[Congressional Record Volume 150, Number 101 (Tuesday, July 20, 2004)]
[House]
[Pages H6071-H6074]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      DEPARTMENT OF HOMELAND SECURITY FINANCIAL ACCOUNTABILITY ACT

  Mr. PLATTS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4259) to amend title 31, United States Code, to improve the 
financial accountability requirements applicable to the Department of 
Homeland Security, to establish requirements for the Future Years 
Homeland Security Program of the Department, and for other purposes.
  The Clerk read as follows:

                               H.R. 4259

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as ``Department of Homeland Security 
     Financial Accountability Act''.

     SEC. 2. FINDINGS.

       The Congress finds the following:
       (1) Influential financial management leadership is of vital 
     importance to the mission success of the Department of 
     Homeland Security. For this reason, the Chief Financial 
     Officer of the Department must be a key figure in the 
     Department's management.
       (2) To provide a sound financial leadership structure, the 
     provisions of law enacted by

[[Page H6072]]

     the Chief Financial Officers Act of 1990 (Public Law 101-576) 
     provide that the Chief Financial Officer of each of the 
     Federal executive departments is to be a Presidential 
     appointee who reports directly to the Secretary of that 
     department on financial management matters. Because the 
     Department of Homeland Security was only recently created, 
     the provisions enacted by that Act must be amended to include 
     the Department within these provisions.
       (3) The Department of Homeland Security was created by 
     consolidation of 22 separate Federal agencies, each with its 
     own accounting and financial management system. None of these 
     systems was developed with a view to executing the mission of 
     the Department of Homeland Security to prevent terrorist 
     attacks within the United States, reduce the Nation's 
     vulnerability to terrorism, and minimize the damage and 
     assist in the recovery from terrorist attacks. For these 
     reasons, a strong Chief Financial Officer is needed within 
     the Department both to consolidate financial management 
     operations, and to insure that management control systems are 
     comprehensively designed to achieve the mission and execute 
     the strategy of the Department.
       (4) The provisions of law enacted by the Chief Financial 
     Officers Act of 1990 require agency Chief Financial Officers 
     to improve the financial information available to agency 
     managers and the Congress. Those provisions also specify that 
     agency financial management systems must provide for the 
     systematic measurement of performance. In the case of the 
     Department of Homeland Security, therefore, it is vitally 
     important that management control systems be designed with a 
     clear view of a homeland security strategy, including the 
     priorities of the Department in addressing those risks of 
     terrorism deemed most significant based upon a comprehensive 
     assessment of potential threats, vulnerabilities, 
     criticality, and consequences. For this reason, Federal law 
     should be amended to clearly state the responsibilities of 
     the Chief Financial Officer of the Department of Homeland 
     Security to provide management control information, for the 
     benefit of managers within the Department and to help inform 
     the Congress, that permits an assessment of the Department's 
     performance in executing a homeland security strategy.

     SEC. 3. CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF HOMELAND 
                   SECURITY.

       (a) In General.--Section 901(b)(1) of title 31, United 
     States Code, is amended--
       (1) by redesignating subparagraphs (G) through (P) as 
     subparagraphs (H) through (Q), respectively; and
       (2) by inserting after subparagraph (F) the following:
       ``(G) The Department of Homeland Security.''.
       (b) Appointment or Designation of CFO.--The President shall 
     appoint or designate a Chief Financial Officer of the 
     Department of Homeland Security under the amendment made by 
     subsection (a) by not later than 180 days after the date of 
     the enactment of this Act.
       (c) Continued Service of Current Official.--An individual 
     serving as Chief Financial Officer of the Department of 
     Homeland Security immediately before the enactment of this 
     Act, or another person who is appointed to replace such an 
     individual in an acting capacity after the enactment of 
     this Act, may continue to serve in that position until the 
     date of the confirmation or designation, as applicable 
     (under section 901(a)(1)(B) of title 31, United States 
     Code), of a successor under the amendment made by 
     subsection (a).
       (d) Conforming Amendments.--
       (1) Homeland security act of 2002.--The Homeland Security 
     Act of 2002 (Public Law 107-296) is amended--
       (A) in section 103 (6 U.S.C. 113)--
       (i) in subsection (d) by striking paragraph (4), and 
     redesignating paragraph (5) as paragraph (4);
       (ii) by redesignating subsection (e) as subsection (f); and
       (iii) by inserting after subsection (d) the following:
       ``(e) Chief Financial Officer.--There shall be in the 
     Department a Chief Financial Officer, as provided in chapter 
     9 of title 31, United States Code.''; and
       (B) in section 702 (6 U.S.C. 342) by striking ``shall 
     report'' and all that follows through the period and 
     inserting ``shall perform functions as specified in chapter 9 
     of title 31, United States Code, and, with respect to all 
     such functions and other responsibilities that may be 
     assigned to the Chief Financial Officer from time to time, 
     shall also report to the Under Secretary for Management.''.
       (2) FEMA.--Section 901(b)(2) of title 31, United States 
     Code, is amended by striking subparagraph (B), and by 
     redesignating subparagraphs (C) through (H) in order as 
     subparagraphs (B) through (G).

     SEC. 4. FUNCTIONS OF CHIEF FINANCIAL OFFICER OF THE 
                   DEPARTMENT OF HOMELAND SECURITY.

       (a) Performance and Accountability Reports.--Section 3516 
     of title 31, United States Code, is amended by adding at the 
     end the following:
       ``(f) The Secretary of Homeland Security--
       ``(1) shall for each fiscal year submit a performance and 
     accountability report under subsection (a) that incorporates 
     the program performance report under section 1116 of this 
     title for the Department of Homeland Security;
       ``(2) shall include in each performance and accountability 
     report an audit opinion of the Department's internal controls 
     over its financial reporting; and
       ``(3) shall design and implement Department-wide management 
     controls that--
       ``(A) reflect the most recent homeland security strategy 
     developed pursuant to section 874(b)(2) of the Homeland 
     Security Act of 2002; and
       ``(B) permit assessment, by the Congress and by managers 
     within the Department, of the Department's performance in 
     executing such strategy.''.
       (b) Implementation of Audit Opinion Requirement.--The 
     Secretary of Homeland Security shall include audit opinions 
     in performance and accountability reports under section 
     3516(f) of title 31, United States Code, as amended by 
     subsection (a), only for fiscal years after fiscal year 2005.
       (c) Assertion of Internal Controls.--The Secretary of 
     Homeland Security shall include in the performance and 
     accountability report for fiscal year 2005 submitted by the 
     Secretary under section 3516(f) of title 31, United States 
     Code, an assertion of the internal controls that apply to 
     financial reporting by the Department of Homeland Security.
       (d) Audit Opinions of Internal Controls Over Financial 
     Reporting by Chief Financial Officer Agencies.--
       (1) In general.--Not later than 180 days after the date of 
     the enactment of this Act, the Chief Financial Officers 
     Council and the President's Council on Integrity and 
     Efficiency established by Executive Order 12805 of May 11, 
     1992, shall jointly conduct a study of the potential costs 
     and benefits of requiring the agencies listed in section 
     901(b) of title 31, United States Code, to obtain audit 
     opinions of their internal controls over their financial 
     reporting.
       (2) Report.--Upon completion of the study under paragraph 
     (1), the Chief Financial Officers Council and the President's 
     Council on Integrity and Efficiency shall promptly submit a 
     report on the results of the study to the Committee on 
     Government Reform of the House of Representatives, the 
     Committee on Governmental Affairs of the Senate, and the 
     Comptroller General of the United States.
       (3) General accounting office analysis.--Not later than 90 
     days after receiving the report under paragraph (2), the 
     Comptroller General shall perform an analysis of the 
     information provided in the report and report the findings of 
     the analysis to the committees referred to in paragraph (2).

     SEC. 5. FUTURE YEARS HOMELAND SECURITY PROGRAM AND HOMELAND 
                   SECURITY STRATEGY.

       Section 874 of the Homeland Security Act of 2002 (6 U.S.C. 
     112) is amended by striking subsection (b) and inserting the 
     following:
       ``(b) Contents.--The Future Years Homeland Security Program 
     under subsection (a) shall--
       ``(1) include the same type of information, organizational 
     structure, and level of detail as the future years defense 
     program submitted to Congress by the Secretary of Defense 
     under section 221 of title 10, United States Code;
       ``(2) set forth the homeland security strategy of the 
     Department, which shall be developed and updated as 
     appropriate annually by the Secretary, that was used to 
     develop program planning guidance for the Future Years 
     Homeland Security Program; and
       ``(3) include an explanation of how the resource 
     allocations included in the Future Years Homeland Security 
     Program correlate to the homeland security strategy set forth 
     under paragraph (2).''.

     SEC. 6. ESTABLISHMENT OF OFFICE OF PROGRAM ANALYSIS AND 
                   EVALUATION.

       Section 702 of the Homeland Security Act of 2002 (6 U.S.C. 
     342) is amended by--
       (1) inserting ``(a) In General.--'' before the first 
     sentence; and
       (2) adding at the end the following:
       ``(b) Program Analysis and Evaluation Function.--
       ``(1) Establishment of office of program analysis and 
     evaluation.--Not later than 90 days after the date of 
     enactment of this subsection, the Secretary shall establish 
     an Office of Program Analysis and Evaluation within the 
     Department (in this section referred to as the `Office').
       ``(2) Responsibilities.--The Office shall perform the 
     following functions:
       ``(A) Analyze and evaluate plans, programs, and budgets of 
     the Department in relation to United States homeland security 
     objectives, projected threats, vulnerability assessments, 
     estimated costs, resource constraints, and the most recent 
     homeland security strategy developed pursuant to section 
     874(b)(2).
       ``(B) Develop and perform analyses and evaluations of 
     alternative plans, programs, personnel levels, and budget 
     submissions for the Department in relation to United States 
     homeland security objectives, projected threats, 
     vulnerability assessments, estimated costs, resource 
     constraints, and the most recent homeland security strategy 
     developed pursuant to section 874(b)(2).
       ``(C) Establish policies for, and oversee the integration 
     of, the planning, programming, and budgeting system of the 
     Department.
       ``(D) Review and ensure that the Department meets 
     performance-based budget requirements established by the 
     Office of Management and Budget.
       ``(E) Provide guidance for, and oversee the development of, 
     the Future Years Homeland

[[Page H6073]]

     Security Program of the Department, as specified under 
     section 874.
       ``(F) Ensure that the costs of Department programs, 
     including classified programs, are presented accurately and 
     completely.
       ``(G) Oversee the preparation of the annual performance 
     plan for the Department and the program and performance 
     section of the annual report on program performance for the 
     Department, consistent with sections 1115 and 1116, 
     respectively, of title 31, United States Code.
       ``(H) Provide leadership in developing and promoting 
     improved analytical tools and methods for analyzing homeland 
     security planning and the allocation of resources.
       ``(I) Any other responsibilities delegated by the Secretary 
     consistent with an effective program analysis and evaluation 
     function.
       ``(3) Director of program analysis and evaluation.--There 
     shall be a Director of Program Analysis and Evaluation, who--
       ``(A) shall be a principal staff assistant to the Chief 
     Financial Officer of the Department for program analysis and 
     evaluation; and
       ``(B) shall report to an official no lower than the Chief 
     Financial Officer.
       ``(4) Reorganization.--
       ``(A) In general.--The Secretary may allocate or reallocate 
     the functions of the Office, or discontinue the Office, in 
     accordance with section 872(a).
       ``(B) Exemption from limitations.--Section 872(b) shall not 
     apply to any action by the Secretary under this paragraph.''.

     SEC. 7. NOTIFICATION REGARDING TRANSFER OR REPROGRAMMING OF 
                   FUNDS FOR DEPARTMENT OF HOMELAND SECURITY.

       Section 702 of the Homeland Security Act of 2002 (6 U.S.C. 
     342) is further amended by adding at the end the following:
       ``(c) Notification Regarding Transfer or Reprogramming of 
     Funds.--In any case in which appropriations available to the 
     Department or any officer of the Department are transferred 
     or reprogrammed and notice of such transfer or reprogramming 
     is submitted to the Congress (including any officer, office, 
     or Committee of the Congress), the Chief Financial Officer of 
     the Department shall simultaneously submit such notice to the 
     Select Committee on Homeland Security (or any successor to 
     the jurisdiction of that committee) and the Committee on 
     Government Reform of the House of Representatives, and to the 
     Committee on Governmental Affairs of the Senate.''.

  The SPEAKER pro tempore (Mrs. Biggert). Pursuant to the rule, the 
gentleman from Pennsylvania (Mr. Platts) and the gentleman from New 
York (Mr. Towns) each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania (Mr. Platts).


                             General Leave

  Mr. PLATTS. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous material on H.R. 4259.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. PLATTS. Madam Speaker, I yield myself such time as I may consume.
  Madam Speaker, I rise today in strong support of H.R. 4259, the 
Department of Homeland Security Financial Accountability Act. This 
legislation, which I introduced in May 2004, along with the chairman of 
the Committee on Government Reform, the gentleman from Virginia (Mr. 
Tom Davis); the ranking member, the gentleman from California (Mr. 
Waxman); the chairman of the Select Committee on Homeland Security, the 
gentleman from New Jersey (Mr. Cox); the ranking member of the Select 
Committee on Homeland Security, the gentleman from Texas (Mr. Turner); 
the gentleman from New York (Mr. Towns); and the gentlewoman from 
Tennessee (Mrs. Blackburn), represents a compromise between the House 
Committee on Government Reform and the House Select Committee on 
Homeland Security.
  Essentially, H.R. 4259 replaces H.R. 2886, which was reported by the 
House Committee on Government Reform in November of 2003. This latest 
version, H.R. 4259, was introduced to incorporate key changes requested 
by the minority and the Select Committee on Homeland Security.
  Madam Speaker, let me provide a brief history of this important 
legislation. On July 24 of last year, I, along with the gentleman from 
Virginia (Chairman Tom Davis), the gentleman from California (Ranking 
Member Waxman), the gentleman from New York (Mr. Towns), and the 
gentlewoman from Tennessee (Mrs. Blackburn), introduced the original 
H.R. 2886 to ensure that the Department of Homeland Security is subject 
to the same financial accountability requirements as all other Cabinet-
level Departments.
  This bill, and the one before us today, codifies a structure for 
sound financial management that is mandatory, not optional, for future 
administrations. H.R. 4259, like its predecessor, achieves this goal by 
adding the Department of Homeland Security to the list of agencies that 
are covered by the CFO Act of 1990.
  H.R. 4259 puts the Department of Homeland Security's Chief Financial 
Officer on the same footing as the CFOs at the rest of the Cabinet-
level Departments by ensuring that the Department's CFO is a 
Presidential appointee subject to Senate confirmation, reports directly 
to the Secretary of the Department, and is part of the statutorily 
created Chief Financial Officer's Council.
  In addition, the bill ensures that the Department will comply with 
the Federal Financial Management Improvement Act of 1996, which 
establishes important financial management systems requirements for the 
CFO Act agencies.
  Additionally, this legislation requires an opinion-level audit of the 
Department's internal controls. Currently, OMB guidance requires a 
report on internal controls in conjunction with annual financial 
audits. Having an auditor issue an opinion on the internal controls 
report would help uncover inherent weaknesses and address problems as 
business practices are being established, before they become ingrained. 
Strong internal controls are essential to sound financial management.
  H.R. 4259 incorporates a number of important changes requested by the 
gentleman from California (Ranking Member Waxman) as well as the Select 
Committee on Homeland Security. Most notably, H.R. 4259 alters the 
reporting structure for the Department of Homeland Security Chief 
Financial Officer to allow for dual reporting to both the Secretary and 
the Under Secretary for Management. It also provides for the 
establishment of an Office of Program Analysis and Evaluation. It 
requires a Future Years Homeland Security Program and Homeland Security 
Strategy. The new bill also delays a requirement for the Department's 
internal control audit until fiscal year 2006.
  H.R. 4259 retains key provisions from the original bill, H.R. 2886, 
as introduced, including the requirement that the CFO at DHS be 
appointed by the President and confirmed by the Senate. The newness, 
size, and mission of the Department of Homeland Security calls for more 
accountability and oversight, not less.
  At present, DHS is the only Cabinet-level Department whose CFO is not 
required to be Senate confirmed. This unique status demotes both the 
CFO position and the importance of financial management within the 
Department. Now is not the time to dilute the importance of the CFO 
position, and we should not require less financial accountability at 
DHS than we do at other Cabinet-level Departments.
  This Department faces many daunting challenges, and these challenges 
will require strong leadership and a commitment from top-level 
management to overcome. Financial management at DHS must be of the 
highest priority. The legislation before the Congress today ensures 
that it is such a priority.
  Madam Speaker, it is important to note that under the leadership of 
President George Bush and Department Secretary Tom Ridge, my fellow 
Pennsylvanian, the Department has shown a determination to be fiscally 
responsible, and they are to be applauded for this approach. I want to 
emphasize that, although they are not required to comply with the CFO 
Act, they have made a determined effort to do so and are setting a good 
example. What we are trying to do is make sure that is a permanent 
example followed by future administrations.
  Future administrations are not bound by law, as I said, to follow 
this same path of fiscal responsibility. This bill rectifies that 
situation by codifying compliance with the provisions of the CFO Act. I 
urge my colleagues to support H.R. 4259.
  Madam Speaker, I reserve the balance of my time.
  Mr. TOWNS. Madam Speaker, I yield myself such time as I may consume.

[[Page H6074]]

  Madam Speaker, let me begin by commending both the gentleman from 
Virginia (Chairman Tom Davis); the gentleman from Pennsylvania (Mr. 
Platts), the chairman of the subcommittee; and the gentleman from 
California (Mr. Waxman), the ranking member, for their tireless efforts 
in forging a consensus for H.R. 4259, the Department of Homeland 
Security Financial Accountability Act, of which I am a proud cosponsor. 
Our work today will move us one step closer to ensuring that the 
critical resources utilized for protecting our Nation will finally have 
an appropriate level of management and oversight.
  In an era of soaring Federal deficits, along with challenges in 
managing a dynamic workforce from distinct legacy agencies, the 
exemption of DHS's CFO from the requirements of all other Cabinet-level 
CFOs is irresponsible. Therefore, I am happy to say that the bill 
before us today is a well-crafted compromise forged after months of 
negotiation and deliberative discussions. There are several key 
provisions contained in this legislation. Most importantly, however, 
the bill amends the Chief Financial Officers Act of 1990 to include the 
Department of Homeland Security, ensuring that the DHS CFO is subject 
to the same reporting requirements, oversight responsibilities, and 
congressional scrutiny required for all major Cabinet-level positions. 
The CFO is in the executive branch.
  Through thoughtful analysis and consideration, there have been 
several significant improvements made to this legislation, which I am 
happy have occurred. These include a provision requiring the CFO to be 
a Presidential appointee subject to Senate confirmation. The specific 
language would require the CFO to report directly to the Secretary of 
Homeland Security, and authorization for the DHS CFO to become part of 
the statutorily created CFO Council. To address the need for stronger 
fiscal oversight, the bill requires DHS to annually review its internal 
financial controls, ensuring that agency standards for financial 
management and accountability remain intact.
  By adding these provisions to the bill, we are strengthening the 
accountability, management, and oversight responsibilities of the new 
Department. As we all recognize, Madam Speaker, the establishment of 
the Department of Homeland Security was an unprecedented effort by 
Congress to increase our Nation's preparedness and responsiveness to 
domestic security threats. The Department is one of the largest in the 
Federal Government, consisting of 22 legacy agencies, and has perhaps 
the most important mission of any Federal agency as we struggle to 
counteract new threats to our domestic security.
  To conclude, this is a necessary step forward if we are to develop an 
efficient and effective agency that is ready to achieve its purpose of 
protecting our citizens, infrastructure, and borders. I urge my 
colleagues to support this bill.
  Madam Speaker, I reserve the balance of my time.
  Mr. PLATTS. Madam Speaker, I yield myself such time as I may consume 
to just thank our ranking member, the distinguished gentleman from New 
York (Mr. Towns), for his work and his staff's work with me and our 
subcommittee staff on the majority side. It has certainly been a 
bipartisan effort, and I am grateful for his assistance.
  Madam Speaker, I urge all Members to support the passage of H.R. 
4259, the Department of Homeland Security Financial Accountability Act, 
and I yield back the balance of my time.
  Mr. TOWNS. Madam Speaker, I yield myself such time as I may consume 
to thank the chairman of the subcommittee for his outstanding work in 
terms of bringing about a coalition to be able to work out some of the 
disagreements that we had, to be able to come up, I think, with a very 
strong bill. So I would like to salute him for that. I would like to 
salute the staff on both sides, the Democratic side and the Republican 
side, for their hard work as well.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Pennsylvania (Mr. Platts) that the House suspend the 
rules and pass the bill, H.R. 4259.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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