Budget Issues:

Reprogramming of Federal Air Marshal Service Funds in Fiscal Year 2003

GAO-04-577R: Published: Mar 31, 2004. Publicly Released: Mar 31, 2004.

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Susan J. Irving
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On May 15, 2003, and again on July 25, 2003, the Department of Homeland Security (DHS) notified the House and Senate Committees on Appropriations, Subcommittees on Homeland Security, of its intention to reprogram a large amount of funds appropriated to the Transportation Security Administration (TSA) for fiscal year 2003. In an August 2003 letter, Congress requested that we review the key events leading up to the reprogramming and subsequent revisions as they related to the Federal Air Marshal Service (FAMS). In particular, we were asked to determine (1) whether senior TSA, DHS, and Office of Management and Budget (OMB) officials were informed of the implications of the FAMS funding reductions prior to submission of the reprogramming notices; (2) the programmatic implications of the funding reductions on the FAMS program; (3) whether it was legally necessary to send an impoundment message to the Congress; and whether the Secretary of Homeland Security had delegated to the Under Secretary for Management the authority to transmit reprogramming notifications to the cognizant Appropriations Subcommittees. Finally, Congress asked us to identify, as appropriate, improvements in budget execution for future consideration. As agreed, we briefed Congressional staff on February 27, 2004, and March 3, 2004, on the results of our work. This report transmits the information we provided in those briefings.

Reprogramming actions allow agencies to shift funds within an account to fund other requirements within an existing appropriation that were not planned when the appropriation was made. Unless limited by some provision of law, agencies are implicitly authorized to reprogram funds as part of their general responsibility to manage funds. However, appropriations laws often set limits on reprogramming or require notification of reprogramming under certain conditions or over certain thresholds. The TSA fiscal year 2003 reprogramming met the notification thresholds established by Section 1601 of the Emergency Wartime Supplemental Appropriations Act. For the specific reprogramming notification requirements. The fiscal year 2003 TSA reprogramming was developed against a backdrop of both rapid program expansion and a changing organizational environment. Among the program expansions affecting TSA were the federalization of passenger and baggage screening functions at airports, establishment of federal airport security directors, deployment of explosives detection equipment for checked baggage, mandatory criminal history checks for employees working in secure airport areas, and working with airlines to strengthen cockpit doors on all passenger aircraft. Further, after the terrorist attacks of September 11, 2001, the President and the Congress decided to rapidly expand FAMS. Within 10 months of the terrorist attacks on the United States, the number of federal air marshals grew from fewer than 50 to thousands. Beyond these program expansions, two major organizational transitions occurred in a 16 month period. First, in November 2001, TSA was created within the Department of Transportation to centralize federal aviation and other transportation security efforts. Aviation security activities that were formerly the responsibility of the Federal Aviation Administration (FAA), including FAMS, were moved to the newly created TSA. Second, FAMS moved with the rest of TSA to DHS when the department was established on March 1, 2003. The budget and appropriations environment in fiscal year 2003 and changing mission needs added to the uncertainty of the situation. Like all federal civilian agencies, TSA faced the challenges inherent in operating under a series of continuing resolutions until February 2003--nearly half of the fiscal year. As a new agency with a newly expanded federal role and mission, TSA faced an additional challenge. It had no historical information to assist in estimating costs for efforts such as federalized checkpoints, baggage screening, and the full growth of the FAMS program. Additionally, initial budget estimates for TSA were created before its mission and organizational structure were established. All of this contributed to a situation described by TSA Chief Financial Officer (CFO) staff as a "misalignment" between fiscal year 2003 appropriations and mission needs at the time appropriations were enacted. TSA CFO staff told us that the need for a reprogramming was clear at that time.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In its guidance on budget execution issued January 26, 2005, the Department of Homeland Security included new language that stated that: "Before submitting reprogrammings, Organizational Elements should clearly identify a process for communicating final reprogramming decisions to affected program managers." In addition, the guidance includes information on how the results of reprogramming actions will be conveyed.

    Recommendation: The Secretary of Homeland Security should articulate the consultation and approval process for reprogrammings and, in particular, state how senior management will communicate final reprogramming decisions to officials of affected programs.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security

  2. Status: Closed - Implemented

    Comments: As a result of GAO's recommendation, the Department of Homeland Security Budget Execution Guidance for FY2005 specifies that component organizations will: "Ensure that congressional directives and obligations made against directive budget authority can be separately identified."

    Recommendation: The Secretary of Homeland Security should require components to identify separately the obligation and expenditure of earmarked funds, which agencies must be able to report.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security

  3. Status: Closed - Implemented

    Comments: As a result of GAO's recommendation, the department's FY2005 budget execution guidance was revised to read: "Before submitting reprogrammings, Organizational Entities should develop a way to monitor below reporting threshold reprogrammings to determnine whether cumulatively there is a need for a reprogramming notification."

    Recommendation: The Secretary of Homeland Security should specify how the department plans to monitor cumulative reprogramming actions below reporting thresholds that can result in a need to notify the appropriations subcommittees.

    Agency Affected: Department of Homeland Security: Directorate of Border and Transportation Security


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