Please find below an example of UPI's continuing coverage of Homeland Security 
and related issues. I hope you find it interesting. You may link to it on the 
web here:

http://www.upi.com/view.cfm?StoryID=20041222-043312-8888r

If you have any comments or questions about this piece, need any more 
information about UPI products and services, or want to stop receiving these 
alerts, please get in touch.

Thank you,

Shaun Waterman
UPI Homeland and National Security Editor
E-mail: [EMAIL PROTECTED] 
Tel: 202 898 8081

Two audits examine DHS budget figures
By Shaun Waterman
UPI Homeland and National Security Editor

WASHINGTON, Dec. 22 (UPI) -- Two sets of auditors are reviewing the way costs 
and assets were apportioned among the 22 agencies merged into the Department of 
Homeland Security, amid claims from one that they were "shortchanged" by 
hundreds of millions of dollars.

The investigations are the latest in a string that have examined the troubled 
finances of Immigration and Customs Enforcement -- the agency charged with 
hunting down money launderers, sanctions busters and human traffickers, and 
which is the sole enforcer of immigration laws inside the country.

The agency is continuing a hiring freeze and a ban on all "non-mission 
critical" travel or other expenditure, instituted earlier this year because of 
serious budget over-runs.

One investigation was commissioned by Homeland Security Chief Financial Officer 
Andrew Maner, in an effort to sort out competing claims about the way costs 
should be apportioned when one agency pays another's bills or provides legal or 
accounting services for another element of the department.

Immigration and Customs Enforcement spokesman Dean Boyd said auditors from 
U.K.-based accountants Grant Thornton had completed their examination of the 
agency's books and were expected to look next at the records of other 
Department of Homeland Security agencies.

"These issues are very, very complex," Boyd told United Press International. 
"Every agency is making claims about its costs and how the reimbursements 
should be done. ... Going forward, we want to ensure that this is resolved."

The department's inspector general is also looking into the budget crisis at 
Immigration and Customs Enforcement, Assistant Inspector General for Audit 
Richard Berman told UPI.

Berman said the inspector general's report will be much wider-ranging than the 
Grant Thornton audit.

"We will be looking at the whole question of exactly how (Immigration and 
Customs Enforcement's) budget problems arose and ... whether the actions taken 
in response have had a direct and serious effect on operations," he said.

Immigration and Customs Enforcement officials have always insisted that 
operations were unaffected by the hiring freeze and other belt-tightening 
measures.

But Berman said his office had "heard a lot of complaints ... from field 
offices" about the effect of the measures.

"What were the effects on operations?" he asked. "That's what we aim to find 
out. It's an open question for us at this stage."

The roots of the financial crisis at Immigration and Customs Enforcement, 
Berman and other officials say, lie in the complex merger of 22 federal 
agencies from numerous departments into a single, but not yet coherent, whole.

"We still consider Homeland Security to be in a start-up mode," Berman said, 
explaining that when the merger took place, many elements transferred from 
other departments did not have their own accounting or legal personnel or their 
own procurement systems.

Immigration and Customs Enforcement "lost a lot of key staff" during and after 
the merger, said Berman. "They got way behind" with their accounts.

There was also a lot of "cross servicing" between agencies, said Berman, with 
different elements of the department providing legal or other administrative 
functions for each other. 

Immigration and Customs Enforcement had to "use its own resources and its own 
budget to pay bills incurred on behalf of other elements of Homeland Security," 
he said.

Disputes about the way those costs should be allocated dragged on throughout 
the 2004 financial year, Berman said. Immigration and Customs Enforcement ended 
up "not only behind the curve on their accounts, but with serious budget 
problems."

It was only as the 2004 fiscal year ended Sept. 30 that Immigration and Customs 
Enforcement received a $500 million reimbursement.

But some say this solves only half the problem.

One government official familiar with the agency's predicament said that it had 
done badly in the way costs were allocated during the merger.

As an example, the official cited the transfer of Customs special agents.

"When Customs gave (Immigration and Customs Enforcement) the budget for the 
special agents they were transferring, they didn't transfer any of the 
overhead, just the base salary. There was no money there for training or travel 
or equipment," the official said, adding that the agency "started in the hole 
hundreds of millions of dollars" budget-wise.

Those allocations, said Berman, are what Immigration and Customs Enforcement 
officials blame for their predicament. "That's where they say the problems come 
from," he said. "They believe they were shortchanged in the initial (budget) 
allocations."

--

(Please send comments to [EMAIL PROTECTED]) 

Copyright � 2001-2004 United Press International



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