Budget Issues: Reprogramming of Federal Air Marshal Service Funds
in Fiscal Year 2003 (31-MAR-04, GAO-04-577R).
On May 15, 2003, and again on July 25, 2003, the Department of
Homeland Security (DHS) notified the House and Senate Committees
on Appropriations, Subcommittees on Homeland Security, of its
intention to reprogram a large amount of funds appropriated to
the Transportation Security Administration (TSA) for fiscal year
2003. In an August 2003 letter, Congress requested that we review
the key events leading up to the reprogramming and subsequent
revisions as they related to the Federal Air Marshal Service
(FAMS). In particular, we were asked to determine (1) whether
senior TSA, DHS, and Office of Management and Budget (OMB)
officials were informed of the implications of the FAMS funding
reductions prior to submission of the reprogramming notices; (2)
the programmatic implications of the funding reductions on the
FAMS program; (3) whether it was legally necessary to send an
impoundment message to the Congress; and whether the Secretary of
Homeland Security had delegated to the Under Secretary for
Management the authority to transmit reprogramming notifications
to the cognizant Appropriations Subcommittees. Finally, Congress
asked us to identify, as appropriate, improvements in budget
execution for future consideration. As agreed, we briefed
Congressional staff on February 27, 2004, and March 3, 2004, on
the results of our work. This report transmits the information we
provided in those briefings.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-577R
ACCNO: A09641
TITLE: Budget Issues: Reprogramming of Federal Air Marshal
Service Funds in Fiscal Year 2003
DATE: 03/31/2004
SUBJECT: Budget obligations
Financial analysis
Funds management
Internal controls
Reprogramming of appropriated funds
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GAO-04-577R
United States General Accounting Office Washington, DC 20548
March 31, 2004
The Honorable Martin Olav Sabo
Ranking Minority Member
Subcommittee on Homeland Security
Committee on Appropriations
House of Representatives
Subject: Budget Issues: Reprogramming of Federal Air Marshal Service
Funds in Fiscal Year 2003
Dear Mr. Sabo:
On May 15, 2003, and again on July 25, 2003, the Department of Homeland
Security (DHS) notified the House and Senate Committees on Appropriations,
Subcommittees on Homeland Security, of its intention to reprogram a large
amount of funds appropriated to the Transportation Security Administration
(TSA) for fiscal year 2003. In an August 2003 letter, you requested that
we review the key events leading up to the reprogramming and subsequent
revisions as they related to the Federal Air Marshal Service (FAMS). In
particular, you asked that we determine (1) whether senior TSA, DHS, and
Office of Management and Budget (OMB) officials were informed of the
implications of the FAMS funding reductions prior to submission of the
reprogramming notices; (2) the programmatic implications of the funding
reductions on the FAMS program; (3) whether it was legally necessary to
send an impoundment message to the Congress; and whether the Secretary of
Homeland Security had delegated to the Under Secretary for Management the
authority to transmit reprogramming notifications to the cognizant
Appropriations Subcommittees. Finally, you asked us to identify, as
appropriate, improvements in budget execution for future consideration. As
agreed with your office, we briefed your subcommittee staff on February
27, 2004, and the majority staff on
1
March 3, 2004, on the results of our work. This report transmits the
information we provided in those briefings.
To address these objectives, we reviewed relevant documentation on the
proposed reprogramming and other documentation on the FAMS program and
budget. We interviewed senior DHS, TSA and FAMS officials and their staffs
and staff at OMB to discuss the reprogramming process and the reductions
in funding for FAMS. We also interviewed DHS and TSA General Counsel staff
to obtain their perspectives on questions regarding impoundments and
delegation. We conducted our work from
1 The summary slides used during these briefings are reprinted in enc.
III.
August 2003 through February 2004 in accordance with generally accepted
government auditing standards. Our scope and methodology is described in
more detail at the end of this report.
Background
Reprogramming actions allow agencies to shift funds within an account to
fund other requirements within an existing appropriation that were not
planned when the
2
appropriation was made. Unless limited by some provision of law, agencies
are implicitly authorized to reprogram funds as part of their general
responsibility to manage funds. However, appropriations laws often set
limits on reprogramming or require notification of reprogramming under
certain conditions or over certain thresholds. The TSA fiscal year 2003
reprogramming met the notification thresholds established by Section 1601
of the Emergency Wartime Supplemental Appropriations Act.3 For the
specific reprogramming notification requirements, see enclosure II.
The fiscal year 2003 TSA reprogramming was developed against a backdrop of
both rapid program expansion and a changing organizational environment.
Among the program expansions affecting TSA were the federalization of
passenger and baggage screening functions at airports, establishment of
federal airport security directors, deployment of explosives detection
equipment for checked baggage, mandatory criminal history checks for
employees working in secure airport areas, and working with airlines to
strengthen cockpit doors on all passenger aircraft. Further, after the
terrorist attacks of September 11, 2001, the President and the Congress
decided to rapidly expand FAMS. Within 10 months of the terrorist attacks
on the United States, the number of federal air marshals
4
grew from fewer than 50 to thousands. Beyond these program expansions, two
major organizational transitions occurred in a 16-month period. First, in
November 2001, TSA was created within the Department of Transportation to
centralize federal aviation and other transportation security efforts.
Aviation security activities that were formerly the responsibility of the
Federal Aviation Administration (FAA), including FAMS, were moved to the
newly created TSA. Second, FAMS moved with the rest of TSA to DHS when the
department was established on March 1, 2003.5
The budget and appropriations environment in fiscal year 2003 and changing
mission needs added to the uncertainty of the situation. Like all federal
civilian agencies, TSA faced the challenges inherent in operating under a
series of continuing resolutions until February 2003-nearly half of the
fiscal year. As a new agency with a newly expanded federal role and
mission, TSA faced an additional challenge. It had no historical
information to assist in estimating costs for efforts such as federalized
checkpoints, baggage screening, and the full growth of the FAMS program.
Additionally, initial budget estimates for TSA were created before its
mission and organizational structure were established. All of this
contributed to a situation described by TSA Chief Financial Officer (CFO)
staff as a "misalignment" between fiscal year 2003 appropriations and
2 In contrast, a "transfer" is when an agency moves funds between
appropriation accounts. 3
Pub. L. No. 108-11 S: 1601 117 Stat. 559, 584 (2003). 4 The exact number
of federal air marshals is classified. 5 FAMS has since moved from TSA to
the Bureau of Immigration and Customs Enforcement within DHS, but this
occurred after the period covered in this study.
mission needs at the time appropriations were enacted. TSA CFO staff told
us that the need for a reprogramming was clear at that time.
Reprogramming Process
On May 15, 2003, DHS formally notified the homeland security
appropriations subcommittees of its intention to reprogram $763.3 million
(reducing FAMS funding by $104 million) among several of its programs
within the TSA budget account and to transfer $150 million from other DHS
appropriation accounts. DHS told us that both the Senate and House
subcommittees advised DHS that the proposed reprogramming was denied. DHS
budget and TSA CFO staff told us that in order to ease the subcommittees'
concerns with the May reprogramming, they engaged in discussions with
congressional staff. A revised reprogramming was submitted on July 25,
2003, which was then modified again on July 31, 2003. Both subcommittees
eventually concurred with this reprogramming, but with caveats. According
to the letter sent by the Chairman of the Subcommittee on Homeland
Security, Senate Committee on Appropriations, "approval of [the
reprogramming] is based on the understanding that this reallocation of
appropriated funds will not decrease the number of air marshals currently
assigned to domestic and international flights." The Subcommittee on
Homeland Security, House Committee on Appropriations, approved of the
revised reprogramming, but "denied the proposed reduction of $95 million
from the FAMS program." The May 15 and July 25 reprogramming plans would
have reduced fiscal year 2003 funding for FAMS from $545 million to $441
million (a difference of $104 million); the revised July 31 proposal
reduced fiscal year 2003 funding to approximately $450 million (a
difference of $95 million).
The timeline in figure 1 highlights key events in this process.
Figure 1: TSA Reprogramming Timeline for Fiscal Year 2003
TSA and FAMS disagree on when and what FAMS was told about the
reprogramming, about whether FAMS agreed to a cut, about the ability of
FAMS to absorb a cut, about the likely programmatic impact of the proposed
cuts, and even about the nature of the hiring freeze imposed on FAMS.
Although evidence provided by DHS reflects some of the communication
between TSA and FAMS, the documents and data provided to GAO permit us to
opine on neither the accuracy of assertions by either TSA or FAMS nor the
reasonableness of TSA's analysis and conclusions and the FAMS
counterarguments. What follows is a description derived from interviews,
documents, and other testimonial evidence of key points in the process. In
cases in which TSA and FAMS disagreed on what happened, both views are
given. A more detailed sequence of the reprogramming process is included
in enclosure I.
Soon after the enactment of the appropriation act for fiscal year 20036 in
February, the TSA CFO informed the DHS CFO that there was a "shortfall" of
nearly $2 billion within TSA and that a reprogramming would be necessary
to realign TSA programs and funds. FAMS was only one part of a very large
reprogramming and transfer package,7 and funding levels for multiple
accounts and activities were reviewed during this reprogramming. TSA CFO
staff said that during the months leading up to the submission of the
reprogramming they were in communication with FAMS and other program
offices, requesting spending plans detailing budget activities, funding
needs, and explanations of how the offices arrived at their assumptions.
TSA CFO staff also noted that they had difficulty obtaining timely
information from FAMS; that the budget data supplied by FAMS did not
support the accompanying narrative provided on the impacts of proposed
budget reductions; and that instead of providing details on obligations,
FAMS officials provided projections, which did not incorporate actual
spending.
TSA CFO staff told us that their review of spending data that showed FAMS
was obligating funds at a slower rate than expected, and that since FAMS
was still meeting its mission targets, TSA was comfortable with proposing
budget reductions for FAMS. However, they also told us that the data on
which they relied were from several legacy financial systems and were of
questionable quality, that they did not have access or did not get data on
the funds FAMS received from FAA, and that no one in the TSA CFO's office
had time to perform program impact analyses.
Although FAMS memos written to TSA during the development of the
reprogramming asserted that there would be "significant to severe"
operational impacts if funds were reduced, TSA officials said that FAMS
provided TSA with little supporting data to validate these claims. The TSA
CFO objected to FAMS's impact characterizations and said FAMS's spending
estimates were inconsistent. In order to settle the funding questions, the
TSA Administrator decided to conduct a program audit of FAMS's funding and
operations. The results of this review revealed that as of late July 2003,
there was a projected deficit of approximately $16 million out of the FAMS
$529 million8 budget ($441 million in fiscal year 2003 funding, plus $88
million carryover). This deficit was partially alleviated when DHS
adjusted the second reprogramming notice to restore approximately $9
million to FAMS. Consequently, the total reduction in the FAMS budget from
its initial fiscal year 2003 funding level was $95 million, rather than
the $104 million described in the first reprogramming, as shown in table
1.
6 Pub. L. No. 108-7, 117 Stat. 11 (2003).
7 The May 15 plan totaled $913 million ($763.3 million reprogramming plus
a $150 million transfer) and the
July 25 plan totaled $1.16 billion ($854.8 million reprogramming plus a
$306.5 million transfer).
8 The program audit conducted in late July 2003 identified an additional
$300,000 available to FAMS, which
brought FAMS's funding level to $529.7 million. However, since discussions
within TSA and FAMS
surrounding the reprogramming commonly referred to a funding level of
$529.4 million, this figure is used
in this report.
Table 1: Progression of FAMS Funding Level During Fiscal Year 2003
Dollars in millions
Fiscal year Change Reprogramming total
funding level
February 26: Fiscal year 2003 $545
congressional mark
March 26: Reduction based on
attrition and other unspecified -$40
agency requirements
April 28: Reduction based on
personnel compensation and -$38.7
benefits savings
April 28: Reduction to cover the
cost of other Aviation Operations -$25
purposes
Total reductions proposed in May -$104
15 and July 25 reprogrammings
Resulting proposed funding level $441
Plus fiscal year 2002 carryover +$88
funds
Total funds available to FAMS $529
Adjustment to reprogramming plan +$9
Revised total reductions proposed -$95
in final July 31 reprogramming
Final total of funds available to $538
FAMS
Source: GAO summary of TSA and FAMS budget information and memos.
Degree of Senior Officials' Awareness of the Implications of FAMS Funding
Reductions Is Unknown
The TSA Administrator was made aware of both the FAMS characterization of
the anticipated impact of the funding reductions and the TSA CFO's
objections to the FAMS claims. In fact, the TSA Deputy Administrator told
us that he and the Administrator approved the reprogramming in early May
2003.
The reprogramming was approved and submitted by DHS. In response to a
question regarding the Secretary's involvement, DHS officials told us that
"Secretary Ridge was briefed regarding the fact [that] there were TSA
reprogrammings, but was not briefed on the specifics of the impact on
FAMS. Instead Department officials relied on TSA for its detailed analysis
and evaluation of the FAMS impact."
In addition, OMB staff cleared the reprogramming. When asked whether the
OMB Director was informed of the reprogramming implications for FAMS, an
attorney from OMB General Counsel's office told us that the OMB Director
is informed of budget execution matters on an "as needed" basis and that
it is not OMB's policy to say whether the Director was notified of any
specific reprogramming. When asked about programmatic impact, OMB staff
said that no one in DHS, TSA, or FAMS is able to describe the impact in
other than in dollar terms.
Impact of FAMS Budget Reductions Was Minimal
As the budget reductions were being imposed on FAMS by TSA, FAMS officials
stated in memos and other documents that the impact of the reductions
could have ranged from significant to severe. The Deputy Assistant
Administrator for Aviation Security Law Enforcement9 claimed that reducing
the program to the $441 million level would result in a budget shortfall
totaling tens of millions of dollars, staff shortages, and a reduction in
FAMS coverage of long-haul flights by approximately 90 percent. FAMS
officials were also concerned that the budget reductions would not allow
FAMS to bring the number of air marshals to its fully anticipated level.
They estimated that as a result of the budget reductions, many thousands
of domestic missions on which they could have placed air marshals would
not be covered.
However, although DHS and TSA reduced FAMS's fiscal year 2003 budget by
about 20 percent, the actual impacts of the budget reductions on FAMS
operations were not as significant as FAMS officials had estimated. The
number of air marshals remained relatively constant over the fiscal year;
by the end of the period, the number of air marshals was only 1 percent
lower than at the beginning of the year. The number of missions10 flown
monthly by air marshals decreased by about 22 percent during fiscal year
2003, but according to FAMS officials much of this reduction was
attributable to factors other than the budget reduction. One factor was
the more than 230 percent increase in the number of international
missions. FAMS officials told us that international missions significantly
reduced the total number of missions conducted, since each additional
international mission results in approximately four fewer domestic
missions. Another factor was the assignment during the year of 58 air
marshals to support Joint Terrorism Task Force functions. In addition,
almost 100 air marshals were taken off-line because their background
clearances had not been completed. Other factors contributing to the
reductions in missions flown included decreases in the average number of
days flown by air marshals to address "quality of life" issues and
disruptions in flight schedules late in the fiscal year caused by
blackouts in the Northeast and Hurricane Isabel.
Senior FAMS officials stated that the eventual fiscal year 2003
operational impacts on the program resulting from the budget reductions
were "minimal," but that significant to severe impacts on the program were
narrowly avoided. One of these officials said that the impacts were
minimal because they took measures to maintain a level of operations
consistent with the number of available air marshals. Consequently, they
reduced equipment and supply purchases, delayed training activities, and
used funds originally intended to establish the FAMS field office
structure to support ongoing FAMS operations instead. They said that by
midsummer 2003, the budget reductions began to have operational impacts.
The number of overnight stays was reduced by 80 percent during an 11-day
period in order to reduce travel costs, and air marshals flew mostly
regional flights to enable them to return home at the completion of each
day's missions.11
9 Deputy Assistant Administrator for Aviation Security Law Enforcement was
the title of the FAMS
Director.
10 "Missions" includes both domestic and international flights.
11 According to FAMS officials, one mission equals one flight.
The FAMS officials said that these program reductions would have continued
for the remainder of the fiscal year, but the restoration of the $8.7
million in late July 2003 permitted them to restore the level of overnight
stays, longer duration flights, and advanced training programs.
Although the reductions in FAMS funding did not have a significant impact
on its current level of operations, they contributed to FAMS not reaching
anticipated staffing levels. FAMS had intended to increase the number of
air marshals to a certain level during fiscal year 2003,12 but was unable
to do so because of funding constraints. During the fiscal year, the
number of on-board air marshals differed by 4 to 7 percent from fully
anticipated levels. Although more air marshals would result in greater
coverage of flights, the reduction in coverage because FAMS was not at
fully anticipated levels was not substantial. Because FAMS was operating
under a continuing resolution until late February 2003 and was precluded
from increasing the number of air marshals during that period, and because
it would have taken until June 2003 to achieve fully anticipated staff
levels, only a relatively small amount of additional flights would have
been covered by air marshals for the remainder of fiscal year 2003 had
FAMS received greater funding.13
Although the budget reductions had some impact on ongoing operations and
FAMS's ability to increase staffing to fully anticipated levels and
implement stand-up activities, it is not possible to determine what
effect, if any, these impacts had on aviation security. According to FAMS
officials, concept of operations allows for varying coverage of flights as
long as all high-risk flights are covered. According to FAMS officials,
all high-risk flights were covered during fiscal year 2003. Moreover,
while the FAMS funding was reduced, funding for other aviation security
programs increased as a result of the reprogramming. Consequently, any
negative impacts on aviation security that may have resulted from the FAMS
reductions may have been offset by positive security impacts in other
aviation security programs. In this regard, OMB staff noted that it is not
possible to determine the impact of the TSA reprogramming, other than that
FAMS funding was reduced.
Legal Issues: No Impoundment or Delegation Problems
You asked us to determine whether a special impoundment message reporting
a deferral should have been sent to the Congress. Based on what we learned
in our review of this reprogramming, we conclude that DHS was not required
to transmit a special impoundment message in accordance with the
Impoundment Control Act of 1974. The act requires the President to
transmit a special message to the House of Representatives and the Senate
whenever there is an impoundment, which is defined as any action or
inaction by an officer or employee of the U.S. government that delays or
precludes the obligation or expenditure of budget authority provided by
the Congress. One type of impoundment is a deferral-a temporary delay in
obligating or expending budget authority. There is a distinction between
deferrals,14 which require a special message, and "programmatic" delays,
which do not. Programmatic delays typically occur when an
12 The number of air marshals on-board or anticipated is classified.
13 The number of flights covered by air marshals is classified.
14 Deferrals are authorized only when they provide for contingencies,
achieve savings made possible by
changes in requirements or greater efficiency in operations, or as
otherwise specifically authorized by law.
2 U.S.C. S: 684(b).
agency is taking steps to implement a program even if funds temporarily go
unobligated. A withholding of funds pending consideration of reprogramming
by congressional committees is generally considered to be based on
programmatic considerations and represents a reasonable means of
facilitating an agency's authority to reprogram budget authority among
activities funded from the same lump-sum appropriation.
TSA delayed obligating funds pending consideration of its reprogramming
notification by the appropriate congressional committees, and TSA intended
to obligate the FAMS funds
15
for an authorized purpose within its lump-sum appropriation. Thus, we
conclude that the agency's delay in obligating funds based on the facts
and circumstances presented did not constitute a deferral requiring the
transmittal of a special message to the Congress under the Impoundment
Control Act.
Furthermore, it was appropriate that the Under Secretary for Management
signed the reprogramming notice rather than the Secretary of Homeland
Security. There is no statute or other authority that requires the
Secretary to sign the department's reprogramming notifications himself.
The Homeland Security Act gives the responsibility to the Under Secretary
for Management to act for the Secretary in the management and
administration of the department, including budget, appropriations,
expenditure of funds, accounting, and financial duties.
Improvements in Budget Execution for Future Consideration
The Antideficiency Act requires that an agency head prescribe, by
regulation, a system of administrative control of funds that must be
approved by OMB.16 OMB staff said that they are working with DHS on a more
formalized apportionment process, which could
17
potentially serve as a framework for a system of administrative control of
funds. For fiscal year 2004, the department issued budget execution
guidance that included procedures for reprogramming funds. The procedures
provide specific guidance on reprogrammings based on congressional
criteria, clear expectations of what information is required to justify a
proposed reprogramming action, and an early post-appropriations review to
determine the need to reprogram funds. Furthermore, the current guidance
encourages, but does not require, components to identify separately the
obligation and expenditure of earmarked funds and notes that cumulative
reprogrammings below reporting thresholds can result in a need to notify
the appropriations subcommittees. Although these are all positive
developments, DHS could better articulate the consultation and approval
process that it will use.
15 In fiscal year 2003, FAMS was funded within the TSA lump-sum
appropriation.
16 31 U.S.C. S: 1514.
17 The purpose of such a system is to ensure that when authority to
obligate funds is delegated to heads of
offices or programs within an agency, managers are prevented from
overobligating or overexpending
either the amounts available in an appropriation or fund or the amounts
apportioned or reapportioned by
OMB. This system must be designed to enable the head of the department or
agency to identify the person
responsible for an obligation or expenditure exceeding an appropriation,
apportionment, or
reapportionment. It is at the agency's discretion, in this case DHS, to
decide how and to whom to delegate
authority to subdivide and obligate apportioned funds while also
considering the mission, organizational
structure, and needs of senior management, consistent with effective and
efficient management.
We recommend that the Secretary of Homeland Security (1) articulate the
consultation and approval process for reprogrammings and, in particular,
state how senior management will communicate final reprogramming decisions
to officials of affected programs; (2) require components to identify
separately the obligation and expenditure of earmarked funds, which
agencies must be able to report; and (3) specify how the department plans
to monitor cumulative reprogramming actions below reporting thresholds
that can result in a need to notify the appropriations subcommittees.
Agency Comments and Our Evaluation
We provided DHS and the OMB with a draft of this report for review and
comment. OMB had no comments. DHS's written comments are reprinted in
their entirety in enclosure
IV.
In its comments, DHS generally agreed with our observations. However,
while recognizing that the scope of our engagement was limited to the
reprogramming of FAMS funding, DHS felt that it was important to emphasize
that during the period covered by our review there was tremendous
uncertainty regarding (1) the availability of funding, (2) new mission
requirements, and (3) lack of a baseline funding history.
DHS also suggested five specific changes to our report language as
follows:
1. DHS suggested that we state that the fiscal year 2004 Appropriation
Conference Report included $95 million in carryover (the amount in
question from the House reprogramming denial) to be available to address
TSA Aviation Security needs. The scope of our review only covered fiscal
year 2003. This congressional action is outside the scope of our report.
2. DHS suggested that a reference be inserted in our sequence of events
in the enclosure that the program audit was completed before the
reprogramming package was resubmitted on July 31, and a chart summarizing
its findings was presented at meetings with House and Senate
Appropriations Committee staff. Although we asked for documentary support,
DHS did not provide evidence that this was completed prior to the
submission of the July 31 revised reprogramming notification and therefore
we have not made that change.
3. DHS also suggested that we change our statement in the second
paragraph on page five that "no one in the TSA CFO's office had time to
perform program impact analyses." DHS commented that the TSA CFO staff
conducted some limited analysis. However, TSA officials told us that their
agency did not have the time or the staff to conduct "program impact
evaluations." Although justifications for moving funds from FAMS were
provided by DHS to us, the data to support these judgments were not.
4. In addition, DHS suggested that we use the term "target strength"
rather than "fully authorized level" when describing FAMS staffing levels.
We have made changes in the text of our report to reflect "anticipated
level," which we believe appropriately characterizes the level of air
marshal staffing that FAMS had planned to reach and that the Congress had
intended.
5. For the first bullet in the reprogramming sequence for July/August
2003 in the enclosure, DHS suggested that a comment should be added to
state the revised reprogramming amount submitted on July 25, 2003, was "at
the same level proposed in May." We have made changes in the text of our
report to incorporate this suggestion.
Scope and Methodology
To examine the reprogramming process DHS and TSA followed in fiscal year
2003 with specific attention to coordination with the FAMS program, we
interviewed senior DHS, TSA, and FAMS officials and their staffs. We also
interviewed OMB's Homeland Security Branch Chief and program examiners to
understand their roles in the May and July proposals and to get their
perspectives on the actions taken. Although evidence provided by DHS
reflects some of the communication between TSA and FAMS, the documents and
data provided permit us to opine on neither the accuracy of assertions by
either TSA or FAMS nor the reasonableness of TSA's analysis and
conclusions and the FAMS counterarguments.
Most of our information on the development, review, and approval of the
reprogramming as it relates to FAMS is based on interviews and other
testimonial evidence. To determine what and when information was made
available to TSA and DHS officials and to find support for respective
claims, we reviewed and summarized FAMS, TSA, and DHS budget information,
internal memorandums and correspondence, and briefing documents.
To examine the claims about programmatic implications, we analyzed data
provided by DHS, TSA, and FAMS. We also interviewed DHS, TSA, and FAMS
officials.
To determine whether a deferral or impoundment notice was necessary and to
consider delegation authority, GAO General Counsel staff interviewed DHS
and TSA General Counsel staff and reviewed relevant statutes, committee
reports, and DHS delegations.
We are sending copies of this report to the Secretary of Homeland
Security. In addition, this report will be available at no charge on the
GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact
Susan Irving at (202) 512-9142 or irvings@gao.gov or Cathleen Berrick at
(202) 512-3404 or berrickc@gao.gov. This report was prepared under the
direction of Denise Fantone, Assistant Director, and Jack Schulze,
Assistant Director, with the assistance of Carlos Diz, Assistant General
Counsel. Other key contributors were Leo Barbour, Jonathan Barker, Joseph
Byrns, Leah Nash, and Gladys Toro.
Sincerely yours,
Susan J. Irving
Director, Federal Budget Analysis
Strategic Issues
Cathleen A. Berrick
Director, Homeland Security and Justice Issues
Enclosures - 4
Enclosure I
DHS and TSA Reprogramming Sequence
Note: Unless otherwise indicated, the information below is based on
interviews and other testimonial evidence. We were unable to obtain
documents that would permit us to substantiate many conflicting
assertions, and given the lengthy delay in receiving documents, we were
unable to go back to DHS, TSA, or FAMS for clarification and validation
while still meeting the requester's needs. The double asterisk (**)
indicates that we have documents to support statements, were otherwise
able to confirm assertions or facts, or both.
February/March 2003 - Development of Reprogramming and FAMS Cut
o Appropriation enacted on February 20;** the TSA CFO informed the DHS
CFO of a $1.976 billion "shortfall" within the TSA account. To help
mitigate the situation, a reprogramming would be necessary to realign TSA
programs and funds.
o FAMS staff reported that on March 26 FAMS incurred a reduction from
$545 million to $505 million (-$40 million) for fiscal year 2003.
o FAMS acknowledged that it was asked to do a zero-based review;**
however, no evidence of the review or of the results of the review were
provided.
April 2003 - Further Development of Proposal and More FAMS Cuts
o DHS and TSA staff continued to work on developing a reprogramming
proposal.
o On April 25 TSA notified FAMS of an immediate hiring freeze.**
o On April 28 FAMS was affected by a second reduction of fiscal year
2003 funding from $505 million to $466 million (-$38.7 million) based on
personnel compensation and benefits savings.**
o FAMS reported that on April 28 it incurred a third funding reduction
from $466 million to $441 million (-$25 million) to cover the cost of
other Aviation Operations purposes.
Early May 2003 - FAMS Claims Severe Impacts
o FAMS claimed that TSA imposed a "hard" hiring freeze effective on May
5, with no authority to backfill for attrition; the TSA CFO disagreed with
this characterization of the hiring freeze.
o On May 5 TSA's Chief Operating Officer (COO) directed FAMS in writing
to revise spending plans to stay within $529 million, $441 million in
fiscal year 2003 funding and $88 million in carryover available to FAMS.**
o On May 8 FAMS projected a $53 million budget "shortfall" based on the
$529 million funding level.**
Early May 2003 - Reprogramming Sent to Homeland Security Appropriations
Subcommittees
o The TSA Deputy Administrator told us that he and the Administrator
approved reprogramming.
o TSA CFO briefed DHS and OMB on the final proposal.
o OMB staff cleared the reprogramming; OMB told us that the OMB Director
is informed of budget execution matters on an "as needed" basis and that
it is not OMB's policy to comment on specific reprogrammings.
o The reprogramming was submitted by DHS on May 15 with reduction of
$104 million for FAMS.
Mid to Late May 2003 - FAMS Continues to Claim Severe Impacts
o After denial of the May 15 reprogramming by both subcommittees, DHS
and TSA sought to adjust the reprogramming.
o FAMS briefed the TSA COO on "impact of severe budget reductions";**
briefings and memos on FAMS's objections to the cutbacks were forwarded to
senior TSA officials, including the TSA Administrator.
o The TSA Administrator directed FAMS in writing to stay within $441
million and take recommended measures to achieve savings.**
June 2003 - Ongoing Dialogue between FAMS and TSA
o The TSA CFO objected to FAMS impact characterizations, saying** that
FAMS reductions were reviewed and approved by the TSA Administrator; FAMS
staff had indicated that they were "ok" at the $529 million level; and
FAMS spending estimates included inconsistencies, for example, FAMS
monthly spending estimates were higher than the average monthly actuals.
o FAMS responded with detailed claims of "significant to severe"
operational
impacts:** 90 percent reduction of long-haul flights effective on or about
July 1, continued "hard" hiring freeze, and a halt in enhancements to the
mission scheduler system and a delay in Phase II training.
o The TSA CFO requested a review of FAMS program obligations.
July/August 2003 - Revised Reprogramming Sent to Homeland Security
Appropriations Subcommittees, and FAMS Program Audit Conducted
o Revised reprogramming submitted by DHS on July 25 with FAMS reductions
at the same level proposed in May.
o Package resubmitted by DHS on July 31 with $9 million restored ($95
million reduction for FAMS).
o On August 25, TSA Aviation Operations, COO, and CFO staff finalized a
program audit of FAMS obligations and spending. This audit identified**
o a projected deficit of about $16 million with proposed reductions in
training, mission deployments, and other offsets; and
o budget execution process issues: the lack of a TSA allotment to FAMS or
other agency components, possible FAMS certification of funds without TSA
knowledge, and lack of updated FAMS spending plans.
August/September 2003 - Reprogramming Approved
o The Senate approved the reprogramming on the condition that
reallocation would not, among other things, "decrease the number of air
marshals currently assigned to domestic and international flights."**
o The House approved the reprogramming, except for the proposed
reduction from the FAMS program.**
Date Uncertain - DHS Secretary Briefed on Reprogramming
o According to DHS, "Secretary Ridge was briefed regarding the fact
[that] there were TSA reprogrammings, but was not briefed on the specifics
of the impact on FAMS. Instead Department officials relied on TSA for its
detailed analysis and evaluation of the FAMS impact."
Enclosure II
Specific Reprogramming Requirements for Agencies under the Jurisdiction of
Homeland Security Appropriations Subcommittees
Emergency Wartime Supplemental Appropriations Act, 2003
Pub. L. No. 108-11, 117 STAT. 584 (2003)
SEC. 1601. (a) None of the funds provided by this Act, or provided by
previous Appropriations Acts to the agencies in or transferred to the
Department of Homeland Security that remain available for obligation or
expenditure in fiscal year 2003, or provided from any accounts in the
Treasury of the United States derived by the collection of fees available
to the agencies funded by this Act shall be available for obligation or
expenditure through a reprogramming of funds which: (1) creates a new
program; (2) eliminates a program, project, or activity; (3) increases
funds for any program, project, or activity for which funds have been
denied or restricted by Congress; or (4) proposes to use funds directed
for a specific activity by either the House or Senate Committees on
Appropriations for a different purpose, unless the Committees on
Appropriations of both Houses of Congress are notified 15 days in advance
of such reprogramming of funds. (b) None of the funds provided by this
Act, or provided by previous Appropriations Acts to the agencies in or
transferred to the Department of Homeland Security that remain available
for obligation or expenditure in fiscal year 2003, or provided from any
accounts in the Treasury of the United States derived by the collection of
fees available to the agencies funded by this Act, shall be available for
obligation or expenditure for programs, projects, or activities through a
reprogramming of funds in excess of $5,000,000 or 10 percent, whichever is
less, that: (1) augments existing programs, projects, or activities; (2)
reduces by 10 percent funding for any existing program, project, or
activity, or numbers of personnel by 10 percent as approved by Congress;
or (3) results from any general savings from a reduction in personnel
which would result in a change in existing programs, projects or
activities, as approved by Congress; unless the Committees on
Appropriations of both Houses of Congress are notified 15 days in advance
of such reprogramming of funds.
Enclosure III
Briefing Slides provided to the Staff of the Subcommittee on Homeland
Security, House Committee on Appropriations
Enclosure IV
Comments from the Department of Homeland Security
(450254)
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