Second OMB memo reiterates IT freeze in new homeland security agencies

For the second time in two weeks, the Bush administration has asked federal agencies targeted for the Department of Homeland Security to halt IT spending with an eye toward consolidating duplicative investments as the new department is set up.

A July 30 memo from Office of Management and Budget Director Mitchell Daniels Jr. directed the component agencies of the proposed Department of Homeland Security to consolidate redundant spending on management systems.

"To be well run, each federal agency should have a single, first-class system for keeping track of its funds. The same also holds true for procurement and personnel. Unless harmonized, current spending plans at individual departments would make matters worse, and more wasteful," Daniels said.

The memo was sent to the departments of Agriculture, Commerce, Justice, Transportation and Treasury, which have units targeted for inclusion in the new department, as well as the Federal Emergency Management Agency. Plans call for FEMA to be relocated to the new department.

The memo reiterates the message of an earlier memo, sent July 19 by OMB, calling on the agencies to temporarily halt spending on IT systems related to homeland security and asking them to work toward integrating their IT infrastructures.

Currently, the proposed DHS component agencies use different financial management systems, and they lack a common automated system for either procurement or human resources, OMB said. According to OMB analysis, seven DHS agencies plan to invest more than $235 million in at least 21 financial management systems. Consolidating these systems could save $65 million to $85 million over the next two years, OMB said.

The memo requires DHS component agencies to:

*Cease temporarily financial management, procurement and human resources system development and planned modernization efforts above $500,000 pending an expedited review of all DHS component agency investment plans;

*Identify by Aug. 22 current and planned spending on financial management, human resources management and procurement-related IT systems not already identified by OMB in the memo;

*Participate in a new Business Systems IT Review Group led by OMB and the Office of Homeland Security.

The business system group, comprising chief financial officers, procurement executives, human resources executives and chief information officers selected from DHS component agencies, will review redundant IT investments and investments that need to be integrated to enhance operations, OMB said. The group will make recommendations that create a single, modern environment that supports homeland security administrative functions. The group will identify and track resulting savings, OMB said.

The memo advises the group to ensure maximum use of several e-government initiatives overseen by OMB, including e-training, integrated acquisition, e-travel, recruitment one-stop and integrated human resources and payroll processing.

By leveraging the latest e-government tools, the new department could integrate its financial management, personnel and procurement processes into a single world-class system that would save taxpayers millions, OMB said.