in addition to DHS. OMB staff also said that it will always require significant effort to identify funding for combating terrorism activities, since such funding is often subsumed in budget accounts that provide funding for other activities. In addition, OMB staff also stated that they were challenged in tracking funding related to combating terrorism, given the wide variety of missions represented, including intelligence, law enforcement, health services, and environmental protection, as well as the global nature of missions for combating terrorism. However, OMB staff told us that they have worked diligently to identify homeland security activities by monitoring agency reviews of homeland security spending and developing an annual crosscut review, which identifies projects with common themes across agencies.

Appendix IV: A Summary of Selected Accounts with Combating Terrorism Activities

Hundreds of budget accounts include activities related to combating terrorism. The following summarizes 15 of the 34 accounts we reviewed. The funding levels shown in these accounts represent the portion of the account that supports combating terrorism efforts by critical mission area as reflected in OMB’s Homeland Security and Overseas Combating Terrorism database that supports the President’s fiscal year 2006 budget request. Our summaries also include descriptions of the combating terrorism activities within these accounts as well as the agencies’ estimates of budget authority that relate to these combating terrorism activities. For purposes of this appendix, we selected one account to display for the Department of Energy, General Services Administration, and the United States Army Corps of Engineers. We also selected to display one account for each component office that we contacted at the Departments of Agriculture, Homeland Security, and Justice—the Animal and Plant Health Inspection Service (APHIS) and the Agricultural Research Service (ARS) within the Department of Agriculture (USDA); Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), the Information Analysis and Infrastructure Protection Directorate (IAIP), the Office of State and Local Government Coordination and Preparedness (SLGCP), the Transportation Security Administration (TSA), the United States Coast Guard (USCG), the United States Secret Service (USSS), and the Science and Technology Directorate of DHS; and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and the Federal Bureau of Investigation (FBI) of the Department of Justice.

The activities included in all 34 of the accounts that we reviewed were consistent with OMB’s definitions of homeland security and overseas combating terrorism as defined in OMB Circular No. A-11.

Department of Homeland Security: Information Analysis and Infrastructure Protection Critical Mission Area: Intelligence and Warning Assessment and Evaluation Account (024-90-0911)

The Assessment and Evaluation account provides funding for threat analysis associated with collecting and fusing law enforcement, intelligence, and other information to evaluate terrorist threats to the homeland.

Infrastructure Vulnerability and Risk Assessment includes efforts to provide analytic tools to promote communication, coordination, collaboration, and cooperation to analyze intelligence information with the Intelligence Community; law enforcement agencies; state, local, and tribal authorities; the private sector; and other critical stakeholders regarding existing threats to the homeland.

Homeland Security Operations Center (HSOC) serves as the nation’s center for information sharing and domestic incident management. The HSOC collects and fuses intelligence information from a variety of sources every day to help deter, detect, and prevent terrorist acts. Operating 24 hours a day, 7 days a week, the HSOC is tasked with providing real-time situational awareness and monitoring of the homeland, and coordinates incidents and response activities.

Analysis and Studies includes efforts by IAIP personnel to develop threat databases, participate in exercises and crisis simulations, and prepare products on threats. It also includes funding for an independent evaluation of IAIP’s risk assessment methodology.

Threat Determination and Assessment includes efforts by IAIP personnel to develop terrorist threat situational awareness, (i.e., the analytical capability required to develop and integrate timely, actionable, and valuable information based on analysis of terrorist threat intelligence information and infrastructure vulnerability assessments).

Biosurveillance includes efforts by IAIP personnel to integrate biosurveillance data from other federal agencies such as the Centers for Disease Control with threat information. These activities are conducted to help IAIP become better positioned to provide information to decision makers and others to aid in the response to threats and incidents.

Other Activities include fiscal year 2004 activities that were restructured for the fiscal years 2005 and 2006 budget request. For instance, in fiscal year 2004, activities to conduct risk assessments were included under the activity, risk assessment division; whereas, for the fiscal year 2006 budget request, these activities are now included in analysis and studies and threat determination and assessment as discussed above. (dollars in millions)

IAIP Assessment and Evaluation (024-90-0911)

The funding levels shown in this account represent the portion of the account that supports combating terrorism efforts for the critical mission area Intelligence and Warning.

Department of Homeland Security: Border and Transportation Security

Critical Mission Area: Border and Transportation Security Customs and Border Protection, Salaries and Expenses Account (024-50-0530)

The Salaries and Expenses account provides funding for Customs and Border Protection personnel efforts to enforce laws relating to border security, immigration, customs, and agricultural inspections and regulatory activities related to plant and animal imports; acquisition, lease, maintenance and operation of aircraft; purchase and lease of police-type vehicles; and contracting with individuals for personal services abroad.

Enforcement funds activities related to CBP personnel’s efforts to identify, investigate, apprehend, and remove criminal aliens; maintain and update systems to track criminal and illegal aliens on the border in areas with high apprehensions to deter illegal entry; repair, maintain, and construct border facilities; and collect fines levied against aliens for failure to depart the United States after being ordered to do so.

Border Protection funds activities by CBP personnel to enforce various provisions of law that govern entry and presence in the United States, including detecting and preventing terrorists and terrorists’ weapons from entering the United States, seizing illegal drugs and other contraband, determining the admissibility of people and goods, apprehending people who attempt to enter the country illegally, protecting our agricultural interests from harmful pests and diseases, collecting duties and fees, and regulating and facilitating international trade.

Small Airport Facilities includes the collection of user fees by CBP personnel generated from inspection services that are provided to participating small airports, including the airports located at Lebanon, New Hampshire, Pontiac/Oakland, Michigan, and other small airports designated by the Department of Treasury based on the volume or value of business cleared through the airport from which commercial or private aircraft arrive from a place outside the United States. (dollars in millions)

CBP Salaries and Expenses Account (024-50-0530)

The funding levels shown in this account represent the discretionary portion of the account that supports combating terrorism efforts for the critical mission area Border and Transportation Security. CBP determined that 67 percent of its discretionary funding relates to combating terrorism efforts.

Department of Homeland Security: Transportation Security Administration Critical Mission Area: Border and Transportation Security Discretionary Fee Funded, Salaries and Expenses Account (024-50-0550)

The Discretionary Fee Funded, Salaries and Expenses account provides funding for TSA personnel’s efforts to provide security services for civil aviation. This account is funded through collections from passenger security and air carrier fees (see descriptions below). These fees offset TSA’s appropriated funds as the fees are collected, thereby reducing the general fund contribution. TSA received authority to collect such fees under the Aviation and Transportation Security Act. Component activities: Aviation Security includes collections from passenger security and air carrier fees. The passenger fee is added to each airline passenger’s ticket purchase and the air carrier fee is paid directly by air carriers. TSA receives its full aviation security appropriation, and these fees offset the appropriated funds as the fees are collected, thereby reducing the general fund contribution for TSA personnel’s efforts to provide security services for civil aviation such as passenger and baggage screening, and establishing Federal air marshals on various commercial flights.

Aviation Security Fee Proposal: In the fiscal year 2006 budget request, the President proposed to increase the air passenger security fee by $3.00, raising the fee on a typical flight to $5.50. For passengers traveling multiple legs on a one-way trip, the President proposed a maximum fee of $8.00. The budget states that such fee increases will allow TSA to almost fully recover the costs of federal airport screening operations, a subset of aviation security activities. (dollars in millions)

The funding levels shown in this account represent the portion of the account that supports combating terrorism efforts for the critical mission area Border and Transportation Security.

Department of Homeland Security: United States Coast Guard Critical Mission Area: Border and Transportation Security Operating Expenses Account (024-60-0610)The Operating Expenses account provides funding for USCG personnel to prevent terrorism by enforcing laws and securing U.S. borders while protecting the public from acts of terrorism. Component activities:

Ports, Waterways, and Coastal Security includes efforts by USCG to conduct harbor patrols, vulnerabilities assessments, and intelligence gathering and analysis to prevent terrorist attacks and minimize the damage from any attacks that could occur. It also includes USCG’s efforts to escort and conduct security boardings of any vessel that may pose a substantial security risk to U.S. ports because of the composition of its crew, passengers, or cargo.

Drug Interdiction includes efforts by USCG personnel to interdict illegal drug shipments by apprehending smugglers at sea attempting to import illegal drugs into the United States and halting the destructive influence of drug consumption by disrupting the drug supply and preventing potential funding sources for terrorism.

Migrant Interdiction includes efforts by USCG personnel to maintain a presence in migrant departure, and to prohibit or deter people who attempt to enter the United States illegally via maritime routes.

Defense Readiness includes efforts by USCG personnel to deploy cutters and other boats in and around harbors to protect the Department of Defense during military operations and meet requirements within the national strategy for homeland security and the national security strategy.

Other Law Enforcement protects U.S. fishing grounds, and therefore the nation’s economic security, by keeping out those who mean to do harm and ensuring that foreign fisherman do not illegally harvest U.S. fish stocks. (dollars in millions)

US Coast Guard Operating Expenses Account (024-60-0610)

Sum includes the USCG’s fiscal year 2004 supplementals for these activities totaling $90.6 million.

Department of Homeland Security: Border and Transportation Security Critical Mission Area: Domestic Counterterrorism Immigration and Customs Enforcement, Salaries and Expenses Account (024-50-0540) The Salaries and Expenses account provides funding for Immigration and Customs Enforcement personnel to conduct investigations to ensure enforcement of immigration laws. Component activities:

Investigations: Immigration and Customs Enforcement personnel conduct investigations to uncover and eliminate vulnerabilities that terrorists and other criminals exploit to harm our nation’s citizens, national security, and the economy through an array of investigative processes in the area of smuggling, finance, and national security. Through these investigations, Immigration and Customs Enforcement personnel work to identify the people, materials, and funding essential to sustaining terrorist threats and criminal enterprises, and to disrupt and dismantle those operations. (dollars in millions)

ICE Salaries and Expenses Account (024-50-0540)

The funding levels shown in this account represent the portion of the account that supports combating terrorism efforts for the critical mission area Domestic Counterterrorism.

Department of Justice: Bureau of Alcohol, Tobacco, Firearms and Explosives Critical Mission Area: Domestic Counterterrorism Salaries and Expenses Account (011-14-0700)The Salaries and Expenses account provides funding for the Bureau of Alcohol, Tobacco, Firearms and Explosives’ personnel to deter and investigate violations of laws relating to firearms, explosives, arson, and alcohol and tobacco diversion. Component activities:

Firearms includes efforts by ATF personnel to counter firearms violence, including acts of terrorism, through enforcement of the federal firearms laws, regulation of the firearms industry, and participation in outreach efforts to leverage partnerships with federal, state, local, and foreign law enforcement in the fight against terrorism.

Arson and Explosives includes efforts by ATF personnel to enforce federal explosives and arson laws, as well as the regulation of the explosives industry and training through innovation to protect the public from terrorists’ use of explosives and acts of arson.

Alcohol and Tobacco includes ongoing efforts by ATF personnel to reduce the rising trend of illegal diversion of tobacco products that may provide financial support to the causes of terrorist groups.

Reduce Violent Crime includes efforts by ATF personnel to deny terrorists access to firearms, explosives, and explosive materials, such as the participation of ATF agents in various terrorism task forces.

Protect the Public includes efforts by ATF personnel to safeguard the public from arson and explosives incidents. (dollars in millions)

ATF Salaries and Expenses (011-14-0700)

Department of Justice: Federal Bureau of Investigation Critical Mission Area: Domestic Counterterrrorism Salaries and Expenses Account (011-10-0200)The Salaries and Expenses account provides funding for efforts for FBI personnel to detect, investigate, and prosecute crimes by terrorists against the United States.

Counterterrorism Field Investigations includes efforts by the FBI to lead investigations in countering the threat of terrorism and Equipment/Technology includes efforts by FBI personnel to provide engineering services, technical support, and equipment to FBI field offices; and to conduct research and development to adapt technology for use against criminals and terrorists.

Counterterrorism Headquarters Coordination includes activities by FBI program managers in directing and guiding field investigators by managing investigations and providing training in the latest terrorism investigation techniques and methods.

Terrorist Screening Center funds multi-agency efforts, including components of the Departments of Homeland Security, Justice, and State, to maintain a consolidated watch list of known or suspected terrorists.

Miscellaneous Activities include a range of activities such as those provided under the Critical Incident Response Group (CIRG).

CIRG responds to crimes which pose great dangers and require skills that are not routinely available in law enforcement agencies. For example, CIRG provides trained, experienced negotiators, crisis managers, and tactical and aviation personnel to assist law enforcement agencies. A portion of these activities are considered related to counterterrorism investigations. (dollars in millions)

FBI Salaries and Expenses (011-10-0200) $1,738.0 Department of Homeland Security: United States Secret Service Critical Mission Area: Protecting Critical Infrastructure and Key Assets Operating Expenses Account (024-40-0400)The Operating Expenses account provides funding to support efforts of U.S. Secret Service personnel in providing protective services and conducting investigations. Protective Services provide for the protection of the President of the United States, immediate family members, the President-elect, the Vice President, or other officer next in order of succession to the Office of the President, and the Vice President-elect and the members of their immediate families, a visiting head of state and accompanying spouse, of a foreign state or foreign government. Investigative Services provide for investigation of counterfeiting of currency and securities; forgery and altering of government checks and bonds; thefts and frauds relating to Treasury electronic funds transfers; financial access device fraud, telecommunications fraud, computer and telemarketing fraud; fraud relative to federally insured financial institutions; and other criminal and noncriminal cases. Component activities: Domestic Protection of Persons includes activities conducted by Secret Service officials to protect the President of the United States, the President-elect, the Vice President, or other officer next in order of succession to the Office of the President, and the Vice President-elect and the members of their immediate families, former Presidents, their spouses and children under the age of 16, visiting heads of foreign states or governments; and major presidential, vice presidential candidates and their spouses. It also includes efforts conducted by Secret Service officials to plan, coordinate, and implement security operations at National Special Security Events, such as Republican and Democratic National Conventions.

Financial and Infrastructure Investigations includes activities by Secret Service officials to protect the nation’s financial and monetary systems, and critical infrastructure that supports those systems, such as the development of tools to combat cyber terrorism.

Domestic Protection of Government Buildings includes activities conducted by Secret Service officials to protect critical infrastructure and key assets by providing a security perimeter and building security at the White House/Treasury complex, the foreign diplomatic community located within the Washington metropolitan area, and at other Secret Service-secured sites. (dollars in millions)

Operating Expenses Account (024-40-0400)

Department of Energy: National Nuclear Security Administration Critical Mission Area: Protecting Critical Infrastructure and Key Assets Weapons Activities Account (019-05-0240)

The Weapons Activities account provide for the maintenance and refurbishment of nuclear weapons to sustain confidence in their safety, reliability, and performance; expansion of scientific, engineering, and manufacturing capabilities to enable certification of the enduring nuclear weapons stockpile; and manufacture of nuclear weapon components under a comprehensive test ban. The weapons activities account also provides for continuous maintenance and investment in DOE’s enterprise of nuclear stewardship, including maintaining the capability to return to the design and production of new weapons and to underground nuclear testing, if so directed by the President.

National Nuclear Security Administration (NNSA) Safeguards and Security ensures the protection of NNSA personnel, nuclear weapons, information, cyber infrastructure, and other materials at NNSA sites and facilities.

NNSA Secure Transportation Asset provides for the transportation of nuclear weapons, special nuclear material, selected non- nuclear weapons components, limited-life components, and any other DOE materials to and from military locations, between nuclear weapons complex facilities, and to other government locations within the continental United States.

NNSA Safety and Security Cybersecurity provides a foundation to facilitate detection of intrusions (hackers and other forms of attacks), and conduct vulnerability assessments and take corrective action at each NNSA site. It also includes actions to implement the Department of Energy’s and NNSA’s cybersecurity policies and practices, and continuously improve NNSA’s network and computing systems. The costs of these activities also include personnel time and acquisition and maintenance of cybersecurity technology (hardware and software) needed to maintain NNSA’s cybersecurity posture while addressing cybersecurity threats.

National Nuclear Security Administration Safeguards and Security-HQ Research and Development aids in the efforts to enhance (dollars in millions)

National Nuclear Security Administration Weapons Activities (019-05-0240)

Critical Mission Area: Protecting Critical Infrastructure and Key Assets Federal Properties Activities/Fee Funded, Federal Buildings Fund Account (023-05-4542)

The Real Property Activities account provides funding for GSA personnel efforts to implement security measures at federal buildings.

New Construction includes efforts to implement security enhancements to newly constructed federal buildings such as implementing a structural design to ensure that support columns are sized, reinforced, and protected so that a terrorist event will not cause collapse; perimeter protection measures; and window systems design to mitigate the hazardous effects of flying glass following an explosive event.

Major Repairs and Alterations includes efforts associated with major repairs and alteration projects (that is, requests for repairs and alterations greater than $2.41 million for fiscal year 2006, $2.36 million in fiscal year 2005, and $2.3 million in fiscal year 2004) to implement security measures to modify federal buildings for security enhancements such as installing bollards.

Building Operations includes studies conducted to determine the need for retrofitting federal facilities against threats that will cause building columns or structures to be critically damaged and collapse.

Minor Repairs and Alterations includes efforts associated with minor repair and alteration projects (that is, those requests costing less than $2.41 million for fiscal year 2006, $2.36 million in fiscal year 2005, and $2.3 million in fiscal year 2004) to implement security measures to modify federal buildings for security enhancements such as installing bollards. (dollars in millions) .

United States Army Corps of Engineers Civil Works

Critical Mission Area: Protecting Critical Infrastructure and Key Assets Operation and Maintenance Account (202-00-3132)

The Civil Works/Operation and Maintenance account provides funding for U.S. Army Corps of Engineer personnel to prepare for emergencies and secure infrastructure owned and operated by, or on behalf of, the United States Army Corps of Engineers, including administrative buildings, facilities, and labs.

Continuity of Operations funds USACE preparedness planning, including exercises related to USACE emergency relocation as a result of either a natural or a man-made disaster.

Critical Project Security provides funds for physical security upgrades such as fences and cameras; guards hired to control access to critical project assets such as hydropower generators; and protection of administrative facilities and laboratories. (dollars in millions)

Civil Works/Operation and Maintenance, General (202-00-3132)

Department of Agriculture: Agricultural Research Service Critical Mission Area: Defending against Catastrophic Threats Salaries and Expenses Account (005-18-1400)

The Salaries and Expenses account provides funding for Agricultural Research Service personnel to conduct research that helps counter agricultural bioterrorism including research that minimizes the risk of agriculture to contamination (chemical, biological, or genetic), helps ensure the security of the food supply, and allows Agricultural Research Service personnel to provide scientific knowledge and expertise in agriculture to support a response to a bioterrorism attack.

Research includes research activities conducted by Agricultural Research Service personnel to help protect the nation’s animal and plant resources by preventing bioterrorism attacks on crops and animal agriculture or providing rapid responses to thwart such attacks, and developing rapid and accurate techniques to monitor the safety of the food supply. (dollars in millions)

Agricultural Research Service, Salaries and Expenses (005-18-1400)

Department of Agriculture: The Animal and Plant Health Inspection Service Critical Mission Area: Defending against Catastrophic Attacks Salaries and Expenses Account (005-32-1600)The Salaries and Expenses account provides funds for APHIS staff to safeguard U.S. plant and animal resources against the introduction of foreign diseases and pests before they cause significant economic or environmental damage.

Pest Detection/Animal Health Monitoring supports efforts by APHIS staff to track plant and animal disease agents that could be used in acts of bioterrorism.

Overseas Activities supports efforts by APHIS staff to collect information on and track foreign pests and animal diseases. (dollars in millions)

Department of Homeland Security: Science and Technology Critical Mission Area: Defending against Catastrophic Attacks Research, Development, Operations, and Acquisitions Account (024-80-0800)The Research, Development, Operations, and Acquisitions account provides funds for Science and Technology personnel to conduct and stimulate research, development, test, evaluation, and the timely transition of domestic combating terrorism capabilities to federal, state, and local agencies. Component activities: Biological Countermeasures includes research activities on early biowarning systems and their future implementation, as well as analysis and countermeasures of biological threats.

Radiological and Nuclear Countermeasures includes activities associated with radiological detection research and implementation, analysis, and countermeasures of nuclear and radiological threats, and the development of systems that will help to coordinate consequence management and recovery.

Research and Development Support to Department of Homeland Security Agencies includes coordination and collaboration research and development activities with the other components of the department to assist and enhance their technical capabilities.

Man-Portable Air Defense Systems Countermeasures Special Program includes activities associated with the development of countermeasures to mitigate threats posed by shoulder-fired missiles directed toward commercial aircraft.

Chemical Countermeasures includes a range of activities to address chemical defense, such as studies to prioritize efforts for mitigating threats among chemical threats and targets, and the development of new chemical detection and forensic technologies.

Miscellaneous Activities includes a range of activities such as enhancing explosive detection equipment for aviation security, providing funding to the academic community to provide support for qualified students and faculty to conduct research and development, and supporting studies and analysis to be conducted by the Homeland Security Institute. (dollars in millions)

Science and Technology Research, Development, Operations, and Acquisitions Account (024-80-0800)

Department of Homeland Security: State and Local Government Coordination and Preparedness Critical Mission Area: Emergency Preparedness and Response State and Local Programs Account (024-10-0560)The State and Local Programs account provides funding for grants, training, exercises, and technical assistance to enhance the terrorism preparedness of first responders, including police, fire, rescue, and emergency response. Component activities: State Homeland Security Grants provide funding to support grants to states for domestic combating terrorism activities such as training, exercises, support costs, and Citizen Corps. Citizen Corps was created to help coordinate volunteer activities that will make our communities safer, stronger, and better prepared to respond to any emergency situation.

High Threat Urban Area Grants provide funding to support grants to states and localities for terrorism preparedness and infrastructure protection in high threat urban areas.

National Exercise Programs provide funding to support the Top Officials Weapons of Mass Destruction Exercise and other federally administered terrorism exercises.

Center for Domestic Preparedness provides funds to train state and local first responders to operate within a live agent Miscellaneous Activities includes funding for a range of activities such as the storage of emergency equipment located at certain National Guard facilities and for emergency preparedness training through the National Domestic Preparedness Consortium (terrorism preparedness training centers). (dollars in millions)

State and Local Programs Account (024-10-0560)

Appendix V: Scope and Methodology

To identify the methods agencies use to determine the portion of their annual appropriation that relates to combating terrorism, we met with OMB officials to review OMB’s efforts to define, categorize, and track homeland security and overseas combating terrorism funding both prior to and after the enactment of the Homeland Security Act. In addition, we met with 7 agencies, including 12 directorates, offices, or bureaus at those agencies that reported receiving funding for combating terrorism activities. The seven agencies we contacted are the Department of Homeland Security, the Department of Defense, the United States Army Corps of Engineers, the Department of Justice, the Department of Energy, the General Services Administration, and the United Stated Department of Agriculture.

To reflect a range of funding levels, we selected these agencies from 33 agencies and the District of Columbia that reported receiving funding related to combating terrorism activities to OMB. We selected DHS and DOD because they account for 73 percent of the gross budget authority enacted for homeland security activities for fiscal year 2005, and DOD and DOE because they account for 69 percent of the gross budget authority enacted for overseas combating terrorism activities for fiscal year 2005. We also selected four agencies: two agencies from a list of those with the most fiscal year 2005 budget dollars related to combating terrorism activities—USDA and DOJ—and two agencies from a list of those with the least enacted budget authority related to combating terrorism activities— GSA and USACE—to ensure we included agencies in our review that had a range of combating terrorism funding. Because the selection we used was a nonprobability sample, the information we obtained from these 7 agencies is not generalizable to all agencies with similar funding for combating terrorism activities.

We used a random sample number generator to select USDA, DOJ, GSA, and USACE from the two categories we established, that is, agencies that were moderately funded and those that were minimally funded. We excluded DOD, DHS, and DOE when performing the random number generation, since we had already included them in our selection. (We also excluded the Postal Service because it did not estimate receiving any funding to combat terrorism activities in fiscal year 2006 and 10 other agencies that each received less than 0.1 percent of combating terrorism dollars—to ensure that our analysis included the more significant of the minimally funded agencies).

Within the seven agencies, we selected directorates or offices that received the most funding for combating terrorism activities. These included the Animal and Plant Health Inspection Service and the Agricultural Research Service, within USDA; Customs and Border Protection, Immigration and Customs Enforcement, the Information Analysis and Infrastructure Protection Directorate, the Office of State and Local Government Coordination and Preparedness, the Transportation Security Administration, the United States Coast Guard, the United States Secret Service, and the Science and Technology Directorate of DHS; the Bureau of Alcohol, Tobacco, Firearms and Explosives; and the Federal Bureau of Investigation of DOJ.

We also reviewed the activities contained in 34 budgetary accounts— separate financial reporting units for which all transactions within the budget are recorded—for these agencies designated as related to combating terrorism. We selected accounts with the most combating terrorism funding at each agency as well as some accounts with smaller amounts to ensure we covered a range of funding. On the basis of our selection, we reviewed at least 70 percent of each agency’s estimated gross budget authority related to combating terrorism activities as reported in the President’s fiscal year 2006 budget request. While we initially selected an additional 23 budgetary accounts to review at DOD, we did not review these accounts because DOD does not enter its combating terrorism activities—specific lines of work—into OMB’s Homeland Security and Overseas Combating Terrorism database. Although OMB computed the portion of budget authority DOD receives to combat terrorism and aligned DOD’s budget authority related to homeland security with the six critical mission areas, OMB staff said that they did not enter information on activities conducted by DOD to combat terrorism. Thus, we did not have any activity level-information to review for DOD for the accounts we selected.

We interviewed agency officials at the seven agencies included in our review and OMB to determine how they identified, categorized, and tracked homeland security and overseas combating terrorism activities and estimated the portion of their budget authority that relates to such activities. To supplement interviews with agency budget officials, we also reviewed relevant budget documentation from each agency and asked agency budget officials to describe procedures the agency had in place to ensure that their funding levels were developed in accordance with OMB’s guidelines and definitions.

To identify the status of recommendations from our November 2002 report, we met with OMB and attempted to meet with National Security Council (NSC) officials to document what actions have been taken to implement our recommendations and the reasons they did or did not implement them. Additionally, we reviewed the National Strategy for Combating Terrorism, the National Strategy for Homeland Security, and the National Security Strategy of the United States and conducted a literature search to determine if any updates or supplements had been written that included governmentwide performance goals and measures. We also interviewed agency officials at the seven agencies included in our review and reviewed their performance plans to determine whether these plans included performance goals and measures that reflected their combating terrorism activities. To determine the status of recommendations made in our 2002 report regarding an analysis of duplication of effort related to combating terrorism activities in annual reporting on funding data associated with such activities and to report this information in a timely manner to support congressional budget decisions, we met with OMB to determine what actions have been taken to implement our recommendations and the reasons it did or did not implement them. We also reviewed the Analytical Perspectives accompanying the President’s fiscal years 2005 and 2006 budgets to determine whether or not OMB included funding data information on combating terrorism and whether this information was issued in a timely manner.

In addition to pursuing our two main objectives, we also identified funding patterns and trends for overseas combating terrorism activities and for homeland security activities between fiscal year 2002 and what is proposed for fiscal year 2006. We extracted, summarized, and analyzed combating terrorism data from the database used to prepare the Budget of the United States for fiscal years 2002 through 2006. To ensure that the database we received was consistent with published sources, we conducted electronic data testing and determined that the data was sufficiently reliable for our purposes.

We also analyzed the effects of the Homeland Security Act of 2002 on reporting requirements for funding data related to combating terrorism activities since our 2002 report by reviewing the act and comparing it with prior reporting requirements under the National Defense Authorization Act for Fiscal Year 1998 as amended by the National Defense Authorization Act for Fiscal Year 1999. To supplement this information, we also reviewed OMB’s 2003 Report to Congress on Combating Terrorism and the Analytical Perspectives of the President’s budget from fiscal years 2005 and 2006.

We conducted our work from January 2005 through November 2005 in accordance with generally accepted government auditing standards.

Appendix VI: Guidance Agencies Most Commonly Report Using to Identify Activities as Combating Terrorism

Officials at five of the seven agencies we contacted—Department of Homeland Security, the Department of Justice, the Department of Energy, the General Services Administration, and the United Stated Department of Agriculture—most commonly reported using guidance from OMB, the Homeland Security Act of 2002, and agency-specific guidance to identify their combating terrorism activities. Officials at all five of these agencies said they use OMB Circular No. A-11, which includes definitions for homeland security and overseas combating terrorism activities, and instructions for submitting information on funding data related to homeland security and overseas combating terrorism to OMB. In addition, officials from four of the seven agencies in our review reported that they consulted with OMB to determine which of their agency’s activities are related to combating terrorism.

Three of the seven agencies we contacted—DHS, USDA, and the United States Army Corps of Engineers—have developed additional guidance, which provides details specific to each agency to help determine combating terrorism activities. For example, to supplement OMB Circular A-11 guidance, DHS established an internal directive, Planning, Programming, Budgeting and Execution, which helps establish policy, procedures, and responsibilities relative to the planning, programming, budgeting, and execution process at DHS. The objective of the directive is to articulate DHS’s goals, objectives, and priorities while guiding the development of the department’s budget request and establishing parameters and guidelines for implementing and executing the current budget.

Furthermore, officials in four of DHS’s components told us that they refer to information included in the Homeland Security Act of 2002 to determine which of their activities relate to homeland security. For example, section 888 of the Homeland Security Act designated 5 of the U.S. Coast Guard’s 11 missions as homeland security and the remaining 6 as non-homeland security. Similarly, Information Analysis and Infrastructure Protection (IAIP) officials at DHS stated that they categorized all of their activities as related to homeland security, since section 201 of the Homeland Security Act of 2002 only authorized IAIP to conduct activities related to homeland security.

Appendix VII: Status of 2002 Recommendations Related to Duplication of Effort and Timely Reporting of Funding Data

This appendix discusses the status of recommendations made in our 2002 report for the Office of Management and Budget to (1) include an analysis of duplication of effort related to combating terrorism activities in its annual reporting of funding data associated with such activities and (2) report this information in a timely manner to support congressional budget decisions.

To improve the usefulness of OMB’s Annual Report to Congress on Combating Terrorism, we recommended that OMB include, as required by the National Defense Authorization Act for Fiscal Year 1998, an analysis of areas where overlap in programs could result in unnecessary duplication of effort. We also recommended that OMB publish the report by the required annual March 1 deadline to provide information in time for congressional budget deliberations.

Although OMB has not implemented our recommendation that it include an analysis of unnecessary duplication of effort in its annual combating terrorism report, this requirement no longer exists. Our November 2002 report was issued concurrently with the enactment of the Homeland Security Act of 2002. Section 889 of the Homeland Security Act of 2002 repealed OMB’s prior reporting requirements, including the duplication analysis.

OMB staff stated that they did not include an analysis of duplication in any of the agency’s prior reports primarily because they perform an analysis of homeland security initiatives and related resource needs across all federal agencies as part of the annual budget preparation process, and that they take action to address duplication prior to the publication of the President’s budget. Therefore, OMB staff said that they believe any issue of duplication is addressed in the President’s budget, specifically through his recommendations related to funding needs.

Our recommendation that OMB improve the usefulness of its Annual Report to Congress on Combating Terrorism by publishing the report by the then-required March 1 annual deadline was also superseded by section 889 of the Homeland Security Act. This section requires that OMB report on funding data for homeland security activities in the President’s budget. Because the President must submit his budget by the first Monday in February, the Homeland Security Act of 2002 accelerated the timeline for reporting funding data on homeland security activities. OMB complied with this reporting requirement in fiscal years 2005 and 2006.

Appendix VIII: Comments from the Office of Management and Budget

Appendix IX: Comments from the General Services Administration

Appendix X: GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the contact named above, Debra B. Sebastian, Assistant Director, Grace A. Coleman, Christine F. Davis, Gerard DeBie, Denise M. Fantone, Michele Fejfar, Jacob Hauskens, Laura R. Helm, Dawn Locke, Sara R. Margraf, and John W. Mingus, and made key contributions to this report.

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Managing for Results: Enhancing Agency Use of Performance Information for Management Decision Making. GAO-05-927. Washington, D.C.: Sept. 9, 2005.

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Combating Terrorism: Evaluation of Selected Characteristics in National Strategies Related to Terrorism. GAO-04-408T. Washington, D.C.: Feb. 3, 2004.

Performance Budgeting: Observations on the Use of OMB’s Program Assessment Rating Tool for the Fiscal Year 2004 Budget. GAO-04-174. Washington, D.C.: Jan. 30, 2004 Homeland Security: Challenges Facing the Department of Homeland Security in Balancing its Border Security and Trade Facilitation Missions. GAO-03-902T. Washington, D.C.: June 16, 2003.

Combating Terrorism: Funding Data Reported to Congress Should Be Improved. GAO-03-170. Washington, D.C.: Nov. 26, 2002.

Homeland Security: Title III of the Homeland Security Act of 2002. GAO-02-927T. Washington, D.C.: July 9, 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. Washington, D.C.: Apr. 11, 2002.

Combating Terrorism: Enhancing Partnerships through a National Preparedness Strategy. GAO-02-549T. Washington, D.C.: Mar. 28, 2002.

Homeland Security: A Risk Management Approach Can Guide Preparedness Efforts. GAO-02-208T. Washington, D.C.: Oct. 31, 2001.

Homeland Security: Key Elements of a Risk Management Approach. GAO-02-150T. Washington, D.C.: Oct. 12, 2001.

Combating Terrorism: Selected Challenges and Related Recommendations. GAO-01-822. Washington, D.C.: Sept. 20. 2001.

Combating Terrorism: Actions Needed to Improve DOD Antiterrorism Program Implementation and Management. GAO-01-909. Washington, D.C.: Sept. 19, 2001.

IRS Modernization: IRS Should Enhance Its Performance Management System. GAO-01-234. Washington, D.C.: Feb. 23, 2001.

Managing for Results: The Statutory Framework for Performance-Based Management and Accountability. GAO/GGD/AIMD-98-52. Washington, D.C.: Jan. 28, 1998.

Federal User Fees: Budgetary Treatment, Status, and Emerging Management Issues. GAO/AIMD-98-11. Washington, D.C.: Dec. 19, 1997.

The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be Uneven. GAO/GGD-97-109. Washington, D.C.: June 2, 1997.

Executive Guide: Effectively Implementing the Government Performance and Results Act. GAO/GGD-96-118. Washington, D.C.: June 1996.