Homeland Security finance law unnecessary, official says

Legislation designed to enhance financial management and accountability at the Homeland Security Department is well-intentioned but unnecessary, a key department official said Wednesday.

Without any prompting from Congress, Homeland Security has already made significant progress on consolidating its agencies' financial management systems and producing accurate, timely financial statements, said Bruce Carnes, the department's chief financial officer. The department has already reduced 22 management systems to 10 and may submit fiscal 2003 audit paperwork to the Office of Management and Budget ahead of schedule, Carnes said.

Carnes testified during a House Select Committee on Homeland Security hearing on the DHS Financial Accountability Act (H.R. 2886). The bill, introduced by Rep. Todd Platts, R-Pa., in July, would add DHS to the list of major departments covered by the 1990 Chief Financial Officers Act, making it subject to the same financial accountability requirements as other Cabinet-level agencies.

Homeland Security already plans to conduct annual audits and comply with other provisions of the CFO Act, Carnes said. "I have the same duties and responsibilities as chief financial officers in other agencies and am held accountable for ensuring the department's financial integrity in the same manner," he told lawmakers. "The proposed legislation will not change the way I perform my job, nor will it give me any authority that I do not already have."

But at a hearing last month, Platts said the legislation is needed because the department inherited agencies in varying financial condition and must consolidate roughly 20 different financial management systems and 15 compensation systems.

The House Government Reform Subcommittee on Efficiency and Financial Management approved Platts' bill on Sept. 24, despite two controversial provisions-one that would require the Senate to confirm DHS chief financial officer nominees and another that requires the department to obtain annual audit opinions on internal anti-fraud and embezzlement procedures beginning in fiscal 2005.

Platts' legislation will face a slightly tougher battle at the full committee level. House Government Reform Chairman Tom Davis, R-Va., is hesitant about the confirmation provision because he would like to reduce the number of politically appointed positions requiring Senate approval, a committee source said.

OMB is weighing whether to propose eliminating the Senate confirmation requirement for CFOs across government, with the exception of those who also serve as department undersecretaries or secretaries. The Presidential Appointee Initiative, a Brookings Institution research project dedicated to making the appointments process fair and efficient, has long advocated reducing the number of nominees requiring Senate confirmation.

However, financial officers should receive full Senate review because they hold key decision-making positions in agencies, according to Paul Light, who served as a senior adviser to the appointee initiative and is director of the think tank's Center for Public Service.

Despite concerns over the Senate confirmation provision, Davis believes the full Government Reform committee will work out any differences and move Platts' legislation along, the committee source said. No date has been set for a markup, but the committee hopes to consider the legislation before the House adjourns.

Sen. Joseph Lieberman, D-Conn., on Wednesday sent a letter to the General Accounting Office asking for a comprehensive evaluation of Homeland Security's consolidated financial systems. GAO should determine whether the systems meet federal standards, including those in the CFO Act and the 1996 Federal Financial Management Improvement Act, Lieberman said.