Spotlight on DHS financial management

The chief financial officer at the Homeland Security Department reports directly to the Cabinet secretary after all, top DHS officials told a critical congressional oversight committee last week.

"There is no doubt in our mind that Andrew Maner, the acting CFO, has a direct report to the secretary," said Janet Hale, DHS' undersecretary for management, testifying July 27 before the House Government Reform Committee's Government Management, Finance and Accountability Subcommittee.

DHS officials did not include the CFO position in an organizational chart unveiled last month as part of the department's massive restructuring effort. But a new chart, which Hale said was issued as a clarification, shows Maner reporting to Hale and DHS Secretary Michael Chertoff.

"Of all the things we do in the department, charts may not be our strength," Hale said. Despite their omission of the position from the chart, DHS officials have always known that the CFO reports directly to both the undersecretary for management and the secretary, Hale added.

DHS officials sent a copy of the clarified chart to Rep. Todd Platts (R-Pa.), the subcommittee's chairman, the night before the hearing on financial management at the department.

The chart is important for the message it sends the organization, Platts said. Without the CFO explicitly included, people might wonder whether Maner has the authority he says he has, Platts said.

Maner has "small but tremendously meaningful daily meetings" with Chertoff, Hale said.

Platts is the author of a law passed in 2004 designed to increase financial accountability at DHS. In the 60 years since President Truman created the Defense Department, the agency has yet to get a handle on its financial management, he said.

"We cannot afford to have DHS go down the same road, and an appropriate focus on financial management sooner rather than later is a key step," Platts said.

Nevertheless, written testimony that former DHS Inspector General Clark Kent Ervin submitted casts doubt on whether the department's CFO has enough power. A major reason behind the department's poor financial performance is that the CFO "can only exhort, cajole and attempt to persuade his component counterparts to do what is necessary to right the department's financial ship," Ervin said.

Institutionally, Maner has the power necessary to effect good financial management at DHS, Hale said. Centralization within the CFO shop is "probably more pervasive than one might guess by looking at the organizational chart," she added.

Maner said he's been concentrating on institutionalizing standard operating procedures across the department's many divisions. "We don't want to have 10 different ways to close our books, we don't want to have 10 different ways to process a travel voucher," he said.

CFOs rarely have day-to-day operational control over the agencies contained in large departments, said C. Morgan Kinghorn, president of the National Academy of Public Administration and former Internal Revenue Service CFO.

"The other bureaus need their own accounting and financial operations because they're huge entities themselves," he said.

Homeland Security Department officials soon will submit a nomination to the Senate for the position of chief financial officer, said Janet Hale, DHS' undersecretary for management, July 27 at a hearing on Capitol Hill.

Under a bill sponsored by Rep. Todd Platts (R-Pa.) that became law in 2004, DHS officials were supposed to have submitted a nomination to the Senate by April 14 to comply with the law's provision requiring legislative approval of the DHS CFO.

Department officials are actively recruiting a CFO "and hope to have one selected in the very near future," Hale said. They will submit a name to the Senate this month, she said.

DHS will also comply with a provision of the law requiring an annual audit of departmental internal controls starting in fiscal 2006, said Andrew Maner, the acting CFO. Language included in the fiscal 2006 budget request asking for a one-year extension before the audit requirement kicks in was submitted by mistake, DHS officials said at the hearing.

Internal discussion leading up to the budget submission centered on whether the department is capable yet of undertaking such an audit, Maner said. "It doesn't do you all the good that you want to do in an audit if you're not ready," he said.

Nonetheless, "we're going to do it, we're going to do it the best we can," Maner added.

— David Perera