Senate passes DHS financial accountability bill
Legislation would hold Homeland Security to the same rules as other major agencies.
The Senate on Wednesday night approved legislation designed to hold the Homeland Security Department to the same financial management standards as other major federal agencies.
Sponsored by Sen. Peter Fitzgerald, R-Ill., the legislation (H.R. 4259) passed by unanimous consent. The House approved the bill, called the Homeland Security Department Financial Accountability Act, in mid-July and the measure now awaits President Bush's signature.
Rep. Todd Platts, R-Pa., introduced the legislation in an effort to place the Homeland Security Department under the 1990 Chief Financial Officers Act, a law requiring agencies to undergo annual audits and place presidentially appointed and Senate-confirmed CFOs in charge of finances.
The 1990 law asks the CFO to report directly to the agency head. To date, the law covers 23 major agencies, but Homeland Security is not among them.
"Now we have codified a structure for sound financial management that is mandatory, not optional, for future administrations," Platts said in a statement. He first introduced the House version of the bill in July 2003 as H.R. 2886, and has spent the past year ironing out some of the act's more contentious points.
From the outset, Bush administration officials disliked the idea of requiring the Homeland Security Department's CFO to undergo Senate confirmation. The administration is trying to cut down on the number of political appointments needing Senate approval and remains concerned in general about the 1990 CFO Act provision requiring Senate confirmation of CFOs.
"[CFO nominees] in this administration alone have collectively experienced in the neighborhood of six years of downtime waiting for confirmation," said Office of Management and Budget Controller Linda Springer on Thursday. "This delay in providing CFO leadership has not been helpful in ensuring that agencies achieve the financial management improvements targeted by this administration."
A separate provision requiring the Homeland Security Department to obtain audit opinions on internal controls beginning in fiscal 2006 also caused a stir. Internal controls are systems of checks and balances designed to prevent errors in financial transactions and reduce the risk of fraud. Federal agencies must submit reports on internal controls, but currently don't need to ask auditors to sign off on the reports.
Skeptics worry that the internal control audit requirement could end up costing too much. But Platts has argued that the extra step is necessary to reduce the potential for fraud, and is open to the idea of extending the requirement governmentwide.
The CFO Council and inspectors general are studying the current rules for reporting on internal controls, Springer said. OMB plans to issue "enhanced" guidelines on internal controls by the end of the calendar year, she said.
The Financial Accountability Act also creates an Office of Program Analysis and Evaluation within the Homeland Security Department. The office would oversee the department's budget and ensure that high priority projects receive adequate support.
Rep. Christopher Cox, R-Calif., chairman of the House Homeland Security Committee, praised Platts and House Government Reform Committee Chairman Tom Davis, R-Va., for leadership on the bill. "Stronger congressional oversight and stricter accountability are essential to help the Department of Homeland Security accomplish its paramount purpose-ensuring the safety and security of the American people," he stated.
Homeland Security officials have argued that the legislation is well-intentioned but unnecessary. A department spokeswoman did not respond to a request for comment Thursday.