Pub.L. 108-331 To authorize the Board of Regents of the Smithsonian Institution to ...

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Public Law 108-330
108th Congress

                                 An Act


 
    To amend title 31, United States Code, to improve the financial 
  accountability requirements applicable to the Department of Homeland 
   Security, to establish requirements for the Future Years Homeland 
Security Program of the Department, and for other purposes. <<NOTE: Oct. 
                       16, 2004 -  [H.R. 4259]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Department of 
Homeland Security Financial Accountability Act. 6 USC 101 note. 6 USC 
342 note.>> 

SECTION 1. SHORT TITLE.

    This Act may be cited as ``Department of Homeland Security Financial 
Accountability Act''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Influential financial management leadership is of vital 
        importance to the mission success of the Department of Homeland 
        Security. For this reason, the Chief Financial Officer of the 
        Department must be a key figure in the Department's management.
            (2) To provide a sound financial leadership structure, the 
        provisions of law enacted by the Chief Financial Officers Act of 
        1990 (Public Law 101-576) provide that the Chief Financial 
        Officer of each of the Federal executive departments is to be a 
        Presidential appointee who reports directly to the Secretary of 
        that department on financial management matters. Because the 
        Department of Homeland Security was only recently created, the 
        provisions enacted by that Act must be amended to include the 
        Department within these provisions.
            (3) The Department of Homeland Security was created by 
        consolidation of 22 separate Federal agencies, each with its own 
        accounting and financial management system. None of these 
        systems was developed with a view to executing the mission of 
        the Department of Homeland Security to prevent terrorist attacks 
        within the United States, reduce the Nation's vulnerability to 
        terrorism, and minimize the damage and assist in the recovery 
        from terrorist attacks. For these reasons, a strong Chief 
        Financial Officer is needed within the Department both to 
        consolidate financial management operations, and to insure that 
        management control systems are comprehensively designed to 
        achieve the mission and execute the strategy of the Department.
            (4) The provisions of law enacted by the Chief Financial 
        Officers Act of 1990 require agency Chief Financial Officers to 
        improve the financial information available to agency managers 
        and the Congress. Those provisions also specify that

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        agency financial management systems must provide for the 
        systematic measurement of performance. In the case of the 
        Department of Homeland Security, therefore, it is vitally 
        important that management control systems be designed with a 
        clear view of a homeland security strategy, including the 
        priorities of the Department in addressing those risks of 
        terrorism deemed most significant based upon a comprehensive 
        assessment of potential threats, vulnerabilities, criticality, 
        and consequences. For this reason, Federal law should be amended 
        to clearly state the responsibilities of the Chief Financial 
        Officer of the Department of Homeland Security to provide 
        management control information, for the benefit of managers 
        within the Department and to help inform the Congress, that 
        permits an assessment of the Department's performance in 
        executing a homeland security strategy.

SEC. 3. CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF HOMELAND SECURITY.

    (a) In General.--Section 901(b)(1) of title 31, United States Code, 
is amended--
            (1) by redesignating subparagraphs (G) through (P) as 
        subparagraphs (H) through (Q), respectively; and
            (2) by inserting after subparagraph (F) the following:
            ``(G) The Department of Homeland Security.''.

    (b) <<NOTE: President. Deadline. 31 USC 901 note.>> Appointment or 
Designation of CFO.--The President shall appoint or designate a Chief 
Financial Officer of the Department of Homeland Security under the 
amendment made by subsection (a) by not later than 180 days after the 
date of the enactment of this Act.

    (c) Continued Service of Current Official.--An individual serving as 
Chief Financial Officer of the Department of Homeland Security 
immediately before the enactment of this Act, or another person who is 
appointed to replace such an individual in an acting capacity after the 
enactment of this Act, may continue to serve in that position until the 
date of the confirmation or designation, as applicable (under section 
901(a)(1)(B) of title 31, United States Code), of a successor under the 
amendment made by subsection (a).
    (d) Conforming Amendments.--
            (1) Homeland security act of 2002.--The Homeland Security 
        Act of 2002 (Public Law 107-296) is amended--
                    (A) in section 103 (6 U.S.C. 113)--
                          (i) in subsection (d) by striking paragraph 
                      (4), and redesignating paragraph (5) as paragraph 
                      (4);
                          (ii) by redesignating subsection (e) as 
                      subsection (f); and
                          (iii) by inserting after subsection (d) the 
                      following:

    ``(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.''; and
                    (B) in section 702 (6 U.S.C. 342) by striking 
                ``shall report'' and all that follows through the period 
                and inserting ``shall perform functions as specified in 
                chapter 9 of title 31, United States Code, and, with 
                respect to all such functions and other responsibilities 
                that may be assigned to the Chief Financial Officer from 
                time to time, shall also report to the Under Secretary 
                for Management.''.

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            (2) FEMA.--Section 901(b)(2) of title 31, United States 
        Code, is amended by striking subparagraph (B), and by 
        redesignating subparagraphs (C) through (H) in order as 
        subparagraphs (B) through (G).

SEC. 4. FUNCTIONS OF CHIEF FINANCIAL OFFICER OF THE DEPARTMENT OF 
            HOMELAND SECURITY.

    (a) Performance and Accountability Reports.--Section 3516 of title 
31, United States Code, is amended by adding at the end the following:
    ``(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;
            ``(2) shall include in each performance and accountability 
        report an audit opinion of the Department's internal controls 
        over its financial reporting; and
            ``(3) shall design and implement Department-wide management 
        controls that--
                    ``(A) reflect the most recent homeland security 
                strategy developed pursuant to section 874(b)(2) of the 
                Homeland Security Act of 2002; and
                    ``(B) permit assessment, by the Congress and by 
                managers within the Department, of the Department's 
                performance in executing such strategy.''.

    (b) <<NOTE: 31 USC 3516 note.>> Implementation of Audit Opinion 
Requirement.--The Secretary of Homeland Security shall include audit 
opinions in performance and accountability reports under section 3516(f) 
of title 31, United States Code, as amended by subsection (a), only for 
fiscal years after fiscal year 2005.

    (c) Assertion of Internal Controls.--The Secretary of Homeland 
Security shall include in the performance and accountability report for 
fiscal year 2005 submitted by the Secretary under section 3516(f) of 
title 31, United States Code, an assertion of the internal controls that 
apply to financial reporting by the Department of Homeland Security.
    (d) Audit Opinions of Internal Controls Over Financial Reporting by 
Chief Financial Officer Agencies.--
            (1) <<NOTE: Deadline.>> In general.--Not later than 180 days 
        after the date of the enactment of this Act, the Chief Financial 
        Officers Council and the President's Council on Integrity and 
        Efficiency established by Executive Order 12805 of May 11, 1992, 
        shall jointly conduct a study of the potential costs and 
        benefits of requiring the agencies listed in section 901(b) of 
        title 31, United States Code, to obtain audit opinions of their 
        internal controls over their financial reporting.
            (2) Report.--Upon completion of the study under paragraph 
        (1), the Chief Financial Officers Council and the President's 
        Council on Integrity and Efficiency shall promptly submit a 
        report on the results of the study to the Committee on 
        Government Reform of the House of Representatives, the Committee 
        on Governmental Affairs of the Senate, and the Comptroller 
        General of the United States.
            (3) <<NOTE: Deadline.>> General accounting office 
        analysis.--Not later than 90 days after receiving the report 
        under paragraph (2), the

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        Comptroller General shall perform an analysis of the information 
        provided in the report and report the findings of the analysis 
        to the committees referred to in paragraph (2).

SEC. 5. FUTURE YEARS HOMELAND SECURITY PROGRAM AND HOMELAND SECURITY 
            STRATEGY.

    Section 874 of the Homeland Security Act of 2002 <<NOTE: 6 USC 
454.>> (6 U.S.C. 112) is amended by striking subsection (b) and 
inserting the following:

    ``(b) Contents.--The Future Years Homeland Security Program under 
subsection (a) shall--
            ``(1) include the same type of information, organizational 
        structure, and level of detail as the future years defense 
        program submitted to Congress by the Secretary of Defense under 
        section 221 of title 10, United States Code;
            ``(2) set forth the homeland security strategy of the 
        Department, which shall be developed and updated as appropriate 
        annually by the Secretary, that was used to develop program 
        planning guidance for the Future Years Homeland Security 
        Program; and
            ``(3) include an explanation of how the resource allocations 
        included in the Future Years Homeland Security Program correlate 
        to the homeland security strategy set forth under paragraph 
        (2).''.

SEC. 6. ESTABLISHMENT OF OFFICE OF PROGRAM ANALYSIS AND EVALUATION.

    Section 702 of the Homeland Security Act of 2002 (6 U.S.C. 342) is 
amended by--
            (1) inserting ``(a) In General.--'' before the first 
        sentence; and
            (2) adding at the end the following:

    ``(b) Program Analysis and Evaluation Function.--
            ``(1) <<NOTE: Deadline.>> Establishment of office of program 
        analysis and evaluation.--Not later than 90 days after the date 
        of enactment of this subsection, the Secretary shall establish 
        an Office of Program Analysis and Evaluation within the 
        Department (in this section referred to as the `Office').
            ``(2) Responsibilities.--The Office shall perform the 
        following functions:
                    ``(A) Analyze and evaluate plans, programs, and 
                budgets of the Department in relation to United States 
                homeland security objectives, projected threats, 
                vulnerability assessments, estimated costs, resource 
                constraints, and the most recent homeland security 
                strategy developed pursuant to section 874(b)(2).
                    ``(B) Develop and perform analyses and evaluations 
                of alternative plans, programs, personnel levels, and 
                budget submissions for the Department in relation to 
                United States homeland security objectives, projected 
                threats, vulnerability assessments, estimated costs, 
                resource constraints, and the most recent homeland 
                security strategy developed pursuant to section 
                874(b)(2).
                    ``(C) Establish policies for, and oversee the 
                integration of, the planning, programming, and budgeting 
                system of the Department.

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                    ``(D) Review and ensure that the Department meets 
                performance-based budget requirements established by the 
                Office of Management and Budget.
                    ``(E) Provide guidance for, and oversee the 
                development of, the Future Years Homeland Security 
                Program of the Department, as specified under section 
                874.
                    ``(F) Ensure that the costs of Department programs, 
                including classified programs, are presented accurately 
                and completely.
                    ``(G) Oversee the preparation of the annual 
                performance plan for the Department and the program and 
                performance section of the annual report on program 
                performance for the Department, consistent with sections 
                1115 and 1116, respectively, of title 31, United States 
                Code.
                    ``(H) Provide leadership in developing and promoting 
                improved analytical tools and methods for analyzing 
                homeland security planning and the allocation of 
                resources.
                    ``(I) Any other responsibilities delegated by the 
                Secretary consistent with an effective program analysis 
                and evaluation function.
            ``(3) Director of program analysis and evaluation.--There 
        shall be a Director of Program Analysis and Evaluation, who--
                    ``(A) shall be a principal staff assistant to the 
                Chief Financial Officer of the Department for program 
                analysis and evaluation; and
                    ``(B) shall report to an official no lower than the 
                Chief Financial Officer.
            ``(4) Reorganization.--
                    ``(A) In general.--The Secretary may allocate or 
                reallocate the functions of the Office, or discontinue 
                the Office, in accordance with section 872(a).
                    ``(B) Exemption from limitations.--Section 872(b) 
                shall not apply to any action by the Secretary under 
                this paragraph.''.

SEC. 7. NOTIFICATION REGARDING TRANSFER OR REPROGRAMMING OF FUNDS FOR 
            DEPARTMENT OF HOMELAND SECURITY.

    Section 702 of the Homeland Security Act of 2002 (6 U.S.C. 342) is 
further amended by adding at the end the following:
    ``(c) Notification Regarding Transfer or Reprogramming of Funds.--In 
any case in which appropriations available to the Department or any 
officer of the Department are transferred or reprogrammed and notice of 
such transfer or reprogramming is submitted to the Congress (including 
any officer, office, or Committee of the Congress), the Chief Financial 
Officer of the Department shall simultaneously submit such notice to the 

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