Report: Security agency needs better financial management

The Homeland Security Department's largest investigative agency needs to improve its invoice management and make a variety of other financial management enhancements, according to a report from a congressionally chartered nonprofit organization.

The report, released last week by the National Academy of Public Administration, criticized the Immigration and Customs Enforcement agency's Federal Protective Service in particular. FPS, responsible for helping secure thousands of federal facilities across the country, faces a budget shortfall recently estimated to be as high as $60 million.

"Stability, understanding and adequate oversight should be highlighted as the immediate financial management objectives for FPS," the report stated, adding that "according to the majority of those interviewed, FPS is the most difficult program to service."

NAPA called for a better analysis of FPS expenses and revenues and said "service level changes or fee modification" will be needed to remedy the financial problems. The report said "hundreds of vendors" working for the agency have "varying degrees of financial sophistication to support and understand."

The NAPA report was not the first to call for changes in how FPS collects funds; multiple sources confirmed that the protective service has trouble getting timely payments. Agency sources, who spoke under the condition of anonymity, said the service may have to increase fees by as much as 60 percent to make up for shortfalls. The agency has already pulled its officers from some federal buildings at off-peak hours, multiple sources confirmed.

FPS exists within a "unique" business model, requiring timely payment from the facilities it guards, the NAPA report stated. The protective service should work more closely with the General Services Administration, which ran it before it was placed within DHS, the report recommended.

More generally, a loss of staff and leadership, "an unfamiliar financial system, the loss of institutional memory" and other factors contributed to "adverse" financial conditions at ICE in 2005, the report said. It cited "strong indicators of past staff/managerial burnout due to heavy workloads." NAPA suggested managers establish a "CFO-level" group to assess workloads.

The report, which included information from fiscal 2005 and fiscal 2006, laid part of the blame on the ICE's hiring process, which it said "lags … by months, causing delay and work backlog."

NAPA recommended that ICE establish a planning office to examine staffing and financial issues and that it seek accounting expertise from contractors or other agencies' chief financial officers. But development and continuation of sufficient financial management will still rely on ICE maintaining its own staff, the report cautioned.

ICE spokesman Ronald Boyd said "ICE has already adopted and is taking action on many of the NAPA recommendations."