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108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-211
_______________________________________________________________________

                                     



      DEPARTMENT OF HOMELAND SECURITY FINANCIAL ACCOUNTABILITY ACT

                               __________

                              R E P O R T

                                 of the

         COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE

                              to accompany

                                S. 1567

    TO AMEND TITLE 31, UNITED STATES CODE, TO IMPROVE THE FINANCIAL 
 ACCOUNTABILITY REQUIREMENTS APPLICABLE TO THE DEPARTMENT OF HOMELAND 
                    SECURITY, AND FOR OTHER PURPOSES




               November 25, 2003.--Ordered to be printed
                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska                  JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio            CARL LEVIN, Michigan
NORM COLEMAN, Minnesota              DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania          RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah              THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois        MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire        FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama           MARK PRYOR, Arkansas

           Michael D. Bopp, Staff Director and Chief Counsel
               Bonnie L. Heald, Professional Staff Member
 Michael Russell, Staff Director, Subcommittee on Financial Management,
                 the Budget, and International Security
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                   Susan L. Propper, Minority Counsel
Jennifer Tyree, Minority Counsel, Subcommittee on Financial Management,
                 the Budget, and International Security
                      Amy B. Newhouse, Chief Clerk


108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-211

======================================================================



 
      DEPARTMENT OF HOMELAND SECURITY FINANCIAL ACCOUNTABILITY ACT

                                _______
                                

               November 25, 2003.--Ordered to be printed

                                _______
                                

Mr. Collins, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 1567]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 1567) to amend title 31, United States 
Code, to improve the financial accountability requirements 
applicable to the Department of Homeland Security, and for 
other purposes, having considered the same reports favorably 
thereon with an amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background.......................................................2
III. Discussion of Legislation........................................4
 IV. Legislative History..............................................6
  V. Section-by-Section Analysis......................................6
 VI. Evaluation of Regulatory Impact..................................8
VII. CBO Cost Estimate................................................8
VIII.Changes to Existing Law..........................................8


                         I. Purpose and Summary

    S. 1567 would amend title 31, United States Code, to make 
the Department of Homeland Security subject to the requirements 
of the Chief Financial Officers Act of 1990 and make conforming 
amendments to P.L. 107-296, the Homeland Security Act of 2002 
(HSA).
    The purpose of this bill is to ensure that the Department 
of Homeland Security is statutorily subject to the provisions 
of P.L. 101-576, the Chief Financial Officers Act of 1990 (CFO 
Act), as amended, and is subject to the same audit and 
financial systems requirements that currently apply to 24 major 
Executive branch departments and agencies, including all 
Cabinet-level departments.

                             II. Background

    The CFO Act provided a comprehensive foundation to reform 
the financial management practices of the Federal Government. 
The Act established a new leadership structure to improve 
Federal financial management practices, provided for long-range 
financial planning, required audited annual financial 
statements, and strengthened financial accountability. The CFO 
Act was approved by Congress and signed into law by the 
President in response to concerns raised over financial 
management practices within Executive branch agencies. In 
September 1989, the Committee on Governmental Affairs held 
hearings during which Inspectors General at seven major 
agencies, the Director of the Office of Management and Budget 
(OMB), and theComptroller General of the United States 
testified that there were serious problems involving Executive branch 
agencies' financial management processes. In offering an amendment to 
the CFO Act in October 1990, Senator John Glenn, then Chairman of the 
Governmental Affairs Committee, said, ``In brief, the conclusion of two 
of the highest officials with fiduciary responsibility for the Federal 
Government, the Director of OMB and the Comptroller General, was that 
the treasury was bleeding and the Government did not have the capacity 
to know where.'' \1\
---------------------------------------------------------------------------
    \1\ Congressional Record, October 16, 1990; p. S17259.
---------------------------------------------------------------------------
    Upon signing the CFO Act into law on November 15, 1990, 
President George H.W. Bush issued a statement saying, 
``Improving the Government's stewardship over public funds is 
critically important. The Act will help us to strengthen the 
systems that provide the President, the Congress, and the 
American people with the information necessary to make informed 
decisions on how public funds are spent. It will also help 
ensure that these data are timely and reflect more accurately 
the true costs of running the Federal Government. The Act 
reinforces my Administration's efforts to establish Federal 
accounting standards, integrate and modernize the Government's 
financial systems, and produce audited financial statements. 
The operations and financial condition of Government must be 
accurately and publicly reported. I am pleased to note that the 
Act's priorities for management improvements coincide with 
those of any Administration.'' \2\
---------------------------------------------------------------------------
    \2\ Statement released by the White House on November 16, 1990. 
Source: George H.W. Bush Presidential Library.
---------------------------------------------------------------------------
    Specifically, the CFO Act required the establishment of 
Chief Financial Officers and deputy Chief Financial Officers at 
24 major Executive branch departments and agencies and defined 
their responsibilities to oversee and report on agency 
financial activities. Given this high level of responsibility, 
Congress sought to ensure that the position of Chief Financial 
Officers would also have a high level of authority by requiring 
that the Chief Financial Officers at the 14 Cabinet-level 
departments, the Environmental Protection Agency, and the 
National Aeronautics and Space Administration would be filled 
by presidential appointees confirmed by the Senate, and that 
they would report directly to the head of the agency.\3\ In 
addition, the CFO Act established the position of Deputy 
Director for Management at OMB to be responsible for 
establishing governmentwide financial management policies and 
requirements, and for monitoring the operation of agency 
financial management systems. The original Act required CFO Act 
departments and agencies to produce annual, audited financial 
statements for each revolving fund and trust fund, and for 
accounts that performed substantial commercial functions. The 
Act called for a three-year pilot program requiring selected 
agencies to prepare audited financial statements for all of 
their accounts. At the time of enactment, the CFO Act agencies 
represented more than 90 percent of the Federal Government's 
spending.
---------------------------------------------------------------------------
    \3\ Eight other agencies are exempted from the Senate confirmation 
process: The U.S. Agency for International Development, Federal 
Emergency Management Agency (now part of the Department of Homeland 
Security), General Services Administration, National Science 
Foundation, Nuclear Regulatory Commission, Office of Personnel 
Management, Small Business Administration, and Social Security 
Administration.
---------------------------------------------------------------------------
    Subsequent amendments extended the CFO Act's purview. In 
1993, the Government Performance and Results Act (GPRA), P.L. 
103-62, built upon agency financial information mandated by the 
CFO Act and stipulated new systematic performance measurement 
requirements. GPRA requires CFO Act agencies to prepare a five-
year strategic plan, and annual performance plans and 
performance reports.
    Provisions in the Federal Financial Management Act of 1993, 
P.L. 103-356, enacted as Title IV of the Government Management 
Reform Act of 1994, also substantially expanded the CFO Act by 
requiring the 24 CFO Act agencies to produce annual audited 
financial statements for all of their accounts and associated 
activities. In addition, the 1994 law required the preparation 
of annual consolidated governmentwide statements covering all 
Executive branch agencies.
    The CFO Act was further amended by the Federal Financial 
Management Improvement Act of 1996 (FFMIA), P.L. 104-208. This 
Act established a general requirement for CFO Act agencies to 
implement and maintain financial management systems that comply 
substantially with Federal financial management system 
requirements, applicable Federal accounting standards, and the 
United States Government Standard General Ledger at the 
transaction level. Auditors are required to report on agency 
compliance with these requirements, and agency heads are 
required to correct deficiencies within certain time periods. 
The 1996 law also requires the OMB Director and the Comptroller 
General of the United States to make annual status reports to 
Congress.
    The CFO Act was again amended in 2002 by the Accountability 
of Tax Dollars Act, P.L. 107-289, which extended the 
requirement for annual audited financial statements to most 
Executive branch agencies. Under certain circumstances, the OMB 
Director may exempt agencies with budget appropriations under 
$25 million in a given year. Currently, 78 Executive branch 
agencies and commissions, in addition to the original CFO Act 
agencies, are required to produce annual audited financial 
statements.\4\
---------------------------------------------------------------------------
    \4\ ``Financial Management in the Federal Government: Efforts to 
Improve Performance,'' Congressional Research Report for Congress; June 
17, 2003; p. 6.
---------------------------------------------------------------------------
    Although the Department of Homeland Security is required to 
comply with the Accountability of Tax Dollars Act, it is not 
statutorily required to comply with other provisions of the CFO 
Act, including the provisions of FFMIA and the requirement that 
the Chief Financial Officer report to the agency Secretary. 
With the exception of the Department of Homeland Security, the 
Chief Financial Officers at all Cabinet-level departments are 
appointed by the President and confirmed by the Senate. The 
Department of Homeland Security's Chief Financial Officer 
reports to the Under Secretary for Management, rather than the 
Secretary, and theposition does not require Senate 
confirmation.
    The Senate Governmental Affairs Committee first approved 
legislation to create a Department of Homeland Security (S. 
2452) in May 2002. That bill did not originally include a 
requirement that the new Department be subject to the CFO Act.
    In June 2002, another bill to create a Homeland Security 
Department (H.R. 5005) was introduced in the House, which also 
did not include this requirement. As debate over the issue 
proceeded, however, efforts were made in both the House and 
Senate to make the new Department subject to the CFO Act. In 
July 2002, the Senate Governmental Affairs Committee adopted a 
substitute amendment to S. 2452, offered by then Chairman 
Joseph Lieberman, that would have made the Department of 
Homeland Security subject to the CFO Act. Also in July 2002, 
Representative Steve Horn offered a similar amendment during 
the House Government Reform's consideration of H.R. 5005, which 
the Committee approved. Neither amendment was included in the 
final version of the homeland security legislation, which was 
passed by the Senate on November 19, 2002 and by the House on 
November 22, 2002, and was signed into law on November 25, 
2002.

                     III. Discussion of Legislation

    Application of the CFO Act to the Department of Homeland 
Security is essential to ensure that the newest, and one of the 
largest, Cabinet-level departments in the Federal Government 
adheres to the same financial management reporting requirements 
and standards that other agencies must follow and that were 
developed over more than a decade. Indeed, it is anomalous that 
the Federal Emergency Management Agency, an original CFO Act 
agency, and portions of other CFO Act departments and agencies 
were relieved of these requirements upon their transfer to the 
new Department.
    In addition to its CFO Act requirements, S. 1567 requires 
the Department to produce audit opinions on internal controls 
over financial reporting. Currently, OMB guidance requires 
agencies to obtain testing and a report on internal controls, 
but not an audit opinion.\5\ An audit opinion will provide 
assurances that the Department's internal controls are 
effective in deterring fraudulent financial reporting, 
protecting assets, and providing an early warning of 
significant control weaknesses.
---------------------------------------------------------------------------
    \5\ OMB Bulletin 01-02, Audit Requirements for Federal Financial 
Statements.
---------------------------------------------------------------------------
    In response to major breakdowns in corporate 
accountability, the 107th Congress passed the Sarbanes-Oxley 
Act of 2002, P.L. 107-204, to, among other things, improve 
quality and transparency in financial reporting and independent 
audits of publicly traded companies. The Act requires publicly 
traded companies to establish and maintain an adequate internal 
control structure and procedures for financial reporting, and 
include in their annual reports a statement of management's 
responsibility for, and assessment of, the effectiveness of 
those controls and procedures. In addition, auditors are 
required to attest to, and report on, the assessment made by 
the company's management on the effectiveness of internal 
controls over financial reporting.
    Currently, Executive branch agencies, including CFO Act 
agencies, are not subject to this same requirement. However, 
believing that a strong internal control environment is the 
foundation of sound financial management, three of the 24 CFO 
Act agencies--the General Services Administration, Social 
Security Administration, and Nuclear Regulatory Commission--
voluntarily provided audit opinions on their internal controls 
in their fiscal year 2002 reports. During this transitional 
period for the Department of Homeland Security, it is extremely 
important that Congress ensures that the Department has strong 
financial internal controls in place.
    The Comptroller General of the United States supports 
enactment of this legislation. In response to questions 
submitted for the record by Senator Peter Fitzgerald during the 
Governmental Affairs Committee's September 16, 2003, oversight 
hearing on the GAO, Comptroller General David Walker stated, 
``Yes, I would support enactment of legislation to include the 
Department of Homeland Security under the requirements of the 
CFO Act.'' Mr. Walker further noted, ``[I]nstitutionalizing the 
CFO Act requirements for future Administrations is paramount. 
We therefore believe that the Senate should ensure that DHS is 
included under the requirements of the CFO Act as soon as 
practical.''
    Both the Comptroller General and the Department of Homeland 
Security's Inspector General support including in this 
legislation the provision requiring the Department to produce 
an audit opinion on its financial controls. A bill similar to 
S. 1567, H.R. 2886, was introduced in the House by 
Representative Todd Platts. During a September 10, 2003, 
hearing on H.R. 2886 before the House Government Reform 
Subcommittee on Government Efficiency and Financial Management, 
GAO witness McCoy Williams stated, ``GAO fully supports the 
objectives of the CFO Act to provide reliable financial 
information and improve financial management systems and 
controls, and believes DHS should be included under the Act and 
therefore also subject to FFMIA. Further, GAO strongly believes 
that auditor reporting on internal controls can be a critical 
component of monitoring the effectiveness and accountability of 
an organization and supports DHS, as well as other CFO Act 
agencies, obtaining such opinions.'' During the same hearing, 
Assistant Inspector General for Audits at the Department of 
Homeland Security, J. Richard Berman, stated, ``We believe that 
rendering opinions on internal controls over financial 
reporting at agencies could be beneficial by identifying 
additional weaknesses, and focusing attention on the state of 
financial management in the Government.''
    However, GAO and the Department of Homeland Security's 
Office of Inspector General recommended two revisions to the 
House bill. The first recommendation involved a provision 
inH.R. 2886 that would allow the Department to delay producing annual 
audited financial statements until fiscal year 2004. The GAO and Office 
of Inspector General stated that the delay was unnecessary because the 
Department had already begun work on its fiscal year 2003 financial 
statements and planned to submit the audited fiscal year 2003 
statements. The second recommendation involved a provision in H.R. 2886 
(which was also included in S. 1567) requiring the Department to 
produce an audit opinion on internal financial controls for fiscal year 
2004. The GAO and Office of Inspector General recommended deferring 
this requirement until fiscal year 2005 because of the Department's 
recent creation and its organizational complexity. As the first 
recommendation had already been addressed in S. 1567, the second 
recommendation was incorporated by Senator Daniel Akaka into an 
amendment in the nature of a substitute, which the Committee adopted by 
unanimous voice vote on October 22, 2003.
    The Department of Homeland Security is composed of 22 
agencies, some of which have long histories of poor financial 
management systems and practices. The Department's Chief 
Financial Officer faces the extraordinary challenge of 
developing a reliable financial management structure for the 
Department and all of its components. Currently, though, the 
Department of Homeland Security is not statutorily required to 
comply with the expanded provisions of the CFO Act, but is 
producing audited financial statements as required by the 
Accountability of Tax Dollars Act, P.L. 107-289. The Department 
has pledged to comply with the CFO Act requirements 
voluntarily. The Committee appreciates the Department's promise 
but does not want to leave compliance in future years to 
chance. S. 1567 will ensure that this large, administratively 
complex Department complies with the same financial management 
standards and reporting requirements that statutorily apply to 
all other Cabinet-level departments and major agencies.

                        IV. Legislative History

    Senator Peter Fitzgerald introduced S. 1567 on August 1, 
2003, for himself and Senator Daniel Akaka. The bill was 
referred to the Senate Committee on Governmental Affairs. 
Additional cosponsors of the bill include Senators Joseph 
Lieberman, Don Nickles, and Carl Levin. On October 22, 2003, 
the Committee adopted by voice vote an amendment in the nature 
of a substitute offered by Senator Akaka and ordered the 
amended bill to be reported to the full Senate. Senators 
present: Collins, Voinovich, Coleman, Bennett, Fitzgerald, 
Levin, Akaka, Lautenberg and Pryor.

                     V. Section-by-Section Analysis


Section 1.--Short title

    This section provides that the Act may be cited as the 
``Department of Homeland Security Financial Accountability 
Act.''

Section 2.--Chief Financial Officer of the Department of Homeland 
        Security

    This section amends 31 U.S.C. Sec. 901(b)(1) by adding the 
Department of Homeland Security to the list of departments and 
agencies covered by the CFO Act. The list of agencies in 31 
U.S.C. Sec. 901(b)(1) includes 14 cabinet-level departments, 
the Environmental Protection Agency, and the National 
Aeronautics and Space Administration. By adding the Department 
of Homeland Security, the Department's position of Chief 
Financial Officer will become a presidentially appointed 
position, subject to Senate confirmation.\6\ Currently, the 
Chief Financial Officer is a presidentially appointed position 
but does not require Senate confirmation.
---------------------------------------------------------------------------
    \6\ Other presidentially appointed, Senate confirmed Chief 
Financial Officers are compensated at Level IV of the Executive 
Schedule; see 5 U.S.C. Sec. 5315. Under the Homeland Security Act of 
2002, the Chief Financial Officer is a presidentially appointed 
position that does not require Senate confirmation. However, section 
1702 of the Homeland Security Act amended 5 U.S.C. Sec. 5315 to add the 
Chief Financial Officer at the Department of Homeland Security to the 
list of positions compensated at Level IV of the Executive Schedule. 
Therefore, no additional change to 5 U.S.C. Sec. 5315 will be 
necessary.
---------------------------------------------------------------------------
    Paragraph (b) requires the President to appoint or 
designate a Chief Financial Officer for the Department of 
Homeland Security within 180 days from the enactment of the 
Act.
    Paragraph (c) specifies that the current Chief Financial 
Officer at the Department of Homeland Security may continue 
serving until the date of confirmation or designation of a 
successor.
    Paragraph (d) makes conforming amendments to the Homeland 
Security Act of 2002 and the CFO Act.
    Paragraph (e) contains amendments to 31 U.S.C. Sec. 901 to 
ensure that the Department's Chief Financial Officer is subject 
to the same requirements as all other similarly situated Chief 
Financial Officers in Cabinet-level departments. It removes 
language in section 103 of the Homeland Security Act, P.L. 107-
296, that makes the Chief Financial Officer at the Department 
of Homeland Security a presidential appointee that is not 
subject to Senate confirmation and adds new language to section 
103 to make the Chief Financial Officer subject to the 
requirements of chapter 9 of title 31, U.S.C. In addition, 
paragraph (e) amends section 901(b)(2) of title 31, U.S.C., to 
remove the Federal Emergency Management Agency (FEMA), which is 
now part of the Department of Homeland Security, from the list 
of CFO Act agencies. A technical correction has been made to 
reflect re-numbering of the agencies included in this 
paragraph.\7\
---------------------------------------------------------------------------
    \7\ The list of agencies in 31 U.S.C. 901(b)(2) includes the Agency 
for International Development, Federal Emergency Management Agency, 
General Services Administration, National Science Foundation, Nuclear 
Regulatory Commission, Office of Personnel Management, Small Business 
Administration, and the Social Security Administration.
---------------------------------------------------------------------------

Section 3.--Functions of the Chief Financial Officer of the Department 
        of Homeland Security

    Paragraph (a) amends 31 U.S.C. Sec. 3516 to make it a 
requirement that the Department of Homeland Security submit 
annual performance and accountability reports that incorporate 
the GPRA program performance reports and include an audit 
opinion of the Department's internal controls over its 
financial reporting.
    Paragraph (b) provides that the Department will include the 
required audit opinions on internal controls beginning with the 
Department's performance and accountability report for fiscal 
year 2005.
    Paragraph (c) requires the Secretary of Homeland Security 
to include an assertion of internal controls that apply to 
financial reporting in the Department's performance and 
accountability report for fiscal year 2004 and subsequent 
years.

Section 4.--Authorization of appropriations

    This section authorizes to be appropriated such sums that 
are necessary to carry out the provisions of this Act.

                  VI. Evaluation of Regulatory Impact

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate the ``regulatory impact which would be incurred in 
carrying out this bill.'' Carrying out S. 1567 would have no 
regulatory impact.

                         VII. CBO Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 29, 2003.
Hon. Susan M. Collins,
Chairman, Committee on Governmental Affairs, U.S. Senate, Washington, 
        DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1567, the Department 
of Homeland Security Financial Accountability Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                      Elizabeth M. Robinson
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

S. 1567--Department of Homeland Security Financial Accountability Act

    S. 1567 would amend the Chief Financial Officers Act and 
the Homeland Security Act to require the President to appoint a 
Chief Financial Officer (CFO) to be confirmed by the Senate to 
oversee the financial accounting practices of the Department of 
Homeland Security (DHS). In addition, DHS would be required to 
submit a performance and accountability report that 
incorporates a program performance report and, after fiscal 
year 2004, submit an audit of its internal financial controls 
to the Office of Management and Budget and to the Congress.
    The DHS currently employs a CFO who has the same duties and 
responsibilities as CFOs in other agencies. According to DHS, 
it currently complies with the provisions of the Chief 
Information Officers Act. Based on information from DHS, we 
estimate that the requirement to prepare an audit of the 
department's internal financial controls would cost $4 million 
a year, subject to the availability of appropriated funds. 
Enacting the legislation would not affect direct spending or 
revenues.
    S. 1567 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact is Matthew Pickford. This estimate 
was approved by Peter H. Fontaine, Deputy Assistant Director 
for Budget Analysis.

                     VIII. Changes to Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

                           UNITED STATES CODE

                      TITLE 31--MONEY AND FINANCE

                          Subtitle I--General


               CHAPTER 9--AGENCY CHIEF FINANCIAL OFFICERS


SEC. 901. ESTABLISHMENT OF AGENCY CHIEF FINANCIAL OFFICERS.

           *       *       *       *       *       *       *


    (b)(1) The agencies referred to in subsection (a)(1) are 
the following:
          (A) The Department of Agriculture.
          (B) The Department of Commerce.
          (C) The Department of Defense.
          (D) The Department of Education.
          (E) The Department of Energy.
          (F) The Department of Health and Human Services.
          (G) The Department of Homeland Security.
          [G] (H) The Department of Housing and Urban 
        Development.
          [H] (I) The Department of the Interior.
          [I] (J) The Department of Justice.
          [J] (K) The Department of Labor.
          [K] (L) The Department of State.
          [L] (M) The Department of Transportation.
          [M] (N) The Department of the Treasury.
          [N] (O) The Department of Veterans Affairs.
          [O] (P) The Environmental Protection Agency.
          [P] (Q) The National Aeronautics and Space 
        Administration.
    (2) The agencies referred to in subsection (a)(2) are the 
following:
          (A) The Agency for International Development.
          [(B) The Federal Emergency Management Agency.]
          [C] (B) The General Services Administration.
          [D] (C) The National Science Foundation.
          [E] (D) The Nuclear Regulatory Commission.
          [F] (E) The Office of Personnel Management.
          [G] (F) The Small Business Administration.
          [H] (G) The Social Security Administration.

           *       *       *       *       *       *       *


                   Subtitle III--Financial Management


                 CHAPTER 35--ACCOUNTING AND COLLECTION


    Subchapter II--Accounting Requirements, Systems, and Information


SEC. 3516. REPORTS CONSOLIDATION.

           *       *       *       *       *       *       *


    (f) The Secretary of Homeland Security.--
          (1) shall for each fiscal year submit a performance 
        and accountability report under subsection (a) that 
        incorporates the program performance report under 
        section 1116 of this title for the Department of 
        Homeland Security; and
          (2) shall include in each performance and 
        accountability report an audit opinion of the 
        Department's internal controls over its financial 
        reporting.

           *       *       *       *       *       *       *


           PUBLIC LAW 107-296--HOMELAND SECURITY ACT OF 2002


                TITLE 1--DEPARTMENT OF HOMELAND SECURITY

SEC. 103. OTHER OFFICERS (6 U.S.C. 113).

           *       *       *       *       *       *       *


    (d) Other Officers.--To assist the Secretary in the 
performance of the Secretary's functions, there are the 
following officers, appointed by the President:
          (1) A Director of the Secret Service
          (2) A Chief Information Officer
          (3) A Chief Human Capital Officer
          [(4) A Chief Financial Officer]
          [5] (4) An Officer for Civil Rights and Civil 
        Liberties
    (e) Chief Financial Officer.--There shall be in the 
Department a Chief Financial Officer, as provided in Chapter 9 
of title 31, United States Code.
    [e] (f) Performance of Specific Functions.--Subject to the 
provisions of this Act, every officer of the Department shall 
perform the functions specified by law for the official's 
office or prescribed by the Secretary.

           *       *       *       *       *       *       *


SEC. 702. CHIEF FINANCIAL OFFICER (6 U.S.C. 342).

    The Chief Financial Officer [shall report to the Secretary, 
or to another official of the Department, as the Secretary may 
direct.] shall perform functions as specified in chapter 9 of 
title 31, United States Code.

           *       *       *       *       *       *       *