	DHS Has Made Progress in Strengthening Its Management Functions, but Considerable Work Remains

		DHS Progress in Meeting Criteria for Removal from the High-Risk List

DHS’s efforts to strengthen and integrate its management functions have  resulted in progress addressing our criteria for removal from the high-risk  list. In particular, in our 2015 high-risk update report, which we released  earlier this month, we found that DHS has met two criteria and partially  met the remaining three criteria, as shown in table 1. In our 2015 report, we found that the  Secretary and Deputy Secretary of Homeland Security, the Under  Secretary for Management at DHS, and other senior officials have  continued to demonstrate commitment and top leadership support for  addressing the department’s management challenges. Senior DHS officials, including the Deputy  Secretary and Under Secretary for Management, have also routinely met  with us over the past 6 years to discuss the department’s plans and  progress in addressing this high-risk area. We found that DHS has established a plan  for addressing this high-risk area. In October 2014, DHS identified that it had  resources needed to implement 7 of the 11 initiatives the department had  under way to achieve the actions and outcomes, but did not identify  sufficient resources for the 4 remaining initiatives. In particular, we found that DHS has implemented  a number of actions demonstrating the department’s progress in  strengthening its management functions. In addition, DHS does not have modernized financial  management systems. This affects its ability to have ready access to  reliable information for informed decision making. DHS Progress in Achieving Key High-Risk Actions and Outcomes

Key to addressing the department’s management challenges is DHS  demonstrating the ability to achieve sustained progress across the 30  actions and outcomes we identified and DHS agreed were needed to  address the high-risk area. In our 2015 report, we found that DHS has  fully implemented 9 of these actions and outcomes, with additional work  remaining to fully address the remaining 21. In particular, DHS has made important progress  in several areas to fully address 9 actions and outcomes, 5 of which it has  sustained as fully implemented for at least 2 years. For instance, DHS  fully met 1 outcome for the first time by obtaining a clean opinion on its  financial statements for 2 consecutive years and fully met another  outcome by establishing sufficient component-level acquisition capability. DHS has also mostly  addressed an additional 5 actions and outcomes, meaning that a small  amount of work remains to fully address them. Specifically, DHS has partially  addressed 12 and initiated 4 of the actions and outcomes. As previously  mentioned, addressing some of these actions and outcomes, such as  modernizing the department’s financial management systems and  improving employee morale, are significant undertakings that will likely  require multiyear efforts. Human capital management. In our 2015 report, we further concluded that in the coming years, DHS  needs to continue implementing its Integrated Strategy for High Risk  Management and show measurable, sustainable progress in  implementing its key management initiatives and corrective actions and  achieving outcomes. In doing so, it will be important for DHS to maintain its current level of top leadership support and sustained  commitment to ensure continued progress in executing its corrective  actions through completion; continue to implement its plan for addressing this high-risk area and  periodically report its progress to us and Congress;  identify and work to mitigate any resource gaps, and prioritize  initiatives as needed to ensure it can implement and sustain its  corrective actions; closely track and independently validate the effectiveness and  sustainability of its corrective actions and make midcourse  adjustments as needed; and make continued progress in achieving the 21 actions and outcomes it  has not fully addressed and demonstrate that systems, personnel,  and policies are in place to ensure that progress can be sustained  over time. Department of Homeland Security: Progress Made; Significant Work  Remains in Addressing High-Risk Areas.
Why GAO Did This Study

GAO has regularly reported on government operations identified as high risk because of their increased vulnerability to fraud, waste, abuse, and mismanagement, or the need for transformation to address economy, efficiency, or effectiveness challenges. In 2003, GAO designated implementing and transforming DHS as high risk because DHS had to transform 22 agencies into one department, and failure to address associated risks could have serious consequences for U.S. national and economic security. While challenges remain for DHS across its range of missions, it has made considerable progress. As a result, in its 2013 high-risk update, GAO narrowed the scope of the high-risk area to focus on strengthening and integrating DHS management functions (human capital, acquisition, financial, and information technology). As requested, this statement discusses, among other things, DHS's progress and actions remaining in strengthening and integrating its management functions. This statement is based on GAO's 2015 high-risk update and reports and testimonies from September 2011 through February 2015. Among other things, GAO analyzed DHS strategies and interviewed DHS officials.

What GAO Found

As GAO reported in its 2015 high-risk update report earlier this month, the Department of Homeland Security's (DHS) efforts to strengthen and integrate its management functions have resulted in the department meeting two and partially meeting three of GAO's criteria for removal from the high-risk list (see table).
b “Partially met”: Some but not all actions necessary to generally meet the criterion have been taken.
c “Not met”: Few, if any, actions toward meeting the criterion have been taken.
For example, the department's Deputy Secretary, Under Secretary for Management, and other senior officials have continued to demonstrate leadership commitment by frequently meeting with GAO to discuss the department's plans and progress in addressing the high-risk area. DHS has also established a plan for addressing the high-risk area, which it has updated seven times since 2010. However, DHS needs to show additional progress in other areas. For example, in October 2014, DHS identified that it had resources needed to implement 7 of 11 initiatives the department had under way to address the high-risk area, but did not identify sufficient resources for the 4 remaining initiatives.
Key to addressing the department's management challenges is DHS demonstrating the ability to achieve sustained progress across 30 actions and outcomes that GAO identified and DHS agreed were needed to address the high-risk area. GAO found in its 2015 high-risk update report that DHS fully addressed 9 of these actions and outcomes, while work remains to fully address the remaining 21. Of the 9 actions and outcomes that DHS has addressed, 5 have been sustained as fully implemented for at least 2 years. For example, DHS fully met 1 outcome for the first time by obtaining a clean opinion on its financial statements for 2 consecutive years. DHS has also mostly addressed an additional 5 actions and outcomes, meaning that a small amount of work remains to fully address them. However, DHS has partially addressed 12 and initiated 4 of the remaining actions and outcomes. For example, DHS does not have modernized financial management systems, a fact that affects its ability to have ready access to reliable information for informed decision making. Addressing some of these actions and outcomes, such as modernizing the department's financial management systems and improving employee morale, are significant undertakings that will likely require multiyear efforts. In GAO's 2015 high-risk update report, GAO concluded that in the coming years, DHS needs to continue to show measurable, sustainable progress in implementing its key management initiatives and achieving the remaining 21 actions and outcomes.

What GAO Recommends

This testimony contains no new recommendations. GAO has made about 2,200 recommendations to DHS since 2003 to strengthen its management efforts, among other things. DHS has implemented more than 69 percent of these recommendations and has actions under way to address others.