GAO Report Highlights DHS Financial Management Practices

WASHINGTON – Today, Senate Homeland Security and Governmental Affairs Committee Chairman Tom Carper (D-Del.), House Homeland Security Subcommittee on Oversight Chairman Jeff Duncan (R-SC) and Senate Financial and Contracting Oversight Subcommittee Chairwoman Claire McCaskill (D-Mo.) highlighteda new Government Accountability Office (GAO) report that found the Department of Homeland Security (DHS) has made critical financial management improvements, but still needs to undertake additional efforts to improve the timeliness and reliability of the financial information that the Department’s officials need to manage the operations and resources of the Department.

DHS and the Department of Defense (DOD) are currently the only two federal departments that have not complied with current law by conducting a clean financial audit. Today’s GAO report found that DHS has “made considerable progress toward obtaining a clean opinion on its financial statements.” The report also outlined necessary improvements to DHS financial IT systems and internal controls while also crediting DHS leadership for many of the improvements in financial management practices made over the past few years.

“Today’s Government Accountability Office report is an important reminder that the Department of Homeland Security still has work to do to improve its accounting and the management of the billions of dollars it spends each year,” said Chairman Carper.  “The good news is that the Department is close to completing a clean financial audit for the first time in its history.  Effective leadership at the highest levels of the agency has ensured that financial accountability is a high priority. I often like to say that the road to improvement is always under construction and this GAO report gives DHS a great blueprint to improve its current financial management practices.”

“Since its inception 10 years ago, the Department of Homeland Security has faced a multitude of challenges in combining 22 separate legacy agencies into one cabinet-level department,” Chairman Duncan said. “This is especially true with financial management practices at DHS. The Department’s inability to have an accurate and timely handle on its financial information remains a major management challenge. If the American people can open up their checking account online and know to the penny how much they have, then surely the third largest federal department should also have real-time financial data. DHS has a fundamental duty to be an effective steward of taxpayer dollars. Using sound financial practices is critical to ensuring taxpayer dollars aren’t wasted and the homeland is secured in an efficient and effective way.”

“While a ray of sunshine might be breaking through the clouds, we’re still looking at a storm of financial mismanagement at DHS,” said Senator McCaskill, former Missouri State Auditor. “Progress toward transparency and oversight have been made, but we’ve still got a long way to go and need to keep the pressure on DHS to be good stewards of taxpayer funds.”  

In December 2012, Congress enacted the DHS Audit Requirement Target Act of 2012 (DART Act) sponsored by Senators Carper and Scott Brown (R-MA) and Ron Johnson (R-WI). The DART Act established key requirements for financial accountability within the Department, including financial IT system reform. Many of these same recommendations appeared in today’s GAO report. To date, DHS has worked to meet the requirements of the law that will ensure the Department is effectively managing the billions of dollars in annual expenditures.