In 2003, GAO designated the Dept. of Homeland Security's (DHS's) management functions -- including financial management -- as high risk. Since obtaining a clean opinion on its financial statements and improving the effectiveness of internal controls are key aspects of DHS's strategy for addressing its high-risk financial management issues, this report reviewed DHS's efforts to strengthen its financial reporting, including how it plans to modernize its current financial systems. It examines (1) DHS's progress toward obtaining clean opinions on its financial statements and internal control over financial reporting; and (2) the extent to which DHS's approach for modernizing its current financial systems was consistent with Office of Mngt. and Budget (OMB) requirements and whether DHS followed certain info. tech. (IT) best practices while implementing its approach. Tables. This is a print on demand report.

In 2003, GAO designated DHS's management functions, including financial management, as high risk. Since obtaining a clean opinion on its financial statements and improving the effectiveness of internal controls are key aspects of DHS's strategy for addressing its high-risk financial management issues, GAO was asked to review DHS's efforts to strengthen its financial reporting, including how it plans to modernize its current financial systems. This report examines (1) DHS's progress toward obtaining clean opinions on its financial statements and internal control over financial reporting and (2) the extent to which DHS's approach for modernizing its current financial systems was consistent with OMB requirements and whether DHS followed certain IT best practices while implementing its approach. To help DHS deploy component-level integrated financial management systems, GAO is making four recommendations to DHS regarding the need to follow best practices related to its target state, transition plan, integrated master schedule, and lessons learned.