Audits of Homeland Security Department financial systems performance during the past fiscal year will reveal improved performance, a top DHS official told an Oct. 27 House panel.

Testifying before the House Oversight and Government Reform subcommittee on government organization, efficiency and financial management, Peggy Sherry, the departmental deputy chief financial officer, said the results of the fiscal 2011 audits should show "significant progress." Fiscal 2011 ended Sept. 30.

In particular, weaknesses at the Coast Guard, the Federal Emergency Management Agency and Immigration and Customs Enforcement should be resolved, she added.

Auditor firm KPMG identified 161 financial system internal controls during fiscal 2010, nearly two thirds of them repeats from fiscal 2009. About a third of the total deficiencies came from FEMA systems, and FEMA represented about 80 percent of the repeat weaknesses.

FEMA's financial management system, Sherry acknowledged, is old and dated. "It's proprietary. I believe it's not even supported at this particular point," she said.

Up until earlier this year, DHS had planned to stand up a departmentwide enterprise resource planning system known as Transformation and Systems Consolidation, but canceled the effort following a March Government Accountability Office protest ruling finding that DHS improperly gave CACI of Arlington, Va. a $450 million contract to implement TASC.

DHS components including the Coast Guard, FEMA and ICE are currently conducting their own analysis of alternatives for a modern financial system, Sherry said. "They're defining what their requirements are with the department, and what we're doing is we are setting forth kind of the standards," Sherry said.

One reason for repeat weaknesses, said Robert West, the DHS chief information security officer, is that auditors must believe remediative controls have been effective for the entire audit cycle, generally a year.

"We take them all seriously, but there is an audit pace that goes with these, and it's generally one or two years before you actually get to the point where something is fully closed with the auditors," he said.

For more:
- go to the hearing webpage (webcast and prepared testimonies available)

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