(GAO photo)

DHS Continues to Make Progress in Addressing Key Management Challenges

The Department of Homeland Security (DHS) continues to make progress in the integration of its management operations, improving its acquisition, financial and human capital systems, although it remains at high risk for waste, fraud, abuse and mismanagement, officials told a House panel recently.

The department has taken several steps in the past two years to improve its procurement of roughly $18 billion in goods and services annually, Rafael Borras, DHS undersecretary for management, testified before the House Homeland Security oversight subcommittee on March 1.

As the DHS chief acquisition officer, Borras has introduced some measures to institute a robust acquisition review process, restructuring the department’s acquisition programs. He elevated the Program Accountability and Risk Management (PARM) office to report directly to him, spurring closer scrutiny of major DHS investments. PARM provides independent assessments of major DHS investments and collects intelligence to guide decisions in acquisition reviews, Borras said.

In December 2011, Borras further issued a Program Management and Execution Playbook to the DHS acquisition workforce. The playbook outlines program management and execution capabilities for the maturing of the department’s acquisition system, Borras said. The playbook addresses acquisition priorities including increasing the expertise and capabilities of the acquisition and program management workforce, improving program execution, increasing access to expert guidance and best practices, and increasing access to useful program performance data.

The PARM office also produced a business intelligence tool called the Decision Support Tool (DST) to monitor acquisition status. DST, a web-based tool, provides DHS officials with a centralized dashboard for examining information on DHS acquisition projects and programs, Borras said. Officials can use it to quickly determine program cost, funding and schedules.

Borras also has tackled DHS financial management, launching the Financial Reporting Dashboard System (FRDS), an enterprise data repository and business intelligence tool, in March 2011. FRDS relies upon monthly budget data provided to Congress to produce reports and trend analyses for DHS officials, Borras said.

“This system increases our ability to validate and improve data, which in turn provides greater transparency and better information for decision-making. Automating the collection and validation of budget execution data will improve our response time to inquiries from stakeholders,” he stated.

FRDS automatically collects some reporting information that formally was compiled manually, Borras added.

DHS recently received a “qualified” audit opinion on its financial balance sheet for the fiscal year ending Sept. 30, 2011, for the first time since its creation, Borras noted. The qualified opinion, submitted by the Government Accountability Office (GAO), suggested that DHS financial management has improved significantly to the point where it can mostly account for its annual spending.

To address weaknesses in human capital systems, Borras set up a Human Resources Information Technology Executive Steering Committee, a board to provide governance on matters related to human capital, training and information technology.

“Our first order of business was initiating the first application of federal segment architecture at DHS. The Human Capital Segment Architecture project provided a clear understanding of the best and most appropriate ways to align the department’s human capital resources — people, technology, data, and systems — to serve the department’s critical mission effectively and efficiently,” Borras explained.

Borras also has instituted measures to standardize workforce classifications, to update historical workforce data, and to automate personnel reports. The chief human capital officer also has worked with the chief information officer to produce the capability to transfer personnel files along with background investigations electronically in 2011.

David Maurer, GAO director of Homeland Security and Justice, however, noted that DHS has only addressed two actions identified by GAO out of 31 activities critical to removing it from the agency’s high-risk list.

In January 2011, the department updated it strategy for addressing the GAO high-risk designation and resolve management challenges with its Integrated Strategy for High-Risk Management, Maurer told the subcommittee.

“GAO found that this strategy, which was later updated in June and December 2011, was generally responsive to the actions and outcomes needed to address GAO’s high-risk designation,” Maurer testified. “For example, the January 2011 strategy generally identified multiple, specific actions and target completion time frames consistent with the outcomes GAOidentified. However, the strategy did not address the root causes of problems, among other things. In its June 2011 strategy, DHS, among other things, identified 10 root causes that cut across the management areas and their integration.”

DHS could still improve the strategy, for example, by more consistently identifying available resources and corrective actions, Maurer said.

Despite progress in reforming acquisition processes, DHS still faces some pitfalls. GAO reported that half of DHS programs it reviewed in June 2010 awarded contracts to initiate acquisition activities without any approval of key planning documents by DHS or the relevant agency, Maurer said.

Despite its qualified audit opinion, as of Sept. 30, DHS cannot provide assurances that its internal controls for financial reporting were working well, Maurer cautioned. GAO also reported in September that DHS continues to face human capital management challenges in areas like developing a workforce strategy.

Independent auditor KPMG LLP was unable to form an opinion on DHS internal controls over its financial systems for fiscal year 2011, Charles Edwards, DHS acting inspector general, told the panel, although DHS was able to produce an auditable balance sheet leading to a qualified opinion for the first time in its existence.

“The independent auditors identified pervasive financial system functionality limitation at all of the significant DHS components,” Edwards said. “The department’s financial information technology system is aging and has limited functionality, which is hindering the department’s ability to implement efficient corrective actions and produce reliable financial statements. The auditors noted that many of the financial systems in use at DHS components have been inherited from the legacy agencies and have not been substantially updated since DHS’ inception. As a result, ongoing financial system functionality limitations are contributing to the department’s challenges in addressing systemic internal control weaknesses and strengthening the overall control environment.”

The inspector general’s office will begin a review of new DHS efforts to consolidate financial management later this month, Edwards announced.

DHS must further ensure its components are reporting all acquisition data into the next Generation Periodic Reporting System (nPRS), an integrated system that provides visibility to the department to track components’ acquisition investments, Edwards said.

Rep. Michael McCaul (R-Texas), subcommittee chairman, urged DHS to continue to improve its acquisition oversight to avoid wasteful and costly initiatives, such as the roughly $1 billion spent on the Secure Border Initiative Network for a “virtual fence” along the Mexican border and another $240 million spent on advanced spectroscopic portals that did not meet specifications for detecting nuclear material.

The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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