Michael Brown initially blames state and local officials for Hurricane Katrina problems, but concedes under questioning that the federal government also failed.
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Rate increase will not offset shortage, officials say.
Inspector general backed merger of Immigration and Customs Enforcement and Customs and Border Protection bureaus, but Homeland Security secretary rejected recommendation.
New system is also difficult to use, auditors find.
Some say flood of funding, lax oversight and quick contracting creates 'perfect storm' for waste.
Observers say procurement office needs leader known for acquisition expertise.