Department of Homeland Security: Addressing Management Challenges
That Face Immigration Enforcement Agencies (05-MAY-05,		 
GAO-05-664T).							 
                                                                 
The Department of Homeland Security (DHS) assumed responsibility 
for the immigration programs of the former Immigration and	 
Naturalization Service (INS) in 2003. The three DHS bureaus with 
primary responsibility for immigration functions are U.S. Customs
and Border Protection (CBP), U.S. Immigration and Customs	 
Enforcement (ICE), and U.S. Citizenship and Immigration Services 
(CIS). This testimony focuses on CBP and ICE, which took over the
immigration enforcement function. CBP is responsible for	 
functions related to inspections and border patrol, and ICE is	 
responsible for functions related to investigations,		 
intelligence, detention, and removal. The Subcommittee on	 
Immigration, Border Security, and Claims, House Committee on the 
Judiciary, held a hearing to discuss management challenges and	 
potential structural changes. Some research organizations have	 
suggested structural changes to address management challenges,	 
including a merger of CBP and ICE. This testimony addresses the  
following questions: (1) Have ICE and CBP encountered similar	 
management challenges to those encountered at INS? (2) What	 
factors might be considered in addressing some of the management 
challenges that exist at ICE and CBP?				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-664T					        
    ACCNO:   A23460						        
  TITLE:     Department of Homeland Security: Addressing Management   
Challenges That Face Immigration Enforcement Agencies		 
     DATE:   05/05/2005 
  SUBJECT:   Agency missions					 
	     Federal agency reorganization			 
	     General management reviews 			 
	     Immigration					 
	     Interagency relations				 
	     Internal controls					 
	     Performance measures				 
	     Strategic planning 				 

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GAO-05-664T

United States Government Accountability Office

GAO	Testimony Before the Subcommittee on Immigration, Border Security, and
Claims,

Committee on the Judiciary, House of Representatives

For Release on Delivery

Expected at 2:30 p.m. EDT DEPARTMENT OF

Thursday, May 5, 2005

HOMELAND SECURITY

  Addressing Management Challenges That Face Immigration Enforcement Agencies

Statement of Richard M. Stana, Director, Homeland Security and Justice Issues

GAO-05-664T

[IMG]

May 5, 2005

DEPARTMENT OF HOMELAND SECURITY

Addressing Management Challenges That Face Immigration Enforcement Agencies

                                 What GAO Found

A number of similar management challenges that had been experienced by INS
have continued in the new organizations now responsible for immigration
enforcement functions. In 2001, GAO testified that, while restructuring
may help address certain management challenges, INS faced significant
challenges in assembling the basic systems and processes that any
organization needs to accomplish its mission. These include clearly
delineated roles and responsibilities, policies and procedures that
effectively balance competing priorities, effective internal and external
communications and coordination, and automation systems that provide
accurate and timely information. In March 2003, the functions of the INS
were transferred to the new DHS and placed in the newly-created ICE and
CBP. In 2004, we reported that many similar management challenges we found
at INS were still in existence in the new bureaus.

In evaluating solutions to ICE and CBP management challenges, including
potential structural changes, several factors might be considered. The
first factor is whether ICE and CBP currently have good management
frameworks in place. Such a management framework, among other items, would
include a clear mission, a strategic planning process, good organizational
alignment, performance measures, and leadership and accountability
mechanisms. The second factor is whether ICE and CBP have developed
systems and processes to support the management frameworks they may have
in place. The third factor is that the management challenges in these two
bureaus exist in the larger context of the creation and evolution of DHS.
The transformation and integration activities at DHS can take 5-7 years to
accomplish, and some management challenges might be resolved in this
process.

 Reorganization of INS into DHS United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to share our views on management challenges
relating to the Department of Homeland Security's (DHS) U.S. Immigration
and Customs Enforcement (ICE) and U.S. Customs and Border Protection
(CBP), whose functions were formerly under the Immigration and
Naturalization Service (INS) and the Customs Service, as this committee
considers potential structural changes to enhance the enforcement of
immigration laws. We have conducted numerous reviews of both specific
programs and overall management in these components, and at the legacy
agencies that preceded them. In my testimony today, I will discuss the
following topics:

o  	Have ICE and CBP encountered similar management challenges to those
encountered at INS?

o  	What factors might be considered in addressing some of the management
challenges that exist at ICE and CBP?

The purpose of my comments is to provide the Subcommittee with oversight
information as potential changes to the structure of ICE and CBP are
considered. My comments are based on our wide-ranging, completed work, and
our institutional knowledge of homeland security and various government
organizational and management issues. We conducted our work in accordance
with generally accepted government auditing standards.

A number of management challenges similar to those found at INS have
continued in the new organizations now responsible for immigration
enforcement functions. These INS management challenges included a lack of
clearly defined priorities and goals; difficulty determining whom to
coordinate with, when to coordinate, and how to communicate; and
inadequately defined roles resulting in overlapping responsibilities,
inconsistent program implementation, and ineffective use of resources. In
1999 and 2001, we testified on these management challenges before this
subcommittee. Our 2001 testimony concluded that, while restructuring may
help address certain management challenges, the new organization would
still face significant challenges in assembling the basic systems and
processes that any organization needs to accomplish its mission. These
systems and processes include clearly delineated roles and
responsibilities, policies and procedures that effectively balance

  Summary

competing priorities, effective internal and external communications and
coordination, and automation systems that provide accurate and timely
information. We noted that unless these elements were established,
enforcing our immigration laws, providing services to eligible aliens, and
effectively participating in the government wide efforts to combat
terrorism would be problematic regardless of how the immigration function
was organized. In March 2003, the enforcement functions of the INS were
transferred to the new DHS and placed in the newly-created ICE and CBP. In
2004, we reported that many similar management challenges we found at INS
were in existence in the new bureaus.

In evaluating solutions to ICE and CBP management challenges, including
potential structural changes, several factors may be considered. The first
factor is whether ICE and CBP currently have a good management framework
in place. Such a management framework, among other items, would include a
clearly defined and articulated mission, a comprehensive strategic
planning process for achieving the mission, an organizational alignment
that supports the mission and strategy, performance measures to gauge
their progress, and leadership and accountability mechanisms. The second
factor is whether ICE and CBP have developed systems and processes to
support such a management framework which assists management in resolving
management challenges. For example, we have noted problems with ICE's
disseminating guidance related to operational activities. The third factor
involves recognizing that the management challenges in these two bureaus
exist in the broader context of the creation and evolution of DHS-the
largest reorganization of the federal government in over 50 years. The
experience of successful transformations and change management initiatives
in large public and private organizations suggests that it can take 5-7
years until such initiatives are fully implemented and cultures are
transformed in a substantial manner. Further, some management challenges
at ICE and CBP might be affected by department-wide management
initiatives. We designated DHS's transformation as a high-risk area in
2003.

Immigration enforcement includes, among other things, patrolling 8,000
miles of international boundaries to prevent illegal entry into the United
States; inspecting over 500 million travelers each year to determine their
admissibility; apprehending, detaining, and removing criminal and illegal
aliens; disrupting and dismantling organized smuggling of humans and
contraband as well as human trafficking; investigating and prosecuting
those who engage in benefit and document fraud; blocking and removing
employers' access to undocumented workers; and enforcing compliance with
programs to monitor visitors.

  Background

Immigration functions also include providing services or benefits to
facilitate entry, residence, employment, and naturalization of legal
immigrants; processing millions of applications each year; making the
right adjudicative decision in approving or denying the applications; and
rendering decisions in a timely manner.

When INS was abolished in 2003 by the Homeland Security Act of 2002,1 its
enforcement functions were transferred to two bureaus within the DHS.
First, INS's interior enforcement programs-investigations, intelligence,
and detention and removal-were placed in ICE. Within ICE, investigators
and intelligence analysts from former INS and the U.S. Customs Service
were merged into the investigations and intelligence offices, while staff
from former INS's detention and removal program were placed in the
detention and removal office. Second, inspectors from former INS, Customs,
and Agriculture and Plant Health Inspection Service, as well as former
INS's Border Patrol agents were incorporated into CBP. Both CBP and ICE
report to the Undersecretary for Border and Transportation Security, who
in turn reports to the Deputy Secretary of the DHS. For service functions,
INS's Immigration Services Division, responsible for processing
applications for immigration benefits, was placed in Citizenship and
Immigration Services (CIS), which reports directly to the Deputy Secretary
of DHS. Figure 1 shows the transition of INS functions into DHS.

1P.L. 107-296, Sec. 471(a).

Figure 1. Transfer of Immigration Functions from INS into DHS

      Source: GAO analysis of President's fiscal year budget, PL. 107-286.

             Immigration and Naturalization Service (INS)           
               Services Investigations, Intelligence, Detention and 
                              Removal Inspections and Border Patrol 

Transition efforts for CBP posed fewer challenges than for ICE.
Specifically, CBP brought together INS and Customs inspections programs

that, prior to the transition, largely worked side by side in many land
ports of entry around the country and that shared similar missions. In
contrast, ICE is a patchwork of agencies and programs that includes INS's
investigations and intelligence programs, Customs' investigations and
intelligence programs, the Federal Protective Service, and the Federal Air
Marshals. In combining the investigations programs, ICE has been tasked
with merging former INS investigators who specialized in immigration
enforcement (e.g., criminal aliens) with former Customs investigators who
specialized in customs enforcement (e.g., drug smuggling).

The integration of INS and Customs investigators into a single
investigative program has involved the blending of two vastly different
workforces, each with its own culture, policies, procedures, and mission
priorities. Both programs were in agencies with dual missions that prior
to the merger had differences in investigative priorities. For example,
INS primarily looked for illegal aliens and Customs primarily looked for
illegal drugs. In addition, INS investigators typically pursued
administrative violations, while Customs investigators typically pursued
criminal violations.

Whether further structural changes are warranted is one of the topics that
this hearing is to address. Some observers have proposed merging ICE and
CBP. For example, the Heritage Foundation and the Center for Strategic and
International Studies (CSIS), in a report on DHS management, suggested a
possible merger of ICE and CBP to address some of these management
problems. A Senior Research Fellow at The Heritage Foundation stated in a
March 2005 congressional testimony, "DHS needs to be organized not to
accommodate the present, but to build toward the ideal organization of the
future. Therefore, the department needs to articulate how it envisions
conducting its missions five to ten years from now and let this vision
drive the organizational design, particularly the structure of border
security operations."2 Another witness stated, "Whether the decision is
ultimately made to merge ICE and CBP or not,

2Statement of Dr. James Jay Carafano, Senior Research Fellow, The Heritage
Foundation, Before the Subcommittee on Management, Integration, and
Oversight, House Committee on Homeland Security (Washington, D.C.: Mar. 9,
2005).

the real issues will remain unless the underlying mission, vision, and
planning occur in a unified manner."3

                               Similar Management
                              Challenges Continue

Over the years, we have issued numerous reports that identified management
challenges INS experienced in its efforts to achieve both effective
immigration law enforcement and service delivery. For example, in 1997 we
reported that INS lacked clearly defined priorities and goals and that its
organizational structure was fragmented both programmatically and
geographically. Additionally, after reorganization in 1994, field managers
still had difficulty determining whom to coordinate with, when to
coordinate, and how to communicate with one another because they were
unclear about headquarters offices' responsibilities and authority. We
also reported that INS had not adequately defined the roles of its two key
enforcement programs-Border Patrol and investigations- which resulted in
overlapping responsibilities, inconsistent program implementation, and
ineffective use of resources. INS's poor communication led to weaknesses
in policies and procedures. In later reports, we showed that broader
management challenges affected INS's efforts to implement programs to
control the border, deter alien smuggling, reduce immigration benefit
fraud, reduce unauthorized alien employment, remove criminal aliens, and
manage the immigration benefit application workload and reduce the
backlog.4

In 1999 and 2001, we testified on these management challenges before this
subcommittee. Our 2001 testimony was delivered at the time when

3Statement of David Venturella, Former Acting Director of the Office of
Detention and Removal Operations, Department of Homeland Security, Before
the Subcommittee on Management, Integration, and Oversight, House
Committee on Homeland Security (Washington, D.C.: Mar. 9, 2005).

4GAO, Immigration Enforcement: Challenges to Implementing the INS Interior
Enforcement Strategy, GAO-02-861T (Washington, D.C.: June 19, 2002); GAO,
Immigration Benefit Fraud: Focused Approach Is Needed to Address Problems,
GAO-02-66 (Washington, D.C.: Jan. 31, 2002); GAO, INS's Southwest Border
Strategy: Resource and Impact Issues Remain after Seven Years, GAO-01-842
(Washington, D.C.: Aug. 2, 2001); GAO, Immigration Benefits: Several
Factors Impede Timeliness of Application Processing, GAO-01-488
(Washington, D.C.: May 4, 2001).GAO, Alien Smuggling: Management and
Operational Improvements Needed to Address Growing Problem, GAO/GGD-00-103
(Washington, D.C.: May 1, 2000); and Criminal Aliens: INS's Efforts to
Identify and Remove Imprisoned Aliens Continue to Need Improvement,
GAO/T-GGD-99-47 (Washington, D.C.: Feb., 25, 1999); and GAO, Criminal
Aliens: INS' Efforts to Identify and Remove Imprisoned Aliens Need to be
Improved, GAO/T-GGD-97-154 (Washington, D.C.: July 15, 1997).

Congress, the Administration, and others had offered various options for
restructuring the INS to deal with its management challenges. We testified
that while restructuring may help address certain management challenges,
we saw an organization (INS) that faced significant challenges in
assembling the basic building blocks that any organization needs: clearly
delineated roles and responsibilities, policies and procedures that
effectively balance competing priorities, effective internal and external
communications and coordination, and automation systems that provide
accurate and timely information. We noted that unless these elements were
established, enforcing our immigration laws, providing services to
eligible aliens, and effectively participating in the government-wide
efforts to combat terrorism would be problematic regardless of how INS was
organized.

In 2004, we reported DHS experienced management challenges similar to
those we had found at INS. For example, some officials noted that in some
areas related to investigative techniques and other operations, unresolved
issues regarding the roles and responsibilities of CBP and ICE give rise
to disagreements and confusion, with the potential for serious
consequences. As in 1999 and 2001, we reported in 2004 that selected
operations had reportedly been hampered by the absence of communication
and coordination between CBP and ICE. Further, we reported in 2004 that
CBP and ICE lacked formal guidance for addressing some overlapping
responsibilities.

  Factors to Consider for Resolving Management Challenges

As this Subcommittee, DHS officials, and other stakeholders consider
potential structural changes to ICE and CBP, we have identified three
factors to consider for resolving management challenges including (1) a
management framework for ICE and CBP, (2) systems and processes to support
this framework, and (3) the context of the larger DHS transformation.
These factors are important to help identify the most suitable and
appropriate course of action to address management challenges.

Management Framework Based on our work on the creation and development of
DHS, and

for ICE and CBP 	additional work on transformation and mergers, we have
identified a number of key success factors. Those factors that I would
like to focus on today include clarity of mission, strategic planning,
organizational

alignment, performance measures, and leadership focus and accountability.5

o  	Clarity of Mission: We have previously reported on the importance of
establishing a coherent mission that defines an organization's culture and
serves as a vehicle for employees to unite and rally around. As such, a
comprehensive agency mission statement is the first GPRArequired element
of a successful strategic plan.6 In successful transformation efforts,
developing, communicating, and constantly reinforcing the mission gives
employees a sense of what the organization intends to accomplish, as well
as helps employees figure out how their positions fit in with the new
organization and what they need to do differently to help the new
organization achieve success. However, as noted above, while CBP was
created from programs that generally shared similar missions, ICE blended
agencies with distinct mission priorities and cultures, and thus faces a
greater challenge in creating a unified bureau.

o  	Strategic Planning: Closely related to establishing a clear mission is
strategic planning-a continuous, dynamic, and inclusive process that
provides the foundation for the fundamental results that an organization
seeks to achieve. The starting point for this process is the strategic
plan that describes an organization's mission, outcomeoriented strategic
goals, strategies to achieve these goals, and key factors beyond the
agency's control that could impact the goals' achievement, among other
things. As with the mission, strategic goals for a transforming
organization must be clear to employees, customers,

5These success factors were derived from work we reported in GAO, Homeland
Security: Management Challenges Facing Federal Leadership, GAO-03-260
(Washington, D.C.: Dec. 20, 2002) and GAO, Results-Oriented Cultures:
Implementation Steps to Assist Mergers and Organizational Transformations,
GAO-03-669 (Washington, D.C.: July 2, 2003). Additional key practices for
successful mergers and organizational transformations not discussed in
this statement include focusing on a key set of principles and priorities
at the outset of the transformation, setting implementation goals and a
timeline to build momentum and show progress, dedicating an implementation
team to manage the transformation process, establishing a communication
strategy to create shared expectations and report related progress, and
involving employees to obtain their ideas and gain their ownership for the
transformation.

6The Government Performance and Results Act of 1993 (GPRA) provides a
strategic planning and management framework intended to improve federal
agencies' performance and hold them accountable for achieving results. Our
work on management structure and strategic planning is based largely on
GPRA.

and stakeholders to ensure they see a direct personal connection to the
transformation.

o  	Organizational Alignment: To ensure that form follows function, an
organizational alignment that supports the mission and strategic goals is
another component of the management framework. Leading organizations
recognize that sound planning is not enough to ensure their success. An
organization's activities, core processes, and resources must be aligned
to support its mission and help it achieve its goals. Such organizations
start by assessing the extent to which their programs and activities are
structured to accomplish their mission and desired outcomes.

o  	Performance Measures: Effective implementation of this framework
requires agencies to clearly establish results-oriented performance goals
in strategic and annual performance plans for which they will be held
accountable, measure progress towards those goals, determine the
strategies and resources to effectively accomplish the goals, use
performance information to make the programmatic decisions necessary to
improve performance, and formally communicate results in performance
reports.

o  	Leadership Focus and Accountability: To be successful, transformation
efforts must have leaders, managers, and employees who have the individual
competencies to integrate and create synergy among the multiple
organizations involved in the transformation effort. Leaders need to be
held accountable for ensuring results, recognizing when management
attention is required and taking corrective action. High-performing
organizations create this clear linkage between individual performance and
organizational success and thus transform their cultures to be more
results-oriented, customer-focused, and collaborative in nature. As we
have reported, a Chief Operating Officer (COO)/Chief Management Officer
(CMO) may effectively provide the continuing, focused attention essential
to successfully completing these multi-year transformations in agencies
like DHS.7 At DHS, we have reported that the COO/CMO concept would provide
the department with a single organizational focus for the key management

7On September 9, 2002, GAO convened a roundtable of government leaders and
management experts to discuss the COO concept and how it might apply
within selected federal departments and agencies. See GAO, Highlights of a
GAO Roundtable: The Chief Operating Officer Concept: A Potential Strategy
to Address Federal Governance Challenges, GAO-03-192SP (Washington, D.C.:
Oct. 4, 2002).

functions involved in the business transformation of the department, as
well as for other organizational transformation initiatives.8

Systems and Processes Needed to Support Management Framework

Dissemination of Guidance Relating to Operational Activities

The second factor to consider for resolving management challenges is
whether CBP and ICE have the systems and processes needed to support the
management framework. While the management framework provides an
overarching structure for an organization, systems and processes provide
the means to implement the daily activities of running an organization.
Some of the specific systems and processes in CBP and ICE that have raised
concerns include:

o  Dissemination of guidance relating to operational activities,

o  Communication and coordination,

o  Information technology systems, and

The lack of program guidance has adversely impacted ICE's ability to
efficiently and effectively perform its mission. In May 2004, we reported
that ICE had not provided its deportation officers with guidance on how to
prioritize their caseload of aliens who required supervision after release
from detention. Consequently, ICE was unable to determine whether and to
what extent such aliens had met the conditions of their release. We
recommended that ICE develop and disseminate guidance to enable
deportation officers to prioritize ICE's caseload of aliens on orders of
supervision so that ICE could focus its limited resources on supervising
aliens who may be a threat to the community or who are not likely to
comply with the conditions of their release.

Also, in October 2004, we reported that ICE headquarters and field offices
had a lack of uniform policies and procedures for some ICE operations that
had caused confusion and hindered the creation of a new integrated
culture. ICE headquarters officials told us that they were prioritizing
the establishment of uniform policies and that until a new ICE policy is
established, field offices are required to use the policies of the former
agencies.

8GAO, The Chief Operating Officer Concept and its Potential Use as a
Strategy to Improve Management at the Department of Homeland Security,
GAO-04-876R (Washington, D.C.: June 28, 2004).

Communication and Coordination

Information Technology Systems

Shortfalls in communications about administrative support services were
also a source of frustration in DHS. In October 2004, we reported that DHS
was in the process of developing and implementing systems and processes
called "shared services." In December 2003, DHS instituted a shared
service system in which certain mission support services-such as human
resources-are provided by one bureau to the other bureaus. However, there
were weaknesses in how the shared services program was communicated to
employees. Officials in CBP, CIS, and ICE expressed confusion about shared
services when we interviewed them 3 to 4 months after the system was
instituted. Many field officials said they did not know what constituted
shared services, what processes they should have been using for receiving
assistance from a shared service provider, or how many of their staff
administrative positions would be reassigned to positions in other offices
as shared service providers.

Further, CBP, CIS, and ICE officials also expressed frustration with
problems they have encountered coordinating their administrative systems
managed within the agency and not a part of shared services, including
travel, budget, and payroll. Some ICE field officials also expressed
concern about their ability to manage their budgets and payroll problems,
because of the systems used for these functions.

Information technology systems and information sharing in general are also
an area of concern. For example, ICE did not have information that
provides assurance that its custody reviews are timely and its custody
determinations are consistent with the Supreme Court decision and
implementing regulations regarding long term alien detention.9 One reason
ICE had difficulty providing assurance is that it lacked complete,
accurate, and readily available information to provide to deportation
officers when post order custody reviews are due for eligible aliens. In
addition, ICE did not have the capability to record information on how
many post order custody reviews had been made pursuant to regulations and
what decisions resulted from those reviews. Therefore, ICE managers could
not gauge overall compliance with the regulations for aliens who have been

9Until 2001, aliens who were issued final orders of removal from the
United States could be held in detention facilities indefinitely if U.S.
immigration authorities determined that the aliens were a threat to the
community or a flight risk. However, U.S. Supreme Court decision in
Zadvydas v. Davis, 533 U.S. 678 (2001), many aliens with final orders of
removal, including aliens determined to be a threat to the community or
flight risk, could generally no longer be detained beyond a period of 6
months if there was no significant likelihood of their removal in the
reasonably foreseeable future.

ordered to be removed from the United States. Although ICE was in the
process of updating its case management system, ICE officials said that
they did not know when the system will have the capability to capture
information about the timeliness and results of post order custody
reviews. In 2005, we designated information sharing mechanisms for
homeland security as a high-risk issue, based on root causes behind
vulnerabilities, as well as actions needed on the part of the agency
involved.10

Broader DHS Transformation and Management Integration Efforts May Affect
ICE and CBP Management Challenges

In addition to considering developing a management framework and
corresponding systems and processes, it is important to consider these
changes in the larger context of the transformation of DHS. We designated
DHS's transformation as a high-risk area in 2003, based on three factors.
First, DHS faced enormous challenges in implementing an effective
transformation process, developing partnerships, and building management
capacity because it had to transform 22 agencies into one department.
Second, DHS faced a broad array of operational and management challenges
that it inherited from its component legacy agencies. Finally, DHS's
failure to effectively address its management challenges and program risks
could have serious consequences for our national security. Overall, DHS
has made some progress, but significant management challenges remain to
transform DHS into a more efficient organization while maintaining and
improving its effectiveness in securing

11

the homeland.

The experience of successful transformations and change management
initiatives in large public and private organizations suggests that it can
take 5-7 years until such initiatives are fully implemented and cultures
are transformed in a substantial manner. Further, some management
challenges at ICE and CBP might be affected by department-wide management
initiatives. The management challenges of the DHS transformation create
additional challenges for its components, including ICE and CBP, such as:

o  	Providing focus for management efforts: Although DHS has been
operating about 2 years, it has had two Secretaries, three Deputy
Secretaries, and additional turnover at the Undersecretary and

10GAO, High-Risk Series: An Update, GAO-05-207 (Washington, D.C.: Jan.
2005).

11GAO, Homeland Security: Overview of Department of Homeland Security
Management Challenges, GAO-05-573T (Washington, D.C.: Apr. 20, 2005).

Assistant Secretary levels. The recent turnover in DHS's top leadership
raises questions about the department's ability to provide the consistent
and sustained senior leadership necessary to achieve integration over the
long term.12

o  	Monitoring transformation and integration: DHS's integration of varied
management processes, systems, and people-in areas such as information
technology, financial management, procurement, and human capital------as
well as administrative services is important to provide support for the
total integration of the department. Total integration of the department,
including its operations and programs, is critical to ultimately meeting
its mission of protecting the homeland. Overall, we found that while DHS
has made some progress in its management integration efforts, it has the
opportunity to better leverage this progress by implementing a
comprehensive and sustained approach to its overall integration efforts.
13

o  	Improving strategic planning: DHS released its first strategic plan in
2004 that details its mission and strategic goals. DHS's strategic plan
addresses five of the six GPRA-required elements-a mission statement,
long-term goals, strategies to achieve the goals, external key factors,
and program evaluations-but does not describe the relationship between
annual and long-term goals.14

o  	Managing human capital: DHS has been given significant authority to
design a new human capital system free from many of the government's
existing civil service requirements, and has issued final regulations for
this new system. Although we reported the department's efforts generally
reflected important elements of effective transformations and included
many principles that are consistent with proven approaches to strategic
human capital management, DHS has

12See GAO-05-573T

13GAO, Department of Homeland Security: A Comprehensive and Sustained
Approach Needed to Achieve Management Integration, GAO-05-139 (Washington,
D.C.: Mar. 16, 2005).

14GAO, Results-Oriented Government: Improvements to DHS's Planning Process
Would Enhance Usefulness and Accountability, GAO-05-300 (Washington, D.C.:
Mar. 31, 2005).

considerable work ahead to define the details of the implementation of the
system.15

o  	Strengthening financial management infrastructure: DHS faces
significant financial management challenges. Specifically, it must address
numerous internal control weaknesses, meet the mandates of the DHS
Financial Accountability Act,16 and integrate and modernize its financial
management systems, which individually have problems and collectively are
not compatible with one another. In July 2004, we reported that DHS
continues to work to reduce the number of financial management service
providers and to acquire and deploy an integrated financial enterprise
solution.17

o  	Establishing an information technology framework: DHS has recognized
the need for a strategic management framework that addresses key
information technology disciplines, and has made a significant effort to
make improvements in each of these disciplines. However, much remains to
be accomplished before it will have fully established a department-wide
information technology management framework. To fully develop and
institutionalize the management framework, DHS will need to strengthen
strategic planning, develop the enterprise architecture, improve
management of systems development and acquisition, and strengthen
security.18

15GAO, Human Capital: Preliminary Observations on Final Department of
Homeland Security Human Capital Regulations, GAO-05-320T (Washington,
D.C.: Feb. 10, 2005). For more information on DHS's human capital issues,
see GAO, Human Capital: Preliminary Observations on Proposed DHS Human
Capital Regulations, GAO-04-479T (Washington, D.C.: Feb. 25, 2003);
Posthearing Questions Related to Proposed Department of Homeland Security
(DHS) Human Capital Regulations, GAO-04-570R (Washington, D.C.: Mar. 22,
2004); Additional Posthearing Questions Related to Proposed Department of
Homeland Security (DHS) Human Capital Regulations, GAO-04-617R
(Washington, D.C.: Apr. 30, 2004); Human Capital: DHS Faces Challenges in
Implementing Its New Personnel System, GAO-04-790 (Washington, D.C.: June
18, 2004); and Human Capital: DHS Personnel System Design Effort Provides
for Collaboration and Employee Participation, GAO-03-1099 (Washington,
D.C.: Sept. 30, 2003).

16Pub. L. No. 108-330 (Oct. 16, 2004).

17GAO, Financial Management: Department of Homeland Security Faces
Significant Financial Management Challenges, GAO-04-774 (Washington: D.C.:
July 19, 2004).

18GAO, Department of Homeland Security: Formidable Information and
Technology Management Challenge Requires Institutional Approach,
GAO-05-702 (Washington, D.C.: Aug. 27, 2004).

Concluding Observations

o  	Managing acquisitions: DHS faces the challenge of structuring its
acquisition organization so that its various procurement organizations are
held accountable for complying with procurement policies and regulations
and ensuring that taxpayer dollars are well-spent.19

o  	Coordinating research and development: DHS has not yet completed a
strategic plan to identify priorities, goals, objectives, and policies for
the research and development of homeland security technologies, and
additional challenges remain in its coordination with other federal
agencies.20

Despite real and hard-earned progress, DHS still has significant
challenges to overcome in all of its management areas. Resolving these
challenges at the top levels could help address similar management
challenges in DHS's component organizations including ICE and CBP.

In closing, it is important to understand the expectations and limitations
of various proposals to address management challenges at ICE and CBP that
we and others have identified. With respect to potential restructuring,
reorganizing an agency or function to better align it with the mission and
strategic planning process is desirable, whereas reorganizing mainly to
address underlying weaknesses in supporting systems and processes, such as
a lack of coordination and cooperation among units or a lack of guidance
relating to operational activities, might not be productive. As we have
seen to date, reorganizing immigration and customs functions, without
fixing existing problems with underlying systems and processes, has not
resolved long-standing management issues. In addition, ICE and CBP may not
be able to resolve some of these challenges alone if they are affected by
DHS department-wide management initiatives and developments. To assist the
Congress in its oversight and in ensuring accountability in homeland
security programs, we will continue to monitor and evaluate ICE and CBP
programs as they meet, and hopefully overcome, their management
challenges.

19 See GAO-05-179

20GAO, Homeland Security: DHS Needs a Strategy to Use DOE's Laboratories
for Research on Nuclear, Biological, and Chemical Detection and Response
Technologies, GAO-04-653 (Washington, D.C.: May 24, 2004).

  GAO Contacts and Staff Acknowledgments

(440415)

Mr. Chairman, this concludes my statement. I would be pleased to respond
to any questions that you or other members of the Subcommittee may have at
this time.

For further information about this testimony, please contact Richard Stana
at 202-512-8777.

Other key contributors to this statement were Stephen L. Caldwell, Lisa
Brown, Mary Catherine Hult, Lori Kmetz, Sarah E. Veale, and Katherine
Davis.

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