OMB to manage homeland security reorganization

The Office of Management and Budget will lead the massive effort to set up the new Homeland Security Department if Congress approves its creation, Bush administration officials said Wednesday.

OMB will guide the merger of up to 22 agencies and programs into the new department, while the Office of Homeland Security provides advice on the reorganization, said Mark Holman, chief of staff of the Homeland Security Office, in a roundtable discussion with reporters. The reorganization will be managed out of a homeland security transition planning office created by President Bush in a June 20 executive order.

OMB has not named a director for the office but is already working on the personnel, budgetary, and communications issues involved in moving several agencies from one department to another, according to spokeswoman Amy Call.

OMB is assembling two teams of employees to manage the reorganization, said Mark Everson, the agency's controller, at the Government Executive-sponsored Excellence in Government conference in Washington Wednesday. One team will organize agencies into the four broad divisions of the proposed department, while the other addresses overarching management issues that cut across the department, such as crafting compatible IT systems.

"The challenge first will be to identify Day 1 issues," he said. "Day 1 issues are ones that must be resolved at the moment of the creation of the new department or at the time when agencies are transitioned into it. We have to address issues like chain of command, communications management. We have to establish protocols."

Administration officials have said the department might be located outside Washington for security reasons. OMB will work with the Office of Personnel Management and General Services Administration on such issues, and agencies slated to move to the new department will have a voice in the planning, Holman said.

Some observers have questioned whether OMB has the in-house management expertise to oversee the complex reorganization.

"OMB is incapable of doing it," said Alan Dean, a fellow with the National Academy of Public Administration who in 1967 helped merge several agencies into the Transportation Department. "They don't have a strong management staff and anyhow they're not going to be part of the new department."

But OMB routinely coordinates initiatives between agencies, making it the natural office to oversee the reorganization, said Holman. "All the agencies affected will be involved, and OMB is just a very productive and logical starting place because they deal with all the agencies," he said. Some staffers working on the Bush management agenda will also help out with the reorganization, added Call. The Congressional Budget Office has estimated that organizing the new department could cost $3 billionover five years, a figure disputed by the Bush administration. Adding in other costs connected with the transition-such as IT upgrades and relocation of personnel-could drive costs even higher, said Comptroller General David Walker in Wednesday testimony before the House Select Committee on Homeland Security. Congress could issue separate appropriations for the transition so costs are clear, he added. "More important than a precise cost estimate of the transition, however, is the recognition that there will be short-term transition costs and that these costs need to be made transparent," said Walker in written testimony. After the department is set up, President Bush will issue performance targets for meeting the organizational challenges laid out in the administration's homeland security strategy, such as linking dozens of databases in agencies that move to the new department. "The president will definitely lay out benchmarks for progress for this new agency and they will be as ambitious as necessary, given the challenge we're facing as a nation," said Holman. Brian Friel contributed to this report.

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