Department of Homeland Security:

Billions Invested in Major Programs Lack Appropriate Oversight

GAO-09-29: Published: Nov 18, 2008. Publicly Released: Nov 20, 2008.

Additional Materials:

Contact:

Michele Mackin
(202) 512-3000
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

In fiscal year 2007, the Department of Homeland Security (DHS) obligated about $12 billion for acquisitions to support homeland security missions. DHS's major investments include Coast Guard ships and aircraft; border surveillance and screening equipment; nuclear detection equipment; and systems to track finances and human resources. In part to provide insight into the cost, schedule, and performance of these acquisitions, DHS established an investment review process in 2003. However, concerns have been raised about how well the process has been implemented--particularly for large investments. GAO was asked to (1) evaluate DHS's implementation of the investment review process, and (2) assess DHS's integration of the investment review and budget processes to ensure major investments fulfill mission needs. GAO reviewed relevant documents, including those for 57 DHS major investments (investments with a value of at least $50 million)--48 of which required department-level review through the second quarter of fiscal year 2008; and interviewed DHS headquarters and component officials.

While DHS's investment review process calls for executive decision making at key points in an investment's life cycle--including program authorization--the process has not provided the oversight needed to identify and address cost, schedule, and performance problems in its major investments. Poor implementation of the process is evidenced by the number of investments that did not adhere to the department's investment review policy--of DHS's 48 major investments requiring milestone and annual reviews, 45 were not assessed in accordance with this policy. At least 14 of these investments have reported cost growth, schedule slips, or performance shortfalls. Poor implementation is largely the result of DHS's failure to ensure that its Investment Review Board (IRB) and Joint Requirements Council (JRC)--the department's major acquisition decision-making bodies--effectively carried out their oversight responsibilities and had the resources to do so. Regardless, when oversight boards met, DHS could not enforce IRB and JRC decisions because it did not track whether components took actions called for in these decisions. In addition, many major investments lacked basic acquisition documents necessary to inform the investment review process, such as program baselines, and two out of nine components--which manage a total of 8 major investments--do not have required component-level processes in place. DHS has begun several efforts to address these shortcomings, including issuing an interim directive, to improve the investment review process. The investment review framework also integrates the budget process; however, budget decisions have been made in the absence of required oversight reviews and, as a result, DHS cannot ensure that annual funding decisions for its major investments make the best use of resources and address mission needs. GAO found almost a third of DHS's major investments received funding without having validated mission needs and requirements--which confirm a need is justified--and two-thirds did not have required life- cycle cost estimates. At the same time, DHS has not conducted regular reviews of its investment portfolios--broad categories of investments that are linked by similar missions--to ensure effective performance and minimize unintended duplication of effort for investments. Without validated requirements, life-cycle cost estimates, and regular portfolio reviews, DHS cannot ensure that its investment decisions are appropriate and will ultimately address capability gaps. In July 2008, 15 of the 57 DHS major investments reviewed by GAO were designated by the Office of Management and Budget as poorly planned and by DHS as poorly performing.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DHS concurred with this recommendation and has taken action to implement it. In the department's letter to OMB and Congress, DHS stated that it had created and piloted a Next Generation Periodic Reporting System to regularly track key program information including, cost, schedule, and performance information, contract awards, and program risks. The database became fully operational in September, 2009 and as of November, 2009, DHS reported to us that 108 major and nonmajor programs were reporting into the database. DHS also established an internal process and has been tracking the results of acquisition review board decisions and required action items.

    Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to establish a mechanism to identify and track on a regular basis new and ongoing major investments and ensure compliance with actions called for by investment oversight boards.

    Agency Affected: Department of Homeland Security

  2. Status: Closed - Implemented

    Comments: In June 2014, the Secretary of Homeland Security directed the creation of a Joint Requirements Council (JRC) to look at cross-component requirements and better inform budget and acquisition reviews. A group chaired by the Deputy Secretary directed the JRC to convene by the first week of July 2014 and focus on five priority areas: information-based screening and vetting; chemical, biological, radiological, and nuclear surveillance and detection; aviation commonality; cybersecurity; and information sharing. Going forward, the JRC will be supported by portfolio teams organized by the five homeland security mission areas in the Quadrennial Homeland Security Review. This accomplishment should help DHS assess potential duplication of effort across acquisition programs, and improve the management of the department's acquisition portfolio as a whole.

    Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to reinstate the JRC or establish another departmental joint requirements oversight board to review and approve acquisition requirements and assess potential duplication of effort.

    Agency Affected: Department of Homeland Security

  3. Status: Closed - Implemented

    Comments: DHS concurred with this recommendation and has taken action to implement it through issuance of the November 2008 interim acquisition management directive 102-01, which requires that acquisition decisions reached at acquisition decision events are documented through an acquisition decision memorandum. These memos are approved by the appropriate acquisition decision authority and have been consistently completed for acquisition decision events occurring through the third quarter of fiscal year 2009.

    Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to ensure investment decisions are transparent and documented as required.

    Agency Affected: Department of Homeland Security

  4. Status: Closed - Implemented

    Comments: The intent of this recommendation was to strengthen the link between DHS's budget formulation and acquisition management processes. In June 2014, DHS's acting Chief Financial Officer (CFO) established that the senior financial officers responsible for implementing the department's budget process shall affirm that acquisition programs are affordable at acquisition decision events. That same month, DHS's Chief Acquisition Officer, the acting Under Secretary for Management, reinforced the importance of linking budget formulation and acquisition management processes by directing the Under Secretary for the National Protection and Programs Directorate to fully fund the Continuous Diagnostics and Mitigation acquisition program. This accomplishment should help DHS's acquisition programs achieve their cost, schedule, and performance goals.

    Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to ensure that budget decisions are informed by the results of investment reviews including IRB approved acquisition information and life cycle cost estimates.

    Agency Affected: Department of Homeland Security

  5. Status: Closed - Implemented

    Comments: In response to this recommendation, DHS indicated that its Office of the Chief Procurement Officer (OCPO) has identified and aligned management resources to implement oversight reviews by establishing a Senior-executive led Acquisition Program Management Division as well as a Cost Analysis Division within the OCPO, and that staffing would eventually increase to a total of 58 personnel. Toward this goal, DHS increased staff from 8 to 22 government employees at the end of fiscal year 2009. In 2011, DHS combined the two divisions into the newly established Office of Program Accountability and Risk Management (PARM). In February 2012, PARM officials told GAO that they had 46 positions available, and that they expected to gain another 10 positions during fiscal year 2012. PARM officials also told GAO that they had enough resources to hold oversight reviews when components request them. This accomplishment should allow DHS to implement its knowledge-based acquisition policy more consistently in the future, and reduce the risk that major acquisitions will perform poorly.

    Recommendation: To better ensure the investment review process is fully implemented and adhered to, the Secretary of Homeland Security should direct the Undersecretary for Management to identify and align sufficient management resources to implement oversight reviews in a timely manner throughout the investment life cycle.

    Agency Affected: Department of Homeland Security

  6. Status: Closed - Implemented

    Comments: DHS has implemented this recommendation. In its response to OMB and the Congress, DHS noted that the November 2008 DHS acquisition management directive 102-01, required components to align their internal policies and procedures with DHS standards within six months. In addition, the DHS Undersecretary for Management issued a January 2009 memo to Component Heads requiring them to create a Component Acquisition Executive position in their organizations responsible for the implementation of management and oversight of component acquisition processes.

    Recommendation: To improve investment management, the Secretary of Homeland Security should direct component heads to ensure that components have established processes to manage major investments consistent with departmental policies.

    Agency Affected: Department of Homeland Security

  7. Status: Closed - Implemented

    Comments: DHS concurred with this recommendation, and in January 2009, the DHS Under Secretary for Management issued a memorandum outlining the designation and implementation process for component acquisition executive (CAE) positions. In June 2012, DHS reported that all components had CAEs in place. This accomplishment should allow DHS to implement its knowledge-based acquisition policy more consistently in the future, and reduce the risk that major acquisitions will perform poorly.

    Recommendation: To improve investment management, the Secretary of Homeland Security should direct component heads to establish a mechanism to ensure major investments comply with established component and departmental investment review policy standards.

    Agency Affected: Department of Homeland Security

 

Explore the full database of GAO's Open Recommendations »

Nov 6, 2014

Oct 14, 2014

Sep 30, 2014

Sep 24, 2014

Sep 18, 2014

Sep 17, 2014

Sep 10, 2014

Sep 9, 2014

Looking for more? Browse all our products here