DHS’s Transformation

We first designated DHS’s transformation as high risk in January 2003  based on three factors. For example, many of the major components that were merged  into the department, including the Immigration and Naturalization Service,  the Transportation Security Administration, the Customs Service, the  Federal Emergency Management Agency, and the Coast Guard, brought  with them existing challenges in areas such as strategic human capital,  information technology, and financial management. Finally, DHS’s  national security mission was of such importance that the failure to  effectively address its management challenges and program risks could  have serious consequences on our intergovernmental system, the health  and safety of our citizens, and our economy. DHS Must Address Key Management Challenges

Managing the transformation of an organization of the size and complexity  of DHS requires comprehensive planning, integration of key management  functions across the department, and partnering with stakeholders across  the public and private sectors. DHS has made some progress in each of  these areas, but much additional work is required to help ensure  sustainable success. Apart from these integration efforts, however, a  successful transformation will also require DHS to follow through on its  initial actions of building capacity to improve the management of its  financial and information technology systems, as well as its human capital  and acquisition efforts. DHS has also not completed other important planning-related  activities. However,  DHS lacks 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. Although DHS has issued  guidance and plans to assist management integration on a function by  function basis, it has not developed a plan that clearly identifies the  critical links that should occur across these functions, the necessary  timing to make these links occur, how these interrelationships will occur,  and who will drive and manage them. Since 2005,  DHS has continued to form necessary partnerships and has undertaken a  number of coordination efforts with private sector entities. Acquisition Management

DHS has made some progress but continues to face challenges in creating  an effective, integrated acquisition organization. Transportation Security

Despite progress in this area, DHS continues to face challenges in  effectively executing transportation security efforts. However, DHS still faces significant challenges in its  ability to effectively provide immigration services while at the same time  protecting the immigration system from fraud and mismanagement. We also recommended that DHS   (1) rigorously re-test, train, and exercise its recent clarification of the  roles, responsibilities, and lines of authority for all levels of leadership,  implementing changes needed to remedy identified coordination  problems; (2) direct that the National Response Plan (NRP) base plan and  its supporting Catastrophic Incident Annex be supported by more robust  and detailed operational implementation plans; (3) provide guidance and  direction for federal, state, and local planning, training, and exercises to  ensure such activities fully support preparedness, response, and recovery  responsibilities at a jurisdictional and regional basis; (4) take a lead in  monitoring federal agencies’ efforts to prepare to meet their  responsibilities under the NRP and the interim National Preparedness  Goal; and (5) use a risk management approach in deciding whether and  how to invest finite resources in specific capabilities for a catastrophic  disaster. Actions Needed to Strengthen DHS’s Transformation and Integration Efforts

To be removed from our high-risk list, agencies need to develop a  corrective action plan that defines the root causes of identified problems,  identifies effective solutions to those problems, and provides for  substantially completing corrective measures in the near term. Such a plan  should include performance measures, metrics and milestones to measure  their progress. According to an official at  OMB, this is one of the few high-risk areas that have not produced a final  corrective action plan. Appendix I: Related GAO Products

	Implementing and Transforming the Department of Homeland Security

		Implementation and Transformation

High-Risk Series: An Update, GAO-07-310 (Washington, D.C.: Jan. 31,  2007).
Why GAO Did This Study

The Department of Homeland Security (DHS) plays a key role in leading and coordinating--with stakeholders in the federal, state, local, and private sectors--the nation's homeland security efforts. GAO has conducted numerous reviews of DHS management functions as well as programs including transportation and border security, immigration enforcement and service delivery, and disaster preparation and response. This testimony addresses: (1) why GAO designated DHS's implementation and transformation as a high-risk area, (2) specific management challenges that DHS continues to face, (3) examples of the program challenges that DHS faces, and (4) actions DHS should take to strengthen its implementation and transformation efforts.

What GAO Found

GAO designated implementing and transforming DHS as high risk in 2003 because DHS had to transform and integrate 22 agencies--several with existing program and management challenges--into one department, and failure to effectively address its challenges could have serious consequences for our homeland security. Despite some progress, this transformation remains high risk. Managing the transformation of an organization of the size and complexity of DHS requires comprehensive planning and integration of key management functions that will likely span a number of years. DHS has made some progress in these areas, but much additional work is required to help ensure sustainable success. DHS has also issued guidance and plans to assist management integration on a function by function basis, but lacks a comprehensive integration strategy with overall goals, a timeline, appropriate responsibility and accountability determinations, and a dedicated team to support its efforts. The latest independent audit of DHS's financial statements showed that its financial management systems still do not conform to federal requirements. DHS has also not institutionalized an effective strategic framework for information management, and its human capital and acquisition systems require further attention to ensure that DHS allocates resources economically, effectively, ethically, and equitably. Since GAO's 2007 high-risk update, DHS has continued to strengthen program activities but still faces a range of programmatic and partnering challenges. To help ensure its missions are achieved, DHS must overcome continued challenges related to such issues as cargo, transportation, and border security; systematic visitor tracking; efforts to combat the employment of illegal aliens; and outdated Coast Guard asset capabilities. Further, DHS and the Federal Emergency Management Agency need to continue to develop clearly defined leadership roles and responsibilities; necessary disaster response capabilities; accountability systems to provide effective services while protecting against waste, fraud, and abuse; and the ability to conduct advance contracting for emergency response goods, supplies, and services. DHS has not produced a final corrective action plan specifying how it will address its many management challenges. Such a plan should define the root causes of known problems, identify effective solutions, have management support, and provide for substantially completing corrective measures in the near term. It should also include performance metrics and milestones, as well as mechanisms to monitor progress. It will also be important for DHS to become more transparent and minimize recurring delays in providing access to information on its programs and operations so that Congress, GAO, and others can independently assess its efforts. DHS may require a chief management official, with sufficient authority, dedicated to the overall transformation process to help ensure sustainable success over time.