Homeland Security:

DHS Needs to Improve Ethics-Related Management Controls for the Science and Technology Directorate

GAO-06-206: Published: Dec 22, 2005. Publicly Released: Dec 22, 2005.

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The Department of Homeland Security's (DHS) Science and Technology (S&T) Directorate was established to focus on areas such as addressing countermeasures for biological threats. To do this, it hired experts from the national laboratories under the authority of the Intergovernmental Personnel Act (IPA). The Directorate is organized into portfolios, led by portfolio managers. Questions have been raised about potential conflicts of interest for these individuals, since a portion of the Directorate's research funds have gone to the national laboratories. GAO was asked to examine (1) the management controls established within the Directorate to help guard against conflicts of interest for IPA portfolio managers; and (2) the role of the IPA portfolio managers, particularly those from national laboratories, in determining where research and development projects were directed.

DHS's S&T Directorate is working to improve its management controls to help guard against conflicts of interest for its IPA portfolio managers, but it can do more. In the first few years of DHS's existence, the S&T Directorate focused on the urgency of organizing itself to meet the nation's homeland security research and development requirements, and had few resources devoted to developing its management infrastructure, including the management controls to guard against conflicts of interest. In the past year, steps have been taken to improve these controls. For example, in June 2005, DHS implemented a new process for hiring IPA employees. Although the S&T Directorate is taking steps to improve its ethics-related management controls, several conditions still need to be addressed to better ensure that its IPA portfolio managers comply with the conflict of interest laws. First, the process for determining where research and development projects and funds are directed, including the role of the IPA portfolio managers, has never been finalized. Second, the S&T Directorate does not require documentation of how determinations are made about where research and development projects and funds are directed. Third, S&T Directorate officials are only now seeking waivers, where appropriate, and considering whether to take other actions that would allow IPA portfolio managers to participate in certain matters. Finally, DHS officials told us that S&T Directorate employees, including those hired under the IPA, are offered the same new employee and annual ethics training as are all DHS employees. However, employees hired under the IPA do not receive regular training that addresses their unique situation; namely that they have an agreement for future employment with an entity that may benefit from the S&T Directorate's funding. The role of the IPA portfolio managers, five of whom came from the national laboratories, in determining where research and development projects and associated funds were directed was unclear. This was due to several factors. First, as previously discussed, the S&T Directorate has never finalized a standard process for determining where research and development projects and funds are directed, or the decision-making role of the IPA portfolio managers within such a process. Second, the extent of the IPA portfolio managers' participation in making these determinations was unclear because there was no documentary evidence of how these determinations were actually made. Third, the testimonial evidence on the extent of the IPA portfolio managers' involvement was inconsistent and, at times, vague. Because we could not determine whether or not the IPA portfolio managers participated "personally and substantially" in the decision-making process, which is precluded by 18 U.S.C. 208, GAO contacted the Acting Director of the Office of Government Ethics (OGE) in September 2005. GAO suggested that OGE review this matter further in conjunction with its planned ethics program review of DHS. In December 2005, OGE officials told us that they plan to examine, among other matters, the transparency and accountability issues in DHS's ethics program raised by our findings.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: According to a March 21, 2007, e-mail from DHS's Science and Technology Directorate, all S&T IPA employees received mandatory ethics training for 2006. GAO received a copy of the Staff Management System Report that shows completed ethics training for IPA employees. S&T had several classroom training sessions in the fall of 2006, as well as new hire and "Ethicsburg" training. The training was conducted by the Office of the General Counsel.

    Recommendation: To help IPA portfolio managers comply with the conflict of interest law, the Secretary of Homeland Security should direct the Undersecretary of the S&T Directorate to improve the S&T Directorate's management controls related to potential conflicts of interest by providing regular ethics training for IPA portfolio managers that focuses on the application of the ethics statutes and regulations to their unique financial situation.

    Agency Affected: Department of Homeland Security: Directorate of Science and Technology

  2. Status: Closed - Implemented

    Comments: In a March 29, 2007, e-mail from DHS's Science and Technology Directorate, DHS stated that for the seven IPAs identified during our review, DHS considered 18 U.S.C 208(b)(1) waivers using Office of Government Ethics templates for waivers. We had also suggested that DHS consult with OGE in considering waivers. However, after internal deliberations, according to DHS, it decided not to pursue the waivers because each IPA's interests in his or her sending institution were a substantial part of his or her gross worth. In such cases, the proposed 18 U.S.C. 208(b)(1) waivers were clearly not appropriate, according to DHS.

    Recommendation: To help IPA portfolio managers comply with the conflict of interest law, the Secretary of Homeland Security should direct the Undersecretary of the S&T Directorate to improve the S&T Directorate's management controls related to potential conflicts of interest by determining, in consultation with DHS's DAEO and OGE, whether waivers of 18 U.S.C. 208 or authorizations related to the appearance of a conflict of interest are appropriate, or other actions are needed.

    Agency Affected: Department of Homeland Security: Directorate of Science and Technology

  3. Status: Closed - Implemented

    Comments: In response to our recommendation, DHS's S&T Directorate took steps to ensure that IPA portfolio managers are no longer involved in any resource management decisions affecting their sending institutions. Based on e-mail received from DHS on March 29, 2007, in the summer of 2006, S&T revisited the assignments of all IPAs to ensure that no IPAs were involved in resource management activities or setting program requirements where there was a chance that such requirements could be performed by a pool of performers in which IPA's sending institution is a part. Because S&T took actions necessary to address the focus of our recommendation, to ensure that IPAs are not in a position to break conflict of interest laws, we consider this recommendation closed.

    Recommendation: To help IPA portfolio managers comply with the conflict of interest law, the Secretary of Homeland Security should direct the Undersecretary of the S&T Directorate to improve the S&T Directorate's management controls related to potential conflicts of interest by developing a system to document how decisions are made within the IPTs.

    Agency Affected: Department of Homeland Security: Directorate of Science and Technology

  4. Status: Closed - Implemented

    Comments: DHS has not provided us with information that its R&D process has been finalized, but DHS's S&T Directorate took steps to ensure that IPA portfolio managers are no longer involved in any resource management decisions affecting their sending institutions. Based on e-mail received from DHS's Science and Technology Directorate on March 29, 2007, in the summer of 2006, S&T revisited the assignments of all IPAs to ensure that no IPAs were involved in resource management activities or setting program requirements where there was a chance that such requirements could be performed by a pool of performers in which and IPA's sending institution is a part. Because S&T took actions necessary to address part of our recommendation, we consider this recommendation to be closed.

    Recommendation: To help IPA portfolio managers comply with the conflict of interest law, the Secretary of Homeland Security should direct the Undersecretary of the S&T Directorate to improve the S&T Directorate's management controls related to potential conflicts of interest by finalizing the S&T Directorate's R&D process and defining and standardizing the role of the IPA portfolio managers in this process.

    Agency Affected: Department of Homeland Security: Directorate of Science and Technology

  5. Status: Closed - Implemented

    Comments: In June 2008, DHS's S&T Directorate provided us with several documents that make up their monitoring and oversight program for IPA personnel. Included in this program are procedures for: 1) selecting IPAs for S&T assignments, 2) reimbursing IPA per diem expenses, 3) ensuring that IPA invoices are processed and paid consistently and appropriately, 4) modifying IPA assignments, and 5) terminating IPA assignments. In addition, the S&T Directorate created a "Intergovernmental Personnel Act Program Reference Guide" which covers all aspects of IPA employment. For example, the Reference Guide includes information on ethics and standards of conduct, and conflicts of interest issues, including financial disclosure requirements and post-employment restrictions.

    Recommendation: To help IPA portfolio managers comply with the conflict of interest law, the Secretary of Homeland Security should direct the Undersecretary of the S&T Directorate to improve the S&T Directorate's management controls related to potential conflicts of interest by establishing a monitoring and oversight program of ethics-related management controls.

    Agency Affected: Department of Homeland Security: Directorate of Science and Technology

 

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