Transfer of Budgetary Resources to the Department of Homeland Security (DHS)

GAO-04-329R: Published: Apr 30, 2004. Publicly Released: May 4, 2004.

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The enactment of the Homeland Security Act of 2002 led to the most substantial reorganization of the federal government since the 1940s by creating the Department of Homeland Security (DHS). Established in January 2003, DHS combined 29 program functions that were transferred from 10 agencies, referred to as the legacy agencies. In addition, legacy agencies transferred resources for support functions, such as offices of inspectors general and management and support. According to the President's proposal to create DHS, the reorganization was also designed to, among other things, achieve future savings through the elimination of redundancies among the transferred programs. Given the breadth and magnitude of the reorganization, questions have been raised among members of Congress and in the media about whether the creation of DHS would prompt increases in the size of the workforces at the agencies affected by the reorganization. This report responds to a request by the Chairman, House Committee on Transportation and Infrastructure, that we examine how the transfer of full-time equivalent (FTE) positions to DHS was conducted at the agencies involved in the transfer. Specifically, in this report, we (1) identify the budgetary resources and number of FTEs transferred from the legacy agencies to DHS, (2) compare the number of FTEs at DHS with the number of FTEs transferred from functions at legacy agencies, (3) identify differences between legacy agency fiscal year 2003 FTE balances after the transition and their fiscal year 2004 FTE requests, and (4) discuss any DHS efforts to identify opportunities to achieve personnel cost savings related to the reorganization.

The Office of Management and Budget (OMB) estimated that of the $38.28 billion transferred from 10 legacy agencies to DHS, $24.76 billion would support DHS's fiscal year 2003 needs, including funding for the 181,875 FTEs transferred from legacy agencies. Ninety-seven percent of the FTEs transferred were associated with seven program functions whose budget accounts were transferred to DHS in their entirety, including the functions of a former standalone agency, the Federal Emergency Management Agency. The nine remaining legacy agencies reported FTE decreases in their fiscal year 2003 budgets that generally matched OMB estimates of FTEs transferred to DHS. Only limited information was available to identify differences between legacy agency FTE balances after the transfer and their fiscal year 2004 requests. For the 24 budget accounts that were the source of the remaining 3 percent of FTEs transferred to DHS, the nine legacy agencies reported that, for their fiscal year 2004 requests: (1) 17 of 24 budget accounts included requests for FTEs less than or equal to the number of FTEs remaining after the transfer, and (2) 7 of 24 budget accounts included requests for FTEs greater than the number of FTEs remaining after the transfer. All legacy agencies reported that requested increases in FTEs were unrelated to the transfer of FTEs to DHS. DHS officials told us that while it was too early to identify personnel savings from the consolidation of legacy agency program functions in DHS, the department is beginning to examine some opportunities that may lead to such savings. They also said that these savings opportunities will have to be balanced with new departmental mission needs as yet to be determined.

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