DHS lags in oversight for data center, IG says

Homeland Security Department officials haven't reviewed invoices for more than $160 million in spending related to DHS’ primary data center operating on Navy property, DHS Inspector General Richard Skinner contends in a new report.

Also, DHS is paying too much rent to the Navy and has failed to include major elements in its interagency agreement, such as how much space it is renting and what percentage of shared costs it will absorb, according to the March 12 report.

DHS officials set up the data center in 2005 in a former Naval munitions facility that required extensive renovation. Skinner’s report outlines a series of missteps on DHS’ part, including initially failing to specify with the Navy which building it was renting, paying too much in rent to the service, and failing to review invoices for the renovations.

DHS Chief Information Officer Richard Spires disputed several of the findings, and rejected Skinner’s recommendation to review invoices. Spires said reviewing invoices related to such interagency agreements is not a common practice.

“DHS has sought invoices from the Navy without success. The Office of Inspector General also has sought invoices without success. It is not a common practice for invoices to be provided in the kinds of intragovernmental relationships such as that DHS has for the data center at Stennis Space Center [in Mississippi],” Spires wrote in his comments on the draft report.

Skinner maintained that the reviews are necessary. “Without reviews of supporting documentation, senior DHS management cannot be assured that department funds are being used to acquire the goods and services outlined in the interagency agreements in a cost-effective manner and for authorized purposes,” Skinner wrote.

DHS officials acknowledged some of the shortcomings in the report. They agreed they may be paying the Navy more than the office space is worth, the IG audit said.

DHS rents about 61,000 square feet, or about 24 percent, of the Navy’s 250,000 square feet in available office space at Stennis. However, DHS pays 81 percent of the total costs, the report said.

Skinner reviewed DHS’ management agreements to set up its data center at the Stennis center. In 2004, the department agreed to set up a data center at Stennis, but since the first choice of facility was not available, the Navy provided a former munitions manufacturing facility that needed rehabilitation. Since 2005, DHS has obligated more than $160 million to convert the facility into a data center.

According to Skinner, DHS did not include key elements in its interagency agreements with the Navy, including DHS’ allotted floor space, the amount of power and utilities provided, and DHS’ percentage of shared costs.

“Without these items in the interagency agreements, DHS cannot be assured that it can continue to house its primary data center in the current location, or that DHS is reimbursing the U.S. Navy only for expenses directly related to the primary data center,” Skinner wrote.

“Without documented agreements identifying the fees to be charged, as well as the specific supplies and services to be provided, DHS cannot be assured that it is operating its primary data center as cost-effectively as possible,” the IG wrote.