GAO designated DHS’s transformation as high-risk in January 2003based  on three factors. First, DHS faced enormous challenges in implementing  an effective transformation process, developing partnerships, and building  management capacity because it had to effectively combine 22 agencies  with an estimated 170,000 employees specializing in various disciplines— including law enforcement, border security, biological research, computer  security, and disaster mitigation—into one department. Second, DHS  faced a broad array of operational and management challenges that it  inherited from its component legacy agencies. 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, our citizen’s  health and safety, and our economy. Overall, our designation of DHS’s  transformation as a high-risk area and its inclusion on the 2003 High-Risk  List was due to the failure to transform the diverse units into a single,  efficient, and effective organization would have dire consequences for our  nation. DHS Management Challenges

DHS faces a number of management challenges to improving its ability to  carry out its homeland security missions. Among these challenges, which  are discussed in more detail in the following sections, are    providing focus for management efforts,    monitoring transformation and integration,   improving strategic planning,    managing human capital,    strengthening financial management infrastructure,    establishing an information technology management framework,    managing acquisitions, and    coordinating research and development. This is  important not only to DHS itself, but also to the nation’s homeland  security efforts, because, in addition to managing its own organization,  DHS plays a larger role in managing homeland security and in coordinating  with the activities of other federal, state, local, and private stakeholders.
Why GAO Did This Study

The Department of Homeland Security (DHS) plays a key role in coordinating the nation's homeland security efforts with stakeholders in the federal, state, local, and private sectors. While GAO has conducted numerous reviews of specific DHS missions, such as border and transportation security and emergency preparedness, this testimony addresses overall DHS management issues. This testimony addresses (1) why GAO designated DHS's transformation as a high-risk area; and (2) the specific management challenges facing DHS.

What GAO Found

GAO designated DHS's transformation as a high-risk area in 2003, based on three factors. First, DHS faced enormous challenges in implementing an effective transformation process, developing partnerships, and building management capacity because it had to transform 22 agencies into one department. Second, DHS faced a broad array of operational and management challenges that it inherited from its component legacy agencies. Finally, DHS's failure to effectively address its management challenges and program risks could have serious consequences for our national security. Overall, DHS has made some progress, but significant management challenges remain to transform DHS into a more efficient organization while maintaining and improving its effectiveness in securing the homeland. Therefore, DHS's transformation remains a high-risk area. DHS faces a number of management challenges to improve its ability to carry out its homeland security missions. Among these challenges are providing focus for management efforts; monitoring transformation and integration; improving strategic planning; managing human capital; strengthening financial management infrastructure; establishing an information technology management framework; managing acquisitions; and coordinating research and development.