http://www.azcentral.com/news/articles/1229homeland29.html

Homeland Security and FEMA chastised by inspector general

Dan Eggen Washington Post Dec. 29, 2005 12:00 AM

WASHINGTON - Nearly three years after it was formed, the mammoth Department of Homeland Security remains hampered by severe management and financial problems that contributed to the flawed response to Hurricane Katrina, according to an independent audit released Wednesday.

The report by Homeland Security Inspector General Richard Skinner aimed some of its criticism at one of the department's major activities, the Federal Emergency Management Agency.

The report found "the circumstances created by Hurricanes Katrina and Rita provide an unprecedented opportunity for fraud, waste and abuse," primarily because FEMA's grant and contract programs are still not being managed properly.

"While DHS is taking several steps to manage and control spending under Katrina, the sheer size of the response and recovery efforts will create an unprecedented need for oversight," the report concludes.

The audit is the latest in a series of tough assessments of the beleaguered department, which has been widely criticized since it was formed in March 2003 by combining 22 disparate agencies. In a final "report card" issued earlier this month, for example, the former members of the Sept. 11 commission gave the department low or failing grades in many key areas, including airline passenger screening and border control.

Earlier this week, a group of House Democrats issued a report alleging that the department had failed to follow through on 33 promised improvements to border security, infrastructure protection and other programs.

In an 11-page response to the inspector general's findings, Homeland Security officials acknowledged some problems but disputed some and offered explanations for others. For example, the department said it has created a special procurement office to oversee hurricane contracts and is using consultants to monitor the process.

Department spokesman William R. "Russ" Knocke said that "retooling FEMA is one of our greatest and most urgent priorities."

"We continue to make programs more efficient, effective and results-oriented," Knocke said, adding that "the department is making substantial progress in implementing several core management initiatives," including improvements in personnel policies and financial accountability.

Homeland Security Secretary Michael Chertoff, who took over the department earlier this year, is in the midst of implementing a broad reorganization of the 180,000-employee department and has announced initiatives in border security and other areas.

But the department's bumbling after Katrina prompted widespread criticism, along with the resignation of FEMA's director, and many lawmakers have since questioned whether Homeland Security is capable of handling recovery efforts along the Gulf Coast.

Congress has approved more than $63 billion in disaster-relief funding, and some estimate that the federal recovery costs for New Orleans and other storm-ravaged areas could exceed $200 billion.

Skinner's audit deals not only with the department's response to Katrina but with an array of broader management challenges that have troubled Homeland Security. The department brought together immigration and customs agencies, Secret Service, Coast Guard and Transportation Security Administration, among others.

Although there has been some progress, "integrating its many separate components in a single, effective and economical department remains one of DHS' biggest challenges," the audit said.

The report found, among other things, that U.S. Immigration and Customs Enforcement has failed to maintain proper financial records; that much of the department's technology infrastructure remains fractured and ineffective; and that Homeland Security faces "formidable challenges in securing the nation's borders."

Skinner also reiterated earlier complaints about poor coordination between the Border Patrol and immigration investigators. Chertoff has rejected Skinner's recommendation that the agencies responsible for these employees be merged.