Homeland contracts oversight deemed poor; $34 B wasted

Dept. of Homeland Security struggles to oversee spending
Department of Homeland Security struggles to oversee spending
By Greg Gordon
McClatchy Newspapers
7/28/06

WASHINGTON - Nearly a year after it began doling out billions of dollars in contracts for recovery from Hurricane Katrina, the Department of Homeland Security still lacks a comprehensive computer system to oversee the spending, the agency's inspector general reported Friday.

Internal auditors found that the agency's chief procurement officer resorted to setting up a makeshift system to track billions of dollars in contracts, despite federal requirements that all contracting data be submitted within three days to a centralized federal system.

The stopgap system of spreadsheets, drawn from various agency divisions' contract-writing systems, resulted in unreliable information being given to the public, Homeland Security Secretary Michael Chertoff and the White House, the auditors said.

In one week last January, the procurement office reported $6.8 million in purchase card transactions, when $25.9 million was actually spent, the auditors reported. They said that other contracts were misidentified, and $777 million in spending was counted twice.

The audit came out one day after a bipartisan congressional report criticized the sprawling, three-year-old agency for massive waste, abuse and mismanagement in contracts covering everything from border patrol to aviation security. The House Government Reform Committee's review of 350 watchdog reports by government auditors and investigators identified 32 agency contracts worth a combined $34.3 billion that were marred by abuse or mismanagement.

The House panel also said that, as agency contract spending spiraled from $3.5 billion in fiscal 2003 to $10 billion two years later, the percentage of contracts awarded without full competitive bidding jumped from 19 percent to 35 percent.

Disaster relief spending in the aftermath of Katrina is sure to push the contract figures higher. Through last March 31, the Department of Homeland Security had awarded 3,457 contracts worth $5.4 billion in response to the hurricane devastation in three Gulf Coast states and, especially, the city of New Orleans, the office of Inspector General Richard Skinner reported recently.

His latest audit said that, despite federal regulations requiring that all contract data be entered into the Federal Procurement Data System within three days, only two Homeland Security procurement offices were linked to the system. The Transportation Security Administration, the Bureau of Customs and Border Protection and the Federal Law Enforcement Training Center weren't hooked to the central system or even to a department-wide computerized procurement system, it said.

Department spokesman Larry Orluskie said the agency already has begun implementing most of the recommendations.

"The department's procurement system strives for data accuracy," he said.

The auditors also scolded the department's procurement office on two other counts. They said it had failed to conduct a cost-benefit analysis before choosing an agency-wide computer system to track contracting, and it failed to take adequate security measures to protect the confidentiality of computerized contracting data.