[House Hearing, 113 Congress]
[From the U.S. Government Printing Office]
CUTTING DHS DUPLICATION AND WASTEFUL
SPENDING: IMPLEMENTING PRIVATE-SECTOR
BEST PRACTICES AND WATCHDOG REC-
OMMENDATIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT
AND MANAGEMENT EFFICIENCY
OF THE
COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
APRIL 26, 2013
__________
Serial No. 113-14
__________
Printed for the use of the Committee on Homeland Security
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COMMITTEE ON HOMELAND SECURITY
Michael T. McCaul, Texas, Chairman
Lamar Smith, Texas Bennie G. Thompson, Mississippi
Peter T. King, New York Loretta Sanchez, California
Mike Rogers, Alabama Sheila Jackson Lee, Texas
Paul C. Broun, Georgia Yvette D. Clarke, New York
Candice S. Miller, Michigan, Vice Brian Higgins, New York
Chair Cedric L. Richmond, Louisiana
Patrick Meehan, Pennsylvania William R. Keating, Massachusetts
Jeff Duncan, South Carolina Ron Barber, Arizona
Tom Marino, Pennsylvania Dondald M. Payne, Jr., New Jersey
Jason Chaffetz, Utah Beto O'Rourke, Texas
Steven M. Palazzo, Mississippi Tulsi Gabbard, Hawaii
Lou Barletta, Pennsylvania Filemon Vela, Texas
Chris Stewart, Utah Steven A. Horsford, Nevada
Richard Hudson, North Carolina Eric Swalwell, California
Steve Daines, Montana
Susan W. Brooks, Indiana
Scott Perry, Pennsylvania
Vacancy
Greg Hill, Chief of Staff
Michael Geffroy, Deputy Chief of Staff/Chief Counsel
Michael S. Twinchek, Chief Clerk
I. Lanier Avant, Minority Staff Director
------
SUBCOMMITTEE ON OVERSIGHT AND MANAGEMENT EFFICIENCY
Jeff Duncan, South Carolina, Chairman
Paul C. Broun, Georgia Ron Barber, Arizona
Richard Hudson, North Carolina Donald M. Payne, Jr., New Jersey
Steve Daines, Montana Beto O'Rourke, Texas
Vacancy Bennie G. Thompson, Mississippi
Michael T. McCaul, Texas (Ex (Ex Officio)
Officio)
Ryan Consaul, Subcommittee Staff Director
Deborah Jordan, Subcommittee Clerk
Tamla Scott, Minority Subcommittee Staff Director
C O N T E N T S
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Page
Statements
The Honorable Jeff Duncan, a Representative in Congress From the
State of South Carolina, and Chairman, Subcommittee on
Oversight and Management Efficiency............................ 1
The Honorable Ron Barber, a Representative in Congress From the
State of Arizona, and Ranking Member, Subcommittee on Oversight
and Management Efficiency...................................... 3
The Honorable Bennie G. Thompson, a Representative in Congress
From the State of Mississippi, and Ranking Member, Committee on
Homeland Security:
Oral Statement................................................. 5
Prepared Statement............................................. 6
Witnesses
Ms. Cathleen A. Berrick, Managing Director, Homeland Security and
Justice Issues, Government Accountability Office:
Oral Statement................................................. 9
Prepared Statement............................................. 11
Ms. Anne L. Richards, Assistant Inspector General for Audits,
Office of Inspector General, U.S. Department of Homeland
Security:
Oral Statement................................................. 28
Prepared Statement............................................. 30
Mr. Paul G. Stern, Ph.D., Member, Board of Directors, Business
Executives for National Security:
Oral Statement................................................. 35
Prepared Statement............................................. 37
Mr. Craig Killough, Vice President, Organization Markets, Project
Management Institute:
Oral Statement................................................. 40
Prepared Statement............................................. 41
Mr. Henry H. Willis, Ph.D., Director, Rand Homeland Security and
Defense Center:
Oral Statement................................................. 46
Prepared Statement............................................. 48
Appendix
Questions From Chairman Jeff Duncan for Cathleen A. Berrick...... 71
Questions From Chairman Jeff Duncan for Anne L. Richards......... 73
Questions From Chairman Jeff Duncan for Paul G. Stern............ 75
Questions From Chairman Jeff Duncan for Craig Killough........... 75
CUTTING DHS DUPLICATION AND WASTEFUL SPENDING: IMPLEMENTING PRIVATE-
SECTOR BEST PRACTICES AND WATCHDOG RECOMMENDATIONS
----------
Friday, April 26, 2013
U.S. House of Representatives,
Subcommittee on Oversight and Management
Efficiency,
Committee on Homeland Security,
Washington, DC.
The subcommittee met, pursuant to call, at 9:05 a.m., in
Room 311, Cannon House Office Building, Hon. Jeff Duncan
[Chairman of the subcommittee] presiding.
Present: Representatives Duncan, Daines, Barber, Payne, and
Thompson.
Mr. Duncan. Committee on Homeland Security, Subcommittee on
Oversight Management Efficiency will come to order.
The purpose of this hearing is to examine the areas of
duplication at the Department of Homeland Security, identify
opportunities for cost savings, and highlight ways the
Department can improve its efficiency. Now I recognize myself
for an opening statement.
We meet today to examine an issue of great importance to
the American people; duplication and wasteful spending. While
our Nation is facing $16 trillion of debt, American families
are continuing to see larger portions of their hard-earned
paychecks taken out in Federal taxes.
I believe that the Federal Government must do more to
eliminate duplicative and wasteful programs, so I recently
introduced legislation establishing the Committee on the
Elimination of Nonessential Federal Programs. Its sole
responsibility is to root out wasteful spending.
As the third-largest Federal agency with a $60 billion
budget, the Department of Homeland Security has an important
responsibility to the American people for how it uses their
hard-earned money.
Yet, when my constituents see unnecessary duplication of
mission or programs that expend valuable resources, a
reluctance to learn from best practices within the Federal
Government or private sector, or an unwillingness to make
changes identified in audits as ways to improve, it can be very
frustrating.
Congressional watchdogs have issued thousands of reports
with ways to improve the efficiency of DHS and save taxpayer
dollars. Earlier this month, the GAO issued a key report
related to duplication and cost-savings opportunities across
the Federal Government, which found 162 areas within the
Federal Government with fragmented, overlapping, or duplicative
spending.
Within DHS, this report identified six separate DHS
components involved in research and development activities. It
also found 35 instances among 29 out of 50 R&D contracts where
overlap in activities occurred. The price tag for these
duplicative contracts was $66 million.
Even more concerning, GAO found that DHS does not have the
policies or mechanisms necessary to coordinate or track R&D
activities across the Department. DHS was created after 9/11 to
help prevent the stovepiping of information.
If DHS does not have a system in place for basic R&D, how
does that lack of communication affect components, operational
abilities, and DHS' ability to meet its mission successfully to
defend the homeland?
In 2012, GAO identified five more duplicative programs in
DHS and four opportunities to save costs. In 2011, GAO
identified four homeland security issues where DHS could
eliminate duplication and five areas for potential cost
savings. Yet, out of all these ways to improve efficiency, DHS
has only fully addressed recommendations in two of these areas.
Likewise, the Inspector General has open and unimplemented
recommendations identifying over $600 million in questionable
costs and about $50 million in funds that could be put to
better use.
As of last month, the IG had issued 210 recommendations
that if implemented could result in cost savings of $1.2
billion. The IG has also identified 10 high-priority
recommendations, which would reduce waste and inefficiency at
DHS.
To date, DHS has closed three of these high-priority
recommendations. However, only one of these recommendations has
been implemented. DHS must take action to implement these
recommendations in a timely manner to improve the efficiency
and effectiveness of the Department.
Further, while I understand that DHS components have
different missions, I believe there may be some overlap in the
type of assets and resources used by these components. U.S.
Customs and Border Protection, CBP, currently has two distinct
operational boating law enforcement units; those under CBP's
Office of Air and Marine, OAM, and Border Patrol agents with
maritime qualifications.
Also, CBP and the Coast Guard each have their own air and
marine assets. Now Coast Guard is part of the overall
Department of Homeland Security. So out of more than 1,000
Coast Guard small boats and 250 CBP boats, only one common
asset is shared between them; the 33-foot safe boat. CBP and
the Coast Guard should consider consolidating these similar
resources to use taxpayer dollars more wisely.
DHS has pointed to its Efficiency Review, Bottom-Up Review,
and success in public-private partnerships for showing progress
in these areas. However, I believe DHS can do more starting
with learning from the best practices of the private industry.
While not every private-sector principle is transferrable
to the Federal Government and although incentives may be
different, there are many core principles that both companies
and the Federal Government require for success.
As a small businessman in South Carolina, I found the same
principles of strategic vision combined with strong and capable
leadership and smart budgeting to be critical. You don't spend
more than you take in or you go bankrupt. Yet the Federal
Government has been slow to learn.
In systems management, process management, and
organizational culture, the Federal Government, and DHS in
particular, have a lot to learn. I believe that DHS components
should better reach out to the private-sector companies with
similar processes.
For example, TSA's challenges with long lines and safe and
satisfied customers are not unique to the TSA. Six Flags,
Disney World also face similar challenges. DHS should be
thinking about what ways its components can better leverage
best practices from the private sector in order to minimize
duplication and wasteful spending and instead improve outcomes.
In conclusion, the issues highlighted by GAO and the
Inspector General require action from DHS; not words, but
action. The private sector possesses many tools that can help
DHS implement these recommendations, and I believe that DHS
should carefully consider how it can improve in order to
steward American tax dollars more efficiently and effectively.
I look forward to hearing more from our witnesses today. I
appreciate them coming and testifying before us. The Chairman
will now recognize the Ranking Minority Member of the
subcommittee, the gentleman from Arizona, Mr. Barber, for any
statement he may have.
Mr. Barber. Well, thank you, Mr. Chairman and thank you for
convening this important hearing. Thank you to the witnesses
for being with us today. I look forward to your testimony and
the opportunity to raise questions with you.
I am really pleased to see that for the third year now the
GAO, as required by law, has taken a very hard look at Federal
Government programs and provided us with a road map for
improving efficiency, eliminating waste and duplication in
saving taxpayer dollars.
This year's report, as you know, identifies 31 areas that
require greater efforts at efficiency as well as suggestions
for providing more effective Government services. Three of
these 31 areas relate to the Department of Homeland Security.
The report also identifies Government duplication, overlap,
and fragmentation to help Congress discover more cost savings
and revenue enhancement opportunities.
The need to reduce spending and examine Federal programs to
determine where reductions can be made is critical to our
efforts to keep the country and move it further along the road
to economic recovery. We must get our budget financial house in
order and this is one important area where we can do that.
Last week, along with 18, 19 other Members of Congress, I
introduced bipartisan legislation to require Congress to
address waste and duplication in Federal programs across the
board.
This legislation would require Congressional committees to
hold hearings to scrutinize duplicative programs and take
actions on these findings before it makes its appropriations
recommendations.
That is what we are here to do today. To talk about these
important findings from the GAO report and how we can act on a
bipartisan basis to find common-sense cost savings at DHS.
This is not a conversation that we can enter into lightly.
We must ensure that the steps we take to cut costs do not
compromise the homeland security.
The threats our Nation faces, both man-made and natural,
are unfortunate and all-too-present reality. As we know, on
April 15, 2013, the terrorist attack on the Boston Marathon
reminds us that terrorism remains a very real threat to our
Nation and to the security of the homeland, and homeland
security professionals must be fully equipped to counter this
threat and preserve our security.
Two days after the Boston attack, a fertilizer plant
explosion in West, Texas claimed the lives of 15 individuals--
the memorial services were held yesterday--and countless others
were injured.
The Federal Emergency Management Agency, FEMA, and the
National Protection and Programs Directorate of the Office of
Infrastructure Protection are just two of the Department's
components that have been involved in analyzing and responding
to that tragic event.
These combined tragedies show us that while duplicative
efforts must be identified and eliminated, we must also
continue to ensure that our homeland security officials have
the resources they need to keep our Nation safe.
Moreover, border security remains a critical National
issue. While we have made some progress in our efforts to
secure the border on the southern part of our country, there is
so much yet left to be done to ensure that my constituents in
particular who work and live along the Southwest Border are
safe in their homes and on their land.
Yes, we have made improvements, but we still have 50
percent of drugs being seized in my district alone. We cannot
allow this to continue, and we cannot afford to lose ground in
our border secure mission where some progress has been made.
That is why we must ensure that the Border Patrol operates
at full capacity and that our agents are given the resources
they must have to do their jobs effectively.
Last month, as a result of sequestration, the Department
was required to slash every new program--every program,
project, and activity by 5 percent. These, in my view, were
irresponsible cuts that we simply cannot afford. We must cut
the budget, we must reduce the deficit, but there are more
prudent ways to do it than the sequestration.
The sequester's impact on our Border Patrol agents along
the Southwestern Border is very real. It is also real for the
customs inspectors who are helping move legitimate trade into
our country and expedite legal passage.
The overtime cuts and work furloughs that have had a
cumulative impact that is slashing our Border Patrol agents'
pay by as much as 40 percent if fully implemented. That means
losing the work-hour equivalent of 5,000 agents Nation-wide.
Cutting pay means agents would spend less time monitoring
our borders, leaving us vulnerable both to terrorism and to
cartel activity and this is absolutely unacceptable.
That is why spending across the Department must be properly
scrutinized to avoid harmful cuts to Border Patrol agents and
the Customs inspectors and we must of course ensure that the
allocation of funds is done effectively.
The Department unfortunately has not yet put metrics into
place to measure and evaluate efforts to secure the Southwest
Border. How can we know what to cut and what programs deserve
increased funding if we don't know what is working? When the
safety of Americans, and my constituents in particular, is on
the line, I refuse to simply guess at what resources make
sense.
I think we can all agree that we have a lot of work to do,
and I look forward to the hearing from the witnesses on how the
Department can improve its effectiveness and efficiency, can
eliminate duplication, and put its resources to the best use
possible.
Thank you, Mr. Chairman, I yield back.
Mr. Duncan. Thank you, Mr. Barber.
The Chairman will now recognize the Ranking Member of the
full committee, the gentleman from Mississippi, Mr. Thompson,
for a statement.
Mr. Thompson. Thank you, Chairman Duncan, for holding this
hearing.
I welcome our witnesses also.
Given the current fiscal climate, every level of
government, Federal, State, and local, has joined the effort to
eliminate wasteful spending, weed out unnecessary duplication,
and cut costs where possible.
Eliminating duplicative programs is a common-sense approach
to saving scarce Federal funds. This approach however should be
implemented with an eye toward ensuring that reducing programs
and activities does not diminish homeland security
capabilities.
Given the broad range of the Department of Homeland
Security's mission including aviation, rail, border security,
emergency preparedness, cybersecurity, critical infrastructure
protection, and counterterrorism, there may be in fact a need
for built-in redundancy through such a far-reaching industry.
As a result, any effort to reduce duplication and
downsizing the programs must not result in leaving the United
States vulnerable. Yet, there is clearly a need to tighten the
belt.
In many instances, the Department has done just that. Since
2009, through its efficiency review and component initiatives,
the Department has identified more than $4 billion in cost
avoidances and its fiscal year 2014 efficiency initiatives are
expected to result in an additional $1.3 billion in savings.
To aid to the effort to reduce spending, the Government
Accountability Office has conducted its annual examination of
duplication, overlap, and fragmentation across Federal
Government programs and has released its third report in this
series including recommendations for improvement.
In this report, GAO identifies 31 areas where agencies may
be able to achieve greater efficiency or effectiveness. Within
those 31 areas, GAO also identified 81 actions that the
Executive branch or Congress should take to reduce
fragmentation, overlap, or duplication as well as other cost
savings or revenue enhancement opportunities.
Due to its size, mission, and inherent overlapping
authority, the Department of Homeland Security is named in more
areas of overlap than any other agency. The report contained
two areas where fragmentation, overlap, and duplication exists
at the Department; No. 1, research and development, and No. 2,
field-based information sharing.
GAO also identified checked baggage screening as an area
that presented an opportunity for cost savings and revenue
enhancement. Hopefully the Department would heed GAO's
recommendations.
I look forward to hearing from GAO on the Department's
response. I must note however that while GAO makes
recommendations in its report for agency action, it also makes
recommendations for Congress.
Unfortunately, following the last two GAO reports on
reducing duplication, the Executive branch addressed far more
of its recommendations than the steps taken by Congress to fix
situations that could only be addressed through legislative
action.
I look forward, Mr. Chairman, to working with you and
drafting some bipartisan legislation that perhaps could fix
some of those obvious overlaps and duplication.
Also, I would be remiss if I did not address at least one
effort to reduce the Departmental duplication that is once
again before Congress seeking approval. This is the
Department's proposal to consolidate its 16 individually
authorized preparedness grant programs into a single pool of
money.
This ill-conceived proposal causes me grave concern. It was
voted down last Congress and I urge my colleagues to do the
same this year. Stakeholders, first responders, and State and
local representatives have all spoken against this proposal and
stated that such a consolidation would result in hamstrung
first responders facing unprecedented natural and man-made
disasters.
As the world watched, first responders who were on the
scene at the Boston Marathon made the difference between lives
being saved and a higher death toll.
Moreover, in the subsequent search and capture of the
surviving perpetrator, local law enforcement, equipped with
infrared technology and other homeland security apparatus that
are often purchased with Homeland Security grant funds, brought
a swift end to what could have been a protracted nightmare for
Boston area residents.
So I look forward to today's testimony, and I thank the
witnesses are for appearing today.
I yield back my time, Mr. Chairman.
[The statement of Ranking Member Thompson follows:]
Statement of Ranking Member Bennie G. Thompson
April 26, 2013
Given the current fiscal climate, every level of Government--
Federal, State, and local--has joined the effort to eliminate wasteful
spending, weed out unnecessary duplication, and cut costs where
possible.
Eliminating duplicative programs is a common-sense approach to
saving scarce Federal funds.
This approach, however, should be implemented with an eye toward
ensuring that reducing programs and activities does not diminish
homeland security capabilities.
Given the broad range of the Department of Homeland Security's
mission--including aviation, rail, border security, emergency
preparedness, cybersecurity, critical infrastructure protection, and
counterterrorism--there may in fact be a need for built-in redundancy
throughout such a far-reaching agency.
As a result, any effort to reduce duplication and downsize programs
must not result in leaving the United States vulnerable.
Yet, there is clearly a need to tighten the belt.
In many instances, the Department has done just that.
Since 2009, through its Efficiency Review and component
initiatives, the Department has identified more than $4 billion in cost
avoidances and its fiscal year 2014 efficiency initiatives are expected
to result in an additional $1.3 billion in savings.
To aid in the effort to reduce spending, the Government
Accountability Office (GAO) has conducted its annual examination of
duplication, overlap, and fragmentation across Federal Government
programs and has released its third report in this series, including
recommendations for improvement.
In its report, GAO identifies 31 areas where agencies may be able
to achieve greater efficiency or effectiveness.
Within those 31 areas, GAO also identified 81 actions that the
Executive branch or Congress could take to reduce fragmentation,
overlap, or duplication, as well as other cost savings or revenue
enhancement opportunities.
Due to its size, mission, and inherent overlapping authority, the
Department of Homeland Security is named in more areas of overlap than
any other agency.
The report contained two areas where fragmentation, overlap, and
duplication exists at the Department: (1) Research and Development; and
(2) Field-Based Information Sharing.
GAO also identified Checked Baggage Screening as an area that
presented an opportunity for cost savings and revenue enhancement.
Hopefully, the Department will heed GAO's recommendations. I look
forward to hearing from GAO on the Department's response.
I must note, however, that while GAO makes recommendations in its
report for agency action, it also makes recommendations for Congress.
Unfortunately, following the last two GAO reports on reducing
duplication, the Executive branch addressed far more of its
recommendations than the steps taken by Congress to fix situations that
could only be addressed through legislative action.
In fact, in a follow-up status report on the 176 recommended
actions made in the first two reports, GAO determined that nearly 80
percent of the issues identified that required Executive branch action
had been addressed.
On the other hand, Congress had addressed less than 40 percent of
the GAO recommendations that required Congressional action.
I would urge the Majority to live up to its stated goal to reduce
spending by not merely providing lip service but working in a
bipartisan manner to bring common-sense, cost-savings bills on actions
recommended by GAO to the House floor.
I would be remiss if I did not address at least one effort to
reduce Departmental duplication that is once again before Congress
seeking approval.
That is the Department's proposal to consolidate its 16
individually-authorized preparedness grant programs into a single pool
of money.
This ill-conceived proposal causes me grave concern.
It was voted down last Congress and I urge my colleagues to do the
same this year.
Stakeholders, first responders, and State and local representatives
have all spoken against this proposal and stated that such a
consolidation could result in hamstrung first responders facing
unprecedented natural and man-made disasters.
As the world watched, first responders who were on the scene at the
Boston Marathon made the difference between lives being saved and a
higher death toll.
Moreover, in the subsequent search and capture of the surviving
perpetrator, local law enforcement, equipped with infra-red technology
and other homeland security apparatus--that are often purchased with
homeland security grand funds--brought a swift end to what could have
been a protracted nightmare for Boston-area residents.
Mr. Duncan. Thank the Ranking Member for participating
today and other Members of the subcommittee are reminded that
opening statements may be submitted for the record.
We are pleased to have a very distinguished panel of
witnesses before us today on this topic, and I will begin by
introducing the witnesses and then I will recognize each one
for their testimony.
Our first witness today is Ms. Cathleen Berrick and she is
the managing director of homeland security and justice issues
at the Government Accountability Office or GAO.
In this position, she oversees GAO's reviews of the
Department of Homeland Security and Department of Justice
Programs and Operations. Prior to being named managing director
by Comptroller General Gene Dodaro, she oversaw GAO's reviews
of aviation and surface transportation's security matters as
well as Department of Homeland Security management issues.
Prior to joining GAO, Ms. Berrick held numerous positions at
the Department of Defense and the U.S. Postal Service.
Our second witness is Ms. Ann Richards who is the assistant
inspector general for the Office of Audits within the
Department of Homeland Security's Office of Inspector General,
OIG.
Prior to joining OIG in 2007, Ms. Richards served in the
Department of the Interior including as the assistant inspector
general for audits. Ms. Richards also held a number of
positions with the U.S. Army Audit Agency and Mrs. Richards is
a CPA in the Commonwealth of Virginia.
Dr. Paul Stern is the chairman of Claris Capital, LLC, and
is a member of the Board of Directors of Business Executives
for National Security. Business Executives for National
Security is nonpartisan and nonprofit group that supports U.S.
Government by applying best business practices solutions to
National security problems.
Dr. Stern has over 26 years of experience in active
operating experience and 7 years of private-equity experience.
Dr. Stern also serves on the board of directors of Whirlpool
Corporation, Dow Chemical Company, and four of Thayer III's
portfolio companies.
Mr. Craig Killough is the vice president of Organization
Markets at the Project Management Institute, PMI. He is
responsible for PMI's government and corporate relations and
regional development.
Previously he served as director of practitioner products
responsible for the development and delivery of PMI
professional and career development programs, products, and
services.
Prior to joining PMI, Mr. Killough was a consultant in
Simulation and Training Technologies. Mr. Killough was the
executive vice president for global operations with General
Physics Corporation and vice president for Systems Engineering
and Licensing with Sigma Energy Services.
Dr. Henry Willis is the director of the RAND Homeland
Security and Defense Center and a professor at the Pardee RAND
graduate school. Dr. Willis has applied risk analysis tools to
resource allocation and risk-management decisions into areas of
public health and emergency preparedness, homeland and National
security policy, energy and environmental policy, and
transportation planning.
Dr. Willis' recent research has involved assessing the cost
and benefits of terrorism security measures like the Western
Hemisphere Travel Initiative and evaluating the impact of
public health emergency preparedness grant programs like the
Cities Readiness Initiative.
I want to thank all of the panelists for being here today
and I look forward to your testimony.
The Chairman will now recognize Ms. Berrick to testify.
STATEMENT OF CATHLEEN A. BERRICK, MANAGING DIRECTOR, HOMELAND
SECURITY AND JUSTICE ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE
Ms. Berrick. Good morning, Chairman Duncan, Ranking Member
Barber, and Ranking Member Thompson and Members of the
subcommittee.
I am pleased to be here today to discuss GAO's work
assessing fragmentation, overlap, and duplication across the
Department of Homeland Security as well as DHS's efforts to
strengthen their management functions.
When DHS was first created back in 2003, GAO recognized
that it was a significant undertaking creating and integrating
a department as large and complex as DHS that would take years
to achieve.
Since that time, we have issued over 1,300 reports
assessing different aspects of DHS's programs and operations
and made over 1,800 recommendations to address issues we
identified in that work of which 60 percent DHS has
implemented.
My testimony today is based on two reports GAO issued
earlier this year. One mentioned this morning, was our third
annual report assessing overlap, duplication, and fragmentation
across the Federal Government. The second report I will discuss
is GAO's biannual high-risk update in which strengthening DHS
management functions was designated a high-risk area.
Since 2011, we have identified 24 areas of fragmentation,
overlap, and duplication across the Department as well as
opportunities to achieve cost savings and enhance revenue.
Taken together, this could result in billions of dollars of
savings if implemented by the Department.
For example, increasing the aviation security passenger fee
collections could increase revenue by $2 billion to $10 billion
over 5 years over current collections.
In addition, adjusting the indicator on which FEMA
principally relies related to major disaster declarations could
result in significant savings. This indicator was developed in
1986. It hasn't been adjusted for inflation every year. It also
hasn't been adjusted to reflect changes and increases in
personal income on which the indicator is based.
In the past 12 years there has been about $80 billion that
has been paid out in Federal disaster declarations. Had that
indicator been adjusted for inflation, about 25 percent of
those declarations likely wouldn't have been approved. Had it
been adjusted for increases in per capita personal income
another 44 percent may not have been approved.
Another example, installing in-line baggage screening
systems could result in net savings of up to $470 million over
5 years due to decreased personnel costs as installing these
systems requires less TSOs to operate equipment.
Further, improving collaboration among field-based
information-sharing entities, and there are about 268 of these
entities across the United States, could help reduce overlap,
duplication, and fragmentation. We looked at eight urban areas
that have 37 of these entities and we found that 34 of the 37
overlapped with the functions of another entity.
In addition to identifying new areas we also assess the
Department's progress in implementing the recommendations we
made in the last two annual duplication reports, and some five
of those recommendations have been addressed, 24 are in
progress, and 13 have not been addressed. Some of those
recommendations, as was mentioned, were made to the Department,
some to the Congress.
One area not addressed relates to FEMA grants. We reported
that DHS needs to collect better project-level information so
that they have visibility over where their grants are being
awarded.
We identified numerous opportunities for potential
duplication and a number of a grant programs. We looked at four
of the largest grant programs at DHS, which accounted for about
$20 billion in grants awarded from 2002 to 2011 and identified
overlap and fragmentation among those programs.
Regarding GAO's designation of strengthening DHS management
functions as high-risk, we first designated this area as high-
risk back in 2003 because of the enormity of the effort of
creating the Department of Homeland Security.
Since that time, DHS has made significant progress in
integrating its component agencies to make a functioning
department, but the one area that we think significant work
remains is the management of the Department.
I will give you some examples--by management I am referring
to acquisition management, IT management, financial management,
human capital management. Related to IT, DHS developed an IT
governance structure to provide oversight over its IT
investment portfolio, which was very positive and consistent
with best practices; however, that structure only covers about
20 percent of DHS's IT investments so they need to do more work
to have oversight over those.
In addition, we reported that DHS leadership continues to
invest in major acquisition programs that lack key foundational
documents that are really essential to managing acquisitions.
Just to give you an example, we have looked at 71 major
acquisition programs and we found that 42 of those programs
exceeded cost and schedule estimates. Sixteen of those 42
exceeded cost estimates by about $32 billion over a 3-year
period.
While DHS has made important progress in these areas more
work remains related to this high-risk area, and specifically
we identified 31 actions and outcomes of which DHS agreed with,
that we believe are important to addressing these management
issues. Of the 31, 7 have been fully or mostly addressed, 16
are in progress, and 7 have just been initiated.
We have on-going work assessing all of these issues and
would be happy to report on DHS's progress moving forward.
Mr. Chairman, this concludes my statement. I would be happy
to respond to questions.
[The prepared statement of Ms. Berrick follows:]
Prepared Statement of Cathleen A. Berrick
April 26, 2013
gao highlights
Highlights of GAO-13-547T, a testimony before the Subcommittee on
Oversight and Management Efficiency, Committee on Homeland Security,
House of Representatives.
Why GAO Did This Study
Since beginning operations in 2003, DHS has become the third-
largest Federal department, with more than 224,000 employees and an
annual budget of about $60 billion. Over the past 10 years, DHS has
implemented key homeland security operations and achieved important
goals to create and strengthen a foundation to reach its potential.
Since 2003, GAO has issued more than 1,300 reports and Congressional
testimonies designed to strengthen DHS's program management,
performance measurement efforts, and management processes, among other
things. GAO has reported that overlap and fragmentation among
Government programs, including those of DHS, can cause potential
duplication, and reducing it could save billions of tax dollars
annually and help agencies provide more efficient and effective
services. Moreover, in 2003, GAO designated implementing and
transforming DHS as high-risk because it had to transform 22 agencies
into one department, and failure to address associated risks could have
serious consequences. This statement addresses: (1) Opportunities for
DHS to reduce fragmentation, overlap, and duplication in its programs;
save tax dollars; and enhance revenue, and (2) opportunities for DHS to
strengthen its management functions.
What GAO Recommends
While this testimony contains no new recommendations, GAO
previously made about 1,800 recommendations to DHS designed to
strengthen its programs and operations. The Department has implemented
more than 60 percent of them and has actions under way to address
others.
department of homeland security.--opportunities exist to strengthen
efficiency and effectiveness, achieve cost savings, and improve
management functions
What GAO Found
Since 2011, GAO has identified 11 areas across the Department of
Homeland Security (DHS) where fragmentation, overlap, or potential
duplication exists and 13 areas of opportunity for cost savings or
enhanced revenue collections. In these reports, GAO has suggested 53
total actions to the Department and Congress to help strengthen the
efficiency and effectiveness of DHS operations. In GAO's 2013 annual
report on Federal programs, agencies, offices, and initiatives that
have duplicative goals or activities, GAO identified 6 new areas where
DHS could take actions to address fragmentation, overlap, or potential
duplication or achieve significant cost savings. For example, GAO found
that DHS does not have a Department-wide policy defining research and
development (R&D) or guidance directing components how to report R&D
activities. Thus, DHS does not know its total annual investment in R&D,
which limits its ability to oversee components' R&D efforts. In
particular, GAO identified at least 6 components with R&D activities
and an additional $255 million in R&D obligations in fiscal year 2011
by DHS components that was not centrally tracked. GAO suggested that
DHS develop and implement policies and guidance for defining and
overseeing R&D at the Department. In addition, GAO reported that by
reviewing the appropriateness of the Federal cost share the
Transportation Security Administration (TSA) applies to agreements
financing airport facility modification projects related to the
installation of checked baggage screening systems, TSA could, if a
reduced cost share was deemed appropriate, achieve cost efficiencies of
up to $300 million by 2030 and be positioned to install a greater
number of optimal baggage screening systems. GAO has also updated its
assessments of the progress that DHS and Congress have made in
addressing the suggested actions from the 2011 and 2012 annual reports.
As of March 2013, of the 42 actions from these reports, 5 have been
addressed (12 percent), 24 have been partially addressed (57 percent),
and the remaining 13 have not been addressed (31 percent). Although DHS
and Congress have made some progress in addressing the issues that GAO
has previously identified, additional steps are needed to address the
remaining areas to achieve associated benefits.
While challenges remain across its missions, DHS has made
considerable progress since 2003 in transforming its original component
agencies into a single department. As a result, in its 2013 biennial
high-risk update, GAO narrowed the scope of the area and changed its
focus and name from Implementing and Transforming the Department of
Homeland Security to Strengthening the Department of Homeland Security
Management Functions. To more fully address this area, DHS needs to
further strengthen its acquisition, information technology, and
financial and human capital management functions. Of the 31 actions and
outcomes GAO identified as important to addressing this area, DHS has
fully or mostly addressed 8, partially addressed 16, and initiated 7.
Moving forward, DHS needs to, for example, validate required
acquisition documents in a timely manner, and demonstrate measurable
progress in meeting cost, schedule, and performance metrics for its
major acquisition programs. In addition, DHS has begun to implement a
governance structure to improve information technology management
consistent with best practices, but the structure covers less than 20
percent of DHS's major information technology investments.
Chairman Duncan, Ranking Member Barber, and Members of the
subcommittee: I am pleased to be here today to discuss our work on
opportunities for the Department of Homeland Security (DHS) to
eliminate fragmentation, overlap, and duplication in its programs;
enhance revenue; and improve management functions at the Department.\1\
Since beginning operations in 2003, DHS has become the third-largest
Federal department, with more than 224,000 employees and an annual
budget of about $60 billion. Over the past 10 years, DHS has
implemented key homeland security operations and achieved important
goals to create and strengthen a foundation to reach its potential.
Since 2003, we have made approximately 1,800 recommendations to DHS
across more than 1,300 reports and Congressional testimonies designed
to strengthen program management, performance-measurement efforts, and
management processes, and enhance coordination and information sharing,
among other things. DHS has implemented more than 60 percent of these
recommendations and has actions under way to address others. However,
the Department has more to do to ensure that it conducts its missions
efficiently and effectively while simultaneously preparing to address
future challenges that face the Department and the Nation.
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\1\ Fragmentation refers to those circumstances in which more than
one Federal agency (or more than one organization within an agency) is
involved in the same broad area of National need and opportunities
exist to improve service delivery. Overlap occurs when multiple
agencies or programs have similar goals, engage in similar activities
or strategies to achieve them, or target similar beneficiaries.
Duplication occurs when two or more agencies or programs are engaged in
the same activities or provide the same services to the same
beneficiaries.
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On April 9, 2013, we issued our third report in response to the
statutory requirement that we identify and report annually on Federal
programs, agencies, offices, and initiatives that have duplicative
goals or activities.\2\ Since 2011, we have identified 162 areas across
the Federal Government where Congress or Executive branch agencies,
including DHS, could take action to reduce fragmentation, overlap, and
duplication or achieve cost savings to address the rapidly building
fiscal pressures facing our Nation.\3\ We reported that fragmentation
among Government programs or activities can be a harbinger of potential
overlap or duplication. Reducing or eliminating fragmentation, overlap,
or duplication could potentially save billions of tax dollars annually
and help agencies provide more efficient and effective services.
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\2\ Pub. L. No. 111-139, 21, 124 Stat. 8, 29-30 (2010), 31 U.S.C.
712 note.
\3\ GAO, Opportunities to Reduce Potential Duplication in
Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-
318SP (Washington, DC: Mar. 1, 2011); 2012 Annual Report: Opportunities
to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and
Enhance Revenue, GAO-12-342SP (Washington, DC: Feb. 28, 2012); and 2013
Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and
Duplication and Achieve Other Financial Benefits, GAO-13-279SP
(Washington, DC: Apr. 9, 2013).
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Moreover, in February 2013, we reported on DHS's efforts to address
the high-risk area of Strengthening the Department of Homeland Security
Management Functions.\4\ We first designated this area as high-risk in
2003 because DHS had to consolidate 22 agencies--several with major
management challenges--into one Department. Further, failure to
effectively address DHS's management and mission risks could have
serious consequences for U.S. National and economic security.
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\4\ GAO, High-Risk Series: An Update, GAO-13-283 (Washington, DC:
February 2013).
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My statement today is based on these reports and addresses: (1)
Opportunities for DHS to reduce fragmentation, overlap, and duplication
in its programs; save tax dollars; and enhance revenue, and (2)
opportunities for DHS to strengthen its management functions. For these
past reports, among other things, we analyzed DHS documents, reviewed
and updated our past reports issued since DHS began its operations in
March 2003, and, interviewed DHS officials. More detailed information
on the scope and methodology of our previous work can be found within
each specific report. We conducted this work in accordance with
generally accepted Government auditing standards.
dhs can strengthen the efficiency and effectiveness of its operations
and achieve cost savings by reducing fragmented, overlapping, or
potentially duplicative activities
Areas of Fragmentation, Overlap, and Potential Duplication at DHS
Since 2011, we have identified 11 areas across DHS where
fragmentation, overlap, or potential duplication exists, and suggested
24 actions to the Department and Congress to help strengthen the
efficiency and effectiveness of DHS operations.\5\ In some cases, there
is sufficient information available to show that if actions are taken
to address individual issues, significant financial benefits may be
realized. In other cases, precise estimates of the extent of potential
unnecessary duplication, and the cost savings that can be achieved by
eliminating any such duplication, are difficult to specify in advance
of Congressional and Executive branch decision making. However, given
the range of areas we identified at DHS and the magnitude of many of
the programs, the cost savings associated with addressing these issues
could be significant.
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\5\ In many cases, the existence of fragmentation, overlap, or
duplication can be difficult to determine precisely because of a lack
of data on programs and activities. Where information was not available
that would have provided conclusive evidence of fragmentation, overlap,
or duplication, we often refer to potential unnecessary duplication.
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In April 2013, we identified 2 new areas where DHS could take
actions to address fragmentation, overlap, or potential duplication.\6\
First, we found that DHS does not have a Department-wide policy
defining research and development (R&D) or guidance directing how
components are to report R&D activities. As a result, the Department
does not know its total annual investment in R&D, a fact that limits
DHS's ability to oversee components' R&D efforts and align them with
agency-wide R&D goals and priorities. DHS's Science and Technology
Directorate, Domestic Nuclear Detection Office, and the U.S. Coast
Guard--the only DHS components that report R&D-related budget authority
to the Office of Management and Budget (OMB) as part of the budget
process--reported $568 million in fiscal year 2011 R&D budget
authority. However, we identified at least 6 components with R&D
activities and an additional $255 million in R&D obligations in fiscal
year 2011 by other DHS components that were not reported to OMB in the
budget process. To address this issue, we suggested that DHS develop
and implement policies and guidance for defining and overseeing R&D at
the Department. Second, we reported that the fragmentation of field-
based information sharing can be disadvantageous if activities are
uncoordinated, as well as if opportunities to leverage resources across
entities are not fully exploited. We suggested that DHS and other
relevant agencies develop a mechanism that will allow them to hold
field-based information-sharing entities accountable for coordinating
with each other and monitor and evaluate the coordination results
achieved, as well as identify characteristics of entities and assess
specific geographic areas in which practices that could enhance
coordination and reduce unnecessary overlap could be adopted. DHS
generally agreed with our suggestions and is reported taking steps to
address them. Moving forward, we will monitor DHS's progress to address
these actions.
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\6\ GAO-13-279SP.
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Concurrent with the release of our 2013 annual report, we updated
our assessments of the progress that DHS has made in addressing the
actions we suggested in our 2011 and 2012 annual reports.\7\ Table 1
outlines the 2011-2012 DHS-related areas in which we identified
fragmentation, overlap, or potential duplication, and highlights DHS's
and Congress's progress in addressing them.
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\7\ An area may comprise a single or multiple suggested actions. We
evaluated the progress of those areas identified in our March 2011 and
February 2012 reports by determining an ``overall assessment'' rating
for each area based on the individual rating of each action with the
area. For Congressional actions, we applied the following criteria:
``Addressed'' means relevant legislation has been enacted; ``partially
addressed'' means a relevant bill has passed a committee, the House of
Representatives, or the Senate, or relevant legislation only addressed
part of the action needed; and ``not addressed'' means a bill may have
been introduced but did not pass out of a committee, or no relevant
legislation has been introduced. For Executive branch actions,
``addressed'' means implementation of the action needed has been
completed; ``partially addressed'' means a response to the action
needed is in development, but not yet completed; and ``not addressed''
means that minimal or no progress has been made toward implementing the
action needed.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
In our March 2011 and February 2012 reports, in particular, we
suggested that DHS or Congress take 21 actions to address the areas of
overlap or potential duplication that we found. Of these 21 actions, 2
(approximately 10 percent) have been addressed, 13 (approximately 62
percent) have been partially addressed, and the remaining 6
(approximately 29 percent) have not been addressed.\8\ For example, to
address the potential for overlap among three information-sharing
mechanisms that DHS funds and uses to communicate security-related
information with public transit agencies, in March 2011, we suggested
that DHS could identify and implement ways to more efficiently share
security-related information by assessing the various mechanisms
available to public transit agencies.\9\ We assessed this action as
partially addressed because TSA has taken steps to streamline
information sharing with public transit agencies, but the agency
continues to maintain various mechanisms to share such information. In
March 2011, we also found that TSA's security assessments for hazardous
material trucking companies overlapped with efforts conducted by the
Department of Transportation's (DOT) Federal Motor Carrier Safety
Administration (FMCSA), and as a result, Government resources were not
being used effectively. After we discussed this overlap with TSA in
January 2011, agency officials stated that, moving forward, they intend
to only conduct reviews on trucking companies that are not covered by
FMCSA's program, an action that, if implemented as intended, we
projected could save more than $1 million over the next 5 years. We
also suggested that TSA and FMCSA could share each other's schedules
for conducting future security reviews, and avoid scheduling reviews on
hazardous material trucking companies that have recently received, or
are scheduled to receive, a review from the other agency. We assessed
this action as addressed because in August 2011, TSA reported that it
had discontinued conducting security reviews on trucking companies that
are covered by the FMCSA program. Discontinuing such reviews should
eliminate the short-term overlap between TSA's and FMCSA's reviews of
hazardous material trucking companies.
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\8\ Percentages do not add to 100 percent because of rounding.
\9\ DHS could not provide us with a reliable estimate of the
potential cost savings resulting from consolidating these three
mechanisms.
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Although the Executive branch and Congress have made some progress
in addressing the issues that we have previously identified, additional
steps are needed to address the remaining areas and achieve associated
benefits. For example, to eliminate potential duplicating efforts of
interagency forums in securing the Northern Border, in March 2011, we
reported that DHS should provide guidance to and oversight of
interagency forums to prevent duplication of efforts and help
effectively utilize personnel resources to strengthen coordination
efforts along the Northern Border.\10\ Further, the four DHS grant
programs that we reported on in February 2012--the State Homeland
Security Program, the Urban Areas Security Initiative, the Port
Security Grant Program, and the Transit Security Grant Program--have
multiple areas of overlap and can be sources of potential unnecessary
duplication. These grant programs, which FEMA used to allocate about
$20.3 billion to grant recipients from fiscal years 2002 through 2011,
have similar goals and fund similar activities, such as equipment and
training, in overlapping jurisdictions. To address these areas of
overlap, we reported that Congress may want to consider requiring DHS
to report on the results of its efforts to identify and prevent
unnecessary duplication within and across these grant programs, and
consider these results when making future funding decisions for these
programs. Such reporting could help ensure that both Congress and FEMA
steer scarce resources to homeland security needs in the most
efficient, cost-effective way possible.\11\ See appendix I, table 4,
for a summary of the fragmentation, overlap, and duplication areas and
actions we identified in our 2011-2013 annual reports that are relevant
to DHS.
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\10\ As of March 2013, DHS had not taken steps to determine the
benefits of participating in the interagency forums or identified the
costs incurred by all partners participating in each forum.
\11\ The President's fiscal year 2014 budget request proposes
consolidating State and local preparedness grant programs (excluding
Emergency Management Performance Grants and fire grants) into the
National Preparedness Grant Program. If approved, and depending on its
final form and execution, the consolidated National Preparedness Grant
Program could help reduce redundancies and mitigate the potential for
unnecessary duplication.
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Opportunities for Cost-Saving and Revenue Enhancements at DHS
Our 2011-2013 annual reports also identified 13 areas where DHS or
Congress should consider taking 29 actions to reduce the cost of
operations or enhance revenue collection for the Department of the
Treasury.\12\ Most recently, in April 2013, we identified 4 cost-
savings and revenue enhancement areas related to DHS. Table 2 provides
a summary of the 2011-2012 DHS-related areas in which we identified
opportunities for cost savings or revenue enhancement, as well the
status of efforts to address these areas.
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\12\ In some cases, there is sufficient information to estimate
potential savings or other benefits if actions are taken to address
individual issues. In other cases, estimates of cost savings or other
benefits would depend upon what Congressional and Executive branch
decisions were made, including how certain our recommendations are
implemented. See appendix I, table 5, for a summary of cost savings and
revenue enhancement areas and actions we identified in our 2011-2013
annual reports that are relevant to DHS.
TABLE 2.--COST SAVINGS AND REVENUE ENHANCEMENT OPPORTUNITIES IDENTIFIED
IN OUR 2013 ANNUAL REPORT
------------------------------------------------------------------------
Annual Report Areas Identified \1\
------------------------------------------------------------------------
2013.............................. Agricultural Quarantine Inspection
Fees (Area 18).--The United States
Department of Agriculture's Animal
and Plant Health Inspection Service
could have achieved as much as $325
million in savings (based on fiscal
year 2011 data, as reported in
GAO's March 2013 report) by more
fully aligning fees with program
costs; although the savings would
be recurring, the amount would
depend on the cost-collections gap
in a given fiscal year and would
result in a reduced reliance on
U.S. Customs and Border
Protection's annual Salaries and
Expenses appropriations used for
agricultural inspection services.
2013.............................. Checked Baggage Screening (Area
28).--By reviewing the
appropriateness of the Federal cost
share the Transportation Security
Administration applies to
agreements financing airport
facility modification projects
related to the installation of
checked baggage screening systems,
the Transportation Security
Administration could, if a reduced
cost share was deemed appropriate,
achieve cost efficiencies of up to
$300 million by 2030 and be
positioned to install a greater
number of optimal baggage screening
systems than it currently
anticipates.
2013.............................. Cloud Computing (Area 29).--Better
planning of cloud-based computing
solutions provides opportunity for
potential savings of millions of
dollars.
2013.............................. Information Technology Operations
and Maintenance (Area 30).--
Strengthening oversight of key
Federal agencies' major information
technology investments in
operations and maintenance provides
opportunity for savings on billions
in information technology
investments.
------------------------------------------------------------------------
Source: GAO.
\1\ The area numbers indicate the number assigned to the area when it
was originally reported.
In addition, in April 2013 we also reported on the steps that DHS
and Congress have taken to address the cost savings and revenue
enhancement areas identified in our 2011 and 2012 annual reports. Table
3 provides a summary of the 2011-2012 DHS-related areas in which we
identified opportunities for cost savings or revenue enhancement, as
well the status of efforts to address these areas.
[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]
Of the 21 related actions we suggested that DHS or Congress take in
our March 2011 and February 2012 reports to either reduce the cost of
Government operations or enhance revenue collection, as of March 2013,
3 (about 14 percent) have been addressed, 11 (about 52 percent) have
been partially addressed, and 7 (about 33 percent) have not been
addressed.\13\ For example, in February 2012, we reported that to
increase the likelihood of successful implementation of the Arizona
Border Surveillance Technology Plan, minimize performance risks, and
help justify program funding, the Commissioner of CBP should update the
agency's cost estimate for the plan using best practices. This year, we
assessed this action as partially addressed because CBP initiated
action to update its cost estimate, using best practices, for the plan
by providing revised cost estimates in February and March 2012 for the
plan's two largest projects. However, CBP has not independently
verified its life-cycle cost estimates for these projects with
independent cost estimates and reconciled any differences with each
system's respective life-cycle cost estimate, consistent with best
practices. Such action would help CBP better ensure the reliability of
each system's cost estimate. Further, in March 2011, we stated that
Congress may wish to consider limiting program funding pending receipt
of an independent assessment of TSA's Screening of Passengers by
Observation Techniques (SPOT) program. This year, we assessed this
action as addressed because Congress froze the program funds at the
fiscal year 2010 level and funded less than half of TSA's fiscal year
2012 request for full-time behavior detection officers.
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\13\ Percentages do not add to 100 percent because of rounding. In
assessing progress on the areas we identified in our 2011 annual report
for this year's report, we combined two areas related to the Department
of Homeland Security's management of acquisitions (Areas 75 and 76)
into one area.
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Although DHS and Congress have made some progress in addressing the
issues that we have previously identified that may produce cost savings
or revenue enhancements, additional steps are needed. For example, in
February 2012, we reported that FEMA should develop and implement a
methodology that provides a more comprehensive assessment of a
jurisdiction's capability to respond to and recover from a disaster
without Federal assistance. As of March 2013, FEMA had not addressed
this action. In addition, in the 2012 report, we suggested that
Congress, working with the administrator of TSA, may wish to consider
increasing the passenger aviation security fee according to one of many
options, including but not limited to the President's Deficit Reduction
Plan option ($7.50 per one-way trip by 2017) or the Congressional
Budget Office, President's Debt Commission, and House Budget Committee
options ($5 per one-way trip). These options could increase fee
collections over existing levels from about $2 billion to $10 billion
over 5 years. However, as of March 2013, Congress had not passed
legislation to increase the passenger security fee.\14\ For additional
information on our assessment of DHS's and Congress's efforts to
address our previously reported actions, see GAO's Action Tracker.\15\
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\14\ In the President's fiscal year 2014 budget request, TSA
proposes to replace the current ``per-enplanement'' fee structure with
a ``per one-way trip'' fee structure so that passengers pay the fee
only one time when traveling to their destination. It also removes the
current statutory fee limit and replaces it with a statutory fee
minimum of $5.00 in 2014, with annual incremental increases of 50 cents
from 2015 to 2019, resulting in a fee of $7.50 per one-way trip in 2019
and thereafter. According to TSA, the proposed fee would increase
collections by an estimated $25.9 billion over 10 years. Of this
amount, $7.9 billion will be applied to increase offsets to the
discretionary costs of aviation security and the remaining $18 billion
will be treated a mandatory savings and deposited in the general fund
for deficit reduction. This proposal presents an option that,
consistent with our suggested action, Congress may consider in
determining whether to take legislative action to change the fee.
\15\ GAO's Action Tracker is a publicly accessible website of the
162 areas and approximately 380 suggested actions presented in our
2011, 2012, and 2013 reports. GAO's Action Tracker includes progress
updates and assessments of Legislative and Executive branch actions
needed. We will add areas and suggested actions identified in future
reports to GAO's Action Tracker and periodically update the status of
all identified areas and activities.
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dhs needs to strengthen its management functions
Following its establishment in 2003, DHS focused its efforts
primarily on implementing its various missions to meet pressing
homeland security needs and threats, and less on creating and
integrating a fully and effectively functioning Department. As the
Department matured, it has put into place management policies and
processes and made a range of other enhancements to its management
functions, which include acquisition, information technology,
financial, and human capital management. However, DHS has not always
effectively executed or integrated these functions.
The Department has made considerable progress in transforming its
original component agencies into a single Cabinet-level Department and
positioning itself to achieve its full potential; however, challenges
remain for DHS to address across its range of missions. DHS has also
made important strides in strengthening the Department's management
functions and in integrating those functions across the Department. As
a result, in February 2013, we narrowed the scope of the high-risk area
and changed the focus and name from Implementing and Transforming the
Department of Homeland Security to Strengthening the Department of
Homeland Security Management Functions.\16\ Of the 31 actions and
outcomes GAO identified as important to addressing this area, DHS has
fully or mostly addressed 8, partially addressed 16, and initiated 7.
Moving forward, continued progress is needed in order to mitigate the
risks that management weaknesses pose to mission accomplishment and the
efficient and effective use of the Department's resources. For example:
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\16\ GAO-13-283.
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Acquisition management.--Although DHS has made progress in
strengthening its acquisition function, most of DHS's major
acquisition programs continue to cost more than expected, take
longer to deploy than planned, or deliver less capability than
promised. We identified 42 programs that experienced cost
growth, schedule slips, or both, with 16 of the programs' costs
increasing from a total of $19.7 billion in 2008 to $52.2
billion in 2011--an aggregate increase of 166 percent. We
reported in September 2012 that DHS leadership has authorized
and continued to invest in major acquisition programs even
though the vast majority of those programs lack foundational
documents demonstrating the knowledge needed to help manage
risks and measure performance.\17\ We recommended that DHS
modify acquisition policy to better reflect key program and
portfolio management practices and ensure acquisition programs
fully comply with DHS acquisition policy. DHS concurred with
our recommendations and reported taking actions to address some
of them. Moving forward, DHS needs to, for example, validate
required acquisition documents in a timely manner, and
demonstrate measurable progress in meeting cost, schedule, and
performance metrics for its major acquisition programs.
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\17\ GAO, Homeland Security: DHS Requires More Disciplined
Investment Management to Help Meet Mission Needs, GAO-12-833,
(Washington, DC: Sept. 18, 2012).
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Information technology management.--DHS has defined and
begun to implement a vision for a tiered governance structure
intended to improve information technology (IT) program and
portfolio management, which is generally consistent with best
practices. However, the governance structure covers less than
20 percent (about 16 of 80) of DHS's major IT investments and 3
of its 13 portfolios, and the Department has not yet finalized
the policies and procedures associated with this structure. In
July 2012, we recommended that DHS finalize the policies and
procedures and continue to implement the structure. DHS agreed
with these recommendations and estimated it would address them
by September 2013.\18\
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\18\ GAO, Information Technology: DHS Needs to Further Define and
Implement Its New Governance Process, GAO-12-818 (Washington, DC: July
25, 2012).
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Financial management.--DHS has, among other things, received
a qualified audit opinion on its fiscal year 2012 financial
statements for the first time since the Department's creation.
DHS is working to resolve the audit qualification to obtain an
unqualified opinion for fiscal year 2013. However, DHS
components are currently in the early planning stages of their
financial systems modernization efforts, and until these
efforts are complete, their current systems will continue to
inadequately support effective financial management, in part
because of their lack of substantial compliance with key
Federal financial management requirements. Without sound
controls and systems, DHS faces challenges in obtaining and
sustaining audit opinions on its financial statement and
internal controls over financial reporting, as well as ensuring
its financial management systems generate reliable, useful, and
timely information for day-to-day decision making.
Human capital management.--In December 2012, we identified
several factors that have hampered DHS's strategic workforce
planning efforts and recommended, among other things, that DHS
identify and document additional performance measures to assess
workforce planning efforts.\19\ DHS agreed with these
recommendations and stated that it plans to take actions to
address them. In addition, DHS has made efforts to improve
employee morale, such as taking actions to determine the root
causes of morale problems. Despite these efforts, however,
Federal surveys have consistently found that DHS employees are
less satisfied with their jobs than the Government-wide
average. In September 2012, we recommended, among other things,
that DHS improve its root cause analysis efforts of morale
issues. DHS agreed with these recommendations and noted actions
it plans to take to address them.\20\
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\19\ GAO, DHS Strategic Workforce Planning: Oversight of
Department-wide Efforts Should Be Strengthened, GAO-13-65 (Washington,
DC: Dec. 3, 2012).
\20\ GAO, Department of Homeland Security: Taking Further Action to
Better Determine Causes of Morale Problems Would Assist in Targeting
Action Plans, GAO-12-940 (Washington, DC: Sept. 28, 2012).
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In conclusion, given DHS's significant leadership responsibilities
in securing the homeland, it is critical that the Department's programs
and activities are operating as efficiently and effectively as
possible; that they are sustainable; and that they continue to mature,
evolve, and adapt to address pressing security needs. Since it began
operations in 2003, DHS has implemented key homeland security
operations and achieved important goals and milestones in many areas.
These accomplishments are especially noteworthy given that the
Department has had to work to transform itself into a fully functioning
Cabinet department while implementing its missions. However, our work
has shown that DHS can take actions to reduce fragmentation, overlap,
and unnecessary duplication to improve the efficiency of its operations
and achieve cost savings in several areas. Further, DHS has taken steps
to strengthen its management functions and integrate them across the
Department; however, continued progress is needed to mitigate the risks
that management weaknesses pose to mission accomplishment and the
efficient and effective use of the Department's resources. DHS has
indeed made significant strides in protecting the homeland, but has yet
to reach its full potential.
Chairman Duncan, Ranking Member Barber, and Members of the
subcommittee, this concludes my prepared statement. I would be pleased
to respond to any questions that Members of the subcommittee may have.
appendix i.--areas and actions identified in 2011-2013 annual reports
related to the department of homeland security
This enclosure presents a summary of the areas and actions we
identified in our 2011-2013 annual reports that are relevant to the
Department of Homeland Security (DHS).\21\ It also includes our
assessment of the overall progress made in each of the areas and the
progress made on each action that we identified in our 2011 and 2012
annual reports in which Congress and DHS could take actions to reduce
or eliminate fragmentation, overlap, and potential duplication or
achieve other potential financial benefits. As of April 26, 2013, we
have not assessed DHS's progress in addressing the relevant 2013 areas.
Table 4 presents our assessment of the overall progress made in
implementing the actions needed in the areas related to fragmentation,
overlap, or duplication. Table 5 presents our assessment of the overall
progress made in implementing the actions needed in the areas related
to cost savings or revenue enhancement.
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\21\ GAO, Opportunities to Reduce Potential Duplication in
Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-
318SP (Washington, DC: Mar. 1, 2011); 2012 Annual Report: Opportunities
to Reduce Duplication, Overlap, and Fragmentation, Achieve Savings, and
Enhance Revenue, GAO-12-342SP (Washington, DC: Feb. 28, 2012); and 2013
Annual Report: Actions Needed to Reduce Fragmentation, Overlap, and
Duplication and Achieve Other Financial Benefits, GAO-13-279SP
(Washington, DC: Apr. 9, 2013).
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Duncan. Thank you, Ms. Berrick.
The Chairman will now recognize Ms. Richards for her
testimony.
STATEMENT OF ANNE L. RICHARDS, ASSISTANT INSPECTOR GENERAL FOR
AUDITS, OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF
HOMELAND SECURITY
Ms. Richards. Good morning Chairman Duncan, Ranking Member
Barber, Ranking Member Thompson, and Members of the
subcommittee. Thank you for inviting me to testify today.
In the 10 years since its establishment, the Department of
Homeland Security has made progress in addressing the
challenges it faces to accomplish its mission and in laying the
groundwork to effectively manage its resources; however, to
successfully fulfill its vital mission to protect and secure
our Nation, DHS must continue to overcome challenges that
hinder its efforts.
Our recommendations are designed to assist the Department
and its components in addressing and overcoming their most
persistent challenges. In the past 10 years we had issued about
8,000 recommendations of which about 15 percent remain open.
Those open recommendations identified a total monetary effect
of about $650 million.
We believe that by implementing our recommendations, DHS
will continue to improve the effectiveness inefficiencies of
its operations. My testimony today will address some of the
highest priorities, short- and long-term open, that is to say
on implemented, recommendations that we have made to DHS. These
recommendations address the Department's critical mission areas
of the border security and disaster preparedness and response
as well as accountability issues related to financial and IT
management.
In an effort to be mindful of your time, I would like to
focus on just a few of the recommendations included in my full
statement. These recommendations addressed interoperable
communications, financial management, and FEMA's process for
tracking public assistance insurance requirements.
We reported in November 2012, that although DHS established
an internal goal of developing interoperable radio
communications and identified common channels to do so, it had
not achieved that goal. Only one out of 479 radio users we
reviewed could access and communicate using the specified
common channel.
Only 20 percent of radios that we tested contained all the
correct program settings for this common channel. We
recommended that DHS establish a robust governance structure to
ensure that the components achieve interoperability as well as
develop and disseminate policies and procedures to standardize
Department-wide radio activities.
Also in fiscal year 2012, DHS produced auditable financial
statements and obtained a qualified opinion on those
statements, but challenges remain in financial management
including the need to improve and integrate the Department's
financial management systems.
We also recommended that DHS continue its financial systems
modernization initiative and improve the Department's financial
management systems. This is an example of a recommendation that
will take significant time and effort to implement.
The Department has worked to improve its financial systems
for several years and is currently pursuing a strategy to
improve the financial systems at individual components such as
the Coast Guard and FEMA.
Our December 2011 report of FEMA's process for tracking
public assistance insurance requirements included
recommendations to help resolve long-standing insurance-related
issues.
The Stafford Act encourages State or local governments to
protect themselves by obtaining insurance to supplement or
replace Federal Government assistance.
To receive public assistant grant funding and be eligible
for funding in future disasters, the act requires applicants to
obtain and maintain insurance on damaged insurable facilities;
however FEMA's public assistance program includes disincentives
for applicants to carry this insurance.
For example, the program pays for building repair following
a first disaster, which reduces the incentive for building
owners to purchase insurance if they had not previously
received a disaster assistance.
In addition, FEMA reimburses deductible amounts in
insurance policies regardless of the amount of the deductible,
which encourages high deductibles.
In our December 2011 report we recommended that FEMA
complete the rulemaking process begun in 2000 and issue a final
rule that resolves the long-standing issues with public
assistance insurance regulations including those related to
deductibles and self-insurance.
The Office of Inspector General continue to analyze the
Department's programs and practices to identify those that they
need improvement, determine how DHS and its components can
address deficiencies and weaknesses, and recommend appropriate
solutions to strengthen the Department.
Mr. Chairman, this concludes my prepared statement. I
welcome the opportunity to address any questions you might have
on our efforts to improve the effectiveness of DHS. Thank you.
[The prepared statement of Ms. Richards follows:]
Prepared Statement of Anne L. Richards
April 26, 2013
Chairman Duncan, Ranking Member Barber, and Members of the
subcommittee, thank you for inviting me here today to discuss cutting
duplication and wasteful spending, and implementing private-sector best
practices and watchdog recommendations at the Department of Homeland
Security (DHS).
My testimony today will address some of our high-priority short-
and long-term open recommendations we have made to DHS, which were
included in reports issued between December 2011 and December 2012.
In the 10 years since its establishment, DHS has matured and made
progress in addressing challenges to accomplishing its mission, and it
has laid the groundwork to manage its resources effectively. However,
to fulfill its vital mission of protecting and securing our Nation
successfully, the Department must continue to overcome challenges that
hinder its efforts. The high-priority open recommendations from the
reports discussed below illustrate our efforts to assist DHS and its
components in addressing and overcoming the most persistent challenges
they face. We believe that by implementing these recommendations, DHS
will continue to improve the effectiveness and efficiency of its
operations and reduce the potential for waste and duplication of
effort.
background
Since DHS-OIG's inception we have made over 8,000 recommendations
to the Department and its components identifying over $2.6 billion in
questioned costs, unsupported costs, or funds that could be put to
better use. Approximately 15% of these recommendations remain open,
representing about $650 million.
Our December 2012 report, Major Management Challenges Facing the
Department of Homeland Security--Revised, summarized and assessed the
Department's progress in addressing its most serious management
challenges. We grouped these challenges into the mission areas of
intelligence, transportation security, border security, infrastructure
protection, and disaster preparedness and response; and accountability
issues of acquisition management, financial management, IT management,
grants management, employee accountability and integrity, and
cybersecurity.
border security
Our report, CBP's Use of Unmanned Aircraft Systems in the Nation's
Border Security (OIG-12-85), issued in May 2012, covered our audit of
U.S. Customs and Border Protection's (CBP) efforts to establish a
program for its unmanned aircraft systems (UAS). In this report, we
made a recommendation to improve CBP's UAS program planning, which is
still open and considered a high-priority short-term recommendation. In
November 2012, we issued a report, DHS' Oversight of Interoperable
Communications (OIG-13-06), which includes a high-priority, short-term
open recommendation that DHS establish policies and procedures to
standardize radio communications.
CBP's Program for Unmanned Aircraft Systems
CBP's Office of Air and Marine (OAM) is responsible for protecting
the American people and the Nation's critical infrastructure through
the coordinated use of integrated air and marine forces. Air and marine
forces are used to detect, interdict, and prevent acts of terrorism and
the unlawful movement of people, illegal drugs, and other contraband
toward or across U.S. borders. UASs provide command, control,
communication, intelligence, surveillance, and reconnaissance
capability to complement crewed aircraft and watercraft, and ground
interdiction agents.
After the pilot of the UAS program, Congress appropriated more than
$240 million to establish the program within CBP. During our 2012
audit, CBP stated it had expended $152.3 million to purchase nine
unmanned aircraft and related equipment and, at that time, had seven
operational aircraft. After our audit, in late 2011, CBP received two
additional aircraft and was awaiting delivery of a tenth aircraft
purchased with fiscal year 2011 funds. Each aircraft system cost
approximately $18 million.
We reported that CBP had not adequately planned resources needed to
support its current unmanned aircraft inventory. Although CBP developed
plans to use the unmanned aircraft's capabilities to fulfill OAM's
mission, its Concept of Operations planning document did not
sufficiently address processes: (1) To ensure that required operational
equipment, such as ground control stations and ground support
equipment, was provided for each launch and recovery site; (2) for
stakeholders to submit unmanned aircraft mission requests; (3) to
determine how mission requests would be prioritized; and (4) to obtain
reimbursements for missions flown on stakeholders' behalf. With this
approach, CBP risked having invested substantial resources in a program
that underutilized assets and limited its ability to achieve OAM
mission goals.
Because UAS is critical to protecting the American people and our
infrastructure, CBP needed to improve its planning to address the UAS
program's level of operation, funding, and resource requirements, along
with stakeholder needs. Thus, we recommended that CBP analyze
requirements and develop plans to achieve the UAS mission availability
objective and acquire funding to provide necessary operations,
maintenance, and equipment.
DHS' Oversight of Interoperable Communications
DHS includes a network of organizations that work together to
prevent and respond to terrorist attacks, other threats, and natural
disasters. Such collaboration requires that DHS components establish
effective communication among external and internal partners during
operations. DHS established an internal goal of developing
interoperable radio communications and identified common channels. To
meet communications requirements, DHS components invested about $430
million in equipment, infrastructure, and maintenance. Although DHS
created policies, guidance, and templates to aid in achieving
interoperability and provided more than $18 million in assistance to
State and local agencies, full interoperability remains a distant goal,
according to a 2012 Government Accountability Office report.\1\
---------------------------------------------------------------------------
\1\ Emergency Communications--Various Challenges Likely to Slow
Implementation of a Public Safety Broadband Network (GAO-12-343,
February 2012).
---------------------------------------------------------------------------
In our November 2012 report we noted that, although DHS had
established a goal for interoperability and common radio channels, only
1 of 479 radio users we reviewed could access and communicate using the
specified channel. Furthermore, only 78 of 382 or 20 percent of radios
that we tested contained all the correct program settings, including
the name, for the common DHS channel. Additionally, DHS did not
establish an effective governing structure with authority and
responsibility to oversee achievement of Department-wide
interoperability. Without an authoritative governing structure to
oversee emergency communications, DHS had limited interoperability
policies and procedures, and the components did not inform radio users
of DHS-developed guidance.
Because of this limited progress in interoperability, personnel
could not rely on interoperable communications during daily operations,
planned events, and emergencies. We recommended that DHS create a
structure with the necessary authority to ensure that the components
achieve interoperability and to develop and disseminate policies and
procedures to standardize Department-wide radio activities, including
program settings, such as naming conventions, to ensure
interoperability.
disaster preparedness and response
Our December 2011 report, FEMA's Process for Tracking Public
Assistance Insurance Requirements (OIG-12-18), includes a high-
priority, long-term recommendation to help resolve long-standing
insurance-related issues. In January 2012, we issued a report related
to Federal Emergency Management Agency's (FEMA) response to Hurricane
Katrina, Efforts to Expedite Disaster Recovery in Louisiana (OIG-12-
30), in which we made a short-term and a long-term recommendation, both
related to closing out Public Assistance (PA) projects and both of
which we consider high-priority and both are open.
FEMA's Process for Tracking Public Assistance Insurance Requirements
FEMA's PA grants totaled more than $10 billion for all disasters
declared between 2007 and 2010. Of that amount, the component provided
$1.3 billion for buildings, contents, and equipment owned by State,
Tribal, and local governments, as well as by private non-profit
organizations. Since fiscal year 2009, we have issued 19 financial
assistance grant reports that included findings pertaining to PA
insurance requirements, which involved duplicate benefits, incomplete
insurance reviews, and applicants who either did not obtain adequate
insurance or did not file an insurance claim.
The Robert T. Stafford Disaster Relief and Emergency Assistance Act
(Stafford Act) encourages State and local governments to protect
themselves by obtaining insurance to supplement or replace Federal
Government assistance. To receive PA grant funding and be eligible for
funding in future disasters, the Stafford Act also requires applicants
to obtain and maintain insurance on damaged insurable facilities.
However, FEMA's PA program includes disincentives for applicants to
carry insurance. For example, the program pays for building repair
following a first disaster, which reduces the incentive for building
owners to purchase insurance if they have not previously received
disaster assistance. In addition, FEMA reimburses deductible amounts in
insurance policies, regardless of the amount of the deductible, which
encourages high deductibles.
FEMA has been aware of these and other equity issues and
disincentives for more than a decade. In February 2000, FEMA published
an advance notice of proposed rulemaking in the Federal Register that
addressed insurance requirements, procedures, and eligibility criteria
with respect to buildings under the PA program. However, FEMA has not
issued a final rule and stated that these issues have not been acted on
because regulatory review and rulemaking for other programs have taken
precedence. Consequently, the disincentives and equity issues continue,
and PA program regulations do not provide adequate guidance to those
who receive, grant, or oversee PA grants.
In our December 2011 report, we recommended that FEMA complete the
rulemaking process begun in 2000 and issue a final rule that resolves
the long-standing issues with PA insurance regulations, including those
related to deductibles, self-insurance, and State insurance
commissioners' determinations of reasonably available insurance. In
February 2013, FEMA rescinded the policy of reducing eligible costs by
an insurance deductible by deducting all insurance proceeds received or
anticipated from the total eligible cost of the project. This change in
policy provides further incentive for applicants to not carry insurance
or, if they do, to choose the highest deductible possible.
FEMA's Efforts to Expedite Disaster Recovery in Louisiana
Under the authority of the Stafford Act, FEMA provides Federal
disaster grant assistance to State, Tribal, and local governments and
certain private nonprofit organizations through the PA program. FEMA
has an obligation to ensure timely and appropriate use of Federal
disaster funds. In January 2012, we reported that only 6.3 percent of
the PA projects for Louisiana had been closed out in the 6 years since
Hurricane Katrina made landfall. Many of these projects are years past
the close-out deadlines.
Although FEMA has worked with Louisiana to expedite the recovery
effort, several factors have contributed to the slowness in closing out
PA projects. Specifically, the Federal Government provided 100 percent
funding of PA projects. The State of Louisiana does not pay for
projects and has no incentive to seek cost-effective replacement or
repair solutions, close completed projects, or reduce the disaster
workforce as work is completed. Other factors, such as the project
procurement process, inconsistent decisions for applicant eligibility,
and determining whether to replace or repair, as well as limited State
staff resources, also contributed to delays in closing PA projects.
Because open PA projects could involve substantial amounts of
obligated Federal funds that could be put to better use, we recommended
in the short term, that FEMA develop and implement specific policies,
procedures, and time lines to ensure timely closeout of 100 percent
Federally-funded projects. For the long term, we recommended that FEMA
evaluate the status of all PA projects in Louisiana associated with
Hurricane Katrina and develop, in conjunction with the State, a process
to close completed projects and to expedite the completion of open
projects.
FEMA took several actions to respond to our recommendations.
Specifically, the component completed the draft of an updated standard
operating procedure for PA program management and grant closeout. In
addition, FEMA began implementing a training course, which was
scheduled for a pilot release in fiscal year 2013, to address the PA
program process and the roles and responsibilities for closeout
activities. FEMA also developed a procedure to track the progress of
recovery and the movement toward programmatic closeout of Hurricanes
Katrina, Rita, Gustav, and Ike projects.
FEMA also worked with the State of Louisiana, which developed a
closeout process to ensure that each applicant and project met the
eligibility requirements and document standards mandated by Federal and
State regulations. In addition, FEMA developed and communicated clear
goals for subgrantees to certify that projects were completed, which
provide an incentive for meeting these goals. FEMA conducted a complete
review of the project closeout process used by the State. The average
number of projects closed monthly increased by 300 percent for
Hurricanes Katrina and Rita in the first quarter of fiscal year 2013.
We will review these efforts to determine whether they have
successfully resolved the recommendations.
financial management
DHS is responsible for an annual budget of more than $59 billion,
employs more than 225,000 men and women and operates in more than 75
countries. Sound financial practices and related management operations
are critical to achieving the Department's mission and to providing
reliable, timely financial information to support management decision
making throughout DHS. Although DHS produced auditable financial
statements in fiscal year 2012 and obtained a qualified opinion on
those statements, challenges remain for the Department's financial
management. One high-priority, long-term challenge is the improvement
of the Department's financial management systems.
Independent Auditors' Report on DHS' Fiscal Year 2012 Financial
Statements and Internal Control Over Financial Reporting
An independent public accounting firm, KPMG LLP, performed the
integrated audit of the DHS financial statements for fiscal year 2012
and an examination of internal control over financial reporting and
compliance.\2\ KPMG considered the effects of financial system
functionality in its tests and determined that many key DHS financial
systems are not compliant with the Federal Financial Management
Improvement Act of 1996 (FFMIA) and Office of Management and Budget
Circular Number A-127, Financial Management Systems, as revised. DHS
financial system functionality limitations add substantially to the
Department's challenges of addressing systemic internal control
weaknesses, as well as limit its ability to leverage IT systems to
process and report financial data effectively and efficiently.
---------------------------------------------------------------------------
\2\ DHS-OIG, Independent Auditors' Reports on DHS' FY08, 09, 10,
11, and 12 Financial Statements and Internal Control Over Financial
Reporting (OIG-09-09, November 2008; OIG-10-11, November 2009; OIG-11-
09, November 2010; OIG-12-07, November 2011; OIG-13-20, November 2012).
---------------------------------------------------------------------------
Specifically, KPMG identified the following persistent, pervasive
financial system functionality issues:
An inability to process, store, and report financial and
performance data to facilitate decision making, safeguarding
and management of assets, and preparation of financial
statements that comply with generally accepted accounting
principles.
Technical configuration limitations, such as outdated
systems that software vendors can no longer fully support, that
impair DHS' ability to comply with policy in areas such as IT
security controls, audit logging, user profile changes, and
restricting departing employees' and contractors' access.
System capability limitations that prevent or restrict the
use of applications controls to replace less reliable, more
costly manual controls. In some cases, additional manual
controls must compensate for IT security or control weaknesses.
Additionally, KPMG determined that the United States Coast Guard
(USCG):
Is routinely unable to query its various general ledgers to
obtain a population of financial transactions and consequently,
must create many manual custom queries that delay financial
processing and reporting processes.
Has a key financial system that is limited in processing
overhead cost data and depreciation expenses to support the
property, plant, and equipment financial statement line item.
Uses production versions of financial statements that are
outdated and do not provide the necessary core functional
capabilities (e.g., general ledger capabilities).
Has a budgetary module of the core financial system that is
not activated. As a result, key attributes (e.g., budget fiscal
year) are missing and potential automated budgetary entries
(e.g., upward adjustments) are not used. This has created the
need for various manual workarounds and nonstandard
adjustments.
Has a financial systems functionality limitation that is
preventing the component from establishing automated processes
and application controls to improve accuracy and reliability,
and to facilitate efficient processing of certain financial
data, such as receipt of goods and services upon delivery and
ensuring proper segregation of duties and access rights.
KPMG concluded in its report that these findings limit DHS' ability
to process, store, and report financial data in a manner that ensures
accuracy, confidentiality, integrity, and availability. KPMG emphasized
that some of these weaknesses may result in material errors in
financial data that go undetected through the normal course of
business. Additionally, because of financial system functionality
weaknesses, there is added pressure on mitigating controls to operate
effectively. Mitigating controls are often more manual, which increases
the risk of human error that could materially affect the financial
statements. We recommended that the DHS Office of the Chief Information
Officer, in conjunction with the Office of the Chief Financial Officer,
continue the Financial Systems Modernization initiative and make
necessary improvements to the Department's financial management
systems.
it management
As technology constantly evolves, the protection of the
Department's IT infrastructure becomes increasingly important. The
Department's chief information officer has taken steps to mature IT
management functions, improve IT governance, and integrate IT
infrastructure.
cybersecurity
The firewall of cybersecurity--the technologies, processes, and
practices that protect our systems from attack, damage, or unauthorized
access--is always on alert for threats to networks, computers,
programs, and data. In 2012, we recommended actions to address
weaknesses in DHS' international cybersecurity program.
DHS' International Cybersecurity Program
Our Nation's economy and security are highly dependent on the
global cyber infrastructure. The borderless nature of threats to, and
emanating from, cyberspace requires robust engagement and strong
partnerships with countries around the world. International engagement
is a key element of the DHS cyber mission to safeguard and secure
cyberspace. DHS' National Protection and Programs Directorate (NPPD)
promotes cybersecurity awareness and fosters collaboration with other
countries and organizations to global cyber space threats.
In our report DHS Can Strengthen Its International Cybersecurity
Programs (OIG-12-112), which we issued in August 2012, we reported that
NPPD had undertaken actions to promote collaboration with the
international community and develop partnerships with other nations to
protect cyberspace better. However, NPPD had not defined its roles for
carrying out the mission of its international affairs program, nor had
it developed a strategic implementation plan to provide a clear plan of
action for achieving its cybersecurity goals with international
partners, international industry, or the private sector. In addition,
NPPD had not streamlined its international affairs functions and
processes to support its international cybersecurity goals, objectives,
and priorities efficiently, nor had had it effectively consolidated
resources. Lastly, NPPD needed to strengthen its communications and
information-sharing activities with international partners to promote
international incident response, exchange of cyber data with other
nations, and to share best practices. We recommended that DHS develop
and implement policies and procedures for establishing and maintaining
open dialogues with foreign partners regarding cyber threats and
vulnerabilities.
steps taken to implement high-priority recommendations
DHS and its components are taking steps to implement these high-
priority recommendations to improve and strengthen program management
with which it agreed. In most instances, however, particularly for
long-term recommendations, it takes time to develop plans, revise and
update guidance, and implement and disseminate new policies and
procedures. This can be particularly time-consuming when, as is usually
the case, such plans, policies, and procedures require coordination and
concurrence among multiple entities, including some outside of DHS and
its components. Competing and changing priorities and funding
uncertainties also affect the Department's ability to implement
multiple recommendations quickly. In addition, some recommended
improvements require funding and staffing resources that are not
readily available.
Although DHS has made a number of attempts over the years to
improve and integrate its financial systems, for various reasons, it
has not yet successfully completed this complicated task. For example,
because of a vendor protest, a contract for an enterprise-wide
initiative had to be cancelled. In addition, in June 2010, the Office
of Management and Budget (OMB) required all agencies to halt the
issuance of new task orders or new procurements for all financial
system projects pending its review and approval. In an effort to comply
with the OMB requirement, DHS began upgrading existing financial
systems at some components. Projects aimed at improving financial and
IT systems are scheduled to be implemented at the USCG and FEMA in
fiscal year 2013.
questioned costs
From April 1, 2012 through September 30, 2012, our audits resulted
in questioned costs of more than $235 million. During this same period,
DHS recovered approximately $115 million as a result of disallowed
costs identified in current and previous audit reports and from our
investigative efforts. We issued 12 reports identifying approximately
$101 million in funds that could be put to better use.
conclusion
We encourage Congress and this subcommittee to continue its
oversight of DHS and its components to ensure effective and efficient
program management and sound financial practices. For our part, we will
continue to analyze the Department's programs and practices to identify
those that need improvement, determine how DHS and its components can
address deficiencies and weaknesses, and recommend appropriate
solutions to strengthen the Department. We understand that our
recommended corrective actions will strengthen DHS only if they are
implemented. Therefore, we will also continue our efforts to follow up
with the Department to make certain that it carries out its mission as
effectively and efficiently as possible.
Mr. Duncan. Thank you, Ms. Richards.
The Chairman will now recognize Dr. Stern for his
testimony.
STATEMENT OF PAUL G. STERN, PH.D., MEMBER, BOARD OF DIRECTORS,
BUSINESS EXECUTIVES FOR NATIONAL SECURITY
Mr. Stern. Chairman Duncan, Ranking Member Barber, Members
of the committee, my name is Paul G. Stern, and I am honored to
be here as a private citizen and a member of the Business
Executives for National Security.
BENS is a nonpartisan organization of business executives
like myself concerned about National security. The views I
express here today are my own although they reflect in great
part BENS' perspectives on better management to our National
security organizations.
My personal experience has been mostly in mergers and
acquisitions and turnaround of businesses in the private
sector. I will make my comments brief and ask that with
permission, with the committee's permission, my written
testimony be entered into the record.
The focus of the hearing is how to find cost savings by
eliminating duplication in the Department of Homeland Security.
Merging and combining functions to improve efficiency and
effectiveness is basic to good management, but Government has
often--skips the crucial next step; that is rationalizing or
reducing the organization once the functions have been marched.
To get the cost savings you have to review very objectively
and aggressively the quality of management, make changes of
leadership when necessary, stress and emphasize the financial
organization as well as IT systems so that they enable
management to track the progress of cost reductions, accurately
identify the cost of inventory because it tends to tie up
significant sums of cash, and to use the human resource
function to help the transition of individuals both in and out
of the organization.
In addition to ridding the Department of redundancy, there
are other management areas that in the private sector have
proven to contribute as much if not more to the success of the
organization and the bottom line.
I have outlined 11 of them in my written testimony. For
example, they range from eliminating excess real property,
streamlining the levels of management, of management review and
approval that tends to slow down progress, and by that I mean
the flattening of the organization charts as well as evaluating
compensation incentives and benefits for those people involved.
What I do not believe in is making arbitrary percentage
cuts across organizations in order--as a means of cost
reduction. It is not thoughtful nor is it good management.
What does work is setting objectives and measuring
performance, providing incentives and bonuses that are tied to
specific measurable performance objectives and then rewarding
management for achieving these performance objectives and these
are sure ways to ensure to get good results.
These things are hard to do, and I appreciate the challenge
that the Department faces in looking across 22 separate units.
Response--in 2002 when Congress voted to create the Department
of Homeland Security, it did so to streamline and integrate the
elements of Government needed to protect our homeland.
Unfortunately it didn't apply the same discipline to itself
and today, 10 years later, we still have considerable
duplication and overlap in the jurisdiction and oversight level
levied on the Department by the various committees of Congress.
How can DHS manage efficiently and effectively with so many
oversight restrictions? Congress could do better by applying
the same management techniques that I have suggested for the
Department.
Give DHS specific short- and long-term performance
objectives for improving effectiveness and cutting costs. Make
sure that the right management team is in place. Focus your
oversight function solely on measuring those performance
objectives, and reward performance, but let management and do
its job.
Many of the business processes and organizational
structures which back up our Nation's security have the analogs
in the private sector. As in the private sector, people in the
heart of any attempt to change whether a successful change is
taking place can be answered--addressed by a simple set of
questions and they are: Why are you here? Why are you coming to
work? What makes you think that you are making a difference? If
you are gone, what effect would that have on the remaining
organization?
I am confident that with the help of this committee, the
Department can make organizational changes in its overhead and
infrastructure functions that can put it in the company of the
best-managed organizations, both public and private, in the
Nation.
I thank you for inviting me to testify, and I am prepared
to answer questions that you might have. Thank you.
[The prepared statement of Mr. Stern follows:]
Prepared Statement of Paul G. Stern
April 26, 2013
Chairman Duncan, Ranking Member Barber, Members of the committee,
my name is Paul G. Stern. I am honored to be here as a private citizen
and a member of Business Executives for National Security. I plan to
address, from the business perspective, several areas of your concern.
I will speak from my own knowledge and operational experience. I have
spent my career in strategic planning, corporate mergers and
acquisitions--and, most recently, in private equity financing for
corporate restructuring and improved shareholder performance.
I am a member of the Board of Directors of Business Executives for
National Security, a non-partisan organization of business executives
concerned about National security. Although reflective of BENS'
perspectives on what the private sector can contribute to better
managing our National security organizations, the views I express are
my own.\1\
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\1\ Dr. Stern has held numerous senior management positions with
IBM. He was chairman and chief executive officer of Braun AG in
Germany, corporate vice president at Rockwell International Corporation
and president of their Commercial Electronics Operations. Dr. Stern
joined Burroughs Corporation (later Unisys) as an executive vice
president and rose to become the president and chief operating officer.
From 1988 to 1992, he served as the chairman and chief executive
officer of Northern Telecom, now known as Nortel Networks. In private
equity, he joined Forstmann Little & Co. in 1993, and, later, co-
founded Thayer Capital Partners, LLC, prior to starting Arlington
Capital.
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A key focus of this hearing is, I believe, the opportunity for cost
savings by eliminating duplication, particularly in research and
development expenditures. I will comment on that issue. But, I will
also suggest other management areas that, in the private sector, have
proven to contribute as much, if not more, to improving the bottom
line--or, more appropriately for the public sector, to improving
organizational efficiency and effectiveness.
1. eliminating duplication and wasteful spending
I think it important to understand the mechanics of eliminating
duplication or redundancy. The objective is to merge and combine
overlapping functions, which is readily accomplished by redrawing
organization charts and ``x-ing'' out redundant units. However, the
next step is crucial. That is, rationalizing the organization to reduce
its size and cost. This is hard, because it ultimately means moving
people out of the organization and changing policies and procedures to
match the new scope and mission. The Government does not do this well.
Here are some considerations from my private-sector experience that
you might appreciate.
The goal of eliminating duplication and overlap is to improve
effectiveness. If this objective can be achieved, cost savings will
surely follow. However, effectiveness is measured only over the long
term, so one needs an interim tool or tools to gauge progress. I
suggest two: Managerial performance and attention to financial
expenses.
You need to get managers to perform and you need to know the cost
of operations. Here's how:
Review management aggressively: Qualifications, capability,
willingness to execute the plan. Make changes to leadership, if
necessary.
However, find ways to positively reinforce change through
incentives and bonuses tied to performance objectives.
Be cautious in trimming the financial function. You need the
data they provide to know and control expenses.
Manage IT platforms with an eye to collecting accurate
financial data.
Track expenses across all operating accounts.
Audit cost of inventory to determine where resources are
tying up organizational funds.
Look at the HR function. It tends to be overstaffed without
adding a great deal of value, except where needed to help
transition individuals out of the organization.
Finally, review layers of management with an eye toward
flattening the organization. This allows you to place
responsibility much closer to the act of decision making.
Because they slow down the decision process, buy things,
and create staff, trimming the number of department heads
saves more than just a salary.
In sum, identifying redundancy, having accurate expense and
performance data, and moving rapidly carries risk. But leaders must be
prepared to take risk. Incenting the change makers, taking intermittent
satisfaction surveys, and having the cliched ``skin in the game'' has
the ability to change hearts and minds quickly--especially when they
see the success that changes are making.
2. strategic business process reorganization and change
Let me turn to another set of management tactics and techniques
that, as I mentioned, are prevalent in private-sector turn-arounds and
restructurings. Applied aggressively and purposely, they can be equal
or more productive than the elimination of redundancy that we just
discussed.
But first I must add a caveat: It is that while instituting change
rapidly is better than moving slowly, enacting too much change too
rapidly can be damaging to morale and counterproductive to
effectiveness. Instead, choose a few transformative actions; follow
through to completion, then choose the next set and repeat.
The Department of Homeland Security under your purview is, by any
measure, a conglomerate of diverse missions, capabilities, and
functions. Even after 10 years under the same management umbrella, the
Department is riven with conflicting cultures and customs. However,
putting its face-to-the-public operating divisions aside, there is a
common management infrastructure that is not at all unlike service-
oriented private-sector businesses. Here is where I believe lessons
from the private sector can be brought to bear on Government management
challenges.
The first two have already been discussed:
(1) Eliminate duplication/redundancy while maintaining safety back-
up;
(2) Consolidate and appropriately rationalize functionally-related
activities.
Here are a few more to consider:
(3) Eliminate excess real property. The Department of Defense has
fought this battle with Congress since the late 1980's, but has
developed the Base Closure and Realignment (BRAC) process to
bring practical resolution to this politically unpalatable
necessity. Has DHS considered doing the same? Furthermore, has
it done the analysis to determine in a corporate-wide--not
independent operating division sense--what excess exists that
could intra-departmentally be put to more productive use?
(4) Reduce duplicative procurement of commercial services,
especially professional services. An inventory of commercially-
provided services by category can yield large opportunities for
eliminating waste. In fact, the act of inventorying can itself
put managers on warning for possible duplicative and unneeded
expenditures.
(5) Streamline levels of management review. Touched on earlier,
this action has system-wide flow-down effects, particularly
with regard to man-hours consumed. Fewer levels of approval
mean fewer meetings, which occasion fewer pre-meetings, less
audio-visual demands, fewer PowerPoints, and less travel. That
is in addition to staff reductions and need for office space.
(6) Reduce inventory to demand levels plus a safety buffer. Owning
your own inventory outside of a safety stock is an obsolete and
costly proposition in a globally-dispersed and digitally-
connected commercial marketplace. Does DHS know how much of its
common inventory is commercially available either through
strategic sourcing or from the GSA schedule?
(7) Rightsource maintenance, repair, and overhaul. Most commercial
service providers outsource the MRO function to take advantage
of the MRO's economies of scale and obviate the need to replace
and upgrade repair facilities and equipment.
(8) Intensely manage real property maintenance/establish a capital
budget. Capital budgeting, which requires a long-term
commitment of resources to effect the replacement of aging or
worn-out equipment or infrastructure has never caught on with
the annual budgeting cycle of the Federal Government. Congress
is loath to give up its short-run appropriations hold on the
purse strings. However, there is nothing illegal about
approaching projects and planning from a capital budgeting
perspective and many States and local jurisdictions have
embraced the concept. The technique has the advantage of
isolating the year-to-year variability of operational resource
demands from the known replacement rates of long-term
infrastructure and equipment life cycles.
(9) Evaluate compensation, pay, and benefits. Pay-for-performance,
pay banding, and other innovative alternatives to the civil
service general schedule had their moment of ascendance in the
1990s, but were struck down by economic and other forces.
However, in an era of declining Federal resources, the ``war
for talent'' with the competitive private sector--where these
plans have become the norm--argues for a relook at the Federal
workforce's compensation systems. DHS should press to reinstate
its pilot program, but this time with greater transparency and
workforce input.
(10) Rightsource logistics, transportation, and sustainment. Next
to the digital revolution, no other sector of the private
economy has made the leaps in efficiency and effectiveness than
the transportation logistics sector. Few major equipment and
materiel manufacturers and many service-sector providers use
third-party logistics (TPL) and many operate their fleets and
equipment on a service rental agreement.
(11) Rationalize and consolidate IT platforms and services. It is
important to have the right data, but owning the means to that
data has become less and less sensible. To keep abreast of
rapid changes in the IT sector, it is better to specify a level
of service and to let the marketplace provides solutions.
Security is a consideration, but today's security is more
likely to be found in the cutting-edge technology of the
independent IT providers than in legacy Government systems.
3. reorganization and change is a process to undertake, not a
prescription to swallow
I have given you a list of management stratagems that, at one time
or another, have worked in the private sector. I will admit that they
are difficult to consider from a Government standpoint given the nature
of our political system and the criteria on which we place success,
that is, failure is not an option. However, many of the business
processes and organizational structures which backstop our Nation's
security have their analogs in the private sector. It would be unwise,
if not inopportune, not to emulate them where they apply. That has been
BENS' mantra since its founding over 30 years ago.
As in any business, people are at the heart of any attempt at
change. The leadership and the rank-and-file both have to be committed
to improvement in the way Government business is done. Leadership, by
definition has to set the tone and lead by commitment or no change is
possible. They must assign clear responsibilities; then measure
performance. Set discretionary spending targets; then enforce spending
discipline. Define the goals; then make the changes transparent and
equitable.
Those affected by such change have responsibilities too. First they
must define and embrace what success means for them and for the
organization. They will see--sooner than management--what measures of
effectiveness are working and which are not. They had better speak up
or they jeopardize the likelihood of success.
Today, the popular test of inclusion or participation, I guess, are
the phrases ``all in'' or ``lean in''. Here's my test of whether
successful change is happening in an organization.
It's a set of questions that, when answered in an affirmative and
confident manner, can predict the outcome. Why are you here? Why are
you coming to work? What makes you think you are making a difference?
If you are gone, what would happen to the organization?
4. conclusion
I recognize that my comments have not been as specific about how
DHS can reduce its overlap in R&D and other areas as you may have
expected and may receive from other witnesses. However, I believe the
plate is bigger and the opportunities far broader to set the Department
on the path to greater effectiveness and efficiency. Certainly 10
years' worth of data should be sufficient to give a basic sense of
where the frictions and the inadequacies lie. I am confident that with
the help of this committee the Department can, in the face a certain
resource restraints in the coming years, commit to structural and
organizational changes in its overhead and infrastructure functions
that can put it in the company of the best managed organizations--
public or private--in the Nation.
Thank you for having me. I am prepared to answer any questions you
might have.
Mr. Duncan. Dr. Stern, thank you for your testimony.
The Chairman will now recognize Mr. Killough for his
opening statement.
STATEMENT OF CRAIG KILLOUGH, VICE PRESIDENT, ORGANIZATION
MARKETS, PROJECT MANAGEMENT INSTITUTE
Mr. Killough. Thank you, Mr. Chairman.
Good morning Chairman Duncan, Ranking Members Barber and
Thompson, and Members of the subcommittee.
The Project Management Institute is the world's largest
project management association with members and credential
holders numbering in excess of 700,000.
The Project Management Institute maintains internationally
recognized standards and professional credentials in project
program and portfolio management that are recognized by the
American National Standards Institute and the International
Standards Organization.
If I were to leave you today with three thoughts in the
time that I have, they would be; First, organizations and
Government bodies that use consistently applied program
management standards and qualified program managers are more
successful than organizations that don't.
Second, organizations that perform poorly in executing
their programs expose themselves to significantly higher risk
unnecessarily.
Third, the entire Government would benefit from broad
adoption of program management standards and the creation of a
job classification and defined career path for program----
[Off mike.]
Mr. Killough. PMI's Pulse of the Profession Research
identifies a key difference between high-performing
organizations and organizations with low program management
performance.
That difference is that low-performing organizations risk
14 times more money than the high performers. High-performing
organizations demonstrate some key common characteristics.
First characteristic is standardization. They utilize
standard program management processes, practices, and
procedures across the enterprise. Talent management; they
recognize the critical value in acquiring, developing, and
retaining talent. They have a defining career path for program
managers and processes to develop program management
competency.
The strategic alignment. They align their program portfolio
and prioritize that portfolio around the organization's mission
and ensure the management commitment to the aligned strategy.
So why would these characteristics be important to the
Department of Homeland Security? A recent GAO study from
September 2012 found that DHS leadership has authorized and
continued to invest in major programs even though the vast
majority of those programs lack the fundamental processes and
procedures necessary to manage risk and measure performance.
In another example a GAO report completed at the request of
Ranking Member Barber on the Customs and Border Patrol stated
that Border Patrol has developed key elements of its 2012 to
2016 strategic plan, but has not identified milestones and time
frames for developing and implementing performance goals and
measures in accordance with standard practices and program
management.
The Department of Homeland Security's Program
Accountability and Risk Management Office has taken a number of
key steps to improve program management. We support these
efforts and would encourage continued engagement with the
program management community.
PARM's efforts should be bolstered by legislation. This
committee approved House Resolution 3116 in 2012, which
contained several important provisions to improve the program
management workforce across the Department of Homeland
Security. We would encourage the subcommittee restart that
effort.
In conclusion, I would like to recommend the following.
Create job classification for project and program managers. A
key factor in program failure is the lack of trained and
experienced program managers.
The phenomenon of the accidental program manager is far too
common across Government agencies. PMI strongly encourages the
Government-wide capability to hire program managers similar to
what exists in OPM's 2210 job series that in--information
technology.
Make the information technology program management career
path Government-wide. The role of a program manager should not
just come about by accident. According to our research, U.S.
Government organizations frequently identify the causes of
program failure as inexperienced or unqualified program
managers. The inexperienced program manager is identified as a
cause for failure in Government programs twice as often as the
private sector.
Finally, utilize program management standards in developing
standard practices and processes. High-performing organizations
recognize that standardization is the key to element and
driving performance.
The Department of Homeland Security has begun to take steps
to implement better policies and they hope--we hope they will
decide to align with the established standards. We would
encourage the Department to adopt the practices identified by
GAO report 12-833 and make them a high priority.
Thank you, Chairman Duncan, Ranking Member Barber, Ranking
Member Thompson, for allowing me to represent the Project
Management Institute.
[The prepared statement of Mr. Killough follows:]
Prepared Statement of Craig Killough
April 26, 2013
Chairman Duncan, Ranking Member Barber, and Members of the
subcommittee, my name is Craig Killough; and I am the vice president of
organizations and markets for the Project Management Institute (PMI). I
appreciate the opportunity to participate in this important hearing and
speak to the benefits organizations can derive from implementing best
practices in project and program management.
The Project Management Institute (PMI) is the world's largest
project management membership association, with more than 700,000
members and credential holders in 187 countries. Our headquarters are
in Newtown Square, Pennsylvania where we were founded in 1969 as a not-
for-profit organization. PMI seeks to advance the profession of project
and program management through globally recognized standards and
certifications, collaborative communities, an extensive research
program, and professional development opportunities. The project
management profession, broadly defined, encompasses project management,
program management, and portfolio management. In the U.S. Government,
the project management practitioner is typically considered a program
manager and so I will use the term program management throughout the
statement. I'd also like to recognize PMI's 259 local chapters; we have
a chapter in every State in the country, which play an essential role
in organizing our members locally.
In this testimony I will outline what PMI has learned about best
practices and how organizations that value and implement best practices
in project and program management are yielding significant value and
gaining a competitive advantage. I will also make recommendations to
improve program management and increase the use of best practices
within the Department of Homeland Security.
PMI-developed standards are the most widely-recognized standards in
the profession, used by hundreds of leading organizations around the
world. PMI's Project Management Professional (PMP) credential is the
most important industry-recognized certification for project managers.
The PMP demonstrates that you have the experience, education, and
competency to lead and direct projects. PMI's research program has
identified how program management delivers a competitive advantage,
producing increased efficiencies, organizational mission alignment,
stakeholder satisfaction, and improved decision making. The most
successful organizations embrace project and program management is a
strategic competency that enables organizations to deliver expected
benefits and value through effective planning, organization, and risk
mitigation.
the value of project management
Effectively implementing program management best practices results
in transparency and accountability. The most successful organizations
have learned that creating a culture focused on program management is
vital to achieving business success. An example of some of the
organizations who are leaders in program management, and active members
of the PMI Global Executive Council, include Accenture, BAE Systems,
Boeing, Booz Allen Hamilton, Deloitte US, Hewlett-Packard, IBM Global
Business Services, ICF International, Mayo Clinic, Microsoft, NASA,
PriceWaterhouseCoopers, and Verizon Wireless. These organizations have
embraced program management, use it to meet their strategic objectives
and drive business success. Government programs have the opportunity to
take advantage from what these companies have already learned--using
global standards in program management is indispensable for business
results.
Congress typically focuses on acquisitions and IT when talking
about the topic of program and project management. Certainly these are
significant areas for program management, but the need for program
management skills goes much further. Program managers play an integral
role in all agencies at all levels. Program managers are asked to
manage considerable efforts--often times without proper training,
skills, experience, or authority. They are responsible for working with
contractors, liaising between our Border Patrol agents, Customs
officers, Coast Guard and executives--defining the requirements needed
to fulfill a mission and their feedback and capability to measure and
report information is critical to agency leadership understanding the
progress of programs. The GAO has cited improving program management in
its High-Risk. There is a clear need for improving the utilization of
best practices in program management given the constraint on resources
and the need to deliver results--on time and on budget.
When organizations continue getting better at executing their
projects and programs, they drive success. PMI's annual research
survey, Pulse of the ProfessionTM, shows that fewer than
two-thirds of projects meet their goals and business intent and about
17 percent fail outright.
According to the study, there is a strong link showing that
effective program management reduces risk. Our Pulse of the Profession
research shows that organizations who have invested in program
management are seeing results. High-performing organizations are
defined as having 90 percent of their projects meet original goals and
business intent. Low-performing organizations see only 34 percent of
projects meet original goals and business intent. In financial terms,
on a billion-dollar project, low-performing organizations risk $280
million of a US$1 billion budget. High performers risk only US$20
million. This makes being a low performer 14 times more likely to
experience inefficiency and waste over the course of the program.
What is the value of being a high performer? PMI's 2013 Pulse of
the ProfessionTM research also looked specifically at
Government programs. Our research showed Government programs risk
approximately 10% more of their budget than the private sector. Our
research indicates that to become high-performing, organizations and
Government agencies must focus on three key factors for better results:
Standardization.--Standardization leads to the efficient use
of resources. High-performing organizations are almost three
times more likely than low-performing organizations to use
standardized practices throughout the organization, and have
better program outcomes as a result.
Talent management.--High-performing organizations are
significantly more likely than low performers to have a defined
career path for program managers, have a process to develop
program management competency and provide training on the use
of program management tools and techniques.
Strategic alignment.--Aligning the portfolio around the
organization's mission and ensuring it is appropriately defined
and resourced is a significant indicator of success. This
aligns capabilities--ensuring that mature and experienced
program managers are leading critical missions and given
adequate flexibility. The results in significantly better
outcomes, improved performance, and less waste.
the importance of standards
As demonstrated by PMI's Pulse data standards are crucial to the
program management profession because they ensure that a basic program
management framework, lexicon, and process are applied consistently.
The value of this framework and lexicon applies equally to the private
and public sector. In the private sector, it means an organization can
work together around the world--understand a similar process and
transfer knowledge between and among teams, develop best practices, and
measure performance. In the public sector--this means effectively
communicating with stakeholders, transferring knowledge, developing
best practices, and measuring performance.
PMI's 13 standards for project, program, and portfolio management
are the most widely recognized standards in the profession--and
increasingly the model for program management in business and
Government. They are developed and updated by thousands of PMI
volunteers experts with experience in every type of project, and
provide a common language for program management around the world. PMI
standards, such as the PMBOK Guide, with more than 4 million copies in
circulation, have been successfully around the world.
For the Department of Homeland Security, an organization with 22
entities, the use of standards is critical to ensure that decision
makers and stakeholders are receiving information that allows for an
effective portfolio and program level review. In addition, standards
allow for best practices to be shared more easily across agency
components. As an example, effective risk management has been an area
of increased complexity and is critical to DHS's mission. PMI has
developed a practice standard for risk management, which, if utilized,
consistently and across the agency, DHS executives will be able to
accurately see how each component or entity is planning for risk with a
common baseline, where shortfalls may occur, where risk management
needs improvement.
Why are these standards relevant to DHS and why should they be
adopted? Just one example: A GAO study from September 2012 found, ``DHS
leadership has authorized and continued to invest in major acquisitions
programs even though the vast majority of those programs lack
foundational documents demonstrating the knowledge needed to help
manage risks and measure performance.''\1\ Utilizing a standard for
risk management will help every entity within the Department meet these
requirements and improve consistency. Standards when used consistently
across an organization dramatically improve transparency, decision
making, and performance.
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\1\ United States Government Accountability Office, ``Homeland
Security: DHS Requires More Disciplined Investment Management to Help
Meet Mission Needs'' GAO-12-833, p. 45 September 2012.
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In another example, a GAO report requested by Ranking Member Barber
on the Customs and Border Patrol, the GAO stated, ``Border Patrol is
developing key elements of its 2012-2016 Strategic Plan needed to
define border security and the resources necessary to achieve it, but
has not identified milestones and time frames for developing and
implementing performance goals and measures in accordance with standard
practices in program management.''\2\ The need for established
standards is clear.
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\2\ United States Government Accountability Office, ``Border
Patrol: Key Elements of New Strategic Plan Not Yet in Place to Inform
Border Security Status and Resource Needs'' GAO-13-25, highlights.
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In 2010, PMI conducted an analysis of successful Government
programs: ``Program Management 2010: A study of program management in
the U.S. Federal Government''. Program managers from a wide variety of
Government sectors shared their insights on ``success factors'' and
best practices for this study. We discovered how Government program
leaders are able to achieve results. The most successful Government
programs studied start with a firm grounding in the fundamentals:
Experienced and well-trained program management practitioners (people),
standardized program management practices (processes), and the tools to
support both. They then learn to be better communicators, more agile,
more collaborative, and more engaging. The most successful programs
demonstrated that standard project and program management process and
practice, along with effective management of risk were key elements of
success. It is the combination of all these elements that has led to
creating an organizational culture of program management, and has
driven their successful programs.
pmi's recommendations for the department of homeland security
PMI advocates for the profession of project management and improved
program management within organizations and has found there are several
areas where Government agencies could broadly improve their
organizational maturity, become high-performing, and spend funds more
efficiently. Implementation of PMI's recommendations to Congress would
make great progress toward establishing the framework needed to manage
projects effectively. It is vital that Congress direct agencies to
embrace project management standards that can be utilized by any agency
on any program across the Federal Government. Because PMI's broad-based
standards are applicable for managing projects across industries and
geographies, they are especially appropriate for use by the Federal
Government.
The Department of Homeland Security's Program Accountability and
Risk Management (PARM) Office has already taken a number of key steps
to improve program management. We support its efforts to date and would
encourage them to continue engaging with stakeholders and the program
management community. PARM's efforts could be bolstered by legislation,
however. This committee approved a bill (H.R. 3116) in 2012, the
Department of Homeland Security Authorization Act, which contained
several important provisions to improve the program management
workforce across the Department of Homeland Security. We would
encourage the subcommittee and full committee to restart that effort
and incorporate the findings of our latest Pulse of the Profession.
In addition, we have several other recommendations for your
consideration.
(1) Create a job classification for project and program managers.
A key factor of failure is the lack of an identified, trained, and
supported program manager. The phenomenon of the ``accidental'' program
manager is far too common across Government agencies. PMI would
strongly encourage a Government-wide capability to hire program
managers similar to what exists in OPM's 2210 Job Series for IT.
Identifying this individual is also critical. Each program should have
a dedicated program manager who is responsible for implementing proven
success factors and ensuring results. GAO has also identified this as a
critical need, given there are staffing shortfalls, this step would
help the Department identify and address its talent needs. This
requirement will also increase transparency and provides additional
accountability and should be the focus of every Government program with
acknowledgement from agency executives.
(2) Scale IT program management career path Government-wide.
The role of a program manager should not just come about by
accident. Recognizing the positive effect that can be obtained by
having a strong program manager and building the necessary skill sets
is critical. This is something successful organizations have
recognized. According to PMI's research, U.S. Government organizations
themselves identify the causes of program failure to include: Changing
priorities, poor risk management, inadequate communications, and an
inexperienced program manager. In fact, Government agencies identified
an inexperienced program manager as a cause for failure almost twice as
often as organizations in the private sector.
It is essential to retain and support talented program managers by
providing defined career ladders and options. Recruiting and retaining
highly-performing personnel is a particular challenge in the Federal
Government. Scaling previously successful reform plans across agencies
is logical and makes good sense. The model utilized by Rep. Issa and
Rep. Connolly in the Federal Information Technology Acquisition Reform
Act; H.R. 1232, could provide an example. This initiative will reduce
duplication significantly and will improve efficiency and program
success rates, thereby improving the expenditure of taxpayer funds and
improving morale at agencies.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
(3) Utilize program management standards in developing standard
practices and processes.
Organizations that value program management understand that the
contributions of professional program managers using standardized
practices increase project success rates, create efficiencies, and
improve alignment with organizational strategies. Standardization leads
to an efficient use of resources, which allows more time and resources
to focus on leading, innovating, and delivering products and services--
and ultimately leads to a competitive advantage. High-performing
organizations are almost three times more likely than low-performing
organizations (36 percent vs. 13 percent) to use standardized practices
throughout the organization, and have better project outcomes as a
result. Organizations that recognize the importance of project
management are driven by expected and tangible results: On time, on
budget, within scope, and in accordance with project requirements.
PMI standards are the guidelines against which individuals and
organizations can assess their existing project management capabilities
and provide the benchmark for them to build and mature their existing
proficiency. They provide the foundation for developing and
implementing the superior practice of program management.
A number of GAO's recommendations refer to the need for program
management standards and their application. The Department has begun to
take steps to implement better policies and we hope they will continue
to align with established standards, which have demonstrated success in
the private sector. Further we would encourage the Department to keep
the practices identified by GAO in report GAO-12-833, as key practices,
for program and portfolio management a high priority. Further we would
encourage the Congress to ensure these recommendations are being
followed.
(4) Support integrated program teams.
Program managers should be working with their counterparts across
the acquisitions workforce and with their counterparts in the private
sector. A program stands a greater likelihood of being successful if
everyone understands the importance of the mission, the business
strategy, and help ensuring the programs are delivering the intended
results. Integrated teams will prevent silos and facilitate maturing
program managers. This should also include program managers remaining
with their programs until a major milestone is reached.
conclusion
PMI will continue to work with the Congress and the administration
to improve efficiency in the Federal Government. We would encourage all
of the Members of this committee to join the Government Efficiency
Caucus, to engage in regular dialog and keep up-to-date on the latest
in effective best practices in program management. We believe
increasing Government efficiency through improving the use of project
and program management standards will save taxpayer funds and improve
delivery of services.
The American people expect results from their Government
particularly in these fiscally challenging times. Having the right
tools and processes alone will not ensure success. But by bringing
together tangible best practices with the more intangible ``culture of
program management'' is what has set successful organizations apart
from the rest. We believe effective use of program management will make
those results possible across the U.S. Government.
Again, thank you Chairman Duncan, Ranking Member Barber for the
opportunity to testify at this important hearing. I will be pleased to
answer any questions you or Members of the subcommittee may have.
Mr. Duncan. Thank you, Mr. Killough.
The Chairman will now recognize Dr. Willis for his
testimony.
STATEMENT OF HENRY H. WILLIS, PH.D., DIRECTOR, RAND HOMELAND
SECURITY AND DEFENSE CENTER
Mr. Willis. Thank you and good morning, Chairman Duncan,
Ranking Member Barber, Ranking Member Thompson, and other
distinguished Members of the subcommittee.
The recent GAO report on fragmentation, overlap, and
duplication is the latest critique of DHS effectiveness. The
report cites inefficiencies across a range of DHS activities.
The waste in programs like these is a symptom of a larger issue
at DHS.
DHS programs too frequently lack strategic guidance and are
not adequately evaluated. Strengthening the Department
strategic planning and program management is essential if DHS
is to implement the Nation's desired capabilities across its
full set of missions.
DHS currently has efforts underway that are consistent with
the goal of integrating Department-wide strategic planning into
decisions about priorities and budgets. These initiatives point
the Department in the right direction, but success is not
assured unless Congress and DHS work together to address three
related issues.
First, implementing greater transparency for strategic
planning, program implementation, and evaluation efforts.
Second, developing a stable well-resourced cadre of a personnel
within DHS to conduct analysis and support decisions. Third,
streamlining Congressional oversight of the Department's
activities.
First, let me turn to transparency. Arguably, the most
important way DHS can improve strategic planning is by
increasing the transparency of the supporting analysis done by
and for the Department. When analysis is made available for all
to view, its quality improves, because data, assumptions, and
logics are examined and policy debates can then become about
the facts.
When data and analysis is subject to review and open to
deliberations another result is innovative new ways to solve
problems. Despite its promise, in practice transparency is
stunted by two myths.
Myth No. 1: The first myth is that transparency of DHS
analysis will compromise the security or privacy. Certainly
concerns about security and privacy warrant careful attention;
however, other organizations have developed procedures that
allow for review of analysis regarding highly-classified issues
or have found that significant analysis of National security
topics can be conducted outside of the restrictions of
classification.
In fact, shielding analysis from review comes at great
cost. Greater access to methods, data, and analysis help bring
the combined resources of our Nation's universities to bear on
homeland security challenges and raise the chances of stronger
program design and less duplication of effort.
Myth No. 2: The second myth that stunts the practice of
transparency is the Government can't explore new ideas under a
microscope. The origin of this myth rests in the belief that
Government officials will be wary about exploring new policy
ideas unless they are provided a shelter from the perceived
penalties of public review and critique of proposed new ideas
in their underpinning analysis.
In practice, there is some truth to these concerns, but
critique in advance that leads to strengthened planning is
nearly always preferable to the costs of a failure later.
Decisions shaped by stronger strategic analysis are better-
positioned to weather critique and ultimately to succeed.
Thus DHS will be better served by increasing transparency.
The expectation should be that the analysis will be shared as a
rule rather than as an exception. If this view is adopted, DHS
could consistently take three steps to improve transparency of
strategic planning.
First, subject analysis and analytic methods to independent
peer review. Second, develop procedures for making data sets
available for analysis across DHS and within academia.
Third, implement processes to share data and analysis as
part of deliberations about strategies, policies, and
regulations with partners across Federal and local governments,
the private sector, and the public.
Now let me turn to analytic capabilities to support
strategic planning. To succeed in conducting strategic planning
and implementing the results, DHS must have analytic
capabilities within the Department. This capability must exist
in support of the Secretary so that it is independent of the
vested interests of any component agencies.
Sustaining this internal analytic capability requires more
than Congress ensuring stable and adequate funding. It also
requires that DHS create and foster career paths across the
Department that allow these people opportunity for growth.
Finally, regarding my third point about Congressional
oversight. The purpose of strategic planning is to ensure that
DHS uses resources provided by Congress in a way that reflects
National priorities.
The current Congressional oversight structure creates
challenges to efficient management, but consistent and early
use of transparent strategic planning formed by analysis will
make it easier for Congress and DHS to together implement
effective homeland security policies.
In summary, DHS's first decade was clearly one marked with
challenges, mistakes, and learning. If DHS is to continue
maturing, both the Department and Congress should work together
to institute a new approach to greater use of integrated
strategic planning that incorporates greater reliance on
transparent analysis, strengthening the Department's internal
analytic capabilities, and to the extent possible simplify
Congressional oversight of DHS.
Thank you very much. I am happy to answer any questions
that you might have.
[The prepared statement of Mr. Willis follows:]
Prepared Statement of Henry H. Willis \1\
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\1\ The opinions and conclusions expressed in this testimony are
the author's alone and should not be interpreted as representing those
of RAND or any of the sponsors of its research. This product is part of
the RAND Corporation testimony series. RAND testimonies record
testimony presented by RAND associates to Federal, State, or local
legislative committees; Government-appointed commissions and panels;
and private review and oversight bodies. The RAND Corporation is a
nonprofit research organization providing objective analysis and
effective solutions that address the challenges facing the public and
private sectors around the world. RAND's publications do not
necessarily reflect the opinions of its research clients and sponsors.
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April 26, 2013
strengthening strategic planning and management at dhs \2\
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\2\ This testimony is available for free download at http://
www.rand.org/pubs/testimonies/CT386.html.
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Congress has given the Department of Homeland Security (DHS) a
complex set of five missions to meet the evolving challenges faced by
our country:\3\
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\3\ These missions were most clearly outlined in two DHS documents:
The Quadrennial Homeland Security Review (released in 2010) and the
Department of Homeland Security Strategic Plan Fiscal Years 2012-2016
(released in 2012).
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Prevent terrorism and enhance security;
Secure and manage borders;
Enforce and administer immigration laws;
Safeguard and secure cyberspace;
Ensure resilience to disasters.
The recent Government Accountability Organization (GAO) report on
Government fragmentation, overlap, and duplication is the latest
critique to question the Department's effectiveness and efficiency in
implementing these missions.\4\ The report cites inefficiencies and
waste across a range of DHS activities, such as airline passenger and
baggage screening, border security, and preparedness grant programs.
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\4\ GAO (2013). 2013 Annual Report: Actions Needed to Reduce
Fragmentation, Overlap, and Duplication and Achieve Other Financial
Benefits, U.S. Government Accountability Office, Washington, DC.
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Though troubling in a period where budgets are lean, the waste in
programs like these is a symptom of a larger problem at DHS. DHS
programs too frequently lack strategic guidance, do not result from
implementation that reflects choices and priorities to achieve desired
outcomes, and suffer inadequate evaluation.\5\
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\5\ As an example, consider observations about DHS acquisition
management provided by Jeffrey Drezner and Andrew Morral in Reducing
the Cost and Risk of Major Acquisitions at the Department of Homeland
Security (2013), PE-105, RAND Corporation, Santa Monica, CA.
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Strengthening the Department's strategic planning and program
management is essential if DHS is to implement effective, integrated
solutions that enable the Nation's desired capabilities across the five
DHS missions. DHS programs should be supported with early and thorough
strategic planning that outlines desired outcomes. Resources should be
directed toward activities that most effectively and efficiently
achieve these desired outcomes. Programs should be subjected to
evaluation to ensure progress is made toward those outcomes or to guide
adjustments to the program.
While the Department has established goals to put processes in
place to implement the required strategic planning and management
capabilities, success depends on Congress and DHS working together to:
implement greater transparency for strategic planning,
program implementation, and evaluation efforts conducted by and
for the Department;
develop a stable, well-resourced cadre of personnel within
DHS to conduct analysis and support decision making;
streamline Congressional oversight of the Department's
activities.
A brief review of the DHS's progress in its first 10 years and
challenges ahead provide insight into why these steps are critical and
what is involved in completing them.
confronting future homeland security challenges
On March 1, 2003, 22 independent agencies joined together to form
the Department of Homeland Security as the newest Cabinet-level
agency.\6\ Now, 10 years later and in the wake of last week's tragedies
in Boston, it is prudent to assess the status of Department and
consider what the most pressing steps should be to continue the
Department's progress.
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\6\ Secretary Janet Napolitano (2013, February 26). The Evolution
and Future of Homeland Security, Third Annual Address on the State of
Homeland Security, Washington, DC.
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Arguably the Department's most notable organizational
accomplishment has been developing the ability to respond as a unified,
coordinated organization, as exemplified in the response to Hurricane
Sandy. In October and November of 2012, DHS:\7\
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\7\ For more details, refer to Hurricane Sandy: Timeline, available
on-line at http://www.fema.gov/hurricane-sandy-timeline as of April 21,
2013.
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coordinated emergency plans with partners at all levels of
government;
deployed close to 10,000 personnel from across FEMA, the
Transportation Security Administration, United States
Citizenship and Immigration Services, Coast Guard, Secret
Service, Customs and Border Protection, Immigration and Customs
Enforcement, and DHS Headquarters;
kept private-sector partners connected and informed through
the National Business Emergency Operations Center daily calls;
distributed more than $700 million to the more than 400,000
disaster survivors from Connecticut, New York, and New Jersey
who applied for individual assistance support.
The Department's integrated response capabilities provide a
foundation for keeping the Nation safe and secure, but the strategic
environment within which the Department is operating remains filled
with complex challenges. For example,
Hurricane Sandy reminded us that old assumptions about where
and how frequently natural disasters occur may no longer be
valid, and indeed place critical infrastructure at risk.
As Congress debates immigration reform, the Department may
find itself overhauling border security operations, workplace
enforcement, and administration of visa policies.
The more we learn about cyber threats to financial networks,
control system software, and intellectual property, the more it
becomes evident that we need new strategy, doctrine, and
standards for securing cyberspace.
Revelations about the motivations behind the terrorist
attacks in Boston underscore the importance of countering the
variety of threats from home-grown radicalization,
transnational crime, and terrorism networks.
While the global community reacts to nuclear ambitions of
Iran and North Korea, at home we must consider how to protect
the country from nuclear terrorism in a period of possible
expanded proliferation.
When the challenges are great and resources limited, good strategic
planning is critically important. Three factors make assessing the
risks from these many sources difficult and strategic planning all the
more essential to DHS's ability to fulfill its multiple missions.
1. The threats themselves are poorly understood.--Consider for
example, how much will the sea level rise? How might nuclear
terrorism occur? Or, what are the threats to the United States
in the cyber domain and what are their associated risks? The
variety and ambiguity of threats to consider requires careful
scoping of scenarios and data-driven analysis to define and
assess the range of conditions the Department must be prepared
to address.\8\
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\8\ For further discussion refer to Treverton, Gregory F. (2009).
Addressing ``Complexities'' in Homeland Security. Center for Asymmetric
Threat Studies, The Swedish National Defence College, Elanders,
Vallingby.
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2. The consequences of these threats and means to mitigate or
prevent them affect the Nation in many ways.--For example,
Hurricanes Katrina and Rita killed people and destroyed
property. Levees can reduce both of these risks. But, levees
also exacerbate poor sediment management and thus can harm
unprotected farmland and fisheries in nearby areas.\9\
Furthermore, failure to build community resilience can deepen
and prolong the economic disruptions that follow disasters.\10\
Solutions must balance efforts to address each of these
outcomes.
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\9\ A description of how these issues were managed in Louisiana is
available in the Lousiana's 2012 Coastal Master Plan, produced by the
Lousiana Coastal Protection and Restoration Authority, Baton Rouge, LA.
\10\ For more discussion see Chandra A., J. Acosta, S. Stern, L.
Uscher-Pines, M.V. Williams, D. Yeung, J. Garnett, L.S. Meredith
(2011). Building Community Resilience to Disasters: A Way Forward to
Enhance National Security, TR-915-DHHS, RAND Corporation, Santa Monica,
CA.
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3. Solutions require multiple capabilities and thus integrated
planning among multiple DHS component agencies.--The desired
capabilities to protect the Nation against a diversity of
threats do not reside in any single organization within DHS.
Thus, choices must be made about how to allocate resources
across DHS to most effectively solve problems of National
concern.
Overcoming these challenges to implement solutions to complex
threats requires setting priorities about which threats are most
concerning, which outcomes are most important, and how resources can be
best used to implement the desired balance across both threats and
outcomes. For example, preventing illegal migration requires choices
among expenditures on fences and barriers; air, sea, and land
surveillance; security at ports of entry; workplace enforcement; and
administering immigration and visa policies. These choices will
certainly lead to shifting of resources among component agencies. In
doing so, DHS will simultaneously have to ensure that these resource
choices do not unduly harm other enduring missions, such as helping
communities recover from floods or other disasters, collecting duties
on imports, or protecting the President of the United States.\11\
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\11\ For a discussion of identifying objectives and performance
measures refer to Willis H.H., J.B. Predd, P.K. Davis, W. Brown (2010).
Measuring the Effectiveness of Border Security Between Ports-of-Entry,
TR837-DHS, RAND Corporation, Santa Monica, CA.
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Too frequently, important decisions at DHS are not made with the
benefit of rigorous analysis. For example, a GAO review of 71 DHS major
acquisition programs documented that 88 percent proceeded past
acquisition review of the DHS Investment Review Board without the
documented planning analyses required by DHS Policy.\12\
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\12\ See Homeland Security: DHS Requires More Disciplined
Investment Management to Help Meet Mission Needs (2012, September 18).
GAO-12-833, Washington, DC.
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In summary, meeting complex security challenges in the future
requires more than just unified action from DHS. For the Department to
continue its growth it must complement the proven ability to respond as
a unified organization with the ability to develop integrated plans
that set priorities, direct resources to programs and activities to
achieve outcomes consistent with these priorities, and conduct
evaluations to ensure these outcomes are realized.
keys to implementing integrated strategic planning at dhs
DHS currently has efforts underway that are consistent with the
goal of developing capabilities to integrate Department-wide strategic
planning into decision making about priorities and budgets. Among these
are both the implementation of the Integrated Investment Life Cycle
Model (known as the IILCM) to improve management of acquisition across
the Department as well as the on-going analysis to support the
Department's second Quadrennial Homeland Security Review, due to
Congress on December 31, 2013. While these initiatives point the
Department in the right direction, success is not assured unless DHS
addresses three related issues:
Increasing transparency surrounding strategic planning and
analysis;
Strengthening internal analytic capabilities to support
strategic planning;
Simplifying Congressional oversight.
increasing transparency surrounding strategic planning and analysis
Arguably the most important way DHS could improve strategic
planning is by increasing the transparency that surrounds the
supporting analysis done by and for the Department. Naturally, efforts
to increase transparency must pay close attention to protecting
information that is security-sensitive, could reveal information that
could favor some firms over others in the Government acquisition
process, or could risk revealing personally identifiable information.
As will be described subsequently, there is a great deal in the way of
analysis that can be done within these constraints.
However, adopting a position of greater transparency involves
adopting the expectation that analysis will be shared as a rule rather
than as an exception. If this goal is adopted, there are several simple
actions DHS could take consistently to improve the transparency of its
strategic planning, including:
subjecting analysis and analytic methods to independent peer
review;
developing procedures for making data sets available for
analysis across DHS and within academia;
implementing processes to use analysis within deliberations
about strategies, policies, and regulations with partners
across Federal and local government (such meetings already
occur regularly) and also to stakeholders among the private
sector and public (which can be done more regularly).
Since greater transparency is key to strengthening strategic
planning and analysis, I'll return to this topic later in my testimony
to explain its benefits, as well as the myths that prevent more
widespread adoption.
strengthening internal analytic capabilities to support strategic
planning
To succeed in conducting strategic planning and implementing the
results, DHS must have analytic capabilities within the Department. To
provide an integrated view for the Department, analytic capability must
exist in support of the Secretary. To support leadership
decisionmaking, the capability must have stable resources so that
analysis can draw on knowledge of missions, datasets, and the analytic
agenda that has developed over the recent past.
Currently, strategic planning and analysis is being conducted
across many parts of DHS, with a substantial portion of activity
residing within the component agencies. Analytic capability within the
components is necessary and appropriate, but is not a substitute for
support to the Secretary. Integrated planning at the Department level
requires analysis that is independent of the interests of any one
component.
Analytic capability in support of the Secretary has historically
resided in several places but has never been stable. For example,
within the DHS Office of Policy, the Office of Strategy, Planning,
Analysis, and Risk has responsibilities for both developing strategic
planning processes and conducting analysis decision making by DHS
leadership. Yet, another place where analytic capability has existed
within DHS is the Division of Program Analysis and Evaluation with the
Office of the Chief Financial Officer. Similar complementary
capabilities have existed or could be developed within the Management
Directorate or Science and Technology Directorate. In all cases, these
analytic cells have experienced periods of high turnover or possible
reductions in funding when DHS is faced with pressure to direct more
effort to operations.
As a result, it is clear that sustained internal analytic
capability requires more than Congress ensuring stable and adequate
funding. It also requires that DHS create and foster analytic career
paths across DHS that allow individuals opportunity for growth. Two
strategies could support development of such careers. First, increased
transparency of analysis could increase interest among analysts in
working on DHS strategic planning. Second, deliberate personnel
development strategies could include cross-Department assignments. It
would be these assignments that could allow analysts to gain first-hand
experiences with missions across the various component agencies that
later helps them answer questions posed by DHS leadership and Congress.
simplifying congressional oversight
The purpose of strategic planning is to ensure that DHS uses
resources provided by Congress in a way that reflects National
priorities. The current oversight structure that DHS must operate
within denies the Department a clear voice from Congress about what
those priorities should be.
The abundant Congressional oversight of the Department has been
widely cited yet remains an obstacle to efficient management. As you
know, DHS answers to 108 Congressional committees and subcommittees,
about four times as many as the Departments of State and Justice
combined.\13\ In contrast, the Department of Defense reports to about
one-third the number of committees for a budget that is approximately
ten times larger than DHS's.\14\ This oversight leads to thousands of
requests for briefings and hundreds of requests for testimony each
year, as well as multiple perspectives on what issues before DHS are
the most pressing.\15\
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\13\ Alicia Caldwell (2011, May 17). DHS Most Overseen Department,
Associated Press.
\14\ Jessica Zuckerman (2012, September 10). Politics Over
Security: Homeland Security Congressional Oversight In Dire Need of
Reform, Heritage Foundation.
\15\ Bipartisan Policy Center (2011). Tenth Anniversary Report
Card: The Status of the 9/11 Commission Recommendations, Washington,
DC.
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The prospect of asking some committees to cede oversight of DHS to
other committees raises difficult political questions. However, these
discussions are more than justified at this 10-year point in the
Department's existence, and could yield potential benefits.
Consolidating jurisdiction over the Department into fewer committees
would make it easier for the Department to work with Congress to
develop priorities and respond quickly and efficiently to oversight
requests.
how greater transparency will improve dhs strategic planning
GAO and the National Academies are two among many organizations
that have identified possible areas where DHS suffers fragmentation or
inefficiency. Often, the critiques stem from incomplete or missing
analysis. In turn, these critiques lead to additional oversight and
requests, and requests for information from Congress. When responses to
these requests do not meet the satisfaction of Congress, the result is
erosion of confidence in the management of DHS programs. This, in turn,
prompts additional reviews and the cycle of criticism, requests, and
unmet expectations continues. Increased transparency can help DHS break
this cycle.
When analysis is made available, the analysis promotes more
complete deliberations about what the facts are and the subsequent use
of those facts in decision making. When analysis is subjected to
review, its quality improves because data, assumptions, and logic are
evaluated under a wider set of considerations. When data and analysis
are open to deliberations, the result can be new ideas and innovative
approaches to solving problems--a natural result when more people are
aware of problems and have access to facts and figures concerning those
problems.
Despite the promise of transparency, in practice implementation is
stunted by two myths.
myth no. 1: ``transparency of dhs analysis will compromise security or
privacy''
Certainly concerns about security and privacy warrant careful
attention. However, other organizations within the National security
and intelligence community have developed procedures and policies that
allow for transparency of highly-classified material. The Military
Operations Research Society was established to provide defense analysts
an opportunity to share and discuss classified work. The National
Academy of Sciences, the JASON advisory group, the Defense Science
Board, and RAND Corporation have found that significant analysis of
National security topics can be conducted outside of restrictions of
classification. And, when security concerns dictate greater
limitations, organizations like these have successfully implemented
peer-review processes for classified studies.
Furthermore, even when specific estimates are classified, often the
methodology, assumptions, and other general features of the problem can
be discussed and debated in unclassified settings. In some cases, data
can be made available in ways the limit the risk of disclosure of
sensitive or personally identifiable information, so that others across
and outside of the Department have the opportunity to study the
problems that DHS is trying to solve. In this realm, it is critical
that research adheres strictly to policies and procedures to protect
sensitive information and the rights of human subjects in a research
setting. However, approaches used in topics related to the study of
education, social security, and health care all provide potential
analogies.
These steps could bring the combined resources of our Nation's
universities to bear on homeland security planning challenges. Beyond
adding some of the best minds in the Nation to the cadre of analysts
working on these issues within DHS, increased dissemination of planning
analyses is likely to foster a new generation of students with the
knowledge and skills needed to enter the DHS workforce and offer
important new innovations to its strategic plans and other analytic
products.
myth no. 2: ``government can't test new ideas under a microscope''
The origin of this myth rests in the belief that the combination of
public interest, vested interests, and costs of complying with requests
for oversight together lead policy makers to be conservative about
exploring new policy ideas and proposals (and thus not innovate) unless
they are provided a shelter from the perceived penalties of this type
of review. Agencies claim that increased transparency would remove this
shelter, and this inhibits innovation.
In practice, there is some truth to these concerns. However,
consider the alternative: Purported innovation without the benefit of
fresh ideas and constructive criticism of new proposals. Transparency
can engender both fresh ideas and constructive criticism, and new ideas
that are born from such a process are arguably better-positioned to
weather critiques. Thus, DHS would be better served by increased
transparency.
summary
Clearly, DHS's first decade was one marked with challenges,
mistakes, and growth. The challenges to the Nation that the Department
is responsible for addressing in the near future are strikingly
complex. Moreover, as the recent GAO report on fragmentation and
duplication indicates, the Department has plenty of room to continue
maturing as an organization. If DHS is to step up to these challenges,
both the Department and Congress should work together to institute a
new approach to greater use of integrated strategic planning that
incorporates strengthening the Department's internal analytic
capabilities, greater transparency surrounding analysis and the data
supporting it, and (to the extent possible) simplified Congressional
oversight of DHS.
Mr. Duncan. I want to thank the witnesses for your opening
testimony.
I now recognize myself for 5 minutes for questions.
I want to start off by saying we have heard words like
flowcharts, redundancy, strategic planning, and coming from the
private sector, that is what business does.
They set an organizational model, they strategically plan
for the future based on incomes, expenses, and anticipated
revenue and future expenses. Strategic planning is important
but also the flexibility with the strategic planning when you
see something that doesn't work, incomes fall short, expenses,
to make adjustments on the fly so to speak as business operates
and so I appreciate that the private sector input here and
vision and I guess your opinions.
I want to start off with the Government side of it to Ms.
Berrick because of the presence of multiple information sharing
entities can have both favorable and unfavorable consequences
for how effectively Federal agencies respond to homeland
security threats.
With what happened last week in Boston, the terrible
tragedy there, let me say law enforcement responded beautifully
and we were able to find the bombers and I appreciate that, but
I think there are lessons to be learned especially as we look
back 10 years for homeland security being stood up and we start
to understand that the reason DHS was created; why all of these
agencies, 22 of which were brought up under one umbrella, and
certain centers like National Counterterrorism Center set up as
the hub in the wheel.
We start understanding and realizing that maybe the
information sharing isn't going like it should or maybe we are
starting to see some stovepipe dynamics that were revealed back
in 2001 reemerge.
So I guess my question for you is: What effects, either
positive or negative, does overlap of information collection
and analysis among these five entities listed in the GAO's
report have on DHS's ability to execute its missions
specifically on information sharing in light of what happened
last week, Ms. Berrick?
Ms. Berrick. Thank you. Thank you, Mr. Chairman.
As you mentioned, there can be significant benefits of
having that overlap, as intelligence is never perfect. So
having--getting that information from more sources than one can
be very beneficial.
Our point has always been that, when doing that,
coordination and sharing of best practices is really critical.
So for example I mentioned we looked at eight urban areas. We
found 37 of these information-sharing entities and there was
overlap among 34 of those.
While these entities had generally good working
relationships, there was no real emphasis on coordination of
activities so that they weren't overlapping one another. And as
a result, some of the customers for these entities would
complain about getting multiple analytical products that
covered the same points.
They thought it, in some cases, was wasting their time
because they were getting the same information from many
sources. So first of all, it is important to coordinate.
Second, in these situations it is really important to share
best practices. Some of these entities worked out very good
arrangements where they co-located--some of the entities were
co-located--that really cut down on unnecessary duplication.
In other cases, governance boards were established where
different entities were members of that, and that helped. So
while some overlap, as you mentioned, can be very good, it
really makes coordination in the sharing of best practices
critical.
I also wanted to mention GAO has designated as early as
2005, and it is still on our high-risk list, the sharing of law
enforcement and intelligence information as a high-risk area
Government-wide.
Where we have seen the most progress is in the
establishment of a governance structure to oversee information-
sharing initiatives. We have seen less progress at the
Department level and actually coordinating and leveraging each
other's initiatives and also in coming up with good technology
solutions to facilitate the sharing of information.
Mr. Duncan. Let me just follow up on that; and while I did
not plan on it, but you hit on something. You think the
different IT systems that we are operating on hamper that
effort of information sharing and do we see some territorial
disputes or maybe ownership issues of owning the data and not
really wanting the other agencies to be able to have access?
I am talking about security data. I am not talking about
just processes and systems, but I guess if a law enforcement
agency has a suspect, they have compiled a file on that
suspect, I would say that it would benefit law enforcement
across the spectrum to all have that information versus what I
think we are seeing is some sort of proprietary ownership of
that information and not wanting to share that. I am afraid
that that is what we are going to discover as we look back on
last week. Is there any validity to that?
Ms. Berrick. Generally speaking, we have identified the
commonality or lack of for IT systems to be a challenge, and we
in fact, made a recommendation to the program manager for the
information-sharing environment to establish an enterprise
architecture through which the Department--there are five key
departments that have key information-sharing
responsibilities--can be a part of so that they can develop
common IT solutions.
Of those five departments, only two have developed
implementing plans to move forward within that architecture.
The other three are still working on it. So it is recognized
that it is a problem. There are efforts underway to address it
but the Government isn't there yet.
Mr. Duncan. I think the subcommittee will probably revisit
this IT issue in light of what happened last week.
I just want to ask one final question before I turn it
over, but Ms. Richards, we had talked about CBP as a shift
change happens, CBP officers down maybe in Arizona or along the
border, having to trade radios out between the car windows
between shift changes.
I think Inspector General Edwards recently confirmed in a
letter--that Department-wide radio interoperability is one of
his officers' highest-priority, short-term recommendations and
having seen what South Carolina did after 9/11 and in the post-
Hurricane Hugo days but then after 9/11 more than anything, is
that our law enforcement; local, Sheriff's Department, Chief of
the Police, and EMS services along with the National Guard,
Highway Patrol at the State level--they all couldn't
communicate.
So grants were issued and money was spent to upgrade to a
500 megahertz system so everybody at certain times could be on
the same frequency to listen what is going on, communicate
effectively.
I would like for you just to address that interoperability
aspect, but also address the fact that we have got $60 billion
budget and agents are having to hand radios out through the car
window for the next shift so that they will have the radio
system that is operable. That alarms me. So if you could
address that for me.
Ms. Richards. Thank you, Mr. Chairman.
There are two issues that you are talking about. One is an
interoperability where the radios that they have should be
programmed so that they can access this common channel and the
radio operator should be aware of the common channel and how to
get to it.
What our audit found was that most of the radios were not
properly programmed although they could have been and that most
of the radio users were simply unaware of the common channel.
We recommended that the Department put out policies and
procedures to make sure that everyone was aware and could get
to this common channel as a workable solution and most
importantly that the Department put in a strong governance
structure to ensure that all of the components were in line
with this common goal of achieving interoperability.
The Department is working on putting out its policies and
procedures. The Department did not agree with our
recommendation for a governance structure. They have a
governance structure in place that is based on memorandums of
agreement among the various components and they believe that
that is sufficient.
As to the question of handing radios off at the end of a
shift, as part of a follow-on to our interoperable
communications audit we started an audit looking at the
inventory of the communications assets.
We have finished our fieldwork and we are about to deliver
our draft report to the Department and hope to have the report
to you within the next quarter. I think that would answer some
of your questions on that issue. Because we haven't finished
the work, I can't address it today.
Mr. Duncan. Thank you so much.
I would ask that y'all would also with interoperability and
I am sure we will review Boston events and interoperability in
communication with regard to that as well.
Ms. Richards. Yes, sir.
Mr. Duncan. Okay. Thank you so much.
I will yield to the Ranking Member of the committee, Mr.
Barber, for his questions.
Mr. Barber. Well, thank you, Mr. Chairman. I hadn't planned
on asking this question but in light of what you just said, I
really feel I must and that has to do with the interoperability
problem.
Let me give you a very specific example and I don't think
much has changed. When the Ranger Rob Krentz was killed 3 years
ago, we believe by a cartel member, one of the biggest problems
was interoperability.
When I drove down there with Congresswoman Giffords to meet
with the ranchers shortly after his death we learned very
quickly that we were trying to reach the Secretary and we kept
losing signal throughout the area.
In this rugged area of the Southwest Border, this is a huge
problem. In talking to agents on the ground it is still a
problem 3 years later. It not only is to the advantage of the
civilians but certainly to our Border Patrol agents that we fix
this problem.
So I look forward to report and unlike your previous report
on this matter, I hope the Department will seriously consider
implementing your recommendations. This is a huge issue.
Let me turn to a general theme. As I have listened to the
witnesses, there are certain ideas that continue to come up,
and I want to ask about how we get them done. Having skilled
personnel doing the right job with the right skill set in the
right evaluation processes.
You know, sometimes we promote people who are really good
at what they do on the field but then they are supervisory,
they don't know how to do it. You talked about transparency and
planning. You talked about data-driven planning and evaluation
processes.
All of these things are pretty much across the board a
consensus I think amongst the witnesses this morning. I am
interested in your ideas about not just what to do but how we
do it in a department of this size. I don't think it is
impossible.
I think any human problem can be fixed by human beings. I
think the private-sector experiences that we have heard about
this morning are being done every single day. So I appreciate
from any and all the witnesses your recommendations on how and
where in the Department we place responsibility for getting
this done in an expeditious manner.
Ms. Berrick. If I can start, I would say there are a few
things that will really be critical for DHS to address these
issues and I think they are on their way to doing it. The key
will be execution.
The first is having a roadmap, you know, identifying what
their problems are, what are the root causes of some of these
fundamental management problems, and how are they going to
address those gaps.
I think second, they need to identify the resources that
are going to be needed to address those gaps and if they
perceive funding shortfalls start prioritizing on which
initiatives are more important than others and which are more
time-sensitive.
They also need a system of metrics and an oversight
structure to make sure that they follow through on those plans,
and then the final piece is show demonstrated progress in
addressing the issues.
These also very much mirror GAO's criteria for removal from
the high-risk list. We are not looking for perfection. We are
looking for a sustainable, repeatable plan that can--you know,
through which the Department can show demonstrated progress.
Related to DHS, they have developed, I think, a good
strategy to address these high-risk areas. I have seen them
make the most progress in the past 3 years than I have seen
since their creation, and they have made improvements to that
strategy.
They have put pretty good metrics in place. For the most
part, they have identified resource needs and prioritized. The
key now is really executing on those plans. They have some very
promising initiatives related to acquisition, IT financial
management, but for the large part they are in the early
stages.
DHS also has a very good policies and procedures. Their
acquisition directive is very strong. It is consistent with
best practices. The issue has been that they haven't executed
on that directive. So I think the bottom line, they have good
strategy strategies and plans in place for addressing these
management issues. The key is execution and continued
oversight.
Mr. Willis. Could I add on to that as well?
Mr. Barber. Please, doctor, yes.
Mr. Willis. Thank you, Ranking Member Barber.
You know, I would add a couple things. I have put in my
written testimony some things the Department can do. I would
like to highlight a few things Congress can do to help them.
One is demand to see analysis for major decisions and
systems. An example is a good one Congress did in the past when
the Congress was considering acquiring advanced portal
detectors.
Congress and legislation said we need, the Secretary needs,
to see a cost-benefit analysis and sign off on it before. That
led it to National Academy's panel that I was a part of that
reviewed the cost-benefit analysis and said this is a cost
analysis not a cost-benefit analysis. Subsequently, decisions
were made of how to change that system.
The second thing is that Congress can make sure that the
analytic capabilities at the Department level have adequate and
stable funding. I highlight adequate, not necessarily large.
These--it doesn't take--it is an ounce of prevention for a
pound of cure here.
Just to test this premise, we at RAND looked at our own
studies for Department of Defense and we were able to find tens
of billions of dollars easily of savings and avoided spending
off a small fraction spent on those types of studies.
Mr. Barber. Mr. Killough.
Mr. Killough. One example to add. In 2008 the Department of
Veterans Affairs created the Acquisition Academy and the
primary objective at the Acquisition Academy was to support
Departmental acquisition reform and program execution through
the creation of curriculum and improved competency capabilities
and the people in the acquisition and program management areas.
That Acquisition Academy has functioned in training over
10,000, I am not sure what the number is--it is 10- to 15,000
people in improved acquisition processes and in becoming
experts in program execution since that time.
In September 2012, the Veterans Affairs Office of the
Inspector General released a report documenting savings in one
specific area and that would be in veterans' medical programs
in the administration, acquisition, and management of programs;
and an annualized savings of $390 million.
The benefit of that is that they made a decision that the
people that were conducting and acquiring assistance needed to
be more highly confident in the knowledge and capability of
defining the specific thing they need to acquire, also in
eliminating redundancy and acquisitions across various
different areas within the Department, and once they acquire
the systems or acquire this capability to improve their
capability to execute the programs.
Mr. Barber. You know, I would love to hear from other
witnesses but my time is well over the allotted time, but I
want to just say, and maybe in the second round I will come
back to this, that the GAO reported earlier in your statement
1,800 recommendations I believe over the last 10 years.
I have looked at many of those GAO studies, some of which I
was involved in directly, and they are all pinpointing this
problem, that problem, this issue, that issue, and what I see
overall is a systemic problem not necessarily individual series
of problems.
My question really is trying to get at, how do we solve the
systemic problem? You know, we hear about banks and other
institutions being too big to fail and I just wonder if DHS may
be too big to succeed in the sense of trying to get the job
done.
That is an editorial comment, not necessarily a fact, but I
do think we have to make this Department work more effectively,
and I am looking for a way to solving the overall problems, not
just the specifics.
Thank you, Mr. Chairman.
Mr. Duncan. Thank you, Ranking Member.
The Chairman will now recognize the Ranking Member of the
full committee, Mr. Thompson, for a question.
Mr. Thompson. Thank you very much, Mr. Chairman.
I think one of the comments we hear quite often is a
statement when you are talking about trying to fix things or
improve them people will say, ``Well we have always done it
this way.''
That kind of, I think, is part of the reason we are here is
we have had people who looked at the agency who said, ``Here
are some better ways to do it.'' We have had business people
who have done acquisitions and other things who have said, you
know, ``Here are just some things that you, from a due
diligence standpoint, you do if you are spending your own
money, you want to get the best value.''
We have some people who also have on a research side said,
``Here are some things that some other people have done and
done them successfully.'' Well, Ms. Berrick, if I would say to
you that there are five or six procurement systems within the
DHS, would you see the value of streamlining procurement so
that we would not have separate systems operating?
Ms. Berrick. I think related to procurement and
acquisition, the key that we have seen at DHS is the need to
have better oversight at the Department level of what the
components are doing and for the under secretary of management
to have authority over the component acquisition executives
because there is a process at the DHS level, there is a process
at the component level, and sometimes those two processes don't
flow together as they should.
So there is a lack of oversight. DHS is taking some action
to improve that and have in fact strengthened the authority of
the under secretary, but more work still needs to be done.
Mr. Thompson. All right. Now, does the work need to come
from the Secretary of DHS or does it require Congressional
direction?
Ms. Berrick. I don't think it requires Congressional
direction to organize internally and provide oversight that is
needed.
Mr. Thompson. Right. Well, one of the things, we put 22
agencies together and we inherited the culture of some of the
legacy agencies who were a little more mature versus the new
kids on the block, and so we see the legacy agencies kind of
being the thousand-pound gorilla sometimes.
Another thing Dr. Willis, that in an effort to consolidate,
the perception is that if we have these programs and we
consolidate them, that will save money.
The Department has proposed to consolidate its 16 grant
programs into one. We had a budget hearing. We have had the
Secretary here. We were saying, ``Okay, how are we going to get
the efficiencies out of consolidation?'' The response comes
back most often, ``Well, we will just have one program and we
will do these missions.''
Well, but we don't have the analytics and other things that
go with it to say that we will be able to maintain the
effectiveness of the programs by consolidation. What is your
opinion of the consolidation?
Mr. Willis. I think this goes back to my main point about
the need for early and sound strategic analysis. We know that
these programs are important from communities because we are
praying it succeeds; it is important, if it fails like it did
in Katrina, it can be devastating.
We know that these programs have put in place capacities
that people have bought things, people have done--but there are
things that we don't know because we don't have planning and
analysis. We don't know whether this capacities are actually
making us prepared and we don't know what the next strategic
step should be taken to improve it.
Similarly, we should probably consider whether this
organization of going from 16 to 1 is in fact something that
will align--allow us to do better leadership or whether there
are other factors--actions that should be taken.
Mr. Thompson. Mr. Killough, if I told you that 10-plus
years later we still have almost as many contractors working in
DHS as we have FTEs, what would you think of that?
Mr. Killough. Well, clearly there are needs to have subject
matter experts and contractors hired to--in specific instances,
but the cases where contractors or non-affiliated employees are
contracted to augment staff on a long-term basis generally
finds that the home or parent organization hasn't been able to
generate the capacity or the capability to be competent and
have competencies in that specific area of expertise.
Mr. Thompson. Well--well one of the things that we have
asked the Department to do is we have been told that there are
people in the same department doing the same job but that
private contractors are being one-and-a-half to two times what
the Government employee is being paid to do the same job.
Now I think we can save money; either make a determination
that we need to over time scale back and bring people in-house
and build a capacity or we doing something wrong.
But over 10 years later we still have private contractors
doing, not the technical that you talked about, but basically
the jobs that full-time employees normally do, procurement, HR,
other kinds of things. So would you say to us that it would be
a good idea to look at those private contracts and see if we
getting our money's worth or could we do to better way?
Mr. Killough. Well, first of all, a lot of the times there
is an authorized head-count issue. So sometimes it is the
chicken or the egg. So if you are going to authorize in the
Department head count for Federal employees, that is one thing,
but if you are not going to authorize increased head-count in
order to change the contractor to an employee, then you are
just going to have a problem with execution.
Mr. Thompson. Well I appreciate it but, you know, I think
if a Department head would come and say, ``I could save the
taxpayers 10 percent of this budget by going from this process
to the other,'' do you think somebody would make the argument
on head-count or is it a cost efficiency?
I guess, Dr. Stern, you the businessman. If somebody walked
in to you and said, ``Dr. Stern, we could save this company 10
percent by doing it this way. It wouldn't lose any
efficiency,'' just your--I know there would be some checking
that you would do, but how would you respond to that?
Mr. Stern. I would definitely proceed to do it, execute it.
I get the sense from the broader conversation that what we have
is kind of a--on the one side a penalty-free system that leads
to inaction. On the flipside, the total lack of desire to take
a risk, take a step forward, because there is no reward for
doing so.
In aggregate we don't see the cliff, okay. As a Nation, now
we do but there are pieces that we do, but we don't really see
the urgency that we find in business where you are seeing a
business that is really heading for bankruptcy, and you better
take action and frequently take risky action, you execute, and
then you make it come out right.
Don't see that happening here. Not sure how you induce that
in the Government. It is certainly a need, and I think the
opportunities are anonymous for consolidation, combining
function, reducing the level of structure in an organization,
having fewer levels of management between the person who is
executing and that the one sitting at the top.
Anytime you have 13 signatures required to approve a
capital acquisition, you know darn well that in between those
13 signatures most of them never read it. They just sign off on
the assumption that somebody else read it.
Just eliminate those and streamline it and get on with it.
We have done it many times and I have been involved in having
saved many companies many businesses by just--and obviously
pick the right people to execute.
One thing you touched on which I think is important you
want to have good financial and IT systems in place that allow
you as a manager to track the progress against the objectives
set. So that area is crucial.
Mr. Thompson. Thank you very much. I yield back. Thank you
for----
Mr. Duncan. Gentleman's time is expired.
I think he said on an age-old debate about the private
sector and risk-taking and risk-benefit analysis and reward and
bureaucracy or large--whether it is Government or large
industry--where people get in a comfort zone and don't want to
take that risk.
We see that. That and the longer they stay in that job, the
less risk-taking they do. So I appreciate your perspective on
that and we will probably talk about that in Round No. 2, but
the Chairman now recognizes Mr. Payne for a question.
Mr. Payne. Thank you, Mr. Chairman.
You know, I as a Ranking Member on Emergency Preparedness
and Communications have continually had this whole issue around
interoperability come up and this question is for Ms. Richards,
but anyone else who might want to add their thoughts, please
feel free to respond.
Now I represent New Jersey's 10th district in northern New
Jersey and my district felt the devastating effects of
Hurricane Sandy. It is clear from my conversations with first
responders who I am interacting with all the time during and
after Sandy, interoperability is an essential--it is essential
to responding to disasters.
But you stated that there are roadblocks to achieving
interoperability including DHS's failure to establish clear
guidelines or effective governing structure with authority and
responsibility to oversee achievement of Department-wide
interoperability.
Could you expand on what more Congress can do in helping
DHS achieve interoperability? Does it take legislation that
clearly sets the guidelines and the--and a time line to comply
with actions like standardizing radioactivity?
Ms. Richards. Thank you for the question. It is a crucial
question and very important to all of us.
The Department should have the capability with the
authorities that they have now to establish that governance
structure. The Department believes that collaboration on this
issue through memorandums of agreement and understanding from
the components will get them there.
My audit work indicates that that collaboration is not at
the point where it is going to get them there quickly. We
continue to discuss with the Department our recommendation and
the need for that authoritative governance structure to make
decisions and disseminate the one decision throughout all of
the components.
Mr. Payne. What is their response to that?
Ms. Richards. Their response continues to be that their
joint working group is up to the task.
Mr. Payne. Yet, and still, we have not achieved it and, you
know--I am by no stretch of the imagination a rocket scientist
but to get everybody on the same channel, you know, doesn't
seem like it could be that difficult. I know we have wide-
ranging number of entities involved but----
Ms. Richards. I would say in an effort to explain some of
the Department's other issues they are upgrading their
communication systems; the infrastructure that supports it.
There are technical upgrades that they are putting in place
that will or should improve the situation.
But in my view, the basic getting out to your radio
operators the information about the common channel and how to
reach it and to the technicians that are programming the radios
the information that that channel needs to be programmed in is
extremely important and it should be fairly straightforward.
Mr. Payne. You know, we have a little technology that was
developed a decade ago called email and, you know, that
potentially could be helpful in everyone--I know I get a lot of
them every day on a myriad of issues.
So that might be something they look at. Does it--do you
think it, you know, would take legislation to set up a
subdepartment? I mean, here we go, building out again--a
subdepartment to have the governing authority to oversee this
achievement toward interoperability because it is--I mean, it
is the key.
Ms. Richards. Certainly that would push the Department into
doing something. This to me is a critical issue for the
Department. Secretary Napolitano has very rightly stated that
one of her most important goals is to create One DHS.
As you are all aware it has been 10 years, which is a long
time, but not a long time in the history of organizations. Some
of the organizations that were put together date back to
colonial times, such as the Coast Guard and the Customs Office.
They are very proud organizations; overcoming those
cultures to bring them together to work as one common
organization is difficult. The Department administration is
pursuing the issue. They have not been as successful as I would
like to see.
Mr. Payne. Thank you.
Mr. Duncan. Thank you.
Committee, we do have time for a second round of
questioning which I would like to personally get into and we
will work through the process if you guys want to, but so I
recognize myself for 5 minutes for additional questioning.
Yesterday, we had the NFL draft, and I will guarantee that
those NFL teams didn't sign more defensive tackles than they
needed. They didn't decide, you know, what we like this guy is
a good athlete, we have got two free safeties, but let's go
ahead and sign a third one, and I know we have got to pay too
much for him, but let's go ahead and get a third one just
because he is a likable guy or just because we might think we
might need him down the road.
They did strategic planning, look at the assets they have,
look at the assets they may need in the future for a long-term
vision for where they want the team to go, the growth that they
are going to need, the age of the assets they currently have.
That is how business operates.
So I think Government needs to operate that way, as well,
and I think you if you went on the street and asked average Joe
American these questions about, ``Well we are $16.8 trillion in
debt as a Nation, we have got an agency that really was--has
been in existence for about 10 years and we are looking back at
it, we understand it has got a $60 billion budget to it,
225,000 employees, but we have identified where this person or
this system is doing the exact same thing as this system over
here, but what should we do?''
They are going to say, eliminate one of them. Let's just
let one of them do the job. Let's let one group do that job.
That is what private sector would do. So I think this is very
timely and I think this ought to transcend just that DHS. This
ought to apply to every Government agency.
We ought to do the same analysis here in Congress where we
have duplication and wasteful spending that can be cut. This is
low-hanging fruit for the American taxpayer, this is low-
hanging fruit for Congress, and it should be low-hanging fruit
for the agencies as they apply stewardship methods to their own
agencies.
They shouldn't need an oversight hearing from a
Congressional committee to recognize duplication, recognize
waste, and start making the right decisions for the taxpayer.
So having said all that rant, Mr. Killough, I want to ask
you this; you know, some of the challenges for acquisition
programs include lacking experience acquisition and contractor
personnel.
You touched on that just a little bit so how would
Government go about hiring and educating and getting the right
skills to the right people in the acquisition process because I
foresee that as part of the big problem here. How do we
identify those people? How do we get them the right skills, I
guess is the question?
Mr. Killough. Well, part of my recommendations was the
first step is defining through adequate job descriptions or
what they call in the Government, job classifications of
these--the critical skills and knowledge that a person needs to
have in order to perform the acquisition functions.
So you create job classifications in those areas that you
feel that you need improved capacity or improved competency in
order to become more efficient.
Mr. Duncan. So what you are telling me, based on your
analysis, that there is not an identified tasked acquisition
person within the agency to buy a communication system and
there is not a tasked person with that responsibility to buy IT
systems. I know there is there but----
Mr. Killough. Well I am not completely versed in all of the
OPM job classifications. I am particularly commenting on the
areas of the program management aspects of it. I know there
isn't that across-the-board in the Government in program and
project management. It only exists today in the IT space.
So there are program and project management activities
being done in every department in every level in this
Government and we only have one area where it is specifically
addressed the skills and knowledge required to do those jobs
and that is in the IT space.
Mr. Duncan. I think that is important. Thanks for touching
on that.
I want to just shift gears to Dr. Stern for a minute
because on page 4 of your written testimony--and it is part of
the record by the way--any written testimony you provide is
part of the record, but you say that, ``Even after 10 years
under the same management umbrella, the Department is riven
with conflicting cultures and customs.''
So we had a lot of independent stand-alone agencies or
subagencies who are now brought under the DHS umbrella. We have
heard this from others, but now you even bring the topic up is
that we have conflicting cultures and customs.
So how does an agency as big and broad as DHS is, with
stand-alone independent agencies that are now a part of
something bigger--private companies have this problem as well
as they do acquisitions and those acquired companies are now a
part of something broader, how do they buy into that culture?
How do they start writing for that brand and how can DHS
apply that writing for the brand mindset to what they are
doing? I use the example that you have got the Coast Guard, you
have got Secret Service, which was part of Treasury, you have
got CBP and ICE, which is part of something broader--stand-
alone but broader independently--now they are all part of this
DHS umbrella. So how do we start working on that culture
because I think that is vital to the on-going mission?
Dr. Stern.
Mr. Stern. In business, you encounter the same problem
every time you acquire a couple of companies and merge them or
frequently more than a couple of companies and you really--you
state your mission and objectives in a broader sense to all
involved and you force the issue.
You actually force it, and those who that don't want to
subscribe to it get invited to go do other things. It is
interesting how rapidly people do adjust to the common thrust
of the new entity because they have a lot at stake. Okay?
Government has less flexibility or less desire to do what I
am talking about as far as removing people from one
organization that turn out to be disruptive to the new mission
and new thrust, but it is a must-do. I don't think it is an
option. Okay?
In business, the end result would be disastrous if people
didn't subscribe to the same objectives and the same
philosophy. But I have seen it again and again and--there are
people that will never change; don't fit. It is not to say they
are not capable as far as professionals but they are better off
going somewhere else.
Mr. Duncan. It is almost like a tenure aspect and you can't
remove them and they do affect the morale because, ``Well this
isn't how we did it in the old organization,'' and I have seen
that in private sector, ``Well, we did it this way before.''
``Well, that entity has gone away. Now you are a part of
something broader and this is how we are going to do it and buy
into it and go home.'' Sort of. That mindset.
I will applaud the Secretary and the Department for coming
up with the One DHS mindset. I thought that was the right thing
but they have got to continue pushing that down and they have
got to do a lot of the things that you have said is that we
have got to have the ability to remove those disruptive
elements and those that aren't part of the team.
We have got to be able to make those trades, to go back to
the NFL analogy. We have got to be able to recruit good team
players with the right assets and we have also got to be able
to let some guys go, cut them, send them back to minor-league,
whatever. So with that, I will yield to the Ranking Member for
a question.
Mr. Barber. Thank you, Mr. Chairman. You know, in another
life many years ago I was involved with a publishing company
and my job was to ensure that acquisitions and mergers were
properly managed.
I was the coordinator of all of the different departments
that had to get on board and one of the things that I found
that was most effective, apart from the fact that the CEO said
``we will do this,'' was a singular deadline by which each
component had to get its job done in order to meet the common
goal. Sometimes I am not sure if that is existing in the
Department.
Well, I just like to ask the witnesses, particularly Dr.
Stern and perhaps Ms. Richards and Mr. Killough--if you could
imagine the circumstance; tomorrow you were appointed Secretary
of Department of Homeland Security--a more enviable job you
could not find in Federal Government.
[Laughter.]
Mr. Barber. You had the lack of smarts to take this job
because you thought you could do something better. What would
you do?
Dr. Stern, let me ask you that. You know, going back to the
earlier question we have so many--we have pinpointed so many
individual problems with this system or that system, and as I
said earlier I think it is a systemic problem of how you manage
the Department, the second-largest Department in the Federal
Government, 250,000 employees, billions of dollars in
taxpayers' money.
I want to be a part of a solution here as a Member of
Congress and I would like to know what you think, if you were
the Secretary, what would be the first steps you take given the
constraints that, you know Government has that are different
from private sector, what would you do to get the job done on a
systemic level?
Mr. Stern. The first step would be to--in conjunction with
the leaders of the different departments--operating units--is
come up with a mission statement that is very clear and very
understandable.
I was involved many years ago in a hostile acquisition that
with mixed feelings we executed on. We ended up with 120,000
employees; so half of homeland security. It was significant
with very different philosophies.
But we did it. We laid out a very clear mission statement
and subset to that with very measurable quantitative
objectives, with dates, schedules, and quantification where
appropriate, and we put in place a risk reward system for the
key leaders for the individuals to execute on it and the risk
was departure from the company. The rewards were incentives and
we were generous with incentives.
We cut the organization way back because that was part of
the objectives underlying it all and on balance it worked, but
there has to be clarity of mission and clarity of the
objectives and they should generally be very measurable and
then management follow-up, and the willingness to execute and
you do take some risks in doing so. Now whether I could do it
as a Secretary here, I don't know.
Mr. Barber. Smartest answer might be, ``Thanks, but no
thanks'' to that job, right? But I think it is serious--I mean
obviously this is a Department that we pulled together at a
time of great crisis in our country and I think there has been
a lot of progress made.
I don't want to in any way suggest that I think we have not
come a long way in those 10 years, and as Ms. Richards pointed
out, in the life of an organization of this size, 10 years, is
not a long time. Although there is a level of impatience that I
have and that my constituents have and I think the country has
with, why we can't get better faster?
So Ms. Richards, I want to offer the enviable job of being
appointed Secretary. As he you look inside the Department in an
objective way, what would you do?
Ms. Richards. Well, first of all, I would like to remind
everyone that I am an auditor at heart and we are detailed
people. So we would probably be a bad choice for the job.
[Laughter.]
Ms. Richards. In addition to all of the things that Dr.
Stern said, which--many of which the Department has worked very
hard to do, they have also gone through an exercise called the
Bottom-Up Review. One of the things that I see from my
perspective is that there is a lack of clarity of data.
It sounds very simple. It is enormously time-consuming to
get it right. We did an audit recently on detection equipment
and we looked to see for commonalities among the different
components that use detection equipment such as walk-through
metal detectors.
They had it on their inventories but they had all defined
it differently so there was no way to pull from a centralized
viewpoint the information that would tell them how many metal
detectors they had or where they were. So if they needed to
shift them or share them they didn't have that information
readily available.
One of the things that, not as Secretary because it is too
in-the-weeds for that job, but one of the things the Department
needs to do is to start setting those data dictionaries and
commonalities and defining the resources that they have both
physical resources and their employees, the skill sets that
they have, so that they can share--do information sharing--
share radios that one component might have that another
component may need. I think that that is critical to the
success of the Department into achieving that One DHS and
getting to the efficiencies that they need.
Mr. Barber. Would any other witness care to be Secretary
for a day or a year or whatever and give us what you would do?
Ms. Berrick.
Mr. Stern. Should I give you----
Mr. Barber. Can I go to Ms. Berrick first, please?
Ms. Berrick. Sure. You had made a comment earlier that I
think relates to this question. You said you spend time reading
a lot of these reports with lots of recommendations, and really
what does all of this mean?
GAO actually went through an exercise where we looked
through those 1,800 recommendations, 1,300 reports on the 10-
year anniversary of 9/11 and we issued a report basically
identifying our take on DHS's progress and what do they need to
do moving forward. Looking across all those recommendations, we
saw three themes that were common that negatively affected
DHS's progress.
So if I were a Secretary for the day would address these
three themes. The first is the management of the Department.
When you talk about acquisition and IT and financial management
and in the abstract way it is hard to see the direct link that
has on DHS's abilities to meet its missions.
So for example in acquisition management there have been a
number of programs that DHS has had to cancel or significantly
scale back and this is to secure the border and this is to
secure air travel because they weren't managed properly. In
fact, we identified $1.75 billion and that related to eight
such of those programs that were scaled back.
Financial management, they need information, you know,
senior leadership needs the information to manage their
operations. DHS senior leadership doesn't have that visibility
today. They are working towards that but they are not there
yet. So management of the Department I would focus very
strongly on strengthening all of those core management
functions.
The second theme we saw is, and it is been discussed today,
performance, measurement, strategic planning, cost-benefit
analysis, before DHS pursues a solution, to what extent are
they looking at the alternatives and weighing the costs and
benefits and also risk management plays a role in there.
We found that DHS has done a lot to assess risk. They are
doing less to incorporate that information into planning,
programming, and budgeting decisions.
The third cost-cutting area that I would pay attention to
is information sharing and partnerships and coordination. DHS--
you know, it is a homeland security enterprise. DHS has to work
with State, local, the private sector, international partners.
They have made a lot of progress in this area, but they can do
more to strengthen those relationships as well as improve
information sharing within and outside the Department.
Now overall I think DHS is about where you would expect
them to be, you know, 10 years into their existence, but I,
because that is early and this can take years to achieve, but I
do think these three cross-cutting themes are really--we are at
a point where they are really negatively affecting their
ability to be effective, and I think they need to be addressed
moving forward.
Mr. Barber. Is there time for one more, Mr. Chairman?
Mr. Stern. Could I give you----
Mr. Duncan. I am going to give some leeway----
Mr. Stern. I am sorry.
Mr. Barber. Dr. Willis, first please.
Mr. Willis. Okay. I just very quickly to add on to some of
the--I would of course like Dr. Stern said, clarify the
strategy, identify the people to implement that and empower
them, but I would also be doing one thing alongside to draw on
the corporate analogy.
I would communicate that strategy to my board fairly early
on before I get too far into it, and I would point out in this
context Congress--there is an analogy between the board and the
corporate board between Congress, but there is not one board
for DHS. So I would like to draw that analogy.
Mr. Stern. I was going to give you a quick example on how
attitudes change and it can be done--it was budget time of a
large company and we were getting the budgets from the
different parts of the company to put it together.
There was one division that came in and like all others we
need more of this or we need more head-count here or we need to
expand there and there and we are trying to trim back the
budgets but they were adamant about it.
Conclusion in the later phase, we decided to sell that
division because it didn't fit our mainstream business. Turns
out that the management of the business succeeded in raising
the capital and buying that division themselves. We sold it to
them.
You should have seen the rapid change of attitude to
spending that took place within that division. Suddenly it was
theirs. It was their money. It was their success. Not the
overall. It was amazing, and you see that again and again and
again.
Mr. Barber. We should be spending the taxpayers' money as
we would our own, and that is where I will close.
Thank you, Mr. Chairman.
Mr. Duncan. You are quite welcome.
The Chairman will recognize Mr. Payne for the final
question of the day.
Mr. Payne. Thank you, Mr. Chairman.
Ms. Berrick, kind of open the door for me in terms of
stating that DHS has improved in information sharing. Where--in
what areas has that been and where are they still lacking and
where else do they need to improve on State and Federal
international level?
Ms. Berrick. Really, in the information sharing they have
made a lot of progress in these past few years identifying what
their information-sharing initiatives are, defining those, and
also clarifying how those tie into the broader information-
sharing environment.
They have a pretty good set of metrics to measure their
progress in implementing those initiatives. But largely due to
funding shortfalls, they are having some difficulty moving
forward with some of those.
So I think they had good strategies and plans in place. It
is going to be executing, moving forward, and also prioritized
among the different information-sharing initiatives that they
have, and part of that is partnering with the other departments
that have key information-sharing responsibilities.
With respect to coordinating with State, local, private-
sector, and international partners, this has been a theme that
we have identified in a lot of our work where DHS could do more
to strengthen those relationships, leverage information at
those parties, have and in some cases work to not duplicate
what each other is doing.
I think DHS has made tremendous progress since it was
created in that area, but I think they had continued work to do
to strengthen those relationships.
Mr. Payne. Okay. I just had another question on another
topic for Mr. Killough.
You know for years what I am hearing at DHS, you know,
there is a low morale, and it has been notoriously low. In your
research have you determined what the key reasons why low
morale exists in the workplace and how does that morale impact
program management, and how does this affect productivity and
results?
Mr. Killough. Sources of low morale are many and varied,
but a lot of common things are the fact that there are
oftentimes people in an organization don't understand the
objectives or don't understand where they stand relative to
their performance.
One thing is that the organization has got to understand,
what does success look like? Management has got to help them
define what success looks like so--and to also answer some of
what Mr. Barber was talking about is that you have got to put
leadership in place.
You get to create clarity to define achievable objectives.
You have got to define a way of reporting against those
objectives that is transparent. Everybody knows how everybody
else is doing and you need to celebrate success but you need to
define what success looks like.
So morale is--it can be low when people are--lack the
appropriate motivational environment because they are not
really sure how well they are doing, whether they are being
successful or being--achieving what they are supposed to, and
therefore they don't--there is no self-satisfaction established
out of that.
So they have got to understand where am I going to be? What
does it look like when we are a successful organization or when
I am a successful person?
Mr. Payne. Well, I appreciate that and moving forward that
is something that I am going to be interested in pursuing in
terms of the morale of the people in the Department to get--to
maximize their potential and do the things we need to do to
continue to make sure that the Nation is safe and secure.
So with that, I yield back.
Mr. Duncan. Okay. I think you are right there, Mr. Payne.
I want to thank the witnesses for their valuable testimony
today. I learned a lot, and I appreciate you coming and being a
part of this.
I want to thank the Members for the questions. I think you
see the bipartisan nature of investigating duplication and
wasteful spending and trying to maximize taxpayer dollars and
keeping our Nation safe as Mr. Payne said at the end there.
So the Members of the committee may have some additional
questions for the witnesses and we will ask that you will
respond to those questions in writing.
With nothing further and without objection, the
subcommittee will stand adjourned.
[Whereupon, at 10:53 a.m., the subcommittee was adjourned.]
A P P E N D I X
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Questions From Chairman Jeff Duncan for Cathleen A. Berrick
Question 1. GAO reported greater overlap in the analytical
activities of fusion centers and FIGs than in any of the other
entities; for investigative activities, fusion centers, and Regional
Information Sharing Systems had the most instances of overlap. What
steps is DHS taking in conjunction with DOJ to address this duplication
in effort?
Answer. The Department of Homeland Security (DHS) concurred with
the two GAO recommendations intended to help reduce unnecessary overlap
and leverage resources among field-based information-sharing entities
and, in conjunction with the Department of Justice (DOJ), is taking
steps that begin to address one of the recommendations.\1\
Specifically, DHS, in a letter to GAO on how it will respond to the
recommendations, stated that it plans to use its annual assessment of
fusion center capabilities to gather data on steps the centers are
taking to better coordinate analytical activities with all four of the
other field-based information sharing entities in our review--Field
Intelligence Groups (FIG), Regional Information Sharing System (RISS)
centers, Joint Terrorism Task Forces (JTTF), and High-lntensity Drug
Trafficking Area (HIDTA) intelligence centers. DHS reported that it is
currently using the assessment to track the extent to which fusion
centers have representatives from the other four entities on their
executive boards, are co-located with other entities, and issue
products jointly developed with other entities. These data should
provide DHS with a current baseline of the extent to which fusion
centers have such collaborative mechanisms in place. DHS also stated
that it is planning to: (1) Add questions to its annual assessment to
determine the degree to which these entities collaborate on their
analytical activities, (2) use the results to monitor and evaluate
coordination among field-based entities, and (3) report these data in
the National Network of Fusion Centers Final Report, which is expected
to be issued during 2013.
---------------------------------------------------------------------------
\1\ See GAO, Information Sharing: Agencies Could Better Coordinate
to Reduce Overlap in Field-Based Activities, GAO-13-471 (Washington,
DC, Apr. 4, 2013).
---------------------------------------------------------------------------
In addition, DHS reported that it, along with the Federal Bureau of
Investigation (FBI), co-chairs the Fusion Center Subcommittee of the
Interagency Policy Committee for information sharing, within the
Executive Office of the President. DHS stated that under the auspices
of the subcommittee, DHS, the FBI, and the Office of National Drug
Control Policy (ONDCP) can collaborate to identify and assess
characteristics of coordination among entities. The co-chair of the
Interagency Policy Committee for information sharing stated that
agencies are making progress in assessing ways in which fusion centers
and HIDTA intelligence centers can further collaborate, and are
starting to discuss RISS center collaboration, but have not addressed
opportunities to better collaborate with the FBI's FIGs and JTTFs. GAO
recommended that the Secretary of Homeland Security, Attorney General,
and director of ONDCP have their respective organizations work together
to assess areas where they can: (1) Take advantage of co-locating
entities, (2) have more participation across entities on their
respective executive boards, or (3) implement other ways to
collaborate. Agencies using the results of the annual fusion center
assessments and the subcommittee structure, among other tools, to
determine where else they can implement collaboration mechanisms
Nation-wide would be responsive to our recommendation.
DHS, DOJ, and ONDCP have not yet begun to address an additional
recommendation--that they develop a mechanism to hold the heads of
their respective field entities accountable for such collaboration and
demonstrating the results achieved through it. The three agencies
indicated that they already hold their field entities accountable for
sharing information and track this through metrics. However, our
recommendation goes beyond having agencies simply agree to share
information. Rather, the recommendation addresses the need for entities
to coordinate on their analytical and investigative activities and
resources, and be held accountable for doing so.
Given that the agencies have not yet addressed our recommendations,
GAO will continue to track their progress through our recommendation
follow-up process. In addition, the co-chair of the Interagency Policy
Committee for information sharing is planning to inventory how some of
these field-based entities are already collaborating and publicly
account for the results in an annual report to the Congress, which we
also recommended as a way to help hold agencies accountable.
Question 2. Is DHS on track to develop a uniform oversight function
and definition of R&D across its components by the May 2013 deadline as
reported to GAO? What form will this new function take (e.g. management
directive, policy guidance) and how will it consistently prevent
duplicative research activities?
Answer. As you know, in our September 2012 report, we made several
recommendations to the Secretary of Homeland Security to help DHS
better oversee and coordinate research and development (R&D)
investments and activities across the Department.\2\ Taking action to
implement these recommendations would better position the Department to
know what R&D activities it was undertaking and the costs of those
activities, as well as to address overlap, fragmentation, and the risk
of unnecessary duplication. Specifically, we recommended that DHS
develop Department-level policies and guidance for defining, reporting,
and coordinating R&D activities across the Department; and that DHS
establish a mechanism to track R&D projects. We also noted that such
policies and guidance could be included as an update to the
Department's existing acquisition directive.
---------------------------------------------------------------------------
\2\ GAO, Department of Homeland Security: Oversight and
Coordination of Research and Development Should Be Strengthened, GAO-
12-837 (Washington, DC: Sept. 12, 2012).
---------------------------------------------------------------------------
DHS agreed with our recommendations and planned to evaluate the
most effective approaches to better manage R&D across the Department.
For example, DHS said it was considering a management directive,
multicomponent steering committee, or new policy guidance to help
better oversee and coordinate R&D. According to DHS officials, a
decision on which one of these approaches to take was to be made by May
1, 2013. In following up with DHS in June 2013, the Department had not
yet determined which approach it would implement to address our
findings and recommendations, but planned to make a decision soon. We
believe that the options DHS is considering, if implemented
effectively, could address the issues we identified in our report and
meet the intent of our recommendations. Specifically, developing policy
guidance to define and coordinate R&D activities across the entire
Department could help ensure that DHS components that conduct R&D
report their efforts and investments consistently and are aware of each
other's research activities, which would help to avoid unnecessary
duplication.
Question 3. GAO reported that S&T knew that Secret Service and ICE
were conducting R&D in the area of mobile radios but CBP moved forward
with its own efforts anyway. Why didn't the components coordinate? Was
this a failure of the process? Who is to blame?
Answer. This example--cited from our September 2012 report--was
used to demonstrate a case of effective coordination between the
Science and Technology (S&T) Directorate and DHS components.\3\
Specifically, S&T officials stated that when Customs and Border
Protection (CBP) requested mobile radios to improve communication among
its field staff, S&T knew that the Secret Service and U.S. Immigration
and Customs Enforcement (ICE) were already working in that area because
of its existing R&D relationships with these components. To address
this technology need and better coordinate these R&D efforts, S&T
provided a senior official to lead and coordinate the Tactical
Communication Team to address the tactical communication needs of these
operational components, and to coordinate, as appropriate, R&D for
needed mobile radios. S&T officials stated that in the absence of a DHS
policy or process to prevent overlap or the risk of unnecessary
duplication, such relationships with components helped to mitigate that
risk.
---------------------------------------------------------------------------
\3\ GAO-12-837.
---------------------------------------------------------------------------
While relationships can help to prevent unnecessary duplication, we
found that DHS did not know the total amount its components invested in
R&D and had no policies or guidance for defining R&D and overseeing R&D
resources across the Department, which is needed to help effectively
manage these investments. We also found that DHS had not developed a
policy defining who is responsible for coordinating R&D and what
processes should be used to coordinate it, and had no mechanisms in
place to track all R&D activities to help prevent overlap,
fragmentation, or unnecessary duplication. As such, we recommended that
DHS develop Department-level policies and guidance for defining,
reporting, and coordinating R&D activities and establish a mechanism to
track R&D projects. DHS agreed with our recommendations and is taking
action to address them, as discussed in our response above. Taking
action to implement these recommendations would better position the
Department to know what R&D activities it was undertaking and the costs
of those activities, as well as to address overlap, fragmentation, and
the risk of unnecessary duplication.
Question 4. According to GAO's High-Risk report, DHS needs to
strengthen its management functions. Of the major DHS management areas
GAO reviewed, acquisition management had made the least progress. GAO
has previously reported billions of dollars in cost overruns in DHS
major acquisitions despite its acquisition policy that reflects aspects
of best practices. What legislative action could this subcommittee/
committee take to ensure the Department improves its acquisition
outcomes?
Answer. DHS acquisition policy consists of Acquisition Management
Directive 102-01, an associated guidebook, and 12 appendixes, and it
reflects many key program management practices that, when properly
implemented, would help DHS deliver systems on-time within established
budgets, and that meet performance expectations. For example, the
directive requires programs to develop documents demonstrating critical
knowledge that would help leaders make better-informed investment
decisions when managing individual programs. DHS has also taken
additional steps to enhance its acquisition management. For instance,
as of June 2013, DHS had launched seven Centers of Excellence to
enhance component acquisition capabilities and improve insight into
program management challenges before they become major problems, and
has also taken some steps to improve investment management. Each DHS
component further established a Component Acquisition Executive to
provide oversight and support to programs within the component's
portfolio, and DHS began to operate a business intelligence system to
improve the flow of information from component program offices to the
Management Directorate to support its governance efforts.
However, we have found that DHS leadership has continued to allow
programs it has reviewed to proceed with acquisition activities without
meeting program-management requirements, and has not always followed
its own guidance for managing and overseeing major acquisition
programs. Officials explained that DHS's culture has emphasized the
need to rapidly execute missions more than adhere to sound acquisition-
management practices. Our work has found that most of the Department's
major programs are at risk of cost growth and schedule slips as a
result. In particular, we found that these programs do not have
reliable cost estimates, realistic schedules, and agreed-upon baseline
objectives, which DHS acknowledges are needed to accurately track
program performance, limiting DHS leadership's ability to effectively
manage those programs and provide information to the Congress.
DHS recognizes the need to implement its acquisition policy more
consistently, but significant work remains. To help support continued
progress in this area, the subcommittee/committee could require that
DHS's annual budget justification include: (1) A list of major
acquisition programs that do not have baselines approved in accordance
with DHS acquisition policy, (2) statements for each of the programs
explaining why their baselines have not been approved, and (3) the
amount of funding DHS is requesting for each program lacking an
approved baseline. The program baseline is the agreement between
program-, component-, and Department-level officials establishing how
systems will perform, when they will be delivered, and what they will
cost. The program baseline also includes performance parameters
expressed in measurable, quantitative terms, which must be met in order
to accomplish an investment's goals. This information would enhance DHS
leadership's ability to effectively manage its acquisition programs and
inform Congressional decision makers' deliberations as they consider
funding options for such programs.
Questions From Chairman Jeff Duncan for Anne L. Richards
Question 1. The Visa Waiver Program was established in 1986 to
promote international tourism without jeopardizing U.S. security. The
Immigration and Nationality Act, as amended, requires the Secretary of
Homeland Security, in consultation with the Secretary of State, to
assess the law enforcement and security risks of Visa Waiver Program
countries, and terminate a country from the Visa Waiver Program if
necessary. In November 2012, the IG recommended that the Visa Waiver
Program Office develop processes for communicating with embassy and
foreign representatives the standards for Visa Waiver Program countries
to achieve compliance, and for meeting mandated time frames for
reporting on a country's compliance with program requirements. Has DHS
taken action to improve the Visa Waiver Program? What do you believe
still needs improvement?
Answer. The Visa Waiver Program Office (VWPO) concurred with our
recommendation and provided revised guidance for Embassy and State
Department desk officers for engaging with countries interested in the
VWP. This guidance was developed by the U.S. Department of State's
Bureau of Consular Affairs (CA) and cleared by the VWPO to help ensure
that Embassies and State desk officers do not discuss the VWP without
DHS and CA guidance and thus unduly raising VWP expectations of a
country. In addition, the VWPO developed diplomatic notes notifying a
VWP government of a review's conclusion and the resulting
determination.
Due to the sequester, the Office of International Affairs has
implemented a hiring freeze, delaying the recruitment for the existing
vacancy in the VWPO. The OIG recommended an assessment of the overall
staffing model and is concerned that the current staffing level
(including the vacancy) is inadequate to handle the review and
oversight of the increasing number of VWP countries.
Finally, on March 31, 2013, the VWPO implemented a new reporting
system to Congress, forwarding a batch of Congressional Summary Reports
on a quarterly basis. With this new system, the VWP hopes to avoid the
delays in producing mandated Summary Reports to the Committees.
Question 2. In February, I along with Mr. McCaul and Mr. Meehan
sent a letter to DHS on improving its financial management. We
emphasized the importance of improving the Department's financial
systems, leveraging best practices from other organizations, and
achieving a clean audit opinion. Even if the Department achieves a
clean audit opinion, much of their efforts still rely on manual data
calls to components for financial data. How sustainable is this
approach to maintaining a clean opinion? Does the Department have a
firm grasp of its finances?
Answer. DHS management recognizes the need to upgrade its financial
systems, most of which were inherited when the Department began
operations in 2003. These legacy information technology (IT) issues
have existed for more than a decade, causing the Department to rely on
complex manual workarounds and compensating processes to support its IT
environment and financial reporting. The financial IT issues have
become even more problematic with the passage of time, as more IT
systems are no longer FFMIA compliant, nor are they supported by the
original vendor. As a result, DHS is unable to attest to a strong
control environment, and must expend disproportionate human and
financial resources for even basic financial statement preparation. The
Department is currently unable to obtain an opinion on its internal
controls over financial reporting, as required by the DHS Financial
Accountability Act.
While DHS financial IT systems have serious internal control
deficiencies, and are expensive to maintain, the Department has
implemented compensating manual processes and workarounds to produce
its financial statements. Provided that the Department maintains the
effectiveness of the manual workarounds from year to year, and the
financial IT systems do not further deteriorate, then the Department
should be able to maintain a clean opinion once it has been achieved.
Thus, if the Department achieves a clean opinion in fiscal year 2013,
its current processes and resources should allow it to maintain this
opinion in the future.
Each year, the Department has improved its financial management by
addressing auditors' concerns and correcting identified significant
deficiencies. This improved financial management includes achieving a
qualified opinion in fiscal year 2012 on all financial statements after
years of disclaimers; fewer violations of the Antideficiency Act;
earlier identification of needed reprogramming of funds; reducing the
number of material weaknesses and significant deficiencies, as well as
mitigating the conditions that contribute to significant deficiencies;
and improving and stabilizing the capabilities of financial management
staff. Although it cannot guarantee future performance, the
Department's commitment and tone at all levels, including that of the
Secretary, have also improved measurably over the past 5 years.
We should note, however, that a Federal financial statements audit
is designed to provide reasonable, but not absolute assurance that the
financial statements are fairly stated. They are designed based on the
process used to audit publicly-traded companies, where the emphasis is
on ensuring reasonably accurate reporting of revenue. A financial
statement audit is not designed to identify waste or inefficiencies;
and the auditors' opinion does not cover any other operational or
performance aspects of the agency, systems, or the supporting documents
that are not part of the underlying financial statements.
Question 3. You reported that challenges exist for TSA to deter and
prevent exfiltration of sensitive information outside its network. What
steps has TSA taken to address these challenges?
Answer. Both recommendations No. 3 and No. 4 in our report
entitled, Transportation Security Administration Has Taken Steps To
Address the Insider Threat But Challenges Remain, were closed due to
continued non-compliance from the component. There appeared to be an
unwillingness of the part of the Department to meet, at a minimum, the
basic intent of each. We became concerned that either or both could
remain open and unresolved for a significant amount of time.
TSA supplied no further plan of action to address either of these
vulnerabilities.
We advised TSA of the risks it would accept for non-compliance. Our
decision to close the recommendations was based on TSA's apparent
acceptance of the risk it was taking by its non-compliance. This could
have been pursued further through the resolution process, but we opted
not to.
Questions From Chairman Jeff Duncan for Paul G. Stern
Question 1. Within DHS, there seem to be endless levels of
management review regarding certain programs and less so in others. How
does the private sector strike the appropriate balance between review
and action? Will Government ever be able to streamline its cumbersome
review process for programs?
Answer. Response was not received at the time of publication.
Question 2. Eliminating excess real property is another important
business practice. DHS has over 50 office locations within the DC
region alone. Realizing the need to reduce its real estate footprint,
DHS embarked in 2005 on an effort to build a consolidated headquarters.
However, the schedule for this project has slipped by about 6 years and
will cost over $4 billion to complete. How would the private sector
have tackled such a consolidation effort? What lessons learned could be
applied to DHS to ensure their effort to consolidate real estate is
done in the most cost-efficient manner?
Answer. Response was not received at the time of publication.
Question 3. As the third-largest Federal department, DHS owns a lot
of vehicles, uses a lot of gas and electricity, ships a ton of
documents--overall, has a huge logistical footprint. Are there lessons
to learn from the private sector in the area of logistics that DHS
should consider in attempting to eliminate wasteful spending?
Answer. Response was not received at the time of publication.
Questions From Chairman Jeff Duncan for Craig Killough
Question 1. Adjusting compensation, pay, and benefits for Federal
employees is not a popular topic of conversation of bureaucrats inside
the beltway. However, the private sector constantly evaluates the way
it compensates employees and takes steps to eliminate overhead and
management staff when it makes sense. What lessons could be learned
from business practices to better structure compensation, pay, and
benefits for Federal employees? What could also be applied to law
enforcement/security professionals as DHS is the largest Federal law
enforcement agency?
Answer. Chairman Duncan, thank you for the question. The treatment
of pay and compensation is a sensitive topic, but there are lessons to
be learned from the private sector. PMI's Pulse of the
ProfessionTM report and other research, including our talent
report, shows significant differences in organizational performance
that is directly dependent on how their project and program managers
are recognized.
Throughout our Pulse of the Profession report, which was submitted
to the subcommittee with my testimony, you will read how high-
performing organizations are doing everything they can to minimize risk
by improving their project and program outcomes. Organizations that
combine excellence in tactical project implementation with alignment to
strategy complete projects successfully 90% of the time, while poorer
performers are successful only 34% of the time. And that gap (which
nets out to somewhere in the neighborhood of $260 million dollars saved
on a billion-dollar project) delivers significant value for the
organizations that do it well.
One of the key lessons from this is that high-performing
organizations provide consistent and continuous development for project
managers to enhance organizational success and are significantly more
likely than low performers to have a defined career path for project
managers. An established career path will allow for an appropriate
definition of a compensation structure. Many private-sector
organizations align their career path with appropriate compensation
structures supported by annual salary research addressing the specific
career path. Furthermore, this process ties performance and achievement
to responsibilities. Each step along the career path should be clearly
outlined with performance metrics and designations for training,
certifications, or other recognitions of skill and merit. A career path
is an important tool for meeting the human capital challenges of the
Federal workforce, particularly evaluating talent, retaining high
performers, and incentivizing career growth through skill development
and knowledge. The Pulse of the Profession report highlighted the
importance of a career path in improving the capabilities of project
professionals to enable excellence, as 68% of high-performing
organizations have a career path as opposed to only 26% of low-
performing organizations. Having a policy to develop competency and
ensuring the use of project management standards is also a significant
element of high-performing organizations. These reforms to the
structure of the workforce will better align the Government to the
private sector.
Finally, for any organization, including law enforcement
organizations, having clear standards that are compatible with the
private sector or common among organizations is critically important
for sharing knowledge, transparency, and oversight. Standards,
especially risk management standards, should be uniform and aligned
with the Department's components so that its executives and Congress
can evaluate risks faced by each law enforcement division of the
Department and allocate resources according to a common understanding
of the risks. The process is very similar to companies using metrics
like earnings per share as a measure to provide investors.
Question 2. In tightening budget times, what are some cost-
effective ways to train program managers? What practices would you
recommend DHS adopt to continue to improve its training program?
Answer. Chairman Duncan, thank you for this important question.
Finding resources and developing efficient training is a challenge for
all organizations. PMI's Pulse of the Profession shows that often
Government organizations have program management offices (like the
Program Assessment and Risk Management Office at DHS), yet the practice
of developing program management talent may not be viewed as a
strategic investment. Our research shows that less than 40% of
Government organizations have a formal process for developing program
manager competency. Training to standards, the use of mentoring, and
having a job classification and career path are critical. Our research
also shows standardization of practices and tools, especially in
program and project management, and the use of certifications leads to
a more efficient allocation of resources and a greater ability to lead
and innovate. The Department should leverage the resources of other
agencies in the U.S. Government; we would recommend organizations like
the Defense Acquisition University, NASA's Academy of Program/Project
Engineering Leadership (APPEL) and the VA's Acquisition Academy. Easing
access for DHS personnel to these resources and aligning the program
management criteria with standard practices could be highly cost-
effective for the taxpayer--reducing duplication and waste, while
improving access to training for the Department.
Question 3. When measuring performance in the private sector, what
are some good performance metrics by which to gauge success? What types
of performance goals are transferrable from the private sector to DHS?
Answer. Chairman Duncan, for members of the program and project
management community, almost any program or project management metric
is transferable from the private sector to DHS. These metrics include
scope, budget, resource utilization, and risk. There have been a number
of steps taken already by the Department, such as the creation of the
Program Assessment and Risk Management Office (PARM), to better align
these metrics and requirements across the Department. While these are
important steps, however, there is one area that should be emphasized
and will provide a significant amount of support to measure and gauge
success--that is the use of portfolio management. Portfolio management
lets executives look holistically across the group of projects to get
the pulse of the portfolio's return on investment (ROI) and strategic
alignment. PMI and a separate PriceWaterhouseCoopers survey \1\ found
that use of portfolio management leads to increases in key performance
indicators including quality, scope, budget (cost), schedule (on time)
and business benefits. Additionally, PMI's Pulse of the Profession
report showed that organizations with mature portfolio management
practices report an average of 76% of their project meet business goals
as opposed to an average of 56% of organizations that don't use
portfolio management as often or as well.
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\1\ Insights and Trends: Current Portfolio, Program, and Project
Management Practices, PwC, 2012. Results based on a survey of 1,524
respondents from 38 countries and within 34 industries.
---------------------------------------------------------------------------
Implementing a strong portfolio management policy will provide
metrics and transparency to better gauge the Department's success. A
model for the Department of Homeland Security could be the
PortfolioStat currently being utilized by the Office of Management and
Budget and several departments, including the Department of Health and
Human Services and the Department of Commerce in IT. The Senate
Homeland Security and Government Affairs Committee held a hearing on
this subject in June 2013.
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