Combating Illicit Financing:

Treasury's Office of Terrorism and Financial Intelligence Could Manage More Effectively to Achieve Its Mission

GAO-09-794: Published: Sep 24, 2009. Publicly Released: Oct 26, 2009.

Additional Materials:

Contact:

Loren Yager
(202) 512-4347
contact@gao.gov

 

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

In 2004, Congress combined preexisting and newly created units to form the Office of Terrorism and Financial Intelligence (TFI) within the Department of the Treasury (Treasury). TFI's mission is to integrate intelligence and enforcement functions to (1) safeguard the financial system against illicit use and (2) combat rogue nations, terrorist facilitators, and other national security threats. In the 5 years since TFI's creation, questioned have been raised about how TFI is managed and allocates its resources. As a result, GAO was asked to analyze how TFI (1) implements its functions, particularly in collaboration with interagency partners, (2) conducts strategic resource planning, and (3) measures its performance. To conduct this analysis, GAO reviewed Treasury and TFI planning documents, performance reports, and workforce data, and interviewed officials from Treasury and its key interagency partners.

TFI undertakes five functions, each implemented by a TFI component, in order to achieve its mission. TFI officials cite the analysis of financial intelligence as a critical part of TFI's efforts because it underlies TFI's ability to utilize many of its tools. They said that the creation of OIA was critical to Treasury's ability to effectively identify illicit financial networks. To achieve its mission, TFI's five components often work with each other, other U.S. government agencies, the private sector, or foreign governments. Officials from TFI and its interagency partners cited strong collaboration in many areas, such as effective information sharing between FinCEN and the Justice Department (Justice). Officials differed, however, about the quality of interagency collaboration involving international forums. Treasury officials who led this collaboration stated that it runs smoothly and that they were unaware of any significant concerns, while Justice and State officials reported declining collaboration and unclear mechanisms to enhance or sustain it. While TFI and some of its components have conducted selected strategic resource planning activities, TFI as a unit has not fully adopted key practices that enhance such efforts. For example, TFI and its components have produced multiple strategic planning documents in recent years, but the objectives in some of these documents are not clearly aligned with resources needed to achieve them. As a result, it may be unclear whether TFI has sufficient resources to address its objectives. Also, though TFI has undertaken some workforce planning activities, it lacks a process for performing comprehensive strategic workforce planning. Thus, it is unclear whether TFI is able to effectively address persistent workforce challenges. Also, TFI has not yet developed appropriate performance measures, changing their number and substance each year. Though TFI's current measures fully address many attributes of effective performance measures, they do not cover all TFI core program activities. TFI officials acknowledge the need for improvement and have worked since 2007 to develop one overall performance measure to assess TFI. Yet questions remain about when TFI will implement its new measure and whether it will effectively gauge TFI's performance.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: In relation to our recommendation to develop and implement a TFI-wide process to address the key principles of strategic workforce planning, Treasury commented on the draft of this report that it was working with Johns Hopkins University's Capstone Consulting to develop a workforce planning model for Treasury. As a part of this effort, TFI planned to develop and disseminate written guidance establishing a process to align resources with TFI and Treasury strategic goals within 12 months of the issuance of this September 2009 report. Despite our repeated efforts to contact TFI officials from April through July 2013, they did not respond with any information or documentation on how they implemented this recommendation.

    Recommendation: To help strengthen Treasury's ability to achieve its strategic goal of preventing terrorism and promoting the nation's security through strengthened international financial systems, the Secretary of the Treasury should direct the Under Secretary for Terrorism and Financial Intelligence to develop and implement a TFI-wide process, including written guidance, that addresses the key principles of strategic workforce planning.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Not Implemented

    Comments: In response to our recommendation to develop and implement policies and procedures for aligning resources with TFI's strategic priorities, Treasury indicated in its comments on a draft of this report that TFI was working to improve its processes in this area. While Treasury stated that its use of the annual budget process has worked well to match resources to strategic goals, we had concluded that the annual budget process does not necessarily reflect TFI's strategic priorities, in part because it reflects priorities for only a given year and not longer-term priorities. Despite our repeated efforts to contact TFI officials from April through July 2013, they did not respond with any information or documentation on how they implemented this recommendation.

    Recommendation: To help strengthen Treasury's ability to achieve its strategic goal of preventing terrorism and promoting the nation's security through strengthened international financial systems, the Secretary of the Treasury should direct the Under Secretary for Terrorism and Financial Intelligence to develop and implement policies and procedures for aligning resources with TFI's strategic priorities.

    Agency Affected: Department of the Treasury

  3. Status: Closed - Not Implemented

    Comments: With regard to our recommendation that TFI develop and implement policies and procedures to operate across agency boundaries and develop a mechanism for monitoring, evaluating, and reporting on interagency collaboration, the Under Secretary for Terrorism and Financial Intelligence indicated in comments on a draft of this report that his counterparts in other agencies have never expressed concerns about process or substance to him regarding TFI?s collaboration. Nonetheless, Treasury stated that it would redouble its efforts to coordinate with other agencies, but did not identify specific steps it planned to take. As discussed in our report, we recommended that such steps include developing clear policies for conducting and monitoring the results of interagency collaboration. Despite our repeated efforts to contact TFI officials from April through July 2013, they did not respond with any information or documentation on how they implemented this recommendation.

    Recommendation: To help strengthen Treasury's ability to achieve its strategic goal of preventing terrorism and promoting the nation's security through strengthened international financial systems, the Secretary of the Treasury should direct the Under Secretary for Terrorism and Financial Intelligence to develop and implement, in consultation with interagency partners participating in international forums related to anti-money laundering and counterterrorist financing issues, (a) compatible policies, procedures, and other means to operate across agency boundaries and (b) a mechanism for monitoring, evaluating, and reporting on interagency collaboration.

    Agency Affected: Department of the Treasury

  4. Status: Closed - Implemented

    Comments: In commenting on a draft of the report, TFI committed to finalizing performance measures and working to ensure they meet the attributes of successful measures. GAO identified 5 newly-developed TFI performance measures for fiscal year 2011 and evaluated these new measures for the key attributes of successful performance measures. GAO found that the new measures fully satisfy the attributes of "linkage" and "core program activities" in addition to addressing nearly all of the other key attributes

    Recommendation: To help strengthen Treasury's ability to achieve its strategic goal of preventing terrorism and promoting the nation's security through strengthened international financial systems, the Secretary of the Treasury should direct the Under Secretary for Terrorism and Financial Intelligence to ensure that TFI's performance measures exhibit the key attributes of successful performance measures.

    Agency Affected: Department of the Treasury

 

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