GAO-10-131, Department of Homeland Security: Actions Taken Toward Management Integration, but a Comprehensive Strategy Is Still Needed


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Report to the Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia, Committee on Homeland 
Security and Governmental Affairs, U.S. Senate: 

United States Government Accountability Office: 
GAO: 

November 2009: 

Department of Homeland Security: 

Actions Taken Toward Management Integration, but a Comprehensive 
Strategy Is Still Needed: 

GAO-10-131: 

GAO Highlights: 

Highlights of GAO-10-131, a report to the Subcommittee on Oversight of 
Government Management, the Federal Workforce, and the District of 
Columbia, Committee on Homeland Security and Governmental Affairs, U.S. 
Senate. 

Why GAO Did This Study: 

Significant management challenges exist for the Department of Homeland 
Security (DHS) as it continues to integrate its varied management 
processes, policies, and systems in areas such as financial management 
and information technology. These activities are primarily led by the 
Under Secretary for Management (USM), department management chiefs, and 
management chiefs in DHS’s seven components. GAO was asked to examine: 
(1) the extent to which DHS has developed a comprehensive strategy for 
management integration that includes the characteristics recommended in 
GAO’s 2005 report; (2) how DHS is implementing management integration; 
and (3) the extent to which the USM is holding the department and 
component management chiefs accountable for implementing management 
integration through reporting relationships. GAO reviewed DHS plans and 
interviewed management officials in DHS’s headquarters and in all 
components. 

What GAO Found: 

DHS has not yet developed a comprehensive strategy for management 
integration as required by the 9/11 Commission Act of 2007 and with the 
characteristics GAO recommended in a 2005 report. Although DHS stated 
in response to the 2005 report that it was developing an integration 
strategy, it has not yet done so, in part because it has focused on 
building operations capacity within functional management areas. In the 
absence of a comprehensive management integration strategy, DHS 
officials stated that documents such as management directives and 
strategic plans address aspects of a management integration strategy 
and can help the department to manage its integration efforts. However, 
they do not generally include all of the strategy characteristics GAO 
identified, such as identifying the critical links that must occur 
among management initiatives and time lines for monitoring the progress 
of these initiatives. In addition, DHS has increased the number of 
performance measures for the Management Directorate, but has not yet 
established measures for assessing management integration across the 
department, although DHS officials stated that the department intends 
to do so. Without these measures DHS cannot assess its progress in 
implementing and achieving management integration. 

In the absence of a comprehensive strategy, DHS’s Management 
Directorate has implemented management integration through certain 
initiatives and mechanisms to communicate and consolidate management 
policies, processes, and systems. The directorate uses councils to 
communicate information related to the implementation of management 
initiatives, among other things. The directorate has also established 
governance boards and processes to manage specific activities. Further, 
the directorate is in the process of consolidating certain management 
systems. However, without a documented management integration strategy, 
it is difficult for DHS, Congress, and other key stakeholders to 
understand and monitor the critical linkages and prioritization among 
these various efforts. 

The USM and department and component management chiefs are held 
accountable for implementing management integration through reporting 
relationships at three levels—between the Secretary and the USM, the 
USM and department chiefs, and the department and component chiefs—in 
which, among other things, the Secretary of Homeland Security, USM, and 
department chiefs are required to provide input into performance plans 
and evaluations. The Deputy Secretary—through delegation from the 
Secretary—and the USM have provided input into the USM’s and department 
chiefs’ plans and evaluations, respectively. Although department chiefs 
are required by management directives to provide component chiefs with 
written objectives at the start of the annual performance cycle, in 
fiscal year 2009 only two out of six department chiefs provided such 
input to component chiefs. Without ensuring that the management chiefs 
provide input into component chiefs’ performance plans and evaluations 
as required, the directorate cannot be sure that component chiefs are 
fully implementing management integration. 

What GAO Recommends: 

Once DHS develops a management integration strategy, GAO recommends 
that it establish performance measures for assessing management 
integration, and that it fully implement its current performance 
management policies between the department and component management 
chiefs. DHS’s USM commented that DHS is taking certain actions to 
address our recommendations. 

View GAO-10-131 or key components. For more information, contact 
Bernice Steinhardt at (202) 512-6543 or steinhardtb@gao.gov, or David 
Maurer at (202) 512-8777 or maurerd@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Departmental Documents Address Aspects of Management Integration, but 
DHS Has Not Yet Developed a Comprehensive Strategy: 

DHS's Management Directorate Has Taken Actions to Communicate and 
Consolidate Management Policies, Processes, and Systems: 

Performance Management Practices Could Be More Consistently Applied 
Departmentwide to Strengthen Reporting Relationships between Department 
and Component Management Chiefs: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Comments from the Department of Homeland Security: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Assessment of the Extent to Which DHS Documents Include GAO- 
Recommended Characteristics of a Management Integration Strategy: 

Table 2: DHS Management Directorate Fiscal Years 2008 and 2009 
Performance Measures: 

Table 3: DHS's Management Councils: 

Table 4: DHS Governance Boards: 

Figures: 

Figure 1: DHS Organizational Structure: 

Figure 2: DHS Management Directorate's Organizational Structure: 

Figure 3: Line of Sight Linking Organizational and Individual Goals and 
Objectives for DHS Data Consolidation: 

Abbreviations: 

ARB: Acquisition Review Board: 

CAO: Chief Administrative Officer: 

CBP: Customs and Border Protection: 

CFO: Chief Financial Officer: 

CHCO: Chief Human Capital Officer: 

CIO: Chief Information Officer: 

CMO: Chief Management Officer: 

COO: Chief Operating Officer: 

CPO: Chief Procurement Officer: 

CSO: Chief Security Officer: 

DHS: Department of Homeland Security: 

EAB: Enterprise Architecture Board: 

eMerge2: Electronically Managing Enterprise Resources for Government 
Effectiveness and Efficiency: 

FEMA: Federal Emergency Management Agency: 

FYHSP: Future Years Homeland Security Program: 

HCA: Head of Contract Authority: 

HCLC: Human Capital Leadership Council: 

ICE: Immigration and Customs Enforcement: 

IG: Inspector General: 

NPPD: National Protection and Programs Directorate: 

PPBE: Planning, Programming, Budget, and Execution: 

PRB: Program Review Board: 

QHSR: Quadrennial Homeland Security Review: 

SES: Senior Executive Service: 

SMC: Senior Management Council: 

TASC: Transformation and Systems Consolidation: 

TSA: Transportation Security Administration: 

USCIS: United States Citizenship and Immigration Services: 

USM: Under Secretary for Management: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

November 20, 2009: 

The Honorable Daniel K. Akaka: 
Chairman: 
The Honorable George V. Voinovich: 
Ranking Member: 
Subcommittee on Oversight of Government Management, the Federal 
Workforce, and the District of Columbia: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The creation of the Department of Homeland Security (DHS) represented 
one of the largest reorganizations and consolidations of government 
agencies, personnel, programs, and operations in recent history, 
initially bringing together approximately 180,000 employees from 22 
originating agencies.[Footnote 1] DHS is now the third largest federal 
government agency with more than 200,000 employees and an annual budget 
of more than $40 billion. DHS began operations in March 2003 with 
missions that included preventing terrorist attacks from occurring 
within the United States, reducing U.S. vulnerability to terrorism, 
minimizing damages from attacks that occur, and helping the nation 
recover from any attacks. The department has initiated and continued 
the implementation of various policies and programs to address these 
missions as well as missions that are not directly related to securing 
the homeland, such as Coast Guard search and rescue. At the same time, 
it is critically important that DHS works to unify and strengthen its 
management functions because the effectiveness of these functions will 
ultimately affect its ability to fulfill its various missions.[Footnote 
2] 

In 2005, we assessed DHS efforts to integrate its various management 
processes, systems, and people, both within and across areas such as 
information technology, financial management, procurement, and human 
capital, as well as in its administrative services--using as criteria 
selected key practices we have reported are consistently found to be at 
the center of successful mergers and organizational transformations. 
[Footnote 3] We noted that DHS had made progress in addressing its 
departmentwide management integration through the issuance of guidance 
and plans to assist the integration of each individual management 
function within the department. However, we observed that DHS had the 
opportunity to expand those efforts by implementing a more 
comprehensive and sustained approach to management integration 
departmentwide. In particular, we recommended that DHS develop an 
overarching strategy for management integration. In response to the 
2005 report, DHS stated that it was developing an integration strategy. 
We also suggested that Congress might want to consider whether DHS's 
Under Secretary for Management (USM)--who heads the department's 
Management Directorate--has the authority to drive, implement, and 
ensure accountability for management integration departmentwide. 

You asked us to review the status of DHS management integration efforts 
since our 2005 report. Specifically, we assessed (1) the extent to 
which DHS has developed a comprehensive strategy for management 
integration that includes the characteristics recommended in our 2005 
report; (2) how DHS is implementing management integration; and (3) the 
extent to which the USM is holding the department and component 
management chiefs accountable for implementing management integration 
through reporting relationships. 

To address our first objective, we considered whether DHS had developed 
a strategy for departmentwide management integration, as required by 
law. Specifically, we assessed whether DHS documents included the 
characteristics recommended in our 2005 report for a management 
integration strategy, which required that the strategy: 

* look across the initiatives within each of the management functional 
units; 

* clearly identify the critical links that must occur among these 
initiatives; 

* identify tradeoffs and set priorities; 

* set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed; and: 

* identify potential efficiencies, and ensure that they are achieved. 

In order to assess these characteristics, we reviewed various 
departmental documents identified by DHS as comprising its management 
integration strategy, including DHS documents related to management, 
strategic planning, and departmental guidance and policy. We examined 
legislation, including the Homeland Security Act of 2002[Footnote 4] 
and the Implementing Recommendations of the 9/11 Commission Act of 
2007,[Footnote 5] which identifies requirements and authorities 
relating to transition, reorganization, and developing and implementing 
a management integration strategy. We also interviewed departmental and 
component management officials and chiefs to obtain information on the 
extent to which DHS has developed a strategy for departmentwide 
management integration. Additionally, we reviewed DHS's performance 
goals and measures for fiscal years 2008 and 2009, as reported in DHS's 
Annual Performance Report for fiscal years 2008 through 2010. We 
assessed these goals and measures against Government Performance and 
Results Act of 1993 (GPRA) requirements to determine the extent to 
which they provided a framework for assessing management integration 
across the department.[Footnote 6] 

For our third objective, we met with the USM as well as department and 
component management chiefs, and reviewed DHS performance agreements 
and performance management activities against requirements set forth in 
law and in DHS policies. These requirements include the need for input 
from senior to subordinate officials for performance agreements and 
evaluations, and the alignment of goals and objectives in a "line of 
sight" that shows how individual performance contributes to 
organizational goals. 

For all three objectives, we interviewed and gathered documents from 
the USM, the USM's Chief of Staff, the six departmental management 
chiefs or acting chiefs--the Chief Procurement Officer (CPO), the Chief 
Financial Officer (CFO), the Chief Human Capital Officer (CHCO), the 
Chief Information Officer (CIO), the Chief Administrative Officer 
(CAO), and the Chief Security Officer (CSO)--and the chiefs, acting 
chiefs, or deputy chiefs from DHS's seven component agencies and one 
directorate--the National Protection and Programs Directorate (NPPD). 
[Footnote 7] DHS's seven component agencies include the Transportation 
Security Administration (TSA), U.S. Customs and Border Protection 
(CBP), U.S. Immigration and Customs Enforcement (ICE), U.S. Citizenship 
and Immigration Services (USCIS), U.S. Secret Service, U.S. Coast 
Guard, and the Federal Emergency Management Agency (FEMA). We also 
spoke with officials from DHS's Office of Policy. We observed meetings 
of DHS's Management Council, Human Capital Leadership Council and CIO 
Council. 

In addition, we reviewed prior GAO reports on DHS management in areas 
such as information technology, financial management, procurement, 
acquisition, human capital, and mergers and organizational 
transformations to determine the status of DHS management integration. 
We also examined reports from DHS's Office of Inspector General (IG) 
related to the status of DHS's management initiatives. 

We conducted this performance audit from September 2008 through 
November 2009 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Background: 

Not since the creation of the Department of Defense in 1947 has the 
federal government undertaken an organizational merger of the magnitude 
of DHS. In 2003, we designated the implementation and transformation of 
DHS as one of the high-risk areas across the federal government because 
it represented an enormous undertaking that would require time to 
achieve in an effective and efficient manner.[Footnote 8] Moreover, the 
components that became part of the department already faced a wide 
array of existing challenges, and any failure to effectively carry out 
their missions would expose the nation to potentially serious 
consequences. The department has remained on our high-risk list since 
2003.[Footnote 9] Most recently, in our January 2009 high-risk update, 
we reported that, although DHS had made progress in transforming into a 
fully functioning department, its transformation remained high risk 
because it had not yet developed a comprehensive plan to address the 
transformation, integration, management, and mission challenges we 
identified in 2003.[Footnote 10] In designating the implementation and 
transformation of DHS as high risk, we noted that building an effective 
department would require consistent and sustained leadership from top 
management to ensure the needed transformation of disparate agencies, 
programs, and missions into an integrated organization. Our prior work 
on mergers and organizational transformations, undertaken before the 
creation of DHS, found that successful transformations of large 
organizations can take at least 5 to 7 years to achieve.[Footnote 11] 

Definition of Management Integration: 

A definition of management integration provides a starting point for 
understanding the needs and requirements for integrating management 
functions. Based on our 2005 work, we define management integration as 
the development of consistent and/or consolidated processes, systems, 
and people--in areas such as information technology, financial 
management, procurement, and human capital--as well as in its security 
and administrative services, for greater efficiency and effectiveness. 
[Footnote 12] 

* On one level, management integration refers to integration of the 
elements mentioned above--processes, systems, and people--within 
management functions (sometimes referred to as vertical integration), 
from the department level down through each of the corresponding 
management functions in the component agencies. An example of this is 
the use of consistent human capital management policies at the DHS CHCO 
level and for each of the corresponding component agency human capital 
management functions. 

* On another level, management integration refers to integration of the 
elements mentioned across management functions (sometimes referred to 
as horizontal integration), such as the integration of human capital 
management and financial management activities in areas related to 
payroll. 

In February 2009, DHS's Management Directorate provided us with a 
definition of its approach and responsibilities for implementing 
management integration in the department. According to the Management 
Directorate, DHS defines management integration as including three 
different levels of activities: (1) strategic integration, (2) 
operational coordination, and (3) functional integration. The 
directorate further stated that the first level, strategic integration, 
consists of efforts to ensure that all component activities and 
acquisitions align with DHS mission goals through appropriate 
leadership oversight and policies and procedures. The second level, 
operational coordination, consists of the delivery of management 
services in order to increase cross-component collaboration and reduce 
costs by achieving efficiencies for managing assets such as real 
property, for procuring volume discounts of supplies and services, and 
acquiring common technology platforms through shared information 
technology infrastructure. The third level, functional integration, 
consists of, among other things, management oversight of component- 
level internal controls and standard operating policies to ensure 
departmentwide compliance with presidential directives, congressional 
mandates, and other legal requirements and DHS policies; and consistent 
business practices that support financial reporting and operational 
assurance statements. 

DHS Management Roles and Responsibilities: 

The Management Directorate includes the CFO, the CSO, the CHCO, the 
CAO, the CPO, and the CIO. They are referred to as the departmental 
management chiefs. In addition to the department's Management 
Directorate, each of the seven DHS component agencies has its own 
component management chief for the procurement, financial, human 
capital, information technology, administrative, and security 
management areas.[Footnote 13] Figures 1 and 2 show the DHS and DHS 
Management Directorate's organizational structures. 

Figure 1: DHS Organizational Structure: 

[Refer to PDF for image: organizational chart] 

Top level: 
Secretary; 
* Deputy Secretary; 
* Chief of Staff. 

Second level, reporting to the Office of the Secretary: 
* Management: Under Secretary; 
* Science &Technology: Under Secretary; 
* National Protection & Programs: Under Secretary; 
* Policy: Under Secretary; 
* General Counsel; 
* Legislative Affairs: Assistant Secretary; 
* Public Affairs: Assistant Secretary; 
* Inspector General. 

Third level, reporting to the Office of the Secretary: 
* Health Affairs: Assistant Secretary/Chief Medical Officer; 
* Intelligence & Analysis: Under Secretary; 
* Operations Coordination: Under Secretary; 
* Citizenship & Immigration Services Ombudsman; 
* Chief Privacy Officer; 
* Civil Rights & Civil Liberties: Officer; 
* Counternarcotics Enforcement: Director. 

Fourth level, reporting to the Office of the Secretary: 
* Federal Law Enforcement Training Center: Director; 
* Domestic Nuclear Detection Office: Director; 
* National Cyber Security Center: Director; 

Fifth level, reporting to the Office of the Secretary: 
* Transportation Security Administration: Assistant 
Secretary/Administrator; 
* U.S. Customs & Border Protection: Commissioner; 
* U.S. Citizenship & Immigration Services: Director; 
* U.S. Immigration& Customs Enforcement: Assistant Secretary; 
* U.S. Secret Service: Director; 
* Federal Emergency Management Agency: Administrator; 
* U.S. Coast Guard: Commandant. 

Source: GAO analysis of DHS documents. 

[End of figure] 

Figure 2: DHS Management Directorate's Organizational Structure: 

[Refer to PDF for image: organizational chart] 

Top level: 
Under Secretary for Management; 
* Deputy Under Secretary; 
* Chief of Staff. 

Second level, reporting to the Office of the Under Secretary for 
Management: 
* Chief Financial Officer[A]; 
* Chief Security Officer; 
* Chief Human Capital Officer; 
* Chief Administrative Officer; 
* Chief Procurement Officer; 
* Chief Information Officer. 

Source: GAO analysis of DHS documents. 

[A] The Department of Homeland Security Financial Accountability Act (§ 
3 of Pub. L. No. 108-330, 118 Stat. 1275, 1276 (Oct. 16, 2004)) made 
DHS subject to the Chief Financial Officers Act of 1990 (Pub. L. No. 
101-576, 104 Stat. 2838, Nov. 15, 1990), which requires the DHS CFO to 
also report directly to the Secretary of Homeland Security. 

[End of figure] 

The Homeland Security Act of 2002 gave DHS's USM responsibility for the 
management and administration of the department, including the 
transition and reorganization process, among other things.[Footnote 14] 
The Implementing Recommendations of the 9/11 Commission Act of 2007 (9/ 
11 Commission Act) enhanced the USM position by designating the USM as 
the Chief Management Officer (CMO) of DHS and principal advisor to the 
Secretary on matters related to the management of the department, 
including management integration and transformation.[Footnote 15] DHS 
also defined the USM responsibilities for integration in department 
management directives following the creation of the department. For 
example, a DHS management directive assigns the USM responsibility and 
accountability for designing departmentwide integrated systems to 
improve mission support. Within the Management Directorate, the 
management chiefs' roles and responsibilities for the integration of 
the department are established in DHS management directives. For 
example, DHS management directives give the departmental management 
chiefs responsibility to ensure the integration of their management 
function and to review their programs in order to recommend program 
improvements and corrective actions where appropriate. DHS management 
directives also require the departmental management chiefs to annually 
establish milestones for the integration of their management function's 
activities. Component management chiefs are to implement initiatives 
within their respective functional areas that relate to management 
integration. 

In 2004, the Secretary of Homeland Security issued a departmentwide 
memo on DHS efforts to integrate management functions. In order to 
ensure that both department and component personnel took responsibility 
for supporting performance of management functions, the memo describes 
the concept of dual accountability in which both the heads of component 
agencies, such as TSA or CBP, and the DHS management chiefs, such as 
CPO or CIO, share responsibility for implementing management functions. 
For example, the TSA Administrator and DHS's CPO are both responsible 
to the DHS Secretary, through their respective chains, for procurement 
performance at TSA. An accompanying memo from the Deputy Secretary of 
Homeland Security in 2004 noted that component agency heads would be 
responsible for accomplishing the mission of their component agencies, 
and management chiefs would be responsible for providing the support 
systems to help components accomplish their mission. The memos also set 
out the "dotted line" reporting relationship of the component 
management chiefs, such as TSA's CPO or CBP's CIO, to the department 
management chiefs, DHS's CPO or DHS's CIO. Resulting management 
directives were developed for each DHS management function in 2004 as 
principal documents for leading, governing, integrating, and managing 
the management functions throughout DHS. These management directives 
require DHS management chiefs to collaborate with component agency 
heads on the recruiting and selection of key component management 
officials, and provide input into component management chiefs' 
performance agreement and evaluation, among other things. 

Departmental Documents Address Aspects of Management Integration, but 
DHS Has Not Yet Developed a Comprehensive Strategy: 

The 9/11 Commission Act requires DHS to develop a strategy for 
management integration as part of the department's integration and 
transformation to create a more efficient and orderly consolidation of 
functions and personnel in the department.[Footnote 16] In our 2005 
report, we recommended that DHS develop an overarching management 
integration strategy for the department that would, at a minimum, have 
the following characteristics: 

* look across the initiatives within each of the management functional 
units; 

* clearly identify the critical links that must occur among these 
initiatives; 

* identify trade-offs and set priorities; 

* set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed; and: 

* identify potential efficiencies, and ensure that they are achieved. 
[Footnote 17] 

We pointed out that a comprehensive management integration strategy 
would, among other things, help the department look across initiatives 
within each of the functional units to clearly identify the links that 
must occur among initiatives and develop specific departmentwide goals 
and milestones that would allow DHS to track critical phases and 
essential activities. By including these characteristics in DHS's 
management integration strategy, we said that Congress, DHS employees, 
and other key stakeholders would have access to more transparent 
information regarding departmental integration goals, needed resources, 
critical links, cost savings, and status documentation, thereby 
providing a means by which DHS could be held accountable for its 
management integration efforts. In commenting on our 2005 report, DHS 
discussed actions it was taking to address our recommendation that it 
develop a management integration strategy, stating that it was 
establishing an integrated project plan/integration strategy that would 
define roles and responsibilities and identify key deliverables and 
milestones. 

Although DHS Identified Various Documents That Support Management 
Integration, These Documents Do Not Contain All the Characteristics of 
a Comprehensive Strategy: 

DHS has not yet developed a comprehensive strategy for management 
integration that is consistent with statute and that contains all of 
the characteristics we identified in 2005. According to DHS's USM, the 
department has not yet developed a comprehensive management integration 
strategy because, in part, the Management Directorate has focused on 
building the management operations capacity within the functional 
areas, such as financial management and information technology. As a 
result, the Management Directorate has not yet focused on integration 
across the functional areas and has not clearly or systematically 
identified trade-offs and linkages among initiatives in different 
functional areas. 

In the absence of a comprehensive management integration strategy, 
DHS's USM, Chief of Staff, and department and component management 
chiefs stated that various departmental documents collectively 
contribute to the department's strategy for implementing and achieving 
management integration. In particular, DHS officials identified (1) 
departmentwide documents that provide guidance that relate to 
management integration across the department; and (2) documents for 
management of functional areas. 

With regard to the departmentwide documents, DHS officials included the 
following as particularly relevant to aspects of management 
integration: 

* DHS Integrated Strategy for High Risk Management. This document is 
intended to be a corrective action plan outlining the department's 
framework for its transformation efforts and methods by which the 
department will seek to improve performance in high-risk areas we have 
identified since 2003.[Footnote 18] For the high-risk area of DHS 
implementation and transformation, the document discusses five areas of 
focus for the department--utilizing a management framework to unify 22 
disparate organizations, creating joint requirements planning and risk 
assessment processes, instituting an Investment Review Board, 
implementing a corrective action plan, and consolidating and 
integrating a financial management system. 

* Management Directorate Strategic Plan Fiscal Years 2009 through 2014. 
This plan sets out the Management Directorate's vision, core values, 
guiding principles, goals and objectives, as well as the organizational 
structure and responsibilities of the Management Directorate and 
department management chiefs. The plan provides the following four 
objectives for the Management Directorate: (1) provide structure 
(strengthen unified organizational governance to enhance departmentwide 
communication, decision making, and oversight); (2) optimize processes 
and systems (integrate functional operations to facilitate cross-
component synergies and streamline coordination ensuring reliable and 
efficient support of mission objectives); (3) foster leadership (adhere 
to core values and guiding principles of DHS in performing duties, 
effecting progress, and leading with commitment for the mission); and 
(4) leverage culture (leverage the benefits of commonalities and 
differences across components to promote cooperative intra-and inter-
agency networks and implement best practices). The plan also discusses 
four methods that the Management Directorate will use to achieve the 
plan's objectives--provide guidance, offer representation, deliver 
tools, and manage services. 

* Integrated Planning Guidance Fiscal Years 2011 through 2015. This 
document describes the DHS Secretary's policy and planning priorities 
for the 5-year budget time frames, such as for fiscal years 2011 
through 2015. The Integrated Planning Guidance is part of the DHS 
strategic planning process and, among other things, provides general 
risk management guidance for prioritizing programming and budget 
proposals within the department. 

* Future Years Homeland Security Program (FYHSP) Fiscal Years 2009 
through 2013. This document provides a summary and breakdown of DHS 
program resources over a 5-year period; including resource alignment by 
goals, component appropriations, and component programs, as well as 
program descriptions, milestones, performance measures, and targets. In 
the fiscal year 2009 through 2013 FYHSP, DHS projected funding for 65 
priority programs within 13 components in support of the five goals of 
the DHS Strategic Plan. 

Internal Control Playbook Fiscal Year 2009. This document comprises 
DHS's plan to design and implement departmentwide internal controls 
with respect to three areas: (1) internal controls over financial 
reporting (which provides an overview of efforts to establish reliable 
financial reporting); (2) internal controls over operations (which 
outlines plans to maximize the effectiveness and efficiency of 
operations); and (3) conformity with financial management system 
requirements (which summarizes efforts to strengthen the internal 
controls over the department's financial systems). Specific examples of 
these internal control areas include: integrating internal control 
assessments across component lines of business, integrating financial 
system security assessments through tests of operating effectiveness, 
and incorporating results into plans of action and milestones. 

With regard to functional area documents, DHS officials indicated that 
both management directives and functional area strategic plans contain 
elements of the department's strategy for achieving management 
integration. DHS issued management directives for each of the six 
department management chiefs--the CAO, CFO, CHCO, CIO, and CPO 
management directives were issued in 2004 (with updates for the CIO and 
CPO in 2007 and 2008, respectively); the management directive for CSO 
was issued in 2006. These directives communicate standard definitions 
of the management chiefs' respective roles and responsibilities; define 
the concept of dual accountability for both mission accomplishment and 
functional integration as the shared responsibility of the heads of 
DHS's individual agencies or components and the department management 
chiefs; and establish the need for the department management chiefs, 
along with the heads of agencies, to annually recommend and establish 
integration milestones for the consolidation of the chiefs' functions. 
Functional area strategic plans generally discuss, among other things, 
the missions and goals of the department management chiefs and the link 
between the goals and objectives in each functional area strategic plan 
and the goals and objectives in DHS's Strategic Plan. Among the six 
department chiefs, four have issued strategic plans for their 
functional areas--the CAO, CIO, CHCO, and CSO.[Footnote 19] 

While some of the documents DHS officials identified as contributing to 
the department's strategy for implementing and achieving management 
integration address some of the characteristics we have previously 
identified for such a strategy, these documents, either individually or 
taken together, do not include all of the characteristics we have 
identified. These documents described by DHS officials as contributing 
to the department's strategy for achieving management integration can 
provide high-level guidance for integration efforts and can help the 
department to manage those efforts. For example, two of the functional 
area strategic plans set goals, objectives, and milestones for 
implementing certain initiatives within functional areas. Moreover, the 
Management Directorate Strategic Plan and other departmentwide 
documents, for example, set performance goals, measures, and targets 
for achieving certain management initiatives. Such elements as goals, 
objectives, milestones, performance targets, and priorities documented 
in these plans and strategies can help the department to manage, 
implement, and monitor the specific initiatives to which these elements 
apply. They can also help to guide efforts to consolidate policies, 
processes, and systems within each management functional area. However, 
among the documents cited by DHS officials as being part of the 
department's management integration strategy, DHS has not yet looked 
across the management initiatives within management functional areas to 
identify the critical links that must occur among these initiatives to 
integrate the department's management functions both within and across 
functional areas. Furthermore, the documents generally do not identify 
the priorities, trade-offs, and potential efficiencies among management 
initiatives, nor do they set implementation goals and a time line for 
monitoring the progress of initiatives to ensure the critical links 
occur when needed. Thus, when considered either individually or 
together these documents do not constitute a management integration 
strategy containing all of the characteristics we have identified. See 
table 1 for more detailed information on the plans. 

Table 1: Assessment of the Extent to Which DHS Documents Include GAO- 
Recommended Characteristics of a Management Integration Strategy: 

GAO-recommended characteristics of a management integration strategy: 

Departmentwide documents: 

DHS documents: DHS Integrated Strategy for High Risk Management; 
Look across initiatives within each of the management functional units: 
The strategy identifies various management initiatives, such as the 
Investment Review Board and consolidation of the department's various 
financial management systems. However, the strategy does not look 
across initiatives within all of the management functional areas; 
Clearly identify the critical links that must occur among these 
initiatives: 
The strategy does not identify the critical links that must occur among 
initiatives; 
Identify trade-offs and set priorities: 
The strategy identifies the five areas of focus, or priorities, for the 
department to address the GAO high-risk area, implementing and 
transforming DHS: (1) a management framework, (2) joint requirements 
planning and risk assessment processes, (3) the Investment Review 
Board, (4) corrective action plans, and (5) financial management 
systems. However, the strategy does not discuss trade-offs among 
management initiatives; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
Under each of the five areas of focus, the strategy identifies expected 
outcomes, accomplishments and actions to be completed, and high-level 
milestones for completing those actions. However, the strategy does not 
identify a time line for monitoring the progress of the initiatives 
that would allow the department to ensure necessary links occur when 
needed; 
Identify potential efficiencies and ensure that they are achieved: 
Departmentwide documents: The strategy does not identify potential 
efficiencies. 

DHS documents: Management Directorate Strategic Plan 2009 through 2014; 
Look across initiatives within each of the management functional units: 
This strategic plan identifies initiatives for each management 
objective. However, the strategic plan does not look across initiatives 
within all of the management functional areas; 
Clearly identify the critical links that must occur among these 
initiatives: 
This strategic plan does not identify the critical links that must 
occur among initiatives; 
Identify trade-offs and set priorities: 
This strategic plan identifies four overall objectives for the 
Management Directorate--provide structure, optimize processes and 
systems, foster leadership, and leverage culture--and sets priorities 
such as aligning investments to the department's enterprise 
architecture under the objectives. The strategic plan does not identify 
trade-offs; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
Under each objective, the strategic plan includes performance measures 
and targets for specific management initiatives for fiscal years 2009 
through 2014. The strategic plan does not include a time line for 
monitoring the progress of the initiatives that would allow the 
department to ensure necessary links occur when needed; 
Identify potential efficiencies and ensure that they are achieved: 
The strategic plan does not discuss potential efficiencies. 

DHS documents: Integrated Planning Guidance, Fiscal Years 2011 through 
2015; 
Look across initiatives within each of the management functional units: 
The Integrated Planning Guidance provides a description of 
departmentwide initiatives, such as asset management and mail 
operations. However, the guidance does not look across the initiatives 
that occur within each management functional area; 
Clearly identify the critical links that must occur among these 
initiatives: 
The guidance does not identify the critical links that must occur among 
initiatives; 
Identify trade-offs and set priorities: 
The guidance does not identify priorities or trade-offs for management 
initiatives; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
The guidance does not set implementation goals or a time line for 
monitoring the progress of management initiatives to ensure necessary 
links occur when needed; 
Identify potential efficiencies and ensure that they are achieved: 
The guidance does not discuss potential efficiencies. 

DHS documents: FYHSP, Fiscal Years 2009 through 2013; 
Look across initiatives within each of the management functional units: 
The FYHSP identifies initiatives such as establishment of a DHS 
consolidated headquarters facility and the consolidation of component 
agencies' financial management systems, but does not look across 
initiatives within each management functional area; 
Clearly identify the critical links that must occur among these 
initiatives: 
The FYHSP does not identify the critical links that must occur among 
initiatives; 
Identify trade-offs and set priorities: 
The FYHSP discusses actions and priorities for the department 
management chiefs to implement for fiscal years 2009 through 2013, such 
as for the CFO to maintain and update a comprehensive financial 
management policy manual and for the CAO to design and complete various 
phases of the St. Elizabeths' construction for the consolidation of DHS 
headquarters facilities. The FYHSP does not identify trade-offs; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
The FYHSP identifies the performance goals and measures for the 
Management Directorate and sets performance targets for fiscal years 
2009 through 2013. The FYHSP also identifies actions to be completed in 
each fiscal year by the Management Directorate. The FYHSP does not set 
implementation goals or a time line for monitoring the progress of 
management initiatives to ensure necessary links occur between 
initiatives when needed; 
Identify potential efficiencies and ensure that they are achieved: 
The FYHSP does not discuss potential efficiencies. 

DHS documents: Internal Control Playbook, Fiscal Year 2009; 
Look across initiatives within each of the management functional units: 
The playbook identifies initiatives and actions for management 
improvement, with an emphasis on strengthening component management 
functions. Corrective action plans are included for areas such as, 
human capital management, acquisition management, and administrative 
management, but does not look across initiatives in each functional 
area; 
Clearly identify the critical links that must occur among these 
initiatives: 
The playbook does not identify the critical links that must occur among 
initiatives; 
Identify trade-offs and set priorities: 
Within corrective action plans for each area, the playbook addresses 
corrective actions to be implemented and identifies strategies to 
mitigate risk to those corrective actions. However, the playbook does 
not identify priorities and trade-offs among the initiatives; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
Within corrective actions for each area, the playbook identifies key 
strategies and milestones for implementing corrective actions. However, 
these goals and milestones do not allow the department to ensure that 
the necessary links occur when needed among the initiatives; 
Identify potential efficiencies and ensure that they are achieved: 
Some corrective action plans identify potential efficiencies that 
relate to the DHS mission, but none of the corrective action plans 
identify potential efficiencies across functional areas. 

Functional area documents: 

DHS documents: Management directives; 
Look across initiatives within each of the management functional units: 
The management directives are focused on management functions, but do 
not look across initiatives within each functional area; 
Clearly identify the critical links that must occur among these 
initiatives: 
The management directives do not identify the critical links that must 
occur among initiatives; 
Identify trade-offs and set priorities: 
The management directives do not identify trade-offs and priorities for 
or across management initiatives; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
The management directives do not identify implementation goals and a 
time line for monitoring the progress of specific initiatives to ensure 
necessary links occur when needed. The management directives indicate 
that management chiefs are to establish integration milestones for the 
consolidation of the chiefs' functions and develop performance metrics 
for the respective functions; 
Identify potential efficiencies and ensure that they are achieved: 
The management directives do not identify potential efficiencies. 

DHS documents: Functional area strategic plans; 
Look across initiatives within each of the management functional units: 
The plans cite functional areas' management initiatives, but do not 
look across the initiatives that occur within each of the functional 
areas; 
Clearly identify the critical links that must occur among these 
initiatives: 
The plans do not identify the critical links that must occur among 
initiatives; 
Identify trade-offs and set priorities: 
Two functional area strategic plans--CIO and CHCO, for example--provide 
priorities within each functional area. A third strategic plan, for the 
CAO, does not specify particular priority areas, although it speaks to 
the importance of developing such priorities. The CSO strategic plan 
does not identify priorities, and none of the functional area strategic 
plans discusses trade-offs; 
Set implementation goals and a time line to monitor the progress of 
these initiatives to ensure the necessary links occur when needed: 
Three functional area strategic plans--CIO, CHCO, and CAO--provide 
strategic/implementation goals. Two of these plans also provide time 
lines for completing individual initiatives. None of the plans identify 
time lines for monitoring the progress of the initiatives to ensure 
necessary links occur when needed; 
Identify potential efficiencies and ensure that they are achieved: 
Two functional area strategic plans--CIO and CHCO--identify potential 
efficiencies within each functional area, but do not identify potential 
efficiencies across functional areas. The CAO strategic plan provides a 
more generic statement that DHS is seeking to analyze and optimize 
existing structures to generate efficiencies. 

Source: GAO analysis of DHS documents. 

[End of table] 

In addition to these functional area and departmentwide documents, DHS 
officials identified three other documents that are related to 
management integration: (1) the DHS Strategic Plan; (2) the Quadrennial 
Homeland Security Review (QHSR); and (3) the Business Operations 
Manual. The DHS Strategic Plan includes, among other things, the 
department's vision, mission, core values, and guiding principles, as 
well as the goals and objectives by which the department will 
continually assess performance.[Footnote 20] The department's latest 
strategic plan for fiscal years 2008 through 2013 includes five 
strategic-level goals related to the department's mission and 
management functions. Goal 5 of this plan--"Strengthen and Unify DHS 
Operations and Management"--sets out the department's goal for its 
management functions; information and intelligence sharing; and policy, 
planning, and coordination functions.[Footnote 21] Under this goal, the 
first objective describes what the department plans to achieve for its 
management functions, through the Management Directorate, and includes 
a reference to achieving management integration.[Footnote 22] 
Specifically, Objective 5.1--"Improve Department Governance and 
Performance"--states that the department will lead efforts that provide 
structure to enhance departmentwide governance, decision making, and 
oversight, including internal controls and performance management 
tracking, and optimize processes and systems to facilitate integration 
and coordination. DHS's Strategic Plan sets out strategic-level goals 
and objectives for the department's overall mission and management 
functions but is not intended to constitute a management integration 
strategy. As we have previously reported, a management integration 
strategy goes beyond what is contained in an agency strategic plan, as 
it provides the more specific operational and tactical information to 
manage the integration effort.[Footnote 23] A strategic plan contains 
the high-level goals and mission for an agency, while a management 
integration strategy would provide the activities and time lines needed 
for accomplishing the goals of the integration effort. 

As required by the 9/11 Commission Act, DHS is developing its first 
QHSR to conduct a comprehensive examination of the homeland security 
strategy for the nation, including recommendations regarding the long- 
term strategy, priorities for homeland security, and guidance on the 
programs, assets, capabilities, budget, policies, and authorities of 
the department.[Footnote 24] The QHSR includes five principal study 
areas, based on the Secretary's priorities for homeland security, one 
of which is maturing and unifying DHS and the homeland security 
enterprise.[Footnote 25] DHS is also developing a Business Operations 
Manual that, according to DHS officials, will provide an overview of 
the key DHS processes including strategic requirements planning, risk 
assessment, programming, budgeting, acquisition, and performance 
assessment, and will also show how these processes link together to 
ensure coordinated decision making. As the QHSR and Business Operations 
Manual are still under development, it is too soon to tell whether or 
how these documents will contribute to DHS's management integration 
efforts. 

DHS Has Expanded Its Performance Measures for Individual Management 
Functions, but Has Not Yet Established Measures for Departmentwide 
Management Integration: 

DHS has developed some performance goals and measures to measure 
management activities, but has not yet established measures for 
assessing management integration across the department. For example, 
DHS has increased the number of departmentwide performance measures for 
the Management Directorate in support of Goal 5 of its strategic plan. 
Specifically, since fiscal year 2008, DHS has added 13 new measures and 
retired 3 others for the Management Directorate in support of Objective 
5.1 of the strategic plan, going from 5 performance measures for the 
Management Directorate in fiscal year 2008 to 15 measures in fiscal 
year 2009, as shown in table 2.[Footnote 26] These measures relate to 
activities in functional areas but do not help to measure management 
integration. 

Table 2: DHS Management Directorate Fiscal Years 2008 and 2009 
Performance Measures: 

DHS Strategic Plan goal: Strategic Goal 5: Strengthen and unify DHS 
operations and management; 

DHS Strategic Plan objective: Objective 5.1: Improve department 
governance and performance; 

Fiscal year 2008 performance measure: 
* Number of internal control processes tested for design and 
operational effectiveness; 
* Percentage of major information technology projects that are within 
10 per cent of cost/schedule/performance objectives; 
* Percentage of President's Management Agenda (PMA) initiatives that 
receive a green progress score from the Office of Management and 
Budget[A]; 
* Percentage of favorable responses by DHS employees on the annual 
employee survey; 
* Total instances of material weakness conditions identified by the 
independent auditor in its report on the DHS financial statements. 

Fiscal year 2009 performance measure: 
* Percentage of favorable responses by DHS employees on the annual 
employee survey; 
* Total instances of material weakness conditions identified by the 
independent auditor in its report on the DHS financial statements; 
* Percentage of major investments currently aligned to Agency 
Enterprise Architecture;
* Percentage of DHS workforce (employees and contractors) with advanced 
identification cards; 
* Percentage of major acquisition projects that do not exceed 10 per 
cent of cost/schedule/performance objectives; 
* Interest penalties paid on all invoices (in millions); 
* Percentage of vendors paid electronically; 
* Percentage of non-credit card invoices paid on-time; 
* Percentage of accounts receivable from the public delinquent over 180 
days; 
* Percentage of improper payments collected; 
* Number of civilian employees serving in the DHS interagency and 
intradepartmental Rotation Training Program; 
* Percentage of civilian employees in designated positions that are 
qualified as National Security Professionals; 
* Attrition rate for career senior executive service personnel; 
* Percentage annual reduction in petroleum-based fuel consumption by 
DHS owned or leased vehicles; 
* Percentage of major information technology systems with full Federal 
Information Security Management Act compliance. 

Source: GAO analysis of information in DHS Annual Performance Report. 

[A] The prior administration's Office of Management and Budget 
developed a President's Management Agenda scorecard that gave a 
"green," "yellow," or "red" score by agency. Green indicates success, 
yellow indicates mixed results, and red indicates unsatisfactory 
results. 

[End of table] 

The Government Performance and Results Act of 1993 (GPRA) provides a 
framework for strategic planning and reporting intended to improve 
federal agencies' performance and hold them accountable for achieving 
results.[Footnote 27] Effective implementation of this framework 
requires agencies to, among other things, clearly establish performance 
goals for which they will be held accountable and measure progress 
toward those goals. Although DHS has added measures for the Management 
Directorate since fiscal year 2008, DHS has not yet clearly 
communicated what the linkages, if any, are between these measures and 
the management integration of the department. DHS officials told us 
that the department's current measures do not allow the department to 
gauge the status of management integration and that the department has 
focused on the development of measures for departmental components, 
offices, and directorates--such as a measure for the attrition rate for 
career Senior Executive Service (SES) personnel and a measure for the 
percentage of improper payments collected. However, these performance 
measures do not allow the department to assess its progress in 
achieving departmental goals for management integration within and 
across functional areas. DHS officials stated that the department's 
goal is to develop a set of measures that will help the department 
assess its management integration. Without such a set of measures, DHS 
cannot assess its progress in implementing and achieving management 
integration both within and across its functional areas. A 
comprehensive strategy for management integration that clearly sets 
implementation goals and time lines could help the department establish 
measures for assessing its management integration. 

DHS's Management Directorate Has Taken Actions to Communicate and 
Consolidate Management Policies, Processes, and Systems: 

Through various management councils, the Management Directorate shares 
information related to the implementation of management initiatives, 
solicits feedback from the components, and provides a forum for 
coordination between component management offices. The Management 
Directorate has several councils that it uses to communicate through 
the department, as shown in table 3. Each management chief chairs a 
functional council to address issues pertaining to that management 
function. For example, the DHS CFO leads a council that includes 
component or agency CFOs across DHS and addresses and coordinates 
departmentwide financial management issues, such as financial 
management internal controls. Likewise, the USM chairs a Management 
Council made up of the DHS management chiefs and a representative from 
each component that discusses issues of departmentwide importance, such 
as training and development programs. DHS management directives give 
five of six functional councils responsibility for developing and 
executing formal communications programs for internal and external 
stakeholders. The functional councils also have charters that generally 
define the role of the councils to communicate information and provide 
input on goals or priorities within their management function. The 
Management Council does not have a formal charter. 

Table 3: DHS's Management Councils: 

Council: Management Council; 
Chair: USM; 
Membership: Cross-functional. 

Council: Chief Administrative Officer Council; 
Chair: CAO; 
Membership: Functional. 

Council: Chief Financial Officer Council; 
Chair: CFO; 
Membership: Functional. 

Council: Chief Information Officer Council; 
Chair: CIO; 
Membership: Functional. 

Council: Chief Security Officer Council; 
Chair: CSO; 
Membership: Functional. 

Council: Head of Contracting Authority (HCA) Council[A]; 
Chair: CPO; 
Membership: Functional. 

Council: Human Capital Leadership Council; 
Chair: CHCO; 
Membership: Functional. 

Source: GAO analysis of DHS documents and interviews. 

[A] The HCA Council is the functional council for the procurement 
management function. 

[End of table] 

We found the Management Directorate uses the councils to share 
information related to management initiatives with their counterparts 
from the components and solicit their input on departmentwide issues. 
For example, when we observed the Human Capital Leadership Council 
(HCLC) in May 2009, the DHS CHCO updated the council members on his 
office's efforts to establish an automated performance management tool. 
Members of the HCLC's Human Capital Subcommittee on Performance 
Management also solicited feedback from the HCLC on whether changing 
the dates of the department's performance management cycle could be 
explored by the subcommittee because it currently falls at a 
challenging time during the fiscal year. The HCLC discussed the issue 
and raised points, such as the relationship with the SES performance 
cycle and the impact of potential continuing resolutions. Ultimately, 
the HCLC agreed the subcommittee should pursue the issue. Similarly, 
when we observed a Management Council meeting in April 2009, the 
council members shared information on issues that affect multiple 
management functions, such as the Transformation and Systems 
Consolidation (TASC) initiative to consolidate and integrate its 
financial management, acquisition, and asset management systems. The 
council meetings also provide a forum for the component chiefs to 
provide input into departmentwide plans, such as the functional area 
strategic plans. For example, component officials from the information 
technology and human capital management functions collaborated with 
their corresponding DHS management chief on the development of their 
functions' strategic plans at council meetings or council-sponsored off-
site meetings. 

The councils also provide a forum for component management chiefs to 
raise concerns and suggestions about departmentwide management 
initiatives. For example, when we observed the CIO Council meeting in 
April 2009, a component official expressed concern about the 
component's outdated financial management system, which they have not 
replaced because they are waiting for the departmentwide TASC solution. 
The official said that the component is repeatedly receiving negative 
results on their financial systems audit while they wait. The DHS CIO 
responded that if the TASC initiative experiences further delays, she 
will work with the DHS CFO's office to jointly determine a solution to 
allow the components to make progress and identify areas of possible 
audit mitigation while waiting for TASC to be implemented. Finally, we 
found that the six functional councils provide the component management 
chiefs with an opportunity to collaborate with their peers in other 
components and share best practices. The FEMA Assistant Administrator 
for Management explained that FEMA is in a better position today 
because of its management chiefs' participation in the councils. He 
said the management chiefs have been able to better handle issues 
because they are able to learn best practices from their counterparts 
in other components who are dealing with the same issues and would not 
have the same access to the other components without the functional 
councils. 

DHS's Management Directorate Has Taken Actions to Consolidate 
Management Policies, Processes, and Systems: 

While DHS does not have a comprehensive management strategy, its 
Management Directorate is working to consolidate management policies, 
processes with associated governance boards, and systems. The 
Management Directorate has developed and implemented departmentwide 
policies to replace policies from each of the legacy agencies that make 
up DHS in all six management functions. For example, the DHS CAO's 
office completed a comprehensive review of directives that govern 
departmentwide activities. According to the DHS Internal Control 
Bluebook for fiscal year 2008, results of this review reduced the 
number of directives by over 56 percent. The DHS CAO's office also 
implemented a new initiative to develop uniform policies and programs 
for radiation safety across the department. The DHS CFO's office 
launched an online Financial Management Policy Manual tool, which 
serves as the single authoritative guide on financial management and 
the foundation for departmentwide financial management knowledge 
sharing and standardization. According to officials from the DHS CFO's 
office, the Financial Management Policy Manual is part of its approach 
to integrate within the financial management function and is critical 
to enable financial management employees to carry out their duties and 
responsibilities effectively and efficiently. 

The Management Directorate has also taken steps toward consolidating 
some management processes and established governance boards to manage 
the processes in the areas of acquisition, information technology, 
financial management, and resource allocation, as shown in table 4. 

Table 4: DHS Governance Boards: 

Governance board and date established: Acquisition Review Board 
(formerly the Investment Review Board); November 2008. 
Chair: 
Deputy Secretary, USM, Deputy USM, Component Head or Component 
Acquisition Executive[A]; 
Membership: 
* USM; 
* CFO; 
* CIO; 
* CAO; 
* CPO; 
* CSO; 
* Assistant Secretary for Policy; 
* General Council; 
* Director of Operational Test and Evaluation. 

Governance board and date established: Enterprise Architecture Board; 
April 2004; 
Chair: CIO; 
Membership: 
* CPO; 
* Office of Applied Technology; 
* Chief Information Security Officer; 
* Office of Accessible Systems and Technology; 
* Information Technology Services Office; 
* Enterprise Business Management Office; 
* Enterprise System Development Office. 

Governance board and date established: Senior Management Council for 
Internal Controls; June 2008; 
Chair: USM; 
Membership: 
* CAO; 
* CFO; 
* CIO; 
* CHCO; 
* Chief Information Security Officer; 
* CSO; 
* CPO. 

Governance board and date established: Program Review Board; March 
2008; 
Chair: Deputy Secretary; 
Membership: 
* USM; 
* CFO; 
* Deputy General Counsel; 
* Deputy Assistant Secretary, Office of Policy; 
* Heads CBP, ICE, FEMA, TSA, U.S. Coast Guard, USCIS, U.S. Secret 
Service, Domestic Nuclear Detection Office, Federal Law Enforcement 
Training Center, Office of Health Affairs, Office of Intelligence and 
Analysis, NPPD, Operations Coordination, and Science and Technology. 

Source: GAO Analysis of DHS documents. 

Note: DHS also has a Working Capital Fund Governance Board, which 
provides policy oversight and direction for the activities to be 
included in the Working Capital Fund. 

[A] The chair of the Acquisition Review Board (ARB) differs based on 
which DHS official is designated as the Acquisition Decision Authority 
for a given acquisition program, according to the amount of the 
program's total life cycle costs. 

[End of table] 

As we previously reported, the Management Directorate recognized 
historical shortcomings in its acquisition review process and released 
an interim acquisition management directive in November 2008.[Footnote 
28] The interim directive established a revised acquisition review 
process, including roles and responsibilities of DHS approving 
authorities, threshold levels for acquisitions, and acquisition 
decision events and the corresponding documentation required. 
Specifically, it established the Acquisition Review Board (ARB) as the 
department's highest review body and charged it with reviewing and 
approving all programs at key milestone decision points that are above 
$300 million in life cycle costs. In September 2009, we testified that 
DHS has also reinstated regular ARB meetings and acquisition decision 
memorandums.[Footnote 29] Specifically, as of September 15, 2009, DHS's 
ARB reports that it completed 14 acquisition reviews in 2008, and has 
thus far completed 18 reviews in 2009, including reviews of major 
acquisitions, such as SBInet, US-VISIT, and Secure Flight. DHS also 
reports that 7 additional reviews are scheduled to occur by the end of 
the fiscal year. We previously reported that while recent actions 
establishing the ARB and an acquisition process represent progress, the 
department's previous acquisition review process was not able to 
effectively carry out its oversight responsibilities and keep pace with 
investments since 2004.[Footnote 30] It is too soon to tell whether 
DHS's latest efforts will be sustained to ensure investments are 
consistently reviewed as needed. The DHS IG has also reported that DHS 
faces challenges in implementing corrective actions for acquisition 
oversight.[Footnote 31] 

In addition, DHS established an Enterprise Architecture Board (EAB) to 
guide and approve new information technology investments. Enterprise 
architecture provides systematic structural descriptions of how a given 
organization operates today and how it plans to operate in the future, 
and it includes a plan to transition from the current state to the 
future state. The EAB reviews and approves information technology 
investments to ensure they align with DHS's enterprise architecture and 
transition plan. Based on these reviews, the EAB makes recommendations 
to the ARB, mentioned above, which the ARB includes in its review of 
information technology acquisitions. In September 2009, we testified 
that since 2003, DHS has issued annual updates to its enterprise 
architecture that have improved prior versions by adding previously 
missing content.[Footnote 32] However, DHS has yet to adequately 
address how it determines and ensures that an investment is aligned 
with its enterprise architecture. Specifically, while the Management 
Directorate has recently chartered its EAB and assigned it 
responsibility for ensuring that each investment is architecturally 
aligned throughout its life cycle, it has yet to define a methodology, 
including explicit criteria, for making a risk-based alignment 
determination. 

The Management Directorate established a mission action plan process 
and Senior Management Council (SMC) for Internal Controls to assist the 
department in identifying, assessing, prioritizing, and monitoring the 
progress of efforts to remediate material weaknesses.[Footnote 33] A 
mission action plan presents an overall plan for correcting a control 
deficiency that includes milestones with specific dates and remediation 
actions and is published annually in the department's Internal Control 
Playbook. In November 2008, the Management Directorate created its 
first Internal Control Bluebook, which provides the status of the 
department's efforts to design and implement departmentwide internal 
controls. The SMC oversees the mission action plan process and 
determines when sufficient action has been taken to correct material 
weakness. The Management Directorate has faced challenges in 
implementing the mission action plan process at the components. For 
example, the DHS IG reported that while FEMA prepared mission action 
plans for the fiscal year 2009 Internal Control Playbook that address 
known deficiencies, its financial reporting mission action plan did not 
adequately emphasize the primary root cause of control weaknesses. 
[Footnote 34] Similarly, the DHS IG reported that the TSA's financial 
reporting mission action plan in the fiscal year 2009 Internal Control 
Playbook lacked specific milestones related to some root causes and 
lacked clear linkage from the root cause to actions and milestones to 
address the deficiencies.[Footnote 35] 

The Management Directorate also participates in the Program Review 
Board (PRB), which governs the department's programming efforts as part 
of the broader Planning, Programming, Budget, and Execution process. 
This process is the department's effort to ensure goals and priorities 
are translated into actionable requirements, programmed and budgeted 
for appropriately, and realized through execution. Specifically, the 
USM is a member of the PRB. The PRB considers major multi year 
programmatic issues across the department and recommends resource 
allocation decisions to the deputy secretary based on priorities. These 
decisions provide department approved 5-year resource profiles by 
component, and provide the foundation for the next DHS budget sent to 
the Office of Management and Budget. The DHS Program Analysis and 
Evaluation Director told us that the USM has been instrumental in 
helping components prioritize activities. The PRB gives the USM a forum 
for providing input into the resource decisions from a management 
perspective. However, without a management integration strategy for the 
department with clear priorities, it is unclear how the management 
initiatives related to integration that are considered are being 
prioritized, and whether resources are being used in the most efficient 
and effective manner. 

Additionally, the Management Directorate has taken steps in an effort 
to consolidate the department's systems. For example, the TASC 
initiative is the department's current effort to consolidate its 
financial management, acquisition, and asset management systems. DHS 
has been working to consolidate its financial management systems since 
the department was first created. A prior effort focused on financial 
management systems integration began in January 2004, known as the 
Electronically Managing Enterprise Resources for Government 
Effectiveness and Efficiency (eMerge2) project. This project was 
expected to integrate financial management systems departmentwide and 
address existing financial management weaknesses. However, DHS 
officially ended the eMerge2 project in December 2005, acknowledging 
that this project had not been successful. Litigation has slowed the 
Management Directorate's selection process for a contractor to 
implement TASC, but DHS expects to award the contract in early 2010. 
While DHS officials told us they believe communications between the 
department's CFO and the component CFOs for TASC seem to be working 
well, in October 2009, we testified that the department has not yet 
completely defined its financial management strategy and plan to move 
forward with financial management integration efforts.[Footnote 36] 

The Management Directorate also has an initiative under way to 
consolidate its information technology data centers, which are 
facilities that contain electronic equipment used for data processing, 
data storage, and communications networking. The Data Center 
consolidation initiative is an effort to move from DHS's 17 legacy data 
centers to two large-scale enterprise data centers. According to DHS's 
fiscal year 2010 Budget in Brief report, DHS expects the reduced number 
of data centers to help streamline the department's maintenance and 
support contracts as well as enhance security and improve information 
sharing with stakeholders.[Footnote 37] While the Management 
Directorate intends to complete the relocation of legacy data centers 
to the new data centers by fiscal year 2011, it is facing challenges in 
the implementation of the Data Center consolidation. For example, the 
DHS IG reported that the department has not established necessary 
connectivity between the two data centers so they are able to provide 
backup capabilities for each other because necessary telecommunications 
equipment and circuits are not in place to transmit data between the 
two centers.[Footnote 38] 

Performance Management Practices Could Be More Consistently Applied 
Departmentwide to Strengthen Reporting Relationships between Department 
and Component Management Chiefs: 

During a transformation, strategic goals must be clear and enable 
stakeholders and employees to understand what they need to do 
differently to help the organization achieve success.[Footnote 39] The 
organization's performance management system can help to show how 
individual performance can contribute to overall organizational 
results, and can help manage and direct the transformation process. 
Specifically, we have reported that several practices are critical to 
ensuring that the performance management system supports 
change.[Footnote 40] To be successful, transformation efforts must 
align individual performance expectations with organizational goals. 
These practices support efforts to create a "line of sight" showing how 
unit and individual performance can contribute to overall 
organizational results, and in the case of transforming DHS and 
integrating the department, can enable the USM and department 
management chiefs to align activities of subordinate management 
officials in support of the management integration strategy. A line of 
sight that connects management integration goals should show how the 
USM, department management chiefs, and management chiefs of DHS 
components all contribute to and support DHS management integration 
goals. Figure 3 provides an example of how individual goals for the USM 
and department and component management chiefs support the Management 
Directorate and department goals and objectives for management 
integration activities related to a particular management integration 
initiative--in this case, DHS Data Center consolidation. The figure 
also depicts how management officials at each level provide performance 
input to align the activities of subordinate levels. 

Figure 3: Line of Sight Linking Organizational and Individual Goals and 
Objectives for DHS Data Consolidation: 

[Refer to PDF for image: illustration] 

Organizational objectives: 

DHS Strategic Plan: 
Goal/objective: 
Strengthen and unify DHS operations and management; 
Detailed statement: 
We will optimize processes and systems to facilitate integration and 
coordination. 

Management Directorate Strategic Plan: 
Goal/objective: 
Optimize processes and systems; 
Detailed statement: 
Integrate functional operations to facilitate cross-component synergies 
and streamline coordination ensuring reliable and efficient support of 
mission objectives. 

Individual objectives: 

Under Secretary for Management Performance Agreement: 
Goal/objective: 
Improve management programs & initiatives for DHS HQ; 
Detailed statement: 
Improve management program & initiatives for DHS HQ that improve the 
quality of life of employees, enhance operations, improve security, and 
provide efficiencies in operations by 30 Sept. 08. 

DHS CIO Performance Agreement: 
Goal/objective: 
Consolidate component data centers; 
Detailed statement: 
Consolidate 17 component data centers into 2 enterprise data centers. 

DHS CIO Performance Agreement[A]: 
Goal/objective: 
Advance DHS headquarters IT collaborative efforts; 
Detailed statement: 
DHS data center consolidation:10% x quantity of certification and 
accreditation tracking systems shut down in non-DHS data centers; 10% x 
quantity of certification and accreditation tracking systems stood up 
in DHS data centers. 

Source: GAO analysis of DHS documents. 

[A] The USCIS CIO performance agreement objective cited in figure 3 was 
linked to DHS's Strategic Plan Goal 5 Strengthen and Unify DHS 
Operations and Management, but not to the Management Directorate 
Strategic Plan. 

[End of figure] 

The USM's Performance Agreement and Evaluation Indicate That the USM 
Was Held Accountable for Management Directorate and DHS Strategic 
Objectives: 

As the designated CMO of the department, the USM is specifically tasked 
with leading management integration at DHS, and is the first link in 
the line of sight that connects organizational and individual goals and 
objectives, necessary to ensure that once a management integration 
strategy is developed, management leaders at each level support its 
implementation.[Footnote 41] The 9/11 Commission Act requires that the 
USM enter into an annual performance agreement with the Secretary, 
including measurable individual and organizational goals, and be 
subject to an annual performance evaluation by the Secretary, with a 
determination of progress made toward achieving those goals and 
measures.[Footnote 42] Similarly, we have reported that top leadership 
should drive the transformation, and have previously stated that the 
organization's CMO should have a clearly defined, realistic performance 
agreement.[Footnote 43] To support departmentwide goals, the USM's 
performance plan should reflect the DHS Strategic Plan and Management 
Directorate Strategic Plan, and when developed, the management 
integration strategy. In reviewing performance management linkages at 
the USM's level, we found that the Deputy Secretary provided input into 
the USM's performance plan in October 2007, and conducted a performance 
evaluation in 2008 based on this agreement. According to DHS officials, 
the Deputy Secretary conducted the performance agreement and 
evaluation--rather than the Secretary--based on delegated 
responsibilities for the performance of management reform as the 
department's chief operating officer. 

Performance objectives in the USM's agreement and evaluation show 
linkages to strategic plans, and include references to several efforts 
related to management integration. Specifically, the USM's performance 
objectives included clear linkages to the fiscal year 2009 through 2014 
Management Directorate Strategic Plan, and to the fiscal year 2008 
through 2013 DHS Strategic Plan Goal 5--"Strengthen and Unify DHS 
Operations and Management." In terms of the content of individual 
objectives, three of the performance objectives refer to projects or 
initiatives specifically: (1) Designing a new acquisition review 
system, (2) finalizing and implementing a plan to improve management 
controls, and (3) establishing a certified SES performance system. One 
objective refers generally to improving management programs and 
initiatives for DHS's headquarters.[Footnote 44] The efforts to 
implement a new acquisition review system and management controls and 
centralize management of SES positions involves increasing integration 
of management functions. The Integrated Strategy for High Risk 
Management referenced in the performance plan was mentioned by DHS as 
providing guidance for management integration efforts. Other 
initiatives that contribute to integration, including the consolidation 
of DHS data centers, are described as accomplishments in the USM's 
evaluation related to the implementing programs and initiatives for 
DHS's headquarters objective. 

Department Management Chiefs' Performance Agreements Show Linkages to 
Higher Level Strategies and Include Management Integration Goals and 
Objectives: 

The second link in the line of sight involves the USM's relationship 
with the department management chiefs. Five department chiefs report 
directly to the USM, and the CFO has a dual reporting relationship to 
the Secretary and the USM.[Footnote 45] Based on performance management 
practices mentioned above, department management chiefs' performance 
plans should support organizational goals included in the Management 
Directorate Strategic Plan. We would expect these performance plans 
should also support a department management integration strategy, when 
one is developed. 

In reviewing department management chiefs' performance agreements, we 
found that they supported higher level Management Directorate goals and 
objectives, and included references to management integration-related 
activities. For example, performance agreements for the six department 
management chiefs consistently include a reference to the Management 
Directorate's Strategic Plan. We also learned from DHS officials that 
fiscal year 2009 was the first year that the USM provided a common 
objective to department management chiefs. Specifically, the fiscal 
year 2009 management chiefs' performance plans included a joint 
performance objective related to management support for the expansion 
of NPPD. In addition, the agreements consistently include objectives 
related to management integration. The following are examples of 
management integration-related objectives in performance agreements: 

* The CSO's agreement included an objective to "Integrate security 
services department wide through development and implementation of 
security policies and practices for the department." 

* The Acting CIO's agreement included objectives for consolidating 
legacy networks and consolidating component data centers (as depicted 
in figure 3). 

* The CHCO's agreement included an objective for providing DHS-wide 
policy and guidance on all major human resources matters. 

* The CAO's agreement included an objective to establish a consolidated 
headquarters for DHS. 

Performance agreements also showed evidence of common goals. For 
example, as discussed previously, each chief's agreement includes 
support for the expansion of NPPD. The performance agreements also 
refer to specific actions for support from that management function, 
such as providing space for the new employees, in the CAO's case, and 
providing information technology hardware and software to support the 
new employees, in the CIO's case. 

Department Management Chiefs Have Not Consistently Implemented "Dotted 
Line" Reporting Relationships in Accordance with Management Directives: 

The third link in the line of sight involves the department management 
chiefs' relationships with the management chiefs in DHS's component 
agencies. The component management chiefs directly report to their 
component agency heads, while also having a "dotted line," or indirect, 
reporting relationship to their respective department management chief. 
[Footnote 46] The arrangement of component heads and department chiefs 
both supporting integration of management functions is referred to as 
"dual accountability." When we reviewed DHS's management integration 
progress in 2005, the department had recently established the dual 
accountability structure of reporting relationships.[Footnote 47] 
Management directives define department and component management 
chiefs' responsibilities, including specific ways that department 
management chiefs should provide direction to component management 
chiefs. For example, management directives require the department chief 
to establish annual milestones for integrating the management function. 
The directives also require the management chiefs to provide written 
performance objectives to the component management chief at the start 
of each performance cycle, feedback to the component rating official on 
the component chief's accomplishment of objectives, and input on bonus 
or award recommendations, pay, and other forms of commendation. Also, 
in accordance with performance management practices mentioned 
previously, to ensure accountability for change, component management 
chiefs' performance agreements should reflect the department management 
chiefs' specific performance objectives for the component chiefs' 
management functions, and should also reflect the Management 
Directorate and departmentwide strategic plans. 

All department management chiefs except for the CSO said that they 
specifically established annual priorities of some sort--either goals, 
objectives, milestones, and /or expected results--for their function. 
In addition, we reviewed documentation of goals, objectives, 
milestones, or expected results for each of these management functions. 
Four management chiefs--the CFO, CPO, CHCO, and CAO--said that the 
priorities were determined through annual planning processes for the 
function, either at an offsite meeting or through the management 
function's council. The CSO indicated that the management function's 
strategic plan served in place of annual milestones, although the plan 
provided did not identify its applicability to any given year or 
distinguish any priorities or target for implementation within a 
particular year. 

At an individual level, however, the department chiefs did not 
consistently provide individual input at the beginning of the component 
management chiefs' performance cycle--either through written goals and 
objectives or via direct input into the performance agreement. 
Management directives for each management function include a 
requirement that department management chiefs provide the component 
management chief with written objectives at the start of the annual 
performance cycle. In our review we found that only two department 
chiefs--the CAO and CPO--said that they provided individual input with 
regard to component chiefs' performance. The CAO said that he provided 
written objectives attached to a memo that was sent to each component 
CAO, and the CPO said that individual input and goals were provided 
annually in the form of a letter. We also reviewed these objectives and 
goals provided to the components. The other four management chiefs said 
that they did not provide individual input, and instead pointed to 
collective goals or objectives developed through planning processes and 
contained in strategic or operational plans. While these collective 
processes and overall plans provide general guidance for the management 
function, they do not meet the standard established by the management 
directives of annual, individualized performance input. 

The USM told us that the functional councils have improved in their 
development of common management goals for their functions, but she 
agreed that they have not yet consistently followed through by putting 
those goals into individual performance plans. She added that the 
department's management chiefs would be including this information in 
component chiefs' performance plans for 2010. Despite the lack of 
department input in the four component management chiefs' performance 
agreements mentioned above, in reviewing the agreements we found that 
some of them included a link to the Management Directorate Strategic 
Plan, a management function strategy or plan, or the DHS Strategic Plan 
Goal 5 for management. Some performance agreements also referred to 
supporting department-level efforts, with references to activities such 
as supporting department-level strategic plans and council activities 
and implementing departmentwide management initiatives. 

In addition to input into component chief performance agreements, 
management directives require department chief feedback to the 
component rating official regarding the component chiefs' 
accomplishment of annual objectives. The CFO, CSO, and CAO told us that 
they provided input into component chiefs' performance appraisals, 
while the CIO and CPO did not provide input. The CPO stated that he 
would be providing input beginning with the fiscal year 2010 
performance appraisals. The CHCO said that, due to his limited tenure 
in the position, he could not state whether input had occurred. In 
addition to individual input, department chiefs have the opportunity to 
review the component chiefs' performance ratings and bonuses and/or pay 
adjustments at the conclusion of the department Performance Review 
Boards prior to their approval by the deputy secretary. While this 
assessment provides an additional opportunity for department oversight, 
it does not satisfy the management directives' requirement for input by 
the department chief to the component rating official. The USM said 
that departmental chiefs' input into component chiefs' performance 
appraisals would be a priority in the future. 

In summary, performance management practices to help ensure 
accountability for management integration between the department and 
component management chiefs are not consistently in place. While 
linkages are being most clearly defined at the department chief level 
within their individual management functions, department chiefs are not 
consistently providing the guidance and input required by department 
management directives and in accordance with performance management 
leading practices. The inconsistent application of such guidance and 
practices presents challenges to institutionalizing individual 
accountability and enabling the effective exercise of authority at the 
department. Without ensuring that the management chiefs provide input 
into component chiefs' performance plans and evaluations as required, 
the Management Directorate cannot be sure that component chiefs are 
fully implementing management integration. 

Conclusions: 

In the more than 6 years since its establishment, DHS has taken actions 
that could help it transform organizationally and integrate its 
management functions to establish a unified department. In particular, 
the department has taken actions to vertically integrate the component 
agencies by developing common policies, procedures, and systems within 
individual management functions, such as human capital and information 
technology However, DHS has placed less emphasis on integrating 
horizontally, and bringing together these multiple management functions 
across the department. 

In addition, key characteristics that are necessary to guide and ensure 
successful management integration are not yet in place, such as 
identification of trade-offs, priorities, and implementation goals, and 
the implementation and transformation of the department remains on our 
high-risk list. Current plans are a step in the right direction, but in 
the absence of a comprehensive strategy for management integration as 
required by the 9/11 Commission Act and meeting all of the previously 
identified characteristics for such a strategy, it is unclear how 
management integration will be more fully achieved across the 
department. We therefore reiterate our prior recommendation, not yet 
fully implemented, that DHS develop a comprehensive management 
integration strategy. We continue to believe that a comprehensive 
strategy for management integration is warranted, and would help the 
department to ensure that its management initiatives are implemented in 
a coherent way. It would also help DHS to communicate its approach for 
management integration and measures for evaluating progress made. 
Moreover, while DHS has been implementing management initiatives and 
processes across the department, in the absence of a comprehensive 
management integration strategy, it is unclear how these efforts are 
being prioritized and sequenced, and trade-offs between them are being 
recognized. In addition, a comprehensive strategy for management 
integration would help the department establish performance measures to 
better gauge its progress in integrating its various management 
policies, processes, and systems across DHS. Although the department 
has developed certain management measures, these measures do not allow 
the department to assess the extent to which it is making progress in 
implementing and achieving management integration both within and 
across functional areas. 

The "dotted line" reporting relationships between the department chiefs 
will be particularly important once DHS develops a management 
integration strategy that would involve decisions and trade-offs that 
are dependent on component compliance to succeed. Implementation of 
existing performance management mechanisms--such as the departmental 
management chiefs' input into component chiefs' performance plans and 
evaluations, and linkages between department goals and objectives and 
individual performance plans for component management chiefs--is 
necessary to ensure that the Management Directorate can exercise its 
authority and leadership to implement a management integration 
strategy. 

Recommendations for Executive Action: 

To strengthen its management integration efforts, we recommend that the 
Secretary of Homeland Security direct the Under Secretary for 
Management, working with others, to take the following four actions: 

* Once a comprehensive management integration strategy is developed, 
consistent with statute and as we previously recommended, establish 
performance measures to assess progress made in achieving 
departmentwide management integration; 

* Ensure that department management chiefs provide written objectives 
for component management chiefs' performance plans at the beginning of 
each performance cycle, and that the objectives are representative of 
determined priorities and milestones for the management functions 
during that period; 

* Ensure that department management chiefs provide input into component 
management chiefs' annual performance evaluations; and: 

* Ensure that component management chiefs' individual performance plans 
are reflective of and include linkages to the goals and objectives for 
the Management Directorate and relevant department management function. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Secretary of the Department 
of Homeland Security for comment. In written comments on a draft of 
this report, the DHS Under Secretary for Management provided 
information on steps the department was taking or planning to take to 
develop a strategy for management integration, as we had recommended in 
our 2005 report, and to link this strategy to SES performance 
appraisals for the management chiefs. Specifically, the Under Secretary 
for Management said that she is leading the process for developing a 
detailed, measurable plan that will include the actions and milestones 
necessary to accomplish management integration at the department. 
Additionally, the Under Secretary for Management stated that the 
integration plan will be tied to the SES performance appraisals for 
each management chief for the fiscal year 2010 performance cycle, and 
that the plan will also serve as the required annual performance 
agreement between the Secretary and the Under Secretary for Management. 

While DHS's letter did not directly comment on our recommendations in 
this report related to the need for performance measures for management 
integration and additional steps needed to strengthen accountability 
for the management chiefs, the Director of DHS's Internal Control 
Program Management Office noted in a subsequent e-mail that DHS 
concurred with our report and its written comments were intended to 
discuss steps to implement the recommendations in our report. 

DHS's written comments are contained in appendix I. We incorporated 
technical comments provided by DHS as appropriate. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to the 
Department of Homeland Security and other interested parties. In 
addition, the report will be available at no charge on the GAO Web site 
at [hyperlink, http://www.gao.gov]. 

If you or your staff have any further questions about this report, 
please contact me at (202) 512-6543 or steinhardtb@gao.gov, or David 
Maurer, Director, at (202) 512-9627 or maurerd@gao.gov. Points of 
contact for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this report. Key contributors to this 
report are listed in appendix II. 

Signed by: 

Bernice Steinhardt, Director: 
Strategic Issues: 

Signed by: 

David C. Maurer, Director: 
Homeland Security and Justice: 

[End of section] 

Appendix I: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528: 

November 10, 2009: 

Ms. Bernice Steinhardt: 
Director: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-001: 

Dear Ms. Steinhardt: 

Thank you for providing the Government Accountability Office's (GAO) 
draft report; "Actions Taken Toward Management Integration, But a 
Comprehensive Strategy is Still Needed" (GAO-10-131). We have taken the 
opportunity to assess our progress on developing a dedicated strategy 
for management integration as well as consider how to incorporate it 
with strategic efforts toward transformation and implementation for the 
Department. 

In support of critical management integration efforts, I am leading the 
process for developing a detailed, measurable plan as recommended by 
your draft report. The plan will further develop the actions and 
milestones necessary to accomplish the Department of Homeland Security 
management integration. Additionally, the integration plan will be tied 
to the senior executive service performance appraisals for each 
business line chief for the Fiscal Year 2010 performance cycle. This 
plan will also serve as the required annual performance agreement 
between the Secretary and the Under Secretary for Management. I am 
confident that this plan will further the Department's integration 
goals as it will clearly and concisely state the actions DHS will take 
in the next years toward integration. 

Thank you for your contributions to provide recommendations for 
improvements to DHS management integration. If there are any questions, 
please contact me or Sharie Bourbeau, Deputy Under Secretary in the 
Office of the Under Secretary for Management, at (202) 4473400. 

Sincerely, 

Signed by: 

Elaine C. Duke: 
Under Secretary for Management: 

[End of section] 

Appendix II: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

Bernice Steinhardt, (202) 512-6543 or steinhardtb@gao.gov. David 
Maurer, (202) 512-9627 or maurerd@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above Sarah Veale, Assistant Director; 
Rebecca Gambler, Assistant Director; S. Mike Davis; Barbara Lancaster; 
Jared Hermalin; Bion Bliss; Jyoti Gupta; Tom Beall; and Karin Fangman 
made significant contributions to this report. 

[End of section] 

Related GAO Products: 

Financial Management Systems: DHS Faces Challenges to Successfully 
Consolidate its Existing Disparate Systems. [hyperlink, 
http://www.gao.gov/products/GAO-10-210T]. Washington, D.C.: October 29, 
2009. 

Homeland Security: Despite Progress, DHS Continues to Be Challenged in 
Managing Multi-Billion Dollar Annual Investment in Large-Scale Systems. 
[hyperlink, http://www.gao.gov/products/GAO-09-1002T]. Washington, 
D.C.: September 15, 2009. 

High-Risk Series: An Update. [hyperlink, 
http://www.gao.gov/products/GAO-09-271]. Washington, D.C.: January 
2009. 

Department of Homeland Security: A Strategic Approach Is Needed to 
Better Ensure the Acquisition Workforce Can Meet Mission Needs. 
[hyperlink, http://www.gao.gov/products/GAO-09-30]. Washington, D.C.: 
November 19, 2008. 

Department of Homeland Security: Billions Invested in Major Programs 
Lack Appropriate Oversight. [hyperlink, 
http://www.gao.gov/products/GAO-09-29]. Washington, D.C.: November 18, 
2008. 

Department of Homeland Security: Progress Made in Implementation of 
Management Functions, but More Work Remains. [hyperlink, 
http://www.gao.gov/products/GAO-08-646T]. Washington, D.C.: April 9, 
2008. 

Organizational Transformation: Implementing Chief Operating Officer / 
Chief Management Officer Positions in Federal Agencies. [hyperlink, 
http://www.gao.gov/products/GAO-08-322T]. Washington, D.C.: December 
13, 2007. 

Department of Homeland Security: Better Planning and Assessment Needed 
to Improve Outcomes for Complex Service Acquisitions. [hyperlink, 
http://www.gao.gov/products/GAO-08-263]. Washington, D.C.: April 22, 
2008. 

Organizational Transformation: Implementing Chief Operating Officer / 
Chief Management Officer Positions in Federal Agencies. [hyperlink, 
http://www.gao.gov/products/GAO-08-34]. Washington, D.C.: November 1, 
2007. 

Homeland Security: DHS Enterprise Architecture Continues to Evolve but 
Improvements Needed. [hyperlink, 
http://www.gao.gov/products/GAO-07-564]. Washington, D.C.: May 9, 2007. 

Federal Real Property: DHS Has Made Progress, but Additional Actions 
Are Needed to Address Real Property Management and Security Challenges. 
[hyperlink, http://www.gao.gov/products/GAO-07-658]. Washington, D.C.: 
June 22, 2007. 

Homeland Security: Departmentwide Integrated Financial Management 
Systems Remain a Challenge. [hyperlink, 
http://www.gao.gov/products/GAO-07-536]. Washington, D.C.: June 21, 
2007. 

Department of Homeland Security: Progress Report on Implementation of 
Mission and Management Functions. [hyperlink, 
http://www.gao.gov/products/GAO-07-454]. Washington, D.C.: August 17, 
2007. 

Information Technology: DHS Needs to Fully Define and Implement 
Policies and Procedures for Effectively Managing Investments. 
[hyperlink, http://www.gao.gov/products/GAO-07-424]. Washington, D.C.: 
April 27, 2007. 

Department of Homeland Security: A Comprehensive and Sustained Approach 
Needed to Achieve Management Integration. [hyperlink, 
http://www.gao.gov/products/GAO-05-139]. Washington, D.C.: March 16, 
2005. 

Results-Oriented Cultures: Implementation Steps to Assist Mergers and 
Organizational Transformations. [hyperlink, 
http://www.gao.gov/products/GAO-03-669]. Washington, D.C.: July 2, 
2003. 

[End of section] 

Footnotes: 

[1] These 22 agencies, offices, and programs were U.S. Customs Service; 
U.S. Immigration and Naturalization Service; Federal Protective 
Service; Transportation Security Administration; Federal Law 
Enforcement Training Center; Animal and Plant Health Inspection 
Service; Office for Domestic Preparedness; Federal Emergency Management 
Agency; Strategic National Stockpile and the National Disaster Medical 
System; Nuclear Incident Response Team; Domestic Emergency Support 
Team; National Domestic Preparedness Office; Chemical, Biological, 
Radiological, and Nuclear Countermeasures Program; Environmental 
Measures Laboratory; National BW Defense Analysis Center; Plum Island 
Animal Disease Center; Federal Computer Incident Response Center; 
National Communication System; National Infrastructure Protection 
Center; Energy Security and Assurance Program; Secret Service; and U.S. 
Coast Guard. 

[2] GAO, Department of Homeland Security: Progress Made in 
Implementation of Management Functions, but More Work Remains, 
[hyperlink, http://www.gao.gov/products/GAO-08-646T] (Washington, D.C.: 
Apr. 9, 2008). 

[3] GAO, Department of Homeland Security: A Comprehensive and Sustained 
Approach Needed to Achieve Management Integration, [hyperlink, 
http://www.gao.gov/products/GAO-05-139] (Washington, D.C.: Mar. 16, 
2005); and GAO, Results-Oriented Cultures: Implementation Steps to 
Assist Mergers and Organizational Transformations, [hyperlink, 
http://www.gao.gov/products/GAO-03-669] (Washington, D.C.: July 2, 
2003). 

[4] Pub. L. No. 107-296, 116 Stat. 2135 (Nov. 25, 2002). 

[5] Pub. L. No. 110-53, 121 Stat. 266 (Aug. 3, 2007). 

[6] Congress enacted the Government Performance and Results Act of 1993 
(GPRA) to address several broad purposes, including improving federal 
program effectiveness, accountability, and service delivery, and 
enhancing congressional decision making by providing more objective 
information on program performance. GPRA requires executive agencies to 
complete strategic plans in which they define their missions, establish 
results-oriented goals, and identify the strategies that will be needed 
to achieve those goals. GPRA also requires executive agencies to 
prepare annual performance plans that articulate goals for the upcoming 
fiscal year that are aligned with their long-term strategic goals. 
Finally, GPRA requires executive agencies to measure performance toward 
the achievement of the goals in the annual performance plan and report 
annually on their progress in program performance reports. Pub. L. No. 
103-62, 107 Stat. 285 (Aug. 3, 1993). 

[7] We selected NPPD because it (1) had the largest budget in fiscal 
year 2008 among all of the DHS directorates and offices, (2) has a 
structure of management chiefs similar to DHS's component agencies, and 
(3) has a unique relationship to the Management Directorate because the 
directorate directly provides management services to NPPD that normally 
occur within component agencies, such as hiring and acquisition 
support. 

[8] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-03-119] (Washington, D.C.: January 
2003). 

[9] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-05-207] (Washington, D.C.: January 
2005); and GAO, High-Risk Series: An Update, GAO-07-310 (Washington, 
D.C.: January 2007). 

[10] GAO, High-Risk Series: An Update, [hyperlink, 
http://www.gao.gov/products/GAO-09-271] (Washington, D.C.: January 
2009). 

[11] [hyperlink, http://www.gao.gov/products/GAO-03-669]. 

[12] [hyperlink, http://www.gao.gov/products/GAO-05-139]. 

[13] Management chiefs in the component agencies for the acquisition 
and procurement function are referred to as Component Acquisition 
Executives (CAE) and Heads of Contracting Authority (HCA), 
respectively. The CAE is the senior acquisition official within the 
component, responsible for management and oversight of all component 
acquisition functions (excluding contracting). The HCA is the senior 
contracting official within the component, responsible for management 
and oversight of all component contracting functions, under the 
authority delegated by the CPO. 

[14] Section 701 of the Homeland Security Act of 2002 included this 
responsibility. Other responsibilities of the USM include financial 
management, procurement, human resources and personnel, information 
technology and communications systems, facilities and property 
management, security, performance measurements, grants and other 
assistance management programs, internal audits, and maintenance of 
immigration statistics. Pub. L. No. 107-296. 

[15] Pub. L. No. 110-53, § 2405. See 6 U.S.C. § 341. 

[16] Pub. L. No. 110-53, § 2405. 

[17] [hyperlink, http://www.gao.gov/products/GAO-05-139] and 
[hyperlink, http://www.gao.gov/products/GAO-03-669]. 

[18] The high-risk areas we have identified include (1) implementing 
and transforming DHS; (2) the National Flood Insurance Program; (3) 
managing federal real property; (4) strategic human capital management; 
(5) information sharing mechanisms to improve homeland security; and 
(6) protecting the federal government's information systems and 
critical infrastructure. 

[19] The CAO strategic plan is for fiscal years 2008 through 2012, the 
CIO strategic plan is for fiscal years 2009-2013, and the CHCO 
strategic plan is for fiscal years 2009 through 2013. The CSO strategic 
plan does not include any dates. 

[20] DHS, One Team, One Mission, Securing Our Homeland: U.S. Department 
of Homeland Security Strategic Plan, Fiscal Years 2008 - 2013 
(Washington, D.C.: 2008) 

[21] The other strategic-level goals included in the plan are: (1) 
protect our nation from dangerous people; (2) protect our nation from 
dangerous goods; (3) protect critical infrastructure; and (4) 
strengthen our nation's preparedness and emergency response 
capabilities. 

[22] The second objective focuses more specifically on intelligence and 
information-sharing operations, including: the timely attainment of 
intelligence and incident-related information for threat/risk 
mitigation; the creation of broad structures to collect, communicate, 
analyze, disseminate, and integrate security and law enforcement 
information; and the further development of private-public information 
sharing partnerships. The third objective focuses more specifically on 
strengthening and unifying the department's strategic and policy 
direction, through use of improved strategic planning and assessment; 
and advancing the department's operations coordination capacity for 
planning and coordinating cross-cutting operations that require multi- 
component activities. 

[23] [hyperlink, http://www.gao.gov/products/GAO-05-139]. 

[24] According to the act, beginning in fiscal year 2009 and every 4 
years after that, DHS must "conduct a review of the homeland security 
of the Nation." DHS plans to complete and report on the first QHSR no 
later than December 31, 2009, as required under the act. Pub. L. No. 
110-53, § 2401. See 6 U.S.C. § 347. 

[25] The other four study areas include (1) counterterrorism and 
domestic security management; (2) securing our borders; (3) enforcement 
of immigration laws; and (4) preparing for, responding to, and 
recovering from disasters. 

[26] DHS has established performance measures in support of Objectives 
5.2 and 5.3, but these measures are tracked by components other than 
the Management Directorate. The Management Directorate also has four 
other measures that support Goal 2 of DHS's Strategic Plan to "Protect 
Our Nation from Dangerous Goods." These performance measures are number 
of kilograms of cocaine seized by DHS components, number of kilograms 
of heroin seized by DHS components, number of kilograms of 
methamphetamine seized by DHS components, and number of pounds of 
marijuana seized by DHS components. 

[27] Pub. L. No. 103-62, 107 Stat. 285. 

[28] GAO, DHS: Billions Invested in Major Programs Lack Appropriate 
Oversight, GAO-09-29 (Washington, D.C.: November 18, 2009). 

[29] GAO, Homeland Security: Despite Progress, DHS Continues to Be 
Challenged in Managing Its Multi-Billion Dollar Annual Investment in 
Large-Scale Systems, [hyperlink, 
http://www.gao.gov/products/GAO-09-1002T] (Washington, D.C.: September 
15, 2009). 

[30] [hyperlink, http://www.gao.gov/products/GAO-09-29]. 

[31] DHS Office of the Inspector General, Major Management Challenges 
Facing the Department of Homeland Security, OIG-09-08 (Washington, 
D.C.: November 12, 2008). 

[32] [hyperlink, http://www.gao.gov/products/GAO-09-1002T]. 

[33] A material weakness is a significant deficiency, or a combination 
of significant deficiencies, that result in more than a remote 
likelihood that a material misstatement of the financial statements 
will not be prevented or detected. 

[34] DHS Office of the Inspector General, Independent Auditor's Report 
on FEMA's FY 2008 Mission Action Plans included in DHS FY 2009 Internal 
Control Playbook, OIG-09-76 (Washington, D.C.: June 5, 2009). 

[35] DHS Office of the Inspector General, Independent Auditor's Report 
on TSA's FY 2008 Mission Action Plans included in the DHS FY 2009 
Internal Control Playbook, OIG-09-68 (Washington, D.C.: May 21, 2009). 

[36] GAO, Financial Management Systems: DHS Faces Challenges to 
Successfully Consolidate its Existing Disparate Systems, [hyperlink, 
http://www.gao.gov/products/GAO-10-210T] (Washington, D.C.: October 29, 
2009). 

[37] DHS, DHS Budget in Brief Fiscal Year 2010 (Washington, D.C.: 
2009). 

[38] DHS Office of the Inspector General, DHS's Progress in Disaster 
Recovery Planning for Information Systems, OIG-09-60 (Washington, D.C.: 
April 16, 2009). 

[39] [hyperlink, http://www.gao.gov/products/GAO-03-669]. 

[40] [hyperlink, http://www.gao.gov/products/GAO-03-669]. The two 
practices noted here were selected from nine total performance 
management practices because they directly related to linkages between 
organizational and individual goals and objectives, and to cross-
cutting goals and objectives. Other practices that did not relate 
directly to linkages include providing and routinely using performance 
information to track organizational priorities, requiring follow-up 
actions to address organizational priorities, using competencies to 
provide a fuller assessment of performance, linking pay to individual 
and organizational performance, making meaningful distinctions in 
performance, involving employees and stakeholders to gain ownership of 
performance management systems, and maintaining continuity during 
transitions. 

[41] 6 U.S.C. § 341 (a). 

[42] Pub. L. No. 110-53, § 2405. See 6 U.S.C. § 341(c). 

[43] [hyperlink, http://www.gao.gov/products/GAO-03-669]. 

[44] The Management Directorate provides management services to DHS 
headquarters directorates and offices, which include the following 
organizations: Office of the DHS Secretary, Management Directorate, 
Science and Technology Directorate, NPPD, Office of Policy, Office of 
General Counsel, Office of Legislative Affairs, Office of Public 
Affairs, Office of the Inspector General, Office of Health Affairs, 
Intelligence and Analysis Directorate, Office of Operations 
Coordination, Citizenship and Immigration Services Ombudsman, Office of 
the Chief Privacy Officer, Office of Civil Rights and Civil Liberties, 
Office of Counternarcotics Enforcement, Domestic Nuclear Detection 
Office, and National Cyber Security Center. 

[45] Although the USM conducts the DHS CFO's performance evaluation, 
the CFO reports to both the Secretary of Homeland Security and the USM, 
as established by the Homeland Security Act of 2002 (6 U.S.C. § 342) 
and the Department of Homeland Security Financial Accountability Act 
(31 U.S.C. § 901 (b)(1)(G)). 

[46] Responsibilities of the component management chiefs may not 
correspond directly with responsibilities of the department chiefs in 
all management functions. 

[47] [hyperlink, http://www.gao.gov/products/GAO-05-139]. 

[End of section] 

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