[Senate Hearing 111-940]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-940

                    IMPLEMENTATION, IMPROVEMENT, AND
   SUSTAINABILITY: MANAGEMENT MATTERS AT THE DEPARTMENT OF HOMELAND 
                                SECURITY

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

                                HEARING

                               before the

                  OVERSIGHT OF GOVERNMENT MANAGEMENT,
                     THE FEDERAL WORKFORCE, AND THE
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 30, 2010

                               __________

         Available via the World Wide Web: http://www.fdsys.gov

       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              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           SCOTT P. BROWN, Massachusetts
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          GEORGE V. VOINOVICH, Ohio
CLAIRE McCASKILL, Missouri           JOHN ENSIGN, Nevada
JON TESTER, Montana                  LINDSEY GRAHAM, South Carolina
ROLAND W. BURRIS, Illinois
EDWARD E. KAUFMAN, Delaware

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk
            Joyce Ward, Publications Clerk and GPO Detailee


  OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL WORKFORCE, AND THE 
                   DISTRICT OF COLUMBIA SUBCOMMITTEE

                   DANIEL K. AKAKA, Hawaii, Chairman
CARL LEVIN, Michigan                 GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          SCOTT P. BROWN, Massachusetts
ROLAND W. BURRIS, Illinois           LINDSEY GRAHAM, South Carolina
EDWARD E. KAUFMAN, Delaware

                     Lisa M. Powell, Staff Director
                Evan W. Cash, Professional Staff Member
             Jennifer A. Hemingway, Minority Staff Director
                Sean M. Stiff, Professional Staff Member
                      Aaron H. Woolf, Chief Clerk















                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Akaka................................................     1
    Senator Voinovich............................................     3

                               WITNESSES
                      Thursday, September 30, 2010

Jane Holl Lute, Ph.D. Deputy Secretary, U.S. Department of 
  Homeland Security..............................................     4
Cathleen A. Berrick, Managing Director, Homeland Security and 
  Justice Team, U.S. Government Accountability Office............    14

                     Alphabetical List of Witnesses

Berrick, Cathleen A.:
    Testimony....................................................    14
    Prepared statement...........................................    33
Lute, Jane Holl, Ph.D.:
    Testimony....................................................     4
    Prepared statement...........................................    25

                                APPENDIX

Background.......................................................    53
Charts referenced by Senator Voinovich...........................    60

 
                    IMPLEMENTATION, IMPROVEMENT, AND
                 SUSTAINABILITY: MANAGEMENT MATTERS AT
                  THE DEPARTMENT OF HOMELAND SECURITY

                              ----------                              


                      THURSDAY, SEPTEMBER 30, 2010

                                 U.S. Senate,      
              Subcommittee on Oversight of Government      
                     Management, the Federal Workforce,    
                            and the District of Columbia,  
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:32 p.m., in 
room 342, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 

Chairman of the Subcommittee, presiding.
    Present: Senators Akaka and Voinovich.

               OPENING STATEMENT OF SENATOR AKAKA

    Senator Akaka. Good afternoon, everyone. This hearing of 
the Subcommittee on Oversight of Government Management, the 
Federal Workforce, and the District of Columbia is called to 
order.
    I want to welcome everyone to another in our series of 
hearings on the continued efforts to improve management at the 
Department of Homeland Security (DHS).
    Implementing and transforming the Department of Homeland 
Security from 22 separate agencies into a cohesive organization 
has been on the Government Accountability Office's High-Risk 
List since the Department's creation nearly 8 years ago, which 
this Subcommittee has followed issues closely. Unfortunately, 
progress has been slower than many expected and than any of us 
would like to see. In some ways, the agency is still struggling 
to forge a cohesive identity and to truly come together as a 
unified department.
    In January, the Government Accountability Office (GAO) will 
once again update its High-Risk List for the new Congress. 
While GAO has noted great progress in improving management and 
DHS has dedicated tremendous resources to this issue, I believe 
more progress will be needed before GAO will remove DHS 
implementation and transformation from that list.
    It is also vitally important that DHS improve the functions 
within the Management Directorate under the leadership of Under 
Secretary for Management Borras. According to Inspector General 
reports and GAO, systemic problems remain in important 
management areas, including human capital, acquisition, and 
financial management.
    I have been especially concerned with DHS's over-reliance 
on service contractors who work side by side with Federal 
employees. Some of these jobs are uncomfortably close to 
crossing the line into inherently governmental functions, which 
should only be performed by a Federal employee. I am very 
pleased at the efforts of the agency, especially the Chief 
Human Capital Officer (CHCO), in working to address this issue 
and right-size the workforce mix.
    Improving acquisition management is also vital to 
preventing waste, fraud, and abuse at the Department. Many 
high-cost projects have been initiated with too little 
analysis, planning, and follow-up, costing millions of taxpayer 
dollars and impacting the agency's mission. One of the most 
high-profile examples has been the Secure Border Initiative 
electronic fence, known as SBInet. After long delays, cost 
overruns, inadequate performance, and frequently evolving 
goals, DHS is beginning to get this project under control.
    Financial management has also been an ongoing problem since 
the Department's formation. Many DHS components still use 
legacy financial management tools from their former agencies. 
Unfortunately, the Department has never been able to obtain a 
clean financial audit. The Department has tried to streamline 
its financial management systems, putting all components on the 
same system. However, this effort, now known as the 
Transformation and Systems Consolidation (TASC) has been a 
difficult one. TASC needs strong oversight, and I hope to hear 
about the Department's progress on that today.
    DHS also must lay the groundwork to sustain good management 
of the third-largest Federal agency. Going forward, DHS must 
develop a comprehensive management integration plan, including 
performance measures, to ensure that the agency is meeting 
mission objectives and continually improving performance. 
Already, DHS has taken important steps in planning through its 
Quadrennial Homeland Security Review (QHSR) and the Bottom-Up 
Review, which the Deputy Secretary took the lead on. These 
documents reinforce the need to establish metrics, and I hope 
that the Department will build on those efforts.
    Finally, I want to acknowledge that this will likely be our 
last DHS management hearing with my good brother and good 
friend, our Ranking Member, Senator Voinovich. I know that this 
issue has been vitally important to him and I want to thank him 
for his efforts and say that I intend to continue to monitor 
this issue in the next Congress on his behalf. Much of the 
progress that has been made is due in part to his invaluable 
leadership here and on the Appropriations Committee, as well.
    I also want to thank the Deputy Secretary for agreeing to 
testify at this important hearing. Continued leadership and 
attention from the highest levels is always important to move 
this issue forward and make DHS one of the best managed 
agencies in the government.
    With that, I look forward to hearing from our witnesses 
today and now would like to call on Senator Voinovich for his 
opening remarks. Senator Voinovich.

             OPENING STATEMENT OF SENATOR VOINOVICH

    Senator Voinovich. Thank you, Mr. Chairman. One of the 
things that I have pointed out to folks around here, 
particularly the media, is that they are not aware of some of 
the really good things that are happening in the U.S. Senate in 
various committees and how chairmen and ranking members have 
worked together to make a difference for our country.
    I have thoroughly enjoyed working with you. One of the most 
comforting things for me is that we started out about 10 years 
ago to work together and had an agenda, and after you took over 
as Chairman, we continued it. I am very pleased that you have 
indicated that you are going to continue to work on the 
Department of Homeland Security. Currently, I am trying to 
identify a Republican who might be as interested in this as I 
am to become your partner, because I do not think this is going 
to be over tomorrow or the next day. It is going to continue to 
take two or 3 years to get the Department to the point where 
the transformation sticks and accomplishes what we started out 
to do some time ago.
    I would also like to say that I thought our meeting this 
morning with Mr. Borras was worthwhile. I thought it was 
productive. I was pleased with his presentation. One of the 
things that stuck out, though, is there is a whole lot of work 
to implement the plan that he shared with us, and one of the 
things I would be interested in is to find out what GAO thinks 
about the plan that has been put in place in terms of whether 
it is going to meet the acquisition concerns that they have and 
also whether or not there are sufficient metrics to judge 
whether or not what has been prepared is actually going to 
happen.
    I would like to remind folks that this Department came into 
being in 2002. It is the largest restructuring since the 
Department of Defense was created in 1947. I was remarking this 
morning, it may be the most gigantic management or 
restructuring that has ever happened in the world. And we asked 
the Department to protect us from terrorism and natural 
disasters while addressing the organizational operation and 
cultural challenges with merging 22 agencies. I think we all 
knew that the transition would take time. GAO reminds us that 
successful transformations of large organizations can take at 
least 5 to 7 years. I sure learned that when I was mayor and as 
Governor.
    But I am frustrated that we are into the seventh year and 
so many issues continue to plague the Department. It currently 
is, as Senator Akaka says, the third largest cabinet agency, 
with 220,000 employees and an estimated 210,000 contractors, 
and an annual budget of nearly $45 billion. That is too big an 
entity spending too much money to be susceptible to waste, 
fraud, abuse, and mismanagement year after year. And 
unfortunately, DHS continues to be on GAO's High-Risk List.
    Helping DHS's transformation and implementation get off 
that list has been one of our top priorities during the time I 
have been in the Senate, and I was really hoping that this 
issue would be removed before I retired. However, as I 
mentioned, it does not appear that will be the case. It is 
going to take probably another 2 to 3 years to do what we think 
needs to be done.
    So today, I look forward to discussing these matters with 
our witnesses, in particular hearing from GAO with regard to 
what more needs to be done for DHS transformation and 
implementation to be removed from the list, and I am hopeful I 
will also hear from DHS about their plans to implement GAO's 
recommendations.
    In my experience as mayor and Governor, I repeatedly 
observed that the path of organizational success lies in 
adopting best practices in management, including strategic 
planning, performance measurement, and effectively leveraging 
human capital. I know that DHS has adopted some such practices 
and in turn has made progress toward better management. But I 
also recognize that much remains to be done for DHS to be a 
cohesive, efficient, and effective organization.
    From our discussion today, I hope to leave here with a 
better understanding of how close the Department is to having 
that transformation and implementation plan and the time frame 
that the Department thinks it is going to need to get the job 
done.
    I want to thank you, Deputy Secretary Lute and Ms. Berrick, 
for appearing before our Subcommittee today and I look forward 
to our discussion.
    Thank you, Mr. Chairman.
    Senator Akaka. Thank you very much, Senator Voinovich.
    On our first panel, it is my pleasure to welcome the 
Honorable Jane Holl Lute, Deputy Secretary of the Department of 
Homeland Security.
    It is the custom of the Subcommittee to swear in the 
witnesses and I ask you to stand and raise your right hand.
    Do you swear that the testimony you are about to give this 
Subcommittee is the truth, the whole truth, and nothing but the 
truth, so help you God?
    Ms. Lute. I do.
    Senator Akaka. Thank you very much. Let the record show 
that the witness answered in the affirmative.
    Secretary Lute, I want you to know that although your 
remarks are limited to 5 minutes, your full statement will be 
included in the record. So will you please proceed with your 
statement.

    TESTIMONY OF JANE HOLL LUTE,\1\ DEPUTY SECRETARY, U.S. 
                DEPARTMENT OF HOMELAND SECURITY

    Ms. Lute. Mr. Chairman, thank you very much. Good 
afternoon, Ranking Member Voinovich, Members of the 
Subcommittee, and thank you for this opportunity to appear 
before you to discuss the management integration efforts at the 
Department of Homeland Security. I think, Mr. Chairman, as you 
have noted, the Department has made significant progress in 
integrating and reforming our acquisition, financial, and human 
capital management while at the same time meeting 
responsibilities of our critical missions, but we still have a 
way to go.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Lute appears in the Appendix on 
page 25.
---------------------------------------------------------------------------
    Secretary Napolitano has consistently stressed the need for 
the Department to operate as one DHS. To achieve that goal, we 
have instituted an ambitious series of management and 
efficiency reforms to ensure that DHS has the proper management 
structure to succeed, can attract and retain top talent, and 
can build a culture of effectiveness and efficiency to make the 
Department leaner, smarter, and a better agency to protect our 
Nation.
    The broad context for these reforms derives from a major, 
first of its kind effort by the Department to align its 
resources with a comprehensive strategy to meet the Nation's 
homeland security needs. The completion of the Quadrennial 
Homeland Security Review and the Bottom-Up Review which 
immediately followed, in addition to the subsequent work that 
we have done to shape our fiscal year budgets from 2012 to 
2016, represents a very significant milestone for this 
Department.
    Over the past 18 months, DHS has made tremendous strides in 
integrating and reforming our acquisition, financial, and human 
capital management, but we also know that success will require 
additional hard work and continued support and flexibility as 
we navigate this large management enterprise. We know, too, 
that we could not do our work without the support of this 
Subcommittee and we thank you both for the support that you 
have given us.
    In collaboration with the Office of Management and Budget 
(OMB) and the Government Accountability Office, DHS has created 
an initial integration strategy in 2010 that addressed several 
high-risk management issues identified by GAO and outlined 
steps to improve performance across functional operations. The 
seven initiatives that constituted the first phase of this 
integration strategy, which I address at length in my written 
testimony, represent long-term cross-cutting efforts that will 
lead to greater management integration over time.
    But because we need to go beyond these initiatives, in May 
of this year, I directed Under Secretary for Management Rafael 
Borras to develop a comprehensive strategic management approach 
to enhance the people, structures, and processes necessary to 
meet our mission goals by integrating and aligning functional 
areas at both the Department and component levels. As you both 
have said, we need to emulate best practice and we need to have 
replicable models of success under a wide variety of conditions 
for every aspect of our operations.
    We have arrayed this strategy around three key themes. 
First, improve end-to-end management of the acquisition 
process. Second, strengthen financial management and reporting. 
Third, improve human capital management to ensure that we can 
recruit and retain high-quality people.
    In July and September, our top leadership from across the 
Department met to discuss how best to augment the original seen 
management integration initiatives and create more cohesive 
structures and processes. In addition, we discussed the best 
way to manage the assets, resources, and people, and the people 
represent our Department's greatest asset. As we have 
consistently stated, we really must have the right people in 
the right place at the right time, properly resourced, to meet 
the expectations of the American people. The enhanced 
integration strategy has been shared with GAO and is being 
tested across the Department with many of the enhancement 
initiatives that will drive this strategy, targeted for 
implementation in fiscal year 2011.
    Ultimately, all DHS employees, from Border Patrol agents 
and Transportation screening officers on the front lines to the 
most senior executives, must understand how their roles and 
responsibilities contribute to the Department's mission, and 
that mission is to help build a safe and secure, resilient 
place where the American way of life can thrive. That is the 
essence of Homeland Security.
    Before I close, I would like to acknowledge, Senator 
Voinovich, your steadfast commitment to the management reform 
and strengthening of this Department. I would like to thank you 
for your public service and for your engagement with us. From 
the time that we first met until this very moment, you have 
been consistent in urging us to seek every opportunity to 
improve. I thank you for that work, and Mr. Chairman, I thank 
you and the Subcommittee for the work that you have engaged 
with us.
    Thank you for the opportunity to speak with you today about 
our management integration and strategic planning. We have made 
significant progress in DHS and I believe we are on the right 
track. Yet we know we still have considerable work to do, and 
we look forward to working with this Subcommittee to implement 
these critical reform efforts. Thank you.
    Senator Akaka. Thank you very much for your statement, 
Secretary Lute. We will have two rounds of questions for you, 
Madam Secretary.
    In response to the GAO high-risk designation, DHS created 
an integrated strategy for high-risk management as well as 
corrective action plans to address management weaknesses.
    Has DHS taken any actions to date or implemented the 
integrated strategy and the corrective action plans?
    Ms. Lute. Thank you, Mr. Chairman. We have. It may sound 
strange for me to say, but in this regard, GAO has been our 
best partner. They have been very clear with us. Last night, we 
received a very detailed outline from them of the kinds of 
things we need to do to what measure of sufficiency in order to 
get off the High-Risk List. This has been a high priority for 
me and certainly for the Secretary.
    We have assembled tracking mechanisms in the Department 
that identify each of the areas and each of the measurements 
and criteria that GAO has outlined for removal from that list, 
and we know now within each of those areas, whether it is the 
commitment of top leadership, resources necessary to resolve 
the risk area, validation of progress, and so on, what we need 
to do. We have made a lot of progress, as these charts show,\1\ 
but they are all not green dots yet and we are determined that 
they will be.
---------------------------------------------------------------------------
    \1\ The charts referenced by Senator Voinovich appear in the 
Appendix on page 60.
---------------------------------------------------------------------------
    Senator Akaka. The Quadrennial Homeland Security Review and 
the Bottom-Up Review both emphasize the importance of 
developing performance measures to address challenges. However, 
neither of these reports contain measures and they do not 
represent a comprehensive strategic management plan to address 
GAO's recommendations.
    Does DHS plan to issue a comprehensive strategic management 
integration plan?
    Ms. Lute. Mr. Chairman, we have had a number of plans in 
each of the management areas--human capital, as you mentioned, 
financial reform, acquisition reform, Information Technology 
(IT) reform, as well--and together, under the umbrella of the 
enhancements that I spoke about in my oral statement, these 
represent our management plan. They are not enough, though, and 
with your permission, I would just like to take a step back.
    The QHSR was really designed to say, what is the mission of 
the Department and how will we achieve that mission? How will 
we achieve a safe, secure, resilient place here in the United 
States?
    We say we have five key missions: Preventing terrorism; 
securing our borders; enforcing our immigration laws; ensuring 
cyber security; building national resilience. And we talk in 
the QHSR about how we will know, what are the things we need to 
do in each of those areas, in addition to other mission areas 
for which we have responsibility that support our national and 
homeland security.
    In turn, we talk about the objectives we are trying to 
achieve, but what you are asking about is the essential 
underpinnings, the plumbing and wiring of the successful 
execution of those missions, because in our view, the American 
people have a right to expect that we can do three things: That 
we can execute those missions that we have outlined as central 
to a safe and secure homeland; that we can run ourselves, and 
that we can run ourselves with the accountability and 
transparency of a respectable public sector organization; and 
the third thing that they can expect is that we can account for 
the resources that have been entrusted to us and demonstrate 
responsible financial stewardship.
    So our approach to management is mindful of the missions we 
need to accomplish, mindful of the fact that the Department of 
Homeland Security is an operational department. The vast 
majority of men and women who wake up to serve this country 
every day in Homeland Security are operators and they are 
supported by equally hard-working headquarters and management 
personnel who are determined to have those operations succeed.
    Senator Akaka. Your testimony discussed the Department's 
effort to create a single financial management tool, a project 
known as TASC, which has grown to include acquisition and asset 
management. Earlier this year, OMB ordered that all agencies 
halt further development of financial management systems for 
the time being. Your testimony states that you are working with 
OMB to align TASC with OMB policy. What is the current state of 
TASC, and how do you envision it changing as a result of 
consultation with OMB?
    Ms. Lute. As you know, Mr. Chairman, well, we have had 
serious deficiencies in the Department with respect to our 
financial management business systems, in part due to aging 
legacy systems and the lack of integration among the systems, 
whether it is financial systems, asset management systems, or 
acquisition systems, as well. TASC was a program that was in 
progress, and as you have rightly noted, we are working closely 
with OMB to ensure that its implementation closely aligns to 
OMB's new guidelines.
    We have established an Executive Steering Committee that is 
chaired by the Under Secretary for Management, Rafael Borras, 
to ensure that TASC stays in alignment with the high-priority 
business needs and that we have realistic and achievable 
project plans. We have right-sized the concept of operations to 
a more risk-based approach, and so we are tailoring its initial 
applications by component and by need to ensure that it will 
succeed. We presented an overview of our plans and progress to 
the Financial Systems Advisory Board earlier this month and we 
intend to stay consistent with the OMB guidelines that they 
have put in place.
    Senator Akaka. As DHS has testified, an important part of 
integration and cohesion for DHS will be to consolidate the 
headquarters at St. Elizabeths. Can you provide an update on 
how work at St. Elizabeths is proceeding?
    Ms. Lute. I can, Mr. Chairman. We are on time and on 
budget, which is the best news anyone can ever give when you 
are executing a project of this size and magnitude. Senator 
Voinovich mentioned that the creation of DHS was the largest 
public sector reorganization, perhaps in history. Certainly, 
the building of St. Elizabeths is the largest single public 
works project in Washington since the Pentagon.
    To date, the Department of Homeland Security and General 
Services Administration (GSA) have obligated over $1 billion, 
approved a master plan and phase one construction of the Coast 
Guard facility, which is underway. All of our interim 
milestones and schedule dates are being met. And next, we have 
created a plan, and we are finalizing that plan, to reduce our 
footprint from over 70 buildings, 50 facilities scattered 
throughout the National Capital Region down to under 10 by the 
end of fiscal year 2016.
    GSA, as you know, has determined that the creation of St. 
Elizabeths and the consolidation of the Department there will 
save over $600 million over the next 30 years, but as important 
as those savings are, we believe also, Mr. Chairman, that this 
will improve the interoperability and the integration of 
Department operations.
    Senator Akaka. Thank you very much. My time has expired. 
Senator Voinovich.
    Senator Voinovich. Thank you for your nice words in terms 
of my concern for the current and future of the Department of 
Homeland Security. I am hoping to have an opportunity to meet 
with your Secretary before I tip my hat, but I would like to 
bring to your attention, and Mr. Chairman, this is a little bit 
off the subject of this hearing and I will get to that--the 
issue of immigration. With regard to the DREAM Act. Many of us 
are concerned about agriculture jobs. But I think you may have 
a window of opportunity between the election and the end of the 
year to perhaps deal with that.
    And the two areas that I think need to be underscored are, 
first, what you have done to secure the border. I do not think 
that has been driven home enough to the American people, and, 
of course, you know what is going on in Arizona. I am not going 
to get into that. But you have to do that.
    As the Ranking Member on the Appropriations Committee 
dealing with Homeland Security, we have numbers to show that 
there is no way possible without spending tons of money on 
Immigration and Customs Enforcement (ICE) and detention 
facilities to deal with the illegal immigrants that are here in 
this country. It is something that really needs to be 
addressed, and I am suggesting that this is something that you 
might put on your list and even talk to the President about.
    Second of all, Mr. Chairman, I am probably going to take 
all my time with this, I think you are going to get 
recommendations out of the Debt Commission that the President 
set up that I think is really going to have a dramatic impact 
on the resources that are available throughout the government. 
I think you need to look at your budget to see where the money 
is going and take advantage of this opportunity, either in the 
omnibus bill, and we might get one before the end of the year, 
or even next year.
    But the point I am making to you is, I can show you right 
now how you can save a billion dollars in your budget a billion 
dollars that you could reallocate to some of the things you 
want to do. For example, in the current budget, you are not 
getting enough money for management. You need more. You did not 
get it. But I can show you that.
    And then, also, to take this opportunity to forthrightly 
look at things in terms of threat assessment. So much money in 
that budget is revenue sharing, and I will never forget after 
September 11, 2001, and we formed the Department, I said, we 
have to be careful that this does not become some kind of 
revenue sharing thing, and I will show you where it has. I 
think that you need to get together with the folks there and 
come back and stand up and say, here is what we need. Here is 
what is relevant and here is what is not relevant, OK.
    The other thing is that you are going to have to do that 
because there are articles out today that Homeland Security is 
out of control, the billions of dollars that are being spent, 
and so forth. So the big light is going to shine on the 
Department of Homeland Security. And I think your Quadrennial 
Homeland Security Review looks at that. But the fact is, there 
is an interim period here, October, in which you ought to maybe 
be looking at that stuff.
    And the last thing is a pain that I have had that I cannot 
get information from your management over there, and I do not 
know if you know about it, I have tried to get from your 
Department, for almost a year, information back on whether or 
not you need the Biometric Air Exit program in DHS. And I am 
putting a bill in that says it is not necessary because that is 
the conclusion that I have gotten from talking to your people.
    But I cannot get an answer out of your Secretary, and I 
have been trying to get her on the phone today, about whether 
or not it is necessary. I put $50 million into the budget to 
deal with it, and it was not in your proposal. So my assumption 
is you do not think it is necessary. All I am asking is for DHS 
to come back with a statement, it is not needed from a cost-
benefit point of view, OK? And we have other things that can 
take its place and we do not need it.
    What is happening now is that we are going to go back to 
the old system where it is going to take 3 percent rejection 
for--less than 3 percent--for a country to become part of the 
visa waiver program. And if you look at the countries that have 
come on through the program, they have absolutely improved the 
communication in terms of terrorism and other things between 
the United States and others. In fact, it would be wonderful if 
we could get the countries that were on it before to reach the 
standards that they have risen to.
    In addition, from a public diplomacy point of view, it has 
been fantastic, the new countries that have come in, in terms 
of our relationship with them, and there are a bunch of them 
out there right now that are pining away--the Poles, for 
example. If we do not get this thing changed, their chances of 
coming on board to this program is probably going to take 2 to 
3, maybe even 4 years.
    But I just want you to know, and I am trying to get her on 
the phone, I am just enraged that a member of the U.S. Senate 
who has tried to be a good friend of your Department and stand 
up for you cannot get a simple answer to a question that I 
think you know the answer to, but for some reason no one has 
got the guts to make it public. And I need that, because I 
think I could get a bill passed during the lame duck session by 
Unanimous Consent (UC) if I had the information from your folks 
that said, ``You know what? We do not need this. It is too 
expensive and we have got something else that can take its 
place.''
    I will get to the hearing, and I have 48 seconds, but I 
will tell you what. I will give it back to the Chairman.
    Senator Akaka. There will be a second round.
    Senator Voinovich. Yes. Go ahead.
    Senator Akaka. Secretary Lute, I want to commend the 
Department on its effort to right-size the Federal employee to 
contractor mix. I am impressed with the results of this 
initiative so far. You testified that you are on track to 
eliminate 3,500 contractor positions by the end of 2010, saving 
nearly $1 billion in service contracts since 2009.
    Does converting these positions to Federal employees help 
the Department better accomplish its mission? And do you expect 
to extend this initiative in the coming years?
    Ms. Lute. Thank you, Mr. Chairman. In the past, the 
Department has had a heavy reliance on contractors. Indeed, it 
was, in part, the deliberate staffing strategy of getting the 
Department up and running quickly. As late as December 2008, in 
fact, the Department was cited for not sufficiently--having 
sufficient numbers of contractors in place.
    We believe in a balanced workforce, the contractors who 
come to work for DHS every day provide valuable services for 
us, but we do believe there has to be a right-sizing and we 
need to look at a number of factors, including the performance 
of inherently governmental functions or closely associated to 
inherently governmental functions and other critical functions 
which really should be performed by Federal employees. So we 
will continue this examination of our workforce until we get it 
right.
    Senator Akaka. Well, thank you for that. Can you also tell 
us what progress has been made in making sure that contractors 
are not working on any inherently governmental functions?
    Ms. Lute. Mr. Chairman, that is precisely the screening 
exercise that we have gone through and prioritized our 
conversion to Federal status for those employees, for those 
functions.
    Senator Akaka. Earlier this year, Madam Secretary, the 
Department implemented Management Directive 102 to standardize 
acquisition management policies and create a stronger framework 
for acquisition decisionmaking. How has MD 102 been effective 
to date in improving acquisition decisions, and how does it 
affect ongoing troubled projects, such as SBInet?
    Ms. Lute. Thank you, Mr. Chairman. I think as you were 
briefed by Under Secretary Borras this morning, we have done a 
lot of work to strengthen our acquisition reform, building on 
the work that has been done by predecessors in this Department. 
A number of the programs that we have currently began life a 
number of years ago in advance of these reforms that have been 
undertaken over the past several years. But we are determined 
to get a handle, as I mentioned, end to end in the acquisition 
process, beginning with our requirements and working through 
finally to life-cycle cost estimates which are accurate and 
reflective of the cost of systems over time and understanding 
how the interface of key decisions in the acquisition oversight 
process brings us better products.
    We are integrating science and technology to a greater 
extent. We are instituting acquisition career development 
programs. We are strengthening our procurement staffing. We are 
having regular portfolio reviews. Over 70 major acquisition 
projects have undergone acquisition review boards since 2009. 
All of the major tier one and tier two programs have undergone 
this review. There are procurement management reviews, 
management certification processes, and strategic sourcing 
boards that now meet in the areas of IT, for example, to ensure 
that our acquisition is on track.
    Senator Akaka. The DHS Performance Improvement Officer 
falls under the agency's Chief Financial Officer (CFO). 
Performance improvement and measures are among GAO's top 
concerns, and they are important outside of financial 
management, as well. Why is the Performance Officer under the 
CFO, and should this position be more prominent within the 
Management Directorate?
    Ms. Lute. Mr. Chairman, I am taking a close personal 
interest in our performance measures. As we mentioned when we 
began the QHSR process, there was going to be a three-stage 
process: The development of the QHSR itself, a strategic 
guiding document; the Bottom-Up Review, which was going to 
evaluate--and did--the performance of the Department and the 
activities of the Department against those things that we said 
were most important to do in the QHSR; and then build the 2012 
budget presentation and 2012 to 2016 Future Years Homeland 
Security Program (FYHSP) in a way that reflects the priorities 
based on the activities of the Department in the strategic 
context laid out by the QHSR.
    In addition to that, we had some plumbing and wiring of our 
own we needed to do. We needed to align our account structure 
so that we could compare personnel costs and cost components. 
It is hard to talk about an integrated department if we do not 
count personnel or acquisition and investment or O and M costs 
in the same way, and we have realigned that with OMB's help and 
the help of Congress.
    In addition, we have reevaluated every single performance 
measure guiding the Department, every single one, and we have 
done that--we have looked at all 180-odd existing performance 
measures and we have recast them in ways that are plain 
language indicators of what the value proposition is in the 
Department for the money that is being allocated, and we think 
this will be a much more sensibilized approach to performance 
metrics.
    So it does not matter where this function lies in the 
Department, Mr. Chairman. I am going to keep my eye on it.
    Senator Akaka. Thank you for taking a personal interest in 
that. Senator Voinovich.
    Senator Voinovich. During last year's hearing on DHS 
management, there seemed to be a difference of opinion between 
DHS and GAO as to what needed to be done for transformation and 
implementation to be removed from GAO's High-Risk List. Our 
second witness is going to be Cathy Berrick. I was disappointed 
to see that in your written statement, there is no explicit 
discussion of efforts to have DHS transformation and 
implementation removed from GAO's High-Risk List, which makes 
me wonder whether or not you are taking it seriously.
    The problem last year was that they did not agree on what 
needed to be done, and then the next thing was that they did 
not agree on the metrics to determine whether or not they did 
it or not. And one of the things I am going to try to ferret 
out at this hearing today is how close has your Department 
worked with GAO to agree on things that are necessary to get 
you off the High-Risk List and also to agree on the measures 
that will be taken to determine whether or not you have, in 
fact, performed them.
    It harks back to the meeting with Mr. Borras this morning. 
He has these nice charts and it looks really good--in fact, I 
asked him to give it to you, and he apparently did not----
    Ms. Lute. No, sir, we brought it.
    Senator Voinovich. You have it here?
    Ms. Lute. Yes, sir.\1\
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    \1\ The charts referenced by Senator Voinovich appear in the 
Appendix on page 60.
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    Senator Voinovich. Thanks very much. The issue to me is, 
has GAO looked at it? What do they think of it? And have you 
agreed on what the measurement would be? Because a lot of it 
looks like--it is the recognition, and I am not going to go 
into the deficiencies that they found. You know and I know that 
you have a long way to go in a lot of these areas. Another 
issue that I am concerned about is when they did that survey of 
your workers, the low morale that still exists over there in 
your Department. I am concerned about that.
    How much input has GAO had in this in terms of is this the 
way to get it done, and have you agreed upon the metrics?
    Ms. Lute. So, Mr. Chairman, certainly I will let GAO speak 
for themselves, but from my perspective, I will say the 
following. I have been running things for a long time in my 
life, different large extended operating organizations of 
expansive size. You do not do management effectively without a 
healthy relationship with your audit function, and I think we 
have a healthy relationship with GAO. We do not always agree on 
everything.
    But we have sat down with them. I have sat down with them 
personally with my senior staff and with the seniors at GAO and 
I would say that we share a commitment to getting this right. 
We share a commitment to clarity and to understanding exactly 
what this Department has to do to get off the High-Risk List in 
all areas. And so let me assure you, Senator, that on the issue 
of implementing and transforming the Department, we are 
committed to taking ourselves off the list.
    We believe that we have a better sense now, and as we go 
through carefully the very detailed report that GAO has just 
given us on those measures that we should take in each of these 
areas--leadership commitment, resources, independent 
validation, demonstrated progress over time, action planning, 
and metrics--that these are areas that we understand and we can 
operationalize and we have a healthy state of dialogue that if 
there is ambiguity, we can get it clarified so we know what we 
need to do.
    What Under Secretary Borras outlined for you this morning 
and what is in part here is a more effective governance tool 
for the acquisition process end to end, as we spoke about, to 
build on what we think is an already strengthened system in 
order to get to best practice.
    Senator Voinovich. Well, as I said, it would give me 
comfort to know that they have had a role of looking at this 
and have signed off and said, ``That is a way to get the job 
done,'' and then you would agree on, well, let us agree on 
whether we are getting it done, the progress that we are 
making, because I think that would go a long way to move you 
off the list and at least there is to be an understanding.
    And I also think that, in my experience, if you have 
disagreements, you ought to let us know about it. In other 
words, one of the things I talked to Mr. Borras about, there 
may be some of your entities that are really working by 
themselves and do not want to be part of the integrated system 
for financial management, for example. Maybe they should not be 
involved in this, and we keep talking, you have to get it all 
together. Well, maybe you can come back and say, ``You know 
what? There are a couple of areas here where we do not need to 
do that. They are already in good shape and let us take the 
ones that are remaining and we will do it with them because 
they are okay.'' I mean, that kind of candor, I think, is 
really important.
    And the last thing is the resources that you need to get 
the job done. The problem is it will always get shortchanged, 
and it just drives me crazy that more departments do not really 
stand up and start raising all kinds of you know what when we 
do not give you the resources that you need to get the job 
done, particularly in management. I mean, there seems to be a 
lack of appreciation in this body for management and the 
importance of what you say, having the right people with the 
right knowledge and skills at the right time, having given them 
the tools. And I think you ought to stand up and fight and just 
do not get rolled over. Just make a big deal out of it. Get the 
President involved. If I am going to get the job done, I have 
to have the tools in those departments to get the job done.
    So you are telling me that GAO has looked at that and 
understands it and thinks it can get the job done?
    Ms. Lute. Sir, as much as I would like to put words in 
GAO's mouth, I certainly would let them speak for themselves. 
What I can tell you is that we have had a continuing dialogue. 
It has been an honest dialogue. We are determined to know and 
to do what it takes to get off the High-Risk List. We are 
determined to know and do what it takes to have DHS be among 
the best places to work in the public sector.
    Our most important resource is our people, and as you have 
heard from our Human Capital Officer, we are working on a 
number of programs, leadership programs, workplace programs, 
resilience programs for our workforce, designed both to give 
the workers the tools they need to add value and to let them 
know how much they are valued by us.
    GAO is an important partner for us. We could not do our 
work without them.
    Senator Voinovich. Thank you, Mr. Chairman. Thank you.
    Senator Akaka. Thank you. Thank you very much, Senator 
Voinovich.
    Again, I want to thank you, Secretary Lute, for appearing 
before us today and for your responses as well as your 
statement. I look forward to working with you on these concerns 
that we have and look forward to also working with the staff of 
DHS, as well. Thank you very much.
    And now I would like to call our second panel to come 
forward, Ms. Cathleen Berrick of the Government Accountability 
Office.
    It is the custom of this Subcommittee to swear all 
witnesses in, so please stand and raise your right hand.
    Do you swear that the testimony you are about to give this 
Subcommittee is the truth, the whole truth, and nothing but the 
truth, so help you God?
    Ms. Berrick. I do.
    Senator Akaka. Thank you. Let the record show that the 
witness answered in the affirmative.
    Although your remarks are limited to 5 minutes, your full 
statement will be included in the record. Will you please 
proceed with your statement.

    TESTIMONY OF CATHLEEN A. BERRICK,\1\ MANAGING DIRECTOR, 
     HOMELAND SECURITY AND JUSTICE ISSUES, U.S. GOVERNMENT 
                     ACCOUNTABILITY OFFICE

    Ms. Berrick. Thank you, Mr. Chairman and Ranking Member 
Voinovich and Members of the Subcommittee. Thanks for inviting 
me to appear today to discuss the status of the integration and 
transformation of DHS.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Berrick appears in the Appendix 
on page 33.
---------------------------------------------------------------------------
    Shortly after the creation of DHS, as you are aware, GAO 
designated its implementation and transformation as high risk, 
in large part because DHS had to transform 22 agencies with 
their own management challenges into one department and the 
enormity of that effort. We also recognized that DHS faced 
significant challenges in building its management capacity 
while at the same time implementing its critical homeland 
security and other missions. DHS has remained on our High-Risk 
List since.
    My statement today addresses the challenges DHS faces in 
acquisition, information technology, financial management, and 
human capital management; DHS's progress in integrating its 
management functions within and across the Department; and the 
Department's progress in addressing the issues that have 
contributed to GAO's high-risk designation.
    DHS has made some important progress in strengthening its 
management functions, but needs to take additional action and 
demonstrate progress in addressing some longstanding issues 
within its management areas. Key among these actions is 
executing plans that they have established and demonstrating 
results across all of these areas.
    For example, our work has identified significant 
shortcomings in DHS's ability to manage an expanding portfolio 
of complex acquisitions worth billions of dollars. DHS has 
revised its acquisition review process to include more detailed 
guidance and has clarified roles and authorities among other 
improvements, but DHS has not effectively carried out all of 
its policies. Our recent work found that over half of the major 
acquisition programs we reviewed awarded contracts without 
Department approval of documents essential to planning 
acquisitions and setting requirements. In addition most of 
these programs we reviewed had cost, schedule, and performance 
shortfalls.
    With respect to financial management, as you are aware, the 
Department has faced challenges in modernizing and integrating 
its financial management systems and has not yet implemented a 
consolidated Department-wide system, although it has plans to 
do that. Since DHS's creation, the independent auditors have 
been unable to express an opinion on its limited scope audit of 
DHS's balance sheets.
    In an effort to integrate its management functions across 
DHS, the Department has put in place a number of common 
policies and procedures within individual management areas to 
help vertically integrate the Department with the components. 
However, DHS has placed less emphasis on integrating 
horizontally across the Department to bring its management 
functions together for common processes and systems.
    DHS has also developed a plan to integrate its management 
functions, which we think is a step in the right direction and 
has a lot of positive aspects. However, the plan lacks details 
on how the initiatives cited will get DHS to the end state of 
management integration and what that end state is. The plan 
also does not address how the Department will measure its 
performance in its integration efforts or what the resource 
needs are and whether they will be available to follow through 
with these initiatives.
    In order to help DHS address the challenges that have 
contributed to the high-risk designation, we have identified 
and worked with DHS over the past year and earlier on the 
specific actions we believe they need to take to improve in 
these areas. Key among these actions is demonstrating 
measurable, sustainable progress and strengthening its 
management functions, such as delivering acquisition programs 
within established cost schedule and performance thresholds. We 
have worked with the Department over the years to address these 
issues and will continue to do that moving forward.
    Senator Voinovich and Senator Akaka, thank you very much 
for inviting GAO here today and thank you for your leadership 
on these very important issues and support for GAO's work.
    Senator Akaka. Thank you very much, Ms. Berrick.
    An important aspect of removing an issue from the High-Risk 
List is having processes in place to make sure the agency will 
not revert back to its old ways after it has been removed. 
While I understand DHS transformation will likely not come off 
the High-Risk List for 2011, do you believe that DHS is laying 
the groundwork to sustain management progress in the future?
    Ms. Berrick. Thank you, Senator. I do think DHS is laying 
the groundwork. If you look across all of the management 
functions, and acquisition is a good example, they do have good 
plans in place in a number of these areas. And while some of 
the plans and strategies can be improved, what we found in 
acquisition and IT management and other areas is that the key 
is implementing these plans and demonstrating progress and 
showing that it is sustainable and repeatable.
    So in addressing the Hig-Risk List and looking at DHS's 
progress, in addition to the plans which we will continue to 
provide feedback to them on, we will be watching the 
implementation of those plans and the ability of DHS to execute 
and to demonstrate progress in each of their management areas.
    Senator Akaka. At past hearings, GAO has emphasized the 
need for strong performance measures in order to integrate and 
transform the Department. In your opinion, has DHS developed 
sound performance measures?
    Ms. Berrick. I think DHS has made some key improvements in 
their performance measures, and this is an area where GAO and 
DHS have worked together over the past few years, where GAO 
would provide input on DHS's Government Performance and Results 
Act (GPRA) performance measures, and based on that input, DHS 
has made some significant changes in their measures, in our 
view, that have significantly improved the measures. For 
example, they have added about 90 new measures since we began 
coordinating with them. They have retired about 40 measures 
that were not proving to provide them the information that they 
needed. And they also provided better descriptions in their 
public reporting of about 100 measures based on our dialogue.
    DHS is continuing to work to strengthen their measures, and 
GAO is continuing to work with them. Some of the changes that 
they are trying to make will be longer-term and it require 
collecting additional data, so it will take time.
    One piece of input that we provided to DHS was with respect 
to measures for integrating the Department. Although DHS added 
a lot of new measures within each of their management 
functions, there were not measures specific to management 
integration, and so that is some feedback that we have provided 
to DHS and would like to see those measures as we move forward 
in assessing this high-risk area.
    Senator Akaka. DHS is reportedly ready to move forward with 
awarding a contract for DHS's financial management system known 
as TASC. However, in the past, GAO has cautioned that DHS must 
have rigorous oversight in place before moving forward with the 
system consolidation. Do you believe DHS has done enough 
planning to execute TASC effectively?
    Ms. Berrick. GAO issued a report earlier this year on DHS's 
status with respect to TASC, and essentially what we found, 
similar to your comments, was that we felt there was an over-
reliance on contractors and there was not adequate oversight. 
The contractors were developing all of the key acquisition 
documents for TASC, including the requirements and the concept 
of operations, rather than the government developing those 
documents. And we also reported that we thought DHS could do 
more work to prepare themselves for awarding the TASC contract, 
for example, developing detailed implementation and migration 
plans and doing an inventory of the business processes that 
needed to be realigned once the contract was awarded. We issued 
that report about 6 months ago. We have not done updated work, 
but that is something that we will be looking at as we update 
our work for the next high-risk designation in January. But I 
do not have an update right now on the current status of those 
efforts.
    Senator Akaka. Do you think that a single comprehensive 
strategic plan is necessary?
    Ms. Berrick. I think it is--with respect to the hig-risk 
designation, I think it is very important to have a strategy 
for how the Department is going to address the high-risk 
designation. And actually, GAO has five general criteria when 
we look at any high-risk area, which is leadership commitment, 
the capacity to address the issues in terms of people and other 
resources, a corrective action plan or a strategy for 
addressing the high-risk designation, the ability to 
independently monitor and measure progress in addressing the 
designation, and then the last criteria is measuring results.
    So we think that having a plan for addressing the overall 
designation and also for making specific improvements within 
each of the management areas is very important and it is 
something that we will be continuing to look at with DHS. Now, 
DHS does have a strategy for addressing the high-risk 
designation that we think is a good start, and we have provided 
additional feedback and they are in the process of revising 
that strategy. So it is certainly something we will review for 
the high-risk update in January.
    Senator Akaka. This morning, Senator Voinovich and I met 
with Under Secretary Borras and he briefed us on what they have 
been doing in this area. The placards that were displayed here 
with the first panel, those placards that showed how they are 
moving on that. I just want to tell you that I was impressed 
with it and look forward to continuing to work with them. So I 
really appreciate that. Senator Voinovich.
    Senator Voinovich. Thank you, Mr. Chairman.
    Building on that, have you ever seen that chart before?
    Ms. Berrick. We have seen a different version of that 
chart. We were briefed that DHS is making an improvement to 
their original management integration strategy through the 
acquisition reform component and we have been briefed 
conceptually on how that is going to work, although we have not 
seen the details yet. Our view of that is we think that there 
are a lot of good measures and controls in that strategy. It is 
going to add more rigor to the acquisition process at both the 
front end with requirements definition and also at the back end 
with measuring cost schedule and performance thresholds, both 
of which are things we have recommended that DHS do.
    So we think it is a good framework. We think the key is 
going to be, again, in the implementation and demonstrating on 
a repeatable basis that DHS can implement this policy for their 
major programs and meet established cost schedule and 
performance thresholds.
    One of the questions we had for DHS that we will have 
further conversation with them about is what is the end state 
of management integration. DHS has communicated to us that they 
are going to put their initial focus on acquisition reform and 
then they will have additional updates to the management 
integration strategy, which we were encouraged to hear because 
we think integration is going to cover more than just that.
    At the same time, we understand why DHS is putting their 
initial focus on acquisition, given the significant dollar 
amount tied to it. But we will continue to monitor DHS's 
modifications to the plan, and there are additional efforts 
both in acquisition and other areas.
    Senator Voinovich. When we talked to Mr. Borras this 
morning, I indicated to him that it would be good if you would 
look at it and comment on whether you think it makes sense in 
order to deal with the acquisition problem. Last year, I 
remember during the hearing that there was some real 
disagreement. First of all, we do not agree with what it is 
that we have to do to get off the High-Risk List, and second of 
all, we do not agree on metrics, and I think I had a meeting in 
my office about that with some folks, can you guys get your act 
together and so forth.
    I really think it is important that you get together with 
DHS, that you look at these charts, is this the way it is going 
to get done, you agree that is what they should do, how do you 
intend to measure the implementation in terms of performance 
and metrics, and you used the word ``repetitive,'' that it is 
just not a one-shot deal, that it is going to occur. I think 
that would help greatly, because then a year from now you can 
all look at it and say, ``We have made it--here is specifically 
what we did.'' We had a little disagreement over here, but we 
are moving down the road and we agree on it.
    The other thing is that you mentioned something about 
resources. I should have known the answer to this a long time 
ago, but do you think that the Department of Homeland Security 
has the resources to get the job done that we have asked them 
to get done?
    Ms. Berrick. Well, I will answer in the context of DHS's 
internal plans, and specifically, DHS has a lot of corrective 
action plans and strategies to improve all of its management 
functions, and if you look through these plans, in almost every 
one, the limitation cited by DHS is resources. So we certainly 
think it is an issue for the Department. They have identified 
that in their own planning documents. And, of course, resources 
is one criteria that GAO looks at in making decisions about the 
high-risk designation, because if agencies do not have the 
resources, they are going to be very limited in what they can 
do.
    So we are going to continue to look at that and we will be 
asking DHS questions, specific questions in acquisition and 
other areas about whether or not they are going to be able to 
implement this and when, based on the resources that they have 
available to them.
    Senator Voinovich. OK. The human capital part of this is a 
big deal in terms of having the folks that they need, because I 
think that is, from the point of view of appropriations--you 
probably heard when I asked the question, ``If we do not give 
you the resources to get the job done, how can you do it? '' We 
just keep loading some of these agencies up with more and more 
and more and more, and quite frankly in many instances they do 
not have enough resources to do the job that we have given 
them, so we just add on to it. That would be a wonderful thing 
that GAO could do for appropriations.
    In terms of the impact that this has on the public and some 
of these things that we are talking about, do you have any 
instances where, because we have not had these things in place, 
it has cost us a ton of money?
    Ms. Berrick. I think there is a significant impact on the 
mission side of DHS. If you look at major programs that they 
have tried to deploy, and you have talked about one of them, 
SBInet is a perfect example. The Transportation Security 
Administration's (TSA) Secure Flight program is another 
example. US-VISIT is another example, where DHS set out to 
develop a program to satisfy an important mission need, but 
because of the way that program was managed, it was not meeting 
performance expectations. They were not meeting cost and 
schedule expectations. And they were either delayed or were 
never deployed to the field. So I think there is a direct 
correlation between how well the Department is managed and how 
they can implement these management functions with how 
successful they are in implementing their missions.
    Senator Voinovich. You heard the question I asked Ms. Lute 
about the issue of the role of the Department of Homeland 
Security and looking at the budget in terms of some of the 
dollars that are being allocated for stuff that, frankly, from 
my point of view, just is not relevant to the mission. 
Specifically, I did not mention it to her, but the money for 
fire--the firefighter grants, I mean, they have not spent all 
of the money out of the 2009 budget. They have not spent the 
money in 2010 and they are asking for about $1 billion more for 
fire grants, and that is fine. Senator Akaka and I sent a press 
release out and we helped Hawaii get a fire engine. But you 
just have to ask yourself, what has that got to do with the 
role of the Department? Is this just revenue sharing?
    And then, also, the threat assessment. If you look at the 
list of cities that have come on, you say to yourself, how did 
they ever get on this list? Was it because Members of the 
Congress, the Senate, lobbied them to add some of these cities? 
Do you look at any of that stuff to say, this just does not fit 
in with the mission of the Department?
    Ms. Berrick. We do look at those sorts of things. There are 
a couple of means. One is, every year, we do what we call a 
budget justification review of the Department of Homeland 
Security. We do this work for the Appropriations Committee and 
we will look at specific programs and prepare a two-page 
product that basically describes the program, what the budget 
request is, and whether we think there are questions about this 
request and whether it should be reduced or rescinded or 
whether Congress needs to look at this. And so every year, we 
send up about 15 to 20 sheets that list specific programs and 
operations, and we can certainly share these sheets with you if 
this is something you would be interested in.
    Second, in the pay-as-you-go legislation, GAO was mandated 
to look across government at areas of duplication, overlap, and 
fragmentation, and general cost saving opportunities, and 
report yearly, and our first report is due in February 2011, on 
programs that could be reduced or modified to save funds. And 
there are a number of DHS programs that we are looking at that 
we will be reporting out on in this February report.
    You mentioned grants. Grants is an area that we will be 
talking about. There are lots of Homeland Security grants that 
have overlap. We have cited and the Inspector General (IG) has 
cited significant problems in grant management, overseeing the 
grants. You mentioned a lot of States being cited as having 
significant vulnerabilities in getting grants. Some grants 
vulnerability is held constant. The Urban Areas Security 
Initiative (UASI) grants are that way. So every State is 
considered to have an equal vulnerability. So grants is a big 
area.
    Another area is research and development, the operations of 
science and technology and how that is being managed. And there 
are also some specific programs, and just to give you an 
example, TSA has a behavior detection program where they have 
specially trained screeners in airports looking for suspicious 
behavior. We have done work that has shown that the science 
behind that program has not been validated and results have not 
been proven, yet TSA is requesting significant increases in 
that program. So, for example, that is one program that we will 
be talking about in both our budget reviews as well as the 
mandate that we will be reporting out in February.
    Senator Voinovich. Well, I would like to get in touch with 
you tomorrow or in the next couple of days and talk about that, 
because I think that the folks that would be interested in this 
also are the ones charged with figuring out how do we deal with 
the debt and how do we balance budgets. I think that they could 
probably benefit a great deal from the information that you 
folks have gathered, and also the Congress, because we are 
going to have a real challenge. From a point of view of looking 
at an agency from the outside, an objective point of view, it 
seems to me that you have done that and I want to find out more 
about it.
    Ms. Berrick. Right. I will be happy to do that.
    Senator Voinovich. Thank you, Mr. Chairman.
    Senator Akaka. Thank you, Senator Voinovich.
    Ms. Berrick, earlier this year, the Under Secretary for 
Management issued Management Directive 102, which aims to 
strengthen acquisition management policies across the 
Department. High-profile acquisitions such as Deepwater and 
SBInet, to name a few, have shown the need for improvement in 
this area. Do you believe that MD 102 goes far enough to 
address weaknesses in the Department's acquisition management?
    Ms. Berrick. We think, generally, the directive is a 
significant improvement over the prior policy and generally is 
what we call knowledge-based, which is when we look at 
acquisition policy, we look at it for specific things, and that 
directive is consistent with it. Now, for managing IT 
investments, we think it needs to go a little bit further and 
we have talked to DHS about that and letting them know 
specifically what we think they need to do with respect to IT 
investments. But generally speaking, for regular acquisitions, 
we think the directive is good.
    The issue has really been execution. Even DHS's prior 
acquisition directive, there were a lot of good aspects to it, 
but DHS was not executing that directive as it was designed. 
For example, under the current acquisition directive, we looked 
at programs and most of them had not gone through the 
Acquisition Review Board process. Most of them did not have 
Department approved requirements, or Department approved 
acquisition baselines as they were required to by the 
directive. Sometimes programs would go through the Acquisition 
Review Board, but the feedback from the board and the 
recommendations from the board were not followed up on. So the 
problems that the Board identified were not addressed.
    So we really think in the area of acquisition that the key 
is implementing the program that they have in place, and the 
changes that DHS has talked about, we think that will further 
strengthen their directive and should help them deliver 
acquisitions on time, within budget, and performance 
thresholds, if implemented, as designed.
    Senator Akaka. Ms. Berrick, in past years, we had heard 
repeatedly that GAO ran into problems with DHS providing access 
to information and to DHS officials when GAO was carrying out 
investigations and audits. Can you update the Subcommittee on 
current relations between DHS and GAO?
    Ms. Berrick. Thank you. GAO has had difficulty historically 
doing our work at Department of Homeland Security, and it was 
mainly due to the protocols that they had in place which 
required us to work through a series of liaisons and lawyers to 
get access to the people we needed to talk to and documents we 
needed.
    We are very happy to say that after about a year and a half 
of dialogue with DHS, the Department has issued a revised 
directive and instruction for working with GAO, and we provided 
significant input into the development of that protocol and its 
direction. It was issued in June of this year. We are very 
happy with the content in that protocol and instruction, and we 
think that if it is implemented as it is designed, it is going 
to result in significant improvements in our access to the 
Department. So we are very grateful that is in place. Now, it 
is the very early stages of that, so we will be monitoring to 
ensure that it is implemented as it is designed and DHS is 
doing the same.
    With respect to the relationship generally, I think we have 
a good relationship. We meet frequently. There is a lot of 
communication between GAO and DHS, not only in specific areas 
like performance measures and the management areas, but just 
generally at senior levels of the Department and senior levels 
of GAO. So we think we have come a very long way in our 
relationship.
    Senator Akaka. Thank you for that response.
    Senator Voinovich, any further questions?
    Senator Voinovich. As a gift to me, before I leave, I would 
like you to get in touch with the Department of Homeland 
Security and Mr. Borras or whoever it is and I would like you 
to take the charts and look at it and tell me what you think of 
it, and second of all, what you and the Department think would 
be the way you would measure whether or not they were making 
progress in regard to those charts.
    Ms. Berrick. I will be happy to do that. I think one of the 
discussions we will need to have with DHS is after acquisition 
reform, what additional efforts do they plan to achieve 
management integration and what is their vision for the end 
state of integration. So we can talk about that, as well, and 
we would be happy to come back and brief you on that.
    Senator Voinovich. Yes. If they would just take that little 
piece and do it and just say, ``Yes, we think this is good, or 
if you have got to change, work it out and then come back.'' 
And then also say, and we agree that the way we will measure 
whether we get it done is the following, OK?
    Ms. Berrick. OK.
    Senator Voinovich. How long did we take to get the 
``management integration plan''? It took forever. And we have 
the plan now, do we not? Do you agree with the plan that they 
came back with? Who developed that plan? Elaine Duke worked on 
that plan, but that came back and they finally got it. And you 
agree that what they have come back with is a good plan in 
terms of integration.
    Ms. Berrick. The feedback we gave them was that we thought 
it was a good start, but it was not clear from looking at the 
plan, again, what the end state was of management integration. 
There were a lot of tactical programs listed in the plan of 
things that they would do, such as consolidating the 
headquarters facility. GAO has criteria that we use when we 
look at these types of plans and they were generally meeting 
that criteria within the various programs that they have 
listed. But it did not seem complete in our opinion in terms of 
how together these initiatives are going to address management 
integration. So we provided that feedback.
    Now DHS has told us that they view that plan as a first 
step and they have said that they agree with most of the input 
that we provided, and so they are going to make enhancements to 
it, and phase one of the enhancements is this acquisition. So 
we think they are moving in the right direction. We think they 
need to do more with the plan, which they, again, they said 
they would do through increments. So we will need to have 
dialogue with them on what these increments are to ensure we 
have a good understanding of what their overall strategy is.
    Senator Voinovich. Thanks.
    Senator Akaka. Thank you very much, Senator Voinovich.
    Again, I want to say thanks to you, Ms. Berrick, for your 
responses. It has been valuable and it will be valuable to our 
work here in the U.S. Senate. I want to thank you and the other 
witness for appearing here today.
    As we have discussed for years, a strong focus on 
management at DHS is vital to integrating the Department, but 
also for our national security. More work is needed to get this 
issue off the High-Risk List, and I hope DHS and GAO will 
continue to work toward that goal. While this is likely Senator 
Voinovich's last hearing on this subject, this Subcommittee 
will continue to build on the good work that he has done and we 
have done together and keep a close watch on DHS management.
    Senator Voinovich, do you have any final remarks for this 
hearing?
    Senator Voinovich. I would just like to say, I really have 
appreciated the wonderful relationship our office has had with 
GAO over the years. I think you really do a good job and you 
are making a difference for our country. One of the things that 
tickles me is that on the list of agencies where people seem to 
be happy, you are right at the top. That makes me feel very 
good, because I know several years ago, you needed some more 
flexibilities, and Senator Akaka and I worked on them. So thank 
you for your work and pass the word on that the Senator from 
Ohio is really happy with the wonderful relationship he has 
had. There are a couple of people I am going to call before I 
leave, and one of them is Gene, your Acting Comptroller 
General. Thank you.
    Ms. Berrick. Thank you very much, and GAO feels the same. 
We appreciate all of the support that both of you have had on 
these important issues and support of GAO's work and using our 
work and analysis to help your oversight efforts. So thank you 
very much.
    Senator Voinovich. And I am going to be in touch with you 
about that other matter, OK?
    Ms. Berrick. Very good.
    Senator Voinovich. Thank you.
    Ms. Berrick. Thank you.
    Senator Akaka. I also want to thank Senator Voinovich's 
staff and my staff for working so well together, and also with 
your staff, as well. This has really helped us in our work here 
in the U.S. Senate.
    The hearing record will be open for 2 weeks for additional 
statements or questions other Members may have pertaining to 
the hearing.
    This hearing is adjourned.
    [Whereupon, at 3:55 p.m., the Subcommittee was adjourned.]


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