Figure 1: Organization and Accountability Criteria for the Department of Homeland Organization and Accountability Criteria The New Department · Definition Statutory Basis Clear Mission Performance-based Organization Agency Transition: Inclusion/Exclusion Similar Goals and Objectives Leverage Effectiveness Gains Through Consolidation Integrated Information Sharing/Coordination Compatible Cultures Impact on Excluded Agencies Cultural Transformation: Implementation and Success Factors Strategic Planning Organizational Alignment Communications Building Partnerships Performance Management Human Capital Strategy Information Management and Technology Knowledge Management Financial Management Acquisition Management With respect to criteria that the Congress should consider for constructing the department itself, the following questions about the overall purpose and structure of the organization should be evaluated: • Definition: Is there a clear and consistently applied definition of homeland security that will be used as a basis for organizing and managing the new department? • Statutory Basis: Are the authorities of the new department clear and complete in how they articulate roles and responsibilities and do they sufficiently describe the department's relationship with other parties? • Clear Mission: What will the primary missions of the new DHS be and how will it define success? • Performance-based Organization: Does the new department have the structure (e.g., Chief Operating Officer (COO), etc.) and statutory authorities (e.g., human capital, sourcing) necessary to meet performance expectations, be held accountable for results, and leverage effective management approaches for achieving its mission on a national basis? Congress should also consider several very specific criteria in its evaluation of whether individual agencies or programs should be included or excluded from the proposed department. Those criteria include the following: •Mission Relevancy: Is homeland security a major part of the agency or program mission? Is it the primary mission of the agency or program? • Similar Goals and Objectives: Does the agency or program being considered for the new department share primary goals and objectives with the other agencies or programs being consolidated? • Leverage Effectiveness: Does the agency or program being considered for the new department create synergy and help to leverage the effectiveness of other agencies and programs or the new department as a whole? In other words, is the whole greater than the sum of the parts? • Gains Through Consolidation: Does the agency or program being considered for the new department improve the efficiency and effectiveness of homeland security missions through eliminating duplications and overlaps, closing gaps, and aligning or merging common roles and responsibilities? • Integrated Information Sharing/Coordination: Does the agency or program being considered for the new department contribute to or leverage the ability of the new department to enhance the sharing of critical information or otherwise improve the coordination of missions and activities related to homeland security? • Compatible Cultures: Can the organizational culture of the agency or program being considered for the new department effectively meld with the other entities that will be consolidated? Field structures and approaches to achieving missions vary considerably between agencies. • Impact on Excluded Agencies: What is the impact on departments losing components to DHS? What is the impact on agencies with homeland security missions left out of DHS? In addition to the above criteria that the Congress should consider when evaluating what to include and exclude from the proposed DHS, there are certain critical success factors the new department should emphasize in its initial implementation phase. Over the years, GAO has made observations and recommendations about many of these success factors, based on effective management of people, technology, financial, and other issues, especially in its biannual Performance and Accountability Series on major government departments. 10 These factors include the following: Strategic Planning: Leading results-oriented organizations focus on the process of strategic planning that includes involvement of stakeholders, assessment of internal and external environments, and an alignment of activities, core processes and resources to support mission-related outcomes. Organizational Alignment: The organization of the new department should be aligned to be consistent with the goals and objectives established in the strategic plan. • Communication: Effective communication strategies are key to any major consolidation or transformation effort. • Building Partnerships: One of the key challenges of this new department will be the development and maintenance of homeland security partners at all levels of the government and the private sector, both in the United States and overseas. Performance Management: An effective performance management system fosters institutional, unit and individual accountability. • Human Capital Strategy: The new department must ensure that its homeland security missions are not adversely impacted by the government's pending human capital crisis, and that it can recruit, retain, and reward a talented and motivated workforce, which has required core competencies, to achieve its mission and objectives. The people factor is a critical element in any major consolidation or transformation. • Information Management and Technology: The new department should leverage state-of-the art enabling technology to enhance its ability to transform capabilities and capacities to share and act upon timely, quality information about terrorist threats. • Knowledge Management: The new department must ensure it makes maximum use of the collective body of knowledge that will be brought together in the consolidation. Financial Management: The new department has a stewardship obligation to prevent fraud, waste and abuse; to use tax dollars appropriately; and to ensure financial accountability to the President, the Congress, and the American people. • Acquisition Management: Anticipated as one of the largest federal departments, the proposed DHS will potentially have some of the most extensive acquisition government needs. Early attention to strong systems and controls for acquisition and related business processes will be critical both to ensuring success and maintaining integrity and accountability. • Risk Management: The new department must be able to maintain and enhance current states of homeland security readiness while transitioning and transforming itself into a more effective and efficient structural unit. The proposed DHS will also 10 U.S. General Accounting Office, Major Management Challenges and Program Risks: A Governmentwide Perspective, GÃO-01-241 (Washington, D.C.: January 2001). need to immediately improve the government's overall ability to perform risk management activities that can help to prevent, defend against, and respond to terrorist acts. • Change Management: Assembling a new organization out of separate pieces and reorienting all of its processes and assets to deliver the desired results while managing related risks will take an organized, systematic approach to change. The new department will require both an executive and operational capability to encourage and manage change. Homeland Security Reorganization and Missions The President's proposal for the new department indicates that DHS, in addition to its homeland security responsibilities, will also be responsible for carrying out all other functions of the agencies and programs that are transferred to it. In fact, quite a number of the agencies proposed to be transferred to DHS have multiple functions. Agencies or programs that balance multiple missions present the Congress with significant issues that must be evaluated in order to determine how best to achieve all of the goals and objectives for which the entity was created. While we have not found any missions that would appear to be in fundamental conflict_with the department's primary mission of homeland security, as presented in the President's proposal, the Congress will need to consider whether many of the non-homeland security missions of those agencies transferred to DHS will receive adequate funding, attention, visibility, and support when subsumed into a department that will be under tremendous pressure to succeed in its primary mission. As important and vital as the homeland security mission is to our nation's future, the other nonhomeland security missions transferred to DHS for the most part are not small or trivial responsibilities. Rather, they represent extremely important functions executed by the federal government that, absent sufficient attention, could have serious implications for their effective delivery and consequences for sectors of our economy, health and safety, research programs and other significant government functions. Some of these responsibilities include: • maritime safety and drug interdiction by the Coast Guard, ⚫ collection of commercial tariffs by the Customs Service, • public health research by the Department of Health and Human Services, • advanced energy and environmental research by the Lawrence Livermore and Environmental Measurements labs, responding to floods and other natural disasters by the Federal Emergency Management Agency (FEMA), and authority over processing visas by the State Department's consular officers. These examples reveal that many non-homeland security missions could be integrated into a cabinet department overwhelmingly dedicated to protecting the nation from terrorism. Congress may wish to consider whether the new department, as proposed, will dedicate sufficient management capacity and accountability to ensure the execution of non-homeland security missions, as well as consider potential alternatives to the current framework for handling these important functions. One alternative might be to create a special accountability track that ensures that non-homeland security functions are well supported and executed in DHS, including milestones for monitoring performance. Conversely, the Congress might separate out some of these functions. In doing so, the Congress will still need to hold agencies accountable for the homeland security missions that are not incorporated in the new department. In making these decisions, Congress should consider the criteria presented earlier in my testimony, especially those related to agency transitions, such as mission relevancy, similar goals and objectives, leveraging effectiveness, and creating gains through consolidation. There are clearly advantages and disadvantages to all of the decisions about placing agencies or programs with multiple missions in DHS and Congress must carefully weigh numerous important factors related to performance and accountability in crafting the legislation. For example, we have indicated in recent testimony that DHS could serve to improve biomedical research and development coordination because of the current fragmented state of disparate activities. Yet, we remain concerned that the proposed transfer of control and priority setting for research from the organizations where the research would be conducted could be disruptive to dual-purpose programs, which have important synergies for public health programs that need to be maintained.11 Similarly, we have testified that the President's proposal, in tasking the new department with developing national policy for and coordinating the federal government's 11 U.S. General Accounting Office, Homeland Security: New Department Could Improve Biomedical R&D Coordination but May Disrupt Dual-Purpose Efforts, GAO-02-924T (Washington, D.C.: July 9, 2002). research and development efforts for responding to chemical, biological, radiological, and nuclear weapons threats, also transfers some of the civilian research programs of the Department of Energy. 12 Again, there may be implications for research synergy. Congress may also craft compromises that strengthen homeland security while reducing concerns of program disruption or unanticipated consequences. One such example is seen in recent deliberations about the appropriate location for visa processing. Congressional debate has focused on two of our criteria, mission relevancy and gains through consolidation. The visa function attempts to facilitate legitimate travel while at the same time denying entry to the United States of certain individuals, including potential terrorists. Some have argued that the mission of the visa function is primarily related to homeland security and that therefore the function should be located within the proposed department. Others have advocated that the Department of State (State) should retain the visa function because they believe that there would be no gains from consolidation. They point out that State has an established field structure and that it may be impractical to create a similar field structure in the proposed department. The compromise position of several committees has been to transfer responsibility for visa policy to the proposed department, while retaining the cadre of overseas visa officers within State. As part of these deliberations, the Congress should consider not only the mission and role that agencies fulfill today, but the mission and role that they should fulfill in the coming years. Thus, while it may be accurate that large portions of the missions engaged in by the Coast Guard or FEMA today do not relate primarily to homeland security, it is wholly appropriate for Congress to determine whether the future missions of such agencies should focus principally on homeland security. Such decisions, of course, would require the Congress to determine the best approach for carrying out a range of the government's missions and operations, in order to see that non-homeland security activities of these departments are still achieved. In fact, given the key trends identified in GAO's recent strategic plan for supporting the Congress and our long range fiscal challenges, it is appropriate to ask three key questions: (1) what should the federal government do in the 21st century? (2) how should the federal government do business in the 21st century? and (3) who should do the federal government's business in the 21st century? These questions are relevant for DHS and every other federal agency and activity. As the proposal to create DHS demonstrates, the terrorist events of last fall have provided an impetus for the government to look at the larger picture of how it provides homeland security and how it can best accomplish associated missions. Yet, even for those agencies that are not being integrated into DHS, there remains a very real need and possibly a unique opportunity to rethink approaches and priorities to enable them to better target their resources to address our most urgent needs. In some cases, the new emphasis on homeland security has prompted attention to long-standing problems that have suddenly become more pressing. For example, we've mentioned in previous testimony the overlapping and duplicative food safety programs in the federal government.13 While such overlap and duplication has been responsible for poor coordination and inefficient allocation of resources, these issues assume a new, and potentially more foreboding, meaning after September 11th given the threat from bio-terrorism. In another example, we have recommended combining the Department of Justice's Office For Domestic Preparedness with FEMA to improve coordination. 14 A consolidated approach to many of these issues can facilitate a concerted and effective response to new threats and mission performance. Similarly, we have conducted a number of reviews of State's visa function over the years and, based on our work, we believe that there are a number of areas in which the visa function can be strengthened. For example, the U.S. government needs to ensure that there are sufficient staff at overseas posts with the right training and experience to make good decisions about who should and who should not receive a visa. In addition, we are currently looking at ways that the visa function can be strengthened as a screen against potential terrorists and we expect to make recommendations later this fiscal year. These recommendations will apply regardless of decisions about the respective roles of the State Department and the proposed Department of Homeland Security regarding visa functions. 12 U.S. General Accounting Office, Homeland Security: Title III of the Homeland Security Act of 2002, GAO-02-927T (Washington, D.C.: July 9, 2002). 13 U.S. General Accounting Office, Food Safety and Security: Fundamental Changes Needed to Ensure Safe Food, GAO-02-47T (Washington, D.C.: October 10, 2001). 14 GAO-01-822. HOMELAND SECURITY IMPLEMENTATION AND TRANSITION ISSUES The ultimate effectiveness of the new department will be dependent on successfully addressing implementation and transition issues. Picking the right leadership for these critical positions in the new department will be crucial to its success. If you don't have the right leadership team in key policy, operational and management positions, the department will be at risk. In addition providing the new department with some reasoned and reasonable, human capital, management and budget flexibilities combined with appropriate safeguards to protect the Congress' constitutional authorities and to prevent abuse can also help contribute to a successful transition. Both the Congress and the Executive Branch have critical roles to play in achieving desired outcomes for the American people. Key Success Factors, Leadership and Accountability Among the most important elements for effectively implementing the new cabinet department will be close adherence to the key success factors. Strategic planning, building partnerships, human capital strategies, financial management and other critical factors will make the difference between a department that can quickly rise to the challenge of its mission and one that might otherwise become mired in major problems and obstacles that hamper efforts to protect the nation from terrorism. The quality and continuity of the new department's leadership is critical to building and sustaining the long-term effectiveness of DHS and homeland security goals and objectives. The experiences of organizations that have undertaken transformational change efforts along the lines that will be necessary for the new department to be fully effective suggest that this process can take up to 5 to 10 years to provide meaningful and sustainable results. Given the scope and nature of challenges facing the new department, the critical question is how can we ensure that the essential transformation and management issues receive the sustained, top-level attention that they require. The nation can ill-afford to have the secretary or deputy secretary being side-tracked by administrative and operational details—the mission of the department requires their undivided attention. As a result, it is important for the Congress to give serious consideration to creating a deputy secretary for management/chief operating officer (COO) position within the department to provide the sustained management attention essential for addressing key infrastructure and stewardship issues while helping to facilitate the transition and transformation process. Recent legislative language adopted by the House Committee on Government Reform suggests elevating the undersecretary for management to a deputy secretary, equivalent to the deputy position provided for in the Administration's proposal. We believe that is an important first step to ensuring that transformation and management issues receive the top-level attention they require. Raising the organizational profile of transformation and management issues is important to ensure that the individual has the authority needed to successfully lead department-wide initiatives. We are not convinced that an under secretary for management, on par with the other under secretaries, would necessarily have sufficient authority. To provide further leadership and accountability for management, Congress may wish to consider several points: • First, Congress should consider making the deputy secretary for management/ COO a term appointment of up to 7 years, subject to Senate confirmation. A term appointment would provide continuity that spans the tenure of the political leadership and thereby help to ensure that long-term stewardship issues are addressed and change management initiatives are successfully completed. • Second, to further clarify accountability, the COO should be subject to a clearly defined, results-oriented performance contract with appropriate incentive, reward and accountability mechanisms. The COO would be selected without regard to political affiliation based on (1) demonstrated leadership skills in managing large and complex organizations, and (2) experience achieving results in connection with "good government" responsibilities and initiatives. Requiring that both the performance contract and the subsequent performance evaluation be made available to the Congress would provide additional accountability and transparency. In addition to providing top-level leadership and accountability, the department will need to develop employee performance management systems that can serve as a key tool for aligning institutional, unit, and employee performance; achieving results; accelerating change; managing the organization on a day-to-day basis; and facilitating communication throughout the year so that discussions about individual |