Lawmaker calls for 'sound business' at Homeland Security

The Homeland Security Department must improve its accounting practices to spend less money on overhead and more on protecting America, a House Government Reform subcommittee chairman said at an oversight hearing on Wednesday.

"Improving our nation's security is essentially a test of the management and leadership abilities of the federal, state and local governments," said Todd Platts, R-Pa. "Given the magnitude and importance of the department's mission, sound business practices are critical to success and must be established at the outset."

A recent inspector general's audit found major problems with the department's accounting practices, including 18 "material weaknesses," or unreliable financial statements, where spending could not be tracked reliably. The worst offenders, the report said, were the agencies focused on emergency management, customs and immigration.

J. Richard Berman, Homeland Security's assistant inspector general, said immigration officials lack an automated accounting system and must stop work to count applications by hand two weeks before a statement is due. He blamed poor, unconnected databases for the problem.

The Federal Emergency Management Agency's disaster-assistance grant program, meanwhile, suffers from ineffective performance and financial oversight that have allowed grant recipients to misuse federal funds. Auditors questioned the use of $900 million from 1993 to 2000. And customs officials and the Transportation Security Administration also lack systems to monitor contractor performance and spending.

Bruce Carnes, the department's chief financial officer, said Homeland Security is working hard to integrate 83 financial management systems and is aggressively overhauling policies, including an attempt to consolidate financial statements on an accelerated schedule.

The final product, he said, will be "the business equivalent of a global positioning system" to provide immediate budget, accounting and procurement information to the White House Office of Management and Budget, Congress and others, and improve data quality and timeliness.

Linda Springer, controller of the Office of Federal Financial Management, said while Homeland Security's reforms are under way, changes will take several years to complete. The department's first challenge is to get a clean audit opinion on its financial statements, and that will require extensive cooperation from each of its 22 entities, she said.

She also said that is only the first step in a long process of streamlining the department's systems, including identifying information technology assets and deciding whether systems will include commercial products, be developed internally developed or involve a hybrid of the two.

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