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Report to the Chairman, Committee on Governmental Affairs, U.S. Senate:



December 2002:



Homeland security:



Management Challenges Facing Federal Leadership:



GAO-03-260:



GAO Highlights:



Highlights of GAO-03-260, a report to the Chairman, Committee on 

Governmental Affairs, U.S. Senate 



Why GAO Did This Study:



To understand the federal government’s response since the September 11 

terrorist attacks, GAO was asked to review governmentwide changes and 

challenges prevalent in the missions and activities of agencies 
involved 

in homeland security, including the coordination and collaboration 

required to meet overall goals and needs, and government’s efforts in 

planning and implementing strategic, transitional, and human capital 

activities designed to reorganize and strengthen homeland security.



What GAO Found:



Since the terrorist attacks of September 11, 2001, the federal 
government 

has invigorated the homeland security missions of many departments and 

agencies, nearly doubled the amount of federal funds devoted to 
homeland 

security, enacted new legislation to create a new department and 

strengthen transportation security and law enforcement activities, 

leveraged relationships with state and local governments and the 
private 

sector, and begun to establish a framework for planning the national 

strategy and the transition required for implementing the new 
Department 

of Homeland Security and other homeland security goals.  Overall, the 

federal government’s response on homeland security issues is still 

evolving.



*	A new homeland security emphasis is under way, but remains 

incomplete. Agencies reported a new emphasis on homeland security 

activities, such as accelerated implementation of existing 

homeland security activities or increased coordination with other 

government agencies or the private sector. Agencies will be challenged 
in 

meeting dual or unrelated missions while maintaining and strengthening 

homeland security operations.  Government organizational changes are 
also 

contributing to the new emphasis, including creation of the Office of 

Homeland Security, the Transportation Security Administration, and the 

integration of many homeland security functions into the new Department 

of Homeland Security.  Although officials say that coordination efforts 

at all levels have increased, concerns remain particularly with state 
and 

local government and collaboration with the private sector needs 
greater 

emphasis. 



*	The federal government’s efforts to improve homeland security 

will require a results-oriented approach to ensure mission 
accountability 

and sustainability over time.  Efforts to strengthen homeland security 
will 

require a strategy to accomplish agencies’ missions, to create an 
effective 

transition for DHS, and to leverage management practices and key 
success 

factors in order to merge and transform the new department.  In 
recognizing 

the value of a national strategy, OHS, DHS, and others should not 
expect 

that all of the homeland security objectives can be achieved 
simultaneously.  

As a result, it will be important for these agencies to focus initially 

on the most critical issues and greatest risks, and to guide the 
strategy’s 

implementation in phases. Strategic planning efforts and comprehensive 
risk 

analysis activities have been started, but remain incomplete.  Agencies 
with 

homeland security missions and the new department need an integrated 
human 

capital strategy, and the development of a performance management 
system and 

utilization of personnel flexibilities can improve organizations’ 

effectiveness.  DHS transition planning has started, but will require 

sustained efforts, including attention to management practices and key 

success factors.



What GAO Recommends:



GAO recommends that

*	OHS, with OMB and DHS, guide development of performance measures 

and time frames, and clarify the roles of all parties to establish 

accountability;

*	OMB develop an effective transition plan for DHS, including 

practices identified in GAO’s Mergers and Transformation Forum and 
other 

key success factors;

*	OMB, with DHS, ensure the implementation of broad based management 

practices and principles that will improve the sustainability of DHS; 
and 

*	OPM, with OMB, develop and oversee the implementation of a long-term 

human capital strategy for homeland security activities.  



OHS had no comments.  OMB staff provided technical comments.  OPM 
agreed 

with our recommendations. 



www.gao.gov/cgi-bin/getrpt?GAO-03-260



To view the full report, including the scope

and methodology, click on the link above.

For more information, contact Patricia A. Dalton (202) 512-6806 or 

daltonp@gao.gov.



Letter:



Results in Brief:



Objectives, Scope, and Methodology:



Background:



New Homeland Security Emphasis Underway, but Incomplete:



Addressing Homeland Security Mission through a Results-Oriented 

Approach:



Effective Oversight Critical to Success:



Conclusion:



Recommendations for Executive Action:



Agency Comments:



Appendixes:



Appendix I: Homeland Security Funding by Department or Agency,

Fiscal Years 2001 to 2003:



Appendix II: Critical Success Factors for New Organizations:



Appendix III: Comments From the Office of Personnel Management:



Related GAO Products:



Tables :



Table 1: Federal Departments, Agencies, and Offices Included in Our 

Review:



Table 2: List of Policy Coordinating Committees:



Table 3: DHS Organizational Elements:



Table 4: Lessons Learned about Mergers and Transformations for DHS and 

Other Federal Agencies:



Figures:



Figure 1: Key Events Occurring after the September 11 Terrorist 
Attacks:



Figure 2: Organizational Structure of the Office of Homeland Security 
as 

of April 2002:



Figure 3: National Strategy Components:



Figure 4: GAO’s Model of Strategic Human Capital Management:



Abbreviations:



ABA: American Bankers Association:



ACC: American Chemistry Council:



APHIS: Animal and Plant Inspection Service:



BOR: Bureau of Reclamation:



BSPC: Border Station Partnership Council:



CBO: Congressional Budget Office:



CDC: Centers for Disease Control and Prevention:



CIA: Central Intelligence Agency:



C-TPAT : Customs-Trade Partnership against Terrorism:



DHS: Department of Homeland Security:



DOE: Department of Energy:



DOI: Department of the Interior:



DOJ: Department of Justice:



DOT: Department of Transportation:



EPA: Environmental Protection Agency:



FAA: Federal Aviation Administration:



FBI: Federal Bureau of Investigation:



FDA: Food and Drug Administration:



FEMA: Federal Emergency Management Agency:



FERC: Federal Energy Regulatory Commission:



GSA: General Services Administration:



HHS: Department of Health and Human Services:



HRSA: Health Resources and Services Administration:



HSC: Homeland Security Council:



IMRA: International Mass Retail Association:



INS: Immigration and Naturalization Service:



ISAC: information sharing and analysis center:



ISC : Interagency Security Committee:



JTTF: Joint Terrorism Task Forces:



NACCHO: National Association of County and City Health Officials:



NACo : National Association of Counties:



NAM: National Association of Manufacturers:



NGA : National Governors Association:



NIPC: National Infrastructure Protection Center:



NLC: National League of Cities:



NORTHCOM: U.S. Northern Command:



NRC : Nuclear Regulatory Commission:



OASPHEP: Office of the Assistant Secretary for Public Health Emergency 

Preparedness:



OHS: Office of Homeland Security:



OMB: Office of Management and Budget:



OPM: Office of Personnel Management:



PCC: Policy Coordination Committee:



TSA: Transportation Security Administration:



USDA: Department of Agriculture:



Letter December 20, 2002:



The Honorable Joseph I. Lieberman

Chairman

Committee on Governmental Affairs 

United States Senate:



Dear Mr. Chairman:



While significant progress has occurred over the past year in 

addressing the demands of its homeland security mission, the federal 

government still faces numerous challenges, including the 

implementation of the newly created Department of Homeland Security 

(DHS), the implementation of the National Strategy for Homeland 

Security, and the coordination of roles and responsibilities of many 

entities in the public and private sectors. The Congress, state and 

local governments, the private sector, and the American people all have 

a shared responsibility for ensuring our homeland security, but the 

leadership of the federal government in achieving this goal is 

critical. The federal government will need to effectively respond to 

significant management and coordination challenges if it is to provide 

this leadership and be successful in preventing and responding to any 

future acts of terrorism.



To better understand the federal government’s response since the 

September 11 terrorist attacks, the Chairman of the Senate Committee on 

Governmental Affairs requested that we conduct a governmentwide review 

of changes to the missions and activities of agencies involved in 

homeland security. Our objectives included (1) describing changes and 

challenges prevalent in the missions and activities of the various 

agencies involved in homeland security, as well as the nature of 

coordination and collaboration required to meet overall goals and 

needs, and (2) describing governmentwide efforts in planning and 

implementing strategic, transition, human capital, and other management 

activities designed to reorganize, strengthen, and support homeland 

security.



In describing homeland security efforts, we used the definition 

employed by the administration in its National Strategy for Homeland 

Security, issued in July 2002. We also focused on those agencies and 

entities listed in the Annual Report to Congress on Combating Terrorism 

of the Office of Management and Budget (OMB), as well as other agencies 

that a review of government budget documents and supporting literature 

indicated had significant involvement in homeland security activities.



Our work is based on the review of documents and interviews conducted 

at more than two dozen federal departments and agencies, including 

central management agencies such as OMB, the General Services 

Administration (GSA) and the Office of Personnel Management (OPM). 

Additionally, due to the dynamic and evolving nature of the 

government’s homeland security activities, some of our work described 

in this report has already appeared in congressional testimony in order 

to assist the Congress with its consideration of DHS legislation and 

other homeland security issues. Although we continue to examine a 

variety of specific homeland security activities and implications for 

the Congress, this report is also consistent with, and summarizes, work 

we have recently done in the general management areas of government 

transformation, strategic planning, and human capital planning.



Results in Brief:



Since the terrorist attacks of September 11, 2001, the federal 

government has invigorated the homeland security activities of many 

departments and agencies, more than doubled the amount of federal funds 

devoted to homeland security, enacted new legislation to integrate some 

homeland security agencies and strengthen transportation security and 

law enforcement activities, leveraged existing and new relationships 

with state and local governments and the private sector, and begun to 

establish a framework for planning the multiplicity of activities 

existing within the nation’s homeland security goals.



While a new homeland security emphasis is under way throughout the 

federal government, the response is still evolving. Additional actions 

to clarify missions and activities will be necessary, and some agencies 

will need to determine how best to support both homeland security and 

non-homeland security missions. For instance, of the more than two 

dozen federal agencies we contacted, many reported a new emphasis on 

homeland security activities; however, the type of response differed 

depending on the individual agencies’ roles and responsibilities. Some 

departments and agencies, such as the Department of Agriculture (USDA) 

and the U.S. Customs Service, have accelerated their implementation of 

existing homeland security activities or increased efforts to 

coordinate activities with other government agencies or the private 

sector. Legislation such as the USA Patriot Act, enacted to strengthen 

law enforcement activities related to homeland security, has provided 

agencies with new tools to help fight terrorism. At the same time, the 

Centers for Disease Control and Prevention (CDC) and the U.S. Coast 

Guard are significantly increasing the priority of and resources 

allocated to homeland security missions while balancing the demands of 

their traditional missions, such as maritime safety. A number of 

agencies will be challenged in meeting dual or unrelated missions while 

maintaining and strengthening their homeland security operations. The 

legislation authorizing DHS requires that DHS ensure that agency 

functions not directly related to homeland security are not diminished 

or neglected.



Federal coordination and collaboration efforts in homeland security 

also have been invigorated, as information-sharing activities between 

and among federal agencies have increased. In the aftermath of 

September 11, the President established the Office of Homeland Security 

(OHS) and the Homeland Security Council (HSC) as the mechanisms for 

coordinating agencies’ homeland security activities and developing a 

national homeland security strategy. These efforts can be built upon 

further to increase coordination and collaboration. Furthermore, the 

newly created DHS will have the responsibility for consolidating many 

homeland security activities and coordinating the efforts of federal, 

state, and local governments and the private sector. The legislation 

also authorizes HSC and establishes an Office of International Affairs.



Although collaboration with state and local governments is increasing, 

more needs to be done in order to enhance its effectiveness. 

Collaboration with the private sector also needs greater emphasis. 

Prior to September 11, the public and private sectors collaborated on 

homeland security activities but the catastrophic events heightened the 

recognition that more concrete and long-term approaches to improving 

homeland security were necessary. Our work indicated that the federal 

government, state and local governments, and certain parts of the 

private sector are engaging in important projects to improve homeland 

security, but that a greater emphasis on coordination and collaboration 

is necessary among some sectors in order to meet long-term goals. DHS’s 

Office of State and Local Coordination will manage this coordination, 

along with a liaison official for the private sector.



Moreover, the federal government’s effort to improve homeland security 

will require a results-oriented approach to ensure mission 

accountability and sustainability over time. The various planning 

activities now under way, including the national strategy, DHS 

transition planning, agencies’ strategic planning efforts, and human 

capital planning, have started, but their implementation has just begun 

and will necessitate sustained management and oversight to ensure 

success. The legislation authorizing DHS includes provisions addressing 

human capital planning, comprehensive transition planning, and the 

development of multiyear budget plans for DHS.



A key component in integrating homeland security missions and 

activities is the President’s National Strategy for Homeland Security, 

which articulates the activities that must be accomplished or 

coordinated to improve the nation’s actions to prevent terrorism. The 

national strategy provides a definition of homeland security and 

outlines a framework for agencies’ activities by setting forth 

overarching goals, but much of the implementation and mechanisms for 

achieving these goals have not been developed, such as establishing 

meaningful performance measures and clear roles and responsibilities. 

In some instances, the DHS legislation specifically calls for 

performance goals and measures. Our prior work has indicated that 

consolidating and transforming activities into a more results-oriented 

organization will require adherence to certain management practices and 

key success factors. A recent mergers and transformation forum we held 

indicated that transforming organizational cultures required such 

practices as ensuring that top leadership drives change, establishing a 

coherent mission and integrated strategic goals, and focusing on a key 

set of principles and priorities. Furthermore, we have indicated in 

recent testimony to the Congress that certain key factors, such as 

strategic planning, risk management, human capital management, 

financial management, and information technology management are 

necessary to achieve the government’s homeland security objectives. A 

comprehensive planning and management focus will also be critical to 

efforts to transition transportation, border security and other 

specific agencies into a new department. The government’s efforts in 

these areas, while under way, are neither complete nor comprehensive; 

additional work will be necessary to ensure that these activities fully 

contribute to homeland security goals. Transitioning agencies into a 

new department will be challenging, with the implementation of a fully 

integrated department expected to take 5 to 10 years. The President has 

taken an important first step by establishing a transition office 

within OMB to design and coordinate this transition so that agencies 

are incorporated into DHS as smoothly as possible while maintaining 

their readiness to protect the nation.



As the federal government clearly faces a number of leadership and 

management challenges in achieving its homeland security mission, we 

recommend the following:



* Given the scope of homeland security objectives across the public and 

private sector, it is important for OHS, in conjunction with OMB and 

DHS, to set priorities, to help guide and support the development of 

performance measures and time frames, and to assess and oversee 

progress in implementing the national homeland security strategy. 

Through the national strategy, OHS should also lead efforts to ensure 

clarity in the roles and responsibilities of all parties - OHS, OMB, 

DHS, and others - to leverage collaboration among them, and to 

establish effective accountability to meet national goals. Moreover, 

these entities will need to balance and reconcile program objectives 

and priorities, and make realistic resource allocations, within and 

among homeland security and non-homeland security missions across 

government.



* OMB in developing an effective transition plan for DHS, should ensure 

that the plan incorporates the practices identified in our mergers and 

transformation forum discussed in this report, as well as the key 

factors for successful organizations listed in appendix II in helping 

lay the foundation for a cohesive, world-class organization capable of 

protecting the nation from terrorism.



* Over the coming years, OMB, in conjunction with DHS, should help 

ensure the implementation of broad-based management practices and 

principles that will improve the sustainability of DHS and other 

homeland security activities, consistent with statutory and regulatory 

requirements as well as the President’s Management Agenda. They should, 

in part, direct the establishment of appropriate plans and management 

systems to ensure the needed management capacity, people, partnerships, 

and accountability to achieve national homeland security goals. This 

includes an effective strategic planning system that articulates 

meaningful performance goals, objectives, and measures; an effective 

human capital strategy; and a process for reporting and oversight. 

Strong financial and information technology systems and internal 

controls will also be critical to the success of DHS and other 

organizations with homeland security missions.



* OPM, in conjunction with OMB and the agencies, should develop and 

oversee the implementation of a long-term human capital strategy that 

can support the capacity building across government required to meet 

the objectives of the nation’s efforts to strengthen homeland security. 

With respect to DHS, in particular, this strategy should:



* establish an effective performance management system, which 

incorporates the practices that reinforce a “line of sight” that shows 

how unit and individual performance can contribute to overall 

organization goals;



* provide for the appropriate utilization of the human capital 

flexibilities granted to DHS to effectively manage its workforce; and:



* foster an environment that promotes employee involvement and 

empowerment, as well as constructive and cooperative labor-management 

employee relations.



OMB, OHS, and OPM were provided a draft of this report for their 

review. OPM concurred with the recommendations relevant to them and 

noted that they were actively involved in accomplishing them. OPM also 

provided technical comments that we have incorporated as appropriate. 

OMB and OHS did not provide official comments. However, OMB staff 

members did provide technical comments to our draft, which we 

incorporated as appropriated.



Objectives, Scope, and Methodology:



To better understand the federal government’s response since the 

September 11 terrorist attacks, the Chairman of the Senate Committee on 

Governmental Affairs requested that we conduct a governmentwide review 

of changes to the missions and activities of agencies involved in 

homeland security. As part of our review, we used the definition of 

homeland security in the President’s February 2002 document, Securing 

the Homeland, Strengthening the Nation. It said homeland security 

encompasses those activities that are focused on combating terrorism 

and occur within the United States and its territories. Such activities 

include efforts to detect, deter, protect against, and, if needed, 

respond to terrorist attacks. As our work progressed, we used the 

homeland security definition within the National Strategy for Homeland 

Security--a concerted national effort to prevent terrorist attacks 

within the United States, reduce America’s vulnerability to terrorism, 

and minimize the damage and recover from attacks that do occur. Our 

objectives included (1) describing changes and challenges prevalent in 

the missions and activities of agencies involved in homeland security, 

as well as the nature of coordination and collaboration required to 

meet overall goals and needs, and (2) describing government efforts in 

planning and implementing strategic, transition, and human capital 

management activities designed to reorganize, strengthen, and support 

homeland security.



To identify federal agency mission and organizational changes, and the 

development and implementation of results management approaches, we 

obtained available documents and interviewed officials from over two 

dozen federal departments, agencies, and offices. Table 1 details the 

specific departments, agencies, and offices we reviewed.



Table 1: Federal Departments, Agencies, and Offices Included in Our 

Review:



Department or independent agency: Department of Agriculture; Agencies 

or offices: Agricultural Research Service.



Agencies or offices: Animal and Plant Health Inspection Service.



Agencies or offices: Food Safety Inspection Service.



Agencies or offices: Office of the Secretary.



Department or independent agency: Department of Commerce; Agencies or 

offices: Bureau of Industry and Security.



Agencies or offices: National Institute of Standards and Technology.



Department or independent agency: Department of Defense; Agencies or 

offices: Defense Advanced Research Projects Agency.



Agencies or offices: National Guard.



Agencies or offices: Office of the Secretary.



Department or independent agency: Department of Energy; Agencies or 

offices: Federal Energy Regulatory Commission.



Agencies or offices: National Nuclear Security Administration.



Agencies or offices: Office of Security.



Department or independent agency: Department of Health and Human 

Services; Agencies or offices: Centers for Disease Control and 

Prevention.



Agencies or offices: Food and Drug Administration.



Agencies or offices: Health Resources and Services Administration.



Agencies or offices: National Institutes of Health.



Agencies or offices: Office of Emergency Preparedness.



Agencies or offices: Office of Assistant Secretary for Public Health 

Emergency Preparedness.



Department or independent agency: Department of the Interior; Agencies 

or offices: Bureau of Reclamation.



Agencies or offices: National Park Service.



Department or independent agency: Department of Justice; Agencies or 

offices: Federal Bureau of Investigation.



Agencies or offices: Immigration and Naturalization Service.



Agencies or offices: U.S. Marshals Service.



Department or independent agency: Department of Transportation; 

Agencies or offices: U.S. Coast Guard.



Agencies or offices: Transportation Security Administration.



Department or independent agency: Department of the Treasury; Agencies 

or offices: U.S. Customs Service.



Agencies or offices: Financial Crimes and Enforcement Network.



Agencies or offices: U.S. Secret Service.



Department or independent agency: Federal Emergency Management Agency; 

Agencies or offices: [Empty].



Department or independent agency: General Services Administration; 

Agencies or offices: [Empty].



Department or independent agency: Environmental Protection Agency; 

Agencies or offices: [Empty].



Department or independent agency: U.S. Nuclear Regulatory Commission; 

Agencies or offices: [Empty].



Department or independent agency: Office of Personnel Management; 

Agencies or offices: [Empty].



Department or independent agency: Office of Management and Budget; 

Agencies or offices: [Empty].



Department or independent agency: Office of Homeland Security; Agencies 

or offices: [Empty].



[End of table]



Source: GAO.



We selected these departments and agencies according to the following 

criteria: (1) homeland security importance based on past combating 

terrorism activities and funding as shown in OMB’s Annual Report to 

Congress on Combating Terrorism, (2) homeland security priorities 

discussed in the President’s Fiscal Year 2003 budget, and (3) related 

GAO work. In addition, we examined publicly available documents from 

state and local government and private sector organizations, and we 

interviewed officials of the National League of Cities and the National 

Association of Counties to obtain information regarding the 

coordination of federal homeland security efforts with states and 

localities. We also reviewed external reports, studies, and literature 

on homeland security.



To identify homeland security activities on budgeting and funding 

priorities, we interviewed officials from OMB and other respective 

department and agency officials. We analyzed the budget documents and 

budget development process for the 2002 emergency supplemental funding 

legislation and the President’s proposed fiscal year 2003 budget.



Although OHS met with us for initial discussions about the scope of our 

engagement, it did not respond to our numerous requests for subsequent 

meetings. As a result, our report’s description of OHS’ role in 

homeland security management is incomplete. In addition, we did not 

verify the accuracy or reliability of the documentation or data 

provided to us by the agencies and departments or other organizations, 

nor did we evaluate the effectiveness of the activities described.



We conducted our review at agency and department headquarters in 

Washington, D.C., and CDC’s headquarters in Atlanta, Georgia, from 

February 2002 through November 2002 in accordance with generally 

accepted government auditing standards.



On November 26, 2002, we requested comments on a draft of this report 

from the Directors of OMB, OHS, and OPM. OHS stated that they had no 

comments. OMB did not provide official comments, but OMB staff members 

did provide technical comments. The Director of OPM provided written 

comments on December 19, 2002, which have been summarized at the end of 

this report and reproduced in appendix III. On December 7, 2002, we 

provided excerpts of our draft report to those agencies that were 

mentioned within the report. We received technical comments from USDA, 

DOJ, DOT, Treasury, FEMA, FERC, and NRC, and we have incorporated them 

as appropriate.



Background:



Since the terrorist attacks of September 11, the President and the 

Congress have responded with important and aggressive actions to 

protect the nation. Funding for homeland security increased 

dramatically immediately following the terrorist attacks, beginning 

with the $40 billion emergency supplemental appropriations act (Public 

Law 107-38), passed by the Congress on September 18, 2001, $10.7 

billion of which was appropriated for homeland security 

initiatives.[Footnote 1] On October 11, 2001, Senator Joseph I. 

Lieberman introduced a bill in Congress to establish a Department of 

National Homeland Security. The President issued Executive Order 13228 

establishing OHS with the broad responsibility for coordinating efforts 

to secure the United States from terrorist attacks. The President also 

signed into law the USA Patriot Act on October 26, 2001 (Public Law 

107-56), which enhanced law enforcement agencies’ ability to 

investigate financial counterfeiting, smuggling, and money laundering 

and to share vital information to combat terrorism. In November 2001, 

the Congress enacted legislation to address transportation-related 

homeland security needs, the Aviation and Transportation Security Act 

(Public Law 107-71), which created the Transportation Security 

Administration (TSA) within the Department of Transportation (DOT) to 

ensure security in the nation’s transportation system, including the 

security of passengers and baggage in commercial aviation. Figure 1 

presents a timeline of significant events since September 11.



Figure 1: Key Events Occurring after the September 11 Terrorist 

Attacks:



[See PDF for image] - graphic text:



[A] As enacted, the emergency supplemental (P.L. 107-206) included $5.1 

billion in contingent emergency spending. The President had 30 days 

after enactment to decide whether to submit a budget amendment to the 

Congress that designated either all or none of that $5.1 billion of 

contingent spending as emergency funding. On August 13, the President 

announced that he would not utilize the $5.1 billion contingent 

emergency spending. Hence, the total amount of available funds is 

approximately $24 billion.



[End of figure] - graphic text:



Due to the timing of the attacks, the President’s fiscal year 2003 

budget proposal was the administration’s first opportunity to define in 

policy and funding terms the scope and nature of homeland security 

activities. For purposes of developing the fiscal year 2003 budget, 

OMB, together with OHS, defined homeland security, as “those activities 

that are focused on combating and protecting against terrorism and 

occurring within the U.S. and its territories.” According to OMB 

officials, OHS was involved in providing guidance and setting 

priorities in the development of the fiscal year 2003 budget proposal.



In the end, total federal homeland security funding was approximately 

$37.7 billion in the President’s fiscal year 2003 budget request, later 

revised to $37.8 to include some programs that initially were not 

included in the definition (mainly some spending for the Department of 

Veterans Affairs). Appendix I list homeland security funding by 

department and agency.



In the spring of 2002, OMB issued planning guidance to executive 

agencies for the fiscal year 2004 budget request. Departments and 

agencies were directed to develop budget requests that constrained 

growth in all areas except those designated by the administration as 

high priority, including homeland security.



On May 2, 2002, Senator Lieberman and Representative William M. “Mac” 

Thornberry both introduced legislation, and in June 2002 the President 

transmitted draft legislation to the Congress, to establish DHS. During 

the summer of 2002, the legislative branch began debating proposals for 

the new department. As part of the Congress’ consideration of the 

legislation, we provided testimony to several committees about the 

proposal for a new department.[Footnote 2] We outlined a number of 

factors that would be critical to the new DHS, organizational issues 

for homeland security, and the sustainability of the government’s 

efforts over the long term. Some of these issues are discussed later in 

this report. In November 2002, the Congress passed and the President 

signed legislation to create DHS.



Several weeks after the President’s legislative proposal was sent to 

the Congress, OHS issued the administration’s National Strategy for 

Homeland Security, which defined homeland security and outlined three 

strategic homeland security objectives. On August 2, 2002, President 

Bush signed a $29 billion emergency supplemental appropriations act 

(Public Law 107-296), $5.1 billion of which was contingency funding 

that was never made available. Of the remaining $24 billion in 

available funds, according to our analysis, approximately $4.6 billion, 

or 19 percent, was appropriated for homeland security activities.



New Homeland Security Emphasis Underway, but Incomplete:



Many federal agencies have made commitments of planning, funding, and 

resources to meet homeland security missions since September 11. 

Although many agencies we reviewed reported a new emphasis on homeland 

security activities, the responses differed depending on the individual 

roles and responsibilities of specific agencies. Some entities, such as 

the Department of Health and Human Service’s (HHS) CDC, the Department 

of the Treasury, and TSA, provided greater vigilance to existing 

homeland security missions, such as improving the response to 

bioterrorism or blocking terrorist financing. Other agencies needed to 

expand their homeland security missions, at times confronting 

challenges to balancing their expanded homeland missions with important 

non-homeland security missions, such as the Coast Guard’s maritime 

safety and fisheries enforcement activities. Still other organizations, 

including the National Guard, were asked to take on new duties. Many 

agencies have also revitalized policy groups or other coordinating 

mechanisms that, after the events of September 11, have become even 

more critical.



Moreover, earlier this year the President approved the latest 

Department of Defense Unified Command Plan (Plan). Defense has said the 

Plan will realign and streamline the U.S. military structure to better 

address 21st century threats. It is characterized as the most 

significant reform of the nation’s military command structure since the 

first command plan was issued shortly after World War II. The Plan, 

among other things, established the U.S. Northern Command (NORTHCOM). 

The new NORTHCOM commander will be responsible for land, aerospace, and 

sea defenses of the United States. Its geographic area will include the 

continental United States, Alaska, Canada, Mexico, portions of the 

Caribbean, and the contiguous waters in the Atlantic and Pacific 

oceans.



NORTHCOM will assume the homeland defense duties now held by the Joint 

Forces Command, such as responsibility to civil authorities for 

chemical, biological, radiological, nuclear, and major conventional 

explosives events. NORTHCOM will also help Defense deal with natural 

disasters, attacks on U.S. soil, or other civil difficulties. It is 

also intended to provide a more coordinated military support to civil 

authorities such as the Federal Bureau of Investigation (FBI), the 

Federal Emergency Management Agency (FEMA), and state and local 

governments.



Meanwhile, the government has engaged in significant reorganization of 

its policy and other operations activities in order to prevent or 

improve protection of the United States against terrorism. As 

mentioned, the President ordered the creation of OHS to coordinate 

governmentwide homeland security activities and to ensure collaborative 

partnerships and effective information sharing between all levels of 

government and the private sector. A number of new laws were passed 

designed to enhance security and improve law enforcement activities 

related to terrorism. A new cabinet department, DHS, was created to 

consolidate some homeland security functions and to help strengthen 

coordination among the many other homeland security functions that are 

not included in DHS.



Federal departments and agencies have recognized that the successful 

achievement of homeland security goals will require more formal and 

intensive coordination. As a result, some agencies created new high-

level policy offices to centralize communication and decision making 

while others established new interagency councils or task forces to 

address needs, gaps, and overlap. A few agencies consolidated existing 

dispersed homeland security offices and others determined that existing 

arrangements were appropriate and required little or no changes. 

Federal agencies have also taken some steps to provide assistance to 

state and local governments, especially in such areas as emergency 

management. Nevertheless, state and local government organizations 

indicate that even as interaction between and among levels of 

government has increased, more needs to be done in order to enhance its 

effectiveness. Furthermore, although federal agencies and certain parts 

of the private sector are engaging in important projects to improve 

homeland security, a greater emphasis on coordination is necessary 

among some sectors in order to meet long-term goals.



Agencies Emphasize Homeland Security Activities:



Most agency officials reported that their homeland security activities 

had been expanded since the September 11 terrorist attacks, with some 

officials reporting a new emphasis on their existing homeland security 

missions. Officials reported that agencies’ expanded or accelerated 

existing homeland security activities because of recent legislation and 

substantial emergency supplemental funding. For example, CDC has 

emphasized approaches to protecting individuals against infectious 

diseases caused by bioterrorism as part of its overall mission of 

preventing and controlling diseases. In addition, CDC has recently 

revised its Smallpox Response Plan and Guidelines to include 

operational and logistical considerations associated with implementing 

a large-scale voluntary vaccination program in response to a confirmed 

smallpox outbreak.[Footnote 3] Likewise, FEMA is awarding grants to 

help States modify their emergency operations plans, expand and train 

community emergency response teams, and make enhancements to emergency 

operations centers and communications capabilities. These efforts will 

lay the groundwork to implement the President’s First Responders 

Initiative, which, once approved by Congress, will assist local 

responders such as firefighters, police officers, and emergency medical 

teams in developing comprehensive response plans for terrorist attacks, 

purchasing equipment, training for response to terrorist incidents, and 

coordinating regular exercise programs with other first responders. 

According to an official of the USDA’s Animal and Plant Health 

Inspection Service (APHIS), it has increased its inspection staff by 50 

percent at points of entry to intercept potential threats to the 

nation’s food supply and agriculture industry.



The Department of Energy (DOE) has focused on safeguarding and securing 

its nuclear weapons complex and stored stockpile materials. DOE has 

accelerated the deployment of the Biological Aerosol Sentry and 

Information System, which provides public health and law enforcement 

authorities with information about airborne biological attacks for 

special events, such as high visibility conferences and major sporting 

events.



In addition to invigorating existing missions, some agencies have 

assumed new homeland security activities. For example, the USA Patriot 

Act has expanded the responsibilities of Treasury’s Office of 

Enforcement, empowering it to use financial institutions’ transaction 

data to investigate a country suspected of supporting terrorist 

financing. Additionally, the National Guard was deployed to improve 

airport security. From September 2001 to May 2002, the National Guard 

mobilized approximately 7,200 guardsmen to protect travelers at 444 

commercial airports nationwide.



The new emphasis on homeland security activities has resulted in 

agencies reallocating equipment and personnel from other traditional 

mission activities. For example, the Coast Guard reported the temporary 

de-emphasis of its maritime safety and environmental protection 

activities after September 11. Coast Guard cutters and aircraft that 

were used mainly on the high seas were relocated closer to major 

harbors and security was strengthened at potential terrorist targets 

such as oil refineries, cruise ship terminals, and other port 

facilities. In March 2002, the Coast Guard Commandant issued guidance 

that its fleet should manage its operations and personnel to address 

the Coast Guard’s non-homeland security missions while still 

maintaining a heightened level of security. We have recently 

recommended that the Coast Guard develop a longer-term strategy that 

outlines how it sees its resources being distributed across various 

missions, and a time frame for achieving it.[Footnote 4]



In addition, the FBI announced the second phase of its reorganization 

on May 29, 2002, that it planned to shift its mission priorities from 

non-homeland security activities such as drug investigations, white-

collar crimes, and violent crimes to homeland security activities by 

permanently shifting 518 field agents to counterterrorism.[Footnote 5] 

Specifically, the FBI plans to reduce the number of special agents 

involved in drug investigations by about 29 percent as well as reduce 

agent personnel in the areas of white-collar and violent crimes. It is 

important to note, however, that the majority of the FBI’s personnel 

will still remain focused on non-homeland security missions.



Several agencies we reviewed have developed dual-purpose programs that 

serve both homeland security and non-homeland security missions. For 

example, CDC has been using its Bioterrorism Preparedness and Response 

Program to help state and local health agencies build a communications 

infrastructure to improve the collection and transmission of 

information related to both bioterrorist incidents and other public 

health events. Similarly, HHS’s Health Resources and Services 

Administration (HRSA) has been using its Bioterrorism Hospital 

Preparedness Program to help state and local hospitals develop plans to 

respond to bioterrorism events and other public health emergencies. 

Although the origin of a disease may not be clear at the outset, the 

same public health resources are mobilized to respond to the emergency 

and deal with any consequences, regardless of the source.[Footnote 6] 

Agencies outside the public health and scientific research and 

development arenas also have programs or units that serve dual 

purposes. For instance, the National Guard maintains its dual status as 

a federal military resource (under Title 10, United States Code) and a 

state-controlled emergency and consequence management resource (under 

Title 32, United States Code). Many of the agencies that will be 

transferred to DHS have both homeland security and non-homeland 

security missions and will be challenged to balance both types of 

mission. The legislation requires DHS to ensure that agency functions 

not directly related to homeland security are not diminished or 

neglected.



OHS Charged with Broad Responsibilities:



A significant amount of federal homeland security functions is being 

reorganized or will likely be reorganized in the future. We have 

indicated in previous testimony that a reorganization of some homeland 

security functions may help to improve efficiencies and reduce overlaps 

in meeting critical objectives.[Footnote 7] Although reorganization 

efforts have been initiated at both the central management and 

department and agency level, these efforts are incomplete and may take 

years to fully and effectively implement.



OHS, established by executive order soon after the terrorist attacks, 

was charged with broad responsibilities including, but not limited to 

working with federal agencies, state and local government, and private 

entities to develop a national homeland security strategy and to 

coordinate implementation of the strategy. The Assistant to the 

President for Homeland Security heads OHS, which is divided into three 

functional components.



The Deputy Homeland Security Advisor is responsible for five 

directorates: (1) research and development, (2) policy and plans, (3) 

protection and prevention, (4) response and recovery, and (5) 

intelligence and detection. A Deputy Assistant to the President for 

Homeland Security is responsible for external affairs, which includes 

directorates for intergovernmental affairs, communications, and public 

liaison. An Executive Secretary is responsible for administration and 

support. In addition, the Executive Secretary and Deputy Homeland 

Security Advisor share responsibility for a coordination center that 

serves as the primary contact for state and local entities as well as 

the private sector and would be tasked with coordinating the response 

to a domestic incident if it occurred and a threat monitoring center, 

which oversees and reviews information for federal agencies. Figure 2 

provides OHS’s organizational structure.



Figure 2: Organizational Structure of the Office of Homeland Security 

as of April 2002:



[See PDF for image] - graphic text:



[End of figure] - graphic text:



In addition to assisting in the coordination of homeland security 

efforts on the federal, state, and local levels as well as the private 

sector, OHS has been responsible for drafting and issuing the national 

strategy for homeland security, designing the homeland security 

advisory system,[Footnote 8] and working with OMB and agencies 

regarding the levels and uses of funding for homeland security 

activities. OHS is authorized through Executive Order 13228 to certify 

that budget requests for homeland security are necessary and 

appropriate. The Director of OHS certified the funding levels for 

homeland security activities in the proposed fiscal year 2003 budget in 

a memorandum dated February 4, 2002.



Along with OHS, the President established the Homeland Security Council 

(HSC) to serve as the mechanism for ensuring coordination of homeland 

security-related activities of executive departments and agencies and 

effective development and implementation of homeland security 

policies.[Footnote 9] The council includes a Principals Committee, 

which consists of the secretaries of the Treasury, Defense, Health and 

Human Services, and Transportation, and the Attorney General; the 

directors of OMB, the Central Intelligence Agency (CIA), FEMA, and the 

FBI; the chiefs of staff of the President and the Vice President, and 

the Assistant to the President for Homeland Security (who serves as 

chairman). In addition, a Deputies Committee, including deputy 

officials from those departments and agencies participating in the 

Principal’s Committee, serves as the senior sub-cabinet interagency 

forum. HSC’s main day-to-day forums for interagency coordination of 

homeland security policy are the policy coordination committees (PCC), 

11 of which were established by Presidential Directive 1 and are listed 

in table 2.



Table 2: List of Policy Coordinating Committees:



1. Detection, Surveillance, and Intelligence.



2. Plans, Training, Exercises, and Evaluation.



3. Law Enforcement and Investigation.



4. Weapons of Mass Destruction Consequence Management.



5. Key Asset, Border, Territorial Waters, and Airspace Security.



6. Domestic Transportation Security.



7. Research and Development.



8. Medical and Public Health Preparedness.



9. Domestic Threat Response and Incident Management.



10. Economic Consequences.



11. Public Affairs.



[End of table]



Source: Homeland Security Presidential Directive -1, October 29, 2001.



Agencies reported varying degrees of input and coordination with this 

central policy development process. Some had frequent contact with the 

PCC or OHS, while others had minimal or no contact at all. For example, 

Defense officials reported having specialists in various areas that 

attended PCC meetings and wrote a chapter for the national homeland 

security strategy. The Environmental Protection Agency (EPA) also 

reported providing input to the national strategy. Officials from the 

Nuclear Regulatory Commission (NRC) reported working closely with OHS 

staff and assisting in the development of a critical infrastructure 

protection plan and the threat advisory system. USDA had 

representatives in all of OHS’s directorates and PCC and said that it 

played an active part in OHS’s decision-making process. DOE officials 

reported being the government lead on three PCC. An HHS official said 

that it was very involved in the medical and public health preparedness 

PCC, the one most important to HHS. In addition, many departments had 

detailees on OHS’s staff.



However, a few departments expressed concern that participation in the 

PCC or contact with OHS was limited or nonexistent even though they 

considered their missions to be important to homeland security. For 

example, officials at GSA’s Public Building Service said they expected 

to work with OHS in developing the homeland security advisory system, 

but they were not involved in formulating the policies. GSA officials 

said they also expected to be involved with OHS on border station 

security issues, but only received feedback through OMB.



Significant Reorganization Will Occur with the New Department:



One of the most important reorganization efforts is the creation of a 

new cabinet department to consolidate a variety of agencies or 

functions critical to the nation’s goal of strengthening homeland 

security. The administration has stated that the creation of DHS would 

empower a single cabinet official whose primary mission is to protect 

the American homeland from terrorism, including (1) preventing 

terrorist attacks within the United States, (2) reducing America’s 

vulnerability to terrorism, and

(3) minimizing the damage and recovering from attacks that do 

occur.[Footnote 10]



Additionally, DHS will be responsible for homeland security 

coordination with other executive branch agencies, state and local 

governments, and the private sector. The legislation to create DHS will 

transfer some federal entities, such as the U.S. Secret Service and the 

U.S. Coast Guard, intact into the new department. For the organizations 

transferred to the new department, DHS will be responsible for managing 

all of their functions, including non-homeland security functions. In 

some instances, these other responsibilities are substantial. Table 3 

displays the major organizational elements of the new DHS.



Table 3: DHS Organizational Elements:



Element: Directorate for Information Analysis and Infrastructure 

Protection; Mission: Analyze law enforcement and intelligence 

information from federal, state, and local government agencies, and 

private sector entities to identify and assess threats and 

vulnerabilities, and identify priorities for protective and support 

measures. Develop a comprehensive national plan for securing key 

resources and critical infrastructure. Administer the Homeland Security 

Advisory System.; Major agencies included: National Infrastructure 

Protection Center (FBI); National Communications System (Defense); 

Critical Infrastructure Assurance Office (Commerce); National 

Infrastructure Simulation and Analysis Center (Energy); Federal 

Computer Incident Response Center (GSA).



Element: Directorate of Science and Technology; Mission: Develop a 

national policy and strategic plan to identify and develop 

countermeasures for chemical, biological, radiological, nuclear, and 

other terrorist threats. Assess and test vulnerabilities and possible 

threats. Conduct basic and applied research and related activities.; 

Major agencies included: National Bio-weapons Defense Analysis Center 

(Defense); Plum Island Animal Disease Center (USDA); Chemical and 

biological national security nonproliferation program, nuclear 

proliferation programs, and nuclear assessment programs (Energy); 

Environmental Measurements Laboratory (Energy); Advanced scientific 

computing research programs and activities (Energy).



Element: Directorate of Border and Transportation Security; Mission: 

Prevent entry of terrorists and terrorist instruments. Secure the 

borders, waters, ports, terminals, waterways, and air, land, and sea 

transportation systems. Carry out immigration enforcement functions and 

provide citizenship and immigration services. Establish and administer 

rules governing visas or other forms of entry.; Major agencies 

included: Customs Service (Treasury); Transportation Security 

Administration (Transportation); Federal Protective Service (GSA); 

Federal Law Enforcement Training Center (Treasury); Office for Domestic 

Preparedness (Justice); Immigration and Naturalization Service 

(Justice).



Element: Directorate of Emergency Preparedness and Response; Mission: 

Ensure effectiveness of emergency response providers to terrorist 

attacks, major disasters, and other emergencies. Provide the federal 

response to terrorist attacks and major disasters and aid in the 

recovery. Build a national incident management system. Develop a 

national response plan.; Major agencies included: Federal Emergency 

Management Agency; Integrated Hazard Information System; National 

Oceanic and Atmospheric Administration; National Domestic Preparedness 

Office (FBI); Domestic Emergency Support Teams (Justice); Emergency 

preparedness, national disaster, and medical response systems (HHS); 

Strategic National Stockpile (HHS).



Element: Coast Guard; Mission: These entities are transferred intact 

and report directly to the DHS Secretary. They retain their current 

missions..



Element: Secret Service.



[End of table]



Source: GAO.



The implementation of a new department to integrate homeland security 

functions will need to recognize that many non-homeland security 

missions of these agencies and functions will become part of DHS. 

Creating an effective structure that is sensitive to balancing the 

needs of homeland security and non-homeland security functions will be 

critical to the success of the new department. For example, the 

legislation creating DHS will transfer certain public health emergency 

preparedness programs from various federal agencies as well as transfer 

the control of, but not the operation of, certain other public health 

assistance programs to the new department. In addition, the legislation 

transfers responsibility for certain chemical, biological, 

radiological, and nuclear research and development programs and 

activities to DHS. Although the department has the potential to realize 

gains from increased coordination and consolidation of programs, 

transferring control over some of these dual use programs, such as the 

public health preparedness assistance programs and research and 

development initiatives, would disrupt synergies that currently exist 

and could lead to duplication of existing capabilities.[Footnote 11]



As we have previously stated in testimony, existing non-homeland 

security missions will still require adequate funding, attention, 

visibility, and support when subsumed into a department that will be 

under tremendous pressure to succeed in its primary mission. In July 

2002 testimony, we suggested that the Congress consider whether the new 

department, as proposed, will dedicate sufficient management capacity 

and accountability to ensure the execution of non-homeland security 

activities.



Coordination Efforts within and among Federal Agencies Has Increased:



As part of their mission revitalization efforts, agency officials said 

that they are increasing their attention to coordinating homeland 

security activities within and among federal agencies through a number 

of existing and new approaches. The national strategy calls for the 

nation to increase collaboration and coordination activities to better 

align public and private resources to secure the homeland. Some efforts 

to coordinate homeland security activities were taking place prior to 

September 11. For example, the Interagency Security Committee (ISC) was 

created through Executive Order 12977 after the 1995 bombing of the 

Alfred P. Murrah Federal Building in Oklahoma City to develop and 

oversee the implementation of policies for protecting federal 

facilities. The ISC comprises 14 department-level agencies and other 

executive agencies, such as the CIA, EPA, and OMB. The ISC has been 

working to revitalize itself to meet its responsibilities in light of 

the September 11 terrorist attacks.[Footnote 12]



To strengthen antiterrorism programs and to provide a single point of 

contact for senior-level coordination between HHS and other departments 

and agencies, the Office of the Assistant Secretary for Public Health 

Emergency Preparedness (OASPHEP)[Footnote 13] was established within 

the Office of the Secretary of Health and Human Services. OASPHEP is 

responsible for directing HHS’s efforts to prepare for, protect 

against, respond to, and recover from acts of bioterrorism and other 

public health emergencies and serves as the focal point for the 

department for those activities. By July 2002, OASPHEP had dispersed 

nearly $1.1 billion via cooperative agreements to all 50 states, the 

District of Columbia, 3 selected major municipalities (Los Angeles 

County, Chicago, and New York City), and the 8 U.S. territories to 

foster state and local preparedness for bioterrorism, other outbreaks 

of infectious disease, and additional public health threats and 

emergencies.



The Department of Justice (DOJ) created 93 antiterrorism task forces to 

integrate the communications and activities of local, state, and 

federal law enforcement. Building on DOJ’s antiterrorism task forces, 

the national strategy calls for each governor to establish a single 

Homeland Security Task Force for the state, to serve as the primary 

coordinating body with the federal government. According to the 

national strategy, this would realign the 93 antiterrorism task forces 

to serve as the law enforcement component of the broader homeland 

security task forces. The homeland security task forces would help 

streamline and coordinate all federal, regional, and local programs and 

would provide a collaborative structure for effectively communicating 

to all organizations and citizens.



The FBI increased its use of joint terrorism task forces (JTTF), which 

were first established in 1980, to integrate federal, state, and local 

law enforcement efforts to address terrorism.[Footnote 14] FBI 

officials believe that JTTF are an effective means of interacting, 

cooperating, and sharing information between FBI and its federal, 

state, and local counterparts. The FBI now has a JTTF in each of its 56 

field offices, plus an additional 10 in satellite locations.



The Department of the Treasury created Operation Green Quest, on 

October 25, 2001, a multi-agency financial enforcement initiative led 

by the Customs Service. According to the Department of the Treasury, 

the initiative is intended to augment existing counterterrorist efforts 

by bringing the full scope of the department’s financial expertise to 

bear against systems, individuals, and organizations that serve as 

sources of terrorist funding. In the 18 months it has existed, the 

Department of the Treasury reports that the initiative has seized 

approximately $21.3 million in smuggled U.S. currency and $8.2 million 

as a result of financial investigations of suspected terrorists.



GSA serves on the Border Station Partnership Council (BSPC) with 

several federal agencies responsible for border security to plan the 

construction of border facilities. BSPC’s coordination role is 

increasing because homeland security efforts are focusing in part on 

securing the U.S.-Canadian border, which includes constructing several 

new border facilities to accommodate the Customs Service, HHS’s Food 

and Drug Administration (FDA), the Department of Transportation’s (DOT) 

Federal Motor Carrier Safety Administration, and Immigration and 

Naturalization Service (INS), for example. A GSA official said that 

each agency requires different types of facilities to perform its 

mission, and GSA is coordinating the integration of several agencies’ 

facility needs into one border station.



According to a senior HHS official, an OHS policy coordinating 

subcommittee is working to clarify roles of agencies to better 

coordinate a response to future terrorist attacks. The national 

strategy calls for integrating separate federal emergency response 

plans into a single incident management plan. As an example, in the 

recent anthrax events, local officials complained about differing 

priorities between the FBI and the public health officials in handling 

suspicious specimens. According to the public health officials, FBI 

officials insisted on first informing FBI managers of any test results, 

which delayed getting test results to treating physicians. The public 

health officials viewed contacting physicians as the first priority to 

ensure that effective treatment could begin as quickly as 

possible.[Footnote 15] According to the national strategy, the new 

incident management plan would cover all national incidents, including 

acts of bioterrorism and agroterrorism and clarify roles and expected 

contributions of various emergency response and law enforcement 

entities at different levels of government in the wake of a terrorist 

attack. In addition, DOJ reported that the United States Government 

Interagency Domestic Terrorism Concept of Operations Plan, signed in 

January 2001 by the Director of the FBI, the Attorney General, and the 

Secretary of HHS, among others, outlined that preserving life or 

minimizing risk to health is the first priority of U.S. government 

operations in response to a terrorist threat or incident. Furthermore, 

DOJ reported that increasing the FBI’s capability to address the threat 

of bioterrorism will require developing partnerships with federal, 

state, and local agencies, especially USDA and CDC for matters 

involving anti-animal and antiplant bioterrorism, and FDA for threats 

involving the food supply.



In December 2001, DOT created the Interagency Container Working Group 

to improve response to security threats posed by marine, truck, and 

rail containers that enter the nation’s ports or cross the Mexican and 

Canadian borders into the United States.[Footnote 16] The Interagency 

Container Working Group is overseen by OHS. The terrorist attacks of 

September 11 demonstrated that terrorists would use our transportation 

systems as weapons, and may exploit vulnerabilities in our marine 

transportation system as well. In February 2002, the working group 

issued its first report to OHS that recommended improvements to the 

coordination of government and business container security activities, 

enhancing cargo data collection, and improving the physical security of 

containers. The report also recommended supporting international 

container security efforts and the increased use of advanced 

technologies to improve the detection of potential security problems 

with containers.



Officials Say Collaboration with State and Local Governments 

Increasingly Effective, but Concerns Remain:



The administration has said that collaboration with state and local 

governments and other entities is important to homeland security 

effectiveness. In March 2002, the President issued Executive Order 

13260 establishing the President’s Homeland Security Advisory Council 

(Council) and Senior Advisory Committees for Homeland Security. 

According to the administration, the Council and committees will 

provide opportunities for state and local officials and emergency 

services, law enforcement, and public health and hospital officials to 

share homeland security information and advice. In addition, OHS 

officials said they met with state and local first responders and 

elected officials to gather information and address concerns about 

state and local homeland security issues. OHS also has hosted 

conference calls with designated homeland security representatives from 

the states, territories, and the District of Columbia for information 

exchanges. In a July 2002 report on state and local homeland security 

actions, the Director of the Office of Homeland Security said that a 

key objective of the national homeland security strategy was to develop 

a framework ensuring vertical coordination between local, state, and 

federal authorities so actions are mutually supportive and communities 

receive the assistance they need to develop and execute comprehensive 

counterterrorism plans.



The national, state, and local association officials we interviewed and 

information from these associations that we reviewed indicated that 

collaboration and support across all levels of government is vital to 

homeland security efforts. For example, in a recent position paper, the 

National Governors Association (NGA) said it viewed homeland security 

as a complex challenge that demands significant investment and 

collaboration among local, state, and federal governments, and 

integration with the private sector. Among other things, NGA said 

homeland security coordination must involve all levels of government, 

state and local governments need help and technical assistance to 

identify and protect critical infrastructure, and the federal 

government should provide adequate federal funding and support to 

ensure that homeland security needs are met.



Officials representing the National Association of Counties (NACo) and 

the National League of Cities (NLC) told us that coordination efforts 

with OHS had been extensive and helpful. For example, NACo said efforts 

had been very beneficial in defining policy and operational needs at 

the local level, and matching federal efforts to those needs. NACo 

officials said that OHS officials were present at each of NACo’s 

Homeland Security Task Force meetings where homeland security policy 

recommendations were made. NACo officials said that OHS had worked 

closely with NACo in developing homeland security policies, operational 

plans, initiatives, the national strategy for homeland security, and 

the proposal for DHS. NLC officials said its involvement has included 

discussions of fiscal years 2002 and 2003 funding, criteria for the 

President’s first responder initiative, policy objectives for regional 

coordination, and resources targeted to local governments for domestic 

preparedness.



However, at the time of our interviews, the national associations 

voiced some concerns about continued federal coordination and services. 

Both NACo and NLC officials hoped the new DHS office dealing with state 

and local contacts would allow the continued collaborative 

relationships they had experienced with OHS. Both said that they 

support the use of state homeland security task forces for DHS 

coordination with state and local governments. NACo officials added 

that they would like the task forces to include local representatives, 

such as first responders, so there is not undue emphasis on state 

government concerns. NLC officials said the task forces should include 

cities as well as regional officials where resources are shared 

locally. In addition, NLC officials were concerned about other federal 

current or anticipated initiatives, for example, (1) promised first 

responder funding has been delayed, (2) federal standards or mandates 

might not be accompanied by funding or other support, such as training, 

and (3) existing public safety and security programs might not be 

adequately funded, with funds diverted to homeland security programs. 

They further said local officials also would like more specific threat 

information as part of the Homeland Security Threat Advisory System.



The new DHS legislation contains provisions that should help maintain 

federal coordination. The legislation establishes within DHS’s Office 

of the Secretary an Office for State and Local Coordination that will 

coordinate DHS activities relating to state and local government. In 

addition, this office is to develop a process for receiving meaningful 

input from state and local governments to assist the development of the 

national strategy for combating terrorism and other homeland security 

activities.



At the department and agency level, our interviews indicated that 

existing working relationships might have aided homeland security work. 

FEMA, of course, has extensive relationships with state and local 

governments. USDA officials told us that the department has 

historically had strong, long-standing relations at the state and local 

level. These relations have come through agricultural programs, land 

grant colleges, and food safety activities. They believe these 

relationships have made it easier to broaden the discussion to homeland 

security issues. In HHS, HRSA took advantage of its relationship with 

the National Association of County and City Health Officials (NACCHO) 

and the American Hospital Association to receive input on designing the 

bioterrorism hospital preparedness program. They believe the agency’s 

already developed relations with state and local governments were 

critical in developing the hospital preparedness grant program. CDC 

officials said they work with NACCHO, NGA, and the National Emergency 

Management Association, along with other health associations, such as 

the American Medical Association and the American Nurses Association, 

to increase surge capacity at hospitals and other medical laboratories.



Collaboration with Private Sector Needs Greater Emphasis:



Since September 11, federal government agencies have increasingly 

coordinated with the private sector on homeland security initiatives. 

The importance of federal and private sector partnerships have been 

recognized in the government’s Critical Infrastructure Protection 

effort, started in 1998, and the President’s National Homeland Security 

Strategy. The partnerships cover many areas, particularly critical 

infrastructure and border security. However, the partnerships require 

additional attention to address challenges with information sharing, 

business continuity, customer protection, business capabilities, and 

duplicative or burdensome governmental efforts.



Several federal agencies included in our study helped identify critical 

infrastructure risks and assess security measures for private sector 

entities they provide service to or regulate. This assistance involved 

efforts such as advisories, inspections, and alerts. For example, the 

Federal Energy Regulatory Commission (FERC) said it issued a notice of 

proposed rule making regarding how to define and protect critical 

energy infrastructure information, and is developing the final rule. 

After September 11, FERC assessed all FERC-jurisdictional dams, 

developed an E-mail system to alert all licensees, developed a security 

program for hydro projects, and identified critical dams that require a 

higher level of scrutiny. During operations inspections, FERC engineers 

annually assess whether security measures are in place at all high and 

significant hazard dams under FERC’s jurisdiction. FERC reported that 

it continues to work with industry and other government representatives 

to address such initiatives as cybersecurity and incident response and 

recovery to hydropower and natural gas emergencies.



Other agency examples include water facilities, food supplies, and 

public health. EPA said it had been working to accelerate the 

development of a waste and water vulnerability assessment tool to be 

used at 16,000 public water facilities. Vulnerability assessments had 

already been completed within major metropolitan areas and EPA had sent 

security alerts to the facilities. USDA’s Food Safety Inspection 

Service has worked with the food industry to help prevent biosecurity 

threats to the nation’s food supply, ensure early detection of such 

threats, and assure containment of pathogens. Moreover, in the public 

health sector, CDC said it has worked in cooperation with private 

sector medical and hospital associations such as the American Medical 

Association and the American Heart Association to develop strategies to 

produce just-in-time information that enhances protection and 

prevention via information technology, especially with regard to safety 

for support workers.



Private sector association information also described government and 

private sector partnerships. For example, DOJ issued a chemical 

facility vulnerability assessment methodology, developed in 

cooperation with the DOE’s Sandia National Laboratories and with the 

assistance of chemical industry representatives. The American Chemistry 

Council (ACC) also said that it had partnered with EPA, the FBI, and 

others to organize regional security briefings around the nation. Its 

Chemical Transportation Emergency Center team had worked with the FBI’s 

Hazardous Materials Response Unit to improve coordination between the 

chemical industry and the FBI. ACC also signed an agreement with the 

National Infrastructure Protection Center (NIPC), a government and 

private sector partnership, to create the Chemical Sector Information 

Sharing and Analysis Center, aimed at sharing security-related 

information between NIPC and the companies that make and use chemical 

products. The American Bankers Association (ABA) noted that efforts to 

address money laundering and tracking, particularly with respect to 

terrorists and their supporters, could draw on the Department of the 

Treasury’s long history of public-private partnerships to establish 

policies and regulations to prevent and detect money laundering. After 

September 11, the National Food Processors Association said it 

established the Alliance for Food Security, a consortium of more than 

130 industry associations and government agencies that addressed a wide 

range of potential threats and provided guidance.



Border security also has been the target of increased joint federal and 

private efforts. In our previous work, we described the Customs 

Service’s engagement with the trade community in a partnership program 

to protect U.S. borders and international commerce from acts of 

terrorism. In this initiative, U.S. importers enter into voluntary 

agreements with Customs to enhance the security of their global supply 

chains and those of their business partners. In return, Customs agrees 

to expedite the clearance of the members’ cargo at U.S. ports of 

entry.[Footnote 17] Under this program--called Customs-Trade 

Partnership Against Terrorism (C-TPAT)--Customs said businesses sign an 

agreement that commits them to actions such as conducting comprehensive 

self-assessments of supply chain security and developing and 

implementing programs to enhance supply chain security according to C-

TPAT guidelines. Business benefits include a reduced number of border 

inspections and an emphasis on self-policing instead of Customs’ 

verification. According to Customs’ officials, 1,100 companies have 

agreed to participate in the program as of November 2002. C-TPAT is 

currently open to all importers, brokers, freight forwarders, and non-

vessel owning common carriers as well as carriers involved in air, 

rail, and sea transportation and U.S.-Canadian border highway carriers. 

Customs plans to expand the program to port authorities, terminal 

operators, warehouse operators, and foreign manufacturers. Customs 

launched the C-TPAT program in April 2002.



The DHS Office of State and Local Coordination mentioned earlier may 

also help improve coordination and collaboration with the private 

sector. It will have responsibilities for coordinating with the private 

sector. In addition, under the DHS legislation, the DHS Secretary is to 

appoint a Special Assistant responsible for creating and fostering 

strategic communications with the private sector, creating and managing 

private sector advisory councils, and developing new public-private 

partnerships.



Partnership Issues Require Additional Attention:



The federal government and private sector face many challenges in 

establishing homeland security partnerships. In prior work, we stated 

that information-sharing barriers with the private sector were a 

problem and noted that a number of activities have been undertaken to 

build relationships between the federal government and the private 

sector, such as NIPC’s InfraGard program, the Partnership for Critical 

Infrastructure Security, efforts by the Critical Infrastructure 

Assurance Office, and efforts by lead federal agencies to promote the 

establishment of information sharing and analysis centers (ISAC). For 

example, the InfraGard program has expanded, providing the FBI and NIPC 

with a means of securely sharing information and a forum for education 

and training on infrastructure vulnerabilities and protection measures. 

In addition, NIPC said a new ISAC development and support unit had been 

created, whose mission was to enhance private sector cooperation and 

trust. NIPC indicates that ISACs had been established for the chemical 

industry, surface transportation, electric power, telecommunications, 

information technology, financial services, water supply, oil and gas, 

emergency fire services, food, emergency law enforcement, and state and 

local governments. The new DHS legislation contains provisions for 

information sharing and security that may respond to some of these 

concerns. For example, the legislation includes safeguards on 

voluntarily provided critical infrastructure information.



Federal officials and their private sector partners are faced with 

striking a reasonable balance between security efforts and business 

objectives. While the private sector supports homeland security 

efforts, it also is concerned that proposed federal mandates or 

guidelines might prove harmful to security or not adequately consider 

business needs. For example, the International Mass Retail Association 

(IMRA) had urged the Customs Service not to sign a recent rule 

requiring carriers to transmit manifest information 24 hours prior to a 

container being loaded on a ship. IMRA believed such a requirement 

might result in increased theft and tampering at the foreign port of 

lading. The National Association of Manufacturers (NAM) has supported 

administration smart border plans and attempts to improve cargo 

security. However, NAM believes that the government should carefully 

assess the impact of new cargo security measures on trade and business 

operations, ensuring that security benefits are commensurate with 

economic costs. The U.S. Chamber of Commerce has also highlighted the 

need for government and industry teamwork on border and transportation 

security that would allow businesses to stay competitive.



In addition, ABA highlighted limitations in bank capabilities in 

security efforts. For example, ABA noted that there are operational 

limitations to what a bank can do in reporting customer transactions. 

For example, ABA said banks can request information on who is the 

“beneficial owner” of an account or the ultimate recipient of a money 

transfer, but most often would have no way to investigate or confirm 

this information.



Our work indicates that achieving the nation’s homeland security goals 

will require considerable input and collaboration between and among the 

federal, state, and local governments. Restructuring federal agencies 

involved in homeland security to reduce overlap or conflicts in 

assistance provision will help to make activities and initiatives more 

effective, and will help to clarify lines of authority and ensure 

accountability in an emergency. Many stakeholders we interviewed 

indicated that working relationships between government levels have 

increased since September 11, as public sector organizations have 

worked more closely to identify risks and solve problems. While 

progress has occurred in this important area, state and local 

government organizations articulated that concerns remain with the 

level of collaboration in certain areas and with certain obstacles, 

such as access to critical data. Ultimately, the success of public 

sector collaboration is necessary to increase the likelihood that many 

homeland security initiatives can be sustained affordably over the long 

term.



Similarly, while progress has been made in improving collaboration 

between the public and private sectors, advances have not been made in 

some sectors where such work is necessary. The effective protection of 

the nation’s critical infrastructure is vital to public safety and 

security, and efforts to achieve this goal cannot be accomplished by 

the government absent private sector assistance. A greater emphasis is 

required on the part of all stakeholders to find common ground, to 

eliminate obstacles, and to build strong working relationships in order 

to strengthen homeland security. DHS includes an Information Analysis 

and Infrastructure Protection Directorate that will have responsibility 

for assessments and protection plans for key resources and critical 

infrastructure. Part of that effort will include consultation and 

cooperation with state and local governments and the private sector. 

For example, the directorate will recommend protection measures in 

cooperation with state and local government agencies and authorities 

and the private sector.



Addressing Homeland Security Mission through a Results-Oriented 

Approach:



The federal government’s effort to strengthen homeland security will 

require a well-articulated strategy to accomplish agencies’ missions 

and activities, to create a transition planning focus for DHS, and to 

leverage certain key success factors for organizational success to 

ensure mission accountability and sustainability over time. A key 

component in integrating homeland security missions and activities is 

the national homeland security strategy, which articulates activities 

that must be accomplished or coordinated to improve the nation’s 

homeland security. While the national strategy seeks to articulate the 

many important tasks and activities that must be accomplished or 

coordinated to improve the nation’s homeland security outlines, much of 

the implementation and mechanisms for achieving goals have not yet been 

articulated.



To accomplish the government’s transition efforts will require 

adherence to certain management practices and key success factors. As 

we have previously indicated in testimony before the Congress, these 

factors include strategic planning, risk management, information 

technology management, human capital strategy and management, and a 

variety of other critical management processes and tools that will 

improve opportunities for achieving significant homeland security 

objectives. For example, strong financial management will be necessary 

to assure accountability over significant direct and indirect federal 

expenditures. Improvements in leveraging information technology will 

also be necessary to enhance not only the effective utilization of 

management systems, but also to increase information sharing among and 

between all parties. Appendix II provides a description of the critical 

success factors discussed in our previous testimony.



Attention to these factors will be critical both to the government’s 

strategy for achieving homeland security goals via multiple departments 

and levels of government and other stakeholders, as well as efforts to 

potentially transition agencies into a new department. By establishing 

a transition office within OMB, the President has taken an important 

first step in creating an effective transition for agencies to be 

incorporated into the proposed department. Continued transition efforts 

thereafter in the new department must sustain and build upon the 

initial actions to maintain mission focus while simultaneously 

integrating multiple entities into the new structure. Further, the 

President’s Management Agenda provides needed governmentwide emphasis 

on many important management objectives.



National Strategy Requires Implementation:



A critical component of the government’s efforts to coordinate and 

establish a plan for homeland security activities has been the creation 

of a homeland security strategy--one of the initial tasks the President 

gave to OHS shortly after the terrorist attacks. On July 16, 2002, the 

President released the National Strategy for Homeland Security. The 

administration indicated that the national strategy was the product of 

intense consultation across the United States, including conversations 

with, among others, governors and mayors, state legislators, Members of 

the Congress, concerned citizens, academics, soldiers, firefighters, 

and police officers.[Footnote 18] The national strategy established 

three strategic homeland security objectives, further defined by 

critical mission areas under each objective. They are:



* to prevent terrorist attacks within the United States, with mission 

areas of intelligence and warning, border and transportation security, 

and domestic counterterrorism;



* to reduce America’s vulnerability to terrorism, with related mission 

areas of critical infrastructure and asset protection and catastrophic 

threat defense; and:



* to minimize the damage and recover from attacks that occur, with the 

mission area of emergency preparedness and response.



The national strategy also describes four foundations--law, science and 

technology, information sharing and systems, and international 

cooperation--that cut across the mission areas, all levels of 

government, and all sectors of society. Figure 3 summarizes the 

national strategy’s strategic objectives and foundation areas and 

related mission areas.



Figure 3: National Strategy Components:



[See PDF for image] - graphic text:



[End of figure] - graphic text:



By providing a definition of homeland security, along with a set of 

strategic objectives and crosscutting foundation areas, the national 

strategy provides some direction for the federal government’s homeland 

security activities. In defining homeland security needs and 

objectives, the national strategy describes the nation’s 

vulnerabilities, the means of attack, and the terrorist organizations 

that potentially pose threats to the United States. The strategy also 

discusses the importance of developing comprehensive national threat, 

risk, and vulnerability assessments to identify homeland security 

needs. Importantly, the risk assessments are discussed within the 

context of other national strategies, such as the National Security 

Strategy. In addition, the national strategy highlights the necessity 

of intergovernmental and private sector partnerships and outlines 

expected near-term budgeting priorities, such as enhancing the analytic 

capabilities of the FBI and increasing the security of international 

shipping containers.



As with most complex strategies, implementing the national homeland 

security strategy represents a significant challenge. The strategy 

would be most effective if it included definitions of measurable 

objectives, clarifications of responsibilities among federal agencies 

and other entities, affordable, long-term budget priorities, and 

addressed management capabilities and accountability. The strategy sets 

overarching performance expectations through its strategic objectives, 

which are further defined by critical mission areas under each 

objective. These strategic objectives would benefit from having 

targeted performance levels that define a minimum level of homeland 

preparedness.



Moreover, implementation of the national strategy will depend on 

clarifying federal agency and nonfederal partner responsibilities as 

well as performance objectives. The national strategy identifies DHS as 

the central point for coordinating national homeland security efforts. 

Many national strategy initiatives rely on DHS leadership, yet the 

national strategy does not cover the period prior to DHS’s operation. 

To better clarify roles, the strategy could designate a federal lead 

agency for each initiative below the department level, even for those 

initiatives that call for crosscutting coordination. The new DHS 

legislation sets out organizational responsibilities that may help in 

further defining partner roles. For example, as mentioned earlier, the 

Under Secretary for Information Analysis and Infrastructure Protection 

is to assess threats and vulnerabilities and to develop a national plan 

for securing key resources and critical infrastructure.



Nonfederal partner responsibilities will also be important. Many of the 

national strategy’s initiatives rely on the efforts of nonfederal 

entities. However, only a few strategy initiatives directly address 

nonfederal performance expectations and related accountability. While 

this is a difficult area given federalism principles, international 

sovereignty, and private sector independence, a national strategy 

requires national (and international) performance expectations and 

accountabilities if it is to be successfully implemented.



Further, the national strategy would benefit from addressing how 

federal, state, local, and private efforts for specific initiatives are 

operationally coordinated and integrated. The national strategy 

articulates the development or consolidation of existing federal plans, 

such as developing a national infrastructure protection plan and 

integrating federal response plans into a single all-discipline 

incident management plan. However, those efforts may not address 

duplicate program efforts under each of the strategic objectives.



Our review of the national strategy indicates that more than 30 of the 

strategy’s initiatives appear to be already under way in whole or in 

part, including those relating to DHS implementation. For example, 

initiatives are under way to implement the Aviation and Transportation 

Security Act of 2001 and target and suppress terrorist financing. 

However, beyond the initial priorities mentioned for fiscal years 2002, 

2003, and 2004, the strategy does not contain a long-range 

implementation plan for the remaining planned initiatives or a 

discussion about the strategy’s long-term implementation costs. 

Further, priorities need to be established and timelines defined.



Implementation of the national strategy will also require addressing 

key, specific federal management capabilities. Some of the federal 

departments and agencies assigned to carry out the strategy face 

management challenges in administering their programs, managing their 

human capital, and implementing and securing information technology 

systems. Federal agencies will need to address these challenges as well 

as develop or enhance specific homeland security management 

capabilities, such as identifying homeland security threats, risks, 

vulnerabilities, and responses and effectively working in interagency, 

intergovernmental, and private sector relationships.



Finally, the strategy could be more explicit on the accountability 

structure that will be necessary to ensure the implementation of 

efforts to strengthen and sustain homeland security. The 

interrelationship of OHS, OMB, and DHS--as well as other federal 

organizations--is not articulated with respect to creating a structure 

that can assure an effective homeland security strategy that is 

accountable to the President and the Congress.



Agencies’ Strategic Planning Revisions Started, but Incomplete:



Several departments and agencies reported that since September 11, they 

were developing or revising strategic plans to address homeland 

security--yet these efforts are far from complete. Some departments and 

agencies have revised their plans to better incorporate homeland 

security goals and objectives in their planning activities. For 

example, FEMA has revised its strategic plan to broaden its focus on 

addressing all hazards, including weapons of mass destruction, under a 

new strategic goal focusing on terrorism. Under this goal, FEMA plans 

to develop and implement a federal program to support state and local 

government incident management capability and establish a process for 

sharing information among federal, state, and local governments; 

emergency responders; and the general public.



Likewise, DOJ substantially revised its strategic plan to consolidate 

homeland security activities under a new strategic goal. While homeland 

security objectives were in the strategic plan before September 11, 

2001, the heightened awareness and overriding priority of DOJ’s 

homeland security activities and responsibilities necessitated a 

separate strategic goal to focus on the prevention, investigation, and 

prosecution of terrorist acts. Among the strategies addressing this 

goal is the establishment of the Anti-Terrorism Task Forces. Other 

strategies under this goal include building and maintaining the 

capacity of the FBI, developing an intelligence capability that 

supports DOJ’s counterterrorism efforts, mitigating threats to the 

nation’s infrastructure, and coordinating with state and local 

government agencies to develop and maintain domestic preparedness. 

However, according to a recent DOJ Inspector General report,[Footnote 

19] the FBI’s Strategic Plan has not been updated to reflect the 

counterterrorism priorities in DOJ’s updated Strategic Plan. The FBI 

indicates that it is now updating this plan.



Other agencies are still in the process of revising their strategic 

plans or are developing new homeland security-specific plans to better 

incorporate their homeland security goals and objectives in their 

planning activities. For example, HHS is revising its strategic plan to 

consolidate its public health threat response and bioterrorism 

activities under one strategic goal. Similarly, USDA is also revising 

its strategic plan to focus more on homeland security initiatives. 

Several officials noted that they expect greater attention to homeland 

security in the fiscal year 2004 planning cycle. CDC officials stated 

that while its fiscal year 2003 performance plan does not contain any 

new goals regarding homeland security, it expects the fiscal year 2004 

performance plan to contain new goals and measures for the smallpox 

vaccine program and, perhaps, the public health preparedness and 

response to bioterrorism cooperative agreement program.



The new department, in fulfilling its broad mandate, has the challenge 

of developing a national homeland security performance focus. This 

focus will necessarily rely on related national and agency strategy and 

performance plan efforts of OHS, OMB, and other departments and 

agencies. Indeed, the planning activities of the various departments 

and agencies represent a good start in the development of this focus; 

however, our past work on implementation of the Government Performance 

and Results Act has highlighted ongoing difficulty with many federal 

departments and agencies setting adequate performance goals, measures, 

and targets. Accordingly, attention will need to be given to federal 

department and agency capabilities in developing and achieving 

appropriate homeland security performance expectations and measures and 

in ensuring that there is linkage between these agency plans and the 

national strategy, and ultimately to individual performance 

expectations. Ensuring these capabilities and linkages will be vital in 

establishing a comprehensive homeland security planning and 

accountability framework that will not only guide the nation’s homeland 

security efforts but also help assess how well they are really working.



The new DHS legislation does require some specific planning efforts 

that include goals and measures. For example, the Directorate of 

Science and Technology is to develop a national policy and strategic 

plan for developing countermeasures to weapons of mass destruction. The 

directorate must develop comprehensive, research-based definable goals 

and annual measurable objectives and specific targets to evaluate the 

goals.



Comprehensive Risk Analysis Efforts Incomplete:



Many departments and agencies are placing a stronger emphasis on risk 

management to focus their homeland security activities. In addition, 

the national strategy places a high priority on the collection and 

analysis of homeland security intelligence and information to 

strengthen defenses against different threats. Departments and agencies 

have told us they are refining and broadening their risk management 

approaches to capture the full range of their agencies’ homeland 

security activities. For example, CDC included a risk assessment in the 

design of its public health preparedness cooperative agreement program. 

NRC initiated a comprehensive reevaluation of its safeguards and 

security programs soon after September 11. NRC officials stated that, 

although NRC had always conducted risk, threat, and vulnerability 

assessments, a reevaluation was undertaken to include additional 

consequence modeling and vulnerability assessments to reflect changes 

in the threat environment, including the effects aircraft used as 

weapons might have on facilities. In another example, FDA recently used 

a risk management approach in its National Food Safety System Project 

to develop counterterrorism strategies and strategic plans, import 

control programs, and food safety programs.



Other agencies are focusing their risk management activities on 

critical infrastructure protection. For example, EPA will be working 

with the chemical industry to assist and encourage the development of a 

chemical facility vulnerability assessment tool. In addition, the 

Department of the Interior’s (DOI) Bureau of Reclamation (BOR) is 

conducting a vulnerability assessment of all BOR-administered dams and 

facilities. BOR has contracted with Lawrence Livermore National 

Laboratory, the Defense Threat Reduction Agency, and others to conduct 

in-depth vulnerability assessments of these dams and facilities. BOR 

expects to have 55 of the most critical assessments completed by the 

end of the year and the remaining 253 completed by the end of fiscal 

year 2003. In another example, DOE officials said the department was 

considering altering its facilities to make them more defendable and 

thus reduce the need to add additional forces to respond to an attack.



Under the DHS legislation, DHS will consolidate many vulnerability 

assessment efforts under its Information Analysis and Infrastructure 

Protection Directorate. Combining such efforts could help to eliminate 

possible duplicative efforts, provide a focus for department 

activities, and result in stronger and more coordinated capabilities 

and information sharing. While many federal agencies have taken steps 

to improve risk management, comprehensive approaches remain incomplete. 

As we have indicated in the past,[Footnote 20] we continue to believe 

that risk management must be at the center of the nation’s effort to 

prevent or mitigate terrorism. Without a comprehensive risk management 

approach, there is little assurance that programs to combat terrorism 

are prioritized and properly focused.



DHS Transition Planning Started, but Requires Sustained Efforts for 

Successful Implementation:



Effective change for leveraging critical homeland security goals 

requires meaningful transition planning. Careful planning and attention 

to management practices and key success factors, such as strategic 

planning, information technology, risk management, and human capital 

management are important for the broad goals of establishing an 

overarching framework to achieve the national strategy and to create an 

effective transition for agencies being incorporated into DHS. The 

creation of DHS will be one of the largest reorganizations ever 

undertaken and the difficulty of this task should not be 

underestimated. Under the reorganization, 22 existing agencies and 

programs and an estimated 170,000 people will be integrated into the 

new department in order to strengthen the country’s defense against 

terrorism. With an estimated budget authority of $37.45 billion for the 

component parts of the new department, successfully transitioning the 

government in an endeavor of this scale will take considerable time and 

money. Careful and thorough planning will be critical to the successful 

creation of the new department. While national needs suggest a rapid 

reorganization of homeland security functions, the transition of 

agencies and programs into the new department is likely to take time to 

achieve. At the same time, the need for speed to get the new department 

up and running must be balanced with the need to maintain readiness for 

new and existing threats during the transition period. Moreover, the 

organizational transition of the various components will simply be the 

starting point--as implementation challenges beyond the first year 

should be expected in building a fully integrated department and could 

take 5 to 10 years to fully implement the department in an effective 

and sustainable manner.



On September 24, 2002, we convened a forum of public and private sector 

leaders to identify and discuss useful practices and lessons learned 

from major private and public sector organizational mergers, 

acquisitions, and transformations that federal agencies could implement 

to successfully transform their cultures and DHS could use to merge its 

various originating components into a unified department.[Footnote 21] 

The results of this forum provide insights into the challenges facing 

the federal government in forming a new cabinet department and in 

building a world-class, high performance organization.



Many major mergers and acquisitions in the private sector do not live 

up to their expectations or potential. In the short term, the 

experience of major private sector mergers or acquisitions is that 

productivity and effectiveness actually decline in the period 

immediately following a merger and acquisition. This happens for a 

number of reasons, including attention being concentrated on critical 

and immediate integration issues and diverted from longer-term mission 

issues, and employees and managers inevitably worrying about their 

place in the new organization. The key is to adopt practices that 

minimize the duration and the significance of the reduced productivity 

and effectiveness and ultimately create a new organization that is more 

than the “sum of its parts.”:



Research suggests that the failure to adequately address--and often 

even consider--a wide variety of people and cultural issues is at the 

heart of unsuccessful mergers, acquisitions, and transformations. But 

this does not have to be the case. While there is no one right way to 

manage a successful merger, acquisition, or transformation, the 

experiences of both successful and unsuccessful efforts suggest that 

there are practices that are key to their success. Table 4 outlines 

these key practices that can serve as a basis for subsequent 

consideration as federal agencies seek to transform their cultures in 

response to governance challenges.



Table 4: Lessons Learned about Mergers and Transformations for DHS and 

Other Federal Agencies:



* Ensure top leadership drives the transformational change.; * 

Establish a coherent mission and integrated strategic goals to guide 

the transformation.; * Focus on a key set of principles and priorities 

at the outset of the transformation.; * Set implementation goals and a 

timeline to build momentum and show progress from day one.; * Dedicate 

an implementation team to manage the transformation process.; * Use the 

performance management system to define responsibility and assure 

accountability for change.; * Establish a communication strategy to 

create shared expectations and report related progress.; * Involve 

employees to obtain their ideas and gain their ownership for the 

transformation.; * Build a world-class organization..



[End of table]



Source: GAO.



On June 20, 2002, the President signed Executive Order 13267 

establishing within OMB a Transition Planning Office to design and 

coordinate the DHS transition. A joint memorandum from OHS and OMB 

directors describes “day one” issues that need immediate resolution 

upon creation of the department, such as chain of command, incident 

management, and communications. Planning teams will be of two types: 

those that are organized around the major operating components of the 

organization and those that are crosscutting, that is, teams for 

functions such as human capital, budget, legal, systems, and 

communications. Additionally, OMB Director Mitchell Daniels issued a 

memorandum temporarily ceasing all financial management, procurement, 

human resource, and information technology system development or 

modernization efforts above $500,000 for fiscal years 2002 and 2003, to 

avoid actions and spending that would seem wasteful or redundant once 

DHS becomes operational.



Despite these initial efforts to identify potentially redundant 

spending, the creation of a new department will cost money. The 

administration has maintained that the consolidation of functions 

within DHS will reduce costs below what would otherwise have been the 

case if these functions continued to operate separately. In the long 

run savings may well be realized, but any reorganization will incur 

start-up costs as well as require some funding that may be temporarily 

redundant, but necessary to maintain continuity of effort during the 

transition period. The Congressional Budget Office (CBO) priced the 

various legislative proposals for DHS, and all proposals would increase 

spending. A July 2002 cost estimate anticipates that implementation 

will cost about $4.5 billion over the 2003-2007 period, assuming 

appropriation of the necessary amounts.[Footnote 22] This is in 

addition to the projected net spending for ongoing activities of the 

transferred agencies--about $19 billion in 2002, growing to $27 billion 

by 2007 under CBO’s baseline assumptions.[Footnote 23]



CBO’s estimates could best be described as conservative. Although CBO’s 

July 2002 estimate included an assumption that key senior managers will 

need to be in a centralized office location along with core functions, 

CBO does not include such potentially significant cost drivers as the 

combination of the multiple pay and retirement legacy systems. More 

important than a precise cost of the transition is the recognition that 

there will be short-term transition costs and that these costs need to 

be made transparent in a transition plan for congressional 

consideration.[Footnote 24]



The importance of the transition efforts to this new homeland security 

environment cannot be overemphasized. OMB was ordered to initiate a 

homeland security transition planning process for DHS, although its 

transition authorities expire 90 days after the law’s enactment. OMB 

told us that some initial transition efforts for the new department are 

under way, especially regarding the consolidation of multiple financial 

and management information systems among agencies. The creation and 

integration of the new department will only be achieved through a 

realistic and aggressive strategy that, to the largest extent possible, 

quickly and seamlessly merges important homeland security components 

into a cohesive entity capable of protecting the nation from terrorism. 

The DHS legislation requires the President to provide a DHS 

reorganization plan to appropriate congressional committees 60 days 

after enactment, which he did, on November 25, 2002.[Footnote 25] 

Practices that have been consistently found to be at the center of 

successful mergers, as outlined during our recent Mergers and 

Transformation Forum, and in the key success factors articulated in 

recent congressional testimony (see app. II), will be beneficial to 

this process and helpful to other federal agencies and organizations 

engaged in homeland security.



Strategic Human Capital Plan Critical to Transition:



An organization’s people are its most important asset. People define an 

organization, affect its capacity to perform, and represent the 

knowledge base of the organization. A strategic human capital plan is, 

therefore, critical to effectively managing federal agencies with 

homeland security missions and activities, including DHS. The 

legislation requires all agencies moving into DHS, and DHS itself, to 

appoint chief human capital officers and include human capital planning 

in performance plans and performance reports.



Agencies slated to move into DHS will need to address long-standing 

human capital problems in order to ease the transition to the new 

department. One of these challenges has been the ability to hire and 

retain a talented and motivated staff. For example, we have reported 

that INS has been unable to reach its program goals in large part 

because of such staffing problems as agent attrition.[Footnote 26] INS 

staffing problems in several of its functions had been affected by the 

lack of a staff resource allocation model[Footnote 27] that would 

identify staffing needs.



To accomplish homeland security missions some agencies have recognized 

the need for new skills in the workforce. It is anticipated that 

agencies will need employees with skills in information technology, law 

enforcement, foreign languages, and other proficiencies. For example, 

we have reported that the FBI has an action plan to hire translators, 

interpreters, and special agents with language skills--areas in which 

the federal government currently has a shortage.[Footnote 28] 

Similarly, last year’s anthrax outbreak highlighted the need for 

trained communications staff at CDC to respond to information requests 

from the media and the general public.



Increased attention to border security will test the capacity of DHS to 

hire large numbers of inspectors for work at our nation’s border entry 

points. Additionally, TSA has faced an extraordinary challenge in 

hiring and training 33,000 passenger security screeners by November 

2002.[Footnote 29] Moreover, other agencies that are to transfer to DHS 

are also expected to experience challenges in hiring security workers 

and inspectors. For example, APHIS has been seeking to increase the 

size of its inspection force by 50 percent at the same time that the 

Customs Service, INS, and other agencies are increasing the size of 

their inspection staffs.



In addition, various agency officials have cited retention problems 

associated with homeland security missions. Since much of TSA’s 

recruitment of federal air marshals has come from other federal 

agencies, this has increased competition for skilled law enforcement 

staff. According to a TSA official, approximately 64 percent of the 

Federal Air Marshal Service’s newly hired staff have previous 

professional experience in other federal agencies. TSA is not limited 

to the grade and step pay structure of the General Schedule, and can 

offer more flexible compensation to law enforcement recruits. Several 

agency officials have cited TSA’s compensation levels as the reason 

they have been losing many employees. For example, the police force 

protecting the facilities of HHS’s National Institutes of Health says 

it has experienced high turnover over the last year. As a result, it is 

considering offering a better compensation package to officers. In 

addition, INS reported that it did not meet its hiring goal for one 

reason--a significant increase in the loss of agents to other federal 

agencies. INS reported that a 556 percent increase in the loss of 

agents from fiscal year 2001 to fiscal year 2002 was due in large part 

to the availability of higher paying jobs with the Federal Air Marshal 

Service at TSA.



Another potential human capital challenge to homeland security 

activities is the expected retirement of many federal employees in the 

near future. Many of the agencies that are due to be transferred to the 

new department are projected to lose substantial portions of their 

staffs to retirement. According to our analysis of OPM data, 26 percent 

of career employees at APHIS, 33 percent at the Coast Guard, 31 percent 

at the Customs Service, 40 percent at FEMA, 21 percent at INS, and 30 

percent at the Secret Service will be eligible for retirement with 

unreduced annuities by the end of fiscal year 2007.



Agencies and New Department Need an Integrated Human Capital Strategy:



Hiring and retaining a talented and motivated staff is only one aspect 

agency leaders must consider as part of its human capital strategy. To 

assist agencies in facing human capital challenges, we have released an 

exposure draft of a model of strategic human capital management that 

highlights the steps that agencies can take to manage their human 

capital more strategically.[Footnote 30] The GAO Strategic Human 

Capital Model identifies four governmentwide human capital cornerstones 

that have been shown to be essential to agency effectiveness. (See fig. 

4.) These four critical areas are leadership; strategic human capital 

planning; acquiring, developing, and retaining talent; and results-

oriented organizational cultures. To address each of these 

cornerstones, the model identifies eight critical success factors, 

based on the following underlying principals:



* People are assets whose value can be enhanced through investment. The 

objective is to maximize value while minimizing risk.



* An organization’s human capital strategy should be designed, 

implemented, and assessed based on its ability to achieve results and 

contribute to the organization’s mission.



Figure 4: GAO’s Model of Strategic Human Capital Management:



[See PDF for image] - graphic text:



[End of figure] - graphic text:



Performance Management Systems and Personnel Flexibilities Can Improve 

Effectiveness:



Performance management systems and personnel flexibilities can help to 

improve the effectiveness of agencies, and some homeland security 

agencies are already utilizing such tools. The Aviation and 

Transportation Security Act requires TSA to develop a performance 

management system and to use performance agreements as a way to align 

organizational and individual goals for employees, managers, and 

executives. TSA has established an interim performance management 

system, which includes procedures for creating performance agreements, 

monitoring employee performance, and determining employee development 

needs. For example, according to the template developed for a TSA 

executive, an executive’s performance agreement includes 

organizational goals to improve and maintain the security of American 

air travel, ensure an emphasis on customer satisfaction, and to make 

substantial contributions to TSA and the accomplishment of its 

performance goals. Results-oriented performance agreements are a good 

mechanism in a performance management system to help create a “line of 

sight” showing how individual employees can contribute to overall 

organizational goals.[Footnote 31]



Moreover, to deal with their human capital challenges, it will be 

important for the new department and other homeland security agencies 

to assess and determine which human capital flexibilities are the most 

appropriate and effective for managing their workforces.[Footnote 32] 

But while this determination is important, how personnel flexibilities 

are implemented is equally important. We have identified six key 

practices that agencies should implement to use human capital 

flexibilities effectively: (1) plan strategically and make targeted 

investments, (2) ensure stakeholder input in developing policies and 

procedures, (3) educate managers and employees on the availability and 

use of flexibilities, (4) streamline and improve administrative 

processes, (5) build transparency and accountability into their 

systems, and (6) change their organizational cultures. By more 

effectively using flexibilities, agencies would be in a better position 

to manage their workforces, assure accountability, and transform their 

cultures to address current and emerging demands.[Footnote 33]



At the same time, new flexibilities for DHS and other homeland security 

agencies should be viewed in the context of how similar flexibilities 

have been exercised by other agencies with similar missions, such as 

TSA. As we testified last summer,[Footnote 34] the Aviation and 

Transportation Security Act authorizes TSA to use and modify the 

personnel system established by the Federal Aviation Administration 

(FAA), which is exempt from many federal personnel provisions. To meet 

its need for talented employees quickly, TSA officials stated that they 

made use of personnel flexibilities such as temporary hiring authority, 

on-the-spot hiring authority, and the authority to use detailees from 

other agencies and executives on loan from the private sector. A TSA 

official said that these various flexibilities have been useful for 

increasing its staffing for critical positions. TSA is also basing its 

compensation system on FAA’s pay banding approach, which allows the 

agency to hire employees anywhere within broad pay bands for their 

positions. For example, the pay band for screeners ranges from $23,600 

to $35,400 (from about $11 to $17 per hour). Pay banding is one example 

of a personnel flexibility that can help agency managers establish a 

more direct link between pay and an individual’s knowledge, skills, and 

performance.



Effective Oversight Critical to Success:



The success of the federal government’s homeland security mission will 

depend on effective oversight by the appropriate parts of our 

government. The oversight entities of the executive branch, including 

the inspectors general, OMB, OPM, and OHS, will have a vital role to 

play in ensuring expected performance and accountability. As stated in 

the President’s June 2002 DHS proposal, OHS was seen as continuing to 

play a key role, advising the President and coordinating a simplified 

interagency process. Likewise, congressional committees, with their 

long-term and broad institutional roles, will also play a role in 

overseeing the transformation of the federal government as it meets the 

demands of its homeland security mission. The creation of DHS has 

raised questions regarding how the Congress can best meet its 

oversight, authorizing, and appropriations responsibilities for the new 

department. DHS will be comprised of some 22 federal agencies or their 

components and be overseen by numerous congressional committees. The 

DHS legislation asks each House of the Congress to review its committee 

structure in light of the reorganization of homeland security 

responsibilities within the executive branch. As a result, the Congress 

may wish to explore ways to facilitate conducting its responsibilities 

in a more consolidated and integrated manner. Whether or not the 

Congress does so could have an impact on the effective implementation 

and oversight of DHS.



Conclusion:



The nation’s efforts to strengthen homeland security will require 

extensive commitments and perseverance to ensure their effectiveness 

and sustainability. There will continue to be multiple demands placed 

on federal agencies’ ability to accomplish their homeland security 

missions, to coordinate and collaborate in meaningful ways with each 

other, with state and local government entities, and with the private 

sector. Many of these demands may be better met through the effective 

implementation of DHS. However, critical roles remain for OHS and other 

agencies with homeland security related missions, as well as for 

central management agencies like OMB and OPM.



The coordination and oversight of a national strategy to better protect 

Americans from terrorism is vital to achieving the nation’s homeland 

security objectives. This will be a primary role for OHS. Because all 

homeland security objectives cannot be achieved simultaneously, it will 

be important for OHS, DHS, and other agencies to focus initially on the 

most critical issues and greatest risks to security, and to guide the 

strategy’s implementation in phases. For example, concerns related to 

border security or visa processing may need to have priority and 

resources over other areas in which current approaches may be more 

effective, or in which fewer risks are apparent. Additionally, the 

completion of a comprehensive threat, risk, and vulnerability 

assessment must be addressed.



While there are indications that federal agencies are developing better 

working relationships among themselves and with other relevant 

stakeholders, concerns remain about collaboration in certain areas, 

especially in regards to the sharing of critical information. Creating 

effective linkage--building the critical partnerships--will be a key to 

successfully implementing the DHS transition and the national strategy. 

The complexity and urgency of the nation’s homeland security goals 

require effective, cooperative, and sustained action from multiple 

public and private entities, and addressing coordination and 

collaboration concerns will be vital to success. OHS, in conjunction 

with OMB, must help support and oversee the implementation of the 

national strategy in order to ensure that responsible entities have 

clear missions, are held accountable for achieving specific results in 

a timely manner, design effective human capital strategies to attract 

and retain critical skills and talent, and create strong partnerships 

so that the nation obtains meaningful and measurable results in its 

efforts to prevent terrorism.



Another critical component of implementing the national strategy is the 

effective transition to DHS. OMB will have a critical support and 

oversight role to play in leading this effort through its 

responsibilities for the DHS transition strategy. OMB has the lead 

responsibility to develop the DHS transition plan, and this role will 

have to be accomplished in conjunction with OHS and DHS. The creation 

and integration of the new department will only be achieved through a 

realistic and aggressive strategy that, to the largest extent possible, 

quickly and seamlessly merges important homeland security components 

into a cohesive entity capable of protecting the nation from terrorism. 

Practices that have been consistently found to be at the center of 

successful mergers, as outlined in our recent Mergers and 

Transformation Forum, and in the key success factors central to well 

performing organizations articulated in recent congressional testimony 

(see app. II), will be beneficial to this process, and helpful to other 

federal agencies and organizations engaged in homeland security.



There is little doubt, however, that the integration and transformation 

required will be difficult and complex and, as a result, not as quick 

or seamless as would be ideally desired. Nor should focus from 

important homeland security missions being integrated into DHS be 

unduly diverted or sidetracked by administrative concerns during the 

transition period. Thus, management attention must be focused upon an 

effective transition plan that prioritizes functions and appropriately 

phases in the transition so that protection of the nation is maintained 

at the same time the new department’s initial transition steps are 

accomplished. Achieving this overarching goal will be important for DHS 

and for maintaining linkages between people, processes, and results 

during the transition in order to effectively meet objectives for 

protecting the nation from terrorism.



It may also be necessary to acknowledge that, at least in the near 

term, program objectives may differ or conflict. In addition, while 

steps must be taken to link all 22 agencies in meaningful ways through 

an overarching mission, common core values, and other means, it may not 

be necessary or appropriate to try and create a single culture within 

DHS. Program objectives of certain DHS agencies may differ or conflict, 

and difficult balances between homeland security and non-homeland 

security missions and resource allocations will remain. Other homeland 

security objectives will be implemented outside of DHS. As a result, 

OHS, OMB, and OPM must continue to assist DHS in resolving policy, 

budget, human capital, communications, and program tensions that may 

interfere with national homeland security objectives, particularly 

during the transition period.



Further, although the creation of the Transition Planning Office for 

DHS is an important first step in the transition of federal agencies 

into a new department, its termination 90 days after the enactment of 

the legislation creating the department means that a sustained 

management approach will need to be developed and refined over time--as 

the new department will likely take years to become fully integrated 

and effective. Once again, OMB, in conjunction with OHS, has a 

significant role and responsibility to play in supporting the long-term 

transition efforts of DHS. The governmentwide management role of OMB, 

particularly, may help to provide DHS with the expertise and guidance 

necessary to succeed in building this complex new entity. OMB’s 

oversight of the government’s principal management laws and practices 

relating to performance management, information technology, financial 

management, human capital management, and acquisition management, for 

example, can help DHS’s leadership create a strong and viable structure 

sustainable for years to come. Moreover, OMB’s role in federal 

management activities can also benefit those agencies with homeland 

security missions that are not being integrated into DHS. Ensuring 

effective homeland security strategic planning and performance 

measurement, for instance, is equally important to the success of the 

FBI as it is to the new department, even though its mission will 

complement and not be subsumed by DHS.



A realistic human capital strategy that helps to lead agencies’ 

transformation into high-performing organizations will be vital to the 

effectiveness and sustainability of our homeland security efforts. An 

organization’s people are its most important asset. People define an 

organization, affect its capacity to perform, and represent the 

knowledge base necessary to achieve its objectives. A strategic human 

capital plan is, therefore, critical to effectively managing federal 

agencies with homeland security missions and activities, including DHS 

and others. OPM, in conjunction with OMB, OHS, and DHS, will need to 

help craft and support such a plan in implementing the national 

strategy and the DHS transition to ensure the optimum effectiveness of 

organizational goals, cooperation, and collaboration among all parties, 

especially DHS employees and management.



Recommendations for Executive Action:



As the federal government clearly faces a number of leadership and 

management challenges in achieving its homeland security mission, we 

recommend the following:



* Given the scope of homeland security objectives across the public and 

private sector, it is important for OHS, in conjunction with OMB and 

DHS, to set priorities, to help guide and support the development of 

performance measures and time frames, and to assess and oversee 

progress, in implementing the national homeland security strategy. 

Through the national strategy, OHS should also lead efforts to ensure 

clarity in the roles and responsibilities of all parties--OHS, OMB, 

DHS, and others--to leverage collaboration among them, and to establish 

effective accountability to meet national goals. Moreover, these 

entities will need to balance and reconcile program objectives and 

priorities, and make realistic resource allocations, within and among 

homeland security and non-homeland security missions across government.



* OMB, in developing an effective transition plan for DHS, should 

ensure that the plan incorporates the practices identified during our 

Mergers and Transformation Forum, as well as the key factors for 

successful organizations listed in appendix II in helping lay the 

foundation for a cohesive, world-class organization capable of 

protecting the nation from terrorism.



* Over the coming years, OMB, in conjunction with DHS, should help 

ensure the implementation of broad-based management practices and 

principles that will improve the sustainability of DHS and other 

homeland security activities, consistent with statutory and regulatory 

requirements as well as with the President’s Management Agenda. They 

should, in part, direct the establishment of appropriate plans and 

management systems to ensure the needed management capacity, people, 

partnerships, and accountability to achieve national homeland security 

goals. This includes an effective strategic planning system that 

articulates meaningful performance goals, objectives, and measures; an 

effective human capital strategy; and a process for reporting and 

oversight. Strong financial and information technology systems and 

internal controls will also be critical to the success of DHS and other 

organizations with homeland security missions.



* OPM, in conjunction with OMB and the agencies, should develop and 

oversee the implementation of a long-term human capital strategy that 

can support the capacity building across government required to meet 

the objectives of the nation’s efforts to strengthen homeland security. 

With respect to DHS, in particular, this strategy should:



* establish an effective performance management system, which 

incorporates the practices that reinforce a “line of sight” that shows 

how unit and individual performance can contribute to overall 

organization goals;



* provide for the appropriate utilization of the human capital 

flexibilities granted to DHS to effectively manage its workforce; and:



* foster an environment that promotes employee involvement and 

empowerment, as well as constructive and cooperative labor-management 

employee relations.



Agency Comments:



On November 26, 2002, we provided a draft of this report to the 

Directors of OMB, OHS, and OPM for their official comments. OMB did not 

provide official comments. However, OMB staff members provided 

technical comments to our draft and we have incorporated them as 

appropriate. The Director of OPM provided written comments on December 

19, 2002, which have been reproduced in appendix III. OPM concurred 

with the recommendations relevant to them and noted that they were 

actively involved in accomplishing them. OPM also provided technical 

comments that we have incorporated as appropriate. OHS informed us that 

they had no comments. On December 7, 2002, we provided excerpts of our 

draft report to those agencies that were mentioned within the report. 

We received technical comments from USDA, DOJ, DOT, Treasury, FEMA, 

FERC, and NRC, and we have incorporated them as appropriate.



As agreed with your office, unless you announce the contents of the 

report earlier, we plan no further distribution until 30 days after its 

date. At that time, we will send copies to the Directors of OMB, OHS, 

and OPM. We will also send copies of this report to appropriate 

congressional committees and to the federal agencies and offices 

discussed in this report. We will make copies available to other 

interested parties upon request. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov.



Please contact me on (202) 512-6806 if you or your staff has any 

questions. Major contributors to this report included Shawn Arbogast, 

Joseph Byrns, Sharon Caudle, Kevin Copping, Katharine Cunningham, Seth 

Dykes, Denise Fantone, Mark Goldstein, Steven Lozano, Kristeen McLain, 

Mary Reintsma, Bradley Trainor, Summer Ramke, and James Whitcomb.



Sincerely yours,



Patricia A. Dalton

Director, Strategic Issues:



Signed by Patricia A. Dalton



[End of section]



Appendixes:



Appendix I: Homeland Security Funding by Department or Agency, Fiscal 

Years 2001 to 2003:



Dollars in millions.



Department of Agriculture; Department/independent agency: $339.87; FY 

2001: $776.56; FY 2002: $573.38; FY 2003 President’s budget request: 

[Empty].



Department of Commerce; Department/independent agency: 97.65; FY 2001: 

124.35; FY 2002: 158.68; FY 2003 President’s budget request: [Empty].



National Security/Department of Defense[B]; Department/independent 

agency: 4,021.00; FY 2001: 6,665.00; FY 2002: 7,844.00; FY 2003 

President’s budget request: [Empty].



Department of Education; Department/independent agency: 0.04; FY 2001: 

0.04; FY 2002: 0.04; FY 2003 President’s budget request: [Empty].



Department of Energy; Department/independent agency: 1,000.28; FY 2001: 

1,271.13; FY 2002: 1,201.40; FY 2003 President’s budget request: 

[Empty].



Department of Health and Human Services; Department/independent agency: 

401.36; FY 2001: 3,084.12; FY 2002: 4,408.39; FY 2003 President’s 

budget request: [Empty].



Department of Housing and Urban Development; Department/independent 

agency: 1.97; FY 2001: 1.97; FY 2002: 2.72; FY 2003 President’s budget 

request: [Empty].



Department of the Interior; Department/independent agency: 25.18; FY 

2001: 114.14; FY 2002: 110.51; FY 2003 President’s budget request: 

[Empty].



Department of Justice; Department/independent agency: 4,625.71; FY 

2001: 7,446.19; FY 2002: 7,112.16; FY 2003 President’s budget request: 

[Empty].



Department of Labor; Department/independent agency: 15.97; FY 2001: 

26.37; FY 2002: 26.95; FY 2003 President’s budget request: [Empty].



Department of State; Department/independent agency: 476.37; FY 2001: 

610.26; FY 2002: 749.50; FY 2003 President’s budget request: [Empty].



Department of the Treasury; Department/independent agency: 1,786.38; FY 

2001: 2,741.55; FY 2002: 2,888.75; FY 2003 President’s budget request: 

[Empty].



Department of Transportation; Department/independent agency: 2,535.95; 

FY 2001: 9,252.60; FY 2002: 7,784.17; FY 2003 President’s budget 

request: [Empty].



Department of Veterans Affairs; Department/independent agency: 18.74; 

FY 2001: 47.42; FY 2002: 83.92; FY 2003 President’s budget request: 

[Empty].



Agency for International Development; Department/independent agency: 

0.11; FY 2001: 0.18; FY 2002: 0.18; FY 2003 President’s budget request: 

[Empty].



Corporation for National Community Service; Department/independent 

agency: 0.00; FY 2001: 29.00; FY 2002: 118.00; FY 2003 President’s 

budget request: [Empty].



District of Columbia; Department/independent agency: 0.00; FY 2001: 

212.65; FY 2002: 15.00; FY 2003 President’s budget request: [Empty].



Environmental Protection Agency; Department/independent agency: 5.59; 

FY 2001: 185.91; FY 2002: 133.48; FY 2003 President’s budget request: 

[Empty].



Executive Office of the President; Department/independent agency: 0.16; 

FY 2001: 143.80; FY 2002: 47.50; FY 2003 President’s budget request: 

[Empty].



Federal Communications Commission; Department/independent agency: 

0.00; FY 2001: 0.00; FY 2002: 1.00; FY 2003 President’s budget request: 

[Empty].



Federal Emergency Management Administration; Department/independent 

agency: 31.45; FY 2001: 329.03; FY 2002: 3,554.53; FY 2003 President’s 

budget request: [Empty].



General Services Administration; Department/independent agency: 92.93; 

FY 2001: 276.95; FY 2002: 346.91; FY 2003 President’s budget request: 

[Empty].



Kennedy Center; Department/independent agency: 0.00; FY 2001: 4.31; FY 

2002: 1.91; FY 2003 President’s budget request: [Empty].



National Aeronautics and Space Administration; Department/independent 

agency: 120.42; FY 2001: 228.92; FY 2002: 137.48; FY 2003 President’s 

budget request: [Empty].



National Archives; Department/independent agency: 0.00; FY 2001: 2.00; 

FY 2002: 7.00; FY 2003 President’s budget request: [Empty].



National Capital Planning Commission; Department/independent agency: 

0.00; FY 2001: 0.76; FY 2002: 0.00; FY 2003 President’s budget request: 

[Empty].



National Gallery of Art; Department/independent agency: 0.00; FY 2001: 

2.15; FY 2002: 2.17; FY 2003 President’s budget request: [Empty].



National Science Foundation; Department/independent agency: 212.15; FY 

2001: 236.29; FY 2002: 236.33; FY 2003 President’s budget request: 

[Empty].



Nuclear Regulatory Commission; Department/independent agency: 5.85; FY 

2001: 41.13; FY 2002: 34.41; FY 2003 President’s budget request: 

[Empty].



Office of Personnel Management; Department/independent agency: 2.04; FY 

2001: 1.93; FY 2002: 1.25; FY 2003 President’s budget request: [Empty].



Securities and Exchange Commission; Department/independent agency: 

1.86; FY 2001: 0.75; FY 2002: 0.17; FY 2003 President’s budget request: 

[Empty].



Smithsonian; Department/independent agency: 0.00; FY 2001: 21.70; FY 

2002: 20.00; FY 2003 President’s budget request: [Empty].



Social Security Administration; Department/independent agency: 73.83; 

FY 2001: 113.10; FY 2002: 129.16; FY 2003 President’s budget request: 

[Empty].



United States Postal Service; Department/independent agency: 0.00; FY 

2001: 762.00; FY 2002: 0.00; FY 2003 President’s budget request: 

[Empty].



U.S. Army Corps of Engineers; Department/independent agency: 0.00; FY 

2001: 138.60; FY 2002: 65.00; FY 2003 President’s budget request: 

[Empty].



Other small/independent agencies; Department/independent agency: 1.54; 

FY 2001: 2.60; FY 2002: 1.97; FY 2003 President’s budget request: 

[Empty].



Total[C]; Department/independent agency: $15,894.40; FY 2001: 

$34,895.44; FY 2002: $37,798.01; FY 2003 President’s budget request: 

[Empty].



Source: OMB Memorandum M-02-14, “Additional Information Requirements 

for Overseas Combating Terrorism and Homeland Security for the FY 2004 

Budget” (August 8, 2002) and GAO analysis.



Note: Numbers may not add to totals because of rounding.



[A] The FY 2002 estimated funds includes homeland security amounts from 

the FY 2002 enacted budget ($19,582.46); the emergency supplemental 

enacted September 2001 ($10,728.83), and the emergency supplemental 

enacted August, 2002 ($4,584.15).



[B] The category “National Security” includes Department of Defense and 

intelligence community funding combined to keep figures unclassified.



[C] OMB does not report on homeland security funds for the judicial or 

legislative branch.



[End of table]



[End of section]



Appendix II: Critical Success Factors for New Organizations:



In our prior work, entitled Homeland Security: Critical Design and 

Implementation Issues, (GAO-02-957T, July 17, 2002), we identified 

certain critical success factors a new organization should emphasize in 

its initial implementation phase. Over the years, we have has made 

observations and recommendations about many of these success factors, 

based on effective management of people, technology, and financial and 

other issues, especially in our biannual Performance and Accountability 

Series on major government departments. These factors include the 

following:



* Strategic planning: Leading results-oriented organizations focus on 

the process of strategic planning that includes involvement of 

stakeholders; assessment of internal and external environments; and an 

alignment of activities, core processes, and resources to support 

mission-related outcomes.



* Organizational alignment: The organization of the new Department of 

Homeland Security (DHS) should be aligned to be consistent with the 

goals and objectives established in the strategic plan.



* Communications: Effective communication strategies are key to any 

major consolidation or transformation effort.



* Building partnerships: One of the key challenges of this new 

department will be the development and maintenance of homeland security 

partners at all levels of the government and the private sector, both 

in the United States and overseas.



* Performance management: An effective performance management system 

fosters institutional, unit, and individual accountability.



* Human capital strategy: The new department must ensure that its 

homeland security missions are not adversely impacted by the 

government’s pending human capital crisis, and that it can recruit, 

retain, and reward a talented and motivated workforce, which has 

required core competencies, to achieve its mission and objectives. The 

people factor is a critical element in any major consolidation or 

transformation.



* Information management and technology: The new department should 

leverage enabling technology to enhance its ability to transform 

capabilities and capacities to share and act upon timely, quality 

information about terrorist threats.



* Knowledge management: The new department must ensure it makes maximum 

use of the collective body of knowledge that will be brought together 

in the consolidation.



* Financial management: The new department has a stewardship obligation 

to prevent fraud, waste, and abuse; to use tax dollars appropriately; 

and to ensure financial accountability to the President, the Congress 

and the American people.



* Acquisition management: As one of the largest federal departments, 

DHS will potentially have some of the most extensive acquisition 

requirements in government. Early attention to strong systems and 

controls for acquisition and related business processes will be 

critical both to ensuring success and maintaining integrity and 

accountability.



* Risk management: The new department must be able to maintain and 

enhance current states of homeland security readiness while 

transitioning and transforming itself into a more effective and 

efficient structural unit. DHS will also need to immediately improve 

the government’s overall ability to perform risk management activities 

that can help to prevent, defend against and respond to terrorist acts.



* Change management: Assembling a new organization out of separate 

pieces and reorienting all of its processes and assets to deliver the 

desired results while managing related risks will take an organized, 

systematic approach to change. The new department will both require an 

executive and operational capability to encourage and manage change.



[End of section]



Appendix III: Comments from the Office of Personnel Management:



OFFICE OF THE DIRECTOR:



UNITED STATES OFFICE OF PERSONNEL MANAGEMENT WASHINGTON, DC 20415-1000:



DEC 19 2002:



Ms. Patricia A. Dalton Director, Strategic Issues, General Accounting 

Office 441 G Street, NW. Washington, DC 20548:



Dear Ms. Dalton:



Thank you for the opportunity to comment on the draft report entitled 

Homeland Security: Management Challenges Facing Federal Leadership 

(GAO-03-260). The Office of Personnel Management (OPM) has reviewed the 

draft report and is pleased to offer the following comments.



This ambitious review of an enormous range of issues succeeds well in 

drawing together multiple themes and focusing attention on integrated 

concerns that will affect the successful establishment of the 

Department of Homeland Security (DHS). This report should prove 

valuable to Homeland Security leadership, at the Office of Homeland 

Security (OHS), the Transition Planning Office, and within the new 

Department itself.



We at OPM were particularly, and understandably, interested in the 

report’s focus on human capital management challenges and agree that 

those cannot be overemphasized. We appreciate that the “Results in 

Brief’ acknowledges OPM’s important role in developing and implementing 

a human capital strategy for DHS. As the managing partner for the human 

capital initiative of the President’s Management Agenda, we work 

closely with all agencies in these matters. With respect to DHS, we are 

actively involved in accomplishing all the items listed on page 8.



We suggest including additional material in the section about 

“Performance Management Systems, Personnel Flexibilities Can Improve 

Effectiveness” on page 67. Although later on page 76 you acknowledge 

that Congress has granted DHS human capital flexibilities, we believe 

those DHS-specific flexibilities should also be recognized earlier as 

you point out the value of using flexibilities. Specifically, the 

Homeland Security Act of 2002 grants to the Secretary of DHS and the 

Director of OPM the authority to modify existing provisions of title 5, 

U.S. Code, in areas impacting hiring, firing, appeals, compensation, 

performance management, and collective bargaining. There could also be 

recognition of OPM’s aggressive plans to develop specific proposals in 

each of these areas for further consultation and ultimate approval and 

establishment of systems through joint regulation by the DHS Secretary 

and OPM Director.



One instance where OPM’s role should also be noted directly occurs in 

the “Effective Oversight Critical to Success” section on page 69. OPM 

should be listed there as one of the oversight entities in addition to 

Inspectors General, the Office of Management and Budget (OMB), and

OHS. Similarly, on page 73 in the “Conclusion” section, “human 

resources” or “human capital” should be added to the list in the final 

sentence of the first paragraph on that page that cites areas where 

tensions must be resolved.



In several places, the report correctly emphasizes the importance of 

establishing effective performance management systems for DHS success. 

We note however, that those references appear to reflect both the 

performance management processes and deliverables associated with the 

Government Performance and Results Act and carried out under OMB 

oversight and the employee performance management systems established 

under chapter 43 of title 5, U.S. Code, and carried out under OPM 

oversight. We fully recognize the value of integrating these systems 

wherever possible. However, for some of the references to performance 

management in the report, it is not clear whether you mean an 

integrated system, just the GPRA elements, or just the employee 

appraisal and recognition aspects. For example, the first paragraph on 

page 54 in the “Agencies Strategic Planning Revisions Started, But 

Incomplete” section provides an excellent opportunity to use the 

integrated approach (e.g., citing “performance expectations and 

measures” that could form the basis for employee appraisals), but 

appears to focus on the GPRA apparatus only. On page 76 in the 

“Conclusion” section, you recommend that the human capital management 

strategy “establish an effective performance management system,” which 

appears to emphasize the employee appraisal and recognition 

perspective. As we fully concur in the importance of effective 

performance management, we believe readers of the report would benefit 

from further clarification of which perspective(s) your references to 

performance management systems entail.



Again, we appreciate the opportunity to comment on this comprehensive 

report. We hope that our comments are helpful. We have also enclosed a 

few additional minor editorial suggestions. If you have any questions 

about them, please contact Doris Hausser at 202-606-2648.



Sincerely,



Kay Coles James

Director



Signed by Kay Coles James



Enclosure:



ADDITIONAL COMMENTS ON “HOMELAND SECURITY: MANAGEMENT CHALLENGES FACING 

FEDERAL LEADERSHIP” (GAO-03-260):



1.	On page 16, provide a more accurate citation for the Homeland 

Security Act of 2002 (Public Law 107-296).



2. On pages 17-18, two paragraphs describing the establishment of the 

U.S. Northern Command appear to have been inserted before a paragraph 

that recapitulates a series of events. That recapitulation should be 

revised and updated, particularly for its abstract reference to “a new 

cabinet department.”:



3.	On page 29, Table 3 lays out DHS Organizational Elements. The 

Immigration and Naturalization Service is missing from the listing of 

Major Agencies Included. Also, it is not clear whether the generality 

“Secure the borders, waters, ports, etc.” under Mission for Directorate 

of Border and Transportation Security is meant to include functions 

concerning contraband.



4.	On page 37, the second full sentence appears to have words missing or 

misordered.



5.	On page 62, the report notes that the DHS legislation requires the 

President to provide a DHS reorganization plan 60 days after enactment, 

but fails to note that he submitted that plan immediately.



6.	We trust that internal GAO reviewers will provide routine copy 

editing corrections as to misspellings, missing words, the correct 

ordering of commas and footnote numbers, etc.



[End of section]



Related GAO Products:



Homeland Security:



Border Security: Implications of Eliminating the Visa Waiver Program. 

GAO-03-38. Washington, D.C.: November 22, 2002.



Homeland Security: CDC’s Oversight of Select Agent Programs. GAO-03-

315R. Washington, D.C.: November 22, 2002.



Homeland Security: INS Cannot Locate Many Aliens Because It Lacks 

Reliable Address Information. GAO-03-188, November 21, 2002.



Container Security: Current Efforts to Detect Nuclear Materials, New 

Initiatives, and Challenges. GAO-03-297T. Washington, D.C.: November 

18, 2002.



Highlights of a GAO Forum: Mergers and Transformation: Lessons Learned 

for a Department of Homeland Security and Other Federal Agencies. GAO-

03-293P. Washington, D.C.: November 14, 2002.



Technology Assessment: Using Biometrics for Border Security. GAO-03-

174. Washington, D.C.: November 14, 2002. :



Coast Guard: Strategy Needed for Setting and Monitoring Levels of 

Effort for All Missions. GAO-03-155. Washington, D.C.: November 12, 

2002.



Building Security: Security Responsibilities for Federally Owned and 

Leased Facilities. GAO-03-8. Washington, D.C.: October 31, 2002.



Border Security: Visa Process Should Be Strengthened as an 

Antiterrorism Tool. GAO-03-132NI. Washington, D.C.: October 21, 

2002. :



Homeland Security: Department of Justice’s Response to Its 

Congressional Mandate to Assess and Report on Chemical Industry 

Vulnerabilities. GAO-03-24R. Washington, D.C.: October 10, 2002. :



Homeland Security: Information Sharing Activities Face Continued 

Management Challenges. GAO-02-1122T. Washington, D.C.: October 1, 2002.



Homeland Security: OMB’s Temporary Cessation of Information Technology 

Funding for New Investments. GAO-03-186T. Washington, D.C.: October 1, 

2002.



Mass Transit: Challenges in Securing Transit Systems. GAO-02-1075T. 

Washington, D.C.: September 18, 2002.



Building Security: Interagency Security Committee Has Had Limited 

Success in Fulfilling Its Responsibilities. GAO-02-1004. Washington, 

D.C.: September 17, 2002. :



September 11: Interim Report on the Response of Charities. GAO-02-1037. 

Washington, D.C.: September 3, 2002.



National Preparedness: Technology and Information Sharing 

Challenges. GAO-02-1048R. Washington, D.C.: August 30, 2002.



Homeland Security: Effective Intergovernmental Coordination Is Key to 

Success. GAO-02-1013T. Washington, D.C.: August 23, 2002. :



Homeland Security: Effective Intergovernmental Coordination Is Key to 

Success. GAO-02-1012T. Washington, D.C.: August 22, 2002.



Homeland Security: Effective Intergovernmental Coordination Is Key to 

Success. GAO-02-1011T. Washington, D.C.: August 20, 2002.



Port Security: Nation Faces Formidable Challenges in Making New 

Initiatives Successful. GAO-02-993T. Washington, D.C.: August 5, 2002.



Chemical Safety: Emergency Response Community Views on the Adequacy of 

Federally Required Chemical Information. GAO-02-799. Washington, D.C.: 

July 31, 2002. :



Homeland Security: Critical Design and Implementation Issues. GAO-02-

957T. Washington, D.C.: July 17, 2002.



Homeland Security: New Department Could Improve Coordination but 

Transferring Control of Certain Public Health Programs Raises Concerns. 

GAO-02-954T. Washington, D.C.: July 16, 2002.



Homeland Security: New Department Could Improve Biomedical R&D 

Coordination but May Disrupt Dual-Purpose Efforts. GAO-02-924T. 

Washington, D.C.: July 9, 2002.



Homeland Security: Title III of the Homeland Security Act of 2002. GAO-

02-927T. Washington, D.C.: July 9, 2002.



Homeland Security: Intergovernmental Coordination and Partnership Will 

Be Critical to Success. GAO-02-901T. Washington, D.C.: July 3, 2002.



Homeland Security: Intergovernmental Coordination and Partnerships 

Will Be Critical to Success. GAO-02-899T. Washington, D.C.: July 1, 

2002.



Homeland Security: New Department Could Improve Coordination but May 

Complicate Priority Setting. GAO-02-893T. Washington, D.C.: June 28, 

2002.



Homeland Security: New Department Could Improve Coordination but May 

Complicate Public Health Priority Setting. GAO-02-883T. Washington, 

D.C.: June 25, 2002.



Homeland Security: Proposal for Cabinet Agency Has Merit, But 

Implementation Will Be Pivotal to Success. GAO-02-886T. Washington, 

D.C.: June 25, 2002.



Homeland Security: Key Elements to Unify Efforts Are Underway but 

Uncertainty Remains. GAO-02-610. Washington, D.C.: June 7, 2002.



National Preparedness: Integrating New and Existing Technology and 

Information Sharing into an Effective Homeland Security Strategy. GAO-

02-811T. Washington, D.C.: June 7, 2002.



Review of Studies of the Economic Impact of the September 11, 2001, 

Terrorist Attacks on the World Trade Center. GAO-02-700R. Washington, 

D.C.: May 29, 2002. :



Homeland Security: Responsibility and Accountability for Achieving 

National Goals. GAO-02-627T. Washington, D.C.: April 11, 2002. :



Homeland Security: Integration of Federal, State, Local, and Private 

Sector Efforts Is Critical to an Effective National Strategy for 

Homeland Security. GAO-02-621T. Washington, D.C.: April 11, 2002.



Homeland Security: Progress Made, More Direction and Partnership 

Sought. GAO-02-490T. Washington, D.C.: March 12, 2002.



Homeland Security: Challenges and Strategies in Addressing Short-and 

Long-Term National Needs. GAO-02-160T. Washington, D.C.: November 7, 

2001.



Homeland Security: A Risk Management Approach Can Guide Preparedness 

Efforts. GAO-02-208T. Washington, D.C.: October 31, 2001.



Homeland Security: Need to Consider VA’s Role in Strengthening Federal 

Preparedness. GAO-02-145T. Washington, D.C.: October 15, 2001.



Homeland Security: Key Elements of a Risk Management Approach. GAO-02-

150T. Washington, D.C.: October 12, 2001.



Homeland Security: A Framework for Addressing the Nation’s Issues.

GAO-01-1158T. Washington, D.C.: September 21, 2001.



Combating Terrorism:



Combating Terrorism: Actions Needed to Guide Services’ Antiterrorism 

Efforts at Installations. GAO-03-14. Washington, D.C.: November 1, 

2002.



Nonproliferation: Strategy Needed to Strengthen Multilateral Export 

Control Regimes. GAO-03-43. Washington, D.C.: October 25, 2002.



Chemical Weapons: Organization for the Prohibition of Chemical Weapons 

Needs Comprehensive Plan to Correct Budgeting Weaknesses. GAO-03-5. 

Washington, D.C.: October 24, 2002.   :



Combating Terrorism: Actions Needed to Improve Force Protection for DOD 

Deployments through Domestic Seaports. GAO-03-15. Washington, D.C.: 

October 22, 2002.



Chemical Biological Defense: Observations on DOD’s Risk Assessment of 

Defense Capabilities. GAO-03-137T. Washington, D.C.: October 1, 2002.



Chemical Weapons: Lessons Learned Program Generally Effective but Could 

Be Improved and Expanded. GAO-02-890. Washington, D.C.: September 10, 

2002. :



Combating Terrorism: Department of State Programs to Combat Terrorism 

Abroad. GAO-02-1021. Washington, D.C.: September 6, 2002.



Export Controls: Department of Commerce Controls over Transfers of 

Technology to Foreign Nationals Need Improvement. GAO-02-972. 

Washington, D.C.: September 6, 2002. :



Nonproliferation R&D: NNSA’s Program Develops Successful Technologies, 

but Project Management Can Be Strengthened. GAO-02-904. Washington, 

D.C.: August 23, 2002. :



Diffuse Security Threats: USPS Air Filtration Systems Need More Testing 

and Cost Benefit Analysis Before Implementation. GAO-02-838. 

Washington, D.C.: August 22, 2002.



Nuclear Nonproliferation: U.S. Efforts to Combat Nuclear 

Smuggling. GAO-02-989T. Washington, D.C.: July 30, 2002.



Combating Terrorism: Preliminary Observations on Weaknesses in Force 

Protection for DOD Deployments Through Domestic Seaports. GAO-02-

955TNI. Washington, D.C.: July 23, 2002. :



Diffuse Security Threats: Technologies for Mail Sanitization Exist, but 

Challenges Remain. GAO-02-365. Washington, D.C.: April 23, 2002. :



Combating Terrorism: Intergovernmental Cooperation in the Development 

of a National Strategy to Enhance State and Local Preparedness. GAO-02-

550T. Washington, D.C.: April 2, 2002.



Combating Terrorism: Enhancing Partnerships Through a National 

Preparedness Strategy. GAO-02-549T. Washington, D.C.: March 28, 2002.



Combating Terrorism: Critical Components of a National Strategy to 

Enhance State and Local Preparedness. GAO-02-548T. Washington, D.C.: 

March 25, 2002.



Combating Terrorism: Intergovernmental Partnership in a National 

Strategy to Enhance State and Local Preparedness. GAO-02-547T. 

Washington, D.C.: March 22, 2002.



Combating Terrorism: Key Aspects of a National Strategy to Enhance 

State and Local Preparedness. GAO-02-473T. Washington, D.C.: March 1, 

2002.



Combating Terrorism: Considerations for Investing Resources in Chemical 

and Biological Preparedness. GAO-01-162T. Washington, D.C.: October 17, 

2001.



Combating Terrorism: Selected Challenges and Related Recommendations. 

GAO-01-822. Washington, D.C.: September 20, 2001.



Combating Terrorism: Actions Needed to Improve DOD’s Antiterrorism 

Program Implementation and Management. GAO-01-909. Washington, D.C.: 

September 19, 2001.



Combating Terrorism: Comments on H.R. 525 to Create a President’s 

Council on Domestic Preparedness. GAO-01-555T. Washington, D.C.: May 9, 

2001.



Combating Terrorism: Observations on Options to Improve the Federal 

Response. GAO-01-660T. Washington, D.C.: April 24, 2001.



Combating Terrorism: Comments on Counterterrorism Leadership and 

National Strategy. GAO-01-556T. Washington, D.C.: March 27, 2001.



Combating Terrorism: FEMA Continues to Make Progress in Coordinating 

Preparedness and Response. GAO-01-15. Washington, D.C.: March 20, 2001.



Combating Terrorism: Federal Response Teams Provide Varied 

Capabilities; Opportunities Remain to Improve Coordination. GAO-01-14. 

Washington, D.C.: November 30, 2000.



Combating Terrorism: Issues in Managing Counterterrorist Programs. 

GAO/T-NSIAD-0-45. Washington, D.C.: April 6, 2000. :



Combating Terrorism: Need to Eliminate Duplicate Federal Weapons of 

Mass Destruction Training. GAO/NSIAD-00-64. Washington, D.C.: March 21, 

2000.



Combating Terrorism: Observations on the Threat of Chemical and 

Biological Terrorism. GAO/T-NSIAD-00-50. Washington, D.C.: October 20, 

1999.



Combating Terrorism: Need for Comprehensive Threat and Risk Assessments 

of Chemical and Biological Attack. GAO/NSIAD-99-163. Washington, D.C.: 

September 7, 1999.



Combating Terrorism: Observations on Growth in Federal Programs.

GAO/T-NSIAD-99-181. Washington, D.C.: June 9, 1999.



Combating Terrorism: Analysis of Potential Emergency Response Equipment 

and Sustainment Costs. GAO/NSIAD-99-151. Washington, D.C.: June 9, 

1999.



Combating Terrorism: Use of National Guard Response Teams Is Unclear. 

GAO/NSIAD-99-110. Washington, D.C.: May 21, 1999.



Combating Terrorism: Issues to Be Resolved to Improve Counterterrorism 

Operations. GAO/NSIAD-99-135. Washington, D.C.: May 13, 1999. :



Combating Terrorism: Observations on Federal Spending to Combat 

Terrorism. GAO/T-NSIAD/GGD-99-107. Washington, D.C.: March 11, 1999.



Combating Terrorism: Opportunities to Improve Domestic Preparedness 

Program Focus and Efficiency. GAO/NSIAD-99-3. Washington, D.C.: 

November 12, 1998.



Combating Terrorism: Observations on the Nunn-Lugar-Domenici Domestic 

Preparedness Program. GAO/T-NSIAD-99-16. Washington, D.C.: October 2, 

1998.



Combating Terrorism: Threat and Risk Assessments Can Help Prioritize 

and Target Program Investments. GAO/NSIAD-98-74. Washington, D.C.: 

April 9, 1998.



Combating Terrorism: Spending on Governmentwide Programs Requires 

Better Management and Coordination. GAO/NSIAD-98-39. Washington, D.C.: 

December 1, 1997.



Public Health:



Public Health: Maintaining an Adequate Blood Supply Is Key to Emergency 

Preparedness. GAO-02-1095T. Washington, D.C.: September 10, 2002. :



Bioterrorism: The Centers for Disease Control and Prevention’s Role in 

Public Health Protection. GAO-02-235T. Washington, D.C.: November 15, 

2001.



Bioterrorism: Review of Public Health and Medical Preparedness. GAO-02-

149T. Washington, D.C.: October 10, 2001.



Bioterrorism: Public Health and Medical Preparedness. GAO-02-141T. 

Washington, D.C.: October 10, 2001.



Food Safety and Security: Fundamental Changes Needed to Ensure Safe 

Food. GAO-02-47T. Washington, D.C.: October 10, 2001.



Bioterrorism: Coordination and Preparedness. GAO-02-129T. Washington, 

D.C.: October 5, 2001.



Bioterrorism: Federal Research and Preparedness Activities. GAO-01-

915. Washington, D.C.: September 28, 2001.



Chemical and Biological Defense: Improved Risk Assessments and 

Inventory Management Are Needed. GAO-01-667. Washington, D.C.: 

September 28, 2001.



West Nile Virus Outbreak: Lessons for Public Health Preparedness. GAO/

HEHS-00-180. Washington, D.C.: September 11, 2000.



Need for Comprehensive Threat and Risk Assessments of Chemical and 

Biological Attacks. GAO/NSIAD-99-163. Washington, D.C.: September 7, 

1999.



Chemical and Biological Defense: Program Planning and Evaluation Should 

Follow Results Act Framework. GAO/NSIAD-99-159. Washington, D.C.: 

August 16, 1999.



Combating Terrorism: Observations on Biological Terrorism and Public 

Health Initiatives. GAO/T-NSIAD-99-112. Washington, D.C.: March 16, 

1999.



Aviation Security:



Aviation Security: Transportation Security Administration Faces 

Immediate and Long-Term Challenges. GAO-02-971T. Washington, D.C.: 

July 25, 2002. :



Aviation Security: Vulnerabilities in, and Alternatives for, Preboard 

Screening Security Operations. GAO-01-1171T. Washington, D.C.: 

September 25, 2001.



Aviation Security: Weaknesses in Airport Security and Options for 

Assigning Screening Responsibilities. GAO-01-1165T. Washington, D.C.: 

September 21, 2001.



Aviation Security: Terrorist Acts Illustrate Severe Weaknesses in 

Aviation Security. GAO-01-1166T. Washington, D.C.: September 20, 2001.



Aviation Security: Terrorist Acts Demonstrate Urgent Need to Improve 

Security at the Nation’s Airports. GAO-01-1162T. Washington, D.C.: 

September 20, 2001.



Aviation Security: Long-Standing Problems Impair Airport Screeners’ 

Performance. GAO/RCED-00-75. Washington, D.C.: June 28, 2000.



Aviation Security: Slow Progress in Addressing Long-Standing Screener 

Performance Problems. GAO/T-RCED-00-125. Washington, D.C.: March 16, 

2000.



Aviation Security: Progress Being Made, but Long-term Attention Is 

Needed. GAO/T-RCED-98-190. Washington, D.C.: May 14, 1998.



Aviation Security: FAA’s Procurement of Explosives Detection Devices. 

GAO/RCED-97-111R. Washington, D.C.: May 1, 1997.



Aviation Security: Commercially Available Advanced Explosives 

Detection Devices. GAO/RCED-97-119R. Washington, D.C.: April 24, 1997.



Aviation Security: Technology’s Role in Addressing Vulnerabilities. 

GAO/T-RCED/NSIAD-96-262. Washington, D.C.: September 19, 1996.



Aviation Security: Urgent Issues Need to Be Addressed. 

GAO/T-RCED/NSIAD-96-251. Washington, D.C.: September 11, 1996.



Aviation Security: Immediate Action Needed to Improve Security. 

GAO/T-RCED/NSIAD-96-237. Washington, D.C.: August 1, 1996.



Critical Infrastructure Protection:



Computer Security: Progress Made, But Critical Federal Operations and 

Assets Remain at Risk. GAO-03-303T. Washington, D.C.: November 19, 

2002.



Critical Infrastructure Protection: Commercial Satellite Security 

Should Be More Fully Addressed. GAO-02-781. Washington, D.C.: August 

30, 2002.



Critical Infrastructure Protection: Significant Challenges Need to Be 

Addressed. GAO-02-961T. Washington, D.C.: July 24, 2002.



Critical Infrastructure Protection: Federal Efforts Require a More 

Coordinated and Comprehensive Approach to Protecting Information 

Systems. GAO-02-474. Washington, D.C.: July 15, 2002.



Critical Infrastructure Protection: Significant Homeland Security 

Challenges Need to Be Addressed. GAO-02-918T. Washington, D.C.: July 9, 

2002.



Information Sharing: Practices That Can Benefit Critical Infrastructure 

Protection. GAO-02-24. Washington, D.C.: October 15, 2001. :



Critical Infrastructure Protection: Significant Challenges in 

Safeguarding Government and Privately Controlled Systems from Computer-

Based Attacks. GAO-01-1168T. Washington, D.C.: September 26, 2001.



Critical Infrastructure Protection: Significant Challenges in 

Protecting Federal Systems and Developing Analysis and Warning 

Capabilities. GAO-01-1132T. Washington, D.C.: September 12, 2001.



Critical Infrastructure Protection: Significant Challenges in 

Developing Analysis, Warning, and Response Capabilities. GAO-01-1005T. 

Washington, D.C.: July 25, 2001.



Critical Infrastructure Protection: Significant Challenges in 

Developing Analysis, Warning, and Response Capabilities. GAO-01-769T. 

Washington, D.C.: May 22, 2001.



Critical Infrastructure Protection: Significant Challenges in 

Developing National Capabilities. GAO-01-323. Washington, D.C.: April 

25, 2001.



Critical Infrastructure Protection: Challenges to Building a 

Comprehensive Strategy for Information Sharing and Coordination. GAO/T-

AIMD-00-268. Washington, D.C.: July 26, 2000.



Critical Infrastructure Protection: Comments on the Proposed Cyber 

Security Information Act of 2000. GAO/T-AIMD-00-229. Washington, D.C.: 

June 22, 2000.



Critical Infrastructure Protection: National Plan for Information 

Systems Protection. GAO/AIMD-00-90R. Washington, D.C.: February 11, 

2000.



Critical Infrastructure Protection: Comments on the National Plan for 

Information Systems Protection. GAO/T-AIMD-00-72. Washington, D.C.: 

February 1, 2000.



Critical Infrastructure Protection: Fundamental Improvements Needed to 

Assure Security of Federal Operations. GAO/T-AIMD-00-7. Washington, 

D.C.: October 6, 1999.



Critical Infrastructure Protection: Comprehensive Strategy Can Draw on 

Year 2000 Experiences. GAO/AIMD-00-1. Washington, D.C.: October 1, 

1999.



Disaster Assistance:



September 11: Small Business Assistance Provided in Lower Manhattan in 

Response to the Terrorist Attacks. GAO-03-88. Washington, D.C.: 

November 1, 2002. :



Disaster Assistance: Improvement Needed in Disaster Declaration 

Criteria and Eligibility Assurance Procedures. GAO-01-837. Washington, 

D.C.: August 31, 2001.



Chemical Weapons: FEMA and Army Must Be Proactive in Preparing States 

for Emergencies. GAO-01-850. Washington, D.C.: August 13, 2001.



Federal Emergency Management Agency: Status of Achieving Key Outcomes 

and Addressing Major Management Challenges. GAO-01-832. Washington, 

D.C.: July 9, 2001.



Budget and Management:



Highlights of a GAO Roundtable: The Chief Operating Officer Concept--A 

Potential Strategy to Address Federal Governance Challenges. GAO-03-

192SP. Washington, D.C.: October 4, 2002.



Program Evaluation: Strategies for Assessing How Information 

Dissemination Contributes to Agency Goals. GAO-02-923. Washington, 

D.C.: September 30, 2002.



Results-Oriented Cultures: Using Balanced Expectations to Manage Senior 

Executive Performance. GAO-02-966. Washington, D.C.: September 27, 

2002.



Performance Budgeting: Opportunities and Challenges. GAO-02-1106T. 

Washington, D.C.: September 19, 2002. :



Electronic Government: Proposal Addresses Critical Challenges. GAO-02-

1083T. Washington, D.C.: September 18, 2002. :



Results-Oriented Cultures: Insights for U.S. Agencies from Other 

Countries’ Performance Management Initiatives. GAO-02-862. Washington, 

D.C.: August 2, 2002. :



Acquisition Workforce: Agencies Need to Better Define and Track the 

Training of Their Employees. GAO-02-737. Washington, D.C.: July 29, 

2002. :



Managing for Results: Using Strategic Human Capital Management to Drive 

Transformational Change. GAO-02-940T. Washington, D.C.: July 15, 

2002. :



Coast Guard: Budget and Management Challenges for 2003 and Beyond. 

GAO-02-538T. Washington, D.C.: March 19, 2002. :



Managing for Results: Building on the Momentum for Strategic Human 

Capital Reform. GAO-02-528T. Washington, D.C.: March 18, 2002.



A Model of Strategic Human Capital Management. GAO-02-373SP. 

Washington, D.C.: March 15, 2002. :



Budget Issues: Long-Term Fiscal Challenges. GAO-02-467T. Washington, 

D.C.:  February 27, 2002. :



Managing for Results: Progress in Linking Performance Plans with Budget 

and Financial Statements. GAO-02-236. Washington, D.C.: January 4, 

2002.



Results-Oriented Budget Practices in Federal Agencies. GAO-01-1084SP. 

Washington, D.C.: August 2001.



Managing for Results: Federal Managers’ Views on Key Management Issues 

Vary Widely Across Agencies. GAO-01-592. Washington, D.C.: May 2001.



High-Risk Series: An Update. GAO-01-263. Washington, D.C.: January 

2001.



Major Management Challenges and Program Risks: A Governmentwide 

Perspective. GAO-01-241. January 2001.



Determining Performance and Accountability Challenges and High Risks.

GAO-01-159SP. Washington, D.C.: November 2000.



Managing for Results: Using the Results Act to Address Mission 

Fragmentation and Program Overlap. GAO/AIMD-97-156. Washington, D.C.: 

August 29, 1997.



Government Restructuring: Identifying Potential Duplication in Federal 

Missions and Approaches. GAO/T-AIMD-95-161. Washington, D.C.: June 7, 

1995.



Reorganization:



FBI Reorganization: Initial Steps Encouraging but Broad Transformation 

Needed. GAO-02-865T. Washington, D.C.: June 21, 2002.



Environmental Protection: Observations on Elevating the Environmental 

Protection Agency to Cabinet Status. GAO-02-552T. Washington, D.C.: 

March 21, 2002.



Implementation: The Missing Link in Planning Reorganizations. GAO/GGD-

81-75. Washington, D.C.: March 20, 1981.



Grant Design:



Grant Programs: Design Features Shape Flexibility, Accountability, and 

Performance Information. GAO/GGD-98-137. Washington, D.C.: June 22, 

1998.



Federal Grants: Design Improvements Could Help Federal Resources Go 

Further. GAO/AIMD-97-7. Washington, D.C.: December 18, 1996.



Block Grants: Issues in Designing Accountability Provisions. GAO/AIMD-

95-226. Washington, D.C.: September 1, 1995.



(450111):



FOOTNOTES



[1] The remainder of the emergency supplemental funded military actions 

overseas and one-time costs for rebuilding and recovery at the attack 

sites. Neither of these activities--direct military action and 

immediate response and recovery--are included in the definition of 

homeland security.



[2] U.S. General Accounting Office, Homeland Security: Critical Design 

and Implementation Issues, GAO-01-957T (Washington, D.C.: July 17, 

2002).



[3] On December 13, 2002, the President announced plans to administer 

the smallpox vaccine to certain military and civilian personnel who are 

or may be deployed in high threat areas, as well as to vaccinate 

emergency health care workers and other critical personnel who may 

serve on volunteer smallpox response teams. Although the administration 

is not recommending vaccination for the general public, the 

administration has stated that public health agencies will work to 

accommodate members of the general public who insist on being 

vaccinated. 



[4] U.S. General Accounting Office, Coast Guard: Strategy Needed for 

Setting and Monitoring Levels of Effort for All Missions, GAO-03-155 

(Washington, D.C.: Nov. 12, 2002). The Homeland Security Act of 2002 

(P.L. 107-296, Nov. 25, 2002) requires that the Coast Guard’s non-

homeland security functions such as marine safety be maintained intact 

and not be significantly reduced after being transferred to DHS, except 

as specified in subsequent acts.



[5] The FBI reports that of these 518 field agents, 480 agents went to 

the Counterterrorism Program, 25 went to support the training of new 

agents at the FBI Academy and 13 went to the Security Division to 

implement critical security improvements. 



[6] U.S. General Accounting Office, Homeland Security: New Department 

Could Improve Coordination but Transferring Control of Certain Public 

Health Programs Raises Concerns, GAO-02-954T (Washington, D.C.: July 

16, 2002).



[7] GAO-02-954T.



[8] The Homeland Security Advisory System, established through 

Presidential Directive 3, is designed to provide a comprehensive and 

effective means to disseminate information regarding the risk of 

terrorist acts to federal, state, and local authorities. Such a system 

would provide warnings in the form of a set of graduated “Threat 

Conditions” that would increase as the risk of the threat increases. 

This system is intended to create a common vocabulary, context, and 

structure about the nature of the threats that confront the homeland 

and the appropriate measures that should be taken in response. 



[9] The DHS legislation institutionalizes the HSC within the Executive 

Office of the President to advise the President on homeland security 

matters. Its members are the President, the Vice President, the 

Secretary of Homeland Security, the Attorney General, the Secretary of 

Defense, and other individuals the President may designate.



[10] Governor Tom Ridge, The Department of Homeland Security: Making 

Americans Safer, written statement for the Committee on Governmental 

Affairs, U.S. Senate, June 20, 2002.



[11] GAO-02-954T and U.S. General Accounting Office, Homeland Security: 

New Department Could Improve Biomedical R&D Coordination but May 

Disrupt Dual-Purpose Efforts, GAO-02-924T (Washington, D.C.: July 9, 

2002).



[12] U.S. General Accounting Office, Building Security: Interagency 

Security Committee Has Had Limited Success in Fulfilling Its 

Responsibilities, GAO-02-1004 (Washington, D.C.: Sept. 17, 2002). 



[13] Recently enacted legislation, Public Health Security and 

Bioterrorism Preparedness and Response Act of 2002 (Public Law 107-188) 

created the OASPHEP. The responsibilities of the office are, among 

other things, to coordinate preparedness for and response to 

bioterrorism and other public health emergencies. It has been proposed 

that OASPHEP be transferred to DHS. 



[14] According to the FBI, among the full-time federal participants on 

JTTF are the Immigration and Naturalization Service; Marshals Service; 

U.S. Secret Service; Federal Aviation Administration; U.S. Customs 

Service; Alcohol, Tobacco, and Firearms; the State Department; the 

Postal Inspection Service; the Internal Revenue Service; and the U.S. 

Park Police. State and local agencies are also represented. 



[15] U.S. General Accounting Office, Homeland Security: New Department 

Could Improve Coordination but May Complicate Priority Setting, GAO-02-

893T (Washington, D.C.: June 28, 2002).



[16] This working group is part of the National Infrastructure Security 

Committee within DOT, with oversight from OHS, and includes 

representatives from the Customs Service, Departments of Defense and 

Commerce, DOE, DOJ, USDA, HHS; and other agencies. 



[17] U.S. General Accounting Office, Container Security: Current 

Efforts to Deter Nuclear Materials, New Initiatives, and Challenges, 

GAO-03-297T (Washington, D.C.: Nov. 18, 2002).



[18] National Strategy for Homeland Security (Office of Homeland 

Security, Washington, D.C.: July 2002).



[19] Department of Justice, Office of the Inspector General, A Review 

of the Federal Bureau of Investigation’s Counterterrorism Program: 

Threat Assessment, Strategic Planning, and Resource Management, Report 

No. 02-38 (September 2002).



[20] U.S. General Accounting Office, Homeland Security: A Risk 

Management Approach Can Guide Preparedness Efforts, GAO-02-208T 

(Washington, D.C.: Oct. 31, 2001).



[21] U.S. General Accounting Office, Highlights of a GAO Forum: Mergers 

and Transformation: Lessons Learned for a Department of Homeland 

Security and Other Federal Agencies, GAO-03-293SP (Washington, D.C.: 

November 2002).



[22] According to CBO, they are planning to revise the cost estimate 

for direct spending for H.R. 5005 as enacted. However, there will not 

be any changes to the cost estimate for spending subject to 

appropriations. H.R. 5005, as amended, was enacted on November 25, 2002 

(P.L. 107-296).



[23] Congressional Budget Office, Congressional Budget Office Cost 

Estimate: H.R. 5005 Homeland Security Act of 2002 (Washington, D.C.: 

July 23, 2002).



[24] The fifth continuing resolution (P.L. 107-294) enacted on November 

23, 2002, permits the Secretary of DHS, with OMB’s approval, to 

transfer up to $500 million in budget authority for unforeseen homeland 

security requirements. In addition, OMB is allowed to reallocate up to 

$140 million of unused budget authority appropriated to organizations 

and entities transferring to DHS for salaries and expenses associated 

with establishing the new department. 



[25] Department of Homeland Security Reorganization Plan (The White 

House, Washington, D.C.: Nov. 25, 2002).



[26] U.S. General Accounting Office, Immigration Enforcement: 

Challenges to Implementing the INS Interior Enforcement Strategy, GAO-

02-861T (Washington, D.C.: June 19, 2002).



[27] U.S. General Accounting Office, Immigration and Naturalization 

Service: Overview of Recurring Management Challenges, GAO-02-168T 

(Washington, D.C.: Oct. 17, 2001).



[28] U.S. General Accounting Office, Foreign Languages: Human Capital 

Approach Needed to Correct Staffing and Proficiency Shortfalls, GAO-02-

375 (Washington, D.C.: Jan. 31, 2002).



[29] U.S. General Accounting Office, Aviation Security: Transportation 

Security Administration Faces Immediate and Long-Term Challenges, GAO-

02-971T (Washington, D.C.: July 25, 2002).



[30] U.S. General Accounting Office, A Model of Strategic Human Capital 

Management,

 GAO-02-373SP (Washington, D.C.: March 15, 2002).



[31] U.S. General Accounting Office, Managing for Results: Emerging 

Benefits From Selected Agencies’ Use of Performance Agreements, GAO-01-

115 (Washington, D.C.: Oct. 30, 2000).



[32] The Homeland Security Act of 2002 amends part III of title 5 of 

the United States Code. Title 5 covers government employees in areas 

such as employment and retention, employee performance, pay and 

allowances, and labor-management and employee relations. The act allows 

the Secretary of DHS and the Director of OPM to jointly establish and 

adjust a human resources management system. The legislation establishes 

criteria for the system, such as nonwaivable provisions.



[33] U.S. General Accounting Office, Human Capital: Effective Use of 

Flexibilities Can Assist Agencies in Managing Their Workforces, GAO-03-

2 (Washington, D.C.: Dec. 6, 2002).



[34] GAO-02-971T. 



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