Transportation IG outlines department management challenges

Facilitating the transfer of two agencies to the Homeland Security Department, cutting costs at the Federal Aviation Administration and complying with the president's management agenda top the challenges facing the Transportation Department in 2003, according to the department's inspector general.

In a report released Jan. 23, Transportation Inspector General Kenneth Mead detailed the major issues facing the department, including shifting the Coast Guard and Transportation Security Administration over to the newly created Homeland Security Department. According to Mead, the shift of those two agencies gives Transportation Department officials the opportunity to focus on the core missions of transportation safety and mobility. But the department would still play an important role in transportation security, the IG's report said.

"DOT's continuing responsibilities for transportation safety and efficiency will inevitably overlap with the Department of Homeland Security's responsibilities for transportation security, requiring close interaction between the two departments to strike an appropriate balance in implementing, regulating, funding, and overseeing programs that benefit the traveling public," said the report.

But until TSA joins the new department, agency officials should focus on training the new baggage screener workforce and controlling costs, the IG recommended. The agency had $8.5 billion in contracts at the end of 2002.

FAA's bloated budget is another area that needs attention, the report said. In the past five years, the agency's budget has grown from $9 billion to $14 billion, largely because of what Mead describes as increases in operating expenses. According to Mead, a new cost accounting system scheduled for implementation by September 2002 did not have the internal controls needed to track the work hours of air controllers. The cost accounting system is supposed to identify areas that are not cost effective.

"Without a fully functioning labor distribution system, FAA will not have a credible cost accounting system, nor will it be able to credibly claim it is a performance-based organization," the report said. "To date, FAA has spent $38 million and is five years behind its original schedule for having a fully operational cost accounting system."

FAA also needs better oversight of its acquisition process, Mead said, making more use of Defense Contract Audit Agency audits and using cost control measures for contracts.

"With schedule slips and cost overruns in major acquisitions, it should be noted that FAA is not getting as much for its $3 billion annual investment as it originally expected," the report said.

The Transportation Department has an annual IT budget around $2.5 billion and invests 2 percent to 3 percent of its IT budget in computer security, according to the IG. To better align itself with the president's management agenda, the department needs to strengthen computer security and information technology investment controls.

"This must be done with a view toward cost-effective system acquisitions and reducing system vulnerabilities to cyberattacks," said the report.

The IG said the department should also fill its position for a chief information officer. The position has been vacant for two years.