Homeland Security Financial Accountability Act: History and Recent Developments (CRS Report for Congress)
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| Release Date |
Nov. 15, 2004 |
| Report Number |
RL32550 |
| Report Type |
Report |
| Authors |
Virginia A. McMurtry, Government and Finance Division |
| Source Agency |
Congressional Research Service |
Summary:
Prior to the enactment of the Department of Homeland Security (DHS) Financial Accountability
Act
( P.L. 108-330 ), the DHS was the only federal cabinet department not included under the Chief
Financial Officers (CFO) Act of 1990. DHS had a CFO, but the position was not subject to Senate
confirmation.
In the 108th Congress, S. 1567 , to bring DHS under the CFO Act, passed the
Senate on November 21, 2003, and a related bill, H.R. 4259 , was approved by the
House on July 20, 2004. Supporters of the DHS Financial Accountability Act contended that the
CFO Act and related laws should apply consistently across the executive branch, and that the
"unequal" status initially accorded the CFO in DHS denigrated the CFO position and the
importance of financial management in DHS. Proponents also argued that the CFO position, with
its fiduciary responsibilities, carries with it special needs for accountability which Senate
confirmation reinforces.
On the other hand, at the beginning of the 108th Congress the Bush Administration continued
to oppose bringing the DHS CFO under the CFO Act, on grounds of special managerial principles
for the new DHS, and, subsequently, from the rationale of reducing the number of positions subject
to Senate confirmation. By the summer of 2004, however, the Administration's opposition to the
legislation appeared to have lessened. On September 29, 2004, under unanimous consent in the
Senate, H.R. 4259 was discharged from the Governmental Affairs Committee, and the
bill was then passed. The Department of Homeland Security Financial Accountability Act was
signed into law on October 16, 2004 ( P.L. 108-330 ).
As enacted, H.R. 4259 brings the CFO in DHS directly under the CFO Act, as
amended. The new law also serves to bring DHS under the Government Management Reform Act
of 1994 and the Federal Financial Management Improvement Act of 1996, and makes the CFO in
DHS a statutory member of the Chief Financial Officers Council. There is a dual reporting
framework for the CFO in DHS -- to the head of the department (as in all the other CFO Act
agencies) and, concurrently, to the Under Secretary for Management (the prior arrangement for the
CFO in DHS). The measure requires an audit of internal controls over financial reporting in DHS
after FY2005. H.R. 4259 as enacted creates an Office of Program Analysis and
Evaluation within DHS, requires DHS to prepare a Future Years Program and a Security Strategy
Report for Congress, and requires a joint study by the CFO Council and the President's Council on
Integrity and Efficiency (PCIE) of the costs and benefits of having all CFO agencies obtain audit
opinions of their internal controls. Finally, the new law requires that specified DHS authorizing
committees receive notification 15 days in advance of transfer and reprogramming actions.
This report will not be further updated.
