[Senate Hearing 110-588]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 110-588
 
                 DEPARTMENT OF HOMELAND SECURITY STATUS
                    REPORT: ASSESSING CHALLENGES AND
                           MEASURING PROGRESS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               ----------                              

                           SEPTEMBER 6, 2007

                               ----------                              

        Available via http://www.access.gpo.gov/congress/senate

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs

             DEPARTMENT OF HOMELAND SECURITY STATUS REPORT:

              ASSESSING CHALLENGES AND MEASURING PROGRESS

                                                        S. Hrg. 110-588

                 DEPARTMENT OF HOMELAND SECURITY STATUS
                    REPORT: ASSESSING CHALLENGES AND
                           MEASURING PROGRESS

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 6, 2007

                               __________

        Available via http://www.access.gpo.gov/congress/senate

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs


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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
                    Beth M. Grossman, Senior Counsel
                       Holly A. Idelson, Counsel
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
   Robert L. Strayer, Minority Director for Homeland Security Affairs
                  Leah Q. Nash, Minority GAO Detailee
                  Trina Driessnack Tyrer, Chief Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     3
    Senator Voinovich............................................    16
    Senator Carper...............................................    18
    Senator McCaskill............................................    21
    Senator Landrieu.............................................    32
Prepared statement:
    Senator Akaka................................................    37

                               WITNESSES
                      Thursday, September 6, 2007

Hon. David M. Walker, Comptroller General of the United States, 
  U.S. Government Accountability Office..........................     5
Hon. Paul A. Schneider, Under Secretary for Management, U.S. 
  Department of Homeland Security................................     9

                     Alphabetical List of Witnesses

Schneider, Hon. Paul A.:
    Testimony....................................................     9
    Prepared statement...........................................    68
Walker, Hon. David M.:
    Testimony....................................................     5
    Prepared statement...........................................    38

                                APPENDIX

Charts submitted for the Record by Mr. Walker....................    79
GAO Report titled ``Department of Homeland Security: Progress 
  Report on Implementation of Mission and Management Functions,'' 
  August 2007....................................................    81
Slides submitted for the Record by Mr. Schneider.................   408
Letter from Secretary Michael Chertoff to the Hon. Peter King, 
  dated September 4, 2007, submitted for the Record by Mr. 
  Schneider......................................................   412
Responses to Post-Hearing Questions for the Record from:
    Mr. Walker...................................................   428
    Mr. Schneider................................................   430


                    DEPARTMENT OF HOMELAND SECURITY
                  STATUS REPORT: ASSESSING CHALLENGES
                         AND MEASURING PROGRESS

                              ----------                              


                      THURSDAY, SEPTEMBER 6, 2007

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.

    The Committee met, pursuant to notice, at 1:34 p.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, Akaka, Carper, Landrieu, 
McCaskill, Collins, and Voinovich.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good afternoon. The hearing will come 
to order. Welcome to everyone. I particularly want to welcome 
Comptroller General Walker and Under Secretary Schneider to 
this important hearing on the Department of Homeland Security. 
In this Committee, we hold many hearings regarding specific 
programs or policies of this critically important Department, 
but at this one we are going to step back and take the long 
view of the big picture and ask: Do we have the kind of 
Department of Homeland Security we sought to create nearly 5 
years ago after September 11, 2001, with the passage of the 
Homeland Security Act?
    GAO, in its very comprehensive report, provides an answer 
to that question. I think it is fair to say that the Department 
of Homeland Security through Mr. Schneider will dissent in 
part, as they say in the courts. For us, it is helpful to 
remember what brought us here. We did not create the Department 
of Homeland Security as an academic exercise in governmental 
reorganization.
    Almost 6 years ago to the day, the September 11, 2001, 
attacks against the United States by Islamist extremists showed 
just how vulnerable our Nation was to attack by terrorists, how 
disorganized we were, and how the terrorists took advantage of 
that disorganization. The September 11, 2001, plot may have 
been formed in the caves of Afghanistan, but it was practiced 
and carried out right here in America--right in front of our 
eyes.
    As we learned more in the days and weeks that followed the 
attacks, it became clear how ill-prepared our divided 
governmental structure was to deal with this stunning new 
challenge. We simply did not have a single official or a single 
department focused on coordinating the various governmental 
agencies that had the responsibility, in one way or another, to 
defend our citizens from threats to their security here at 
home. As a result, we had failed to adequately recognize or 
prepare for the terrorist threat against our American homeland. 
We lacked a system to connect the dots that could have 
forewarned us of the September 11, 2001, attacks. We had no 
clear place to turn for guidance when the attack occurred or in 
its immediate aftermath. And we had no strong hand to guide us 
in preventing and preparing for future attacks. In short, the 
Department of Homeland Security was born of necessity, not of 
chance or desire.
    We knew it would be an arduous and awkward undertaking to 
forge this new Department. To do so required uniting more than 
22 component agencies into a new whole, while simultaneously 
creating major new capabilities to address issues such as 
homeland security information sharing, State and local 
preparedness and coordination, critical infrastructure 
protection, transportation system protection, and R&D for 
homeland security capabilities. Leading such an effort is the 
kind of job that would be daunting to the most seasoned CEO or 
the toughest veteran military commander.
    In the face of this massive challenge, I would say that 
there has been tremendous work done by many people to 
successfully launch the Department of Homeland Security. I want 
to particularly thank former Secretary Tom Ridge, current 
Secretary Chertoff, and all of the DHS employees for everything 
they have done to bring this Department into being. We know 
that many people have worked tirelessly to identify the threats 
we face, to design measures to prevent or protect against them, 
and to put those programs into action.
    Somebody asked me earlier in the day would I say that in 
response to this GAO report America was not safe, and I said, 
and as we have all said before and the 9/11 Commission said, 
America is a lot safer than it was on September 11, 2001; but 
as this report makes clear, we have got a lot to do before we 
can say we are as safe as we need to be.
    This Committee's commitment to homeland security 
necessarily includes a responsibility for honest examination of 
what is working, what is not, and what has still not come into 
being but should. So I commend Comptroller Walker and his team 
at GAO for the tremendous effort they have made--not only in 
this comprehensive, really unprecedented report but in the 
dozens of ongoing studies that underlie it--to help the 
Department of Homeland Security be all that it can and must be.
    Which brings me to the report itself. The report the 
Comptroller General is presenting today confirms what many of 
us have believed, and it does so in specifics: First, that the 
Department has made important progress establishing programs 
and procedures that make us safer today; and, second, that 
there remain serious deficiencies within the Department that 
require much more attention and resources than they have 
received to date.
    GAO tells us that DHS has made important strides in 
aviation and maritime security, both absolutely critical 
homeland security responsibilities. The report also documents 
how the Department is beginning to lay critical groundwork to 
strengthen border security, infrastructure protection, and non-
aviation modes of transportation security.
    But there are clearly serious problem areas remaining as 
well which the report documents. Almost 2 years after Hurricane 
Katrina, GAO nonetheless still finds weaknesses in the area of 
emergency preparedness and response. GAO has also documented 
the difficulties DHS has had in forging a unified department 
from its many component pieces. This is difficult, unglamorous 
work, but it goes to the very core of why we created this new 
Department. If the component agencies of DHS operate as 
disconnected entities who happen to be under the same umbrella, 
we will have gained much less than we need to gain in exchange 
for the effort that creating this Department has entailed. And 
that is something we have got to get right.
    I know that the Department of Homeland Security takes issue 
with some aspects of GAO's methodology and some of its 
conclusions. That is not surprising given the scope and content 
of the report. I cannot imagine that there is any perfect way 
to measure a still evolving Department. But I hope today we can 
focus our discussion on the shared bottom line, which is: Where 
do we need to concentrate our energy and our resources and our 
leadership to ensure that we have the strongest Homeland 
Security Department possible? Because we know as recently as 
yesterday's news from Germany that the terrorist threat is as 
real as it was on September 11, 2001.
    Whatever the differences of opinion over methodology, there 
can be no difference of opinion about our shared responsibility 
to make this Department the best it can possibly be.
    I look forward to hearing from our witnesses and, most 
important, to working with them to strengthen this new 
Department. Thank you. Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman.
    After the terrorist attacks on September 11, 2001, the U.S. 
Government launched the largest reorganization in its history 
to strengthen coordination among the 22 agencies with 
responsibilities for protecting our Nation. We established the 
Department of Homeland Security.
    More than 4 years have now passed since DHS opened for 
business on March 1, 2003. As Senator Lieberman noted this 
afternoon, our Nation is safer than prior to September 11, 
2001. But, nevertheless, the threats continue to evolve and 
intensify. Violent extremists, both foreign and homegrown, 
remain determined to attack Americans. Natural disasters 
continue to challenge our communities' ability to prepare, 
respond, and rebuild. Meanwhile, global commerce, travel, and 
new drug-resistant microbes raise the risk of pandemic disease.
    DHS officials and staff have worked hard to enhance our 
security. I think it is important that we take note of that. We 
have been spared a new terrorist attack on U.S. soil since 
2001, and the people of DHS deserve a measure of credit for 
that. We all know, however, that the Department has also 
encountered difficulties and setbacks in performing its vital 
mission.
    Today, we will attempt to assess the Department's 
performance fairly and accurately, noting its successes, its 
failures, and its incompletes. When Senator Lieberman and I 
first asked the GAO last year to perform a status check on 
DHS's first 4 years, we knew that we were asking for a major 
assessment. And the 320 pages in this new GAO report are 
certainly proof of that.
    I also expected that DHS would receive a mixed report card, 
and it has. Reviewing the grades fairly, however, does require 
a word of context. As the GAO notes, ``Successful 
transformations of large organizations, even those faced with 
less strenuous reorganizations than DHS, can take 5 to 7 years 
to achieve.''
    Applying the GAO's measure of ``performance expectations'' 
to 14 key DHS mission areas yielded indications of ``moderate'' 
or ``substantial'' progress in six areas, including key 
concerns like aviation security and maritime security. Four 
other areas were judged to show ``modest'' progress.
    That DHS should be a work in progress after only 4 years 
should surprise no one. But it is, nevertheless, disturbing to 
see ``limited'' progress in four areas as critical as human 
capital management, information technology management, science 
and technology, and, most of all, emergency preparedness and 
response.
    The limited progress grade in emergency preparedness and 
response particularly concerns me. The GAO does document some 
progress, such as grant programs to improve interoperable 
communications for first responders, a very high priority for 
the Chairman and for me. And I would also think that it is 
important to note that there are some positive developments 
resulting from last year's FEMA reform legislation that are not 
reflected in GAO's analysis. For example, FEMA now has regional 
centers with defense coordinating officers and multi-agency 
strike teams, multiplying its readiness to deliver rapid and 
effective assistance. FEMA also has improved its capability to 
preposition vital supplies and to track their deployment. I 
have seen these improvements firsthand in the regional exercise 
in New England, and they are encouraging, and they are not 
fully reflected in this report.
    But, nevertheless, I am very concerned that GAO found only 
limited progress in establishing an all-hazards national 
response plan, developing national all-hazards preparedness 
goals, and coordinating the implementation of a national 
incident management system. These are troubling 
``incompletes.'' No amount of investment in technology and in 
aid to first responders can compensate for the lack of well-
developed and well-understood goals and procedures for 
coordinated response. We simply must have better results in 
this area.
    Now, I am proud that the highest score GAO awarded was in 
an area that this Committee has worked very hard on, and that 
is maritime security. We held a number of hearings. We authored 
landmark port security legislation that was signed into law 
last year. And in this area, the GAO has found that DHS has 
achieved more than 75 percent of performance expectations.
    Another topic that has occupied a great deal of the time of 
this Committee is acquisition management. This Committee has 
uncovered appalling instances of waste and fraud in the 
response to Hurricanes Katrina and Rita and in contracting in 
Iraq and in Afghanistan. In light of those investigations, it 
is troubling that GAO found that DHS still lacks clear 
Department-wide acquisition policies and suffers from 
acquisition staff shortages. This is an area where the 
Department must redouble its efforts because faulty acquisition 
not only wastes scarce taxpayers' dollars, but it also can 
literally cost lives if vital supplies are lacking or they 
cannot be moved swiftly to aid victims of natural disasters or 
terrorist attacks.
    Nearly 6 years after September 11, 2001, 4 years after its 
creation, and 2 years after Hurricane Katrina, the Department 
must pick up the pace of its progress. GAO's report should 
serve as a useful road map in this effort. With so much at 
stake and with so many areas where progress is still required, 
America cannot settle for a mixed report card.
    I welcome our witnesses today, and I look forward to a 
productive discussion. Thank you.
    Chairman Lieberman. Thanks very much, Senator Collins.
    I know the Comptroller General has to depart here around 
3:20 p.m., so I want to go right to the opening statements and 
make sure we get plenty of time for Committee Members to ask 
questions.
    As Senator Collins said, this is a report that was done by 
the GAO at the request of Senator Collins and myself pursuant 
to our oversight responsibilities. And, again, I know there are 
disagreements between GAO and DHS about methodology, but this 
is a serious piece of work that makes some tough judgments. And 
because of all that is on the line, those are exactly the kind 
of judgments we have to make about homeland security.
    So, General Walker, I thank you again for your service to 
our country and to the Congress, and this Committee in this 
case, and we welcome your testimony now.

 TESTIMONY OF HON. DAVID M. WALKER,\1\ COMPTROLLER GENERAL OF 
    THE UNITED STATES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Walker. Thank you, Chairman Lieberman, Senator Collins, 
and other Senators. It is a pleasure to be back before this 
Committee again, this time to discuss the Department of 
Homeland Security's efforts to implement its major mission and 
management reforms. As has been noted, this GAO work was done 
at your request. It was a major undertaking. I feel like this 
is ratings week, between Iraq and the Department of Homeland 
Security. Let me just note that both are very complex and 
controversial endeavors, both are very important endeavors, and 
both of them are situations where, quite frankly, we were 
mandated or requested to do them. Third, these represent 
situations where reasonable people can and will differ. There 
is no doubt about that because the stakes are so high.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Walker appears in the Appendix on 
page 38.
---------------------------------------------------------------------------
    With that, I think it is important to know that, prior to 
the creation of DHS, most of the agencies that comprise DHS 
were not focused on homeland security or counterterrorism 
activities. And so, therefore, a lot of them had their own 
challenges before this agency was created, and they brought a 
lot of those challenges with them; and added to that was 
merging 22 different agencies with different systems, different 
histories, different missions, different cultures, even 
different uniforms and other things of that nature that we have 
seen over time. And that made a complex undertaking even more 
complex.
    I think we have to keep in mind that even in the private 
sector, when you do a major merger and where you are trying to 
effectuate fundamental transformation that can be sustained, 
including an integration, that it takes 5 to 7 years at least, 
and in government, it typically takes longer for a variety of 
reasons.
    I think we also have to keep in mind that the Department of 
Defense was created 60 years ago and that while they are No. 1 
in fighting and winning armed conflicts, they are a D on 
business practices. And I am confident DHS can do better faster 
than the Department of Defense has done, but we need to make 
progress on both.
    I think it is also important to state at the outset we 
clearly are safer than we were on September 11, 2001, and there 
is no such thing as zero risk. We can and should do better. But 
we will never have zero risk. That does not exist in today's 
world, and we have to recognize that reality. Furthermore, this 
Department is not just about trying to prevent another event 
like September 11, 2001. It is about a lot of other things too, 
including natural disasters and border security and a variety 
of other issues.
    When they began back in 2003, we put DHS on our high-risk 
list not as an agency but because of the implementation, 
integration, and transformation effort. And I have talked about 
why we felt that was important to do so. This report is a major 
undertaking. Our people spent a lot of time on it. I want to 
thank all of our very capable staff who worked on it. In the 
report, we assess DHS's progress across 14 different mission 
and management areas. For each area, we identified performance 
expectations based on responsibilities either set out in 
legislation, homeland security presidential directives and 
executive orders, or DHS planning documents. In a few 
circumstances, there were other sources, but those were the 
primary sources.
    Our analysts and subject matter experts reviewed the work 
of the Department of Homeland Security's Inspector General and 
information that DHS provided us, which was extensive, in 
trying to determine whether or not DHS achieved each of those 
performance expectations. We used the performance expectation 
assessments to determine DHS's overall progress in each mission 
and management area, and in commenting on our draft, Mr. 
Chairman, as you noted, DHS raised some concerns about our 
methodology, including the criteria that we use for assessing 
the extent to which DHS has achieved each performance 
expectation and our consistent application of the criteria.
    Let me note that while we changed the terminology, we did 
not change the substance. The methodology was not changed. The 
terminology was changed. So it was a form-over-substance 
change. The substance was the same.
    And as you noted yourself, Mr. Chairman, there are a lot of 
different ways you could go about doing this, and there is no 
way that is perfect. But one of the things that we did do is I 
am confident that we had a clearly defined, consistently 
applied, and transparent methodology that we employed and that 
we are comfortable with. And I am confident that we used our 
best independent professional judgment to reach the conclusions 
we reached.
    We believe that our methodology provides a sound basis for 
our progress report. Overall, we appreciate DHS's concerns and 
recognize that in any such broad-based evaluation there is 
going to be some level of disagreement that is inevitable. But 
as I said, we have tried to be consistent, fair, and 
transparent with regard to our judgments, and all of their 
comments are in our report, and what we did with their comments 
is reflected in our report as well.
    DHS has made varying levels of progress in implementing its 
mission and management areas since March 2003. If we can put up 
the first chart,\1\ you can see the summary table, which is--
fortunately, we have a highlights page. Senator Collins, as you 
know, probably one of the best things we ever did was to take 
these thick reports and have a one-page, maximum two-page 
highlights page. And so we have that here, and, in fact, this 
is part of the highlights page. And for the 14 mission and 
management areas, you can see that there were 171 performance 
expectations. As you can tell, it is a major undertaking. We 
are having a tough time just with the table here.
---------------------------------------------------------------------------
    \1\ The charts submitted by Mr. Walker appears in the Appendix on 
page 80.
---------------------------------------------------------------------------
    Chairman Lieberman. That is the largest chart we have ever 
had presented to our Committee.
    [Laughter.]
    Mr. Walker. We are happy to provide it for your archives, 
if you would like, if you have storage room for it. But as you 
can see, it is a massive undertaking. There are 14 different 
mission and management areas. There were 171 different 
performance expectations of which we judged that 78 were 
generally achieved, 83 generally not achieved, and 10 that we 
did not assess. We assessed based upon clearly defined 
criteria, which are on the highlights page, how many of the 
different performance expectations you needed to meet in order 
to achieve a limited, modest, moderate, or substantial rating.
    As I think I may have noted, generally they made more 
progress in mission areas than management areas. That is 
understandable. Mission is job one. And to the extent that it 
is trying to deal with counterterrorism or deal with border 
security or deal with emergency preparedness and response, or 
whatever it might be, mission is job one. And many times we 
found, especially with the Department of Defense, prima-facie 
evidence that the business areas, the management areas 
sometimes lagged. It is important that we do better than we did 
with the Department of Defense, and I am confident that DHS 
will over time do that.
    Sometimes DHS has made progress in developing plans and 
programs, but they faced difficulty in implementing them. After 
all, 90 percent of success or failure is implementation, and it 
is no different in government than it is anywhere else. And 
some things are tough, no doubt about it.
    DHS disagreed with our assessments on 42 of 171 performance 
expectations, and we provided detailed responses with regard to 
those items in our report.
    Given the leading role that DHS plays in securing the 
homeland, it is critical that the Department's missions, 
programs, and management systems and functions are operating as 
efficiently and effectively as possible. It has been more than 
4 years since the Department has been established. They have 
taken important actions. People are working very hard. They 
have made progress, more in the mission area than the 
management area, and the mission areas vary as well as the 
management areas. They have done their best to try to do as 
much as they can in this period of time. As I said, even for 
private sector entities, it is a 5- to 7-year effort, minimum, 
and in government, it is going to take longer to fully 
integrate and transform.
    But what is important is that they are focusing on the most 
important things and that they are allocating their limited 
human, financial, technological, and other resources to get the 
most important things done. And it is also important that 
Congress stay engaged to try to be able to provide reasonable 
oversight and to be able to deal with any appropriations and 
authorization needs that they might need. And I might note, as 
Senator Collins said, it paid off when you did in the maritime 
security area. There is no question about it. And working 
together, you can and have made a difference.
    We have all seen the effects of Hurricanes Katrina and 
Rita. We have all seen the concerns there. There have been a 
number of actions taken, I think most of which are probably 
reflected in our report, but evidently, Senator Collins, at 
least something was not, and we will be happy to take a look at 
what you mentioned. I appreciate that, and we will take a look 
at that.
    [The information submitted for the Record follows:]

           INFORMATION PROVIDED FOR THE RECORD BY MR. WALKER

    To what extent does the report capture progress made by 
FEMA with regard to its regional offices with Defense 
coordinating officers and multiagency strike teams and efforts 
to pre-position emergency supplies and equipment?

    Answer: Our report does not specifically address FEMA's 
efforts to improve the role of its regional offices in 
emergency response. With regard to the pre-positioning of 
supplies and equipment, our report provides information on 
DHS's Pre-Positioned Disaster Supply and Pre-Positioned 
Equipment Program. We concluded that DHS has generally not 
achieved the performance expectation under which the pre-
positioning of supplies was included--develop the capacity to 
provide needed emergency assistance and services in a timely 
manner--as, among other things, DHS's optimization planning 
efforts for its logistics capabilities are still in the 
preliminary stages. DHS also did not provide us with 
documentation on how it determined requirements for the pre-
positioning of disaster supplies and equipment to assess 
whether FEMA has achieved its intended capacity.

    In summary, the Department of Homeland Security has 
thousands of very capable people working for it, trying to do 
the right thing for our country. Many people are working very 
hard. In some cases, we have had multiple people in different 
jobs. We have already had--I believe this is right, although I 
did not ask this to be verified before I testified--two 
Secretaries, three Deputy Secretaries, and two Under 
Secretaries for Management in the roughly 4-year history of 
DHS. All capable people, but the lack of continuity is an issue 
in government, especially when you are dealing with major 
management reforms and transformation efforts. And that is 
something we may get into in the question and answer period.
    We are clearly safer. We will never be 100 percent safe, 
but we are clearly safer. And I am confident that working 
together in a constructive fashion, we can continue to keep you 
apprised of how they are doing, and we can do a lot better than 
the Department of Defense did with regard to achieving 
implementation of integration. Thank you.
    Chairman Lieberman. Thanks, Mr. Walker. That is an 
optimistic note to end on. We are at the beginning of the 
history of this Department, so we have a chance to really make 
it work well together before it gets, frankly, encrusted in 
ways that older departments sometimes do.
    Mr. Schneider, welcome. You are the designated 
representative, perhaps the designated defender, maybe the 
designated hitter. In any case, we welcome you.

    TESTIMONY OF PAUL A. SCHNEIDER,\1\ UNDER SECRETARY FOR 
        MANAGEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Schneider. Thank you, Mr. Chairman, Senator Collins, 
and Members of the Committee. It is a pleasure to appear before 
you today. I have been the Under Secretary for about 8 months. 
I am here today to discuss the recent GAO report titled 
``Department of Homeland Security, Progress Report on 
Implementation of Mission and Management Functions.'' \2\
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Schneider appears in the Appendix 
on page 68.
    \2\ The GAO report titled ``Department of Homeland Security, 
Progress Report on Implementation of Mission and Management Functions'' 
appears in the Appendix on page 81.
---------------------------------------------------------------------------
    Without question, the most significant challenge we face is 
to continue to transform the Department into a unified force 
that protects the country. GAO has referred to this project as 
an ``enormous management challenge'' and to the size, 
complexity, and importance of our efforts as ``daunting.'' By 
meeting this challenge, DHS will be better positioned to 
protect the country against threats, both foreign and domestic.
    Although the Department has faced numerous challenges 
during the first 4 years of this critical undertaking, we have 
made great progress. The GAO report largely recognizes this 
progress across 14 mission and management areas. In fact, GAO 
concluded that the Department has generally achieved 78 
performance expectations. This is particularly noteworthy given 
GAO's recognition that in many cases there was no anticipation 
that the Department would achieve the performance expectations 
by the end of the fourth year. Although the Department takes 
issue with the methodology and rating system employed by the 
GAO, there can be no dispute that GAO's positive assessments of 
the ``Generally Achieved'' reflect the Department's significant 
progress in four major mission areas, including securing modes 
of transportation; securing the border and administering the 
immigration system; defending against, preparing for, and 
responding to threats and disasters; and implementing 
management functions.
    Since my written testimony lists many of the Department's 
achievements recognized by the GAO, I will not go into the 
details here.
    I think it is worth noting, as the Comptroller General has 
pointed out, that many of the areas where GAO rightly 
recognized the Department's progress were in those critical 
areas where we chose to focus our resources to secure the 
homeland.
    I would also like to state that we are very appreciative of 
the frank and open communication with the GAO that has been 
established during recent months, and especially during the 
final stages of GAO's work on this report. I am especially 
appreciative of the efforts of the Comptroller General, the 
Managing Director of Homeland Security and Justice, Mr. Rabkin, 
and their team for their professionalism, courtesy, and 
cooperation. We look forward to building on and continuing this 
cooperative approach.
     While we were pleased that the GAO recognized our 
progress, the Department continues to believe that they used a 
flawed methodology in preparing the report, which resulted in 
many of the assessments not fully reflecting the Department's 
progress.
    We are particularly concerned that the GAO report is based 
on vague, shifting criteria and standards that result in an ``A 
or Fail'' grading system. It does not properly credit us for 
on-track implementation of long-term, multi-year goals, or 
constantly evolving programs. It is subjective and does not 
normalize the audit standard amongst analysts to ensure 
consistent assessments across the 171 performance expectations. 
It does not consistently account for issues outside of DHS's 
control. And it weighs all performance expectations equally.
    After Secretary Chertoff personally reviewed the initial 
Statement of Facts, he wrote to the Comptroller General 
expressing his concerns and offering to work with GAO to ensure 
the final GAO statement fully reflected the Department's 
achievements over the past 4 years. The Department met with and 
provided GAO with thousands of pages of documents explaining 
how the key programs were on track and performance expectations 
were being met.
    In late May 2007, GAO officials submitted a Revised 
Statement of Facts, and, frankly, without any advance notice 
with the Department, indicated that the Department's progress 
would now be rated as ``Generally Achieved'' or ``Generally Not 
Achieved'' rather than ``Generally Addressed'' or ``Generally 
Not Addressed.''
    Although GAO's recent reply to our comments suggests that 
this was merely a change in language rather than substance, the 
practical differences between these standards are significant, 
reflecting, at a minimum, a difference in how the performance 
expectations would be perceived. ``Addressed'' suggests that a 
program is on track; whereas ``achieved'' indicates final 
completion. Our view is that GAO went from a Pass/Fail to an A/
Fail grading system without explaining why. This, frankly, is 
like moving the goal post in the middle of the game.
    Based on this new standard, GAO downgraded its assessments 
of the Department in 28 performance expectations to ``Generally 
Not Achieved.'' These changes were particularly surprising in 
light of the documentation and materials that we provided.
    We are also concerned with this binary ``Achieved/Not 
Achieved'' standard. We believe it is ill-equipped to evaluate 
the Department's progress accurately in a multi-year endeavor, 
and many of our efforts are multi-year endeavors.
    Here are some examples. Although GAO has indicated that the 
Department's Secure Border Initiative (SBI) is ``on a 
trajectory'' toward achievement, the Department received a 
score of ``Generally Not Achieved'' in this performance 
expectation because it had not yet fully completed the goals of 
the entire SBI program, a multi-year program. There is no 
obvious way, based on this criteria, to accurately portray the 
actual status, and that is perhaps the major flaw in the 
methodology.
    GAO continues to assess the Department's efforts to detect 
and identify illegal border crossings as ``Generally Not 
Achieved.'' This assessment understates the importance of our 
successful efforts to deploy National Guard agents to the 
border, our efforts to increase the Border Patrol staffing by 
30 percent since 2001, and our effort to begin and implement 
the comprehensive SBI Program.
    The Department delivered a 5-year Research and Development 
Strategic Plan to Congress on June 26, 2007, that incorporates 
information on milestones for fiscal year 2007 through 2011. 
The milestones, deliverables, and goals are included for every 
project within the science and technology effort of the 
Department. It reflects the highest-level objectives for 
internal departmental activities and provides overarching 
guidance for addressing the science and technology needs within 
each homeland security mission area. The plan also addresses 
the importance of developing a strong homeland security science 
and technology national workforce by developing professional 
science and technology employees. In spite of these 
achievements, this performance expectation is rated as ``Not 
Achieved.''
    Regarding airport perimeter security, not only has DHS 
established standards and procedures for effective airport 
perimeter security, we have gone beyond meeting the performance 
expectation and are implementing those standards by executing 
the Aviation Inspection Plan, which addresses the Aviation and 
Transportation Security Act. This also is rated as ``Not 
Achieved.''
    The Department issued the National Response Plan, which is 
in place and functioning. It establishes, coordinates, and 
implements a single all-hazards national response, as we saw 
with the successful handling of Hurricane Dean. But because it 
is under revision, as most living plans are at some point in 
time, GAO rates this as ``Not Achieved.'' The enclosure of my 
letter to the GAO dated July 20, 2007, which is included in the 
report that we are discussing today, contains a more detailed 
discussion of these and the other particularly problematic 
assessments.\1\
---------------------------------------------------------------------------
    \1\ The letter from Mr. Schneider to Mr. Walker appears in the 
Appendix on page 328.
---------------------------------------------------------------------------
    The Department has done a great deal to ensure the safety 
and the security of our country. We are proud of what DHS has 
been able to accomplish in a short time, notwithstanding the 
many challenges faced by the Department. Moving forward, we 
will build upon the Department's recent program developments 
and successes while dedicating ourselves to continuous 
improvement.
    I look forward to maintaining the cooperative approach with 
the GAO that was followed in preparing this report. I would 
also like to thank the Congress and this Committee for your 
leadership and for your continued support of the Department of 
Homeland Security. And I would be happy to answer any questions 
that you may have.
    Chairman Lieberman. Thanks, Mr. Schneider.
    We will go to the questions now. We will do a 6-minute 
round so that everybody can get an opportunity, and hopefully 
we can even do a second one. I do want to indicate both to the 
Members and the public, I think the Members know that we are 
going to follow this hearing on Monday with a hearing on the 
eve of September 11 when we will hear testimony from Secretary 
Chertoff, FBI Director Mueller, DNI McConnell, and Admiral 
Redd, the head of the National Counterterrorism Center, an 
overall hearing asking each of these critical leaders how are 
we doing in the war against terrorism and particularly in 
protecting the homeland from terrorists. So I look forward to 
that.
    Let me proceed with the questions. Mr. Walker, as I said 
earlier, you have presented a very useful, wide-ranging report 
that examines many of the Department of Homeland Security's 
diverse missions and integrates material from a host of 
previous analyses that GAO has done. I want to ask you at the 
outset to step back for a moment, and if you had to provide a 
single overall assessment of how the Department is doing, 
whether it is on track to meet our expectations and its 
statutory goals, what would your assessment be? And if you can, 
what grade would you give it at this point?
    Mr. Walker. I would hesitate to give them a grade, Mr. 
Chairman, because I do not think that is really fair because 
there is variance from that grade. I would say clearly they 
have made more progress on the mission area than the management 
area.
    Chairman Lieberman. Right.
    Mr. Walker. And that is understandable.
    Chairman Lieberman. Define that a little more.
    Mr. Walker. By ``mission,'' what I mean is, what they are 
trying to achieve--enhance aviation security, enhance maritime 
security, and enhance border security.
    Chairman Lieberman. As opposed to management----
    Mr. Walker. As opposed to financial management, human 
capital management, etc.
    Chairman Lieberman [continuing]. Of the overall Department.
    Mr. Walker. Yes, like information technology management, 
real property management, and acquisition management.
    Chairman Lieberman. Because achieving those missions also 
involves management of those separate tasks.
    Mr. Walker. Correct.
    Chairman Lieberman. But you are saying overall the 
Department is----
    Mr. Walker. I will give you an example, Mr. Chairman. Let 
me give you an example for another agency to help put it on. 
The Defense Department does a great job on achieving mission, 
but it does not necessarily do it in an economical, efficient 
manner. And so many times you can get things done, but the way 
you go about doing it may not be economical and efficient, and 
it may or may not be sustainable.
    So I think they have understandably prioritized their 
efforts to try to make as much of a difference as they can on 
mission as quick as they can, but they haven't made as much 
progress in the area of putting together the necessary 
management infrastructure--systems, controls, people, 
integration--that can be sustainable over time that will help 
on economy and efficiency on the general management front.
    Chairman Lieberman. OK. Mr. Schneider, do you want to take 
the opportunity to grade the Department or give a brief verbal 
assessment, perhaps responding to what the Comptroller General 
has said?
    Mr. Schneider. Well, first off, like the Comptroller 
General, I am not about to put a grade on the table. I do agree 
with what he said because it reflects what we have done. We 
really have focused on the mission areas, and I think his chart 
shows it.
    So if you take a look at some of the areas, aviation 
security, if you take a look at the maritime security, these 
are the mission areas. These are the ones where we have focused 
our effort, and the report, while we may disagree with the 
rating, as we clearly do in 40-some-odd instances, the fact of 
the matter is the report's own words frankly cite the many 
progresses that we have achieved in these particular areas.
    So I do not want our disagreement with the rating to in any 
way infer or give the impression that the report does not 
address many of the achievements. We frankly have disagreement 
on the rating, and I think that is probably true of any time 
somebody is given a grade or a rating. You end up having 
differing views about it. So we clearly have focused on exactly 
what the Comptroller General has said we have.
    Mr. Walker. If I can?
    Chairman Lieberman. Go ahead.
    Mr. Walker. As Under Secretary Schneider mentioned before, 
they had strong differences of opinion in some cases with 
regard to how we rated them on certain of these performance 
expectations. But we had a two-step process. We rated on the 
performance expectations, and then after we did that, we 
aggregated to determine what the overall progress should be in 
each major area. What I just asked my staff is, while we have 
not done the detailed analysis, would the overall progress have 
been dramatically different if we had changed a number of the 
ratings we are talking about? It would have been different, but 
it would not have been dramatically different. So I think that 
is what is important.
    Chairman Lieberman. OK. If you are so critical--and I know 
in part you are positive, but you make some tough criticisms of 
the Department--how do you explain why we have not had another 
terrorist attack since September 11, 2001?
    Mr. Walker. Mr. Chairman, I have always been very 
uncomfortable with anybody who wants to assert that because we 
have not had another terrorist attack, it automatically means 
that we have done a great job and we have done everything we 
should do. We should keep in mind that based on that standard 
on September 10, 2001, we were doing a great job. I do not 
think we can take comfort in the fact necessarily that we have 
not had another attack. Thank God we have not had another 
attack, and I think there are a lot of reasons that we have 
not, and in many cases because of efforts by the Department of 
Homeland Security, intelligence agencies, and things going on 
overseas. But I do not think we should use that as a standard 
for whether we are successful or not.
    Chairman Lieberman. I agree. That was well answered. The 
challenge, as you have talked about, of integrating 22 
component agencies, over 200,000 employees into a Department is 
not easy. You said that in the private sector it often takes 5 
to 7 years to achieve. And we are short on where we should be 
in this regard. What do you believe are the most important 
things the Department of Homeland Security can do to create an 
integrated and fully functioning Department?
    Mr. Walker. Well, obviously, one has to have a strategic 
plan. One has to align the organization to support that plan. 
One has to be able to have appropriate goals, objectives, 
metrics, and measures that will help focus the energies and 
efforts of all the related parties, including tying their 
performance evaluation systems and their compensation systems 
to getting those things done. And one of the things that I know 
all of us have talked about, especially Senator Voinovich and 
I, is I think one of the things we need to think about in 
government on the management side is do we need chief 
management officials in some of these larger, more complex 
entities like DOD and DHS that not only have capable and 
credible people, but provide for continuity within and between 
Administrations to deal with issues that are inherently non-
partisan and non-political.
    Chairman Lieberman. Thank you. My time is up. Senator 
Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Schneider, I want to focus on the four areas where the 
GAO really gave the Department unsatisfactory ratings, in other 
words, found only limited progress, the lowest rating. They are 
emergency preparedness and response, science and technology, 
human capital management, and information technology management 
on the chart.
    Now, I have indicated in my opening statement that I think 
GAO actually graded the Department too low on the emergency 
preparedness and response area, that one deserves at least a 
somewhat higher rating. So let's go to the other three. Tell me 
whether or not you agree specifically with the ratings of only 
limited progress for those three areas--science and technology, 
human capital management, and information technology.
    Mr. Schneider. In science and technology, we strongly 
disagree, and the basis for that is the strategic plan that I 
referred to in my opening oral statement. And the reason for 
that is I have looked at that strategic plan. One of the things 
that the Department was criticized for significantly about 2 
years ago was the lack of a good science and technology 
strategic plan.
    I would say that we did not have a good plan, we did not 
have a good structure, and we did not have a good process for 
making science and technology investments. It was one of the 
Secretary's priorities, which is why he went outside, hired a 
new Under Secretary, brought in a lot of people, and changed 
the processes around.
    I worked very closely with the Under Secretary for Science 
and Technology, actually a retired admiral from the Navy who 
used to work with me, and you might say he actually worked for 
me. And so what we have done is we actually have instituted 
some of the very basic processes that were used in DOD and the 
Navy for science and technology investments, which is why we 
spent a lot of time making sure that the science and technology 
plan that we sent to the Hill was, in fact, what we considered 
to be an outstanding plan.
    If you take a look at the number of the performance 
expectations that drive from that science and technology plan, 
there are several. So I would say that we strongly disagree 
with that one.
    Senator Collins. And if I could just interrupt, that is 
Admiral Cohen who was brought in.
    Mr. Schneider. Yes.
    Senator Collins. And I, too, think he has made a real 
difference in that area. I think it was very weak until he was 
brought in. But I think he is making a real difference.
    Mr. Schneider. Most plans are living plans if they are good 
plans. This is a living plan. We changed the number of mission 
areas that we invest in. We increased it based on the changing 
threat. There are handshake agreements between the operational 
customers and those that are managing the science and 
technology so that if the science and technology is executed, 
it reaches a certain point in time. There is an agreement by 
the operator that they will, in fact, use it, and that 
basically is a handshake budget agreement, which means they 
will fund it.
    And so he has instituted and the Department has instituted 
what I consider to be some very rigorous and disciplined 
processes to ensure that we get a pretty good return on the 
investment for science and technology, and our plan reflects 
that.
    Senator Collins. Let us go on to the other two.
    Mr. Schneider. In the area of human capital, we do not take 
exception to that. That is one of the weak areas that we have. 
I do not remember if we contested any of those off the top of 
my head. But the fact of the matter is in the management areas 
generally, and I used this term with the Comptroller General 
when I met with him a couple of weeks ago, I almost think we 
have reached an equilibrium of understanding, and the reason is 
we know what they look for in the management areas, be it 
acquisition, financial systems, internal controls, and the 
like. And the fact is we either produce it, the objective 
quality evidence, or we do not. So we have very few--probably I 
would say for the most part--disagreements in the management 
area. So we would not contest that.
    In the information technology area, that one we had a 
couple of issues--I think three associated with the enterprise 
architecture. In my 40-page letter which addressed some of 
these, we talk about the fact that we have an enterprise 
architecture. It is an approved enterprise architecture. It is 
being executed. We get high marks from OMB on the architecture, 
and I think that relates to, I think, several of those 
performance expectations in the information technology area. So 
we have some disagreement on that.
    I want to go back to the preparedness issue which you 
covered. That is our biggest exception. Roughly 25 percent of 
the total pages in my letter to the Comptroller General takes 
issue across the board with the preparation of performance 
expectations. And it is all-encompassing. It talks about the 
various levels of response teams, and this is where the issue 
is, the grade, not so much the words. In their assessment, they 
talk about the various tiers of response teams that we have for 
local, regional, national disaster type levels. And it talks 
about the progress we have made, but yet it gives us a low 
score.
    There are three performance expectations that talk about 
interoperable communications. We strongly disagree with the 
rating on those three, and I think the GAO's own words that 
describe our progress relative to implementing SAFECOM, 
implementing interoperability standards at the local and State 
level, we think that their words support our rating.
    The other issue is the National Response Plan that I talked 
about in my statement. We really have a problem with that one, 
and the reason being is we have a plan, it is being executed. 
One of the criticisms in the report was the fact that we 
haven't been able to test it out in a large-scale disaster. 
Well, it is very hard to simulate a large-scale disaster, and 
thank God we have not had one. One of the other ones we 
disagree with is emergency assistance.
    So we strongly disagree with that particular area more than 
any other area in the report, and I think I have covered all 
four.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks, Senator Collins. We will call 
on Members of the Committee in order of arrival at the 
hearing--Senators Voinovich, Carper, Akaka, and McCaskill. 
Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Mr. Chairman. First of all, I 
commend you for holding this hearing as I believe it is 
critical that we continue to closely monitor the progress and 
remaining challenges for the Department, which this Committee 
created by legislation in 2002. I thank the witnesses for being 
here and for their candor. But I must say that I find it 
regrettable that GAO and the Department were unable to agree 
upon the basic methodology for this progress assessment. What 
bothers me is that a year from now, if we don't reach 
agreement, we will be quibbling about metrics that are being 
used instead of solving the underlying problems.
    We have been able to achieve progress in addressing other 
areas on the GAO high-risk list, and Senator Akaka and I are 
very conscientious about continuing this work.
    I am pleased that Comptroller General Walker has outlined 
five overarching goals for the Department in his testimony, 
which I have repeatedly highlighted as critical to the 
Department's success, including agency transformation, 
strategic planning and results management, risk-based 
decisionmaking and resource management, information sharing and 
coordination with Federal, State, local, private sector, and 
international stakeholders.
    I am concerned that of all of the agencies that were on the 
high-risk list, DHS was the last to come up with a strategic 
plan. The GAO has criticized the plan for a lack of detail, 
clarity, and clear goals. On the high-risk list, the Department 
still has not come up with a corrective action plan to get off 
the high-risk list. And so I am asking the two of you, and I 
would ask the Chairman and the Ranking Member of this Committee 
to invite you back here in the next several months and see if 
you cannot get together and come up with some kind of 
understanding about the metrics that will be used to determine 
whether or not progress is being made in these respective 
areas.
    Second of all, I would certainly like to have a consensus 
from you on the top four or five challenges for which solutions 
are really going to make the most difference for the 
Department. What I am worried about is that we are going to 
have what we have had with the Department of Defense, and 
General Walker has made it very clear. The Defense Department 
has had eight areas on the high-risk list since 1990, six more 
that are on the general list, and they still have not gotten 
the job done.
    From my perspective, as Ranking Member on the Oversight of 
Government Management, the Federal Workforce, and the District 
of Columbia Subcommittee, we want to be able to determine 
whether or not progress is really being made.
    So I would urge the Chairman and Ranking Member that we get 
our witnesses to agree on common goals to prevent this 
situation in the future.
    Chairman Lieberman. It is a very good idea. I accept it, 
and I echo it and make that appeal to both of you. That is the 
sort of idea that a former mayor and a former governor makes, 
which Senator Voinovich is.
    Mr. Walker. I think it is a great idea. We will do that, 
Senator Voinovich. Let me just clarify that reasonable people 
can and will differ about what is the best way to do something 
like this, and I can think of other ways that we could approach 
it. Quite candidly, we laid out pretty early on what we were 
proposing to do, and it is my understanding that we did not 
really have strong objection from DHS until we were pretty far 
down the pike. And with the massive undertaking that this 
represents, you could not change the course of this battleship 
that far into the effort.
    Now, I think the bottom line is that what I am hearing from 
Under Secretary Schneider is the words they do not have a big 
problem with. The overall bottom-line assessment, with the 
possible exception of emergency preparedness and response, 
there is not a big problem there. There are concerns about how 
we got to that point. We are willing to work together to see 
what we can do, but let us not overstate the problem. I do not 
think there is as big a difference as what 47 items out of 171 
would imply.
    I think the approach that we took is such that it takes 
moving a lot of those items before you are going to change the 
right-hand column. And my personal view is we ought to really 
look at things two ways: Where do you stand? And what progress 
are you making? And you really need to know both in order to 
have a true sense. And we will endeavor to try to do that on a 
prospective basis.
    Senator Voinovich. General Walker, I would like for you to 
comment on why you believe a term for an Under Secretary of 
Management is important for this Department to complete the 
transformation that we think it needs so that it will get the 
job done for the American people.
    Mr. Walker. I do not think that government places enough 
attention on management in general, and in particular, I think 
government has an incredibly complex job to do with regard to 
major mergers and transformation efforts that is of higher 
complexity than the private sector. In the government, you have 
more bosses, you have less flexibility, and you have much more 
transparency. All the more reason why you must not just have 
people who are competent and credible; you must have 
continuity. It is critically important to have adequate 
continuity in order to be able to make transformational change 
happen. And I think in the area of the Department of Defense 
and the Department of Homeland Security, and maybe one or two 
others, you need a level two official with the right kind of 
background, with a term appointment, to provide continuity 
within and between Administrations to try to be able to deal 
with these transformation challenges.
    They can be a political appointee. If they are not doing 
the job, you can have a performance contract so that you can 
get rid of them. But I think we underestimate the degree of 
complexity in government, and we underestimate the degree of 
importance of having this type of person stay there over time.
    Chairman Lieberman. Thanks, Senator Voinovich.
    Let me ask you, on behalf of the Committee, to report back 
to us before Thanksgiving. That gives you a period of months to 
work on that.
    Mr. Walker. On how we would go about it prospectively, is 
that what you are saying?
    Chairman Lieberman. Yes, about working out the disagreement 
about methodology so we can all--we have a common goal here--
operate together.
    Mr. Walker. Methodology prospectively.
    Chairman Lieberman. Good. Senator Carper, welcome.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thanks very much.
    Gentlemen, Mr. Walker, Secretary Schneider, thanks so much 
for being here and for the work that your folks have done at 
GAO, Mr. Walker.
    Let me start off, if I could, with a question. I do not 
know. I have been in and out so this question may have been 
asked. But you said several times--and I have read it in the 
testimony--that big transformations like this in private 
corporations take between 5 and 7 years to fully integrate. 
Federal agencies like the Department of Homeland Security take 
a whole lot longer not uncommonly. I think I know the answer to 
this, but why the difference? Why the much shorter time frame 
with the private sector than, in this case, the public sector?
    Mr. Walker. The private sector has market forces. If the 
private sector does not get things done within a reasonable 
period of time, it gets punished with regard to its stock 
price. It gets punished with regard to its ability to raise 
capital at reasonable rates. And potentially it gets punished 
with its existence if it does not get things done.
    The government does not face the same thing, at least in 
the foreseeable future. We do not have a stock price. 
Fortunately, we are deemed to have a safe credit rating. If we 
get our fiscal act in order, maybe we can avoid what Standard & 
Poor's said, which is we are headed for junk bond status within 
15 to 20 years if we do not get our fiscal house in order.
    But I think the private sector also understands the 
importance of these basic management areas, frankly, a lot more 
than the government does. The private sector is a lot more 
outcome-based and results-oriented than the government is. You 
either get the job done, or you get going. And, last, as I said 
before, frankly it is a lot tougher in government than it is in 
the private sector to get things done. You have a lot more 
bosses, you have a lot more restrictions on you, and you have a 
lot more transparency. That combined with less continuity--we 
can at least deal with the continuity.
    Senator Carper. Alright. Good. Thanks very much.
    I think it was former President Richard Nixon who once said 
that the only people who do not make mistakes are the people 
who do not do anything. And I have oftentimes said to my own 
teenage son, ``Don't be afraid of making mistakes. The sin is 
in making the same mistake over and over and over again and not 
learning from your mistakes.''
    I want to go back to one of the issues that was raised 
earlier, I think maybe by Senator Collins, and I think you 
mentioned--and it is mentioned at some length in your progress 
report--that one of the areas of significant progress was 
maritime security. Let me ask both of you to just take a minute 
or two on this and talk to us about how and why you think the 
Department was able to be especially successful in this 
particular area. And is there a lesson for the Department or 
for us that we can learn from the success as we try to apply it 
or the Department tries to apply it to other areas that are 
being examined?
    Mr. Walker. I think there are a lot of reasons, and I would 
be interested in hearing Under Secretary Schneider's comments 
on this. First, it is a mission area, and the Department 
provided more focus on mission areas than it did to management 
areas, for understandable reasons.
    Second, the Coast Guard is part of this, and the Coast 
Guard is probably the best managed service, and the Coast Guard 
is also an agency that has a long tradition of having multiple 
missions and having great partnerships between different levels 
of government and others in trying to achieve those missions.
    Furthermore, as has been mentioned, in addition to DHS and 
its component parts doing a better job with regard to its area, 
Congress was focused on maritime security with regard to 
oversight, and Congress also engaged in some authorization 
legislation, and I believe Congress also provided more funding 
here.
    So I think there are a number of factors that came together 
to cause this significant progress to be made.
    Mr. Schneider. I agree totally. I think it was the high 
priority assigned to the Department by the Congress. I think it 
is the fact that we have the Coast Guard, which is a well-
established, well-trained, agile organization. They probably 
were in a better position to respond to changing missions than 
just about anybody. We see that today as recently as within the 
past couple of months, the deployment of these deployable 
operation groups (DOGs), which basically address multi-mission 
areas within the service. And so they are trained, they are 
operational, and they are readily adaptable. And I think that 
was the major driver, as well as the additional resources.
    Senator Carper. Alright. Thank you. So maybe if we renamed 
the Department the Department of the Coast Guard and aligned 
all the different missions--no, I am just kidding.
    Chairman Lieberman. I want to note for the record that 
Secretary Schneider had the expression on his face that I often 
have after you tell one of your jokes.
    [Laughter.]
    Mr. Walker. Although Secretary Schneider might like being 
called ``Admiral Schneider.''
    Mr. Schneider. I think Admiral Allen would have something 
to say about that.
    Senator Carper. That is alright. I am sure we have all been 
called a lot worse.
    Mr. Walker, my Financial Management Subcommittee, which I 
Chair and on which Senator McCaskill and others serve, held a 
hearing not long ago to examine the Department of Homeland 
Security and the challenges that they face in the particular 
area of financial integration, and I want to just take a minute 
to talk about the progress that has been made in integrating 
the Department as a whole.
    What problems has the Department leadership faced in its 
effort to bring the component agencies under the same 
management structure, the same chain of command, if you will, 
and the same culture?
    Mr. Walker. Well, as you know, Senator, the 22 agencies 
merged. They all had their different information systems. They 
had some of their own challenges with regard to financial 
management. And so you have got the issue of multiple legacy 
information systems that are not integrated, thank God not as 
many as the Department of Defense. And you also have a number 
of internal control challenges that exist in that environment. 
Those are the two primary areas, I would say, and Under 
Secretary Schneider may have some additional comments.
    Senator Carper. Admiral Schneider. I mean, Secretary 
Schneider.
    Mr. Schneider. I have a feeling that when I go back, the 
next time you have a hearing there will be a different witness.
    [Laughter.]
    The financial area is a big deal for us. At a hearing that 
Senator Akaka chaired with the Comptroller General and myself 
where we talked about some of the management challenges, one of 
the things that I talked about was that, prior to my 
confirmation, one of the great resources that I used was all 
the GAO reports that had been issued in the management areas. 
And so it pointed out a couple of things: First, that our 
internal controls were very weak across the Department; and the 
second thing was we had the myriad of financial management 
systems.
    So this is a special interest item for myself, the Chief 
Financial Officer, and the Secretary. So we have laid out a 
road map that works on the two areas.
    In terms of areas of internal controls, we issued what we 
call the ICOFR Playbook, which is the Internal Controls Over 
Financial Reporting Playbook, which goes into excruciating 
detail in each of the operational entities of the Department, 
looking at where potential material weaknesses are. And I am 
not an accountant. I am an engineer by profession. But as to 
the business of fund balances with Treasury, budgetary account, 
operating materials and supplies, etc., we have worked with 
each of our operating components and layed out a get-well plan 
that addresses each one of these areas. And we worked that with 
the GAO, we worked that with the Inspector General.
    I report with the CFO on a monthly basis to the Secretary, 
and we go over component by component where they are on each of 
these things. And I can tell you that if a component is not 
making progress, they have got to come around.
    So we, I believe, are holding the components of the 
Department responsible and accountable for getting well in 
terms of internal controls. The financial management system----
    Senator Carper. I am going to have to ask you to go ahead 
and wrap it up because my time is up.
    Mr. Schneider. The financial management system approach 
initially with e-merge was a failure. Instead, what we decided 
to do is migrate down to a couple of stable financial 
management platforms. So we have seven, and we are in the 
process over the next several years of migrating it down to 
two. And that is probably the No. 1 priority of my Chief 
Financial Officer.
    Senator Carper. Alright. Good. Thank you both.
    Chairman Lieberman. Thanks, Senator Carper. In the interest 
of the comprehensiveness of the record for the hearing, I do 
want to note that you are a Senator with a very good sense of 
humor, and often we all do genuinely laugh at your jokes.
    [Laughter.]
    Senator Carper. People have been laughing at me for a long 
time.
    Chairman Lieberman. Senator, thank you. Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. If we are going to say we laugh at his 
jokes, I think we need to find out do we laugh at it 
substantially, partially, or how far along----
    Chairman Lieberman. Well, we may ask for a GAO report on 
that.
    Senator McCaskill. I am ready for that audit.
    I want to first compliment this report. I have read every 
page of it. It is an overwhelming body of work for an auditor. 
And I compliment the substance of what is contained in it. I 
want to repeat what you said, Mr. Walker, because what you said 
is that the disagreements are not about the words. The 
disagreements are about how we are characterizing those words 
as to level of accomplishment. And if you read the words, we 
have a lot of work to do, and I think everyone agrees with 
that.
    I think it is also important to remember that if we get 
sidetracked by how we are characterizing the words, we are 
going to lose sight of some of the important messages in the 
words. And so I, for one, am going to try not to use your chart 
as much as I am some of the words that are in the report 
because I think they are important.
    I also want to make a comment before I ask you some 
questions, Mr. Walker, about the lack of a terrorist attack. I 
think it is really important. People need to remember the seat 
that you sit in. What you say in this report is here for 
history, and now there are people in this building that want to 
say we have not been attacked because we are doing a good job. 
If we were attacked tomorrow, there would be people in this 
building that would say it happened because we were doing a 
terrible job. And truth be known, neither are correct, and that 
is really what this report stands for. It is much more 
complicated than saying we are safe because they are doing a 
great job or we are in big trouble because they are doing a 
terrible job. And I think that--please convey from me to the 
individual auditors that worked on this report--quantifying 
this objectively is a huge challenge and had you done things 
differently, in fact, in terms of trying to pass judgment about 
prioritizing--which is one of the criticisms the Department has 
made--you would have been criticized for imposing your judgment 
for the judgment of Congress.
    The priorities are in the eye of the beholder as to what is 
important. I bet if we got all the Senators here and we looked 
at all of this report and they looked at it in detail, we might 
get 100 different opinions as to what was the most important 
part of this report. So I wanted to make that comment, too.
    You referenced the Inspector General at Homeland Security 
many times in this body of work, and I want to recognize the 
Inspector General at Homeland Security because, clearly, you 
believe they have done good work because you referenced a lot 
of their work. I am trying to make a habit of asking every 
Department that appears to put a link directly to the Inspector 
General on their home page. To find the Inspector General on 
DHS's home page, you have to either go down through all the 
agencies or you have to know to put in the search ``Inspector 
General.'' And so I would certainly ask, Mr. Schneider, that 
you all consider putting a direct link to the IG on the home 
page of your website.
    Mr. Schneider. Sure.
    Senator McCaskill. I also want to briefly ask questions 
about access issues. I notice you did not include access issues 
in your summary, Mr. Walker, but in the report, on page 206, 
you talked about delays and issues relating to access. Could 
you address that briefly for us?
    Mr. Walker. Two things. First, we made a conscious decision 
not to prioritize, in part because of what you said. Second, we 
have had continued challenges over a period of time to 
differing degrees with the Department of Homeland Security in 
getting timely access to information. Now, in fairness to them, 
they receive a lot of requests. They have a lot of things to 
do. At the same point in time, the process that they have used 
historically--and hopefully it is changing--has involved the 
lawyers to a greater extent than I believe it should. Under 
Secretary Schneider and I have met on this. I also had, I 
believe, one conversation with the Secretary on this at one 
point in time as well. They both pledged to do better. They are 
doing better, however they are still not doing well enough, but 
they are doing better. And, interestingly, when we got to the 
point where they saw our preliminary assessment here, we had 
well over 1,000 pages of information that came our way pretty 
quickly. Sometimes that happens when the assessments are not 
necessarily coming out the way that people want and, therefore, 
they want to make sure we are fully considering everything that 
is out there. But it really should not have to be that way. I 
mean, we really need to figure out a more streamlined way for 
us to get information, and the only thing I would say to the 
Department to close this out is, look, we are doing work for 
the whole Congress, and to the extent that they can cooperate 
with us, frankly, it is going to save them time because we can 
try to consolidate the requests of many committees, and we 
share our work broadly. And so while our work may cost them 
some time, it may actually save them time over time.
    Senator McCaskill. Well, I am glad to hear that the problem 
is improving, that we are getting better on access issues.
    Let me hone in on a part of the report that I think should 
be a priority, and that is working enforcement in the area of 
illegal immigration. I was interested to see that one of the 
things you talked about in June 2006 was the decline in numbers 
of enforcement personnel, the decline in number of enforcement 
actions.
    The thing that I am, frankly, mildly critical of the audit 
about--and I think it may have to do with the performance 
expectation as to how it has been written--is shouldn't we be 
separating out criminal investigations and sanctions against 
the workers and the employers? To me, these are two different 
issues. One is the magnet that is drawing the illegal immigrant 
over the border. The other is the immigrant who is coming 
across the border trying to feed his family. And I have not 
been able to determine from this audit report or, frankly, from 
much that has come out of ICE as to any kind of delineation as 
to--I keep reading about the sweeps they are doing. I never 
read about a criminal conviction or a jail sentence for an 
employer. You talk about, in this audit, egregious violations 
by employers. Have they defined what ``egregious'' is? What 
does it take, for gosh sakes, to be egregious as an employer in 
terms of hiring illegal immigrants?
    Mr. Walker. Well, let me say several things, and I will 
provide some more details for the record.
    [The information provided for the Record follows:]

           INFORMATION PROVIDED FOR THE RECORD BY MR. WALKER

    To what extent does performance expectation No. 8 under 
Immigration Enforcement (Implement a prioritized worksite 
enforcement strategy to ensure that only authorized workers are 
employed) differentiate between efforts to investigate and 
arrest employers of unauthorized workers and efforts to 
investigate and arrest unauthorized workers? What does DHS mean 
by ``egregious employers violations?''

    Answer: We did not identify separate performance 
expectations for worksite enforcement actions aimed at 
employers of unauthorized workers and at the unauthorized 
workers themselves. Within DHS, U.S. Immigration and Customs 
Enforcement (ICE) is responsible for implementing worksite 
enforcement efforts and has conducted worksite enforcement 
actions against employers and workers, which are described in 
our report. According to ICE, ``egregious employers 
violations'' include those violations that involve multiple or 
widespread abuse such as money-laundering, harboring aliens, 
smuggling aliens, document fraud, or some form of worker 
exploitation.

    I think while there has been a recent increase in the 
enforcement of hiring of illegal workers, that is a real 
serious problem. I think we have to recognize the reality that 
a vast majority of illegal immigration is for economic reasons. 
In Mexico, for example, the average daily wage for an unskilled 
worker is less than $5 a day. They are going to come here, and 
they are going to come here as long as they can get jobs here. 
And so unless we end up enforcing the laws against hiring 
illegal workers aggressively, then we are not going to stem the 
tide. We are just not going to do it. We have to recognize that 
reality. They have allocated some additional resources, but I 
think it is still an issue. And I do think there is a 
difference, clearly a difference, between the employer and the 
individual.
    Senator McCaskill. I am out of time, but I will probably 
stick around. You know me.
    [Laughter.]
    Chairman Lieberman. That is good news.
    Senator McCaskill. Maybe. I will not tell any bad jokes, I 
promise.
    Chairman Lieberman. OK. We have time for a second 6-minute 
round.
    Let me just pick up on the last area that Senator McCaskill 
was talking about. In this case, I want to go to border 
security. The GAO found that the Department had not yet 
implemented a program to detect and identify illegal border 
crossings between ports of entry. Specifically, GAO found that 
the Secure Border Initiative and the SBInet were only in the 
early stages of implementation, and the other border security 
programs that predate the SBI had faced real difficulties in 
implementation.
    The report also notes that of the 6,000 miles of U.S. land 
border, only 392 miles, or 6.5 percent, were under effective 
control as of March 2007, including only 12 miles on the 
Northern border. Obviously we have a very large border.
    Furthermore, it has recently been reported that the launch 
date for the first phase of SBInet's virtual fence of cameras, 
radar, and sensors, which has been much discussed and supported 
here in Congress--and I might say in various campaigns going 
on--is 2 months overdue as a result of technology failures, 
which would seem to confirm GAO's assertion that the Department 
of Homeland Security is not meeting its goals.
    So I want to ask both of you to respond. Mr. Walker, first, 
can you elaborate on GAO's conclusions about the Department's 
work in securing the country's land borders? And if you can, 
address the recent delays in implementing the first 28 miles of 
the so-called virtual fence.
    Mr. Walker. Well, first, this is a massive undertaking. I 
mean, we have thousands of miles of land border, and I would 
argue that the nature of the challenge is fundamentally 
different on the Southern border than the Northern border. 
Fundamentally different. And, from a practical standpoint, I 
think, as you said, SBInet is in the early stages. We only have 
it operational in a fairly small percentage of territory. They 
have missed some of their early milestones.
    Let me tell you what the good news is. The good news is 
that unlike Deepwater, where it was a system of systems 
approach, where we had a number of challenges, there are some 
existing technologies and capabilities that exist out there 
already that we need to be able to draw upon to the maximum 
extent possible, and I will give you an example. My son used to 
be a Marine Corps officer, and at one point in time, right 
before he was in Iraq, he was on the border of Mexico--in Yuma, 
Arizona. There is a big training and testing facility for the 
Marine Corps there, and they use extensive technology to keep 
people off of the range. That type of technology exists. That 
type of technology presumably is something that is being looked 
at as one of the possibilities to use elsewhere.
    Chairman Lieberman. Mr. Schneider, I know that DHS has 
challenged GAO's conclusions in this area, so let me ask you to 
tell us why you disagree, and also if you could address the 
delays in SBInet's 28-mile virtual fence.
    Mr. Schneider. Sure. The initial deployment of SBInet is 
what we call Project 28, which is roughly 28 miles of border, 
roughly southwest of Tucson. Exactly as the Comptroller General 
said, this is totally different than Deepwater. The basis for 
the program is to take available technologies and do a 
comprehensive system engineering effort to deploy a system. In 
other words, take the risk out of a lot of the developments. So 
this has ground-based radars. It has cameras. It has unattended 
ground sensors linked through a command and control 
architecture that basically the CBP can execute command and 
control. This contract was awarded approximately 10 months ago.
    That said, this system is up and it is running, and as part 
of the initial deployment of the system, we have found problems 
that need to be solved. Many of them have to do with slowing of 
the camera after you identify through the ground-based radar a 
target. You need to use the camera to basically do a 
classification of the target.
    And so what is happening is the synchronization of all the 
sensors that ultimately feed the command and control have to be 
worked out. This is no different than in the world that I come 
from in Defense what we would call ``grooming the system.''
    So the system is up and running. As part of this initial 
deployment, we have CBP people that are on the ground that are 
learning how to use the system, learning how to develop their 
concepts of operations that will be a much more effective 
business process. As we fix these problems, that will 
ultimately lead to what I would call ``established doctrine'' 
by which they will basically defend the border. That will 
ultimately get incorporated into training programs, and we will 
adjust our business accordingly.
    The other thing about this architecture is that it is 
modular and scalable, so what we will do is literally move 
across the border once we are satisfied and we accept this 
system. I think we have learned a lot of lessons in the 
Department from a lot of the poor examples where we have had 
acquisition deficiencies to the tune of where we basically--we 
have minimized the government's expenditure in this. This is a 
$20 million fixed-price effort. The government will not spend 
more than $20 million. It will not accept the system until it 
is working.
    Chairman Lieberman. So as I understand it, it is not 
actually operational now.
    Mr. Schneider. It is operating.
    Chairman Lieberman. But it is not operating to the 
satisfaction of the Department.
    Mr. Schneider. That is correct. We have refused to accept 
deliverance of the system, and our liability on this is capped. 
We have had some very serious conversations with the leadership 
of the company. We told them that this system will not be 
accepted until it performs satisfactorily. The leadership of 
the company, Boeing, understands that fully. They have a full-
court effort underway with expertise that has been brought in 
from their entire corporation to get this system up and 
running.
    Chairman Lieberman. Let me just ask you to clarify. How can 
a system be operational that the Department has not yet 
accepted?
    Mr. Schneider. People are using it.
    Chairman Lieberman. It is actually being used to----
    Mr. Schneider. It is being used.
    Chairman Lieberman [continuing]. Secure the border.
    Mr. Schneider. It is being used, but the fact is we have 
deficiencies in the system.
    Chairman Lieberman. But it is not up to the standard----
    Mr. Schneider. It is not up to the standards where we would 
accept formal government acceptance of the system and then give 
them a go-ahead to go further.
    Chairman Lieberman. Is there a time limit on how long you 
are going to work with Boeing?
    Mr. Schneider. Yes. Well, we are in the middle of reviews 
with them right now, and I want to get back to you on a date, 
but we are talking--I believe it was somewhere between 4 to 9 
weeks to where they thought the majority of these problems 
could be----
    Chairman Lieberman. From now?
    Mr. Schneider. It was last week, I think, approximately.
    Chairman Lieberman. Thank you. My time is up. Senator 
Collins.
    Senator Collins. Thank you, Mr. Chairman.
    Mr. Walker, when you looked at the four areas where DHS has 
fallen most short, did you see a common pattern in these areas 
as far as the cause of the difficulties? What I am interested 
in, in particular, is: Did you identify that the problems were 
caused by resource shortages, not enough funding, leadership 
deficiencies, statutory barriers, institutional or cultural 
problems from legacy agencies? Were there common themes that 
prevented progress from being made in those four particular 
areas?
    Mr. Walker. Well, first, I think to the extent that 
leadership at the Department makes something a priority, 
clearly you have a higher likelihood that you are going to see 
progress there. And we saw that.
    To the extent that there are adequate resources or more 
resources allocated, there is some difference. But I think it 
is not just a matter of how much in resources. It is a matter 
of the flexibility that one has with those resources. To what 
extent are they tied? To what extent are they earmarked? To 
what extent does the Department have the ability to allocate 
those resources based upon value and risk? And so I think that 
is an issue where one might have adequate resources, but you 
may not have enough flexibility to allocate those resources 
based upon value and risk and, therefore, you are not going to 
get as much of a result.
    As I said before, to the extent that Congress has paid 
attention in a constructive way to try to be helpful and 
acknowledge progress, not just point out what is wrong, and to 
figure out whether or not there is enabling legislation that 
might be necessary, such as maritime security and other things, 
that has been a positive indicator as well.
    Senator Collins. Mr. Schneider, there is one area within 
the port security area that the GAO was very critical of, and I 
agree with the criticism, and that is that the GAO graded the 
Department as not achieving implementation of a national 
facility access control system for port-secured areas--in other 
words, the TWIC card. We have been talking about the 
Transportation Workers Identification Credential for years. And 
we are never going to achieve the highest level of security at 
our ports until we come up with a good system of restricting 
access to our ports.
    This has been a source of great frustration to me. I have 
brought it up to the Department time and time again. And I was 
not surprised to see GAO highlight this as an area of 
deficiency.
    Can you explain to us why this many years later, after the 
TWIC program was first envisioned, the Department continues to 
miss deadline after deadline and delay the full implementation?
    Mr. Schneider. Senator, I cannot tell you what happened 
before January 2007 and what led to all those problems. I can 
tell you what has happened since January 2007, and the reason 
being I have been personally involved in this ever since I came 
on board. This is one of those areas where I prioritize my 
time, what I consider to be, in terms of the acquisition 
procurement area, the five major areas that I want to spend 
time on. This is one of them.
    We had some deficiencies in the execution of the initial 
contract with TWIC. It was a failure. And so what we did is we 
went out and we resolicited the effort. The contractor that is 
currently performing that effort is Lockheed Martin, and what 
we did starting in, I believe it was, late January is set up, 
if you will, a schedule that I personally oversee every 2 
weeks, with a meeting with the program team, and we track 
everything. And so what I believe is that we are essentially on 
track, based as of my meeting a week ago Friday, to be able to 
start enrollment and issuing cards early this fall. And what we 
have had to work out is software glitches. We have had to work 
out just the sheer production of the card. There is an awful 
lot of information on that card. I will not bore you with the 
details of bar coding and 1D-type bar codes and how you have to 
upgrade printers and how you have to get the software to 
actually trigger the printer. We have had issues relative to 
being able to have--somebody punch in--an applicant fill out 
the form on the computer, go through what they call a screening 
gateway to basically get all the checks back, if you will, so 
you can get a go on issuing the card.
    We believe the end-to-end test is actually completing 
literally as we speak. We are going to review the results of 
that at the meeting I am chairing tomorrow. And we also are 
going to be discussing the detailed rollout plans for--I am 
talking about the number of sites that will be used for 
applicants to come on board. We also have drafted the draft 
rule that would implement that. We worked with the Coast Guard 
and the rulemaking people.
    So I can tell you that since January, this has been 
micromanaged between myself and the Deputy Secretary and the 
head of the Transportation Security Administration. So we are 
going to wait, frankly, until after this rather comprehensive 
review tomorrow afternoon. And if we think the situation is a 
go, then we will publish the dates for initial enrollment at 
the first two sites.
    So I can tell you, after doing the postmortem back in 
January when I came on board, that there were a lot of false 
starts. There was a lot of poor work done on the initial 
contract. I think they have marshaled the forces with the team 
that is, frankly, executing the plan, by and large, that we put 
together in January, and we may be off by a week or so.
    So I hope to be able to tell the Secretary next week that 
we are on track. I had briefed him about a week ago on where 
this was with the team, so I am hopeful that we have turned 
this thing around.
    Senator Collins. I certainly hope so, too, and I hope you 
will keep us informed. Thank you.
    Chairman Lieberman. Thank you, Senator Collins. Senator 
Voinovich.
    Senator Voinovich. I would like to get back to one of the 
recommendations from the 9/11 Commission that I would like to 
have you both comment on, if possible, and that is 
congressional oversight. It is my understanding that we have 88 
committees in the Congress that oversee the Department of 
Homeland Security. And I think, Mr. Schneider, you may have the 
number of hearings that you have come up here for, and the 
question I would like to ask is: What impact do these constant 
hearings have in terms of your getting the job done in your 
agency? Do you think it would be wise for us to reconsider the 
way we are handling the oversight so that we could relieve some 
of the pressure that you have in constantly having to come up 
here to Congress? And, Mr. Walker, I would like your comment on 
the same thing.
    Mr. Schneider. Yes, sir. First off, I think my boss has 
done a pretty good job of putting this matter in a letter that 
he sent to Congressman King on September 4, and we will get you 
a copy of that letter, if we have not already provided one.\1\ 
But it goes into excruciating details on the number of 
hearings, last year's statistics, where we are this year, 
number of reports, and the issues.
---------------------------------------------------------------------------
    \1\ The letter to Mr. King from Mr. Chertoff appears in the 
Appendix on page 412.
---------------------------------------------------------------------------
    I have been in this job 8 months. I don't remember if this 
is my 11th hearing or not, but it is pretty close. I have been 
asked to testify in front of the House a week and a half from 
now, and I just found out that there is another House committee 
that wants me to testify that morning. I have also received 
notice that there is another committee in the House that wants 
me to testify, potentially at the end of this month.
    So the fact of the matter is I have been in this job 8\1/2\ 
months, and I conceivably will have had roughly two hearings a 
month. I think the Secretary does a great job--obviously, he is 
my boss--in talking about the fact that he enthusiastically 
supports the 9/11 Commission hearing. It talks about two 
principal focus committees--one in the Senate and one in the 
House. Frankly, as one individual who appreciates congressional 
oversight, I think some of the recommendations that were made 
by the Committee as well as what he has in his letter would 
kind of help us all.
    Some of the committees that I have to testify in front of, 
frankly, are on the periphery of what we do. It is not the main 
battery. This Committee and your equivalent in the House are 
the principal committees that exercise oversight over the 
Department. And, frankly, in some areas I find myself spending 
what might end up being a disproportionate amount of time--not 
that I want to ever criticize congressional oversight--in some 
of these peripheral committees.
    Senator Voinovich. Mr. Walker.
    Mr. Walker. Well, first, the Department of Homeland 
Security is a large, important, complex agency that gets a lot 
of money. It is in the early stages of its existence. One would 
expect that it would receive more than an average amount of 
oversight given all those factors and given the importance of 
its missions.
    That being said, the Congress is a lag indicator on 
organizing itself, just as the Federal Government is a lag 
indicator on organizing itself. I think there are too many 
players, but that obviously raises sensitive issues with regard 
to the client. But, I think while they should receive more 
oversight given all the factors that I said, I think there are, 
arguably, too many players that can conduct that oversight at 
the present point in time.
    Senator Voinovich. Thank you.
    One of the things that, again, people are not aware of is 
that the budget of the Department of Homeland Security since 
its creation has gone up 150 percent. In the area of border 
security and immigration enforcement, there has been a 160-
percent increase, from $4.6 billion in fiscal year 2001 to 
$12.1 billion in 2007, including the $14.9 billion recommended 
by Senate Appropriations Committee.
    Mr. Schneider, with all of this money and the announcement 
of yet another delay in SBInet, are we allocating the money 
that the Department gets responsibly? Where should our 
resources be placed so that we get the greatest return in terms 
of our homeland security?
    Mr. Schneider. Well, let me try to address this a piece at 
a time.
    I believe that our future-year homeland security plan for 
2008 through fiscal year 2013 for the first time tries to 
capture where the money goes from a mission area--what I call a 
warfare mission area type of a blueprint. In looking at the 
previous years' submittals, they were, frankly, very hard to 
understand from--again, I come from Defense--a warfighting 
perspective; we are putting it into anti-submarine warfare, air 
warfare, etc.
    What we did this year with the recent submittal of the 
future-year plan was to try to follow the DOD model to show 
where the resources go and to even show it at a much greater 
level of granularity in terms of whether we are putting it into 
technology or whether we are putting it into manpower, agents.
    So what I would offer to do is to come sit down with you 
and brief you and whoever else on the details. We think that 
this is the first year, frankly, that we have done a pretty 
good job of trying to trace the money flow so you can see that 
we are investing in securing the borders, we are investing and 
doing analysis of infrastructure, we are investing in 
interoperable communications--because that is how we build the 
budget.
    Relative to the $3 million, I can tell you because I was a 
major player in the discussions of working with all the 
components and the Secretary in terms of what would be our 
priorities and what would be the bang for the buck. Do you put 
it into agents? If you put it into agents, what does that mean 
in terms of throughput through FLETC? If you cannot get the 
throughput through--in other words, I call it like the NTAN 
model. And so where is the best return on----
    Senator Voinovich. The reason I ask these questions is that 
I want to make sure we are not being short-sighted and our 
money is being spent to guard against not only current, but 
future threats to our homeland. I have held three round tables 
in Ohio on interoperability, and the biggest complaint that I 
have heard from the locals is, ``We don't have the money to pay 
for the interoperability. We don't have the money to do it.''
    Now, how important is that? I mean, from a response point 
of view, it is a big deal. Congress has held hearing after 
hearing on interoperability. Should we be maybe putting more 
resources into that area versus maybe some other area?
    Mr. Walker. Mr. Chairman, I know it is almost over, but 
with your indulgence, could I have 1 minute to talk on this?
    Chairman Lieberman. Sure. I have actually been worried 
about getting you out of here on time, but if you could stay a 
little longer.
    Mr. Walker. You are my primary client in the Senate, 
meaning this Committee, so I will be out in about 5 minutes, if 
that is OK, Mr. Chairman.
    First, Senator Voinovich, you are putting your finger on a 
much bigger issue. I know you are talking about a micro sense. 
Candidly, the Federal Government does not allocate money on a 
merit basis. Candidly, most of the Federal Government's budget 
is based upon a baseline and incremental approach. And in the 
absence of key national indicators, outcome-based indicators--
economic, safety, security, social, environmental--outcome-
based indicators, which some countries have and we do not, then 
in all too many frequent cases what happens is the only way you 
can show that you care is to spend more money or give more tax 
preferences, when in reality what we ought to be doing is we 
ought to be defining what kind of outcomes are we looking for. 
Let's link those outcomes with strategic planning for all the 
different departments and agencies. Let's then determine how 
much money do we need for what and what outcome are we 
expecting to get and let's make sure we are getting it. And if 
we are not, we get rid of it or we do something different.
    I would like to be able to work with this Committee on the 
need for key national indicators. GAO has been working with the 
National Academy of Sciences and the OECD to try to make this 
happen, and I think it is a strategically important thing that 
goes well beyond homeland security that could make a huge 
difference for the country.
    Chairman Lieberman. Absolutely. We would love to work with 
you on it.
    Senator McCaskill. And then if you have a few extra 
moments, I want to give Senator Landrieu a last round of 
questions. Senator McCaskill.
    Senator McCaskill. Thank you. Great segue because the audit 
says there are no outcome goals or measures for workplace 
enforcement. Do you disagree with that, Mr. Schneider?
    Mr. Schneider. We have metrics that we use, and I would be 
glad to provide it in terms of the number of aliens removed, 
criminal arrests, criminal fines and forfeitures----
    Senator McCaskill. No. I am talking about workplace 
enforcement. I am not talking about how many aliens were 
arrested.
    Mr. Schneider. Well, I am talking about the worksite 
enforcement. We track criminal arrests, administrative arrests, 
and criminal fines and forfeitures, and those are worksite 
enforcement issues, kind of like a follow-on to that 
discussion. I am not sure, frankly, what else we track. I 
happen to know that we track this at a pretty high level. I do 
not know if we have any other details.
    Senator McCaskill. ICE reported in the audit that 
additional time is needed to afford its programs the 
opportunity to mature into an outcome-based system. In other 
words, they are doing data collection now, but there is no 
outcome goals and measures that are there. And we can avoid the 
argument over the blue chart if all of the departments in 
Homeland Security had outcome-based goals and measures. Then 
the auditor's job becomes relatively straightforward and 
simple. We know what your outcome goals and measures are, and 
we look to see if you are achieving them. If they are, success. 
If they are not, why not? And what is the underlying reasons 
why they are not being achieved?
    And it specifically says in here that basically the 
Department is admitting that they have not done outcome goals 
and measures for workplace enforcement.
    Mr. Schneider. Yes, Senator, and I think also that has been 
one of the Comptroller General's major complaints across the 
entire Department.
    Senator McCaskill. Right.
    Mr. Schneider. And that is where Senator Voinovich has been 
very aggressive in trying to help us, if you will, establish 
our strategic plan so we have these types of metrics that can 
be used. And we have a long way to go.
    Senator McCaskill. In the criminal arrests in the data that 
you provided to GAO, you said there had been 716 criminal 
arrests in fiscal year 2006. Was there any indication in those 
arrests how many of those arrests were for--and maybe you can 
provide this to the Committee. I certainly would be interested 
in knowing. How many of those arrests are for employers and how 
many of those criminal arrests are for illegal immigrants 
working in this country?
    Mr. Schneider. I will provide that. I know the number of 
administrative arrests, which are nearly 4,000. I will see if I 
can break that down into some details, categories, as well as 
the over $30 million in fines and forfeitures. I will see if we 
can provide some granularity on that.
    Senator McCaskill. And then in regard to the ICE Mutual 
Agreement Between Government and Employers, from reading the 
audit you have nine members. I am glad there are nine, but nine 
in the whole country, I do not think that is something that we 
should be crowing about at this point. Is there a number, is 
there an outcome goal or measure in that area as to how many 
employers you are targeting to participate in the ICE Mutual 
Agreement Between Government and Employers?
    Mr. Schneider. I will have to get back to you on that.
    Senator McCaskill. OK. And while you are doing that, one of 
the things that was most troubling to me is that we have nine, 
but the problem we have is that there is a weakness in one of 
the key requirements. For the program to work, you have to have 
an employment eligibility verification program, and so if we 
get too far down the road in this mutual agreement and these 
employers are busy patting themselves on the back that they are 
participating, I do not think you are going to get the finding 
from GAO that you want until you tackle the ability to identify 
document fraud. And whatever outcome goals or measures that 
have been set in that area I would certainly like a follow-up 
in that regard also.
    Mr. Schneider. Sure.
    Senator McCaskill. I do not want to take too much time on 
the other area because I know who is going to question next, 
and Senator Landrieu has done an incredible job fighting for 
the people of her State with regard to the mistakes and 
problems that occurred with Hurricane Katrina. I would say just 
very briefly in the minute and a half I have left that the 
specifics that are in the Summary of Findings, particularly 
about ensuring the capacity and readiness for disaster response 
teams, and then, second, the specifics that are in the Summary 
of Findings about developing the capacity to provide needed 
emergency assistance and services in a timely manner. The 
actual words that are in those two sections should really be a 
cause for concern. Essentially, those two sections of this 
audit say that there is not the documentation available to 
reassure the American public that it would not happen again. 
And I bring your attention to those two sections. I am not 
going to dwell on them because I know that my colleague is 
going to be the one that will go into this in some detail, and 
I know of her great concerns in that area. Those were two 
places that I stopped for my highlighter. As we talk about the 
priorities and the metrics, clearly the demonstrated ability to 
respond in a timely manner, in a way that is appropriate to the 
level of the emergency is probably, I think, one of the most 
important things that we expect out of FEMA.
    Thank you very much, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Senator McCaskill.
    Senator Landrieu.

             OPENING STATEMENT OF SENATOR LANDRIEU

    Senator Landrieu. Thank you, Mr. Chairman. And let me thank 
my colleague for her comments and also her interest. She has 
been down to Louisiana, focused on this with Members of this 
Committee, and I appreciate it.
    And I thank you, Mr. Walker. I know that you have to leave, 
and I thank you for waiting just a few minutes.
    This report, Mr. Chairman, is alarming. It is 
disappointing. It is not, though, surprising to me. I have 
observed very carefully the last 2 years the workings of this 
Department, particularly relative to the disaster response and 
recovery underway in the Gulf Coast. And I have said time and 
time again that it has been apparent that there does not seem 
to be any real serious mobilization. Although this Committee 
has acted and pushed for reforms and Congress in different ways 
has pushed reforms and there have been some minimum 
initiatives, I can say that I am not surprised with the 
findings that only 5 of the 24 benchmarks when it comes to 
response for disasters were met and that 18 have gone basically 
unanswered. But it is time again then for us to re-engage.
    I do have a few questions, Mr. Walker, on this to try to 
move us forward. When you said that the Department had made 
minor advances, basically, for community recovery, in your 
review did the Department note any achievements in the area of 
restoring public facilities? What is your assessment of the 
Department's overall capacity to promote disaster recovery? I 
know it is only one mission of this Department, but for us, for 
a city that went 80 percent underwater, a metropolitan area of 
1.5 million people still struggling to come back, the part of 
the recovery portion is very important to us. Did you observe 
any strong initiatives, mobilization to improve the recovery 
aspects of catastrophic disaster response?
    Mr. Walker. My understanding, Senator Landrieu--and I will 
provide more for the record--is that we saw activity in 
emergency preparedness and response, more there than in 
recovery, and there was a lack of documentation in a number of 
areas. Recovery is important, especially with the type of 
disaster that was experienced by the Gulf Coast. Our sense is, 
from what I have seen so far--and I will provide some more for 
the record--that more emphasis has been given on the 
preparedness and response than the recovery so far, as far as a 
future event.
    [The information submitted for the Record follows:]

           INFORMATION PROVIDED FOR THE RECORD BY MR. WALKER

    When you said that the Department had made minor advances, 
basically, for community recovery, in your review did the 
Department note any achievements in the area of restoring 
public facilities? What is your assessment of the Department's 
overall capacity to promote disaster recovery?
    Answer: DHS did not provide us with documentation on its 
achievements to restore public facilities. We also have not 
completed work at this time that permits us to reach 
conclusions about the overall capacity of FEMA and DHS to 
promote disaster recovery. We have ongoing work looking at the 
recovery from Hurricane Katrina that will provide insight into 
the recovery efforts in the Gulf Coast and lessons these 
efforts may offer regarding recovery capacity.

    Senator Landrieu. And, Mr. Schneider, how would you respond 
to missing 18 of the 24 benchmarks? I know that you have taken 
general issue with the report. But how would you respond to us 
about major initiatives underway by the Department of Homeland 
Security to help a major metropolitan area recover from a 
catastrophic disaster?
    Mr. Schneider. Well, I have some familiarity in the case of 
the Gulf Coast relative to maybe what I would call, again, the 
recovery phase versus what happened immediately after Hurricane 
Katrina. Right after Hurricane Katrina, we had no assets on the 
ground in the Gulf Coast. We had no contracting capability. We 
had no familiarity with local businesses. We were not prepared 
to go execute and help the community.
    What has happened since then is we have about 60 people, 
trained contracting officers, throughout the Gulf Coast. We 
work, if you will, very closely with the local industries to 
understand all their capabilities. We have significant outreach 
programs. We have in-place contracts that have already been 
awarded in terms of technical assistance. We are trying to spur 
growth in the Gulf Coast in the local areas. We basically 
restrict the solicitations of these efforts to local small 
business, expand it to small business, etc. And so the idea 
being is we think from an emergency standpoint that we are 
fairly well networked to be able to respond immediately from 
both providing products and services as well as the 
administrative contracting and financial operations.
    Senator Landrieu. Well, let me say that your Department has 
yet to go on record on getting community development block 
grants distributed based on actual damage assessments. To date, 
you are not on the record on that. That is a fundamental 
question. As Federal aid came through only three major sources, 
that is one. If we are not distributing it based on damage, I 
do not know how we are helping places recover.
    But my time is short. When you did, Mr. Walker, the 
review--and I very much appreciate the Ranking Member's 
question about the barriers because we would like to help you 
break through barriers. We are about fixing this, not blaming 
but fixing. With the Stafford Act, did you come upon it as 
maybe a potential barrier or do you perceive it as a barrier in 
terms of response to catastrophic disasters? Because that seems 
to be the kind of evidence that we are gathering through a 
variety of different places.
    Mr. Walker. Senator, as you know, you and I have had some 
conversations on this, and we have done some work in the past, 
and we are doing additional work. There are certain challenges 
with the Stafford Act. There is no question about that, 
especially when you are dealing with a catastrophic event, an 
event of very large, broad-based, and significant magnitude.
    Senator Landrieu. Could you elaborate on one or two 
challenges that might come to your mind? I mean, is it the 
reimbursement process of the Stafford Act? And I thank the 
Chairman for just giving me an additional 30 seconds.
    Chairman Lieberman. Go right ahead.
    Mr. Walker. It is not just a matter of that, and I will be 
happy to provide more for the record, Senator. But, part of the 
issue is how quickly can you provide assistance, how can you 
streamline the provision of that assistance, and then also the 
issue that you talked about as well, when you are dealing with 
a catastrophic event of the size that we had in New Orleans and 
the Gulf Coast.
    [The information submitted for the Record follows:]

           INFORMATION PROVIDED FOR THE RECORD BY MR. WALKER

    Did you come upon the Stafford Act as maybe a potential 
barrier, or do you perceive it as a barrier in terms of 
response to catastrophic disaster? Because that seems to be the 
kind of evidence that we're gathering through a variety of 
different places.
    Answer. In our prior work on catastrophic disaster 
preparedness, we raised a matter for Congressional 
consideration related to the Stafford Act. We stated that the 
Stafford Act did not explicitly authorize Federal agencies to 
prepare for a catastrophic disaster when there is warning 
before the disaster strikes, as would be the case with 
hurricanes. We suggested that Congress consider giving Federal 
agencies explicit authority to take actions to prepare for 
catastrophic disasters when there is warning.

    Senator Landrieu. OK. And let me just say in conclusion, 
Mr. Chairman, I do believe the American people are grateful for 
the work of this Department and the Administration from 
preventing attacks. And I do not say this at all lightly. It is 
just a huge responsibility of this Department to prevent 
terrorist attacks. But I will say again for the record it is 
also a great responsibility of this Nation to help a community 
recover from a catastrophic disaster, whether that disaster is 
caused by an attack or by the failing of critical 
infrastructure--in this case, levees that should have held but 
did not. And this report indicates, Mr. Chairman, that we have 
an awful lot of work to do. So I thank you.
    Chairman Lieberman. Thank you, Senator Landrieu. That is a 
good note on which to end.
    Mr. Walker, you and your folks at GAO have once again done 
a great public service here. I think to the credit of DHS, you 
have told us some areas, critical areas, that we were hit in on 
September 11, 2001, where they have done very well for us--
aviation security, now maritime security, surface 
transportation security, and I suppose we should take also 
comfort generally from your evaluation that the Department is 
handling the mission part of its work very well. The management 
part continues to be lacking, and we have to work together, 
hopefully with a metrics system that we can come to an 
agreement on in the next couple of months to make this as good 
as we can. The threat is out there, the danger is there, and we 
have to work together to protect the American people at home 
from that danger. And the work you have done with this report 
is a tremendous assist to this Committee in fulfilling its 
oversight responsibility for this Department, which the 
Committee played a leading role in creating.
    Senator Collins, would you like to say anything in 
conclusion?
    Senator Collins. I am just going to submit my remaining 
questions for the record, Mr. Chairman, and I thank you for 
holding this hearing.
    Chairman Lieberman. Thank you very much. Thanks to both of 
you.
    The record for the hearing will remain open for 15 days. 
With that, the hearing is adjourned.
    [Whereupon, at 3:34 p.m., the Committee was adjourned.]


                            A P P E N D I X

                              ----------                              


                  PREPARED STATEMENT OF SENATOR AKAKA

    Thank you, Mr. Chairman. I join you in welcoming our distinguished 
panel members.
    DHS continues to face a monumental management challenge: Bringing 
together 22 separate agencies with nearly 180,000 employees into a 
cohesive Department, while protecting the Nation against natural and 
man-made disasters. While the substantive programs that DHS implements 
are critical to the protection of our country, the effective management 
of DHS as a cohesive entity is central to how effective it is in 
implementing those activities.
    This May, my Subcommittee on Oversight of Government Management, 
the Federal Workforce, and the District of Columbia held a hearing in 
which we examined the Department's challenges and needed improvements. 
Several overarching themes were highlighted at that hearing. Mr. 
Walker's testimony and the GAO report issued today underscore that a 
number of those same issues continue to challenge DHS.

    First, the Department must do more to address its human capital 
needs. With nearly half the workforce eligible for retirement in the 
next 5 years, the Department needs to focus on the recruitment and 
retention of skilled and talented employees, while addressing the 
unacceptably low morale within the workforce as demonstrated by the OPM 
Human Capital Survey.
    Second, the Department still has not developed a comprehensive 
management integration strategy. Although the Department has made 
progress in many areas, some key functions, such as acquisitions and 
financial management, are not fully integrated.
    I also remain concerned that the Under Secretary for Management 
does not have sufficient statutory authority to oversee the 
Department's integration while also focusing on ongoing management 
challenges. The Under Secretary was given more authority to serve as 
the Chief Management Officer and the principal advisor for management 
at DHS with the approval of the Improving America's Security Act (P.L. 
110-53). However, the measure did not elevate the position to a Deputy 
Secretary level as I believe is necessary for the CMO to be most 
effective. That is why I joined with Senator Voinovich in supporting 
the Effective Homeland Security Management Act, S. 547, to elevate the 
Under Secretary for Management to Deputy Secretary for Management. With 
your support, Mr. Chairman, the Committee approved this bill, and I 
look forward to working with the Senate leadership to pass this bill 
and improve the state of management at the Department.
    Again, Mr. Chairman, I thank you for holding this hearing today, 
and I look forward to learning more about these important issues.

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