Secret Service:

Additional Guidance Would Enhance Financial Management and Communication of Candidate Protection Spending to Congress

GAO-10-762: Published: Jun 30, 2010. Publicly Released: Jun 30, 2010.

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Due to the unprecedented pace and crowds of the 2008 presidential campaign, the U.S. Secret Service (Secret Service), a component of the Department of Homeland Security (DHS), exceeded its budgeted amount for fiscal year 2009 presidential candidate nominee protection funding, but did not notify Congress of this shortfall (fiscal year 2009 shortfall) until June 2009--5 months after the Inauguration. In response to the Conference Report accompanying the 2010 DHS Appropriations Act, this report addresses the extent to which, at the time of the fiscal year 2009 shortfall, (1) Secret Service had the necessary internal controls in place to help ensure it could effectively manage and report on funds for presidential candidate protection; and (2) Secret Service and DHS had policies and procedures in place to help ensure that information related to the fiscal year 2009 shortfall was communicated to DHS and Congress. To conduct the audit work, GAO reviewed appropriation laws and regulations, Secret Service financial reports, and various DHS and Secret Service policy and procedural documents. GAO also interviewed officials from DHS and Secret Service.

At the time of the fiscal year 2009 shortfall, Secret Service did not have--and still does not have--all of the necessary internal controls, including policies and procedures, in place to help ensure it can effectively manage and report on funds for presidential candidate protection. For example, the agency relied on undocumented manual processes to prepare and review two key reports--the Monthly Execution and Staffing Report and the Presidential Campaign Cost Report--used to monitor obligations, manage its funds by subaccounts, and report to Congress. Documenting the processes to prepare and review these reports could decrease the risk of future reporting errors and be useful to managers in controlling operations. Secret Service also did not have documented procedures for charging costs for certain candidate protection activities that cut across multiple subaccounts. The subaccounts are not discrete, and Secret Service officials stated that they lacked clarity and procedures on which to use to cover costs for certain protection activities. Documenting policies and procedures for charging such costs could be useful in controlling operations and monitoring budget execution. Also, neither DHS nor Secret Service had documented benchmarks to serve as an early warning system when monitoring obligations and expenditures for potential future funding shortfalls. Lastly, DHS' budget guidance did not specify how to develop such benchmarks. Developing and implementing guidance on how to document benchmarks could help ensure that any future potential shortfalls in presidential candidate protection funds are identified in a timely manner. DHS and Secret Service lacked sufficient policies and procedures to ensure that information related to the fiscal year 2009 shortfall was communicated to DHS and Congress. At the time of the shortfall, DHS had written guidance on how to communicate a violation of the Antideficiency Act--which prohibits federal officials from obligating or expending funds in excess of appropriations--and notify Congress of a reprogramming, or shifting funds within an appropriation. However, because they mistakenly determined the guidance did not apply, Secret Service informed DHS of the shortfall and requested assistance in covering it. GAO issued a legal opinion determining that DHS and Secret Service violated reprogramming notification requirements and the Antideficiency Act. Further, DHS had no written guidance on communicating a reprogramming that did not require congressional notification. Since the shortfall, DHS and Secret Service developed a Corrective Action Plan (CAP) to address issues related to the shortfall. DHS implemented two of the four communication-related CAP measures, but has not provided written guidance for implementing the other two, which require that (1) components complete internal funding reviews prior to submitting reprogramming requests and articulate the negative impact of using internal resources to cover shortfalls, and (2) DHS provide timely submission of reprogramming notifications to the Appropriations Committees.Implementing these measures could help ensure better communication among Secret Service, DHS, and Congress in the event of future shortfalls, and help DHS and the committees assess whether DHS effectively provides information about potential shortfalls. GAO recommends that DHS and Secret Service (1) document certain financial management, cost allocation, and benchmark procedures, and (2) provide guidance on remaining communications-related corrective actions. DHS concurred.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To improve financial management controls and communication related to presidential candidate protection budget execution, the Secretary of DHS should direct the DHS CFO to develop and provide written guidance clarifying the elements necessary in a reprogramming request from a component to document internal funding reviews and the negative impact of using internal sources.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: Due to the unprecedented pace and crowds of the 2008 presidential campaign, the U.S. Secret Service (Secret Service), a component of the Department of Homeland Security (DHS), exceeded its budgeted amount for fiscal year 2009 presidential candidate nominee protection funding, but did not notify Congress of this shortfall until June 2009--5 months after the Inauguration. Following this shortfall, DHS and Secret Service developed a corrective action plan (CAP) to, among other things, improve communication about internal and external reprogrammings--shifting funds within an appropriation. One CAP measure required that components complete internal funding reviews prior to submitting reprogramming requests and articulate the negative impact of using internal resources to cover the shortfall; however, we found that DHS had not provided written guidance describing what components needed to do to implement this measure. As a result, we recommended that the Secretary of DHS direct the DHS Chief Financial Officer to develop and provide guidance clarifying the elements necessary in a reprogramming request from a component to document internal funding reviews and the negative impact of using internal sources. In May and July, 2010, DHS revised its guidance to clarify the elements necessary in a reprogramming request to do so, including providing a sample reprogramming request that contains these elements. The revised guidance is consistent with our recommendation.

    Recommendation: To improve financial management controls and communication related to presidential candidate protection budget execution, the Secretary of DHS should direct the DHS Chief Financial Officer (CFO) to ensure that DHS' components, including Secret Service, have guidance and training on how to develop and document appropriate benchmarks for monitoring obligations and expenditures.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: Due to the unprecedented pace and crowds of the 2008 presidential campaign, the U.S. Secret Service (Secret Service), a component of the Department of Homeland Security (DHS), exceeded its budgeted amount for fiscal year 2009 presidential candidate nominee protection funding, but did not notify Congress of this shortfall until June 2009--5 months after the Inauguration. We found that neither DHS nor Secret Service had documented early warning system benchmarks to use when monitoring Secret Service obligations and expenditures to alert them of potential shortfalls. As a result, we recommended that DHS ensure that DHS' components, including Secret Service, have guidance and training on how to develop and document appropriate benchmarks for monitoring obligations and expenditures. In November 2013, DHS provided revised budget execution training to Secret Service officials, which provided guidance on how to develop and document appropriate benchmarks for monitoring obligations and expenditures. The training is consistent with our recommendation.

    Recommendation: To improve financial management controls and communication related to presidential candidate protection budget execution, the Secretary of DHS should direct the Director of Secret Service to develop written policies and procedures for charging costs when protection activities may be funded by multiple Secret Service's Program, Project, or Activity (PPA) levels.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: Due to the unprecedented pace and crowds of the 2008 presidential campaign, the U.S. Secret Service (Secret Service), a component of the Department of Homeland Security (DHS), exceeded its budgeted amount for fiscal year 2009 presidential candidate nominee protection funding, but did not notify Congress of this shortfall until June 2009--5 months after the Inauguration. We found that Secret Service did not have the necessary documented policies and procedures for splitting costs for presidential candidate protection activities across multiple Programs, Projects, or Activities (PPA) which increases the risk of reporting incomplete, inaccurate information on these activities. As a result, we recommended that Secret Service develop written policies and procedures for charging costs when protection activities may be funded by multiple PPAs. In October 2011, Secret Service issued a Directive (ADM-02(02)) to provide written guidance and procedures for charging costs when protection activities may be funded by multiple PPAs and reprogramming guidance. This policy and procedure applies when budgeting, obligating, and authorizing payment for activities that could be funded by multiple PPAs. The most commonly used PPAs in this situation are protection of persons and facilities; National Special Security Events; and presidential candidate nominee protection. The Directive includes guidance and procedures explaining how and when multiple PPAs are used in the protective context, and outlines decision logic for determining the appropriate PPA. The Directive also includes guidance for internally reprogramming or realigning funding such as from one PPA to a different PPA. These policies and procedures are consistent with our recommendation.

    Recommendation: To improve financial management controls and communication related to presidential candidate protection budget execution, the Secretary of DHS should direct the Director of Secret Service to develop documented procedures for preparing and reviewing its Monthly Execution and Staffing Reports and Presidential Campaign Cost Reports.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: Due to the unprecedented pace and crowds of the 2008 presidential campaign, the U.S. Secret Service (Secret Service), a component of the Department of Homeland Security (DHS), exceeded its budgeted amount for fiscal year 2009 presidential candidate nominee protection funding, but did not notify Congress of this shortfall until June 2009--5 months after the Inauguration. We found that Secret Service did not have the necessary documented internal control procedures in place, including financial management policies and procedures, to help ensure it could effectively manage and report on funds for presidential candidate protection. As a result, we recommended that Secret Service develop documented procedures for preparing and reviewing its Monthly Execution and Staffing Reports and Presidential Campaign Cost Reports. In October 2011, Secret Service issued a Directive (ADM-02(03)) to outline the process and provide guidance on preparing the Monthly Execution and Staffing Report. This Directive outlines the various sources of data to be used for report production, and also specifies who is responsible for preparing the supporting documentation and assembling it into the monthly report, and who is responsible for approving the report and ensuring that it is submitted, as required, to DHS. The Directive references the detailed, step-by-step process for creating this report which is documented in the internal operating procedure titled "Development of the Campaign Cost Report," maintained by the budget staff. These policies and procedures are consistent with our recommendation.

    Recommendation: To improve financial management controls and communication related to presidential candidate protection budget execution, the Secretary of DHS should direct the DHS CFO to define time frames by which DHS could assess timeliness of submissions of reprogramming notifications to the Appropriations Committees.

    Agency Affected: Department of Homeland Security

    Status: Closed - Implemented

    Comments: Due to the unprecedented pace and crowds of the 2008 presidential campaign, the U.S. Secret Service (Secret Service), a component of the Department of Homeland Security (DHS), exceeded its budgeted amount for fiscal year 2009 presidential candidate nominee protection funding, but did not notify Congress of this shortfall until June 2009--5 months after the Inauguration. Following this shortfall, DHS and Secret Service developed a corrective action plan (CAP) to, among other things, improve communication about internal and external reprogrammings--shifting of funds within an appropriation. One CAP measure required that all reprogrammings over $5 million or 10 percent of the account--about which, by law, DHS must notify the Committees on Appropriations--be submitted to the Appropriations Committees in a timely manner. However, we found that DHS had not provided written guidance describing what components needed to do to implement this measure. As a result, we recommended that the DHS Chief Financial Officer (CFO) define time frames by which DHS could assess the timeliness of submissions of reprogramming notifications to the Appropriations Committees. In September 2013, DHS revised its guidance to define timeframes for reprogramming processing. The revised guidance is consistent with our recommendation.

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