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Friday, September 21, 2007

Watchdog finds DHS division improperly transferred funds

A branch of the Homeland Security Department improperly transferred money between appropriation accounts in 2006, according to the Government Accountability Office.

DHS' Preparedness Directorate developed a complex system to pool funds from different appropriations accounts to pay for directoratewide management and administrative needs in fiscal 2006. But according to a Sept. 17 letter from GAO to the Senate and House Appropriations committees, the agency did not meet the legal requirements to make such a move.

The letter said the department should adjust those accounts, and noted that if any of the accounts lack unobligated balances to cover the adjustments, the department violated the Antideficiency Act and should report the violation. The Antideficiency Act prohibits agencies from spending money they have not been appropriated.

The Preparedness Directorate, which has since been dismantled, was created as part of a departmental reorganization in 2005. For fiscal 2006, the directorate was financed through eight separate appropriations accounts. According to DHS, the appropriation for management and administration was far below the level necessary, in part because the reorganization that created the directorate occurred after the department had submitted its fiscal 2006 budget justification to Congress.

According to the GAO letter, congressional appropriators gave the directorate about $16 million for management and administration, while the actual costs totaled about $59 million. Because the directorate did not have enough money for some directoratewide services, it pooled funding from different appropriations accounts to pay for them.

Sharing funds across appropriations accounts is tantamount to transferring money between accounts, GAO said in the letter. These transfers are generally illegal. Three separate laws provide exceptions that would allow DHS to make the transfers, but each comes with limitations and requirements, and the department failed to meet the requirements, according to the watchdog agency.

-Zack Phillips, GovExec.com

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