Transfer of Budgetary Resources to the Department of Homeland	 
Security (DHS) (30-APR-04, GAO-04-329R).			 
                                                                 
The enactment of the Homeland Security Act of 2002 led to the	 
most substantial reorganization of the federal government since  
the 1940s by creating the Department of Homeland Security (DHS). 
Established in January 2003, DHS combined 29 program functions	 
that were transferred from 10 agencies, referred to as the legacy
agencies. In addition, legacy agencies transferred resources for 
support functions, such as offices of inspectors general and	 
management and support. According to the President's proposal to 
create DHS, the reorganization was also designed to, among other 
things, achieve future savings through the elimination of	 
redundancies among the transferred programs. Given the breadth	 
and magnitude of the reorganization, questions have been raised  
among members of Congress and in the media about whether the	 
creation of DHS would prompt increases in the size of the	 
workforces at the agencies affected by the reorganization. This  
report responds to a request by the Chairman, House Committee on 
Transportation and Infrastructure, that we examine how the	 
transfer of full-time equivalent (FTE) positions to DHS was	 
conducted at the agencies involved in the transfer. Specifically,
in this report, we (1) identify the budgetary resources and	 
number of FTEs transferred from the legacy agencies to DHS, (2)  
compare the number of FTEs at DHS with the number of FTEs	 
transferred from functions at legacy agencies, (3) identify	 
differences between legacy agency fiscal year 2003 FTE balances  
after the transition and their fiscal year 2004 FTE requests, and
(4) discuss any DHS efforts to identify opportunities to achieve 
personnel cost savings related to the reorganization.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-329R					        
    ACCNO:   A09941						        
  TITLE:     Transfer of Budgetary Resources to the Department of     
Homeland Security (DHS) 					 
     DATE:   04/30/2004 
  SUBJECT:   Budget authority					 
	     Budget outlays					 
	     Cost control					 
	     Counterterrorism					 
	     Data collection					 
	     Employee transfers 				 
	     Federal agency reorganization			 
	     Future budget projections				 
	     National preparedness				 
	     Budget requests					 
	     Homeland security					 

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GAO-04-329R

United States General Accounting Office Washington, DC 20548

April 30, 2004

The Honorable Don Young
Chairman
Committee on Transportation and Infrastructure
United States House of Representatives

Subject: Transfer of Budgetary Resources to the Department of Homeland
Security (DHS)

Dear Mr. Chairman:

The enactment of the Homeland Security Act of 20021 led to the most
substantial
reorganization of the federal government since the 1940s by creating the
Department
of Homeland Security (DHS). Established in January 2003, DHS combined 29
program functions that were transferred from 10 agencies, referred to as
the legacy
agencies (appendix I lists the functions, by agency, identified for
transfer).2 In
addition, legacy agencies transferred resources for support functions,
such as offices
of inspectors general and management and support. DHS was created to
improve the
government's coordination of efforts to protect against threats to the
homeland.
According to the President's proposal to create DHS, the reorganization
was also
designed to, among other things, achieve future savings through the
elimination of
redundancies among the transferred programs. Given the breadth and
magnitude of
the reorganization, questions have been raised among members of Congress
and in
the media about whether the creation of DHS would prompt increases in the
size of
the workforces at the agencies affected by the reorganization.

This report responds to your request that we examine how the transfer of
full-time
equivalent (FTE) positions-a workforce measure equal to one work year or
2,080
nonovertime hours-to DHS was conducted at the agencies involved in the
transfer. Specifically, in this report, we (1) identify the budgetary
resources and
number of FTEs transferred from the legacy agencies to DHS, (2) compare
the
number of FTEs at DHS with the number of FTEs transferred from functions
at
legacy agencies, (3) identify differences between legacy agency fiscal
year 2003 FTE
balances after the transition and their fiscal year 2004 FTE requests, and
(4) discuss
any DHS efforts to identify opportunities to achieve personnel cost
savings related to
the reorganization.

1P.L. 107-296 (Nov. 25, 2002).
2As of March 1, 2003, the Federal Emergency Management Agency (FEMA)
transferred to DHS and no
longer exists as a stand-alone federal agency. Therefore, there are nine
legacy agencies currently in
existence.

As agreed with your office, we are not reporting on changes to the
contractor workforce because reliable data on the total number of
contractor employees are not available. Except for cases involving certain
cost reimbursement contracts, the government generally does not require
its contractors to report on the number of employees involved in
performing government contracts. We are not aware of any source from which
complete and reliable data on this matter would be readily available.
Similarly, we are also not providing information on the dollar value of
contracts transferred by legacy agencies to DHS because, according to DHS
officials, such information is not readily available for the inventory of
contracts that DHS inherited from legacy agencies. 3 DHS officials report
that they have created a contract transfer list based on on-going contract
obligations, which at the time of the DHS transfer was the government-wide
standard for reporting procurement actions to the Federal Procurement Data
System (FPDS), the federal government's central source of statistical
information on federal contracting.4 DHS officials said that to obtain
total contract value information for contracts transferred into the
Department, DHS would have to compile these data from a variety of
sources, most of which are manual, and they would not have a high degree
of confidence in the data.

According to DHS officials, FPDS does not provide data on total contract
value for legacy agency contracts transferred to DHS in fiscal year 2003.
Consistent with expected changes to FPDS, DHS officials stated that they
are now tracking contract dollar value data for DHS's new contracts
executed in fiscal year 2004 and future

5

years.

The transfer of programs, funding, and personnel resources from legacy
agencies to DHS began on March 1, 2003.6 OMB had and continues to have
responsibility for overseeing the transfer of FTEs, positions, and budget
authority from legacy agencies

7

to the new department. OMB staff said that they worked with legacy
agencies to

3According to DHS officials, total contract value represents the total
amount estimated to be spent
under a contract, often over multiple years.
4According to DHS officials, contract obligations are actions that
financially bind the federal
government. DHS officials said that there is no direct correlation between
total contract value and
contract obligation amounts. DHS officials said that internal controls to
ensure contract obligations
do not exceed total contract values are in place and controlled at the
local level by individual
contracting officers.
5In March 2004, the Department of Homeland Security's Office of Inspector
General issued a report
entitled "Review of the Status of Department of Homeland Security Efforts
to Address Its Major
Management Challenges," which stated that a major challenge for DHS is the
identification and
management of its procurements. The report states that DHS has struggled
to prepare a sufficiently
detailed and accurate listing of its procurements and that data that DHS
has received to date come
from 22 different sources and do not provide total contract award
information. In a report to the
Director of the Office of Management and Budget (OMB), we conveyed our
serious and continuing
concerns with the reliability of data contained in FPDS and recommended
steps to help improve data
reliability as the successor system, FPDS-Next Generation, is implemented.
See U.S. General
Accounting Office, Reliability of Federal Procurement Data, GAO-04-295R
(Washington D.C.: Dec. 30,
2003).
6The Department of Homeland Security Reorganization Plan, required under
Section 1502 of the
Homeland Security Act of 2002, specified that transfers were to begin on
March 1, 2003.
7Under 5 U.S.C. 5102(a)(3), position is defined as the work, consisting of
the duties and
responsibilities, assignable to an employee. Positions can represent
full-time or part-time employees or
can be vacant and do not represent actual full-time equivalent employment.
Budget authority is the
authority provided by law to enter into financial obligations that will
result in immediate or future

determine the functions, number of corresponding FTEs and positions, and
budget

8

dollars to be transferred to DHS. Given that the transfer occurred midway
through fiscal year 2003, OMB estimated DHS's "gross discretionary budget
authority," which, according to OMB, represented a projection of what
DHS's budget authority would have been if DHS had been operating for the
entire fiscal year 2003. OMB also estimated the corresponding number of
fiscal year 2003 FTEs DHS would have needed to operate for the entire
fiscal year. Once OMB developed these estimates, it directed the legacy
agencies to reduce their fiscal year 2003 budget authority and FTEs by
amounts equal to the amounts transferred from them to DHS. For example,
according to OMB staff, OMB directed the Department of the Treasury to
reduce its budget authority and FTEs from its Office of Inspector General
budget account for fiscal year 2003, and these resources were then
transferred to DHS's Office of

9

Inspector General budget account. OMB also used the estimates it prepared
for DHS's transition in fiscal year 2003 as the basis for developing DHS's
2004 budget request.10

To meet our objectives, we reviewed available data and documentation and
interviewed officials from DHS, OMB, the nine legacy agencies still in
existence, and the Office of Personnel Management (OPM) in Washington,
D.C.11 To identify information on the number of FTEs and budgetary
resources transferred from the legacy agencies to DHS, we obtained OMB
estimates of fiscal year 2003 FTEs and "gross discretionary budget
authority" transferred to DHS. To compare the number of FTEs at DHS after
the transfer with decreases in FTEs at legacy agencies, we identified
legacy agency functions and related budget accounts affected by the
transfer, obtained and compiled by function and budget account FTE data
from each legacy agency before and after the transfer, compared the
results of our compilation with OMB estimates, and asked OMB and legacy
agencies to confirm whether our compilations were correct.12 To identify
differences between legacy agency fiscal year 2003 FTE balances after the
transition and their fiscal year 2004 FTE requests, we obtained available
legacy agency FTE data for functions and budget accounts affected by the
transfer and compared these data with the fiscal year 2004 FTE requests
developed by legacy agencies for the President's budget. Finally, to
discuss

outlays involving federal government funds. Budget authority includes the
credit subsidy cost for
direct loan and loan guarantee programs, but does not include authority to
ensure or guarantee the
repayment of indebtedness incurred by another person or government. The
basic forms of budget
authority include (1) appropriations, (2) borrowing authority, (3)
contract authority, and (4) authority
to obligate and expend offsetting receipts and collections.
8On January 7, 2003, OMB issued a directive that asked heads of selected
departments and agencies to,
among other things, identify financial, logistical, and human resources
that could be transferred to
DHS as part of the reorganization.
9For purposes of this report, we used the term budget account in the same
context as OMB, described
in OMB Circular A-11, Section 20.11.
10 The President's fiscal year 2004 budget request presented DHS as a
freestanding agency and
constructed comparable estimates from legacy agency budget accounts for
fiscal years 2002 and 2003.
11Since FEMA became part of DHS on March 1, 2003, and no longer exists as
a stand-alone agency, we
met with former FEMA officials in DHS's Emergency Preparedness and
Response Directorate who
were responsible for the FEMA transfer process.
12Our comparison focused only on functions with budget accounts in the
nine legacy agencies that
existed after the transfer occurred.

DHS efforts to identify opportunities to achieve personnel cost savings
related to the reorganization, we interviewed DHS officials from the
Office of the Undersecretary for Management and reviewed available DHS
documents on cost savings opportunities. We also asked OMB to review our
comparisons of OMB and legacy agency-provided data on FTEs to explain any
differences between the OMB-provided numbers and those from the legacy
agencies. In comments on this report, OMB staff explained that FTE
estimates are made as point-in-time estimates and can change, but did not
specifically comment on the differences between legacy agency and OMB
data.

In addition to analyzing FTE data on the transfer, during our review, we
sought to analyze whether there were increases in positions, budget
authority, and personnel at legacy agencies after the transition. However,
we did not report on increases in these other data because some of the
information obtained was either incomplete or we were unable to reconcile
differences in data provided by OMB, OPM, and the legacy agencies.
According to OMB staff, differences could occur because (1) estimates on
positions were in flux at the time the transfer occurred and (2) budget
authority estimates could have been collected at different points in time
and were subject to change. OPM officials said that OPM's data on
personnel could differ from legacy agency personnel data because (1) OPM's
personnel data included both those personnel who were part of the formal
DHS transfer as well as those personnel who voluntarily left their
positions at legacy agencies and were hired by DHS during the time of the
DHS transition and (2) data on personnel could have been collected at
different points in time.

Because of generally corresponding FTE data from OMB and legacy agencies
and basic confirmation during interviews with knowledgeable officials, we
determined the FTE data used to develop this report to be sufficiently
reliable to meet our objectives for this report. We did our work from May
2003 to April 2004 in accordance with generally accepted government
auditing standards. Appendix II discusses our scope and methodology in
greater detail.

                                Results in Brief

OMB estimated that of the $38.28 billion transferred from 10 legacy
agencies to DHS, $24.76 billion would support DHS's fiscal year 2003
needs, including funding for the 181,875 FTEs transferred from legacy
agencies. Ninety-seven percent of the FTEs transferred were associated
with seven program functions whose budget accounts were transferred to DHS
in their entirety, including the functions of a former standalone agency,
the Federal Emergency Management Agency. The nine remaining legacy
agencies reported FTE decreases in their fiscal year 2003 budgets that
generally matched OMB estimates of FTEs transferred to DHS. Only limited
information was available to identify differences between legacy agency
FTE balances after the transfer and their fiscal year 2004 requests. For
the 24 budget accounts that were the source of the remaining 3 percent of
FTEs transferred to DHS, the nine legacy agencies reported that, for their
fiscal year 2004 requests:

o  	17 of 24 budget accounts included requests for FTEs less than or equal
to the number of FTEs remaining after the transfer,13 and

o  	7 of 24 budget accounts included requests for FTEs greater than the
number of FTEs remaining after the transfer.

All legacy agencies reported that requested increases in FTEs were
unrelated to the transfer of FTEs to DHS.

Figure 1 shows the FTEs transferred to DHS, by budget accounts, for
accounts that were transferred in their entirety, and for accounts with
remaining balances at legacy agencies.

Figure 1: Percentage of FTEs Transferred to DHS Associated with Budget
Accounts Transferred in their Entirety and Those That Remain at Legacy
Agencies

Source: GAO analysis of fiscal year 2003 estimated FTEs transferred to DHS
provided by OMB on August 7, 2003.

DHS officials told us that while it was too early to identify personnel
savings from the consolidation of legacy agency program functions in DHS,
the department is beginning to examine some opportunities that may lead to
such savings. They also said that these savings opportunities will have to
be balanced with new departmental mission needs as yet to be determined.

                            Resource Transfer to DHS

According to OMB, a total of $38.28 billion in unobligated
funding-including fiscal year 2003 funding and funds from prior budget
years-was transferred from the 10 legacy agencies to DHS. Given that DHS
was established midway through fiscal year 2003, OMB estimated a transfer
of $24.76 billion from legacy agencies to DHS in fiscal year 2003 "gross
discretionary budget authority"-which represented current year funding DHS
would have needed during fiscal year 2003. This included funds for an
estimated 181,875 FTEs transferred from legacy agencies. OMB data also
showed that the transfer included 209,105 full- and part-time positions.14
Table 1 shows

13U.S. Department of Agriculture (USDA) officials provided fiscal year
2003 FTE data for the Animal
and Plant Health Inspection Service-Plant Protection and Quarantine
Program.
14Positions can be part-time, full-time, or vacant and do not equate to
the number of FTEs, e.g., one
FTE can include two or more part-time positions. According to DHS and
legacy agency officials,
additional positions were scheduled to transfer to DHS after the official
transfer date of March 1, 2003.
They said position data are expected to be adjusted based on continuing
negotiations between DHS
and legacy agency offices. Some of the legacy agencies are still providing
support services to DHS via

OMB's March 2003 estimates of the legacy agency resources that would have
been needed to operate DHS during all of fiscal year 2003.

Table 1: Estimated Legacy Agency Resources Needed to Operate the
Department of Homeland Security during Fiscal Year 2003

                       Fiscal year 2003             Fiscal year 2003 "gross   
                       estimated FTEs               discretionary budget      
                       transferred a      Estimated authority" transferred    
         Legacy agency                  positions b (in millions of dollars)c 
           Agriculture            2,690      2,655d                     $56.0 
              Commerce              35e          50                       8.0 
               Defense               92         105                     500.0 
                Energy              101         101                     148.0 
     Federal Emergency                                                        
Management Agency f            5,330       8,542                   2,830.0
      General Services                                                  450.0 
        Administration            1,497       1,713 
      Health and Human              110         91d                     500.0 
              Services                              
               Justice           40,053     37,154d                   5,500.0 
        Transportation          103,073     129,302                  10,348.0 
              Treasury           28,894      29,392                   4,417.0 
                 Total        181,875 g     209,105                 $24,757.0 

Source: GAO analysis of OMB data as of March 2003.
aBased on estimates provided by OMB on August 7, 2003. Although the
transfer of legacy agency resources began on March
1, 2003, OMB estimates of FTEs are projected for the entire fiscal year
2003. This allows comparisons with other fiscal years
that cover a 12-month period. For civilian employees in the executive
branch, one FTE is equal to one work year or 2,080
nonovertime hours.
bBased on data compiled by OMB as of February 28, 2003. Positions are the
specific duties and responsibilities assignable to
an employee and can be full-time, part-time, or vacant. Positions do not
represent actual full-time equivalent employment.
cBased on estimates provided by OMB as of August 7, 2003. Given that the
transfer occurred midway through fiscal year
2003, OMB estimated DHS's "gross discretionary budget authority," which,
according to OMB, represented a projection of what
DHS's budget authority would have been if DHS had been operating for the
entire fiscal year 2003. According to OMB data, a

total of $38.28 billion in unobligated funding was transferred to DHS's
budget.
dAccording to OMB staff, the number of positions could be lower than the
number of FTEs for these agencies because OMB
position data were not necessarily complete at the time the OMB estimates
of FTEs were compiled.
eAlthough OMB FTE estimates show that 35 FTEs were transferred from the
Department of Commerce to DHS for the Critical
Infrastructure Assurance Office (CIAO), according to Department of
Commerce officials, Commerce reduced the number of
FTEs associated with this budget account by 50 FTEs because of the
transfer. Commerce officials said that 50 FTEs have
been associated with CIAO since its inception in Commerce.
fFEMA became a part of DHS on March 1, 2003, and no longer exists as a
freestanding agency.
gAn additional 100 new FTEs were allocated to DHS to establish a budget
for departmental operations in fiscal year 2003.

Ninety-seven percent of the estimated FTEs (176,466 FTEs) transferred were
associated with seven program functions whose budget accounts were
transferred to DHS in their entirety, and budget accounts for these
functions no longer exist at the legacy agencies.15 For example, the Coast
Guard was transferred from the Department of Transportation (DOT), and the
Immigration and Naturalization Service (INS) was abolished and its
functions were transferred from the Department of Justice (DOJ).16 In
addition, FEMA, formerly a stand-alone agency, was merged into

memorandums of agreement. As of March 31, 2003, DHS had 160,201 full-and
part-time civilian
employees on board, according to OPM's Central Personnel Data File.
15These seven program functions are the Federal Emergency Management
Agency, Secret Service,
Federal Law Enforcement Training Center, Customs Service, U.S. Coast
Guard, Transportation
Security Administration, and Immigration and Naturalization Service.
16In comments on this report, DOJ noted that functions delegated to INS
transferred to DHS, but that
the Attorney General did not delegate to INS every function under the
Immigration and Naturalization
Act. Specifically, according to DOJ, the Attorney General continues to
manage those functions that he

DHS in its entirety. The remaining 3 percent of the estimated FTEs (5,409
FTEs) were associated with transfers from 24 budget accounts that remain
at the legacy agencies. For example, FTEs for the Federal Protective
Service were formerly included in the General Services Administration's
(GSA) Real Property Activities- Federal buildings fund-budget account and
are now with DHS. In another instance, some FTEs were transferred from
offices of inspectors general budget accounts at DOT, Treasury, DOJ, GSA,
and USDA for a new office of inspector general budget account at DHS.
Appendix III provides information on OMB estimates of fiscal year 2003 FTE
transfers, by function, for each legacy agency.

In addition to the resources transferred, for DHS's fiscal year 2003
budget, OMB allocated DHS an additional 100 FTEs for management staff. In
fiscal year 2003, DHS also received $6.61 billion in budget authority
through supplemental appropriations for a total of $31.37 billion in
budget authority.

The Homeland Security Act of 2002 requires the legacy agencies to transfer
identified programs, personnel, and funding resources to DHS within one
year of the department's creation.17 According to DHS and legacy agency
officials, the transfer of funding, FTEs, and positions is not complete;
legacy agencies are still providing support services to DHS through
memorandums of agreement. According to DHS and legacy agency officials,
these agreements-of which there are at least 50--cover a variety of
services such as mail and messenger services, payroll processing, computer
network services, building security, and shuttle bus services. DHS and
legacy agency officials told us that some of the agreements may have
extended beyond the one-year period, and additional personnel could be
transferred when these agreements end. However, DHS officials said that,
so far, as agreements have ended, DHS has absorbed the additional workload
without increasing FTEs or personnel because of DHS's consolidation of
support services.

Our discussions with legacy agency officials indicated that it would be
difficult to estimate (1) the number of FTEs associated with existing
agreements at legacy agencies and (2) how FTEs might be affected once
memorandums of agreement end. Officials said that some of the agreements
were shared service arrangements where DHS agreed to pay a proportionate
share of the total cost of services rendered; the agreements did not
include a dedicated number of personnel providing services to DHS.
Officials stated other agreements included staff hour cost estimates that
could not be readily converted to FTEs.

Legacy agency officials also indicated that legacy agencies vary in their
plans for reassigning personnel after the agreements end. For example,
officials at the Department of Commerce, the Department of Defense (DOD),
DOJ, and GSA said that they do not plan to reassign staff after the
agreements end because dedicated

did not delegate to INS, e.g., the management of certain law enforcement
responsibilities related to
visas that were delegated to DOJ's Criminal Division.
17Section 1502(d) of the Act states that the Department of Homeland
Security Reorganization Plan shall
become effective for an agency by the date specified in the plan or by the
end of the transition period,
whichever is earlier. Pursuant to Section 1501(2), the end of the
"transition period" is January 24, 2004,
12 months following the effective date of the Act as specified in Section
4. The Reorganization Plan
specified an earlier date for the transfers to begin, March 1, 2003.

staff are not providing these services or the amount of support provided
is small. Treasury officials said that they might need to reduce staff if
DHS decided to discontinue receiving working capital fund services, such
as those for telephone operator services, and no other client required
additional support.

Legacy Agencies Fiscal Year 2003 FTE Decreases GenerallyMatched FTEs Transferred
                                     to DHS

All legacy agencies reported FTE decreases in their fiscal year 2003
budgets, and these decreases generally matched OMB's data on the number of
FTEs transferred to

18

DHS. Specifically, data provided to us by the legacy agencies for those
budget accounts still existing at the agencies showed that all nine legacy
agencies decreased their budgeted FTEs by amounts that generally
corresponded to OMB data on the FTEs transferred to DHS. Three of the nine
agencies-USDA, DOT, and GSA- provided data that showed that their FTE
decreases were the same as OMB data on the transfer. Four of the nine
agencies-Commerce, Department of Energy (DOE), Department of Health and
Human Services (HHS), and Treasury-said that their FTE decreases were
slightly greater than OMB's data on FTEs transferred.19 The number of FTEs
over and above the amounts transferred by OMB ranged from 1 FTE at DOE to
45 FTEs at Treasury. DOD said that it decreased its FTE budget by 1 FTE
less than

20

the number of FTEs in OMB's data.

Finally, the ninth legacy agency, DOJ, provided data showing FTE decreases
that differed from OMB estimates associated with three budget accounts:

o  General Administration-Office of Inspector General (OIG) budget account

DOJ said that it transferred 15 FTEs to DHS, rather than 55 FTEs as shown
in OMB's data. DOJ said that originally, the Treasury OIG was to transfer
155 FTEs to DHS and 40 FTEs to the DOJ OIG for the transfer of the Bureau
of Alcohol, Tobacco, and Firearms to DOJ.

However, under a second plan agreed to by DOJ, Treasury, DHS, OMB, and
OPM, the Treasury OIG transferred 195 FTEs directly to DHS's OIG, reducing
to 15 the number of FTEs that DOJ's OIG transferred to DHS's OIG.21

18Our analysis did not include budget decreases that legacy agencies made
for FEMA, the Secret
Service, Federal Law Enforcement Training Center, Customs Service, U.S.
Coast Guard,
Transportation Security Administration, and Immigration and Naturalization
Service transfers to DHS
because budget accounts for these program functions no longer existed at
legacy agencies after the
March 1, 2003, transfer. Our analysis included other program function
transfers, such as the Critical
Infrastructure Assurance Office and Federal Protective Service because
their former budget accounts
still exist at the legacy agencies.
19In addition to transferring the amounts identified by OMB, DOE
transferred one additional FTE for
DHS support activities. Also, HHS transferred an additional seven FTEs
from the Office of Inspector
General, Centers for Disease Control and Prevention, Food and Drug
Administration, and National
Institutes of Health.
20According to DOD, all FTEs for the National Communication System
function were transferred to
DHS.
21According to DOJ, the original transfer plan would have resulted in
DOJ's OIG receiving 40
individuals from Treasury's OIG while at the same time transferring 55 of
its personnel to DHS's OIG.

o  General Administration-Salaries and expenses budget account

DOJ said that it transferred 10 FTEs in fiscal year 2003, rather than 93
as shown in OMB's data. DOJ said that only 10 of the 93 FTEs for the
General Administration-Salaries and expenses budget account were planned
for transfer in 2003 and the remaining 83 FTEs were transferred in the
fiscal year 2004 budget submission.

o  Office of Justice Programs-Justice assistance budget account

DOJ said that it transferred 55 FTEs, rather than no FTEs as shown in
OMB's data.

OMB staff explained that, as discussed earlier, FTE estimates are made as
point in time estimates and can change.

Limited Information Available to Identify Differences between Legacy Agency FTE
                 Balances after the Transfer and RequestedFTEs

As mentioned earlier, 97 percent of the estimated FTEs (176,466 FTEs)
transferred were associated with seven program functions that were
transferred to DHS in their entirety, and their budget accounts no longer
exist at the legacy agencies. For the 24 budget accounts that were the
source of the remaining 3 percent of FTEs transferred to DHS, the nine
legacy agencies reported that, for their fiscal year 2004 requests,

o  	17 of 24 budget accounts included requests for FTEs less than or equal
to the number of FTEs remaining after the transfer,22and

o  	7 of 24 budget accounts included requests for FTEs greater than the
number of FTEs remaining after the transfer.

Figure 2 shows a breakdown of FTEs transferred by agency and budget
account.

DOJ stated that the inspectors general for DOJ, the Department of
Treasury, and DHS agreed that the
transfers originally directed by OMB would have been inefficient and would
have caused undue
personal and mission-related disruptions, particularly to the personnel
and field offices affected by the
transfers. DOJ said that the three inspectors general conferred and agreed
to a proposal that would
avoid such disruptions but still accomplish the same overall number of
transfers.
22USDA officials provided fiscal year 2003 FTE data for the Animal and
Plant Health Inspection
Service-Plant Protection and Quarantine Program.

 Figure 2: Breakdown of FTEs Transferred to DHS, by Agencies and Budget Account

 Source: GAO analysis of OMB, USDA, Commerce, DOD, DOE, GSA, HHS, DOT, DOJ, and
                                 Treasury data.

Legend: N/A = Not applicable.

Notes:

aUSDA officials provided fiscal year 2003 FTE data for the Animal and
Plant Health Inspection Service-Plant Protection and Quarantine Program.

bAccording to the Department of Commerce, Commerce reduced FTEs by 50
because of the transfer.

cAccording to DOD, 91 FTEs, representing all FTEs for the National
Communication System, were transferred to DHS.

dAccording to DOD, the fiscal year 2003 FTE balance for the DOD-Operations
and Maintenance-Operation and maintenance, Defense-wide budget account
after the transfer included a larger decrease (-4,153 FTEs) than the 91
FTEs transferred to DHS because it reflects FY 2003 actual data submitted
in the FY 2005 budget cycle and decreases occurred for other management
and budgetary reasons.

eIn addition to transferring the amounts identified by OMB, DOE
transferred 1 additional FTE for DHS support activities.

fAccording to GSA, 1 FTE was transferred to DHS immediately and 15 FTEs
are being retained at GSA to provide support services for DHS while the
GSA/DHS support services are in effect. GSA's total reduction to the
working capital fund account as a result of the transfer is 16 FTEs.

gHHS transferred an additional 7 FTEs from the Office of Inspector
General, Centers for Disease Control and Prevention, Food and Drug
Administration, and National Institutes of Health.

hAccording to DOJ officials, FTEs were transferred from the Office of
Justice Programs to DHS in 2002. According to DOJ, 55 FTEs were
transferred from the Office of Justice Programs to DHS.

iDOJ officials stated that only 10 of the 93 FTEs for the General
Administration-Salaries and expenses budget account were planned for
transfer in 2003. According to DOJ, the remaining 83 FTEs were transferred
in the fiscal year 2004 budget submission.

jAccording to DOJ officials, as part of the formation of DHS, the Office
of Management and Budget (OMB), directed the Treasury Office of Inspector
General (OIG) to transfer 155 FTEs to DHS's OIG and directed the DOJ OIG
to transfer 55 FTEs to DHS's OIG. At the same time, OMB directed the
Treasury OIG to transfer 40 FTEs to the DOJ OIG to compensate for the
transfer of the Bureau of Alcohol, Tobacco, and Firearms from the
Department of the Treasury to DOJ. According to DOJ, this would have
resulted in the DOJ OIG receiving 40 individuals from the Treasury OIG
while at the same time transferring 55 of its personnel to DHS's OIG. DOJ
said that the inspectors general for DOJ, the Department of the Treasury,
and DHS agreed that the series of transfers originally directed by OMB was
inefficient and would cause undue personal and mission-related
disruptions, particularly to the personnel and field offices affected by
the proposed transfers. According to DOJ, the three inspectors general
conferred and agreed to a proposal that would avoid such disruptions but
still accomplish the same overall number of transfers. Under this plan,
DOJ said that the Treasury OIG transferred 195 FTEs directly to DHS's OIG
(the 155 FTEs it was required to transfer to DHS's OIG as well as the 40
it was required to transfer to DOJ's OIG). This reduced to 15 (55 minus
40) the number of FTEs that DOJ's OIG had to directly transfer to DHS's
OIG.

kAccording to the Department of the Treasury, Treasury transferred 226
FTEs from the Departmental Offices-Salaries and expenses budget account to
DHS.

lFEMA became a part of DHS on March 1, 2003, and no longer exists as a
freestanding agency with its own budget accounts.

mUnder the Homeland Security Act of 2002, P.L. 107-296 (Nov. 25, 2002),
the Immigration and Naturalization Service was abolished and its functions
were transferred from the Department of Justice. In its technical
comments, DOJ noted that functions delegated to INS transferred to DHS,
but that the Attorney General did not delegate to INS every function under
the Immigration and Naturalization Act. Specifically, according to DOJ,
the Attorney General continues to manage those functions that he did not
delegate to INS, e.g., the management of certain law enforcement
responsibilities related to visas that were delegated to DOJ's Criminal
Division.

nU.S. Coast Guard, Transportation Security Administration, U.S. Customs,
U.S. Secret Service, and Federal Law Enforcement Training Center budget
accounts were transferred to DHS in their entirety, and budget accounts
for these functions no longer exist at the legacy agencies.

We asked the five agencies that provided data showing that they requested
increased FTEs associated with seven budget accounts to explain why they
requested these increases. For all seven budget accounts, agency officials
said that requested increases in FTEs were for programmatic or mission
changes in the programs. Specifically, for those budget accounts:

o  	GSA requested 10 additional FTEs for its working capital fund. A GSA
official explained that the additional FTEs were requested to staff GSA's
Human Capital Strategy and Competitive Sourcing Initiatives related to the
President's Management Agenda and for other programmatic changes unrelated
to the transfer.23

o  	GSA requested 60 additional FTEs for its General Activities-Operating
expenses budget account. A GSA official said that the requested increase
was a result of the restructuring of the GSA budget internally, which
would have occurred regardless of the transfer of FTEs to DHS and is
unrelated to the transfer.24

23The President's Management Agenda (PMA), announced in fiscal year 2002,
is the President's strategy
for improving management and performance of the federal government. Under
PMA, the President
identified five government-wide management initiatives-budget and
performance integration,
strategic human capital management, improved financial performance,
expanded electronic
government, and competitive sourcing.
24For fiscal year 2004, the General Activities-Operating expenses budget
account FTE request
included the transfer of funding for the Office of Citizen Services and
Communications (OCSC) from
the Policy and Citizen Services account. The GSA official told us that GSA
requested this
reorganization because of inherent differences in the Office of
Government-wide Policy and the OCSC
programs, and the diverse budgetary and accounting requirements needed to
properly manage them.

o  	DOT requested 22 additional FTEs for its Office of the
Secretary-Salaries and expenses budget account. A DOT official said that
the requested increase included FTEs for the Office of Intelligence and
Security, which, among other things, coordinates DOT transportation
security issues with DHS. The official said that the requested increase
was not related to the transfer.

o  	Commerce requested 16 additional FTEs for its Bureau of Industry and
Security- Operations and administration budget account. A Commerce
official said that the requested FTEs were for the bureau's core export
enforcement and export regulation missions and not related to the missions
that were transferred.

o  	DOD requested 2,889 additional FTEs for its Operations and
Maintenance- Operation and maintenance, Defense-wide budget account. A DOD
official said that the requested increase is related to changes in the
composition of the budget account and the conversion of military positions
to civilian positions and is unrelated to the transfer.25

o  	DOJ requested 1,868 additional FTEs for its Federal Bureau of
Investigation- Salaries and expenses budget account. A DOJ official said
that the requested increase is associated with Counterterrorism and
Operations Support, Counterintelligence, Cybercrime Investigations,
Security, Technology Investments, and Criminal Investigations and is
unrelated to the transfer.

o  	DOJ requested 59 additional FTEs for its General
Administration-Salaries and expenses account. A DOJ official said that the
requested increase is associated with transfers from the Department of
Treasury and increases in the Office of Intelligence Policy and Review and
is unrelated to the DHS transfer.

  DHS Officials Identified a Preliminary Plan They Hope Will Achieve Personnel
                                  Cost Savings

In November 2003, officials with DHS's Office of the Undersecretary for
Management said that they had developed a plan that could lead to
potential personnel cost savings through the consolidation of DHS-wide
support services. According to these officials, DHS had begun to implement
a tri-bureau initiative, which is a plan to identify and reorganize
support services to achieve management efficiencies in the Bureaus of
Immigration and Customs Enforcement, Citizenship and Immigration Services,
and Customs and Border Protection. As part of this initiative, DHS said it
was evaluating (1) how and where support services were currently being
provided within the department; (2) what the optimal service level should
be, based on quality

According to the official, GSA also transferred functions from the Public
Buildings Service to OCSC in
the General Activities-Operating expenses budget account and the
management of the FirstGov Web
site function from the General activities-operating expenses budget
account to the Federal Citizen
Information Center Fund.
25A DOD official said that the requested increase was related to (1) the
stand-up, or transfer in, of two
defense agencies into the budget account-the National Defense University
and Counter-Intelligence
Field Activity; (2) transfers in of other subfunctions, such as continuity
of government functions, into
the budget account; and (3) the conversion of military positions to
civilian positions as part of the
Secretary of Defense's plan to ensure military members serve military
purposes rather than fulfill
functions that can be performed by civilians.

and cost considerations; and (3) what was the best approach for realigning
and reorganizing support services. For example, officials said they had
begun to examine how motor vehicle fleet management in particular
locations was currently being provided and how it could be reorganized at
these locations so that customers could share services.

Officials from the Office of the Undersecretary for Management said the
reorganization and consolidation of these services through the tri-bureau
initiative should yield efficiencies and cost savings, including possible
personnel savings. However, these officials said that they were still in
the early stages of identifying and assessing the agency's support service
needs and how they should be provided. Thus, DHS was not at the point of
realizing savings in the support service area. In addition, they said that
although there may be opportunities to realize personnel cost savings, DHS
would have to consider personnel needs as new missions arise.

In the meantime, for fiscal year 2004, DHS requested a total of 179,241
FTEs-2,634 FTEs less than the number of FTEs transferred in fiscal year
2003. According to DHS officials, DHS's fiscal year 2004 enacted
appropriation will support 179,917 FTEs.

                       Agency Comments and Our Evaluation

On January 14, 2004 and April 14, 2004, we requested comments on this
report from the Attorney General, Secretary of Agriculture, Secretary of
Commerce, Secretary of Defense, Secretary of Energy, Secretary of Health
and Human Services, Secretary of Homeland Security, Secretary of
Transportation, Secretary of the Treasury, Director of the Office of
Management and Budget, Director of the Office of Personnel Management, and
the Administrator of the General Services Administration. The Department
of Defense, in a letter, which is included in appendix IV, stated that it
concurred with our report. The Department of Justice provided comments
that are discussed below and included in appendix V. The Departments of
Agriculture, Energy, Treasury; the Office of Personnel Management; and the
General Services Administration stated that they had no comments on our
draft report. The Departments of Commerce, Justice, Health and Human
Services, Transportation, and Homeland Security and Office of Management
and Budget also provided technical comments that we have incorporated
where appropriate.

In written comments dated February 6, 2004, DOJ stated that it was
concerned that the draft report, as written, could be misconstrued when
trying to discern what resources DOJ provided to DHS. DOJ provided data
showing that FTEs transferred to DHS differed from OMB estimates for
transfers associated with three DOJ budget accounts. We included
additional language in the report to reflect the information provided by
DOJ. DOJ also stated that while the draft report referred to the transfer
of INS to DHS, the functions of INS were transferred to DHS and INS was
abolished. We included additional language in the report to clarify how
INS functions were transferred. Regarding differences in OMB and DOJ
provided data on FTEs transferred to DHS, in comments provided during an
interview with us on March 12, 2004, OMB staff said that there could be
differences between these data because

OMB gave agencies flexibility and discretion to determine "what made
sense" for the transfer of functions.

DHS officials commented that DHS has made "significant progress" in
consolidating services under fewer service providers within the
department. Specifically, these officials said that DHS had reduced the
number of financial management service providers from 19 to 10, separate
contracting offices from 13 to 8, human resource offices from 22 to 7, and
property management systems from 22 to 3. In addition, they also indicated
that DHS had reduced its payroll systems from 8 to 3, and it expects to
pay all of its employees using one system by the end of the year. DHS
officials said that they believe that their continued focus on
consolidation and integration of services and service providers will aid
DHS in realizing further savings and efficiencies in support of its
overall mission. Because DHS provided this information after the
completion of our review, we were not able to assess these DHS efforts.

                                   _ _ _ _ _

As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 15 days from
the report date. At that time, we will send copies of this report to other
interested congressional committees and to the agencies included in our
review. We will also make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site at
http://www.gao.gov.

If you have any questions about this report, please contact my Assistant
Director,
John F. Mortin, or me at (202) 512-8777. Key contributors to this report
were Vickie
Miller, Barbara Stolz, Chelsa Kenney, Julian King, Christine Davis,
Katherine Davis,
Jenna Aurand, Denise Fantone, Bill Woods, Michele Mackin, and Gregory
Wilmoth.

Sincerely yours,

Paul L. Jones, Director
Homeland Security and Justice Issues

                                   Appendix I

      Program Functions Transferred to the Department of Homeland Security

List of program functions transferred to the Department of Homeland
Security (DHS) under the Homeland Security Act of 2002, P.L. 107-296 (Nov.
25, 2002). For program functions in italics, budget accounts no longer
exist at legacy agencies because these functions were transferred in their
entirety to DHS.

Department of Agriculture

1. 	Specified agricultural import and entry inspection activities from the
Animal and Plant Health Inspection Servicea

2. Plum Island Animal Disease Centerb

Department of Commerce

3. Critical Infrastructure Assurance Officec

4. Integrated Hazard Information System (to be renamed "FIRESAT")d

Department of Defense

5. National Communications Systemc

6. National Bio-Weapons Defense Analysis Centere

Department of Energy

7. 	Chemical and biological national security program and supporting
programs and activities of the nonproliferation and verification research
and development

e

program

8. 	Nuclear smuggling programs and activities within the proliferation
detection program of the nonproliferation and verification research and
development programe, m

9. 	Nuclear assessment program and activities of the assessment,
detection, and cooperation program of the international materials
protection and cooperation

e

program

10. Such life sciences activities of the biological and environmental
research program related to microbial pathogens as the President may
designate for transfer to DHSe

11. Advanced scientific computing research and program activities at
Lawrence Livermore National Laboratory e

12. Environmental Measurements Laboratory e

13. National Infrastructure Simulation and Analysis Center and the energy
security c

and assurance program

14. Nuclear Incident Response Teamf

                                       d

15. Federal Emergency Management Agency

General Services Administration

16. Federal Protective Serviceg c

17. Federal Computer Incident Response Center

Department of Health and Human Services

18. Office of Emergency Preparedness, the National Disaster Medical
System, and the d

Metropolitan Medical Response System

19. Strategic National Stockpiled,n

Department of Justice

20. Immigration and Naturalization Servicei

21. National Infrastructure Protection Center (other than the Computer
Investigations and Operations Section)c

22. National Domestic Preparedness Officed

23. Domestic Emergency Support Teamsd, j

24. Office for Domestic Preparednessg

Department of Transportation

25. Coast Guardk

26. Transportation Security Administrationg

Department of the Treasury

27. U.S. Customs Serviceg,h l

28. U.S. Secret Service

29. Federal Law Enforcement Training Centerg

Source: GAO analysis of the Homeland Security Act of 2002, P.L. 107-296
(Nov. 25, 2002).

aP.L. 107-296, S: 421.
bP.L. 107-296, S: 310. This section authorizes the Department of
Agriculture to continue research,
diagnostic, and other activities at the Plum Island Animal Disease Center
after its transfer to DHS.
cP.L. 107-296, S: 201(g).
dP.L. 107-296, S: 503.
eP.L. 107-296, S: 303.
fP.L. 107-296, S: 504. This section provides that at the direction of the
Secretary of Homeland Security
(in connection with an actual or threatened terrorist attack, major
disaster, or other emergency in the
United States), the Nuclear Incident Response Team of the Department of
Energy shall operate as an
organizational unit of DHS. The Secretary of Energy and the Administrator
of the Environmental
Protection Agency shall exercise direction, authority, and control over
the team when it is not
operating as a unit of DHS.
gP.L. 107-296, S: 403.
hCertain customs revenue functions did not transfer to DHS under the
Homeland Security Act,
although Section 412 authorizes the Secretary of the Treasury to delegate
such functions to DHS.
iP.L. 107-296, S:S: 441, 451(b). Certain federal immigration functions
relating to the care of
unaccompanied alien children transferred to the Department of Health and
Human Services under the
Act rather than DHS. P.L. 107-296, S: 462.
j Interagency group mobilized in response to major incidents.
kP.L. 107-296, S: 888(b).
lP.L. 107-296, S: 821.

mSection 303(1)(B) of the Homeland Security Act of 2002 authorizes the
President to designate the nuclear smuggling programs and activities
either for transfer to the Department of Homeland Security or for joint
operation by the Homeland Security and Energy Departments. nIn its
technical comments, HHS noted that Section 1705 of the Homeland Security
Act divides responsibilities for the Strategic National Stockpile between
DHS and HHS, with HHS retaining management authority over the stockpile.
DHS, on the other hand, is to "maintain" the stockpile under Section 1705
and direct its response in the event of a terrorist attack or major
disaster under Section 502(3)(B). Because of the agencies' respective
spheres of authority under the Homeland Security Act, the agencies have
entered a memorandum of agreement interpreting the Act's stockpile
transfer provision, Section 503(6), to require the transfer of stockpile
assets, except for personnel, who are to remain with HHS to carry out the
agency's statutory management responsibilities.

                                  Appendix II

                             Scope and Methodology

Our objectives were to determine the number of full-time equivalent26
(FTE) positions and amount of funding transferred from the legacy agencies
to the Department of Homeland Security (DHS), compare the number of FTEs
at DHS after the transfer with decreases in FTEs from affected programs at
the legacy agencies, identify differences between legacy agency fiscal
year 2003 FTE balances after the transition and their fiscal year 2004 FTE
requests, and describe any DHS efforts to identify opportunities to
achieve personnel cost savings related to the reorganization.

To meet our objectives, we conducted our work in Washington, D.C., at DHS,
the Office of Management and Budget (OMB), the Office of Personnel
Management (OPM), and the nine agencies that were required to transfer
program functions to DHS under the Homeland Security Act of 2002. Referred
to as legacy agencies and remaining after the transition, the nine
agencies were the Department of Agriculture, Department of Defense,
Department of Energy, Department of Commerce, Department of Justice,
Department of Health and Human Services, Department of the Treasury,
Department of Transportation, and the General Services Administration. A
tenth agency, the Federal Emergency Management Agency (FEMA) was
transferred in its entirety and became part of DHS on March 1, 2003. At
each agency, we interviewed budget and program officials and obtained and
reviewed documentation related to the transfer. In addition, we obtained
and reviewed applicable laws and documents related to the reorganization.

To determine the number of FTEs and amount of funding transferred from the
legacy agencies to DHS, we met with officials at DHS, OMB, and the nine
legacy agencies to discuss the approach OMB and DHS used to carry out the
transfer.27 For each of the nine legacy agencies and FEMA, OMB provided
estimates of the number of fiscal year 2003 FTEs28 and fiscal year 2003
"gross discretionary budget authority"29 transferred to DHS. OMB also
provided data on the number of positions that were transferred to DHS from
the legacy agencies. 30 We also met with OPM officials to discuss their
role in the transfer.

26For civilian employees in the executive branch, one FTE is equal to one
work year or 2,080
nonovertime hours.
27Funding may include support for FTEs or program funds.
28Although the transfer of legacy agency resources began on March 1, 2003,
OMB estimates of FTEs
transferred from legacy agencies are projected for the entire fiscal year
2003.
29Budget authority is the authority provided by law to enter into
financial obligations that will result in
immediate or future outlays involving federal government funds. Budget
authority includes the credit
subsidy cost for direct loan and loan guarantee programs, but does not
include authority to ensure or
guarantee the repayment of indebtedness incurred by another person or
government. The basic forms
of budget authority include (1) appropriations, (2) borrowing authority,
(3) contract authority, and (4)
authority to obligate and expend offsetting receipts and collections.
Given that the transfer occurred
midway through fiscal year 2003, OMB estimated DHS's "gross discretionary
budget authority," which,
according to OMB, represented a projection of what DHS's budget authority
would have been if DHS
had been operating for the entire fiscal year 2003.
30FTE and position data are not comparable. Under 5 U.S.C. 5102 (a)(3),
position is defined as the
work, consisting of the duties and responsibilities, assignable to an
employee. Positions can represent

To compare the number of FTEs at DHS with decreases in FTEs from programs
at the legacy agencies remaining after the transfer, we obtained OMB
estimates of DHS and legacy agency budgeted FTEs and available data from
each legacy agency on fiscal year 2003 FTE balances, before and after the
transfer. We compiled OMB data by agency and asked each legacy agency to
confirm whether our compilations were correct. In order to provide the
most accurate data on these transfers, we compared OMB estimates with
legacy agency data to determine whether any differences existed between
them. We also asked OMB to review this information and to explain any
differences between the OMB-provided numbers and those from the legacy
agencies. OMB staff explained that FTE estimates are made as point-in-time
estimates and can change, but did not specifically comment on differences
between legacy agency and OMB data. In addition to analyzing FTE data,
during our review, we also sought to analyze whether there were increases
in positions, budget authority, and personnel after the transition. Some
of the position, budget authority, and personnel information obtained were
incomplete, and we also were unable to reconcile all the differences in
data provided by OMB, OPM, and the legacy agencies. According to OMB
staff, differences in position and budget authority data could occur
because estimates on positions were in flux at the time the transfer
occurred, and budget authority estimates could have been collected at
different points in time and were subject to change. OPM officials said
that OPM and legacy agency personnel data could differ because of what the
data include and the point in time the data were collected.

To identify differences between legacy agency fiscal year 2003 FTE
balances after the transition and their fiscal year 2004 budget requests,
we obtained available data from the legacy agencies associated with their
fiscal year 2003 FTE budget balances after the transfer and fiscal year
2004 FTE requests when budget accounts remained at the legacy agency. We
then compared agencies' fiscal year 2003 balances after the transition
with their fiscal year 2004 requests to determine any differences. Once we
did our comparison, we focused on those cases where legacy agencies'
fiscal year 2004 requested FTEs were greater than their fiscal year 2003
balances after the transition and asked agency officials to provide
explanations for the increases.

To describe any DHS efforts to identify opportunities to achieve personnel
cost savings related to the reorganization, we interviewed DHS officials
from the Office of the Undersecretary for Management about their efforts
to identify such opportunities and barriers in the support services area.
We obtained and reviewed the plans that they had developed to consolidate
support services and that may result in cost savings. DHS did not,
however, respond to our request to meet with those agency officials who
could discuss with us the steps DHS is taking to identify opportunities
and barriers to personnel cost savings in program offices.

Because of generally corresponding FTE data from OMB and legacy agencies
and basic confirmation during interviews with knowledgeable officials, we
determined the FTE data used to develop this report to be sufficiently
reliable to meet our

full-time or part-time employees or can be vacant and do not represent
actual full-time equivalent employment.

objectives for this report. We conducted our work from May 2003 to April
2004 in accordance with generally accepted government auditing standards.

                                  Appendix III

                        Fiscal Year 2003 Estimated FTEs
               Transferred to the Department of Homeland Security
                  by Legacy Agency Function and Budget Account

The full-time equivalent (FTE) data included in tables III.1 to III.10
below are based on estimates provided by the Office of Management and
Budget (OMB) on August 7, 2003. Although the transfer of legacy agency
resources to the Department of Homeland Security (DHS) began on March 1,
2003, OMB estimates are projected for the entire fiscal year of 2003. For
civilian employees in the executive branch, one FTE is equal to one work
year, or 2,080 nonovertime hours.

Table III.1: Fiscal Year (FY) 2003 Estimated FTEs Transferred from the
Department of Agriculture (USDA) to DHS by Legacy Agency Function and
Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

      Agriculturea 2,690 Animal Plant and Health Inspection Service 2,684

[USDA-Animal and Plant Health Inspection Service-Salaries and expenses
budget account]

Departmental Administration [USDA-Departmental administration budget
account]

            Executive Operations-Office of Chief Information Officer

[USDA-Executive Operations-Office of Chief Information Officer budget
account]

Office of the Inspector General
[USDA-Office of the Inspector General budget account]

Source: GAO analysis of OMB estimates.

aAccording to a USDA official, on March 17, 2004, 17 FTEs and personnel
were transferred from the USDA's Agricultural Research Service to DHS as
part of the transfer of the Plum Island Animal Disease Center. Although
the Plum Island Animal Disease Center facility was transferred to DHS on
June 1, 2003, under the Homeland Security Act of 2002, USDA and DHS agreed
that the transfer of personnel resources to operate the center should be
delayed to a later date. USDA entered into a reimbursable agreement with
DHS to provide operating personnel for the center until March 17, 2004.

Table III.2: FY 2003 Estimated FTEs Transferred from the Department of
Commerce (Commerce) to DHS by Legacy Agency Function and Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

                                  Commerce 35

Critical Infrastructure Assurance Office (CIAO) [Commerce-Bureau of
Industry and Security-Operations and administration

a

budget account] 35 b

Source: GAO analysis of OMB estimates.

aAccording to OMB data, 15 FTEs were transferred from Commerce's Bureau of
Industry and Security-Operations and administration budget account to
DHS's Department-wide Technology Investments budget account.

bAccording to the Department of Commerce, 50 FTEs have been associated
with CIAO since its inception in Commerce.

Table III.3: FY 2003 Estimated FTEs Transferred from the Department of
Defense (DOD) to DHS by Legacy Agency Function and Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

                                   Defense 92

National Communications System

[DOD-Operations and Maintenance-Operation and maintenance, Defense
wide budget account] 92

                     Source: GAO analysis of OMB estimates.

Table III.4: FY 2003 Estimated FTEs Transferred from the Department of
Energy (DOE) to DHS by Legacy Agency Function and Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

Energy

Environmental Measurements Laboratory [portion of Environmental Management
Program Direction]

[DOE-Environmental and Other Defense Activities-Defense environmental
restoration and waste management budget account]

Energy Security and Assurance and National Infrastructure Simulation
Center

[DOE-Environmental and Other Defense Activities-Other defense activities
budget account]

Program Direction, Defense Nuclear Nonproliferation, Office of the
Administrator, National Nuclear Security Administration

[DOE-National Nuclear Security Administration-Office of the Administrator
budget account]

                     Source: GAO analysis of OMB estimates.

Table III.5: FY 2003 Estimated FTEs Transferred from the Federal Emergency
Management Agency (FEMA) to DHS

      Legacy agency function and budget account Total FY 2003 FTE transfer

Federal Emergency Management Agency

a

                          [FEMA budget accounts] 5,330

Source: GAO analysis of OMB estimates.

aAccording to OMB data, 42 FTEs were transferred from the FEMA-Salaries
and expenses budget account to DHS's Departmental Operations budget
account; 206 FTEs were transferred from the FEMA-Working capital fund to
DHS's Working capital fund; and 200 FTEs were transferred from the
FEMA-Office of the Inspector General budget account to DHS's Office of the
Inspector General budget account.

Table III.6: FY 2003 Estimated FTEs Transferred from the General Services
Administration (GSA) to DHS by Legacy Agency Function and Budget Account

Legacy agency function and budget account Total FY 2003 FTE transfer

General Services Administration 1,497

Federal Protective Service

a

[GSA-Real Property Activities-Federal buildings fund budget account] 1,452

Federal Computer Incident Response Center
[GSA-General Activities-Operating expenses budget account] 25

Working Capital Fund
[GSA-General Activities-Working capital fund account] 16b

Office of the Inspector General
[GSA-General Activities-Office of the Inspector General budget account] 4

Source: GAO analysis of OMB estimates.

aAccording to OMB data, 29 FTEs were transferred from the GSA-Real
Property Activities-Federal buildings fund budget account to DHS's
Departmental Operations budget account.

bAccording to GSA, 1 FTE was transferred to DHS immediately and 15 FTEs
are being retained at GSA to provide support services for DHS while the
GSA/DHS support services are in effect. GSA's total reduction to the
working capital fund account as a result of the transfer is 16 FTEs.

Table III.7: FY 2003 Estimated FTEs Transferred from the Department of
Health and Human Services (HHS) to DHS by Legacy Agency Function and
Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

Heath and Human Services

Office of Emergency Preparedness

-National Disaster Medical System

-Metropolitan Medical Response System

[HHS-Departmental Management-General departmental management budget
account]

Departmental Management [HHS-Departmental Management-General departmental
management

a

budget account]

Source: GAO analysis of OMB estimates.

aAccording to OMB data, 3 FTEs were transferred from the HHS Departmental
Management-General departmental management budget account to DHS's
Departmental Operations budget account.

Table III.8: FY 2003 Estimated FTEs Transferred from the Department of
Justice (DOJ) to DHS by Legacy Agency Function and Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

                                 Justice 40,053

                 Immigration and Naturalization Service 39,598

a

[DOJ-INS budget accounts]

National Infrastructure Protection Office
[DOJ-Federal Bureau of Investigation-Salaries and expenses budget account]
307

b

Office for Domestic Preparedness (from DOJ Office of Justice Programs)
[DOJ-Office of Justice Programs-Justice assistance budget account]

General Administration-Salaries and expenses 93 c [DOJ-General
Administration-Salaries and expenses budget account]

Office of the Inspector General
[DOJ-General Administration-Office of the Inspector General budget
account] 55d

Source: GAO analysis of OMB estimates.

aAccording to OMB data, 87 FTEs were transferred from the Immigration and
Naturalization Service-Immigration Enforcement budget account to DHS's
Departmental Operations budget account.

bAccording to DOJ officials, FTEs were transferred from the Office of
Justice Programs to DHS in 2002. According to DOJ, 55 FTEs were
transferred from the Office of Justice Programs to DHS.

cDOJ officials stated that only 10 of the 93 FTEs for the General
Administration-Salaries and expenses budget account were planned for
transfer in 2003. According to DOJ, the remaining 83 FTEs were transferred
in the fiscal year 2004 budget submission.

dAccording to DOJ officials, as part of the formation of DHS, OMB directed
the Treasury Office of Inspector General (OIG) to transfer 155 FTEs to
DHS's OIG and directed the DOJ OIG to transfer 55 FTEs to DHS's OIG. At
the same time, OMB directed the Treasury OIG to transfer 40 FTEs to the
DOJ OIG to compensate for the transfer of the Bureau of Alcohol, Tobacco,
and Firearms from the Department of the Treasury to DOJ. According to DOJ,
this would have resulted in the DOJ OIG receiving 40 individuals from the
Treasury OIG while at the same time transferring 55 of its personnel to
DHS's OIG. DOJ said that the inspectors general for DOJ, the Department of
the Treasury, and DHS agreed that the series of transfers originally
directed by OMB was inefficient and would cause undue personal and
mission-related disruptions, particularly to the personnel and field
offices affected by the proposed transfers. According to DOJ, the three
inspectors general conferred and agreed to a proposal that would avoid
such disruptions but still accomplish the same overall number of
transfers. Under this plan, DOJ said that the Treasury OIG transferred 195
FTEs directly to DHS's OIG (the 155 FTEs it was required to transfer to
DHS's OIG as well as the 40 it was required to transfer to DOJ's OIG).
This reduced to 15 (55 minus 40) the number of FTEs that DOJ's OIG had to
directly transfer to DHS's OIG.

Table III.9: FY 2003 Estimated FTEs Transferred from the Department of
Transportation (DOT) to DHS by Legacy Agency Function and Budget Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

                            Transportation 103,073a

U.S. Coast Guard (USCG)

a

                        [USCG budget accounts] b 43,508

Transportation Security Administration (TSA)

c

                          [TSA budget accounts] 59,512

Office of the Inspector General
[DOT-Office of the Inspector General-Salaries and expenses budget account]

Office of the Secretary
[DOT-Office of the Secretary-Salaries and expenses budget account]

Office of the Secretary
[DOT-Office of the Secretary-Office of Civil Rights budget account]

Office of the Secretary

[DOT-Office of the Secretary-Transportation planning, research, and
development budget account]

Source: GAO analysis of OMB estimates.

aIncludes 37,074 military FTEs.

bAccording to OMB data, 44 FTEs were transferred from the USCG-Operating
expenses budget account to DHS's Departmental Operations budget account.

cAccording to OMB data, 18 FTEs were transferred from TSA budget accounts
to DHS's Departmental Operations budget account.

Table III.10: FY 2003 Estimated FTEs Transferred from the Department of
the Treasury (Treasury) to DHS by Legacy Agency Function and Budget
Account

      Legacy agency function and budget account Total FY 2003 FTE transfer

                                Treasury 28,894

                              U.S. Customs 21,570

a

[U.S. Customs budget accounts]

U.S. Secret Service
[U.S. Secret Service budget accounts] b 6,111

Federal Law Enforcement Training Center (FLETC)

c

[FLETC budget accounts]

Departmental Offices-Salaries and expenses
[Departmental Offices-Salaries and expenses budget account]

Office of the Inspector General
[Departmental Offices-Office of the Inspector General budget account] 155d

Source: GAO analysis of OMB estimates.

aAccording to OMB data, 97 FTEs were transferred from the U.S. Customs
Service-Salaries and expenses budget account to DHS's Departmental
Operations budget account.

bAccording to OMB data, 45 FTEs were transferred from the U.S. Secret
Service-Salaries and expenses budget account to DHS's Departmental
Operations budget account.

cAccording to OMB data, 4 FTEs were transferred from the Federal Law
Enforcement Training Center-Salaries and expenses budget account to DHS's
Departmental Operations budget account.

dAccording to DOJ officials, as part of the formation of DHS, OMB directed
the Treasury Office of Inspector General (OIG) to transfer 155 FTEs to
DHS's OIG and directed the DOJ OIG to transfer 55 FTEs to DHS's OIG. At
the same time, OMB directed the Treasury OIG to transfer 40 FTEs to the
DOJ OIG to compensate for the transfer of the Bureau of Alcohol, Tobacco,
and Firearms from the Department of the Treasury to DOJ. According to DOJ,
this would have resulted in the DOJ OIG receiving 40 individuals from the
Treasury OIG while at the same time transferring 55 of its personnel to
DHS's OIG. DOJ said that the inspectors general for DOJ, the Department of
the Treasury, and DHS agreed that the series of transfers originally
directed by OMB was inefficient and would cause undue personal and
mission-related disruptions, particularly to the personnel and field
offices affected by the proposed transfers. According to DOJ, the three
inspectors general conferred and agreed to a proposal that would avoid
such disruptions but still accomplish the same overall number of
transfers. Under this plan, DOJ said that the Treasury OIG transferred 195
FTEs directly to DHS's OIG (the 155 FTEs it was required to transfer to
DHS's OIG as well as the 40 it was required to transfer to DOJ's OIG).
This reduced to 15 (55 minus 40) the number of FTEs that DOJ's OIG had to
directly transfer to DHS's OIG.

                                  Appendix IV
                    Comments from the Department of Defense

                                   Appendix V
                    Comments from the Department of Justice

(440212) Page 29 GAO-04-329R FTE Transfers to DHS
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