Homeland Security:

Management Challenges Facing Federal Leadership

GAO-03-260: Published: Dec 20, 2002. Publicly Released: Dec 24, 2002.

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To understand the federal government's response since the September 11 terrorist attacks, GAO was asked to review governmentwide changes and challenges prevalent in the missions and activities of agencies involved in homeland security, including the coordination and collaboration required to meet overall goals and needs, and government's efforts in planning and implementing strategic, transitional, and human capital activities designed to reorganize and strengthen homeland security.

Since the terrorist attacks of September 11, 2001, the federal government has invigorated the homeland security missions of many departments and agencies, nearly doubled the amount of federal funds devoted to homeland security, enacted new legislation to create a new department and strengthen transportation security and law enforcement activities, leveraged relationships with state and local governments and the private sector, and begun to establish a framework for planning the national strategy and the transition required for implementing the new Department of Homeland Security and other homeland security goals. Overall, the federal government's response on homeland security issues is still evolving. A new homeland security emphasis is under way, but remains incomplete. Agencies reported a new emphasis on homeland security activities, such as accelerated implementation of existing homeland security activities or increased coordination with other government agencies or the private sector. Agencies will be challenged in meeting dual or unrelated missions while maintaining and strengthening homeland security operations. Government organizational changes are also contributing to the new emphasis, including creation of the Office of Homeland Security, the Transportation Security Administration, and the integration of many homeland security functions into the new Department of Homeland Security. Although officials say that coordination efforts at all levels have increased, concerns remain particularly with state and local government and collaboration with the private sector needs greater emphasis. The federal government's efforts to improve homeland security will require a results-oriented approach to ensure mission accountability and sustainability over time. Efforts to strengthen homeland security will require a strategy to accomplish agencies' missions, to create an effective transition for DHS, and to leverage management practices and key success factors in order to merge and transform the new department. In recognizing the value of a national strategy, OHS, DHS, and others should not expect that all of the homeland security objectives can be achieved simultaneously. As a result, it will be important for these agencies to focus initially on the most critical issues and great risks, and to guide the strategy's implementation in phases. Strategic planning efforts and comprehensive risk analysis activities have been started, but remain incomplete. Agencies with homeland security missions and the new department need an integrated human capital strategy, and the development of a performance management system and utilization of personnel flexibilities can improve organizations' effectiveness. DHS transition planning has started, but will require sustained efforts, including attention to management practices and key success factors.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: In March 2005, GAO issued a report on DHS's strategic planning efforts (GAO-05-300), and we noted that it was linked to the National Homeland Security Strategy, and we made a number of related recommendations. DHS's updated strategic plan has not been issued yet, so the status of developing specific performance measures and timeframes departmentwide has not changed. The Future Years Homeland Security Plan (FYHSP) does contain goals, targets and timeframes. Our report on DHS's progress in implementing its mission and management functions (the DHS "report card" GAO-07-454)states that since its inception, DHS has not done a good job of clarifying roles and responsibilities, coordinating and collaborating, and to establish effective accountability. Concerning balancing program objectives and priorities and making realistic resource allocations, we have reported that DHS does not have a department-wide risk assessment strategy.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, GAO recommends that, given the scope of homeland security objectives across the public and private sector, it is important for OHS, in conjunction with OMB and DHS, to set priorities, to help guide and support the development of performance measures and time frames, and to assess and oversee progress, in implementing the national homeland security strategy. Through the national strategy, OHS should also lead efforts to ensure clarity in the roles and responsibilities of all parties--OHS, OMB, DHS, and others--to leverage collaboration among them, and to establish effective accountability to meet national goals. Moreover, these entities will need to balance and reconcile program objectives and priorities, and make realistic resource allocations, within and among homeland security and non-homeland security missions across government.

    Agency Affected: Executive Office of the President: Office of Homeland Security

  2. Status: Closed - Not Implemented

    Comments: OMB's Transition Planning Office (TPO) was dissolved once the Department of Homeland Security was stood up in March 2003. DHS has not, to date, provided GAO with any planning documents from OMB's TPO to help GAO determine whether such transition plans existed and whether they included the mergers and transformation and other successful practices that GAO recommended. However, GAO has made a similar recommendation to DHS under GAO-05-139 related to a strategy for the management integration of DHS. DHS has provided us with its Management Directorate Strategic Plan, which contains some information relative to developing an agencywide management integration strategy, but there are no timelines and milestones that would allow the completion of this recommendation. In addition, the plan is not an integrated one, as we had recommended. According to an agency official at DHS, the Management Directorate plans to craft Lines-of-Business-specific functional integration plans, articulating the Line of Business Chief's plan for functional integration in his or her set of business activities and processes, with an articulated end-state, action steps, and a timeline. DHS is undertaking the first of those functional integration plans with the Chief of Administrative Services, as a prototype effort. Once this prototype plan matures and DHS has identified lessons learned from this approach, it intends to extend that type of functional integration planning effort in each Line of Business within the Management Directorate. In a May 10, 2007, testimony on DHS's management challenges (GAO-07-833T), we stated that DHS continues to lack a comprehensive management integration strategy with overall goals, a timeline, appropriate responsibility and accountability determinations, and a dedicated team to support its management integration efforts.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OMB, in developing an effective transition plan for DHS, should ensure that the plan incorporates the practices identified during Mergers and Transformation Forum, as well as key factors for successful organizations listed in appendix II in helping lay the foundation for a cohesive, world-class organization capable of protecting the nation from terrorism.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Not Implemented

    Comments: In February 2005, DHS issued its final regulations for its new human capital system. In March 2005, GAO issued a report on DHS' strategic planning efforts (GAO-05-300) that made a number of related recommendations. DHS has not yet updated its strategic plan that would indicate whether they have implemented our prior recommendations related to strategic planning. Consistent with another prior recommendation, DHS has directed the establishment of a departmentwide strategic framework for managing its IT information. As we reported in March 2006, DHS is continuing to work to institutionalize the strategic framework, including fully defining and implementing effective IT management controls and capabilities (disciplines). The department has made efforts over the past 3 years to establish and implement these IT management disciplines, and is still striving to make these and the other disciplines fully mature and institutionalized. For example, the department has completed a comprehensive inventory of its major information systems, a prerequisite for effective security management as a key step toward its future implementation of a comprehensive information security program. Similarly, the department's other IT disciplines, such as its enterprise architecture, are also still evolving at various stages of maturity and as such, also remain a work in process. Based on our work on DHS's financial management over the past three years, while some progress has been made, there are a number of challenges facing the department in this area. For example, the independent auditors for DHS were unable to express an opinion on the department's most recent (FY 2005) financial statements, and cited 10 material weaknesses. These material weaknesses included financial management oversight, financial reporting, financial systems security, and budgetary accounting among other areas. We also found that DHS's financial management system does not substantially conform to government-wide requirements, including nonconformance with federal accounting standards and the US Standard General Ledger. A new financial management system (eMerge2) was being developed in DHS but did not meet established performance goals and timelines. The contract for eMerge2 was cancelled in October 2005. DHS officials decided to focus on leveraging the financial systems already in place. The revised strategy allows DHS components to choose from an array of existing financial management shared service providers. Our DHS report card report (GAO-07-454) notes that DHS has made modest progress in acquisition and financial management, and limited progress in human capital and IT management. We have also noted in a recent testimony (GAO-07-833T) that DHS still has not developed a management integration strategy.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, over the coming years, OMB, in conjunction with DHS, should help ensure the implementation of broad-based management practices and principles that will improve the sustainability of DHS and other homeland security activities, consistent with statutory and regulatory requirements as well as with the President's Management Agenda. They should, in part, direct the establishment of appropriate plans and management systems to ensure the needed management capacity, people, partnerships, and accountability to achieve national homeland security goals. This includes an effective strategic planning system that articulates meaningful performance goals, objectives, and measures; an effective human capital strategy; and a process for reporting and oversight. Strong financial and information technology systems and internal controls will also be critical to the success of DHS and other organizations with homeland security missions.

    Agency Affected: Executive Office of the President: Office of Homeland Security

  4. Status: Closed - Not Implemented

    Comments: In February 2005, DHS issued its final regulations for its new human capital system. In March 2005, GAO issued a report on DHS' strategic planning efforts (GAO-05-300) that made a number of related recommendations. DHS has not yet updated its strategic plan that would indicate whether they have implemented our prior recommendations related to strategic planning. Consistent with another prior recommendation, DHS has directed the establishment of a departmentwide strategic framework for managing its IT information. As we reported in March 2006, DHS is continuing to work to institutionalize the strategic framework, including fully defining and implementing effective IT management controls and capabilities (disciplines). The department has made efforts over the past 3 years to establish and implement these IT management disciplines, and is still striving to make these and the other disciplines fully mature and institutionalized. For example, the department has completed a comprehensive inventory of its major information systems, a prerequisite for effective security management as a key step toward its future implementation of a comprehensive information security program. Similarly, the department's other IT disciplines, such as its enterprise architecture, are also still evolving at various stages of maturity and as such, also remain a work in process. Based on our work on DHS's financial management over the past three years, while some progress has been made, there are a number of challenges facing the department in this area. For example, the independent auditors for DHS were unable to express an opinion on the department's most recent (FY 2005) financial statements, and cited 10 material weaknesses. These material weaknesses included financial management oversight, financial reporting, financial systems security, and budgetary accounting among other areas. We also found that DHS's financial management system does not substantially conform to government-wide requirements, including nonconformance with federal accounting standards and the US Standard General Ledger. A new financial management system (eMerge2) was being developed in DHS but did not meet established performance goals and timelines. The contract for eMerge2 was cancelled in October 2005. DHS officials decided to focus on leveraging the financial systems already in place. The revised strategy allows DHS components to choose from an array of existing financial management shared service providers. Our DHS report card report (GAO-07-454) notes that DHS has made modest progress in acquisition and financial management, and limited progress in human capital and IT management. We have also noted in a recent testimony (GAO-07-833T) that DHS still has not developed a management integration strategy.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, over the coming years, OMB, in conjunction with DHS, should help ensure the implementation of broad-based management practices and principles that will improve the sustainability of DHS and other homeland security activities, consistent with statutory and regulatory requirements as well as with the President's Management Agenda. They should, in part, direct the establishment of appropriate plans and management systems to ensure the needed management capacity, people, partnerships, and accountability to achieve national homeland security goals. This includes an effective strategic planning system that articulates meaningful performance goals, objectives, and measures; an effective human capital strategy; and a process for reporting and oversight. Strong financial and information technology systems and internal controls will also be critical to the success of DHS and other organizations with homeland security missions.

    Agency Affected: Office of Personnel Management

  5. Status: Closed - Implemented

    Comments: In February 2005, the Department of Homeland Security issued its final regulations for its new human capital system. Among the system's requirements is setting and communicating performance expectations to employees. Further, these expectations must align with and support the Department's strategic goals and other measures of performance.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OPM in conjunction with OMB and the agencies, should develop and oversee the implementation of a long-term human capital strategy that can support the capacity building across government required to meet the objectives of the nation's efforts to strengthen homeland security. With respect to DHS, in particular, this strategy should establish an effective performance management system, which incorporates the practices that reinforce a "line of sight" that shows how unit and individual performance can contribute to overall organization goals.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  6. Status: Closed - Implemented

    Comments: In February 2005, the Department of Homeland Security issued its final regulations for its new human capital system. Among the system's requirements is setting and communicating performance expectations to employees. Further, these expectations must align with and support the Department's mission and strategic goals and other measures of performance.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OPM in conjunction with OMB and the agencies, should develop and oversee the implementation of a long-term human capital strategy that can support the capacity building across government required to meet the objectives of the nation's efforts to strengthen homeland security. With respect to DHS, in particular, this strategy should establish an effective performance management system, which incorporates the practices that reinforce a "line of sight" that shows how unit and individual performance can contribute to overall organization goals.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  7. Status: Closed - Implemented

    Comments: In February 2005, the Department of Homeland Security issued its final regulations for its new human capital system to implement the flexibilities established in the Homeland Security Act (P.L. 107-296).

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OPM, in conjunction with OMB and the agencies, should develop and oversee the implementation of a long-term human capital strategy that can support the capacity building across government required to meet the objectives of the nation's efforts to strengthen homeland security. With respect to DHS, in particular, this strategy should provide for the appropriate utilization of the human capital flexibilities granted to DHS to effectively manage its workforce.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  8. Status: Closed - Implemented

    Comments: In February 2005, the Department of Homeland Security issued its final regulations for its new human capital system to implement the flexibilities established in the Homeland Security Act, P.L. 107-296.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OPM, in conjunction with OMB and the agencies, should develop and oversee the implementation of a long-term human capital strategy that can support the capacity building across government required to meet the objectives of the nation's efforts to strengthen homeland security. With respect to DHS, in particular, this strategy should provide for the appropriate utilization of the human capital flexibilities granted to DHS to effectively manage its workforce.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  9. Status: Closed - Implemented

    Comments: GAO reported that in designing its new human capital system, the Department of Homeland Security provided for collaboration and employee involvement. In addition, the final regulations provide for continuing collaboration in developing directives, participating on the Compensation Committee, and commenting on evaluations of the system.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OPM, in conjunction with OMB and the agencies, should develop and oversee the implementation of a long-term human capital strategy that can support the capacity building across government required to meet the objectives of the nation's efforts to strengthen homeland security. With respect to DHS, in particular, this strategy should foster an environment that promotes employee involvement and empowermnent, as well as constructive and cooperative labor-management employee relations.

    Agency Affected: Office of Personnel Management

  10. Status: Closed - Implemented

    Comments: DHS provided for collaboration and employee involvement. Employees were provided multiple opportunities to be included in the design team, town hall meetings, and focus groups. The regulations also recognize the importance of employee involvement in implementing the new system and providing for involvement in developing directives, participating on the compensation committee, and commenting on evaluations.

    Recommendation: As the federal government clearly faces a number of leadership and management challenges in achieving its homeland security mission, OPM, in conjunction with OMB and the agencies, should develop and oversee the implementation of a long-term human capital strategy that can support the capacity building across government required to meet the objectives of the nation's efforts to strengthen homeland security. With respect to DHS, in particular, this strategy should foster an environment that promotes employee involvement and empowermnent, as well as constructive and cooperative labor-management employee relations.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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