WASHINGTON, D.C. – Long-standing financial consolidation problems were the focus of two independent government reports Monday, both of which criticized the Department of Homeland Security for failing to implement the initiative.

The reports – one from the Government Accountability Office (GAO) and one from the Inspector General (IG) for the Department of Homeland Security – reflected the findings of two examinations into the Department’s financial management.

The DHS, the largest civilian department in the federal government, was created in the wake of the 9/11 terrorist attacks on America. As a part of its evolution, it is implementing a new financial management system, called the Transformation and Systems Consolidation (TASC) program.

Both reports, however, faulted DHS for having insufficient accounting and financial management, policies and procedures, and for its lack of a functioning information technology system.

The GAO report found that the Department still “lacks a clear strategy to successfully consolidate its existing disparate systems.”

Senator Susan Collins, R-Me., said she was dismayed by the findings of the two reports. “I have raised concerns before about the missteps at DHS as it moves forward with TASC,” she said. “The current estimated price tag on this project is $450 million, but DHS’ own IG has projected that the ultimate cost could exceed $1 billion.”

Said Sen. Tom Carper, D-Del.: “Whenever a new agency or department is created, especially one the size of the Department of Homeland Security, there are bound to be some bumps and bruises along the way. In fact, I held a subcommittee hearing on this very issue more than two years ago, but it appears the department has made little headway in consolidating its financial systems since then. In addition, the cost of this consolidation is estimated to be almost double the originally projected costs. Once again, it seems we may have an agency that has over promised and under delivered.”

Senator Collins said that effective planning and aggressive management are needed to bring TASC online, within cost parameters. The implementation of TASC is needed because DHS, in an earlier flawed initiative, spent $52 million to pursue the same financial management consolidation with no measureable results.

“Unfortunately, these new reports underscore that the urgency for aggressive action remains,” she said. “I am pleased that DHS has accepted the recommendations of both reports and plans to take action. The Department must be a good steward of taxpayer dollars. Careful planning and thoughtful implementation, particularly in the wake of past failures, must not fall prey to a needless rush to find a quick solution to DHS’ financial management challenges. The changes should be thoughtful and workable.

“As I have said before, we need to get this right. We need to learn from the errors of the past, not repeat them.”

In its report, the IG found that an independent public accounting firm was not provided sufficient evidence to audit DHS’ 2008 and 2009 balance sheets. Further, the audit revealed “six material weaknesses, two significant deficiencies in internal controls, and five instances of noncompliance with laws and regulations.” One area of material weakness was “Information Technology Controls and Financial System Functionality.” This area is of particular significance given the Department’s plans to implement TASC.

On Oct. 29, the GAO testified before a House Homeland Security Subcommittee about its examination of the DHS financial management system overhaul.

The GAO noted that during its review, “two issues surfaced that pose unnecessary risks to the TASC program.” The issues were the Department’s “significant reliance on contractors to define and implement the TASC solution and the independence of the contractor hired to perform the verification and validation function for TASC.”

Additionally, GAO stated that “the extent of DHS’ reliance on contracts to define and implement the TASC program, without the necessary oversight mechanisms to minimize risks associated with contractor-developed documents, could result in performance and management problems with its system efforts.”

In its report, the GAO concludes that in the six years since DHS has been established, it has not implemented a department-wide, integrated financial management system. Further, the GAO found that the Department has not implemented recommendations made in 2007 to improve the planning for the financial management system. In closing, the GAO found that the failure to minimize risks associated with the program “could lead to developing a system that does not meet cost, schedule, and performance goals.”

In its comment on the reports, DHS officials agreed with the recommendations and said steps were being taken to address the concerns.