Implementing and Transforming the Department of Homeland Security

What We Found | What Needs to Be Done | Key Reports

Why It's High Risk

In 2003, GAO designated implementing and transforming the Department of Homeland Security (DHS) as high risk because DHS had to transform 22 agencies—several with major management challenges—into one department, and failure to effectively address DHS’s management and mission risks could have serious consequences for U.S. national and economic security. GAO’s prior work on mergers and acquisitions, undertaken before the creation of DHS, found that successful transformations of large organizations, even those faced with less strenuous reorganizations than DHS, can take years to achieve. DHS, with more than 200,000 employees and an annual budget of more than $40 billion, is now the third largest federal department, and its transformation is critical to achieving its homeland security missions.

^ Back to topWhat We Found

DHS has taken action to implement, transform, and strengthen its management functions. For example, the Secretary and Deputy Secretary of Homeland Security, and other senior officials, have demonstrated commitment and leadership support to address the department’s management challenges. The Secretary designated the Under Secretary for Management as responsible for coordinating efforts to address this high-risk area. In January 2011, DHS provided us with its updated Integrated Strategy for High Risk Management, which details the department’s plans for addressing the high risk designation. The strategy contains information on, among other things, the implementation and transformation of DHS, such as corrective actions to address challenges within each management area and officials responsible for implementing these corrective actions. GAO plans to provide DHS with detailed feedback on the strategy, as well as monitor its implementation, going forward.

While DHS has taken action to implement and transform its management functions, this area remains high risk because DHS has not yet demonstrated sustainable progress in implementing corrective actions and addressing key challenges within its management functions, and in integrating those functions within and across the department and its components. DHS also needs to identify and acquire the resources needed to address those challenges. DHS has also established a framework to monitor implementation of corrective actions through various departmentwide committees, but these committees have just begun to monitor implementation efforts and DHS is working to develop measures to address its progress in implementing corrective actions. Additionally, DHS has begun to implement corrective actions, but has not yet demonstrated sustainable, measurable progress in addressing key challenges within each management function and in the integration of those functions.

Regarding its management functions, DHS has made progress in implementing and strengthening the functions, but continues to face significant weaknesses that hinder the department’s transformation efforts and its ability to meet its missions.

DHS has revised its acquisition management oversight policies to include more detailed guidance to inform departmental acquisition decision making. However, as GAO reported in June 2010, DHS’s Acquisition Review Board had not reviewed most major programs, and DHS did not yet have accurate cost estimates for most programs. GAO has recommended that, among other things, DHS establish a mechanism to identify and track on a regular basis new and ongoing major investments and ensure compliance with actions called for by investment oversight boards, and that investment decisions be transparent and documented as required. DHS generally concurred with these recommendations and reported taking action to begin to address some of them, including developing the Next Generation Periodic Reporting System to capture and track key program information, and monitoring cost and schedule performance, contract awards and program risks.
DHS has strengthened its enterprise architecture, or blueprint to guide information technology acquisitions, but has not yet fully defined and prioritized all architecture segments. Since 2007, GAO has made a range of recommendations to strengthen DHS information technology management, such as establishing procedures for implementing project-specific investment management policies, and policies and procedures for portfolio-based investment management. DHS generally concurred with these recommendations and stated it would use GAO’s findings to improve its investment management and investment review procedures. DHS has since reported taking action to address some of the recommendations, including issuing a new departmental directive and related guidance for information technology acquisitions in November 2008.
DHS has developed corrective action plans for its financial management weaknesses, and the number of conditions contributing to departmentwide material weaknesses has declined at the component level since 2005. However, DHS has been unable to obtain an unqualified audit opinion on its departmentwide financial statements and has not yet implemented a consolidated financial management system. In December 2009, GAO recommended that DHS establish contractor oversight mechanisms to monitor its procurement of a consolidated financial management system; expedite the completion of the development of its financial management strategy; and develop a human capital plan for the system that identifies needed skills for the acquisition and implementation of the new system. DHS generally agreed with these recommendations and described actions it had taken and planned to take to address them. DHS noted, for example, the importance of being vigilant in its oversight of the program and that it had already taken some action such as developing a robust concept of operations for the financial system. In November 2010, DHS awarded a contract for the financial system, which will enable the department to move forward with the standardization of business processes and fiscal reporting capabilities.
DHS issued plans for human capital management and employee development. For example, in December 2010 DHS issued its Workforce Strategy for Fiscal Years 2011-2016 which contains the department’s workforce goals, objectives, and performance measures for human capital management. DHS’s scores on the Partnership for Public Service’s 2010 rankings of Best Places to Work in the Federal Government improved from prior years, but DHS was ranked 28 out of 32 large federal agencies on employee satisfaction and commitment. DHS also has not fully assessed its needs and capabilities to identify shortfalls, such as foreign language gaps. In June 2010, GAO recommended that DHS comprehensively assess the extent to which existing foreign language programs and activities address foreign language shortfalls, and incorporate the results of these foreign language assessments into the department's future strategic and workforce planning documents. DHS generally concurred with our recommendations and reported taking actions to address them. For example, DHS stated that it would establish a task force consisting of DHS offices and components to, among other things, identify foreign language requirements and assess the necessary skills.

Challenges within acquisition, information technology, financial, and human capital management have resulted in performance problems and mission delays. For example, because of acquisition management weaknesses, major programs, such as the recently canceled Secure Border Initiative Network virtual fence, have not met capability, benefit, cost, and schedule expectations. Further, financial management internal control weaknesses have impeded DHS from providing reliable and timely financial data to support daily operational decision making. In addition, human capital management challenges at the Federal Protective Service within DHS, such as some new security officers not completing basic law enforcement training and lack of data on officers’ skills and abilities, have hindered the agency’s ability to protect federal facilities and conduct law enforcement activities.

DHS has also taken action to integrate its management functions by, for example, establishing common policies within each function. In February 2010, DHS developed an initial plan for management integration in which it identified seven initiatives for achieving management integration, including implementing a consolidated financial management system, developing a balanced workforce strategy, and consolidating DHS headquarters operations at one location. However, GAO reported that this initial plan did not contain details on how the initiatives contribute to management integration, among other things. In January 2011 DHS provided us with its updated management integration plan, which is part of the Integrated Strategy for High Risk Management. The plan contains information on ongoing and planned initiatives to integrate its management functions within and across the department and its components. For example, DHS plans to establish a framework for managing investments across its components and management functions to strengthen integration within and across those functions, as well as to ensure mission needs drive investment decisions. This framework seeks to enhance DHS resource decision-making and oversight by creating new department-level councils to identify priorities and capability gaps, revising how DHS components and lines of business manage acquisition programs, and developing a common framework for monitoring and assessing implementation of investment decision. GAO will continue to provide DHS with feedback on their plans and monitor their implementation.

^ Back to topWhat Needs to Be Done

Based on GAO’s prior work, we have identified and provided to DHS key actions and outcomes that are critical to addressing the challenges within the department’s management functions and in integrating those functions within and across the department. These key outcomes include, among others:

validating required acquisition documents at major milestones in the acquisition review process,
demonstrating that enterprise architecture documents provide a meaningful basis for informing investment decisions,
obtaining and then sustaining unqualified audit opinions for at least two consecutive years on the departmentwide financial statements while demonstrating measurable progress in reducing material weaknesses and significant deficiencies, and
implementing the Workforce Strategy for Fiscal Years 2011-2016 and linking workforce planning efforts to strategic and program-specific planning efforts to identify current and future human capital needs.

In addition to addressing these actions and outcomes, DHS also needs to implement its Integrated Strategy for High Risk Management, and continue its efforts to

identify and acquire resources needed to achieve key actions and outcomes;
implement a program to independently monitor and validate corrective measures and
show measurable, sustainable progress in implementing corrective actions and achieving key outcomes.

Demonstrated, sustained progress in all of these areas will help DHS strengthen and integrate management functions within and across the department and its components.