Mr. President, as the ranking member of the Subcommittee on Financial Management, the Budget, and International Security, I am honored to work with my colleague Senator Fitzgerald, Chairman of the Subcommittee, to introduce the "Department of Homeland Security Financial Accountability Act."
Our bill would add the Department of Homeland Security (DHS) to the Chief Financial Officers Act of 1990 (CFO Act) (P.L. 101-576). It is a companion measure to bipartisan legislation, H.R. 2886, introduced in the House on July 24, 2003. Adding DHS would ensure that Congress will have timely and accurate financial information imperative for good governance of the resources of the Department entrusted to making our homeland safe.
The CFO Act recognizes the responsibility of governmental agencies to be accountable to taxpayers. This bill would require the President to appoint, subject to Senate confirmation, a Chief Financial Officer for DHS, who would report directly to the Director of the Department regarding financial management matters. It also requires the DHS CFO to be a member of the CFO Council. This Council is charged with advising and coordinating the activities of its members' agencies on such matters as consolidation and modernization of financial systems, improved quality of financial information, financial data and information standards, internal controls, legislation affecting financial operations and organizations, and any other financial management matters. In addition, the bill would require the DHS CFO to prepare and provide for audit, annual financial statements that are submitted to Congress, which will aid in congressional oversight of the Department.
Although the DHS bill adopted by the Governmental Affairs Committee last year (S. 2452) would have put the new Department under the CFO Act, the enacted version of the bill (P.L. 107-296) did not. All other federal departments and major agencies are under the requirements of the Act. Since the passage of the CFO Act in 1990, tremendous improvements have been made in agency financial management. For example, all CFO Act agencies, except for the Department of Defense and the Agency for International Development, achieved clean opinions from their auditors on their financial statements in fiscal year 2003. Initially, none of the agencies were able to do so. Also, the General Accounting Office has reported that the number and severity of internal control problems reported for CFO Act agencies have been significantly reduced. We expect good corporate governance from the private sector; we should also expect good governance from federal agencies.
Adding DHS to the CFO Act would also require that it meet the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA) (P.L. 104-208), which mandates that all agencies subject to the CFO Act meet certain financial system conditions. The goal of FFMIA is for agencies to have systems that provide reliable financial information available for day-to-day management.
It is our responsibility to ensure the federal government is accountable to the American taxpayers. I am pleased to join with the Chairman of our Subcommittee to ensure that DHS has the financial management systems and practices in place to provide meaningful and timely information needed for effective and efficient management decision-making.
