C ongress has scaled back funds for a new personnel system at the Department of Homeland Security, a sign that the department will not be making progress on the system as quickly as envisioned.

The department originally planned to spend $102.5 million for the development of a performance management and compensation system, training of managers and contractor support. The House and Senate recommended $70 million for fiscal 2005, but congressional negotiators cut the appropriation to $36 million.

"Some of these monies are not going to be necessary in 2005 because they are not going to be as far along in the implementation process," a House aide said. "This is not meant as a criticism of the process or the initiative itself but simply recognizes the realities involved in making this complex change."

In the Senate, "staff certainly felt, and got from DHS, that it would be difficult for DHS to prudently use that full amount," said Keith Williams, press secretary for Sen. Thad Cochran (R-Miss.), chairman of the Senate Appropriations homeland security subcommittee.

The funds being made available, Williams said, should be adequate for designing and testing a personnel system in a pilot project, including management training to ensure that the department's employees are treated fairly when their job performance is evaluated.

Congressional aides said the department planned to roll out the first phase of the personnel system at the Coast Guard but is now looking to move the test site to the Federal Law Enforcement Training Center, based in Glynco, Ga.

The Senate approved the fiscal 2005 spending bill for the department Oct. 11 and sent it to President Bush for his signature. White House aides have threatened a veto because of a provision that would halt the possible outsourcing of 1,400 immigration jobs, but Senate aides said they were skeptical that Bush would veto the bill, which provides $33 billion to the department.

Homeland Security officials have been working for much of the past year on a new pay and personnel system that would cover about 110,000 employees. They also are dealing with the aftershocks of the 22-agency merger that created the department.

A report by the Government Accountability Office released Friday noted that field offices have faced travel, budget and payroll problems. GAO said a foul-up in travel software codes kept some Immigration and Customs Enforcement employees waiting months for reimbursement, for example.

The department also has been consulting with its major unions on the new personnel system. Secretary Tom Ridge and Office of Personnel Management Director Kay Coles James recently met with two labor leaders to hear their concerns about the system.

Partly in response to union concerns, a senior official this month suggested that the department's shift to new salary scales could be delayed until 2006 to provide more time for testing and refining the management system that will be used to rate employees on how well they do their jobs.

Larry Orluskie, a department spokesman, said officials "continue to carefully review and consider the issues" raised by unions and others.

"Once that review is completed, we will move forward with a new human resource management system, which will support the mission of the Department of Homeland Security while recognizing the rights of its employees. These decisions will determine our implementation plan," Orluskie said.

The $36 million provided by Congress "will be used for the HR [human resources] system across the department," he said.

The administration hopes to issue final regulations in the Federal Register before year's end to set up the framework for establishing new pay and personnel rules.

The rules will move most Homeland Security employees out of the General Schedule, the government's white-collar pay system, and into one that gives more weight to occupation, location and job performance. The rules also will likely weaken the clout of unions in the department.

NARFE on Diary Live

Ken Glass and Dan Adcock of the National Association of Retired Federal Employees will take questions and comments at noon Wednesday on Federal Diary Live at www.washingtonpost.com/liveonline.

Glass is NARFE's director of retirement benefit services, and Adcock is the association's assistant director of legislation.

E-mail: barrs@washpost.com