Auditors: ICE financial management a work in progress

Homeland Security Department auditors released a report Wednesday calling for continued improvements to financial management and reporting at the Immigration and Customs Enforcement bureau and the Coast Guard.

The review, conducted by accounting firm KPMG for the DHS inspector general, stated that vague criteria for spending oversight need to be re-evaluated and fine-tuned.

ICE's management has had "abnormal balances" and problems with "accurate and timely submission of financial reports," the report stated. Safeguards designed to issue warnings when erroneous data is submitted are not adequately monitored

But there also were indications that the agency -- which previously has been the target of criticism over financial problems, including budget shortfalls -- has made progress, the report said.

"The leadership provided by the ICE [chief financial officer] in setting a positive 'tone-at-the-top' and actively monitoring ICE's progress … has shown to be integral to the success achieved at ICE thus far," the report stated. The bureau got its first permanent financial chief in January.

DHS spokesman Larry Orluskie cited coordination issues that arose with ICE's formation as the root of past financial reporting errors. "They were a mess" in March 2003 "when we first stood up as a department," he said.

Wednesday's audit report also cited flaws with financial management at the Coast Guard. The agency lacks managerial oversight, the report said, and on the subject of internal financial controls, "management's assessment of the resources required to investigate and resolve these issues is limited to five staff (GS-12) personnel."

The report recommended that the Coast Guard review its technology and staff and conduct more thorough investigations of financial control weaknesses. In addition, it suggested the agency "make a realistic assessment" of what it will need to solve its financial oversight troubles, including on the personnel front.

The Coast Guard should "obtain support from executive leadership, since effective correction will at times compete with other mission priorities, and progress could falter without continuous reinforcement from leadership," the report stated.

The auditors also recommended that David Norquist, the CFO of the entire Homeland Security Department, have his office better define criteria gauging how well corrective actions are implemented. The report did not offer an estimate for how much funding was at risk, or has already been lost, as a result of the shortcomings identified.

Norquist said in a response to the IG that he agreed with the report, and said actions are already under way to implement the recommendations. He noted that DHS has sponsored workshops focusing on eliminating causes of "internal control deficiencies."