Performance and 

Accountability Report

Fiscal Year 2012

U.S. Customs and Border Protection • Annual Financial Report i

America’s Frontline

We guard the boundaries of freedom and stand between the good citizens of our Nation and those that want to 

do us harm.

About This Report

U.S. Customs and Border Protection (CBP) Fiscal Year (FY) 2012 Performance and Accountability Report (PAR) 

presents a comprehensive report that combines CBP’s Annual Performance Report with its audited financial statements, assurances on internal control, accountability reporting and agency assessments. CBP’s PAR provides program, financial, and performance information that enables Congress and the public to assess the performance of 

the agency as it relates to the CBP mission.

The CBP PAR discusses the agency’s strategic goals and objectives and provides a comparison of agency performance 

targets to actual performance results. The CBP PAR satisfies the reporting requirements of the Reports Consolidation 

Act of 2000 (Pub. L. No. 106–531), Government Performance and Results Modernization Act (GPRMA) of 

2010, Chief Financial Officers Act of 1990 (Public Law No. 101–576), Office of Management and Budget (OMB) 

Circular No. A-136, Financial Reporting Requirement, dated August 3, 2012, and other financial management statutes 

and reports.

The CBP PAR provides a summary of the agency’s major mission programs, including strategies. Additional information related to the specific programs, initiatives, tools and resources used to achieve agency objectives can be 

found in the body of the Department of Homeland Security (DHS) Congressional Budget Justification for the 

President’s Budget, which details information by DHS component.

For FY 2012, CBP will produce its Performance and Accountability Report and the Summary of Performance and 

Financial Information.

When published, both reports will be located on our public website: www.cbp.gov

For more information, contact:

U.S. Customs and Border Protection

Office of Administration

1331 Pennsylvania Avenue, NW, Suite 950

Washington, DC 20229–1103

About This Report
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Table of Contents 1

Deputy Commissioner’s Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Management’s Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Core Values . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Fiscal Year 2012 Statistical Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Drug Seizure Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Major Mission Programs and Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Securing America’s Borders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Securing and Expediting Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Securing and Expediting Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Intelligence and Targeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Integrated Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Enterprise Business Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

Looking Ahead .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

Headquarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

Component Organizations and Field Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

Performance Goals and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Performance Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Fiscal Year 2012 Performance by Mission Set . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Management Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

Federal Manager’s Financial Integrity Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

DHS Financial Accountability Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

Federal Financial Management Improvement Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Federal Information Security Management Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Systems and Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Management Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

Self-Inspection Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Audit Management and Liaison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Financial Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Overview of the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

Limitations of the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Performance Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

Performance Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Individual Performance Measure Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Financial Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Message from the Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

Management’s Response to the Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166

Other Accompanying Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

Schedule of Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

Revenue Gap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

CBP Collections by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175

CBP Collections by Major Processing Port Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

Summary of Financial Statement Audit and Management Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

Improper Payments Information Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

Office of Inspector General (OIG) Report on Major Management Challenges . . . . . . . . . . . . . . . . . . . . . . . 182

Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Table of Contents
2 U.S. Customs and Border Protection • Performance and Accountability Report

I am pleased to present the Fiscal Year (FY) 2012 Performance and Accountability 

Report (PAR) for U.S. Customs and Border Protection (CBP).

CBP is responsible for managing, securing, and controlling our Nation’s borders while facilitating the legitimate international travel and trade that is so 

vital to our Nation’s economy. Our priority mission within this broad area 

of responsibility is to prevent terrorists and terrorist weapons from entering 

the United States. As we execute our mission we seek to adhere to the highest 

standards of fiscal discipline and accountability.

We continually update and adjust CBP’s programs to enhance the overall efficiency of how we operate in the ever-changing global environment. CBP has 

built a multi-layered approach for screening and identifying potential travelers 

to the United States who may pose a threat to the homeland and we will continue to use all of the means within our authority to protect the Nation and its citizens.

In FY 2012, CBP continued to respond to illegal cross-border traffic through targeted operations, enhanced partnerships and an effective deployment of personnel, technology, and infrastructure along the border, while facilitating legitimate trade and travel. Over the last four years, CBP has focused on reducing barriers for fast, efficient, 

and secure travel to and from the United States. This year, CBP officers inspected 351 million travelers, processed 

over 30 million trade entries, and apprehended 364,768 illegal aliens attempting to cross the border.

Beginning in FY 2012, CBP implemented the Planning, Programming, Budgeting, and Accountability (PPBA) strategic framework to manage its financial and personnel resources. The PPBA process is a disciplined approach that 

ensures the Agency’s vision, goals, and objectives are clearly articulated; programs and activities are aligned to 

the goals and objective; and resources are appropriately allocated to achieve the desired goals and objectives. This 

process provides the opportunity to assess our strategic direction, accommodate new trends, adapt to challenges 

inside and outside CBP, and adjust our corporate priorities to ensure sustained progress toward our strategic goals.

This year, I am proud to report that as a result of its FY 2012 Financial Statement Audit, CBP received its seventh 

unqualified opinion on its full set of financial statements. This outstanding accomplishment attests to CBP’s continued commitment to fiscal discipline and accountability.

CBP is also committed to sound stewardship of federal dollars and transparency of financial and performance 

information. In FY 2012, CBP collected more than $ 39 billion in revenue. The FY 2012 PAR demonstrates this 

commitment through reliable and complete financial and performance information. It also addresses CBP’s compliance with financial management requirements and identifies areas for improvement. For example, CBP’s financial management systems do not fully comply with federal financial management systems requirements and the 

U.S. Government Standard General Ledger at the transaction level; we have made financial system modernization 

a priority.

Deputy Commissioner’s Message
Commissioner’s Message 3

CBP evaluated our management controls and financial management systems in compliance with the Federal 

Managers’ Financial Integrity Act of 1982 and our internal controls over financial reporting as required by the 

Department of Homeland Security Financial Accountability Act.

CBP is committed to remediating the deficiencies identified in the PAR and the corresponding independent auditor’s report and has put in place timetables for corrective action to ensure future compliance. As a result of these 

assessments, one material weakness, three instances of nonconformance, and three deficiencies were identified. 

I am proud to be leading an organization of men and women who are truly dedicated to the CBP mission and 

to the greater good of helping to secure our homeland and its citizens. The goal of our financial reporting 

remains to provide timely, reliable, and useful financial and performance information to the U.S. Congress and 

the American public, and to enable managers across CBP to make sound business decisions that further the critical 

agency mission.

David V. Aguilar, Deputy Commissioner

U.S. Customs and Border Protection

Deputy Commissioner’s Message
4 U.S. Customs and Border Protection • Performance and Accountability Report

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Management’s 

Discussion and 

Analysis

This section explains CBP’s mission, organization structure, strategic direction, and summarizes program and 

financial performance.
6 U.S. Customs and Border Protection • Performance and Accountability Report

Mission

We are the guardians of our Nation’s borders. We are America’s frontline. We safeguard the American homeland 

at and beyond our borders. We protect the American public against terrorists and the instrument of terror. We 

steadfastly enforce the laws of the United States while fostering our Nation’s economic security through lawful 

international trade and travel. We serve the American public with vigilance, integrity, and professionalism.

CBP’s 60,668 employees manage, control, and protect the Nation’s borders at, and between, the official ports of 

entry. CBP is responsible for protecting more than 5,000 miles of border with Canada, 1,900 miles of border with 

Mexico, and 95,000 miles of shoreline.

Core Values

Vigilance is how we ensure the safety of all Americans. We are continuously watchful and alert to deter, detect, and 

prevent threats to our Nation. We demonstrate courage and valor in the protection of our Nation.

Service to Country is embodied in the work we do. We are dedicated to defending and upholding the Constitution 

and the laws of the United States. The American people have entrusted us to protect the homeland and 

defend liberty.

Integrity is our cornerstone. We are guided by the highest ethical and moral principles. Our actions bring honor to 

ourselves and our Agency.

Fiscal Year 2012 Statistical Highlights

•	 Ports of entry: 329

•	 Pre-clearance locations: 15

•	 Border Patrol sectors: 20

•	 Air units: 46 (1 Training location and 3 Radar/Communications locations)

•	 Marine units: 71 (2 Training locations and 1 Maintenance location)

•	 Trade entries processed: 30.4 million

•	 Total revenue: $39.4 billion (includes custodial and entity revenue)

•	 Illegal narcotics seized: 2.8 million pounds (represents narcotics held by CBP until disposal or destruction)

•	 Illegal alien apprehensions between the ports of entry: 364,768

Overview of CBP
7

•	 Inadmissible aliens interdicted at the ports of entry: 195,865

•	 Pedestrians and passengers processed: 351 million

•	 Conveyances processed: over 107 million

•	 Aircraft passengers processed: over 98 million

•	 Prohibited plant and animal materials seized at the ports of entry: 1,576,343

•	 Agricultural plant and pest intercepted at the ports of entry: 170,967

Drug Seizure Statistics

Note: The following amounts represent total CBP 

seizures, including amounts transferred to Other 

Government Agencies (OGA) for disposition.

•	 Number of pounds of cocaine seized: 206,246

•	 Number of pounds of heroin seized: 4,398

•	 Number of pounds of marijuana seized: 3,859,381

•	 Number of pounds of methamphetamine 

seized: 15,810

Major Mission Programs and Strategies

Securing the Nation’s borders from illegal entry of aliens and contraband, including terrorist and weapons of mass 

destruction, while welcoming all legitimate travelers and trade continues to be a major challenge.

As America’s frontline border security agency, CBP has established programs and strategies designed to enhance 

border security and other mission critical functions by operating as a fully integrated information-driven agency. 

CBP strives to maximize partnerships on the home front and abroad by promoting an effective management infrastructure that fosters the highest standards of integrity. CBP has built a layered strategy using risk-based approaches 

and performance management techniques that maximize CBP’s strengths.

Beginning in FY 2012, CBP moved forward with the process of implementing a Planning, Programming, Budgeting, 

and Accountability (PPBA) strategic framework to manage its financial and personnel resources. The PPBA process 

is a disciplined approach that ensures the Agency Head’s vision, goals, and objectives are clearly articulated; programs and activities are aligned to the goals and objectives; and resources are appropriately allocated to achieve the 

Management’s Discussion and Analysis

Overview of CBP

A CBP officer seizes illegal substances concealed in 

a vehicle.
8 U.S. Customs and Border Protection • Performance and Accountability Report

desired goals and objectives. CBP continues to ensure that the individual elements of PPBA remain cross-cutting 

and in alignment to effectively support the agency mission.

The planning aspect of CBP’s PPBA process provides the opportunity to assess our strategic direction, accommodate new trends, adapt to challenges inside and outside CBP, and adjusts our corporate priorities to ensure 

sustained progress toward our strategic goals. CBP’s vision and mission are global in scope and, therefore, require 

both domestic and international engagement to achieve the established priorities. CBP assesses its external trends 

and drivers, mission requirements, program capabilities and strategic imperatives facing each CBP Line of Business 

(LOB). CBP’s LOBs reflect on alignment of programs and activities with designated capabilities that support a 

common mission area. CBP LOBs are as follows:

1. Securing America’s Borders (Between the Ports)

2. Securing and Expediting Trade

3. Securing and Expediting Travel

4. Intelligence and Targeting

5. Integrated Operations

6. Enterprise Business Services

Securing America’s Borders

CBP has a multifaceted and complex mission of protecting the Nation against a multitude of cross-border violations. CBP’s first priority is to prevent terrorist and terrorist weapons from entering the country. U.S. border 

security is challenged daily by criminals who engage in illegal activity ranging from the import or export of 

counterfeit goods and outgoing bulk cash movements to the smuggling of narcotics and people into the interior 

of the United States.

Border Patrol Strategic Plan

The diverse areas between the Port of Entry (POE) along our Nation’s borders include urban cities, small towns, 

farms, and ranches, interspersed with miles of open space, deserts, waterways, forests, mountains, and prairies. 

CBP’s Border Patrol mission is to protect this vast area from threats of terrorism, exploitation by smugglers of 

humans, narcotics, and other contraband, as well as threats of illegal entry into the United States.

Following the realignment of the U.S. Border Patrol (USBP or Border Patrol) under its new parent organization in 

2003, it developed the Border Patrol 2004 National Strategy to carry out its new post-9/11 mission. Building on the 

capabilities realized under the 2004 Strategy, and faced with a changed border and converging threats to national 

security, USBP was positioned in FY 2012 to introduce and transition to the 2012–2016 Border Patrol Strategic Plan. 

Overview of CBP
9

The Border Patrol Strategic Plan uses a risk-based approach to securing the border, focusing enhanced capabilities 

against the highest threats and rapidly responding along the border. It involves a set of objectives, strategies, and 

programs that use Information, Integration, and Rapid Response to develop and deploy new and better tactics, 

techniques, and procedures to achieve the USBP strategic objectives.

The 2012-2016 Strategic Plan places risk management at the core of USBP’s strategic planning, an evolution from 

the 2004 National Strategy and from earlier risk-based strategic deployments. Through enhanced situational awareness and intelligence (Information); coordinated operations with our Federal, state, local, tribal, and international 

partners (Integration); and the ability to respond quickly to changing threats (Rapid Response); USBP will put the 

greatest capabilities in place to combat the greatest risks. Following is a snapshot of some important elements that 

fall under each of the three pillars of the Strategic Plan.

Information

Integrated Mission Analysis

Integrated Mission Analysis (IMA) uses a systematic and comprehensive methodology to identify, evaluate, and 

manage vulnerabilities, consequences, and capabilities of CBP and matches these with known or potential threats. 

The resulting Border Assessment Level (BAL) helps CBP answer the question: Is our capability commensurate with 

the threat?

The IMA process supports the Border Patrol’s risk-based approach to border security by integrating operational 

and threat-condition assessments. Once harnessed, these operational statistics, threat indicators, and warnings will 

be used to estimate risk. Outputs from the IMA process will aid security stakeholders in determining operational 

gaps and critical threats, vulnerabilities and risks. As a result, commanders will have both the data and analysis to 

effectively identify, evaluate, and manage risk. The IMA process assists commanders in managing identified risks 

by allowing them to make better and timely decisions to:

•	 Sustain current capabilities;

•	 Divest from capabilities;

•	 Reallocate resources;

•	 Commit mobile-response capabilities;

•	 Implement non-material solutions;

•	 Deploy urgent solutions;

•	 Develop new capabilities; and

•	 Harness external resources.

Management’s Discussion and Analysis

Overview of CBP
10 U.S. Customs and Border Protection • Performance and Accountability Report

Consequence Delivery System

Substantial investment in personnel, technology, and infrastructure along the southwest border with Mexico 

during the past several years has facilitated reduction of illegal cross border activity to unprecedented levels. This 

reduction in traffic is now enabling the Border Patrol to manage, as opposed to simply react to, the volume of 

illegal traffic along our borders through application of appropriate consequences to illegal entrants.

The Consequence Delivery System (CDS) interrupts the smuggling cycle and attempts to disrupt and degrade Alien 

Smuggling Organizations (ASO) through the use of administrative, criminal, and programmatic consequences. 

CDS measures the effectiveness and efficiency of available consequences that can be applied to persons illegally 

entering the country against defined alien classifications. CDS provides a process to uniquely evaluate the circumstances of each apprehension and applies the appropriate post-arrest consequences to that individual to break 

the smuggling cycle and influence the subject’s decision on attempting further illegal entry. CDS is a means of 

standardizing CBP’s decision-making process specific to each apprehended subject, consistently applying consequences, and evaluating each consequence’s effectiveness and efficiency.

Administrative:

Immigration related administrative dispositions and charges are applied to every alien apprehended and progressively result in greater limitations and restrictions on an alien’s ability to enter the country. By applying the appropriate administrative consequence, aliens are documented and returned to their country of origin after a complete 

immigration record is established, through consequences such as Expedited Removal, a Notice to Appear before 

an Immigration Judge, or Reinstatement of a prior Order of Removal. Each of these administrative dispositions 

aid in establishing a basis for the future application of consequences and formally provides notice to the alien of 

additional criminal or programmatic consequences that may be applied if future violations occur.

Criminal:

Criminal prosecution is the traditional means by which aliens are held responsible for their illegal actions. Using 

prosecution to deliver consequences for illegal cross-border activity is a critical element in the larger bordersecurity strategy. Prosecutorial consequences, such as Streamline – a government initiative that applies a criminal 

charge for illegal entry (8 USC § 1325) to aliens who enter into the United States through any designated, targeted enforcement zone – ensure that our resources and those of our partners are used effectively and efficiently. 

Cooperation is key to the success of criminal prosecution, requiring the support of the U.S. Attorneys Office and 

other Federal, state, and local partners, such as the U.S. Magistrate, Federal judiciary, U.S. Marshals Service, the 

Office of Chief Counsel, U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations, 

and the Executive Office of Immigration Review.

Overview of CBP
11

Programmatic:

Through the use of several programmatic consequences, such as the Alien Transfer and Exit Program (ATEP), and 

the Operation Against Smugglers Initiative on Safety and Security (OASISS), CDS supports the concept of “breaking 

the smuggling cycle.” In the ATEP program, apprehended aliens are transported out of an apprehending Border 

Patrol sector for their subsequent removal to Mexico through other sectors along the southwest border, thus disrupting ASO. Additionally, the OASISS program is a cooperative effort with the Government of Mexico (GOM) to 

prosecute members of ASOs in Mexico. Using innovative ways to break the smuggling cycle and focus resources 

by developing programs that achieve specific positive border security outcomes enhances our ability to affect the 

future behavior of aliens and ASOs alike. These programs are essential enhancements to the administrative and 

criminal consequences imposed.

e3 Prosecutions

The deployment of e3 technology further enhances the ability of tactical field commanders to make informed and 

operationally effective decisions. e3 Prosecutions serves as a central repository to capture information related to 

the day-to-day processes by which criminal prosecution activities are identified, assigned, performed, managed, 

scheduled, and measured. The information is used to analyze effectiveness and efficiency as it relates to the overall 

mission of securing the Nation’s borders.

Within general guidance from the DOJ, each U.S. Attorney’s Office has its own priorities, and prosecutorial guidelines. e3 Prosecutions is a web-based application with the flexibility to adapt to local procedures and regulations 

as they relate to the form and function of collecting, submitting, and reporting of data, legal articulation, and 

court documents associated with disparate court locations. e3 Prosecutions has ample depth to collect, manage 

and report activities related to cases handled utilizing administrative resolutions or referred to outside agencies. e3 

Prosecutions allow for electronic submission and exchange of prosecution case data between other Federal agencies, which establishes a partnership for efficient parallel missions by eliminating redundant manual data collection. e3 Prosecutions was also developed to allow for manual capture and, therefore, the ability to locally update 

critical data during systems failures, to accommodate for timely submission to the U.S. Attorney and the Judiciary.

Mobile Surveillance Systems

USBP has numerous Mobile Surveillance System (MSS) units deployed along the northern and southern border. 

The combination of electronic surveillance sensors, when applied in concert with appropriate tactics, techniques, 

and procedures, enhance CBP’s ability to detect, identify, classify, and track persons attempting to enter the 

United States by other than legal or lawfully approved avenues of approach and/or entry. The deployment of 

this equipment has helped CBP meet its additional goal of increasing border protection capabilities within its 

allotted manpower.

Management’s Discussion and Analysis

Overview of CBP
12 U.S. Customs and Border Protection • Performance and Accountability Report

Integration

Integrated Border Enforcement Teams

The Integrated Border Enforcement Teams (IBET) operate as intelligence-driven enforcement teams comprised 

of U.S. and Canadian Federal, state/provincial, and local law enforcement personnel. The IBETs incorporate an 

integrated mobile response capability (air, land, and marine) designed to provide collaboration and support to participating law enforcement agencies and to serve as a force multiplier to maximize border enforcement efforts in 

support of CBP’s National Strategy. IBETs consist of five core agencies with law enforcement responsibilities within 

the border area. These agencies share information and intelligence, coordinate operations, and share resources to 

maximize border enforcement efficiency and effectiveness. The participating agencies include USBP, ICE, the U.S. 

Coast Guard (USCG), the Royal Canadian Mounted Police, and the Canadian Border Services Agency.

Since their inception, IBETs have enhanced border integrity and security on both sides of the U.S. and Canadian 

border by identifying, investigating, and interdicting persons and criminal organizations that pose a threat to the 

national security of both the United States and Canada. There are 24 IBETs in 15 IBET Regions. Each of these IBETs 

actively share information, and work bi-national and joint enforcement operations aimed at securing the integrity 

of the U.S.-Canada border.

Alliance to Combat Transnational Threats

Operation Alliance to Combat Transnational Threats (ACTT) began on September 5, 2009, in the USBP Tucson 

Sector’s Central Corridor, now currently known as the Focus Area 1 (FA-1) corridor. ACTT utilizes a collaborative, 

cooperative enforcement approach that leverages the capabilities and resources of the DHS agencies in Arizona, 

in partnership with other Federal, state, local, and tribal governments, as well as Government of Mexico (GOM). 

ACTT targets individuals and criminal organizations that pose a transnational threat and are involved in unlawful 

cross border activity.

The strategic approach of ACTT creates an environment that deters, denies, degrades, disrupts, and applies a consequence to illegal activity and dismantles the criminal elements’ ability to conduct their illicit operations.

•	 ACTT also applies the CDS to individuals involved in illegal cross border activity. The objective of the CDS is 

to ensure the most effective and efficient consequence is applied to each apprehension of an illegal alien by 

using a range of administrative, programmatic, and criminal actions.

•	 At the field level, the unity of effort is overseen by the ACTT Unified Command (UC). The UC brings together 

the field level leaders of DHS and State of Arizona agencies currently participating in ACTT. The UC directs 

operational activities, including the development and implementation of overall mission objectives and strategies, and approves the ordering and releasing of resources for more law enforcement and public safety agencies that have agreed to participate in ACTT.

Overview of CBP
13

•	 In the immediate border area, transit routes, and final destination locations, ACTT is currently conducting the 

following operations :

» Coordination with the GOM;

» Focused border enforcement operations (at and between the POEs);

» Defense in depth (including checkpoints and other enforcement efforts along routes of egress);

» Coordinated and focused investigative efforts in both Tucson and Phoenix, Arizona;

» Mobile Response Team operations;

» Detailed deployment of additional Detection and Surveillance and technology; and

» Deployment of additional assets.

•	 On June 26, 2011, Arizona ACTT began a drawdown of detailed resources in Arizona with the replacement of 

newly hired Border Patrol agents that reached their initial operation capability.

•	 FY 2013 operations will concentrate on maintaining the significant enforcement gains achieved in Tucson 

Sector, while reducing the number of externally detailed resources. Throughout FY 2010 to 2012, Tucson 

Sector received a significant amount of detailed agents and equipment. All new agents reached initial operating capability by the third quarter of FY 2012. Additional detection capability improved with technology 

received in Arizona in FY 2012.

•	 CBP established the Joint Field Command – Arizona (JFC-AZ) in January 2011 in order to more effectively 

address the unique border security challenges faced in Arizona. JFC-AZ achieves unity of effort through sustained coordination with Federal, state, local, and tribal partners (ACTT) in order to minimize operational 

vulnerabilities, maximize capabilities, and achieve a common understanding of the operating environment 

throughout the JFC-AZ area of responsibility. JFC-AZ oversees CBP participation in the ACTT, to include 

operations and activities that are ACTT related.

South Texas Campaign

The primary focus of the South Texas Campaign (STC) staff and area teams, since the last reporting period, 

remained consistent and in process.

The STC focus is joint integrated operational planning against Transnational Criminal Organizations (TCO) based 

on threat and risk operating in the south Texas corridor. TCOs are responsible for smuggling significant volumes 

of both Mexican national and Other Than Mexican (OTM) aliens, narcotics, weapons, bulk cash, and stolen vehicles, as well as other associated crimes and violence in the United States, Mexico, and Central America. The STC’s 

objective is expanded Unified Command to integrate intelligence, interdiction, and investigative components to 

prioritize support and execution of enhanced and focused operations, based on threat and risk, to achieve highest 

level impact.

Management’s Discussion and Analysis

Overview of CBP
14 U.S. Customs and Border Protection • Performance and Accountability Report

Key to the planning efforts previously referenced is the continued establishment of joint interagency, integrated 

targeting teams (JTT). The JTTs vary in size and make-up according to operational needs, but generally consist 

of CBP components, Homeland Security Investigations (HSI), Drug Enforcement Administration (DEA), Federal 

Bureau of Investigation (FBI), Internal Revenue Service (IRS), U.S. Attorney’s Office, and other agencies as appropriate. The objective of area JTTs will not be a task force to develop cases, but rather provide oversight, coordination, and de-confliction for large scale STC integrated operations.

Caribbean Border Interagency Group

The mission of the Caribbean Border Interagency Group (CBIG) is to optimize joint efforts and serve as a forcemultiplier for our DHS and participating Department of Justice (DOJ) partners, as we work to prevent, detect, 

and interdict the entry of terrorists, weapons of mass destruction, illegal migrants, and illegal narcotics across 

shared areas of responsibility. These partners include USBP, Office of Air and Marine (OAM), and Office of Field 

Operations (OFO), the USCG, ICE, and the U. S. Attorney’s Office.

The partnership has developed an innovative prosecution template, and ensures that enforcement efforts include 

gathering evidence sufficient for successful prosecution of violators of maritime or immigration laws. The USCG 

has developed biometric capability at sea, which is also a key accomplishment and is critical to identifying and 

categorizing those apprehended as threats.

Operation Stonegarden

The Operation Stonegarden (OPSG) grant program is a component of the Homeland Security Grant Program 

(HSGP), which is an important part of a larger coordinated effort by DHS to strengthen Homeland Security preparedness. HSGP implements objectives addressed in a series of post 9/11 laws, strategy documents, plans, and 

Homeland Security Presidential Directives. OPSG funds are intended to enhance cooperation and coordination 

among local, tribal, territorial, state, and Federal law enforcement agencies in a joint mission to secure the U.S. 

borders along routes of ingress from international land and water borders. OPSG funds must be used to increase 

operational capabilities for Federal, state, local, tribal, and territorial law enforcement, promoting a layered, coordinated approach to law enforcement with U.S. border states and territories.

USBP, with its unique operational knowledge of effective border enforcement, leads the operational planning 

coordination for OPSG, including evaluation and allocation determinations. To properly determine allocations, 

USBP analyzes the threat and vulnerability border security risks. Analysis of the threat factor includes examination 

of supporting information to determine the likelihood and/or impact of an incident or occurrence, as well as the 

ability and intent of a transnational criminal organization to commit an act. Vulnerability is determined by the 

opportunity for the action or incident to occur based on various factors, such as terrain, personnel, technology, 

and tactical infrastructure. Threat and vulnerability can vary significantly; therefore, each factor receives a value 

based on specific evaluation criteria to calculate the risk for planning purposes.

Overview of CBP
15

FYs 2010, 2011, and 2012 Program Highlights

FY 2010

•	 $60 million appropriated to OPSG

•	 39 states/territories eligible to participate in OPSG

•	 102 counties or equivalent entities received grant award

FY 2011

•	 $54.9 million appropriated to OPSG

•	 39 states/territories eligible to participate OPSG

•	 114 counties or equivalent entities received grant award

FY 2012

•	 $46.6 million appropriated to OPSG

•	 39 states/territories eligible to participate OPSG

•	 121 counties or equivalent entities received grant award

International Liaison Unit

The mission of the International Liaison Unit (ILU) is to create and maintain positive working relationships and 

foster alliances with foreign counterparts to increase border security. The alliances established by the ILU maintain 

open communications and mutual respect with foreign and domestic law enforcement counterparts. Previously 

named the Mexican Liaison Unit (MLU), which started in El Centro, California the MLU was reorganized as the 

ILU to standardize national policies and procedures for international liaison. Today, the ILU is operational in all 

southwest Border Patrol sectors. Their success was the direct result of relationships formed with Mexican authorities in Federal, state, and local law enforcement having the common goal of border safety and security.

The ILU strategic goals are as follows:

•	 Establish, develop, and maintain effective relationships of trust and confidence with individuals representing 

their foreign government agencies;

•	 Identify and develop common law enforcement objectives with foreign governments to combat border crime;

•	 Cultivate and reinforce commitment with foreign and domestic law enforcement communities; and

•	 Develop and maintain information sharing with foreign and domestic law enforcement agencies.

Management’s Discussion and Analysis

Overview of CBP
16 U.S. Customs and Border Protection • Performance and Accountability Report

Agents serving under the ILU focus and engage in activities that complement and support current program operations as well as agency and department enforcement strategies.

The ILU’s established partnerships have paved the way for programs like OASISS and the Border Violence Protocols 

program, which was formed in an effort to reduce and provide a response to increased violence in the immediate 

border area along the southwest border. OASISS was a product of the United States-Mexico agreement to establish a bilateral, standardized prosecution program. The OASISS program was developed to address the increasing 

amount of alien smugglers across the southwest border. The program allows for alien smugglers apprehended in 

the United States to be prosecuted by the GOM. In FY 2012, 414 OASISS cases were generated, with 295 principals 

accepted for prosecution by the GOM.

Rapid Response

Mobile Response Capability

Given the dynamic nature of cross-border threats, the Border Patrol must ensure that it becomes more mobile 

to respond appropriately to the changing threat. The Mobile Response Capability provides the Border Patrol with 

the flexibility to deploy capabilities to the highest risk areas of the border. The Border Patrol also deploys scalable 

capabilities to areas—before those areas become a high risk—to maintain the highest possible levels of security 

in each border area. This capability builds on situational awareness, because the Border Patrol must know when, 

where, and to what extent to deploy its capabilities.

Mobile Response Team

The Mobile Response Team (MRT) provides a national group of organized, trained, and equipped Border Patrol 

agents who are capable of rapid movement to regional and national incidents and events in support of priority 

CBP operations. The MRT also responds to intelligence-driven targets and shifts in local and cross-border criminal 

activity as deemed necessary by each sector’s Chief Patrol Agent. The MRT provides a flexible, enhanced, tieredresponse capability to counter the emerging, changing, and evolving threats along the operational areas of the 

Nation’s borders.

Special Operations Group

The Border Patrol Special Operations Group (SOG) is composed of two operational components: the Border Patrol 

Tactical Unit (BORTAC) and the Border Patrol Search, Trauma and Rescue team (BORSTAR). Each possesses robust 

support and intelligence sections. SOG provides USBP with specially trained and equipped tactical teams capable 

of rapid response to emergent or unusual law enforcement situations that require special tactics and techniques, 

search, rescue, and medical response capabilities via land, air, and sea.

Overview of CBP
17

Change Detection Capability

Mobile response ensures flexibility to deploy capabilities to identified high-risk areas but does not fully address the 

Border Patrol’s responsibility to be vigilant in continually evaluating identified low-threat areas for any changes 

in threat levels. Change Detection Capability is a tactical strategy using various techniques to gather information and intelligence in low-threat areas. This allows the Border Patrol to continue focusing capabilities on areas 

where the highest risk exists, but ensures that any threat adaptation need can be identified quickly through information and intelligence, culminating in mitigation efforts to rapidly minimize any emergent risk. Examples of 

programs and techniques that are employed to determine the presence of new threats include periodic reconnaissance patrols, sign-cutting, and tracking, Unmanned Aerial Systems (UAS) over-flights, and interaction with 

community partners.

Forward Operating Bases

CBP began using Forward Operating Bases (FOB) in the Tucson Sector to address remote crossing points that have 

historically been difficult for agents to patrol because of the vast distances and time involved to access these areas. 

FOBs have proven beneficial in the detection and deterrence of illegal entries in the areas in which they have 

been deployed.

As USBP continues to successfully conduct enforcement operations along the border, illegal immigration activities 

and smuggler tactics shift in an attempt to identify and exploit other vulnerabilities in border security measures, 

particularly in the more remote areas of the U.S. border. Strategically placed FOBs afford the Border Patrol a costeffective, secure staging facility that allows agents to be deployed in close proximity to the border, thus improving 

CBP’s ability to rapidly respond to and counter these shifts in illicit cross border traffic.

Border Patrol Checkpoint Operations

Border Patrol traffic checkpoint operations play a significant, strategic, and tactical role in the support of the 

National Border Patrol Strategy. USBP currently operates a combination of permanent and tactical traffic checkpoints nationwide as part of a three-tiered, defense-in-depth strategy to secure our Nation’s border between POEs. 

This strategy involves the use of line-watch operations on the border, roving patrol operations near the border, and 

traffic checkpoints on highways leading away from the border.

Immigration violators are the primary target of an effective Border Patrol traffic checkpoint operation. USBP places 

specific operational emphasis on terrorists and their weapons, criminals, and smugglers of both humans and narcotics who have successfully evaded detection at or between the POEs. Traffic checkpoints deter criminal elements 

from using major traffic arteries as egress routes from the border. Smugglers use highway infrastructure to further 

the illegal entry of their smuggling operations into the United States. Highways provide a rapid and inexpensive 

means for transporting illicit cargo away from the majority of enforcement assets and to the intended destination. 

Management’s Discussion and Analysis

Overview of CBP
18 U.S. Customs and Border Protection • Performance and Accountability Report

Border Patrol traffic checkpoints deny the criminal elements routes of egress and force them to take alternate 

avenues thereby leaving them more susceptible to detection.

Border Patrol agents at the checkpoint are highly trained to identify suspect vehicles and subjects through a combination of visual, auditory, olfactory, tactile, and logic cues during vehicle and interview inspection. USBP also 

employs specialized resources—such as canines trained to detect concealed humans and narcotics, radiation detection equipment, and Vehicle and Cargo Inspection Systems (VACIS)—that enhance agents’ ability to prevent illegal 

aliens and contraband from proceeding into the interior of the United States.

During FY 2012, the following border enforcement successes were attributed to Border Patrol traffic checkpoint 

operations nationwide:

•	 Individuals arrested: 7,593 (2 percent of total Border Patrol apprehensions)

•	 Cases referred for prosecution: 1,809

•	 Narcotic seizure events and incidents: 4,905 (33 percent of the total Border Patrol narcotic seizures)

Canine Enforcement Teams

CBP has the largest and most diverse law enforcement canine program in the United States. CBP canine Officers 

and Border Patrol agents use specially trained canines to combat terrorist threats, and interdict concealed persons, 

currency and firearms, agriculture, narcotics, and other 

contraband at the POEs, traffic checkpoints, at international mail facilities, commercial carrier hubs, and 

along the border between the POEs. Some CBP canines 

are trained to perform Border Patrol Search and Rescue 

(SAR) missions. The Border Patrol Special Response 

Team (SRT) Patrol Canine program have teams for use 

in tactical high stress situations. These teams are another 

tool supporting CBP’s ongoing effort to combat border 

violence to prevent assaults against agents and illegal 

aliens, and control criminal activity along the border. 

Presently, there are 963 Border Patrol teams deployed 

along the southwest, northern, and coastal borders.

Canine teams are assigned to POEs and Border Patrol sectors, and special operations groups throughout the 

United States. USBP has organized a canine horse patrol unit that allows the canine to work alongside the handler 

riding on horseback. To meet both new and growing threats, the CBP Canine Program has trained and deployed 

canine teams in an array of specialized capabilities, known as disciplines. CBP has two canine training facilities, 

located in Front Royal, Virginia, and El Paso, Texas. In FY 2012, CBP is projected to train approximately 371 canine 

teams at these training academies. Of the 371 dogs trained, 84 canine teams were trained for the GOM.

Overview of CBP

CBP canines are trained to detect illegal immigrants 

and contraband.
19

Mobile Processing Center

The Mobile Processing Center (MPC) is a 53-foot, reconfigured semi-trailer that provides a mobile solution to 

mass migration, remote processing and disaster-related incidents. Through the MPC, agents are linked via satellite 

to the DHS/CBP network with access to e3 Processing, IAFIS, email, internet, and other law enforcement systems. 

Additionally, agents are provided with a platform utilizing the Radio Interoperability System to communicate with 

other Federal, state, and local agencies. The MPC is used to assist with emergency responses similar to that of a 

command center during a terrorism-related and disaster-relief situations.

Border Safety Initiative

The Border Safety Initiative (BSI) builds on the long-standing public safety and humanitarian measures practiced 

by USBP. The primary objective of the BSI is to reduce injuries and prevent of deaths along the southwest border 

region. Over the past several years, unscrupulous alien smugglers have moved migrants into more remote areas 

with hazardous terrain and extreme conditions. In particular, the BSI is intended to inform potential migrants 

of the hazards of crossing the border illegally and to respond to those who are in a life-threatening situation. 

Through the BSI initiative, USBP works closely with the GOM to discourage illegal crossings and to identify those 

who have perished in the desolate border terrain. In FY 2012 there were 646 incidents resulting in 1,333 rescues.

CBP Office of Air and Marine

CBP’s Office of Air and Marine (OAM) secures the borders against terrorists, acts of terrorism, drug smuggling, 

and other illegal activity by operating air and marine branches at strategic locations along the borders. Multimission aircraft with advanced sensors and communication equipment provide powerful interdiction and mobile 

capabilities directly in support of detecting, identifying, and interdicting suspect conveyances, and apprehending 

suspect terrorists and smugglers. OAM maximizes the capabilities of air and marine assets through a cohesive joint 

air operations model for centralized command and control and a responsive and integrated control system for 

decentralized execution.

OAM works in partnership with numerous stakeholders in performing its missions throughout the continental 

United States and the Western Hemisphere. This includes domestic operations at the borders; source, transit, and 

arrival zone operations; interior law enforcement support; and, support to other agencies. Truly cross-cutting 

within DHS and the Federal Government as a whole, the unique capabilities of OAM serve as both a stand-alone 

entity and as a force multiplier. To fulfill the CBP mission of border protection, the focus has expanded from a 

concentration on the southern border to a broader initiative expanding to all of our Nation’s borders.

Management’s Discussion and Analysis

Overview of CBP
20 U.S. Customs and Border Protection • Performance and Accountability Report

Securing and Expediting Trade

CBP employs a coordinated approach to balance security, risk, and efficiency in resolving compliance and security 

issues while facilitating legitimate trade. CBP utilizes three principles to prioritize its efforts. First, CBP identifies 

trade issues that cause significant revenue loss, pose economic risk to U.S. industry, or represent health and safety 

concerns to citizens. Second, CBP investigates trade issues that are susceptible to noncompliance, have a history of 

problems, or are characterized by a lack of automation or complexity. Third, CBP provides guidance to the trade 

community in the form of regulations, rulings, and directives that enable traders to meet their obligations. CBP 

uses these three principles to analyze information and identify high-risk trade areas. Currently, CBP concentrates 

on five priority trade issues: Antidumping and Countervailing Duty (AD/CVD), Intellectual Property Rights (IPR), 

Textiles and Wearing Apparel, Import Safety, and Trade Agreements.

Implementation of the CBP Trade Strategy

The CBP Trade Strategy is a framework for management of the agency’s trade mission. CBP implements its Trade 

Strategy by focusing on the management and enforcement of designated Priority Trade Issues (PTI), such as AD/

CVD, IPR, and Textiles.

CBP’s Re-Engineering Dumping (RED) Team, which is composed of offices throughout CBP, actively develops 

ways to strengthen CBP’s AD/CVD enforcement. The group focuses on transshipment, under collections, the role 

of shell companies, and other gaps, vulnerabilities, and challenges. The RED Team seeks to strengthen AD/CVD 

enforcement, reduce the AD/CVD administrative burden to free up resources for enforcement, and increase communication with the Department of Commerce (Commerce), ICE HSI, and the trade community. The accomplishments of the RED Team include:

•	 Creation of policy guidelines and factual scenarios for the CBP field to increase the use of Single Transaction 

Bonds (STB) to stop AD/CVD evasion and reduce the uncollectible amount of AD/CVD;

•	 Development of and implementation of procedures to proactively enforce AD/CVD cases, and to prepare CBP 

to enforce new AD/CVD orders;

•	 Establishment of trade intelligence groups with the steel and seafood industry to enhance CBP’s 

AD/CVD enforcement;

•	 Conducting of the first joint CBP and Commerce training webinar to CBP field staff on an AD/CVD order, and 

planned other joint webinars; and

•	 Update of an automated scripting program to liquidate no-change AD/CVD liquidations, in one-third of the 

previous working hours.

CBP plays an integral role in the implementation and enforcement of trade agreements, which provide duty-free 

or reduced duty access to the U.S. market for qualifying merchandise. The United States currently has 13 free 

trade agreements in force with 19 countries, as well as several preferential trade legislation programs. CBP is 

Overview of CBP
21

also strengthening trade agreement expertise in the field by providing training courses to its import specialists, 

auditors, and account managers. During FY 2012, the trade agreements verification pilot resulted in 566 negative 

determinations (invalid trade preference claims) with an associated revenue recovery of $1.2 million.

CBP continues its enforcement efforts on textile imports. CBP’s most effective tools for enforcing trade preference 

programs are Textile Production Verification Teams (TPVT). In FY 2012, CBP deployed TPVTs to 9 countries to 

validate factory production and the accuracy of trade preference claims. As of September 2012, nine TPVT visits 

have been completed. Of the 174 factories visited, 39 were closed or unable to show production, and 40 were 

unable to substantiate eligibility for duty free treatment under a trade preference program.

Importer Self-Assessment

The Importer Self-Assessment program (ISA) provides the opportunity for importers who have made a commitment of resources to assume the responsibility for self-monitoring their compliance in exchange for less intrusion 

by CBP. The primary objective of the program is for the company to maintain a system of internal control that will 

mitigate risk and achieve a high level of trade compliance. CBP is exploring new initiatives to broaden the scope of 

the ISA program and provide additional benefits to its members. Some of these initiatives are highlighted below.

•	 The ISA-Product Safety (ISA-PS) pilot was announced in October 2008. ISA-PS is a partnership that was created among CBP, the Consumer Product Safety Commission (CPSC), and importers to maintain a high level of 

product safety compliance and to work collaboratively to prevent unsafe imports. Any importer who participates in the ISA program may apply to ISA-PS.

•	 Under the United States-Canada Beyond The Border: A Shared Vision For Perimeter Security, announced in 

February 2012, the United States and Canada will adopt a common framework for trusted trader programs, 

which will align requirements and enhance member benefits. ISA and Canada Self-Assessment (CSA) programs have recently completed a side-by-side comparison of their trusted trader programs. Preliminary results 

indicated some areas of similarity in the vetting and evaluation process; however, significant differences exist 

in the benefits provided to the members. ISA and CSA conducted joint stakeholder’s consultations to identify 

and assess additional ways to expedite border processes. A jointly prepared report containing the results of the 

activities has been drafted and is scheduled for dissemination to the stakeholders in the near future.

•	 CBP created a Broker ISA Pre-Certification (Broker ISAPC) pilot to test a broker’s ability to be a force multiplier. Under this pilot, CBP certifies qualified brokers and provides guidance on how to conduct the ISA 

evaluations and reporting requirement. The Certified Brokers will perform a comprehensive review of an ISA 

applicant’s package. The Certified Broker will also evaluate the importer’s system of internal control designed 

to ensure compliant transaction and determine its ability to self-govern through risk based self-testing before 

presenting the ISA candidate to CBP.

•	 On October 5, 2012, a General notice was published in the Federal Register announcing ISA program 

changes. The program now allows importers, who have successfully completed a Focused Assessment audit 

and are determined to pose an acceptable risk to CBP, eligibility to transition into the ISA program without 

further review, provided they agree to fulfill the program requirements.

Management’s Discussion and Analysis

Overview of CBP
22 U.S. Customs and Border Protection • Performance and Accountability Report

Advancing Import Safety

CBP continues to re-enforce its commitment to Import Safety by working in collaboration with the OGAs in 

order to prevent unsafe products from entering the U.S. commerce. CBP plays an essential role in the interagency 

import safety arena by promoting risk management strategies, such as partnership programs, increased information sharing, and coordinated enforcement efforts. CBP works in conjunction with the OGAs to develop uniform enforcement strategies, such as detention, seizure, and destruction policies, to control any potential import 

safety concerns.

To foster interagency coordination at the highest level, CBP chairs the Border Interagency Executive Council 

(BIEC), which was formed to improve interagency coordination on matters relating to import safety, and is the 

foundation for enhanced efforts in the area of import safety and trade enforcement. BIEC working groups have 

been established to explore the potential for Document Imaging System technologies, feasibility of information sharing, a government-wide approach to partnerships and signature accountability in an electronic world. 

CBP works with the OGAs and the trade community to expand participation in the ISA-PS program. Each participant agency analyzes its operations, policy, and regulatory authorities to identify areas of potential trade and 

government efficiencies.

CBP continues to work with its Federal partners in the expansion of the Import Safety Commercial Targeting and 

Analysis Center. Currently the Commercial Targeting and Analysis Center (CTAC) hosts eight partner agencies, 

including the CPSC, ICE, U.S. Department of Agriculture’s Food Safety Inspection Service and the Animal and Plant 

Health Inspection Service, U.S. Environmental Protection Agency, U.S. Department of Transportation’s Pipeline 

and Hazardous Materials Safety Administration and the National Highway Traffic Safety Administration, and CBP. 

Each agency has its own public safety statutory responsibility and all work together to target imports that should 

be examined for possible safety violations.

Protection of Intellectual 

Property Rights

Intellectual Property Rights (IPR) are a prominent 

enforcement priority for CBP, consistent with the mission to protect the economy, national security, and the 

health and safety of American citizens. CBP continued 

implementation of its ambitious and ground-breaking 

Five-Year IPR enforcement strategy that focuses on facilitation, enforcement, and deterrence. Integrated field 

training covering legal authorities, targeting, and policy 

were implemented at high-risk ports.

Overview of CBP

Counterfeit products are a violation of intellectual 

property rights.
23

In FY 2012, CBP launched IPR Strike Units, multi-discipline IPR enforcement units that work in the post-entry 

environment and allow CBP to more easily issue deterrent fines and penalties against violators. CBP continues to be 

the primary source of referrals of IPR violations to the National IPR Coordination Center (IPR Center) for criminal 

investigations by HSI/ICE.

Enforce Trade Law and Collect Revenue

OA supports the collection of duties, taxes, and fees tied to cargo that is imported into the United States. CBP 

deposits, reconciles, and manages collections for over one dozen government agencies and collected a total of 

$39.4 billion in 2012. CBP processes associated trade payments that relate to refunds of duty, drawback, and distribution of funds collected related to specific trade programs, such as the Payment to Wool Manufacturers and 

the Continued Dumping and Subsidy Offset Act (P.L. 106-387; CDSOA) of 2000. CBP also processes, reviews, and 

maintains all surety bond related documents, which help secure the revenue.

Mitigating Revenue Risk

With the growth in imports and in AD/CVD cases in recent years, CBP has seen increased exposure to revenue 

loss. To stop the circumvention of U.S. trade laws, CBP identifies high-risk areas and acts to pursue enforcement of U.S. trade laws and collection of proper revenue. CBP utilizes its automated systems to evaluate entry 

reviews, post audits, and determine necessary cargo examinations. Further, CBP’s AD/CVD, Revenue Divisions, 

and other CBP offices provide referrals to CBP’s Regulatory Audit Division, which determines noncompliance with 

trade laws and regulations. If criminal activities are suspected, then referrals to HSI are made and may lead to 

criminal investigations.

CBP coordinates internally and with other OGAs to ensure that enforcement actions are consistently applied. So 

that events are uniformly recorded, results are integrated, and trade information is shared across the enterprise. 

CBP provides field personnel with the knowledge, tools, and training to identify and address violations related 

to PTIs. CBP’s Fines, Penalties, and Forfeitures (FP&F) Officers and Seized Property Specialists take enforcement 

actions that deliver immediate impact to non-compliant importers and help deter future non-compliance.

Trade Transformation

CBP is moving forward on several initiatives to transform the agency’s trade facilitation and enforcement efforts. 

These “Trade Transformation” initiatives look to provide benefits for the U.S. Government and the private sector, 

and aim to reduce the cost of doing business for both CBP and the trade community, strengthen U.S. economic 

competitiveness, and enhance cargo security. Central to CBP’s work on Trade Transformation is the strength of 

partnerships with the private sector. The ability to co-create mutual beneficial strategies with the trade community has proven to be a successful strategy for CBP to develop key trade initiatives. The Trade Transformation 

Initiatives include:

Management’s Discussion and Analysis

Overview of CBP
24 U.S. Customs and Border Protection • Performance and Accountability Report

•	 Centers of Excellence and Expertise (CEE);

•	 Simplified Processes;

•	 Role of the Broker;

•	 Trade Intelligence;

•	 Trade Partnerships; and

•	 One U.S. Government at the Border

The CEEs align CBP trade processing along industry sectors for maximum efficiency. Two CEEs for Electronics 

in Los Angeles and for Pharmaceuticals in New York. Two additional CEEs were established in FY 2012: for 

Automotive & Aerospace in Detroit and for Petroleum, Natural Gas & Minerals in Houston. By redirecting work 

involving our trusted traders to centralized, industry-specific locations, POEs are able to more effectively focus 

resources on high-risk shipments and importers that may pose a danger to U.S. border security, harm the health 

and safety of consumers, or violate U.S. trade laws and IPR critical to our nation’s economic competitiveness.

The Simplified Process joint industry-CBP Workgroup was established in April 2011 with the goal of formulating 

viable solutions to diminish the administrative burden related to importing into the United States by reducing 

duplicative data elements required to obtain the release of products for cargo. The ultimate objective is to streamline the release of goods and enhance cargo security by segregating the filing of transportation information from 

the filing of entry information.

In May 2012, CBP successfully completed a pilot test of Simplified Entry capabilities in the air mode of transportation at three ports (Indianapolis, Chicago and Atlanta). The pilot was expanded at these three ports to increase the 

volume of SE filings beginning June 25, 2012. The delivery of Simplified Entry was accomplished within a year 

from the initial discussions of this functionality and is the result of a successful Government/industry partnership.

The Broker Workgroup was established in January 2011 by CBP, in partnership with the National Customs Brokers 

and Forwarders Association of America (NCBFAA), to work collaboratively to develop solutions to meet the challenges of 21st Century commerce.

International Trade Data System

CBP continues its commitment in advancing the International Trade Data System (ITDS) program. The ITDS is 

a “single window” vision that would provide all parties involved in trade and transport access to standardized 

information and documents with a single entry point to fulfill all import, export, and transit-related regulatory 

requirements. CBP is pursuing three measures as a tangible demonstration of this commitment. The fulfillment 

of these three projects was identified as a key deliverable in the Beyond the Border Action Plan Single Window 

Initiative, due December 2013.

Overview of CBP
25

•	 Measure 1: In FY 2013 CBP will add data elements required by other agencies to the major import reporting messages for entry and entry summary. CBP developed the infrastructure to capture and store the 

Participating Government Agency (PGA) specific data, submitted by the trade, in conjunction with the ACE 

Entry Summary or the ACE Simplified Entry.

•	 Measure 2: CBP delivered the capability for the trade community to submit electronic image files of documents 

related to ACE Entry Summaries through the Digital Imaging System (DIS). The DIS capability was expanded 

to accept image files of export manifests to support the export process. The Environmental Protection Agency 

(EPA) is undertaking a pilot with the trade community to test the utility of this capability by the end of calendar year 2012.

•	 Measure 3: CBP developed the standards for technical interoperability between CBP and other agencies’ systems in order to allow other agencies to receive trade data automatically. CBP documented the protocols for 

interfaces with PGA systems and successfully implemented the interface with two PGAs, namely CPSC and the 

Food Safety Inspection Service (FSIS). Additional PGAs are in various stages of testing the interface and will be 

using the interface standards in FY 2013.

Automated Commercial Environment

CBP is making continued progress on several Automated Commercial Environment (ACE)/ITDS initiatives to further facilitate legitimate trade with the following accomplishments in FY 2012:

Deployed ACE e-Manifest: Rail and Sea

•	 e-Manifest: Rail and Sea (M1) provides a consolidated view of rail and sea shipment manifest and entry data 

at the bill of lading or container level to facilitate the identification of shipments that may pose a risk and 

expedite the pre-arrival processing of legitimate cargo.

•	 On September 29, 2012, ACE became the only CBP-approved means for transmitting rail and sea cargo information to CBP.

•	 CBP and the USCG successfully completed a joint pilot of M1 functionality in May 2012. The USCG became 

the first PGA to navigate ACE M1 in a production environment during a series of successful operational trials 

in May, 2012 piloted in Charleston, South Carolina. These trials produced information that will lead to better 

targeting capability of high-risk cargo, improved communication to the trade community, and greater 

border security.

Simplified Entry/Cargo Release

•	 Simplified Entry streamlines the data required to obtain release of products for cargo, eliminating the current 

entry (CBP Form 3461) for those transactions in the Simplified Entry pilot.

•	 Simplified Entry was built using an Agile development methodology. With Agile development, CBP will build 

modular components, treating each piece of distinct functionality as a separate project that quickly delivers 

value for stakeholders and more frequent delivery of smaller segments of functionality.

Management’s Discussion and Analysis

Overview of CBP
26 U.S. Customs and Border Protection • Performance and Accountability Report

•	 Stakeholders have already begun to experience how this new methodology works in ACE through the quick 

deployments of the DIS, PGA Interoperability Web Service (IWS), and now Simplified Entry.

Exports

CBP is in the planning phase of establishing ACE as the single processing platform for all export manifest and commodity transactions. This effort keeps with the President’s National Export Initiative (NEI) and the Export Control 

Reform Initiative. Current plans call for the development of an automated export manifest system for all modes. 

This will involve coordination with the Bureau of the Census and other PGAs involved in export licensing and 

commodity transactions.

A five-month Automated Export Manifest pilot using the DIS concluded in August 2012, and the Automated Export 

Manifest is now available to all carriers at all ports.

CBP is also pursuing three near-term initiatives related to ITDS as a tangible demonstration of its commitment 

to the single window vision. These key ITDS initiatives will automate and enhance interaction between Trade 

Partners, CBP, and PGA by facilitating electronic collection, processing, sharing, and review of trade data and documents required by Federal agencies during the cargo importation and release process. The initiatives are expected 

to significantly increase efficiency and reduce costs over the manual, paper-based interactions currently in place. 

Document Image System – allows trade members to electronically supply documentation needed during the cargo 

release process to CBP and other Federal agencies. The DIS monthly releases have continuously enhanced features 

and functionality. The set of documents supported in DIS also continues to expand as more PGAs participate in the 

program. An April 6, 2012 Federal Register Notice authorized initiation of a pilot, allowing the trade community 

to transmit documents in Extensible Markup Language (XML) format. For the purposes of PGA forms, invoices, 

and packing lists that are associated to ACE entry summaries certified for cargo release, the trade may submit the 

required documentation without a prior request by CBP or the PGA. PGAs, including the EPA and National Marine 

Fisheries Services (NMFS), participated in the CBP pilot test of DIS capabilities. At the completion of the pilot in 

August 2012, and the Automated Export Manifest via DIS became available to all carriers at all ports.

PGA Interoperability – enables CBP to share trade data, documents, and events of interest in an automated manner. 

It essentially allows CBP and PGA systems to talk to one another, which allows PGAs greater access to the data they 

need and increases information sharing and better collaboration with CBP during the cargo importation, review 

and release process. Both the FSIS and the CPSC are successfully receiving production entry and entry summary 

data directly from CBP in a fully automated manner. CBP is bringing several more PGAs into the interoperability 

environment, including: APHIS, Department of Transportation, EPA, NMFS, and USCG.

PGA Message Set – introduces a well-defined, harmonized set of data to be collected electronically from international traders by CBP on behalf of PGAs. This initiative automates the collection, processing, and sharing of information required by PGAs, and will replace the myriad of paper forms currently submitted to several individual 

Overview of CBP
27

Federal agencies by the trade community during the cargo importation process. It allows the trade community 

to have a CBP managed “single automated window” for data submission required by all Federal Agencies during 

the cargo importation and review process. The PGA Message Set is planned to be delivered as part of a subsequent 

phase of the SE pilot.

Implementation of the National Annual Audit Plan

The FY 2012 National Annual Audit Plan (NAAP) was developed to provide audit support for trade security, facilitation, and enforcement initiatives in keeping with the mission and goals of DHS and CBP. The NAAP was designed 

to address DHS priorities, CBP PTI and other Trade and security issues. The NAAP includes PTI such as AD/CVD, 

Import Safety, IPR, Revenue, Textiles and Trade Agreements. The NAAP also covers Trade Fraud, User Fees, outreach to OGAs, the Trade community and interagency coordination and support. As of September 30, 2012, the 

results include:

•	 Assignments completed: 374

•	 Recommended recoveries, including user fees, identified in assignments completed: approximately 

$53.5 million

•	 Collections from current and prior assignments completed, including penalties: approximately $40.8 million

•	 Assignments in progress: 263

Regulations and Rulings

The Office of International Trade’s Regulations and Rulings (RR) provides essential technical legal support, advice, 

and guidance for all of CBP’s trade operations and much of CBP’s border operations on a national basis. In its 

administrative decision and rulings role, RR provides binding uniform guidance with respect to the application 

of the Customs and trade laws including tariff classification, valuation, marking, origin, import procedures and 

navigation laws (including the Jones Act). By issuing final administrative decisions and advice on major penalty 

and other civil enforcement matters, RR ensures uniform and impartial application of enforcement laws while 

facilitating legitimate trade. In its regulatory document development role, RR is responsible for creating the legal 

and administrative framework that enables CBP’s trade and border security operations and programs to be implemented successfully on a national basis. These legal tools often have major impact on the conduct of trade and on 

the ability of CBP to protect the United States homeland against unsafe persons and goods.

Non-Intrusive Inspection

The Non-Intrusive Inspection (NII) and Radiation Detection Technology program is a critically important component of the CBP layered enforcement strategy. NII technology allows CBP to scan a larger portion of the stream 

of inbound traffic for the presence of contraband in less time while facilitating legitimate trade and travel. These 

Management’s Discussion and Analysis

Overview of CBP
28 U.S. Customs and Border Protection • Performance and Accountability Report

tools provide CBP a significant capability to detect and interdict terrorist weapons and other contraband at and 

in between our POEs. At the end of FY 2012, CBP had 308 large-scale NII imaging systems deployed to our 

Nation’s air, land, and seaports of entry and to Border Patrol checkpoints. These systems include large-scale X-ray 

and Gamma-ray imaging systems, as well as a variety of small-scale, portable, and hand-held technologies. CBP 

moved quickly to deploy nuclear and radiological detection equipment. Through the end of FY 2012, CBP acquired 

and deployed 1,461 Radiation Portal Monitors (RPM), 2,555 Radiation Isotope Identification Devices (RIID), and 

27,824 Personal Radiation Detectors (PRD) nationwide.

CBP officers employ risk analysis, targeting information and/or officer discretion to scan conveyances for the presence of contraband with NII equipment. If an anomaly is discovered, a more intensive inspection is conducted. 

Without NII systems, this cargo would require a more time-consuming manual examination that could negatively 

impact the expedited flow of commerce (i.e., NII technology can image a conveyance in minutes, while a manual 

inspection can average over several hours). This equipment is effective at identifying a variety of illegal activity 

and contraband, including human smuggling, narcotics, weapons, and explosives.

CBP uses RPMs to scan cargo containers for radioactive materials as the containers pass through vehicle-processing 

lanes at land border ports as well as when they are off-loaded from ships at seaports, at select airports, and all 

express consignment/mail courier facilities. Officers also use PRDs and RIIDs to scan for and identify signs of 

radioactive materials as they perform inspections on smaller vehicles, private aircraft, and shipments. Special hightech tools such as density meters and fiber-optic scopes allow officers to peer inside suspicious containers. Finally, 

if necessary, containers are unloaded and opened for a more intensive manual inspection.

Container Security Initiative

Maritime containerized shipping is a critical component of global trade because most of the world’s manufactured 

goods are transported in maritime cargo containers. In the United States, almost half of incoming trade (by value) 

arrives by containers onboard ships. In FY 2012, more than 12 million cargo containers arrived on ships and were 

off-loaded at U.S. seaports.

Through the Container Security Initiative (CSI), sea cargo containers that pose a risk for terrorism are identified 

and examined at foreign ports before they are shipped to the United States. CSI is operational at 58 foreign seaports, and the majority of the containerized maritime cargo destined for the United States originates in or transits through a CSI port. CBP receives the bill of lading and manifest data on sea containers 24 hours before the 

containers are loaded on vessels destined for the United States. Through partnerships with foreign governments, 

CSI deploys teams of CBP officials to work with their host Nation counterparts to examine containers that pose a 

terrorism risk. CSI extends the U.S. zone of security outward so that America’s borders are the last line of defense, 

not the first.

In FY 2012, CBP officers reviewed 10,782,372 bills of lading and conducted 49,415 examinations of high-risk cargo 

in cooperation with host country counterparts. During the year, CSI continued to transition CSI temporary duty 

Overview of CBP
29

assignment personnel to permanent status and place resources at NTC-Cargo to reduce the number of CBP officers 

deployed. CSI will continue to evaluate and adjust personnel levels at CSI ports to achieve desired staffing levels.

CBP’s intent for the CSI program in the next two fiscal years includes:

•	 Becoming a hybrid of different operational models based upon individual ports and host governments;

•	 Evaluating deployments and foreign footprint and align staffing based upon different operational models;

•	 Expanding remote targeting and central hubs in certain countries based upon the host country government’s 

willingness to share information and transmit images; and

•	 Evaluating expanding the role of CSI personnel to promote and/or participate in other CBP programs or 

initiatives and operate under the “county team” concept with Office of Field Operations and Office of 

International Affairs.

Trusted Trader Program

Customs-Trade Partnership Against Terrorism (C-TPAT) focuses on strengthening the supply chain security as it is 

an important layer in CBP’s cargo enforcement strategy. C-TPAT asks its member partners to ensure the integrity 

of their security practices and communicate and verify the security guidelines of their business partners within 

the supply chain.

C-TPAT requires trade community participants to document and validate their supply chain security procedures in 

relation to the program’s criteria. C-TPAT Supply Chain Security Specialists and C-TPAT participants jointly conduct 

validations of the supply chain security procedures. The validation process is essential to verifying the company’s 

commitment to C-TPAT. In FY 2012, C-TPAT completed the validation/revalidation of 2,448 companies.

The key outcomes for expanding the trusted trader program (C-TPAT) include:

•	 Identifying low-risk shipments (risk segmentation) to increase security and facilitate the lawful movement 

of goods;

» Recently C-TPAT Tier 3 and Tier 2 members (who are also ISA members) became exempt from Stratified Compliance Exams, as the 

members are trusted partners at high levels whose cargo should be facilitated; and

» C-TPAT is working with the NII Division to exempt Tier 2 and 3 imports from NII exams in the near future.

•	 Implementing TSA and CBP initial strategy for a Joint Trusted Shipper Program for inbound international 

air cargo;

•	 Improving efficiency and reducing redundancy with OGA through information sharing and foreign 

validation activities;

» On April 10, 2012, CBP and TSA launched an eight-month, joint validation pilot. Members of the C-TPAT and TSA Headquarters 

staff reviewed their 2012 work plans to determine which airports and carriers were best suited to host joint inspection teams. The 

Management’s Discussion and Analysis

Overview of CBP
30 U.S. Customs and Border Protection • Performance and Accountability Report

joint teams work together on location to minimize the redundant efforts that normally occur when the two agencies schedule independent site visits. Each agency maintains its current reporting mechanism; and

» To date, C-TPAT and TSA conducted three of the six pilot joint validations/inspections. C-TPAT and TSA expect that the results of 

the 2012 pilot will lead to C-TPAT’s acceptance that TSA security assessments are commensurate with a validation site visit, and 

C-TPAT will no longer have to conduct visits for that sector.

•	 Strategically increasing the number of C-TPAT participants over the next 5-7 years without compromising 

security standards;

•	 Conducting research to identify additional business sector expansion opportunities in critical supply chain 

nodes to increase membership in a valuable way, including discussions on expanding Third Party Logistics 

providers as well as creating foreign based Consolidator and U.S. Exporter sectors;

•	 Strengthening scrutiny of future and current members. C-TPAT has been vigilant during the validation process to ensure that company security procedures are being tested and that evidence of implementation is 

being gathered; and

•	 Linking various international industry partnership programs through Mutual Recognition. In 2012 C-TPAT 

signed a Mutual Recognition Agreement with the European Union and expects to sign two more with Taiwan 

and Singapore.

Securing and Expediting Travel

Another component of CBP’s mission is to prevent the illegal flow of people, weapons, drugs, contraband, and 

dangerous goods, and protect against cross-border threats to health, food, environment, and agriculture, while 

expediting the safe flow of lawful travel and commerce. CBP utilizes its capabilities to screen travelers against law 

enforcement databases and no-fly lists, target for high-risk travelers, monitor departing travelers, and expedite the 

processing of legitimate travelers. CBP uses a combination of technology, advance knowledge, intelligence, situational awareness, and personnel to screen and inspect travelers arriving at POEs according to assessed levels of 

risk and determination of potential threats.

Trusted Traveler Program

CBP’s Trusted Traveler Program includes: NEXUS (a bilateral program operated jointly by Canada Border Services 

Agency [CBSA] and CBP); the Secure Electronic Network for Travelers Rapid Inspection (SENTRI); the Free and 

Secure Trade program (FAST); and Global Entry (GE). These programs use a common automated system for application submission. Applicants register for an account online, and then submit program applications online via the 

Global Online Enrollment System (GOES).

The NEXUS and SENTRI programs provide expedited CBP processing for pre-approved, low-risk travelers at 

the land borders. NEXUS provides expedited processing into the United States and Canada and offers expedited 

Overview of CBP
31

processing in Canadian airports and at the pre-clearance locations. Applicants must voluntarily undergo a thorough biographical background check against criminal, law enforcement, customs, immigration, agriculture, and 

terrorist indices/databases. In addition, a personal interview with a CBP officer and the CBSA is required. Once 

an applicant is approved, he or she is issued a Radio Frequency Identification (RFID) card that will identify his or 

her record and status in the CBP database upon arrival at the U.S. land border port of entry. This allows users to 

have access to specific, dedicated primary lanes for processing into the United States. For NEXUS participants at the 

airports, the member’s iris is scanned during enrollment allowing users to have access to the self-service kiosks. 

NEXUS members are also allowed to participate in GE and use the GE kiosks.

The FAST commercial driver program is the result of the United States, Canada and Mexico Border Partnership 

Action Plan (PAP). The FAST program provides expedited processing of participants’ qualifying merchandise in 

designated traffic lanes at select border sites. These designated FAST lanes allow FAST qualified shipments a nearly 

unencumbered approach up to and through the commercial facility.

GE was announced as a pilot program in June 2008, and 

the program is now available at 30 U.S. airports and 

10 pre-clearance locations. GE also expanded to airports 

based on passenger volume. GE was established as a permanent program with the February 6, 2012 publication 

of the Global Entry Final Rule.

Currently, there are more than 1.54 million members 

enrolled in the SENTRI, NEXUS, FAST, and GE programs. NEXUS, SENTRI, and GE are being integrated, 

and as part of this integration, United States Citizen and 

Lawful Permanent Resident SENTRI members and all 

NEXUS members have been extended GE benefits. This 

allows NEXUS, SENTRI, and FAST program members to utilize the GE kiosks and participate in the GE program.

As of July 12, 2011, new GE members are issued an RFID enabled GE card, which allows members to use the 

inbound NEXUS and SENTRI lanes at the land borders.

Citizens of the Netherlands are allowed to participate in GE through a joint arrangement with the Government of 

the Netherlands known as the Fast Low-risk Universal Crossing Alliance. Through this arrangement, U.S. citizens 

approved for GE may apply for and participate in Privium, the Government of the Netherlands’ trusted traveler 

program. Reciprocally, citizens of the Netherlands approved for Privium may apply for and participate in GE.

Citizens of the Republic of Korea are allowed to participate in GE through an arrangement with the Government of 

Korea. Conversely, U.S. citizen GE members may apply for and participate in the Korean expedited entry program, 

the Smart Entry Service.

Management’s Discussion and Analysis

Overview of CBP

A traveler using a GE kiosk at the airport.
32 U.S. Customs and Border Protection • Performance and Accountability Report

CBP has signed joint statements with the United Kingdom, Germany, and Qatar and is operating limited pilot 

programs with these countries. Permanent, publicly available programs are being developed. CBP has also signed 

joint statements with Australia, Israel, New Zealand, and Panama, and is working with these countries to develop 

trusted traveler arrangements.

Advance Passenger Information System

The Advance Passenger Information System (APIS) is the single most critical element in CBP’s ability to identify 

dangerous individuals entering or departing the United States. Through this system, CBP receives biographical and 

travel document information on passengers and crew arriving in and departing from the United States by air, sea, 

and in some cases, land (from commercial bus and rail operators).

APIS data is received in advance of a traveler boarding the intended aircraft (both commercial and private) or 

departing on a commercial vessel, and in advance of a traveler arriving on a commercial vessel entering the 

United States, allowing CBP to screen all travelers against government watch lists and provide a screening response 

to commercial air carriers and private aircraft operators. CBP receives advance information on passengers and 

crew that is also sufficient for automated basic law enforcement queries that look for matches with multi-agency 

law enforcement alerts, immigrant visas, and historical databases. The APIS process has also been modified to 

incorporate Electronic System for Travel Authorization (ESTA) screening to allow carriers to use the existing APIS 

processes to meet ESTA requirements.

Electronic System for Travel Authorization

Electronic System for Travel Authorization (ESTA) allows CBP to effectively screen the information provided by 

travelers using the Visa Waiver Program (VWP) to determine whether an alien presents a security risk and is eligible to travel to the United States under the VWP.

CBP screens travelers against appropriate databases to identify potential threats to the security of the United States. 

Those travelers determined to be inadmissible because of this screening are denied a travel authorization via ESTA, 

and, as result, are unable to travel to the United States under VWP. Those persons denied via ESTA are given the 

opportunity to apply for a visa to travel to the United States at the nearest U.S. Embassy or Consulate.

Determining eligibility for VWP travel in advance of travel reduces the number of instances in which a traveler 

who does not meet VWP eligibility arrives in the United States and is subsequently denied admission. In such cases, 

the traveler and the carrier incur additional expense, as an immediate return to the country of origin is required.

Currently, the ESTA web site appears in English and 23 other languages and has the full capacity to process the 

total volume of VWP travelers arriving to the U.S. ESTA became mandatory for all VWP travelers in January 

2009, and, in January 2010, CBP began enforcing compliance by requiring airlines to verify ESTA status before 

boarding passengers.

Overview of CBP
33

In FY 2011, CBP introduced a fee mandated by the Travel Promotion Act of 2009. This $14.00 fee is required of 

all new applications since September 8, 2010. Of the fee, $10.00 funds the Corporation for Travel Promotion, a 

program known as “Brand USA”, and the remaining $4.00 funds the ESTA web-based application.

CBP is redesigning the ESTA web site to make the application process easier, to facilitate making payments on multiple applications at the same time, and is exploring new payment types.

TECS Modernization

TECS is a key border enforcement system supporting the inspection of travelers entering the United States and 

the vetting requirements of other Federal agencies used for law enforcement and benefit purposes. TECS supports 

Federal agencies responsible for traveler processing, investigations, vetting, entry/exit, and research requirements. 

The TECS Modernization program is primarily focused on modernizing server infrastructure, databases, and user 

interfaces that sustain and/or improve current screening capabilities well into the future. The program also provides for highly scalable functionality that meets constantly emerging screening requirements.

The over-arching objective of the CBP TECS Modernization program is to ensure continuity of existing CBP and 

DHS mission capabilities into the future, while at the same time, establishing a foundation that more readily facilitates adding new technology in response to ever-changing mission requirements and emerging threats. Efforts 

will result in improvements to system availability, reliability, scalability, and sustainability by transitioning from 

the mainframe technology to the CBP enterprise architecture. Improvements will facilitate the use of an improved 

search capability using linguistic searches, and create a service-oriented architecture environment required by 

Federal law and Departmental guidance. Results also include improved interoperability through user facing applications, standardized query processing, and transition system to system interfaces with external data sources, with 

minimal impact on external stakeholders. The user interfaces will be web-based, user-friendly, and more intuitive, 

pre-populating data where possible to minimize re-entry of information and increase efficiency.

Admissibility Review Office

CBP’s Admissibility Review Office (ARO) provides institutional knowledge and a consistent decision-making 

approach about admissibility and the exercise of discretion for inadmissible aliens under the Immigration and 

Nationality Act. The ARO works extensively with the Department of State and other agencies to determine whether 

inadmissible aliens can legally travel as non-immigrants with waivers. Each case requires an assessment of the 

alien’s reason(s) for travel balanced with the seriousness of his or her ineligibility, weighed against any benefit or 

potential risk of harm to society if CBP were to admit the alien.

ARO currently processes and adjudicates all waivers of inadmissibility that DOS consular officers recommend 

worldwide. The ARO decides all high profile “seat of government” non-immigrant waivers. It also processes and 

adjudicates all waiver applications submitted directly to CBP by eligible individual international travelers.

Management’s Discussion and Analysis

Overview of CBP
34 U.S. Customs and Border Protection • Performance and Accountability Report

Fraudulent Document Analysis Unit

The Fraudulent Document Analysis Unit (FDAU) was established to act as a central location for the collection 

and analysis of fraudulent travel documents seized by CBP officers nationwide. The mission of the FDAU is to 

remove fraudulent travel documents from circulation and prevent the use of these documents by mala fide travelers attempting to enter the United States. The FDAU receives documents that are counterfeit, altered, presented 

by impostors, or otherwise obtained by fraud or intended for fraudulent use. Documents presented by imposters 

make up the vast majority of the fraudulent documents received by the FDAU. Since its inception, the FDAU has 

received over 251,500 fraudulent documents.

The FDAU manages the CBP Fraud Prevention Program (FPP). The goal of the FPP is to increase fraudulent document interceptions by expanding access to standardized training, high-quality document examination equipment, 

and current information on fraudulent document use and fraud trends. A total of 264 CBP officers have been 

designated as Fraud Prevention Officers (FPO) in 158 locations, and have been tasked with sharing information 

regarding document fraud and fraud trends, creating reports on fraudulent document use, conducting document 

examination training and working closely with headquarters on matters related to document examination and 

document fraud.

The FDAU also manages the Carrier Liaison Program (CLP). The mission of CLP is to enhance border security 

by increasing commercial carrier effectiveness in identifying improperly documented passengers destined for 

the United States. The CLP uses interactive training that allows participants to engage in hands-on instruction in 

fraudulent document identification, passenger assessment, impostor identification, and travel document verification. The CLP team has developed innovative training products, including a sample travel document that allows 

participants to examine dozens of common security features. Since its inception, the CLP has developed standardized training material for the carrier industry and has developed a Vessel Inspection Guide for the seaport industry.

CBP has partnered with Dutch law enforcement authorities on the Electronic Documentation and Information 

System in Investigation Networks with Information of Travel Documents (Edison-TD). Edison-TD is a stand-alone 

global database used for the verification of travel and identity documents. The FDAU is the U.S. representative on 

the Edison-TD steering committee and is responsible for inputting of documentation information.

Immigration Advisory Program

The Immigration Advisory Program (IAP) is a component of CBP’s layered border strategy to prevent terrorists, 

high-risk, and improperly-documented travelers from boarding commercial flights bound for the United States. 

The goals of IAP are:

•	 Enhance border and air travel security through the pre-flight identification and denied boarding of high-risk 

passengers destined to the United States;

•	 Disrupt alien smuggling and human trafficking air routes;

Overview of CBP
35

•	 Combat the proliferation of fraudulent travel documents used by terrorists and alien smuggling organizations; 

and

•	 Prevent improperly documented passengers from traveling to the United States.

IAP officers serve as on-site experts in U.S. entry requirements, provide document training to carriers and use 

advance targeting and pre-departure passenger assessments to identify potentially high-risk passengers without 

delaying, canceling, or diverting flights destined to the United States.

In FY 2012, there were 2,505 “No Board” recommendations with an estimated CBP cost savings of $6,260,847. 

In January 2012, IAP Doha, Qatar was opened. In February 2012 the Joint Security Program (JSP) in Panama City, 

Panama assisted Panamanian immigration officials with the setup of a fraudulent document analysis lab and in 

May 2012 began guiding the Panamanian government’s implementation of its advance passenger information 

targeting program. From February 2012 through May 2012, JSP exercises were conducted in Guatemala City, 

Guatemala and San Salvador, El Salvador.

National Agriculture Release Program

The National Agriculture Release Program (NARP) was developed by the USDA APHIS, Plant Protection and 

Quarantine (PPQ), in cooperation with CBP to expand the long-existing southern border cargo release program 

for implementation at a national level. This program facilitates the importation from several countries of regulated 

agricultural products that present very low pest risk and are imported in high volume. The commodities are subject to a reduced rate of inspection based on USDA risk analysis. USDA APHIS PPQ determined that inspections at a 

reduced rate would not compromise United States agricultural resources, as the risk of introduction of potentially 

harmful plant pests and diseases are very low for the agriculture commodities selected for NARP.

Land Border Integration

CBP is capitalizing on the success of the Western Hemisphere Travel Initiative (WHTI) investment by expanding 

innovative technologies and processes to provide further efficiencies in both security and facilitation at the land 

border. The key to integration of the land border lies in the Triangle Strategy that aims to authenticate travelers 

entering the United States, those leaving the United States, and those who are being inspected at checkpoints away 

from the land POE. As such, CBP is focusing investments in outbound enforcement operations, inbound processing 

(vehicle and pedestrian), and border patrol checkpoint processing. Strategies include: automated/advanced information, active lane management, mobile technologies, traveler communication, and traffic flow optimizations.

Management’s Discussion and Analysis

Overview of CBP
36 U.S. Customs and Border Protection • Performance and Accountability Report

Automated/Advance Information

Inbound RFID Saturation

Nearly 17 million RFID-enabled travel documents have been issued since January 2008. RFID travel documents, 

when used in a Ready Lane, reduce processing time compared to general vehicle lanes. During FY 2012, average 

vehicle processing time was 49.7 seconds; down from 50.8 seconds in FY 2011 and 51.6 seconds in FY 2010.

Pedestrian Reengineering

At the Paso Del Norte (PDN) pedestrian facility in El Paso, Texas, CBP deployed a transit style dual-gate system that 

queries travel documents and verifies biometrics before the traveler arrives at the inspection booth. At Otay Mesa, 

California, CBP deployed pedestrian kiosks that query travel documents before the traveler arrives at the inspection 

booth. These systems have reduced pedestrian inspection time and increased throughput for available processing 

lanes. Facility improvements at PDN have further reduced wait times in pedestrian processing and added a layer of 

physical security to operations.

Automation at Outbound and Checkpoints

After infusing technology for inbound vehicle processing at land POEs (WHTI), CBP is infusing similar and much 

needed technologies for outbound vehicle and Border Patrol checkpoint processing on the southwest border. 

During FY 2012, outbound locations on the Southwest Border received fixed LPR, an application similar to the 

Inbound Vehicle Primary Client and mobile handheld devices. Similar technology was deployed at Border Patrol 

checkpoints. In FY 2012, the new outbound technologies on the southwest border facilitated the seizure of over 

$16.8 million in currency, 89 firearms, 76,618 rounds of ammunition, and arrest of nearly 650 wanted fugitives 

or violators of export laws.

Active Lane Management

CBP has issued a traffic management policy, which established maximum wait time targets for inbound vehicle 

processing, to all land border ports. In priority order, Dedicated Commuter Lanes (DCL) will always have the 

shortest wait time, followed by Ready Lanes, and lastly, the general lanes. When DCL wait times are longer than 

15 minutes, general lanes will be re-designated. If Ready Lane wait times are more than half as long as general 

lanes, additional lanes will be re-designated Ready Lanes. CBP actively tracks violations of these targets. Active 

Lane Management (ALM) leverages existing initiatives such as automated wait time measurement, Ready Lanes, 

Trusted Travelers Programs, and variable message signage to help Port Directors optimize resources and available 

lanes to achieve the desired wait time targets. The targets encourage travelers to obtain the document necessary to 

participate in DCLs and Ready Lanes.

Overview of CBP
37

Mobile Technology Solutions

CBP deployed mobile handheld devices (and wireless access points) to meet the specific concept of operations for 

outbound processing and checkpoint processing. Handheld Device MC-75A augments operations by automatically 

capturing and querying license plate images, enabling document machine readable zone swipes, and providing results of law enforcement queries to the officer or agent. CBP also deployed the Enforcement Link Mobile 

Operations (ELMO) that provide real-time tactical targeting data to field personnel via a smart-phone. The ELMO 

tool (used by CBP Officers, Border Patrol Agents, and Air and Marine Officers) has resulted in numerous successful CBP enforcement actions, including the interdiction of undocumented aliens, narcotics, unreported currency, 

and weapons.

Traveler Communication

AM Radio Transmitters

CBP has deployed short-range AM radio transmitters at El Paso and Laredo, Texas, with additional deployments 

planned at San Luis, Calexico East, Gateway, and San Ysidro POEs by the end of Calendar Year 2012. Deploying AM 

radio transmitters enhances CBP’s current capability to educate travelers regarding procedures at the land border, 

provide real-time emergency notifications and broadcast wait times at ports near the traveler. Better informed 

travelers will likely result in reduced wait times.

Variable Message Signage

CBP deployed variable message signs to 22 ports nationwide to better manage traffic flow and provide information 

to travelers. The signs use LED technology and are positioned above each vehicle lane to inform travelers of processing mode DCL (Ready Lane or general), lane status (open or closed), and processing procedures and policies.

Outbound

CBP is also responsible for ensuring that travelers and commerce departing the United States comply with U.S. 

export laws and regulations. CBP’s outbound mission is to interdict the illegal export of unreported currency 

(including proceeds from narcotics trafficking and other illicit activities that are fueling violence along the southwest border); arrest fugitives; interdict illegal exports of firearms and ammunition; prevent international terrorist 

groups and rogue nations from obtaining sensitive and controlled commodities; interdict stolen property, including stolen vehicles; and increase export compliance.

To perform this mission, CBP utilizes a risk based strategy for inspecting people, cargo, and conveyances departing 

the United States through all airports, seaports, land border crossings, and at international mail/courier facilities. 

Management’s Discussion and Analysis

Overview of CBP
38 U.S. Customs and Border Protection • Performance and Accountability Report

These operations permit CBP to conduct outbound enforcement action while remaining unpredictable to smuggling organizations in order to facilitate the flow of legitimate trade and travel.

The success of CBP’s outbound mission relies on its overall layered enforcement strategy. This strategy includes 

deploying experienced CBP officers for currency/firearms canine teams, the availability of actionable information for officers through leveraging human and network intelligence, increased cooperation with other foreign, 

U.S. Federal, state, local, and tribal law enforcement agencies, and use of various inspection tools to assist in outbound operations. The mission on the southwest border will also benefit from planned upgrades and expansion 

to the existing LPR program, outbound infrastructure improvement, and enhancements to outbound Automated 

Targeting Systems (ATS). The LPR program and ATS enhancements will increase CBP’s capabilities to identify and 

interdict fugitives, persons of interests or contraband (i.e., unreported currency, firearms smuggling, stolen vehicles) before they depart the United States. In FY 2012, CBP completed the deployment of handheld wireless technology to detect and identify high-risk travelers at all POE along the southwest border. Additionally, in FY 2013, 

CBP will complete the deployment of temporary outbound infrastructure at crossings along the southwest border. 

The temporary infrastructure improvements include canopies for operations under inclement weather, improved 

lighting for night operations, traffic control devices for officer safety, connectivity to CBP automated databases, and 

vehicle arresting devices for those attempting to flee prosecution.

Intelligence and Targeting

Intelligence and Targeting Programs augment the physical inspection and patrol operations at the field level. CBP’s 

focus is to become an integrated, intelligence-driven organization. CBP’s objectives in this area include the coordination of intelligence across agencies (to include foreign partners) and to expand existing collection, analysis 

and exploitation capabilities to support the development of near real-time, predictive intelligence products and 

enhanced targeting capabilities. These same efforts also address the need to leverage and link intelligence across all 

threat streams, activities, and environments.

Intelligence Driven Operations: Border Intelligence Centers

The mission of Border Intelligence Centers (BIC) is to prevent terrorists and terrorist weapons, smugglers and their 

contraband, and illegal aliens from entering the United States through the real-time collection, analysis, and dissemination of tactical intelligence.

The BICs collect and analyze information using databases, operational statistics, other agency intelligence reports, 

and interviews with apprehended illegal aliens and smugglers as well as using geospatial decision support tools. 

The products produced by the BICs support the implementation of coordinated border enforcement operations 

that result in more effective and efficient deployment of resources to address evolving threats and vulnerabilities. 

Actionable intelligence is forwarded to decision makers at all levels within CBP and is shared with other DHS 

components and law enforcement partners. These efforts support CBP’s commitment to become a fully integrated 

Overview of CBP
39

intelligence-driven organization. BICs also serve as a Tactical Operation Center during emergent situations, acting 

as a lead component when the Incident Command System is initiated.

Enterprise Geospatial Information Services

The Enterprise Geospatial Information Services (eGIS) web-based mapping application provides CBP personnel 

with the ability to view and analyze Agency-specific data when using any web-enabled computer connected to 

CBPnet. eGIS is an enterprise-wide, centrally-managed, and highly-distributable system that supports critical missions and daily operations across all major CBP offices. By integrating data from multiple, stand-alone CBP systems, 

eGIS allows aggregated information (e.g. border activities, resources, allocations, intelligence, etc.) to be visualized 

and explored in previously unrealized ways. In FY 2012, eGIS access was provided to all users throughout CBP and 

was fully migrated to a Microsoft Silverlight platform to enhance application speed and functionality. Additionally, 

CBP added significant base data resources to the system to allow users to analyze Agency-specific data against other 

vital information such as natural events, critical infrastructure, and partnering agency assets to facilitate betterinformed decisions.

Intelligent Computer Assisted Detection

The Intelligent Computer Assisted Detection (ICAD) application supports real time monitoring of USBP covert 

Underground Sensor (UGS) network and tracks agent dispatch, safety and operational status.

ICAD allows Border Patrol supervisors and dispatchers to monitor, in real-time, the location, status, and activity type of each agent in their area of responsibility. The system provides audible and visual alerts of potential 

dangers that an agent could face while on-duty. Supervisors and leadership are able to determine exactly how 

and where resources have deployed, or moved throughout the workday, and maintain situational awareness of 

developing events.

ICAD maintains a full life cycle record of Underground Sensors (UGS). Since 2011, all sensor acquisitions, transfers, repair status, and deployments have been tracked. ICAD processes UGS detections based on user-defined rules 

and promotes significant events as alarms. Sensor responses and dispositions are documented thereby allowing 

users to analyze sensor activations over time. In 2012, ICAD integrated imaging sensors and “smart” sensors, to 

enable real time monitoring and increased efficiency in sensor response activities.

Sensor alarms can be viewed from within ICAD or within the eGIS web-based map viewer. In 2012, CBP implemented a new web-based module of ICAD4 allowing users and Operation Centers to view sensor alarms from 

multiple stations and sectors in an easy to use, user-configurable interface.

Management’s Discussion and Analysis

Overview of CBP
40 U.S. Customs and Border Protection • Performance and Accountability Report

Unmanned Aircraft System

CBP introduced the Predator B Unmanned Aircraft System (UAS) in 2005 as a long duration, remotely-piloted asset 

for border security. However, the advantages of the UAS over conventional aircraft, including surveillance and 

detection capabilities from 18 to 20 hours and access to environments that may be hazardous to traditional aircraft 

crews, persuaded CBP to increase the types of missions being performed by the UAS. Additionally, as the Federal 

Aviation Administration (FAA) granted ever-expanding Certificates of Authorization (COA) for flights over 3,000 

miles of the land and maritime borders, CBP has realized the potential of the Predator B as an intelligencegathering asset, for special missions requiring forensic 

analyses, and as a strategic platform for coordinating 

multiple air and ground responses over broad areas of 

the border, has been realized.

The UAS is now entering an entirely new phase of operations and employment. With the introduction of broad 

area sensors for use over land and water, and the potential for specialized sensors for unique national missions, 

the UAS is no longer just another tool for land border 

interdiction support. The UAS supports capabilities not 

envisioned with the earlier secure border initiatives. CBP currently has 10 UASs in operation, and the tenth system, 

the third maritime Guardian was delivered in September of 2012. CBP intends to halt temporarily the acquisition 

of new systems and to concentrate its efforts on refining the CBP sensor capabilities, and the tactics, techniques, 

and procedures by which these sensors can be employed most effectively.

CBP will continue its efforts to expand and maintain effective control of all air, land, and maritime borders at and 

between POEs through a layered, in-depth defense approach. Providing security along the northern, southern, and 

coastal borders requires effective coordination and integration of all of CBP’s operational components, along with 

the guidance and assistance of essential CBP mission support personnel.

National Targeting Centers

National Targeting Center – Passenger

CBP created the National Targeting Center – Passenger (NTC-P) to be the single point of reference for CBP antiterrorism efforts. NTC-P plays a vital role in the identification of individuals who pose a national security concern 

at POEs and Border Patrol checkpoints. While the vast majority of travelers and goods are legitimate, NTC-P is 

designed to carefully identify and examine the small minority of those persons who may be involved in terrorism or its attendant concerns (e.g. money laundering, facilitation of travel, etc). NTC-P is staffed with permanent 

and Temporary Duty (TDY) analysts, as well as several inter-agency liaisons to provide 24 hours, 7 days a week 

Overview of CBP

Unmanned Aircraft System.
41

(24x7) tactical targeting and analytical research support for CBP anti-terrorism efforts. NTC-P uses numerous automated enforcement data processing systems that are focused on detecting and preventing terrorist access to the 

United States including the Automated Targeting System-Passenger (ATS-P) and the Targeting Framework. These 

systems allow NTC-P to screen passenger manifests and related information prior to arrival in the United States.

The mission outcomes for pre-departure targeting are to maximize the effectiveness of advanced technology, 

intelligence information, domestic and international partnerships, and well-trained human resources to effectively screen, review, identify and prioritize passengers and cargo across all international modes of transportation, 

inbound and outbound. This includes the following:

•	 ATS-P Pre-Departure targeting;

•	 U.S. Visa re-vetting for derogatory information subsequent to the Visa issuance;

•	 Targeting Outbound inspections;

•	 Synchronizing Department of Defense biometrics with US VISIT;

•	 Supporting IAP teams;

•	 Enhancing ATS-P entity resolution and infrastructure capabilities and improving quality of commercial 

carrier-provided Passenger Name Recognition (PNR) data;

•	 Improving the Terrorist Watch List in collaboration with the DHS National Counterterrorism Center (NCTC);

•	 Coordinating with Department of State (DOS) and ICE to automate vetting of U.S. non-immigrant Visa applications before submission to Consular officers overseas; and

•	 Implementing the National Targeting Strategy:

» Create a unified NTC - establish a joint NTC facility;

» Expand all modes pre-departure targeting;

» Strengthen Container Security Initiative (CSI) targeting; and

» Strengthen Agriculture Bioterrorism (Ag-Bio) attack resources targeting.

Additionally, NTC-P conducts liaison work with the Centers for Disease Control, Central Intelligence Agency (CIA), 

ICE, FBI, Transportation Security Administration’s (TSA) Office of Intelligence, TSA Secure Flight, Federal Air 

Marshals, DOS Consular Affairs, Diplomatic Security Service, USCG, The International Criminal Police Organization 

(INTERPOL), and U.S. Citizenship and Immigration Services’ Fraud Detection and National Security unit. CBP and 

TSA have established a joint Targeting Workgroup to leverage CBP targeting capabilities with TSA authorities to 

ensure that high-risk passengers are screened overseas prior to boarding a conveyance bound for the United States. 

NTC-P has also instituted an International Targeting Center, with on-site representatives from the United Kingdom 

and Canada to conduct international operations to stop the smuggling of people, weapons, and contraband.

Management’s Discussion and Analysis

Overview of CBP
42 U.S. Customs and Border Protection • Performance and Accountability Report

National Targeting Center - Cargo

The National Targeting Center - Cargo (NTC-C) supports CBP cargo-related activities by proactively targeting and 

coordinating examinations of high-risk cargo in all modes of transportation; provides high-quality research to the 

CSI, Secure Freight Initiative (SFI), domestic analytical units, and OGA; and implements new proactive targeting 

methodologies. NTC-C provides advance cargo targeting, research, and coordination in support of the CBP antiterrorism mission on a 24x7 basis.

Key functions of the NTC-C include identifying companies and cargo linked to identified terrorists and criminals, 

and creating Memoranda of Information Received, The Enforcement Communication System (TECS) records, 

Automated Targeting System (ATS) user-defined rules, ATS notes, and Terrorist Screening Data Base (TSDB) nominations. NTC-C conducts user-defined queries for Weapons of Mass Destruction (WMD), Weapons of Mass Effect 

(WME), agroterrorism, and bioterrorism threats. NTC-C identifies shipments linked to terrorism, narcotics, and 

trade-based money laundering. Analysts conduct research on seized or detained documents relating to terrorism, 

organized crime, IPR, and human smuggling to develop additional targets and makes enforcement referrals to ICE. 

NTC-C enhances remote targeting operations in support of the CSI, supports and coordinates the International 

Container Security (ICS) component of SFI, and supports domestic and CSI/SFI port targeting. CSI and 

SFI operations at the NTC-C facility support CBP maritime related anti-terrorism activities and maritime 

enforcement targeting.

In response to the October 2010 attempted terrorist attack to ship explosives to the United States from Yemen, 

NTC-C initiated the Air Cargo Advance Screening (ACAS) pilot program. The ACAS operation is staffed with both 

CBP and TSA targeting analysts who jointly target and mitigate air cargo inbound to the United States before allowing the cargo to be loaded onto an aircraft. Pre-departure targeting allows CBP to push U.S. borders outward by 

keeping high risk cargo off international conveyances destined to the United States. The success of the ACAS pilot 

program in the express carrier phase with UPS, FedEx, DHL, and TNT Express in FY 2012 laid the framework for 

program expansion, to include air carriers and freight forwarders.

NTC-C identifies drug trends, conducts tactical post seizure analysis, and disseminates intelligence products to 

CBP, DHS, and OGAs. In addition to targeting for heroin, cocaine, and marijuana, the NTC-C narcotics operation 

also has nationwide responsibility for targeting precursor chemicals used for the production of methamphetamines, ecstasy, and other dangerous drugs. NTC-C aggressively targets shipments originating in or transiting 

Mexico for narcotics and precursor chemicals utilizing risk management principles.

In FY 2012, NTC-C continued to target outbound and in-transit shipments destined to high-risk countries, including shipments containing controlled chemicals, weapons, and dual-use equipment used in the production of 

WMD/WMEs. In FY 2012, NTC-C also continued to target narcotics and precursor chemicals.

Overview of CBP
Management’s Discussion and Analysis 43

NTC-C Agricultural/Biological Terrorism Countermeasures (ABTC) operation continued to increase efforts to 

identify and target shipments and subjects that pose potentially significant risks. NTC-C Agriculture Program 

Trade Liaisons (APTL) collaborate with the Defense Intelligence Agency, USDA, and OGAs to identify and target 

entities with derogatory information that have the capability and knowledge to utilize biological materials for 

nefarious purposes.

Integrated Operations

Integrated Operations describes mission-direct, cross-cutting enabling functions and the coordination with 

OGAs designed to protect key assets and special events of national interests. This also encompasses the provision of international/partner technical and training assistance to improve global border security and the socioeconomic vitality of border towns, as well as responding to natural or man-made occurrences and managing endto-end logistical needs within CBP.

Incident Management

The CBP Joint Operations Directorate (JOD) Incident Management Division ensures CBP’s emergency preparedness, establishes incident management protocols and oversees CBP response efforts to events beyond the scope 

of steady state operations. CBP’s emergency preparedness and response efforts are in collaboration with inter/

intra-agency partners to ensure and support an integrated, whole of government approach to recover from any 

natural or man-made disaster. CBP aligns its incident management processes and procedures using the Homeland 

Security Management System structure in accordance with the principles of the National Response Framework, 

the National Incident Management System and Incident Command System. CBP utilizes the FEMA region boundaries to guide coordinated field-level emergency preparedness and incident management planning. Each Region 

includes a Lead Field Coordinator (LFC) and Deputy Field Coordinator (DFC) identified by their component office 

and approved by the Commissioner.

Under the Homeland Security Act, CBP is charged with supporting National Special Security Events (NSSE) 

and Special Event Assessment Rating (SEAR) level events. CBP utilizes the LFC construct to provide support to 

these venues. Primarily, CBP conducts security patrols and performs non-intrusive inspections with large scale 

imagining systems.

Continuity of Operations (COOP)

CBP has established a COOP program to ensure that appropriate planning policies and procedures are in place to 

make certain that Mission Essential Functions (MEF) can be continued regardless of the availability or accessibility 

of any one specific facility or even our main national Headquarter buildings within the National Capital Region. 

The CBP COOP program follows a framework that provides the capability to meet the highest level of COOP 

Overview of CBP
44 U.S. Customs and Border Protection • Performance and Accountability Report

response in support of MEF. The CBP COOP Program includes, but is not limited to, this over-arching COOP Plan 

that provides strategic guidance; an independent Continuity Operating Procedures (COP) outlining specific roles, 

responsibilities, critical processes and associated activities for attaining operational capability at a pre-designated 

Emergency Relocation Site (ERS) within 4 to 12 hours of activation, and Office-specific COOP Implementation 

Plan procedures that are pre-scripted, office-specific actions that ensure continuation of each offices respective 

CBP MEF.

Business Resumption

The JOD, Canada Border Services Agency and Mexico Customs have developed business resumption planning protocols in the event of an incident that has the potential to cause, or causes, significant and measurable disruption 

to the normal flow of trade between Canada, Mexico, and the U.S. at the POEs. Business resumption resumes the 

flow of legitimate travel after a significant incident by providing coordinated situational awareness to the public 

and trade community, developing a commensurate enforcement response based on threat, facilitating the movement of people and goods, and continuing to assess and communicate to all stakeholders. CBP employs the use 

of the Unified Business Resumption Message (UBRM) service to provide the trade and travel community instant 

alerts and up-to-date information if an event occurs that could delay the flow of trade through a POE.

Strategic Air and Marine Plan

In the nearly six years since the submission to Congress of the first edition of the Strategic Air and Marine Plan 

(StAMP), CBP’s efforts to create a more capable and flexible air and marine service have proven highly successful. 

As the program enters FY 2013, light helicopter acquisitions for new helicopters were funded, and entire types/

models of aged and unsupportable helicopters retired or being processed for retirement. Work on extending the 

service life of CBP’s Black Hawk medium lift helicopters is well underway, with the fifth of 16 proposed aircraft 

going into production before the end of the year. The P-3 long range patrol aircraft, undergoing a 10-year service life extension program (SLEP), remains on cost and schedule targets as the SLEP enters its seventh year. The 

remainder of the P-3 SLEP remains on schedule to complete during fiscal year 2016. The agency can now provide 

aircraft to support the vital national mission to disrupt bulk cocaine shipments from South America to Mexico 

and the U.S. border. The acquisition of DHC-8 medium range patrol aircraft has been completed. The first 2 twinengine Multi-role Enforcement Aircraft (MEA), replacements for 26 aging C-12, PA-42, and B-200 type assets, are 

operating along the southwest border region. MEA has been requested in the FY 2013 President’s Budget. Contracts 

for marine vessel acquisitions were awarded in early FY 2012, paving the way for the completion of the strategic 

plan for the entire marine component of the StAMP.

OAM continues to strategically address threats and challenges by deploying additional air and marine assets, facilities, and personnel. OAM has expanded its surveillance and interdiction coverage across the maritime approaches 

to the United States. Concurrent with these efforts, OAM continues to build management and infrastructure systems that will effectively support field operations, including CBP agents and officers on the ground.

Overview of CBP
45

Capacity Building

Capacity Building is a holistic process driven by the partner administration that result in sustainable changes, 

through training, mentoring, and the infusion of resources. It is a long-term, comprehensive, and repetitive process designed to improve the ability of a CBP partner administration to carry out its assigned functions through 

the development or acquisition of skills, competencies, tools, processes, and resources.

Additionally, these efforts are designed to improve international relationships and enhance border security by 

supporting the adoption of best practices and the development of infrastructure that will allow foreign partners to 

keep pace with changes in the global environment and securing the safe flow of people and goods.

CBP’s international capacity building efforts are focused on the following areas: international narcotics and 

crime control; non-proliferation; export control and related border security; commercial enforcement operations; and private sector partnership programs. Each program begins with a border security assessment designed 

to determine the type of training and/or equipment needed to improve operations within the host foreign 

country. Additionally, the assessments provide the host government with a better understanding of its border 

control vulnerabilities.

During FY 2012, CBP provided 257 capacity building sessions for foreign partners including 17 courses at the 

International Law Enforcement Academy, and provided capacity building support in over 62 countries.

Information and Technology

CBP’s network infrastructure and associated data center capabilities are the Information and Technology (IT) 

backbone that supports all CBP systems. All CBP systems depend on the CBP infrastructure to ensure delivery of 

critical information; any disruption in service can result in an inability for CBP to effectively perform its mission. 

The systems supported by CBP infrastructure allow for a unified border presence and provide for more efficient 

and effective information sharing among trade and law enforcement agencies. CBP infrastructure serves a variety 

of Federal, state, local, and international government agencies. These agencies have varying missions and strategic 

goals but collectively their purpose is to minimize threats to the American people.

The IT systems are vital tools that CBP and other Federal agencies depend on to defend our borders and support 

our POEs. The systems assist CBP officers and BP agents in identifying potential threats, including terrorists, weapons of mass destruction, and bioterrorism. The systems provide the means by which U.S. trade laws are enforced 

and provide the capability to collect tariffs and taxes related to international trade and commerce. The technology 

utilized in CBP infrastructure enables CBP to continually improve the selectivity of low-risk cargo, vehicles, and 

people, while expediting the clearance process.

IT infrastructure is the catalyst that enables the CBP frontline to protect the United States from the entry of 

dangerous goods and people while simultaneously expediting the flow of people and goods. Specifically, on a 

Management’s Discussion and Analysis

Overview of CBP
46 U.S. Customs and Border Protection • Performance and Accountability Report

Overview of CBP

daily basis, CBP’s IT systems allow frontline officers and agents to process millions of passengers and pedestrians 

arriving internationally, by air, sea and land across our borders. Additionally CBP’s IT systems and infrastructure 

enable the collection of fees, duties, and tariffs. The processing of cargo and passengers, as well as the collection 

of fees, duties, and tariffs, results in the daily processing of messages and database queries with OGAs, passenger 

carriers, cargo brokers, trade representatives, and airlines. CBP’s on-line database queries are among the highest 

in the world. To sustain these capabilities requires a robust IT infrastructure and a dynamic IT Operations and 

Maintenance (O&M) strategy to rapidly respond to daily issues/problems.

In addition, the Office of Information and Technology (OIT) is focused on the future. Technology forces, such as 

social media and cloud computing, are rapidly shifting the market and the scope of threats that CBP and DHS are 

encountering, which are changing our ways of doing business. Budget constraints are adding greater pressure to 

find ways to standardize and streamline, and to drive further efficiencies. In response, CBP is looking to improve 

business processes and to change the way it delivers services.

To address the required technology changes, OIT has been working to review its technology capabilities and 

change its processes for service delivery so that CBP can better serve employees in the field and other customers. 

OIT has started efforts to simplify and to migrate its production applications on future state standard architecture, 

and has started to migrate applications to DHS data centers. These migration efforts will continue through FY 2015, 

with continued migration funding in the DHS Chief Information Office’s budget. Now that migration has begun, 

CBP must continue to move its productions applications from the CBP National Data Center to the two DHS data 

centers so that CBP is not left with production applications in multiple environments that will be more costly to 

sustain in the future.

Tactical Communications Modernization

The Tactical Communications (TACCOM) modernization effort is composed of two parts. TACCOM 1 focuses on 

upgrading aging infrastructure from analog to digital, expanding coverage and capacity, and providing Advanced 

Encryption Standard protection to law enforcement sensitive communication in three focus areas: Houlton, 

Maine; Rio Grande Valley, along the Gulf Coast of Texas; and El Paso, western Texas and State of New Mexico. The 

program completed modernizing land mobile radio systems in Yuma and Tucson (State of Arizona) in July 2011. 

Additionally, TACCOM 1 is doing a Digital-in-Place as a capstone project to the TACCOM 1 program; its goal is to 

set the baseline configuration and to replace/upgrade existing land mobile radio analog equipment with Project 

25/Advanced Encryption Standard compliant digital equipment.

Next Generation TACCOM, known as TacNet, will analyze the potential for mission-grade broadband wireless 

service to users; leverage commercial or public safety networks; and provide broadband voice, video, and data at 

reduced per-user cost. The TACCOM Acquisition Program received an Acquisition Decision Event 1 approval from 

DHS on March 31, 2011 to pursue this program.
Management’s Discussion and Analysis 47

Overview of CBP

Laboratories and Scientific Services

Laboratories and Scientific Services (LSS), the scientific arm of CBP located in the Office of Information and 

Technology, provides scientific and technical support and advice on trade, weapons of mass effect, and forensic 

issues. LSS field personnel provides trade enforcement support by analyzing samples from imported commodities for classification and admissibility issues, Intellectual Property Rights (IPR) evaluation and support, and antidumping and countervailing duties scientific advice. Samples are analyzed in both the laboratory and on-site at 

the ports-of-entry utilizing mobile laboratories. These mobile laboratories are equipped with portable, high tech 

analytical scientific instrumentation.

Forensics scientists provide advice and support to the Office of Field Operations, Office of Border Patrol, Immigration 

and Customs Enforcement (ICE), United States Coast Guard, and other Federal agencies. The forensic services 

include latent fingerprint lifting and identification, digital forensics including cell phones, computers, and GPS 

devices, audio/video enhancement and duplication, crime scene processing, and suspect controlled substances 

analysis. Scientists are dispatched to the field to provide training on processing crime scene and field testing of 

suspected controlled substances.

LSS operates a Tele-forensic Center (TC) that provides field personnel with reach back access to scientific and 

technological resources. These resources help facilitate resolutions for field personnel in the performance of their 

duties. One of the field personnel’s primary duties is detection, isolation and control of potential threats that may 

result from the presence of chemical, biological, radiological or nuclear (CBRN) materials. TC scientists provide 

technical support to resolve threat issues related to the execution of this duty.

Field scientists have also been trained on the use of sophisticated scientific instrumentation for the detection of 

weapons of mass destruction materials. These instruments are used to support the ports of entry and are delivered 

on site by use of a mobile laboratory.

The Interdiction Technology Branch (ITB) consists of general engineers, physical scientists, and project managers 

to provide CBP with an internal technical capability to ensure that field personnel have the best and most advanced 

high-technology enforcement equipment available. As the Department of Homeland Security and other organizations are conducting multiple research and development projects for next generation equipment, ITB assists CBP in 

assessing the “readiness” of equipment proposed for field validation and/or deployment. ITB also performs factory 

acceptance tests and installation certification of new enforcement equipment. ITB is also involved in the testing of 

tunnel detection equipment along the southern border of the US for future deployment along the border.
48 U.S. Customs and Border Protection • Performance and Accountability Report

Enterprise Business Services

Enterprise Business Services focus on the efficient and effective management of infrastructure that supports all CBP 

mission areas. This line of business encompasses management of CBP’s assets and logistics; real property; finances; 

security and clearances; human resources; and information technology; as well as executive office support; workforce development; and policy, planning, and governance functions. The responsibilities of each sub-program are 

detailed below.

Asset/Logistics Management

As CBP’s Office of Administration (OA) is the sole provider of asset management for CBP. In this role OA acquires, 

implements, and controls all asset related programs, including personal property, fleet, uniforms, seized and forfeited property, mail, and the CBP printing program.

OA provides program management oversight for CBP personal property through its sustainable lifecycle, including the accurate accounting of property, efficient utilization of property resources, identification of efficiencies, 

and effectiveness in property management, and integration of property records with financial accounting and 

reporting. While managing and maintaining CBP’s Personal Property Program, OA works to increase efficiency 

and effectiveness; leverage acquisition strategies; and minimize loss of all accountable, high-risk and sensitive, 

capitalized, and leased property to meet critical mission requirements in accordance with OMB, GSA, DHS, and 

CBP laws and regulations.

OA’s fleet management facilitates the acquisition, up-fit, and disposal of vehicles necessary to maintain an operationally ready fleet. OA provides vehicles to support interdiction, enforcement, intelligence gathering, pursuit, 

surveillance, seizure, trade and travel facilitation at and between the ports of entry, and first responder activities 

required by officers and agents nationwide. The outcomes are best represented by the ability of CBP to maintain 

the current levels of operational readiness, in part, by holding the average age of the fleet steady at three to four 

years old and stabilizing the replacements made. Additionally, fleet management provides environmental reporting, acquisition reporting, program performance status, administration of the Home-to-Work program and leading the maintenance, repair, and operations initiatives aimed to gain efficiencies and drive down costs.

OA also oversees the uniforms supply chain for CBP officers and agents. Integral to the DHS mission is the support 

provided by the uniformed personnel throughout DHS that guard and protect the nation daily. Key capabilities and 

responsibilities include establishing and managing uniforms acquisition contracts; formulating and reporting on 

the uniforms program budget; ensuring proper distribution of uniform items to CBP academy graduates; managing the uniforms catalog; monitoring uniforms inventory; and tracking and reporting use of uniform allowances. 

Overview of CBP
Management’s Discussion and Analysis 49

Overview of CBP

Real Property Management

OA manages CBP’s Construction and Facilities Management Program, which delivers critical facilities, associated 

infrastructure, and program support services in order to provide the facilities solutions and associated infrastructure required to obtain and maintain operational control of the border. This sub-program encompasses the personnel and tools to plan, acquire, finance, manage, and sustain CBP’s multifaceted facilities portfolio across the 

acquisition life cycle, including construction, operations and maintenance, and rent activities.

The real property management sub-program provides basic building operations (e.g. custodial services, grounds 

services, trash and snow removal, and utilities), maintenance and repairs (e.g. preventative maintenance and 

regional contracts, planned and unplanned emergency repairs, and tunnel remediation), and one-time costs associated with the management of leased space (e.g. moving costs for forced re-locations, physical security requirements, voice/data cabling infrastructure updates and configuration of space). CBP customers are assisted by a 

cadre of highly skilled real property specialists which offers architectural, environmental, energy, real estate, and 

engineering services, along with long-term strategic planning expertise that allows CBP to strengthen operational 

support and enhance operational capabilities and efficiencies.

The sub-program also includes the rental of facilities, space, buildings, structures, land, and rent-related building 

charges and services, including utilities and services provided by the Federal Protective Service (FPS). Leased operational space requirements include marine units, National Marine Training Centers, Unmanned Aerial Systems 

(UAS), Air Branches and Units supporting OAM; Sector Headquarters facilities, Border Patrol Stations, Forward 

Operating Bases, and checkpoints supporting USBP; field offices and POE supporting Office of Field Operations 

(OFO); and administrative office space and laboratories supporting Mission Support offices.

Financial Management

OA provides CBP’s essential financial management services including budgeting, accounting, processing of vendor 

payments, procurement of products and services, investment analysis, and collection of over $39.4 billion in revenue annually. OA delivers these services through customer involvement and modern, integrated financial systems. 

One such system is CBP’s Enterprise Resource Planning (ERP) system for integrated financial, procurement, and 

property management. This state-of-the-art system has eliminated many paper processes, improved efficiencies 

in several business areas, allowed CBP to continue its outstanding financial performance with unqualified audit 

annual opinions since 2005. These systems support CBP’s goal of developing and promoting more effective and 

efficient methods to obtain and manage financial data, resources, and capital assets, consistent with the needs of 

customers and stakeholders.

This subprogram also encompasses the full range of budget administration activities provided by OA. These 

include budget formulation, management of the budget submission, defense of annual funding and reprogramming requests, budget execution, management of appropriations and expenditures of funds, correspondence with 

OMB and Congress on all budget matters including budget submissions, and provision of requested reports.
50 U.S. Customs and Border Protection • Performance and Accountability Report

OA oversees CBP’s internal controls over financial reporting, as required by OMB Circular A-123, the Federal 

Managers Financial Integrity Act (P.L. 97–255; FMFIA) and Federal Financial Management Improvement Act (P.L. 

104–208; FFMIA), by conducting internal control reviews and coordinating the development, monitoring and 

resolution of any corrective action plans or mission action plans resulting from any reviews or audits. OA also 

coordinates and oversees the annual audit of CBP’s financial statements and the annual consolidated audit of DHS’ 

financial statements and internal controls. The Chief Financial Officers Act (P.L. 101–576) and the DHS Financial 

Accountability Act (P.L. 108–330) require that DHS undergo an annual financial statement audit and internal controls audit. OA serves as the liaison with the DHS Office of the Inspector General’s (OIG) contracted Independent 

Public Accountant firms and DHS for coordination and facilitation of audit activities. OA also liaises with the GAO 

and the OIG to facilitate these entities’ audits of all CBP programs. Results of the internal control reviews and the 

Financial Statement Audit findings recommendations and remediation lead to increased efficiency within CBP.

OA also provides procurement contract operations, which include all pre-award, award, and post-award contract 

activities required to plan, select, acquire and manage the acquisition of products, services, supplies and equipment. CBP’s requirements range from simplified acquisitions to major systems acquisitions, which result in the 

award of a variety of contracts and task, delivery and purchase orders, as well as interagency agreements. Many 

of the procurements involve complex requirements, are high-dollar value, represent multi-year efforts, are competitively awarded, and come with intense political interest. OA also manages special projects and executes CBP’s 

extensive, reimbursable interagency agreement program. OA’s contracting operations support all of CBP to effectively deliver mission capability through the acquisition of critical products and services.

OA establishes the processes that ensure policy and strategy align with Department and Agency guidance and the 

Future Years Homeland Security Program (FYHSP). OA also established process that measure and determine if 

programs are effective at meeting their stated goals and objectives.

Executive Office Support

Executive office support is provided primarily by the Office of the Commissioner (OC), which has responsibility 

for management and administration of the CBP Front Office. This portfolio includes responding to Freedom of 

Information Act (FOIA) requests, providing daily information support to senior leadership, facilitating interagency 

coordination, and overseeing internal communications.

Human Resources

HRM provides centralized human resources support to more than 60,000 CBP employees, both nationwide and 

overseas. HRM recognizes that its first priority is to support the CBP mission, and HRM is committed to being a 

strategic and tactical partner in achieving the Agency’s mission. HRM provides human resources and personnel 

management services that support CBP leadership, as well as law enforcement officers, revenue collectors, agricultural specialists, and support personnel.

Overview of CBP
51

HRM’s operational and programmatic scope is broad, and its commitment to build a sustainable infrastructure to 

support the growing demands for strategic human capital planning is strong and customer focused. HRM meets its 

customers’ operational requirements by providing strategic leadership to ensure the efficient and effective delivery 

of services for:

•	 Recruiting, assessing, and hiring candidates to fill mission critical occupations;

•	 Creating efficiencies by leveraging technology to improve human resources business processes;

•	 Providing medical, benefit, and work life advisory services;

•	 Promoting a safe and healthy work environment;

•	 Facilitating workforce and organizational effectiveness;

•	 Establishing CBP human capital policies; and

•	 Conducting all labor and employee relations operational services for all CBP.

Below are some examples of HRM’s FY 2012 major activities that resulted in substantial cost avoidance and savings: 

Recruit, Hire, and Retain a Mission-Ready Workforce

One of HRM’s mission priorities is recruiting, hiring, and retaining a mission-ready workforce. The timely and 

efficient hiring of highly qualified people is one of the most important factors in maintaining a successful organization. This is particularly relevant to CBP which must annually fill high numbers of entry-level law enforcement 

positions that become vacant due to attrition. Hiring to maintain congressionally mandated staffing levels for these 

mission-critical positions requires HRM to maintain efficient hiring processes that ensure the best candidates are 

hired in a timely and cost-effective manner.

In FY 2012, HRM, in coordination with several program offices, began a review of CBP processes used to attract, 

evaluate, and hire candidates for frontline entry-level law enforcement positions. The objectives of this review 

were to identify opportunities to reduce hiring costs and achieve operational efficiencies while continuing to 

ensure the quality of applicants hired. The HRM-led collaborative effort resulted in the successful implementation 

of hiring process improvements that allowed CBP to realize substantial cost avoidance and savings during FY 2012. 

CBP also met the requirements of the Anti-Border Corruption Act (ABCA) of 2010 three months in advance of the 

January 1, 2013 start-date required by the legislation.

HRM, in partnership with other CBP offices, pursued innovative approaches to attract, assess and ensure hiring 

of the best-qualified applicants, and implemented changes in hiring processes and practices that allowed CBP to 

reduce hiring costs and the time-to-hire, leverage technology, and achieve process efficiencies. Process improvements implemented included: providing CBPO applicants an opportunity to gain an understanding of the content 

difficulty of the written test they must pass before completing their application; amending practices to allow 

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52 U.S. Customs and Border Protection • Performance and Accountability Report

applicants a second opportunity to meet position-related physical fitness requirements; and sequencing various 

assessment processes to minimize overall processing costs.

Realize Organizational Efficiencies

HRM is committed to streamlining and realizing organizational efficiencies where ever possible, and HRM continues to advocate for efficiency and cost reduction through innovation.

One example of efficiency implemented in FY 2012 was the Table of Organization (T/O). The T/O depicts the 

allocation of human resources required to meet mission requirements, and enables CBP managers across the enterprise to effectively allocate the workforce to meet mission requirements within budget limitations. Simply stated, 

the T/O reflects the total positions, occupied or vacant, authorized to accomplish the CBP mission.

In June 2012, HRM enhanced the T/O by administering the development of the Query Module, enabling Program 

Offices to accurately refine T/O information with live data thereby improving the quality of workforce management programs to allocate and manage staffing requirements. This initiative resulted in efficiencies gained through 

the identification and elimination of numerous redundant or obsolete vacancies, saving the agency substantially 

on an annual basis.

Prior to the development of the T/O, program offices used various tools, such as spreadsheets and Access files, to 

allocate and manage workforce levels within their budgets. The tools were not consolidated; consequently, CBP 

leadership did not have the capability to view the total workforce at any given time. This lack of visibility hindered CBP managers and leadership in identifying and reducing duplication of efforts, improving efficiencies, and 

lowering costs.

Another area in which HRM created efficiencies during FY 2012 was the Workers’ Compensation Program. HRM 

proactively assesses, plans, and advocates for necessary services to meet the needs of CBP employees who are 

injured while performing their duties. HRM initiated an aggressive chargeback report review and return to work 

initiatives that resulted in a reduction of CBP Workers’ Compensation Program chargeback costs.

Improve Business Processes for Managing Human Resources

HRM continues to improve the development and management of processes that serve its customers. Part of this 

effort is HRM’s continued commitment to using information technology and Business Process Management (BPM), 

a flexible approach to the design and implementation of its process workflows.

The Human Resources Business Engine (HRBE), a web-based workflow engine, was a direct result of the drive 

toward efficiency in HRM processes. To date, HRBE supports HRM’s largest, most complex pre-employment processes in both the Indianapolis and Minneapolis Hiring Centers, for professional and entry-level hiring.

Overview of CBP
Management’s Discussion and Analysis 53

Overview of CBP

Combining the two disciplines of Business Intelligence and BPM, with an eye to re-engineering internal human 

resources processes, HRM will implement the Table of Organization, Occupational Safety and Health (OSH) Injury 

Analytics, the automated OGE-450 Financial Disclosure micro flow, an automated case management micro flow 

for OSH Safety Inspections, and an automated workflow for the Drug Free Workplace program, that helps schedule 

and manage drug tests over all CBP sites. The multi-million dollar cost avoidances and savings are fully in line with 

CBP’s business transformation efforts towards a more efficient, more effective CBP.

Security/Clearance Management

The security/clearance management sub-program falls primarily under the purview of the Office of Internal 

Affairs (IA). IA exercises oversight authority for all aspects of CBP security including operational, personnel, and 

facilities, as well as the CBP counterintelligence program (including cyber protection). IA’s mission is to promote the integrity and security of the CBP workforce. IA performs and manages a wide variety of functions and 

programs distributed among seven divisions: Personnel Security, Investigative Operations, Integrity Programs, 

Credibility Assessment, Operational Field Testing, Security Management, and Management Inspections.

IA conducts investigations of alleged criminal and serious non-criminal misconduct on the part of all CBP employees. The office coordinates its internal investigative activity with the Department of Homeland Security’s Office 

of the Inspector General, U.S. Immigration and Customs Enforcement’s Office of Professional Responsibility, the 

Federal Bureau of Investigation, and numerous other Federal, state and local law enforcement authorities.

Additional support to this subprogram is provided by the Office of Field Operations’ Analytical Management 

Systems Control Office (AMSCO). AMSCO works to identify potential misconduct issues among frontline CBP 

personnel working in the air, land, and sea environments. The AMSCO team applies sophisticated analytical 

techniques to scan massive amounts of data for transaction anomalies and patterns indicative of potentially corrupt behavior. AMSCO performs national analysis of CBP operations using a multitude of private and public data 

sources. AMSCO detects unintended consequences resulting from deployment of new technologies and coordinates with partnering CBP offices to remedy the vulnerability.

Workforce Development

The Office of Training and Development (OTD) is responsible for the centralized leadership and direction of all 

training programs for the CBP workforce. OTD manages CBP’s National Training Plan (NTP), which prepares 

employees to carry out the core missions of CBP by providing basic and advanced training based on identified 

agency and organizational requirements.

OTD establishes and upholds standards for designing, developing, delivering, and evaluating training to ensure 

the agency’s training programs are transparent, accountable, and legally defensible. OTD has also developed and 

maintains a robust distance learning program (the Virtual Learning Center) that enables CBP to deliver hundreds 

of training courses to CBP personnel in an efficient and cost effective manner.
54 U.S. Customs and Border Protection • Performance and Accountability Report

IT Management

The Office of Information and Technology (OIT) provides integrated, comprehensive technical support that facilitates the CBP and DHS missions. OIT is responsible for developing, acquiring, testing, and maintaining legacy and 

new government and commercial off-the-shelf applications, and also for ensuring the reliable performance of 

CBP’s data infrastructure, which transmits critical data to and from CBP and DHS data centers to CBP agents and 

officers on the front-line. CBP’s Information Technology applications support the CBP enterprise nation-wide.

While much of CBP’s information technology is included in other lines of business, within this sub-program of 

Enterprise Business Services OIT is responsible for help desk services, operation of classified voice and data systems, data center migration management, desktop services, information management systems, and systems planning, development, management, and maintenance.

Policy, Planning, and Governance

Numerous CBP offices provide support to the policy, planning, and governance sub-program within Enterprise 

Business Services.

Within the Office of the Commissioner, the Office of Diversity and Civil Rights (DCR) is responsible for ensuring diversity and inclusion as well as overseeing compliance with applicable civil rights and civil liberties law. 

The Office of the Executive Secretariat (OES) ensures appropriate and expeditious action on all requests for information, executive correspondence, and official memoranda addressed to the Commissioner and other CBP and 

DHS officials. The Office of Strategic Integration (OSI) represents the Commissioner’s intent with enterprise-wide 

focus, and manages CBP’s strategic integration portfolio. The Office of Program Development (OPD) develops and 

oversees the Planning, Programming, Budgeting, and Accountability (PPBA) framework for managing resources. 

The Office of Policy and Planning (OPP) provides leadership, direction, and advice regarding CBP’s overall policy 

development and implementation and implements CBP’s Strategic Management Framework (SMF) to fully integrate CBP’s investment, resource, and program management. The State, Local, and Tribal Office (SLT) is responsible for advising the Commissioner and program offices regarding the impact of CBP policies and initiatives on 

state, local, and tribal stakeholders. The Office of Trade Relations (OTR) provides timely information about CBP 

trade policy to the international community and conducts formal outreach efforts by hosting regional and local 

trade conferences.

OA provides a wide range of activities that indirectly support agency operations and functions. OA ensures that 

certification levels are maintained by employees who serve as technical liaisons between CBP and private contractors as part of the Contracting Officer Technical Representative (COTR) program. OA develops, deploys, and 

maintains sourcing strategies to ensure efficient and effective sourcing of goods and services while supporting 

strategic sourcing and process improvement efforts within CBP and DHS. OA develops and provides oversight of 

core business processes, business process improvement, program and organizational performance metrics, management, and scorecard management. OA also provides oversight and coordination of efficiency reviews, program 

Overview of CBP
55

management reviews, and program management structural development and change management of multiple CBP 

asset and administrative programs.

OA provides effective and efficient payroll services for the unique pay circumstances encountered by CBP personnel, as well as efficient and timely payment for employee travel vouchers, and for products and services that are 

acquired from private companies or other government agencies.

OA provides print and print related services for CBP and other DHS components. This program acquires all 

the necessary forms and paperwork such as the CBP Declaration and is also responsible for procuring all of the 

Agency’s travel related signage, which is found at all land, air, and sea ports of entry. OA provides guidance to the 

Government Printing Office (GPO) for the design and production of the Trusted Traveler Program cards. OA is also 

responsible for records management policy.

The Office of Chief Counsel (OCC) is CBP’s in-house law office and chief legal officer and reports to the DHS 

General Counsel through a Deputy General Counsel. OCC also serves as the CBP Ethics Officer and is the principal legal advisor to the Commissioner, CBP’s senior executive management, and CBP officers and employees in 

their official capacities. OCC attorneys provide legal advice to, and legal representation of, CBP officers in matters relating to the activities and functions of CBP. OCC provides comprehensive legal services to CBP, including 

reviewing proposed administrative actions to ensure compliance with legal requirements; preparing formal legal 

opinions; preparing or reviewing responses in all court actions, civil or criminal, that involve CBP; assisting with 

the collection and protection of revenue; representing the agency in administrative and judicial forums, including arbitration, the U.S. Court of International Trade, federal district and appellate courts, and immigration court 

proceedings; reviewing contractual, procurement, and real property actions; reviewing legislative proposals; and 

training CBP officials in myriad law enforcement, trade and ethics subjects.

The Office of Public Affairs (OPA) is responsible for informing and managing the flow of information to the public 

about CBP and its missions, accomplishments, and ongoing operations. This includes oversight and management 

of external and internal communications, responding to media inquiries, writing speeches, coordinating speaking 

events, developing educational programs to increase public preparedness, and managing organizational identity.

The Office of Congressional Affairs (OCA) serves as a conduit between DHS, CBP, and the Congress. OCA performs the vital work of advancing CBP’s core mission priorities in the legislative arena by facilitating effective and 

timely information exchange and analysis between its stakeholders in three critical areas: Enforcement, Trade and 

Agriculture, and Appropriations and Management.

The Office of International Affairs (INA) is responsible for coordinating foreign initiatives and programs such as 

partnership programs and overseas program which support the United States Government’s security objectives in 

areas of anti-terrorism, border security, export controls, non-proliferation, and customs and immigration policy.

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56 U.S. Customs and Border Protection • Performance and Accountability Report

Looking Ahead

CBP continues to expand and enhance mission effectiveness by its forward-looking approach to secure America’s 

borders and the vitality of the United States economy.

CBP will continue to integrate state-of-the-art technologies and traditional security infrastructures at United States 

POEs and along the Nation’s borders and to work in collaboration and partnership with the trade community 

and foreign governments to secure the United States against terrorists and terrorist weapons while facilitating 

world commerce.

Overview of CBP
57

CBP Organization

Executive Director

Office of Policy 

and Planning

Executive Director

Office of Diversity 

and Civil Rights

Assistant 

Commissioner

Office of Field 

Operations

Chief

Office of Border Patrol

Assistant 

Commissioner

Office of Air and Marine

Assistant 

Commissioner

Office of Intelligence 

and Investigative Liaison

Commissioner

Deputy 

Commissioner

Senior Advisor

Office of

Trade Relations

Director

Office of the 

Executive Secretariat

Office of 

Chief Counsel

Chief of Staff

Deputy Chief 

of Staff

Assistant 

Commissioner

Office of International 

Affairs

Assistant 

Commissioner

Office of International 

Trade

Assistant 

Commissioner

Office of 

Congressional Affairs

Assistant 

Commissioner

Office of Administration

Assistant 

Commissioner

Office of Human 

Resources 

Management

Assistant 

Commissioner

Office of 

Internal Affairs

Assistant 

Commissioner

Office of Public Affairs

Assistant 

Commissioner

Office of Training 

and Development

Assistant Commissioner

Office of Technology 

Innovation and 

Acquisition

Assistant Commissioner

Office of Information and 

Technology

Executive Director

Joint Operations 

Directorate

Principal Executive

Office of 

Strategic Integration

Director

State, Local, and 

Tribal Liaison Office

Principal Executive

Office of Program 

Development

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58 U.S. Customs and Border Protection • Performance and Accountability Report

Headquarters

Office of the Commissioner: The Commissioner is responsible for securing, managing, and controlling the Nation’s 

borders by advancing CBP’s priority mission of preventing terrorists and terrorist weapons from entering the 

United States while facilitating legitimate trade and travel.

Deputy Commissioner: Mr. David V. Aguilar was named Deputy Commissioner on April 11, 2010, having previously served as Acting Commissioner from December 30, 2011 to August 29, 2012. Mr. Aguilar is responsible for 

providing leadership and executive-level direction to CBP’s day-to-day operations, including oversight of agency 

initiatives that facilitate the international movement of legitimate, low-risk goods and travelers while promoting 

effective border security.

Chief of Staff (COS): Serves as the direct liaison to DHS for all agency issues. The COS assists the Office of the 

Commissioner in formulating and implementing policies through coordination with other CBP office components, DHS, and OGA. The COS provides advice and counsel to the Commissioner in defining priorities to accomplish CBP mission and goals.

Office of Chief Counsel (OCC): Serves as the chief legal officer of CBP and reports to the General Counsel of DHS. The 

Chief Counsel serves as the Ethics Officer for the Agency and is the principal legal advisor to the Commissioner of 

CBP. OCC provides legal advice to and legal representation of CBP officers in matters relating to the activities and 

functions of CBP.

Office of Program Development (OPD): Is responsible for transitioning CBP from a budget-centric process to a planning 

and programming process that is driven by goals and objectives. OPD was established in FY 2011, and is responsible for integrating and executing the Planning, Programming, Budgeting, and Accountability (PPBA) process 

within CBP. This includes: Establishing repeatable processes and structures, establishing priorities and capabilities 

required to achieve a strategy, making informed, cross-cutting operational and resource decisions consistent with 

DHS and Commissioner priorities and goals, increasing transparency through more detailed, focused budget, and 

performing and monitoring the achievement of goals and the spending of plans.

Office of Strategic Integration (OSI): Is responsible for facilitating the development of a mature strategic integration 

culture across CBP and all its stakeholders, both internal and external. OSI was established in FY 2011, and is 

responsible for managing the integration of the CBP portfolio of strategies, ensuring the maximization of value, 

balance in approach, alignment to business strategy, and balance in resource requirements.

Office of Diversity and Civil Rights (DCR): Is responsible for developing and administering all CBP programs and 

activities necessary to ensure compliance with the Federal anti-discrimination laws, regulations and policies, 

and civil rights and civil liberties requirements necessary to facilitate lawful individual travel and trade across the 

United States borders, while ensuring national security and economic prosperity. DCR implements initiatives that 

sustain, retain, and advance a highly qualified ethical workforce that attracts the most qualified candidates that 

Overview of CBP
59

America has to offer. In addition, DCR ensures that CBP is a progressive champion of diversity and inclusion by 

providing activities and programs that celebrate and honor all individuals.

Office of State, Local, and Tribal Liaison (SLT): Advises the Commissioner, Deputy Commissioner, and program offices 

regarding the impact of CBP policies and initiatives on state and local stakeholders. SLT also acts as the primary 

conduit for information to, and guidance from, the DHS Office of Intergovernmental Affairs. SLT informs state and 

local stakeholders of current and proposed CBP programs, assists these stakeholders in addressing concerns with 

CBP programs, and assist in building and maintaining partnerships between CBP and state and local governments.

Office of Policy and Planning (OPP): Advises the executive staff on policy development and implementation in the 

broad array of mission issues addressed by CBP, including national border security policy, immigration enforcement, cargo security and facilitation, agriculture protection, interagency coordination, and legislation. OPP further 

coordinates with individual offices and programs inside and outside the agency to develop specific strategies and 

planning guidance that support CBP’s mission.

Office of Trade Relations (OTR): Is responsible for managing CBP’s outreach and communications with the international trade community. OTR ensures that the trade community and the public understand that trade is an integral 

part of CBP’s mission to make America safer, stronger, more prosperous, and economically competitive. OTR’s 

mission is to continually improve relations between CBP and the trade community by enhancing collaboration, 

and cooperation, and by informing decision-making at all levels including operational, legislative, and political. 

OTR is also responsible for organizing and presenting formal CBP outreach efforts to the trade community, including CBP’s annual Trade Symposiums, monthly trade day meetings, trade roundtable meetings, and webinars. OTR 

manages the Advisory Committee on Commercial Operations of U.S. Customs and Border Protection (COAC), a 

congressionally mandated trade advisory group. OTR is the designated regulatory fairness representative for the 

agency with responsibility for promoting compliance with the Small Business Regulatory Enforcement Fairness 

Act (SBREFA).

Office of Executive Secretariat (OES): Is responsible for ensuring appropriate and expeditious action on all requests for 

information, executive correspondence, and official memoranda addressed to the Commissioner and other CBP 

and DHS senior officials. OES provides direct support to the Commissioner and Deputy Commissioner, as well as 

related support to leadership and management across the agency.

Office of Joint Operations Directorate (JOD): Is responsible for facilitating and strengthening the strategic capabilities 

of CBP for collaborating, coordinating, and conducting joint field operations. The JOD was established in FY 2011 

and under the authority and at the discretion of the Commissioner, the JOD is tasked to develop CBP joint operational doctrine, provide direction and oversight, and act in concert with CBP field commanders. The JOD supports 

the development and maturation of joint/unified commands, ensures the synchronization of resources and leverages the expertise of inter/intra-agency partners and HQ personnel. The incident management functions within 

the JOD include the development and oversight of the CBP corporate response to recover from any natural or 

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60 U.S. Customs and Border Protection • Performance and Accountability Report

man-made disaster. The development of long-term strategies and operational plans rooted in the use of technology 

and new efficiencies to defeat potential threats to border security, trade, and travel are integral to the JOD mission.

Component Organizations and Field Structure

CBP is organized into 14 separate offices, each of which report directly to the Commissioner. The mission of each 

office is described briefly below:

Office of Field Operations (OFO): Enforces customs, immigration, and agriculture laws and regulations at U.S. borders 

and has the primary responsibility for preventing terrorists and their weapons from entering the United States at 

the POEs. OFO maintains programs at 20 field operation offices; 329 POEs, 15 pre-clearance stations in Canada, 

the Caribbean, and Ireland; and 58 CSI ports worldwide. A Director of Field Operations heads each field office, 

and Port Directors oversee POEs in their operational areas, where virtually all conveyances, passengers, and goods 

legally enter and exit the United States. OFO oversees the enforcement of laws and regulations while ensuring the 

safe and efficient flow of goods and people through the POEs.

Office of Border Patrol (OBP): Serves as the CBP law enforcement organization with the primary responsibility of 

preventing terrorists, weapons of terrorism, illegal aliens, drugs, and those who smuggle them, from entering the 

United States between the POEs. The Border Patrol is organized into 20 sectors along the southwestern, northern, 

and coastal areas of the United States.

Office of Air and Marine (OAM): Protects the American people and critical infrastructure through the coordinated 

use of integrated air and marine forces. These forces detect, interdict, and prevent acts of terrorism and the unlawful movement of people, illegal drugs, and other contraband toward or across the borders of the United States. 

OAM’s core competencies include air and marine interdiction, air and marine law enforcement, and national 

border domain security. OAM further supports DHS missions such as the response and recovery to natural disasters and terrorism.

Office of Intelligence and Investigative Liaison (OIIL): Develops, coordinates, and implements intelligence capabilities 

to support the execution of CBP’s mission to secure America’s borders while facilitating legitimate trade and travel. 

OIIL serves as a coordinating facilitator that integrates CBP’s diverse intelligence capabilities into a single cohesive 

intelligence enterprise. OIIL supports CBP’s mission through a multi-layered approach, which includes collection 

and analysis of advance traveler and cargo information, use of enhanced law enforcement technical collection 

capabilities, delivery of timely analysis of intelligence and information, and establishment of intelligence-sharing 

relationships with Federal, state, local and tribal agencies and intelligence agencies.

Office of International Affairs (INA): Coordinates and supports CBP’s foreign initiatives, programs, and activities. To 

support CBP’s mission, INA establishes essential partnerships with U.S. government agencies, foreign administrations, and international organizations. Through its 21 Attaché and 6 Advisory office locations INA coordinates 

Overview of CBP
61

CBP’s international engagement efforts by implementing programs and initiatives that promote border enforcement best practices and capacity building globally.

Office of International Trade (OT): Provides unified strategic direction for trade policy and program development. 

OT directs national enforcement responses and takes punitive actions against companies participating in predatory trade practices, including textile transshipment and intellectual property rights infringement. OT directs CBP 

risk-based investigation detection and prevention programs designed to identify the importation of contaminated 

agricultural products and goods that present health or safety risks, and products requiring protection from unfair 

trade practices. OT streamlines the flow of legitimate shipments and fosters corporate self-governance to achieve 

compliance with trade laws, regulations, and international trade agreements. Finally, OT provides the legal tools to 

promote facilitation and compliance with customs, trade, and border security requirements by issuing CBP regulations, binding rulings and decisions, compliance publications, and by offering training and outreach on trade 

laws and regulations.

Office of Congressional Affairs (OCA): Coordinates all CBP congressional and legislative activities to ensure that the 

full range of policy, operational, technical, and programmatic aspects are appropriately considered. These functions and activities include work performed in the congressional arena, relationships with Members of Congress 

and their staffs, and requests for information, briefings, meetings, hearings, tours, or other forms of assistance 

received from Congress.

Office of Administration (OA) and Chief Financial Officer (CFO): Oversees all financial operations, procurement, asset 

management, and budget activities within CBP. OA is responsible for administering $13.7 billion that is budgeted 

annually for law enforcement and trade operations and processing collections of $39.4 billion in custodial and 

entity revenue annually. OA is responsible for administering the broad range of financial management activities 

delineated under the CFO Act of 1990, including accounting, budgeting, procurement, asset management, financial systems, and financial management.

Office of Human Resources Management (HRM): Manages a centralized human resources program for all CBP employees nationwide and overseas. HRM supervises all matters involving human resources, including organizational 

structure, staffing, compensation administration, benefits, workplace safety, personnel actions, labor relations, 

and employee relations. HRM also assists employees by providing recruitment services, retention support, benefits 

information, and employee health and wellness programs.

Office of Information and Technology (OIT): Provides CBP with information, services and technology solutions to 

secure the border, prevent the entry of terrorists or terrorist weapons, and facilitate legitimate trade and travel. In 

addition, OIT operates a worldwide, round-the-clock secure, stable, and high-performance IT infrastructure while 

supporting tactical communications, scientific solutions, and forensic services. OIT implements and supports CBP’s 

IT, automation, and technology strategies. OIT personnel manage all computers and related resources, including 

all operational aspects of the Computer Security Program. OIT establishes requirements for computer interfaces 

between CBP and various trade groups and Government agencies, and manages matters related to automated 

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62 U.S. Customs and Border Protection • Performance and Accountability Report

import processing and systems development. OIT also serves as the steward for DHS OneNet Network Operations, 

Security Operations, and Network Engineering.

Office of Internal Affairs (IA): Serves as the designated Office of Security for CBP and manages a wide range of 

investigative and security functions and programs, including applicant and employee background investigations 

and clearances; employee integrity and misconduct investigations; credibility assessments including polygraph 

examination; operational field testing; integrity awareness and corruption detection; deterrence and prevention 

of internal corruption; physical, informational, operational, industrial and internal security; management inspections; audit liaison; and, monitors cyber security counter intelligence policies, instructions, procedures, control 

systems, networks and methods. IA’s mission promotes the integrity and security of the CBP workforce.

Office of Public Affairs (OPA): Communicates CBP’s mission and operations to the agency’s chief stakeholders, which 

includes the American public, foreign nationals who conduct business in the United States, international trade 

entities, and travelers who cross U.S. borders. Tools used in the national and international public communication 

process include media outreach and public information campaigns conducted via media events, video, photography, and informational brochures. CBP maintains a public website at (www.cbp.gov) and a national customer service call center, CBP INFO Center, to address public questions and complaints. OPA also keeps the CBP workforce 

informed through the CBPnet Intranet site, the weekly emailed news compilation “Frontline News,” and mass 

emails. A bimonthly newsletter, “CBP Today,” is distributed to CBP personnel and other stakeholders nationwide.

Office of Technology Innovation and Acquisition (OTIA): Ensure that all of CBP’s applied technology efforts are properly 

focused on the mission and are well integrated across the agency. In addition, OTIA is charged with strengthening CBP’s expertise and effectiveness in acquisition and program management of contractor-delivered products 

and services. This office is headed by an Assistant Commissioner who also serves as CBP’s Component Acquisition 

Executive (CAE), providing oversight to all CBP acquisition programs to ensure they are managed in compliance 

with DHS and CBP regulations and policies.

Office of Training and Development (OTD): Provides centralized leadership and direction of all CBP training programs 

for the entire workforce. OTD ensures that all training supports the CBP mission and strategic goals and that the 

workforce is prepared to meet the challenges faced in the performance of mission critical operations by establishing CBP training standards and policies, leading the development, delivery and evaluation of training, and procuring the necessary tools.

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66 U.S. Customs and Border Protection • Performance and Accountability Report

In FY 2011, the Commissioner issued CBP’s Missions, Goals, and Priorities, FY 2011–2013, a document that articulates the missions, goals, objectives, and priority initiatives for the Agency. The document was designed to shape 

planning and policy development for CBP’s offices, to guide resource allocation, and to direct the focus and efforts 

of senior executives.

CBP’s Performance Management Framework (PMF) provides CBP with performance management and oversight 

capabilities that improve the efficiency and effectiveness of CBP programs, initiatives, and operations through 

improved measurement, analysis, and reporting. The PMF was designed to meet statutory reporting and budgeting 

requirements established by the Office of Management and Budget, the Government Performance and Results Act 

(GPRA) of 1993, and the GPRA Modernization Act of 2010. The PMF also supports management decision-making 

processes associated with Agency-wide strategic planning, requirements determination, and resource allocation 

through the use of performance information in the execution of the annual budget.

The associated CBP Performance Measurement Hierarchy contains five levels of performance measures: long-term, 

strategic, management, operational, and investment measures. The Hierarchy sets the foundation for performance 

measure presentation and reporting through a variety of formats and methods tailored to the decision-making 

processes that the Hierarchy is intended to serve.

Measures that are multi-year in nature 

and do not tie to our annual budget.

Measures that communicate achievement 

of strategic goals and objectives.

Measures that gauge program results 

and tie to resource requests.

Measures that inform the management 

of operations and activities.

Strategic

Management

Operational

Investment

Long-Term Linkages and Feedback

Measures that gauge program 

management and results 

delivered by capital investments.

Long-term level measures are those that cross multiple fiscal years and are not tied to an annual budget. Strategic 

level measures are used to manage and report accomplishments of CBP strategic goals and objectives, thus demonstrating the value that CBP programs provide to the American people. Management level measures inform internal 

CBP decision-making processes to determine program priorities, allocate resources, and monitor progress and 

Performance Goals and Results
67

performance. Operational level measures inform management of the effectiveness and efficiency of individual 

program operations. Investment level measures are associated with CBP’s major capital investments and map to the 

Federal Enterprise Architecture Performance Reference Model.

Performance Management

CBP’s performance management efforts are guided by key pieces of legislation that provide the framework for 

Government-wide performance improvement. The GPRA of 1993 established a solid foundation for results-oriented planning, measurement, and reporting in the Federal Government. The GPRA Modernization Act of 2010 

sought to further that effort by promoting the consistent use of performance measurement and reporting outcomes to drive management decision-making and resource use. After passage of the GPRA Modernization Act of 

2010, CBP immediately began incorporating aspects of this legislation into the CBP processes.

CBP uses performance measures to determine if desired results are achieved, thereby indicating the Agencies 

accomplishments. CBP is dedicated to continuously refining and improving its performance measures. The goal is 

to ensure that the data it reports internally and externally is useful to senior executives who make programming 

and funding decisions.

In February 2010, DHS completed the first Quadrennial Homeland Security Review (QHSR) to provide a strategic 

framework that guides the activities of participants in homeland security toward a common end. In FY 2010, in 

concert with DHS, CBP engaged in a review of its existing performance measures to ensure that the Department 

can accurately monitor and improve its own performance towards meeting the missions, goals, and objectives 

outlined in the QHSR. Where gaps existed, new measures were proposed and developed. In FY 2011, CBP finalized 

these new measures and also proposed several additional measures.

Additionally, the strategic goals and objectives in CBP’s Missions, Goals, and Priorities, FY 2011–2013 document 

provided a roadmap of activities necessary to accomplish the Agency’s important mission. The Agency identified 

several strategic areas that would benefit from new outcome-based performance measures and began to develop 

them. By responding to emerging guidance, CBP will demonstrate program effectiveness in achieving its longterm performance goals through the continuous improvement of performance measures.

FY 2012 Performance by Mission Set

This section presents a discussion of highlighted FY 2012 performance objectives and related key performance 

measures for each of CBP’s Mission Sets. Additional performance measures and results can be found in the 

“Performance Section” under “Performance Summary,” beginning on page 83.

Management’s Discussion and Analysis

Performance Goals and Results
68 U.S. Customs and Border Protection • Performance and Accountability Report

Performance Goals and Results

Mission Set 1: Securing America’s Borders

As a frontline border security agency, CBP has a multifaceted and complex mission of protecting the Nation against 

a multitude of cross-border violations. All CBP efforts to secure the border, including the mission of enforcing 

the immigration, customs, trade, agriculture, and other laws of the United States contribute to the mission of 

thwarting terrorism.

Performance Objective—Secure the U.S. border in areas deemed as high priority for terrorist threat potential or 

other national security objectives.

CBP will continue its efforts to improve security at and between the POEs by using information and intelligence 

to focus resources in a more effective, risk-based manner. Providing security along our northern, southern, and 

coastal borders requires integration with CBP international, Federal, state, local, and tribal partners in order to 

leverage and focus joint resources.

Performance Measure—Number of apprehensions on the Southwest Border between the ports of entry.

Description

Protection of our southwest border against threats from illicit cross-border activity is a key element 

needed to secure our country. This measure calculates the number of apprehensions made of those 

attempting entry along the southwest border between an official POE. DHS’s border security strategy 

is based on a layered approach of strategically positioning personnel, technology, and defensive 

infrastructure; developing strong partnerships with law enforcement partners on both sides of the 

border; and increasing consequences to repeat offenders to provide a deterrent effect.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A < = 390,000 < = 371,000

Actual N/A N/A N/A 327,577 356,873

Explanation 

of FY 2012 

Results

Target Met - The Border Patrol was successful in meeting its target of maintaining historically low 

apprehensions along the Southwest Border (SWB) in Fiscal Year 2012. Although the apprehensions 

have slightly increased from 2011, the Border Patrol has displaced traffic along the SWB, forcing 

Transnational Criminal Organizations into a constant state of reorganization. This has been 

accomplished by targeted enforcement and the use of information, integration, and rapid response 

in order to mitigate risk in high density traffic areas along the SWB, especially in the Tucson Sector, 

where volume of traffic and apprehensions have been the highest. The intelligence, planning, and 

operational cycle employed by Border Patrol have allowed the agency to maintain its influence on 

keeping illegal flow across the border at historically reduced levels, and position itself to continue this 

influence in the future.

Recommended 

Action N/A
Management’s Discussion and Analysis 69

Performance Goals and Results

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

400,000

280,000

320,000

360,000

380,000

300,000

340,000 Target

Actual

Number of Apprehensions on the Southwest Border Between the Ports of Entry

Number of 

Apprehensions

< = 390,000

327,577

< = 371,000

356,873

Performance Measure—Amount of currency seized on exit from the United States.

Description

This measure provides the total dollar amount of all currency in millions seized during outbound 

inspection of exiting passengers and vehicles, both privately-owned and commercial. The scope 

of this measure covers both the southwest and northern borders and includes all modes of 

transportation (land, air, and sea).

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A 40,000,000 35,000,000

Actual N/A N/A N/A 47,000,000 31,900,000

Explanation 

of FY 2012 

Results

Target Not Met - Although the fourth quarter is historically the busiest of the year, currency seizures 

were not sufficient to enable CBP to meet the FY 2012 target.

Recommended 

Action

CBP will continue to conduct risk-based Outbound enforcement operations to identify and seize 

currency being transported out of the country illegally and work with other law enforcement 

agencies and both local and international partners to identify and disrupt outbound 

smuggling activities.
70 U.S. Customs and Border Protection • Performance and Accountability Report

50

0

20

40

5

10

15

25

30

35

45

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target

Actual

Amount of Currency Seized on Exit from the United States

Amount of 

Currency

Millions

40

47

35

32

Mission Set 2: Securing and Expediting the Movement of People and the 

Flow of Goods

In order to meet the dual goals of security and facilitation, CBP will develop and implement programs that 

expedite the processing of people and goods at land border ports, airports, and seaports, while at the same time 

securing the global trade environment and strengthening supply chain security. CBP will focus its resources on 

identifying and responding to high-risk travelers and conveyances. CBP employs a risk-based, layered enforcement 

approach through the use of accurate advance information; the most advanced inspection, screening, and scanning 

technology available; modernized systems for cargo processing; and international and trade compliance partnership programs. Modern trade practices make it essential for CBP to provide risk-based, predictable, transparent, 

and efficient procedures for the clearance of goods, while simultaneously addressing increasingly complex trade 

compliance requirements and evolving security challenges.

Performance Objective—Improve the targeting, screening, and apprehension or seizure of high-risk international 

travelers and cargo away from the physical border in order to prevent terrorist attacks and criminal activity while 

expediting the processing of legitimate travelers and cargo.

CBP’s ability to expeditiously process people, products, and conveyances is dependent on its ability to identify 

high-risk travelers and goods for inspection. High-risk targeting allows law-abiding travelers and commerce to 

move without unnecessary delay. CBP applies its targeting methods against data to identify which passengers or 

shipments need to be segregated for closer inspections. CBP uses the ATS and associated databases to provide CBP 

officers (including those stationed overseas) with advance notice of travelers and goods arriving at U.S. POEs, 

Performance Goals and Results
71

allowing the officers to crosscheck the passenger and cargo manifests against databases such as TECS and the 

National Crime Information Center.

Performance Measure—Percent of requested cargo examinations conducted at foreign ports of origin in 

cooperation with host nations under the Container Security Initiative.

Description

The measure is an indication of the extent to which potential higher-risk cargo is satisfactorily 

inspected before it leaves the foreign port of origin. This measure is the percent of requested 

container examinations resolved or conducted by foreign Customs officials meeting CBP examination 

standards and requirements divided by the total number of examinations requested by CBP Container 

Security Initiative (CSI) officials. These examinations would otherwise have taken place at U.S. ports 

of entry.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target 97.00% 97.00% 95.00% 100.00% 100.00%

Actual 95.10% 93.00% 94.00% 96.00% 98.00%

Explanation 

of FY 2012 

Results

Target Not Met - The Container Security Initiative relies on the voluntary cooperation of host nation 

customs officials.

Recommended 

Action

CBP continually works with the host ports to resolve examination issues as they arise and works with 

foreign governments to increase the percentage of conducted examinations.

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target

Actual

Percent of Requested Cargo Examinations Conducted at Foreign Ports of Origin

in Cooperation with Host Nations Under the Container Security Initiative

Percent of 

Requested 

Cargo 

Examination

100%

88%

94%

98%

96%

92%

90%

100%

96%

94%

93%

95.1%

95%

97%

97%

98%

Management’s Discussion and Analysis

Performance Goals and Results
72 U.S. Customs and Border Protection • Performance and Accountability Report

Performance Measure—Percent of cargo by value imported to the United States by participants in CBP trade 

partnership programs.

Description

This measure describes the percent of all cargo that is imported from CBP trade partnership 

programs based on the value compared to total value of all imports. Partnership programs include 

both Customs-Trade Partnership Against Terrorism (C-TPAT) and Importer Self Assessment (ISA). 

CBP works with the trade community through these voluntary public private partnership programs, 

wherein some members of the trade community adopt tighter security measures throughout their 

international supply chain and in return are afforded benefits. A variety of trade actors are included 

in these partnership programs, such as importers, carriers, brokers, consolidators/third party logistic 

providers, Marine Port Authority and Terminal Operators, and foreign manufacturers.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A 45.00% 45.00%

Actual N/A N/A N/A 55.07% 54.66%

Explanation 

of FY 2012 

Results

Target Met - CBP participated in domestic and international trade seminars and conferences in 

furtherance of our outreach efforts to the trade community during FY 2012. These efforts resulted in 

new trade program participants.

Recommended 

Action N/A

Target

Actual

Percent of Cargo by Value Imported to the United States by

Participants in CBP Trade Partnership Programs

Percent of 

Cargo by Value 

Imported

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

60%

40%

45%

50%

55%

45%

55.07%

54.66%

Performance Goals and Results
73

Performance Measure—Percent of inbound high-risk cargo transported by air, land, or sea that has been 

screened and entry status is resolved prior to or during processing at a U.S. POE.

Description

This measure gauges the percent of international cargo coming to the United States via air, land, and 

sea identified as potentially high-risk using the Automated Targeting System (ATS) that is screened 

and has entry status resolved prior to leaving the port of entry. Screening and resolving potentially 

high-risk cargo prior to departure from the port of entry ensures the safety of the U.S. public and 

minimizes the impact to the trade through the effective use of risk-focused targeting.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A FOUO FOUO

Actual N/A N/A N/A FOUO FOUO

Explanation 

of FY 2012 

Results

Target Not Met - This program did not meet its target for FY 2012. This measure gauges the overall 

percent of inbound cargo identified as potentially high-risk by the Automated Targeting System that is 

assessed or scanned prior to lading or at arrival at a U.S. port of entry. End of year reporting includes 

results for Q3 and Q4 in the sea and air environments only. Reporting this measure in the land 

environment continues to be a challenge due to data accessibility and system data exchange issues.

Recommended 

Action

The Office of Field Operations is working with the Targeting and Analysis Systems Program Office to 

develop a standard methodology to assemble this measure across all modes of entry.

Mission Set 3: Sustaining Investment in People and Capabilities

In order for CBP to remain a successful law enforcement organization, it will invest in its people. This investment 

includes providing training for CBP agents, officers, and mission support personnel to ensure they are proficient in 

their job-related skills and are prepared for future leadership opportunities. This investment also includes addressing any integrity issues that may arise.

Performance Objective—Improve mission effectiveness and efficiency by integrating, unifying, and leveraging 

resources to support CBP’s operational offices.

Another example of CBP investing in its people includes ensuring that its agents and officers on the border have the 

required technology to achieve the organization’s objectives. This investment includes having the proper technology to communicate with Mexican, Canadian, Federal, state, local, and tribal partners.

While the activities that fall under this mission set are important to CBP’s success, CBP does not have GPRA or 

Strategic measures that align to this mission set due to the mission support nature of its activities. Operational 

measures exist within this Mission Set and are used in internal decision-making processes.

Management’s Discussion and Analysis

Performance Goals and Results
74 U.S. Customs and Border Protection • Performance and Accountability Report

Overview

To assist with DHS’ compliance with the provisions of the Federal Managers’ Financial Integrity Act of 1982 

(FMFIA); the DHS Financial Accountability Act of 2004; the Reports Consolidation Act of 2000; the Federal 

Financial Management Improvement Act of 1996 (FFMIA); the Federal Information Security Management Act of 

2002 (FISMA); and the Office of Management and Budget (OMB) Circular A-123, “Management’s Responsibility 

for Internal Control,” revised December 2004, the Agency-head of CBP must provide annual assurance statements 

to DHS regarding CBP’s management and financial system controls, internal controls over financial reporting, and 

performance data reliability regarding activity that is significant at the DHS Consolidated level. Any reportable 

conditions or deficiencies are reported in the statements. Information for these statements are derived from the 

Government Accountability Office (GAO) and DHS Office Inspector General (OIG) reviews, independent audits, 

and self-assessments conducted by CBP management.

Federal Managers’ Financial Integrity Act

In accordance with FMFIA and OMB Circular A-123, CBP has evaluated its management controls and financial 

management systems for the fiscal year ending September 30, 2012. As a result of its annual self-assessment process 

and GAO and OIG reviews for FY 2012, CBP is reporting 1 material weakness and 3 instances of nonconformance. 

Custodial Revenue and Drawback Controls

CBP’s Automated Commercial System (ACS) has inherent limitations in detecting and preventing excessive drawback claims; therefore, CBP relies on a risk-based approach to review drawback claims. The strengthening of drawback controls is dependent upon system improvements and legislation to simplify the drawback process and to 

revise documentation retention requirements for the trade. Weaknesses were noted in the monitoring of Bonded 

Warehouse and Foreign Trade Zones, as well as the tracking of In-Bond Cargo. The ATS Compliance Module was 

implemented in September 2012 to increase oversight and monitoring of the In-Bond Program, thus verification 

and validation procedures were not completed during FY 2012 to determine whether or not this system is designed 

or operating effectively.

Financial Systems Security

During FY 2012, CBP completed remediation work on 15 of the 36 findings issued in the FY 2011 Financial 

Statement Audit. CBP reviewed the procedural changes and concluded that the weaknesses had been remediated. 

Additionally, there were 25 new IT findings in the FY 2012 Financial Statement Audit for a total of 46 IT findings. 

CBP will continue to remediate IT findings in FY 2013.

Management Assurances
Management’s Discussion and Analysis 75

Core Financial Systems

The remaining open issues relate to updating the Accounts Receivable module to adequately interface trade revenue activity with SAP, and to integrate data associated with the items held in use, excess, obsolete, and unserviceable category in the inventory tracking system with SAP at the transaction level.

Information Technology Infrastructure

A technical assessment of CBP’s data center and network technology infrastructure was performed in FY 2012. The 

assessment identified infrastructure vulnerabilities. Funding to help remediate these vulnerabilities was received 

in FY 2012 and remediation efforts are underway.

DHS Financial Accountability Act

The DHS Financial Accountability Act requires an assertion of internal controls over financial reporting. CBP’s 

assessment of internal control over financial reporting included performing tests of operational effectiveness 

throughout FY 2012 and verification and validation of corrective action effectiveness as of September 30, 2012.

Tests of Operational Effectiveness

•	 Budgetary Resources Management - continued to follow updated policies and procedures to improve timeliness of monitoring the period of performance of open contracts/obligations; continued to follow policies and 

procedures to evidence review of the reconciliation of Standard Form (SF)-132 to SF-133; and enhanced communication between the Office of Administration’s Financial Operations Directorate and Budget Directorate 

when completing transfers;

•	 Payment Management - developed training for goods receivers to emphasize the importance of timely entry 

of goods and services received, and continued to send reminder communication to goods receivers to emphasize the importance of timely entry of goods and services received; and

•	 Human Resources and Payroll Management - updated policies and procedures related to payroll reconciliation and quarterly Department of Labor chargeback estimate.

Verification and Validation of Corrective Actions

•	 Asset Management - updated procedures, implemented additional post-transaction reviews, and developed 

an alternative goods receipt form to address asset addition transactions; implemented an additional review 

of asset settlements; updated procedures for determining percent of completion accruals on construction 

projects; issued new procedures for settling personal property assets created from construction projects; 

revised and released a new Personal Property training course for all local property officers; issued the revised 

Personal Property Asset Management Handbook (PPAMH); and began tracking and communicating retirement/disposal performance metrics; and

Management Assurances
76 U.S. Customs and Border Protection • Performance and Accountability Report

•	 Revenue and Receivables Management - continued to review and refine the Drawback Compliance 

Measurement (DCM) program, and worked on incorporating pre-liquidation sampling into the sampling methodology; implemented the Automated Tracking System (ATS) Compliance module to enhance 

Headquarters’ monitoring capabilities for In-Bond cargo; and enhanced its oversight and monitoring of the 

Trade Compliance Measurement (TCM) program through implementing updated policies and procedures to 

the field.

Based on this assessment, CBP provides reasonable assurance that internal controls over financial reporting were 

operating effectively, with the exception of the material weakness, Custodial Revenue and Drawback Controls, as 

previously discussed. CBP management believes that sufficient compensating controls exist to provide assurance 

on the related financial statements and will continue to test and refine these controls.

Federal Financial Management Improvement Act

FFMIA instructs agencies to maintain an integrated financial management system that complies with Federal 

system requirements, Federal Accounting Standards Advisory Board standards (FASAB), and the U.S. Standard 

General Ledger at the transaction level. Although CBP has made significant improvements toward compliance 

with the implementation of SAP financial software, it cannot claim full compliance because of the deficiencies 

previously discussed.

Federal Information Security Management Act

FISMA requires agencies to conduct an annual self-assessment review of their IT security programs and to develop 

and implement corrective actions for identified security weaknesses and vulnerabilities. CBP has completed a comprehensive self-assessment for FY 2012 and can state with reasonable assurance that the IT security controls are in 

compliance with FISMA, with the exception of the material weakness previously discussed.

Management Assurances
Management’s Discussion and Analysis 77

Overview

Data Integrity: CBP is dedicated to providing clear, concise, relevant, and reliable data for managerial decisionmaking and program management. CBP strives to ensure that the data are both quantifiable and verifiable and 

provided in a timely manner. In place are internal management controls, including ongoing data reviews, annual 

self-inspections, audit trails, restricted access to sensitive data, and separation of duties, which are designed to 

safeguard the integrity and quality of CBP’s data resources.

Data Systems and Controls: Performance data for the planned performance measures are generated by automated 

management information and workload measurement systems and reports as a byproduct of day-to-day operations. All levels of management routinely monitor the data systems and controls. CBP management has reviewed 

the performance measurement data for FY 2012 and has determined, with reasonable assurance, that the data is 

complete, accurate and reliable.

Audit of the FY 2012 CBP Consolidated Financial Statements: To assist the Department in complying with the 

DHS Financial Accountability Act of 2002, the DHS OIG engaged independent auditors, KPMG LLP, to audit CBP’s 

consolidated financial statements (Consolidated Balance Sheets, Consolidated Statements of Net Cost, Consolidated 

Statements of Changes in Net Position, Combined Statements of Budgetary Resources, and Consolidated Statements 

of Custodial Activity), hereinafter referred to as the “financial statements.” The objective of the audit was to determine whether CBP’s financial statements are fairly presented in accordance with Generally Accepted Accounting 

Principles (GAAP) in the United States. The Independent Auditors’ Report can be found on page 146.

Management Inspections

As part of its oversight role to promote the integrity, effectiveness, and efficiency of CBP programs and operations, the Office of Internal Affairs, Management Inspections Division (MID), performs management inspections 

that complement operational monitoring activities performed by CBP component offices. As part of an integrated 

inspections program, MID performs office inspections, program evaluations in the areas of core management 

responsibilities and control activities susceptible to financial, technological, and/or physical vulnerabilities and 

other analytical assessments of operational or management issues.

MID’s work reflects a proactive approach to identifying areas of potential vulnerability or conditions that could 

hinder the successful accomplishment of CBP operational goals and objectives. During FY 2012, MID issued a total 

of 33 reports, presenting CBP executive managers with 956 recommendations to address operational, financial or 

administrative deficiencies identified during inspection activity.

Systems and Controls
78 U.S. Customs and Border Protection • Performance and Accountability Report

Self-Inspection Program

The Self-Inspection Program (SIP), administered by the Office of Internal Affairs, MID, is one of the mechanisms 

through which CBP monitors agency performance, the adherence to established operational requirements, and 

the accomplishment of strategic goals and program objectives. The SIP promotes management accountability and 

strengthens the oversight of programs and operations. SIP also helps CBP meet Federal internal controls requirements established by the Federal Managers’ Financial Integrity Act, OMB Circular A-123, and the DHS Financial 

Accountability Act. Under SIP, CBP managers and supervisors annually conduct self-assessment activities requiring 

them to verify that agency programs and operations are being implemented properly and effectively. In conducting the self-assessments, CBP managers report on the implementation of policies and procedures applicable to the 

operational, financial, and administrative functions reviewed through SIP.

During the SIP cycle, CBP managers complete, certify, and approve the self-inspection worksheets related to the 

functions and activities under their control. Responses indicating compliance and non-compliance with the 

requirements, along with information supporting the responses, are recorded in the web-based Self-Inspection 

Reporting System. Managers reporting non-compliance with, or inconsistent implementation of, policies and procedures are required to timely implement corrective action to resolve each deficient condition.

On a national level, the analysis of self-inspection results allows executive managers and national program managers to gauge the level of compliance with critical program management controls; identify programmatic issues 

that require national attention; and provide appropriate guidance to CBP offices and managers. For the current 

reporting cycle, more than 3000 managers in approximately 700 CBP Headquarters and Field Offices performed 

self-assessment activities researching, certifying, and/or approving the results of office self-inspections. CBP managers completed 17,581 self-inspection worksheets by answering a total of 108,477 questions.

Audit Management and Liaison

The MID Audit Management and Liaison team serves as the agency liaison to the GAO and the DHS OIG providing oversight concerning audits and reviews of CBP programs and operations. The Audit Management and 

Liaison team facilitates meetings between external auditors and CBP personnel, ensures timely responses to auditor 

requests for documents and interviews, coordinates CBP responses to audit findings and reports, tracks the status 

of required corrective actions, provides agency-wide audit training, and keeps senior leadership informed of highprofile audits and reviews.

In FY 2012, CBP had 139 ongoing GAO and OIG audits. Of these audits, GAO initiated 38 new audits (46 audits 

were carried over from previous years) and issued 43 reports containing 21 recommendations. DHS OIG initiated 

21 new audits (34 audits were carried over from previous years) and issued 27 reports containing 49 recommendations. As of the end of FY 2012, CBP has 169 open recommendations.

Systems and Controls
Management’s Discussion and Analysis 79

Overview

CBP strives to be a leader in financial management by providing high-quality, cost-efficient services through customer involvement and modern, integrated financial systems. CBP is positioning to become a shared accounting 

service provider to other DHS components. CBP’s goal is to continuously develop and implement more effective 

and efficient methods to obtain, manage, and deliver the financial resources, capital assets, and financial services 

required to meet or exceed the needs of customers and stakeholders. Because CBP is also a revenue-collection 

agency, it is imperative that it accurately identify amounts owed to CBP and efficiently and effectively collect, 

report, and account for revenue.

Providing top-quality financial management services includes translating workloads and requirements into budget 

requests for needed resources; allocating and distributing funds after resources are made available; acquiring and 

distributing goods and services used to accomplish the CBP mission; managing and paying for those goods and 

services; and reporting on the costs and use of personnel, goods, and services.

For FY 2012, SAP financial software continues to be used by CBP. SAP is an Enterprise Resource Planning (ERP) 

solution that integrates budget formulation, budget execution, acquisition through the disposal of assets, requisition through payment, billing to collection of receivables, and business intelligence. SAP integrates business processes and reporting within one system, thereby eliminating unnecessary data entry, ensuring data accuracy, and 

enabling single system reporting and analytical reporting. SAP ensures that CBP complies with Federal Government 

standards and regulations for financial management systems. This single integrated solution supports all program 

types eliminating data redundancy and inefficiencies.

Overview of the Financial Statements

The financial statements and footnotes appear in the “Financial Section” of this report on pages 96 through 140. 

The financial statements have been audited by the independent auditor engaged by the DHS OIG, KPMG LLP, who 

determined that the financial statements are fairly presented in accordance with GAAP.

Consolidated Balance Sheet

The Consolidated Balance Sheet presents the property owned by CBP (assets), amounts owed by CBP (liabilities), 

and the amounts of the difference (net position). As of September 30, 2012, total assets were $15.9 billion, a 

2 percent decrease from FY 2011.

Financial Management
80 U.S. Customs and Border Protection • Performance and Accountability Report

Fund Balance with Treasury

39%

Other

4%

Duties & Trade 

Receivables

17%

Property, Plant & Equipment

40%

2012 Assets

Fund Balance with Treasury

43%

Other

3%

Duties & Trade 

Receivables

17%

Property, Plant & Equipment

37%

2011 Assets

2012 Liabilities

Accounts Payable

8%

Injured Domestic 

Industries

2%

Payroll & Benefits

27%

Due to the General Fund

46%

Other

14%

Refunds Payable

3%

2011 Liabilities

Accounts Payable

11%

Injured Domestic 

Industries

7%

Payroll & Benefits

24%

Due to the General Fund

43%

Other

13%

Refunds Payable

2%

As of September 30, 2012, total liabilities were $6.1 billion, a decrease of 6 percent over FY 2011. The assets and 

liabilities charts present a comparison of the major categories as a percentage of the totals for FY 2012 and FY 2011.

Consolidated Statement of Net Cost

The Consolidated Statement of Net Cost presents the net cost of the major CBP programs as they relate to the goals 

of the 2009–2014 Strategic Plan. The gross cost less any offsetting revenue for each program equals net cost of 

operations. Net cost of operations was $12.3 billion.

Financial Management
81

Facilitation at the Ports of Entry

52%

Border Security 

& Control

37%

Air & Marine Operations

6%

2012 Net Program Costs

Border Security Fencing, 

Infrastructure & Technology

3%

Automation 

Modernization

2%

Facilitation at the Ports of Entry

53%

Border Security 

& Control

40%

Air & Marine Operations

5%

2011 Net Program Costs

Border Security Fencing, 

Infrastructure & Technology

< 1%

Automation 

Modernization

2%

Consolidated Statement of Changes in Net Position

The Consolidated Statement of Changes in Net Position represents those accounting transactions that caused the 

net position of the balance sheet to change from the beginning to the end of the reporting period. CBP’s net cost 

of operations serves to reduce the net position. Appropriations used totaled $8.4 billion, representing 66 percent 

of CBP’s total financing sources. CBP collected and retained $3.5 billion of non-exchange revenue, amounting to 

27 percent of total financing sources, which was used to fund CBP operations.

Combined Statement of Budgetary Resources

The Combined Statement of Budgetary Resources illustrates how budgetary resources were made available, as well 

as their status at the end of FY 2012. CBP had $17.2 billion in budgetary resources, of which $1.3 billion were 

unobligated. CBP incurred obligations of $15.9 billion and recorded $16.1 billion in gross outlays by the end of 

the Fiscal Year.

Consolidated Statement of Custodial Activity

The Consolidated Statement of Custodial Activity presents non-entity (financial activity conducted by CBP on 

behalf of others) revenue and refunds using a modified cash basis. This method reports revenue from cash collections separately from receivable accruals, and cash disbursements are reported separately from payable accruals. 

The custodial revenue, using the modified cash basis, for FY 2012 was $35.6 billion.

Financial Management

Management’s Discussion and Analysis
82 U.S. Customs and Border Protection • Performance and Accountability Report

Duties

86%

User Fees

4%

2012 Custodial Cash Collections

Excise Taxes

9%

Other

1%

Duties

86%

User Fees

4%

2011 Custodial Cash Collections

Excise Taxes

9%

Other

1%

Limitations of the Financial Statements

The principal financial statements have been prepared to report the financial position and results of the operations 

of CBP, pursuant to the requirements of 31 U.S.C. 3515(b). While the financial statements have been prepared from 

the books and records of CBP in accordance with GAAP for Federal entities and the formats prescribed by OMB, 

the statements are in addition to the financial reports used to monitor and control budgetary resources, which are 

prepared from the same books and records.

The financial statements should be read with the realization that they are a component of the U.S. Government, a 

sovereign entity.

Financial Management
Performance Section

This section provides information on CBP’s progress in achieving performance goals and objectives.
84 U.S. Customs and Border Protection • Performance and Accountability Report

Performance Summary

The charts below highlight CBP’s success in achieving Fiscal Year 2012 performance goals. The performance 

measures are established as an integral part of CBP’s Missions, Goals, and Priorities, FY 2011–2013 document, the 

Quadrennial Homeland Security Review, and the DHS Future Years Homeland Security Program (FYHSP). The 

measurement data is collected through various systems and methods and then entered into the FYHSP System for 

tracking and compiling for management decision-making and year-end reporting.

CBP FY 2012 GPRA Measures Status

Target Not Met

80%

Target Met

20%

Security, threat, and risk analyses often necessitate changes in the agency’s focus. CBP performance measures continue to evolve to better reflect operational functions and alignment with critical missions.

For Fiscal Year 2012, CBP has 10 GPRA performance measures that support CBP’s Missions, Goals, and Priorities, 

FY 2011–2013 document. Of the 10 performance measures, 2 were met and 8 were not met. The performance 

data presented in this report is in accordance with the guidance provided by OMB. The data integrity discussion 

in the “Systems and Controls” section of the “Management’s Discussion and Analysis” (page 77) describes CBP’s 

commitment to providing quality and timely performance information to increase its value to CBP management 

and interested parties. CBP managers routinely use this data to improve the quality of program management and 

demonstrate accountability of program results.
85

Performance Summary

Individual Performance Measure Results

This section describes CBP’s Fiscal Year 2012 results for each GPRA performance measure by the CBP Mission Set 

and performance objective they support. Although some of the performance measures may relate to more than one 

performance objective, each performance measure was aligned under the single objective considered most relevant 

or meaningful. Discussions of the key performance measures can be found in the “Management’s Discussion and 

Analysis” section under “Performance Goals and Results,” beginning on page 66.

Mission Set 1: Securing America’s Borders

Performance Objective—Secure the U.S. border in areas deemed as high priority for terrorist threat potential or 

other national security objectives.

The measures aligned to this Mission Set are focused on showing CBP’s effectiveness in securing the border and 

achieving the Mission Set’s performance objective. For example, there is a correlation between the “Number 

of apprehensions on the Southwest Border between the ports of entry” and the number of unlawful migrants 

attempting to cross the Southwest Border. By effectively utilizing a combination of additional personnel, technology, and infrastructure, delivering appropriate consequences to repeat offenders, and leveraging partnerships, CBP 

can decrease the “Number of apprehensions on the Southwest Border between the ports of entry” and ultimately 

decrease the number of unlawful migrants attempting to cross the Southwest Border as a result of deterrence. CBP 

is also screening southbound vehicle traffic for the illegal weapons and cash that are helping fuel the cartel violence in Mexico. The “Amount of currency seized on exit from the United States” and the “Number of weapons 

seized on exit from the United States” show the results of CBP’s efforts in this area.

Performance Measure—Number of apprehensions on the Southwest Border between the ports of entry.

Explanation 

of FY 2012 

Results

Target Met—See page 68 for results and detailed discussion.

Performance Measure—Amount of currency seized on exit from the United States.

Explanation 

of FY 2012 

Results

Target Not Met—See page 69 for results and detailed discussion.

Performance Section
86 U.S. Customs and Border Protection • Performance and Accountability Report

Performance Measure—Number of weapons seized on exit from the United States.

Description This measure provides the total number of illegal weapons seized during outbound inspection of 

exiting passengers and vehicles, both privately-owned and commercial.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A 2,200 2,100

Actual N/A N/A N/A 1,987 649

Explanation 

of FY 2012 

Results

Target Not Met—The target for FY 2012 was based upon previous year’s seizures, which included 

a large number of commercial shipper weapon seizures that did not meet firearms compliance 

requirements. Due to continuing outbound enforcement operations, together with outreach to 

shippers to clarify requirements, firearms seizures related to commercial shipper non-compliance 

have been substantially reduced and commercial firearms shippers are now considerably more 

compliant. This resulted in a significant drop in outbound-related firearms seizures.

Recommended 

Action

CBP will continue to conduct risk-based outbound enforcement operations to identify and seize 

weapons being transported out of the country illegally and work with other law enforcement 

agencies and both local and international partners to identify and disrupt outbound 

smuggling activities.

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

2,500

0

1,000

2,000

1,500

500

Target

Actual

Number of Weapons Seized on Exit from the United States

Number of 

Weapons 

Seized

2,200

1,987

2,100

649

Performance Summary
87

Performance Measure—Percent of detected conventional aircraft incursions resolved along all borders of 

the United States.

Description

The measure represents the percent of conventional aircraft, once detected visually or by radar 

that are suspected of illegal cross-border activity and are brought to a successful law enforcement 

resolution. In some cases, Office of Air and Marine (OAM) assets are launched to interdict the 

aircraft. In most cases, resolution of the aircraft identity is made by the Air and Marine Operations 

Center (AMOC) working with interagency partners such as the Federal Aviation Administration 

(FAA). If the incursion is deemed legal, OAM considers the incursion resolved. If not resolved, 

AMOC—working with our partners including OAM assets—could not identify the target and is thus 

considered illegal.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A 100.00% 100.00%

Actual N/A N/A N/A 95.30% 96.04%

Explanation 

of FY 2012 

Results

Target Not Met—In FY 2012, there were conventional aircraft detected and classified as border 

incursions of which most were resolved. Some incursions were not resolved due to the difficulty in 

resolving incursions visually identified versus being tracked by radar.

Recommended 

Action

The Air and Marine program will continue to evaluate and improve tactics, techniques, and 

procedures to track and resolve visually-detected incursions in order to bring individuals that commit 

illegal incursions to a successful law enforcement resolution.

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

100%

85%

95%

90%

80%

Target

Actual

Percent of Detected Conventional Aircraft Incursions Resolved 

Along All Borders of the United States

Percent of 

Detected 

Incursions 

Resolved

100%

96.04%

95.3%

Performance Summary

Performance Section
88 U.S. Customs and Border Protection • Performance and Accountability Report

Mission Set 2: Securing and Expediting the Movement of People and the 

Flow of Goods

Performance Objective—Improve the targeting, screening, and apprehension or seizure of high-risk international 

travelers and cargo away from the physical border in order to prevent terrorist attacks and criminal activity while 

expediting the processing of legitimate travelers and cargo.

The measures aligned to this Mission Set are focused on showing CBP’s effectiveness in preventing terrorist attacks 

and criminal activity while expediting the flow of people and goods. In order to achieve the performance objective, CBP has established several programs and initiatives. Established in 2001, Customs-Trade Partnership Against 

Terrorism (C-TPAT) is a voluntary government-business initiative to build cooperative relationships that strengthen 

and improve overall international supply chain and U.S. border security. By C-TPAT members complying with 

established security standards, CBP can expedite members’ shipments and focus on screening high-risk cargo. 

The “Compliance rate for Customs-Trade Partnership Against Terrorism (C-TPAT) members with the established 

C-TPAT security guidelines” shows the percent of C-TPAT members that were in compliance with the established 

security standards during their periodic validation.

CBP has also established the Container Security Initiative (CSI), which is intended to prevent and deter terrorist use 

of maritime containers while facilitating the movement of legitimate trade. CSI Officers at the foreign ports identify containers that pose a potential threat for terrorism. Once identified, CSI host government officers examine 

those containers identified as posing a potential risk at the foreign port while our CBP Officers observe. CSI allows 

the removal or mitigation of high-risk cargo from the supply chain prior to it entering the U.S. and decreases the 

associated costs to the U.S. by partnering with host nations. The “Percent of requested cargo examinations conducted at foreign ports of origin in cooperation with host nations under the Container Security Initiative” demonstrates the success CBP has had in mitigating potential threats away from the physical border of the U.S.

In addition, CBP has established revenue collection as a Priority Trade Issue (PTI). CBP collects over $30 billion 

annually, the second largest revenue generator for the U.S. Government. To avoid the full payment of lawfully 

owed duties and fees to the U.S. Government, importers are prone to use a variety of circumvention schemes. The 

“Percent of revenue directed by trade laws, regulations, and agreements successfully collected” shows how effective CBP was in the past year in collecting the revenue that was due to the U.S.

Performance Summary
89

Performance Measure—Compliance rate for Customs-Trade Partnership Against Terrorism (C-TPAT) members 

with the established C-TPAT security guidelines.

Description

This measure provides the overall compliance rate achieved for all validations performed during 

the Fiscal Year. After acceptance into the Customs-Trade Partnership Against Terrorism (C-TPAT) 

program, all C-TPAT members must undergo a periodic validation in which U.S. Customs and Border 

Protection (CBP) examiners visit company locations and verify compliance with an industry-specific 

set of CBP security standards and required security practices. These validations are prepared using 

a weighted scoring system that is used to develop an overall compliance rate for each company. 

Compliance with security guidelines enhances the security of cargo shipped to the U.S.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target 95.50% 99.00% 95.00% 100.00% 100.00%

Actual 99.90% 97.50% 97.80% 95.10% 94.50%

Explanation 

of FY 2012 

Results

Target Not Met—The overall compliance rate decreased after a number of companies were suspended 

or removed due to the implementation of strengthened C-TPAT security criteria, including new 

suspension and removal guidelines and increased management oversight.

Recommended 

Action

C-TPAT is working with partner companies to explain the enhanced security criteria and ensure they 

understand the validation requirements.

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

100.0%

90.0%

94.0%

98.0%

96.0%

92.0%

Target

Actual

Compliance Rate for Customs-Trade Partnership Against Terrorism (C-TPAT) Members

with the Established C-TPAT Security Guidelines

Compliance 

Rate for 

C-TPAT 

Members

100.0%

95.1%

97.8% 97.5%

99.9%

95.0%

99.0%

95.5%

94.5%

Performance Summary

Performance Section
90 U.S. Customs and Border Protection • Performance and Accountability Report

Performance Measure—Percent of revenue directed by trade laws, regulations, and agreements 

successfully collected.

Description

This measure estimates the collected duties expressed as a percent of the all collectable revenue due 

from commercial imports to the United States directed by trade laws, regulations, and agreements. 

The total collectable revenue is defined as total collection plus the estimated net under collection (also 

called revenue gap or loss) due to non-compliance with U.S. trade laws and regulations. The revenue 

gap is a calculation of uncollected duties based on statistical sampling, expressed as both a dollar 

estimate and a percent of under collections.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A N/A 100.00% 100.00%

Actual N/A N/A N/A 99.12% 98.88%

Explanation 

of FY 2012 

Results

Target Not Met—During the random sample review process, CBP found classification errors that 

resulted in a reduction of revenue collected.

Recommended 

Action CBP will target importers to ensure shipments are classified correctly.

Target

Actual

Percent of Revenue Directed by Trade Laws, Regulations, and Agreements 

Successfully Collected

Percent of 

Revenue 

Successfully 

Collected

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

100%

90%

95%

100%

99.12%

98.88%

Performance Summary
91

Performance Measure—Percent of imports compliant with applicable U.S. trade laws.

Description This measure reports the percent of imports that are compliant with U.S. trade laws including 

customs revenue laws.

Key Highlights

Fiscal Year FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Target N/A N/A 98.00% 98.00% 98.00%

Actual N/A N/A 98.89% 97.67% 96.46%

Explanation 

of FY 2012 

Results

Target Not Met—During the random sample review process, CBP found classification errors by 

importers that resulted in a reduced compliance rate.

Recommended 

Action CBP will target importers to ensure shipments are classified correctly.

Target

Actual

Percent of Imports Compliant with Applicable U.S. Trade Laws

Percent of 

Imports 

Compliant

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

100.00%

90.00%

95.00%

98.00%

97.67%

98.89%

96.46%

Performance Measure—Percent of requested cargo examinations conducted at foreign ports of origin in 

cooperation with host nations under the Container Security Initiative.

Explanation 

of FY 2012 

Results

Target Not Met—See page 71 for results and detailed discussion.

Performance Summary

Performance Section
92 U.S. Customs and Border Protection • Performance and Accountability Report

Performance Measure—Percent of cargo by value imported to the U.S. by participants in CBP trade 

partnership programs.

Explanation 

of FY 2012 

Results

Target Met—See page 72 for results and detailed discussion.

Performance Measure—Percent of inbound high-risk cargo transported by air, land, or sea that has been 

screened and entry status is resolved prior to or during processing at a United States 

port of entry.

Explanation 

of FY 2012 

Results

Target Not Met—See page 73 for results and detailed discussion.

Mission Set 3: Sustaining Investment in People and Capabilities

Performance Objective—Improve mission effectiveness and efficiency by integrating, unifying, and leveraging 

resources to support CBP’s operational offices.

While the activities that fall under this Mission Set are important to CBP’s success, CBP does not have GPRA or 

Strategic measures that align to this Mission Set due to the mission support nature of its activities. Operational 

measures exist within this Mission Set and are used in internal decision-making processes.

Performance Summary
Financial Section

This section presents CBP’s audited comparative financial statements, related note disclosures, and Independent 

Auditors’ Report.
94 U.S. Customs and Border Protection • Performance and Accountability Report

U.S. Customs and Border Protection (CBP) has been working diligently to provide citizens with timely, reliable, and useful financial management information that facilitates intelligent decision-making and effective stewardship 

of the resources entrusted to our organization. The Office of Administration 

stands with other offices in CBP to help accomplish the agency’s mission by 

providing the resources and facilities necessary to ensure mission success.

The purpose of this report is to provide a comprehensive assessment of our 

Agency’s financial performance, and to provide an accounting for our stewardship of resources entrusted to CBP to support our mission of securing the borders of the United States. These stewardship-related responsibilities continue 

to evolve in response to the changing fiscal environment and new strategic priorities, as well as the ever-present drive to improve our processes. To address 

these changes and more closely link budgeting with performance, CBP has begun transitioning to the Planning, 

Programming, Budgeting, and Accountability (PPBA) process, and has re-conceptualized its mission programs in 

terms of Lines of Business.

CBP has continued our efforts to achieve a balanced workforce, realize cost savings, and close critical workforce 

gaps. These programs promote efficiencies and savings across CBP that save taxpayer dollars and allow maximal 

use of CBP’s funds in support of our mission.

I can provide reasonable assurance that the objectives of Section 2 (Management Controls) and Section 4 (Financial 

Management Systems) of the Federal Managers’ Financial Integrity Act have been achieved. CBP still has room 

for improvement. We are correcting issues identified by internal management evaluations in support of CBP’s 

Management Assurance, as well as auditor-identified weakness in internal controls. CBP is committed to addressing all of our financial management challenges by continuing to implement corrective measures that improve our 

oversight and accountability.

CBP continues to correct issues identified by the Financial Statement Audit as well as other weaknesses identified 

through Governments Accountability Office (GAO), Department of Homeland Security Office of Inspector General 

(OIG) or internal management evaluations. CBP’s most challenging control deficiencies relate to issues involving custodial revenue and drawback. These issues cannot be resolved without legislative changes and/or system 

enhancements. However, CBP continues to develop and implement compensating controls in the areas where 

these limitations exist.

Message from the Chief Financial Officer
95

None of this could be accomplished without the diligent work of employees across CBP whose attention to detail 

and devotion to duty allow us to maintain our high standards of financial stewardship. Our goal remains to provide timely, reliable, and useful financial management information to Congress and the American public, and to 

enable the managers across CBP to make informed business decisions.

Deborah J. Schilling, Chief Financial Officer

U.S. Customs and Border Protection

Message from the Chief Financial Officer

Financial Section
96 U.S. Customs and Border Protection • Performance and Accountability Report

Financial Statements

Introduction

The financial statements have been audited by the independent auditor engaged by the DHS OIG, KPMG LLP, who 

determined that the financial statements are fairly presented in accordance with GAAP.

•	 The Consolidated Balance Sheets present the property owned by CBP (assets), amounts owed by CBP (liabilities), and the amounts of the difference (net position).

•	 The Consolidated Statements of Net Cost present the net cost of the major CBP programs as they relate to the 

goals of the 2009–2014 Strategic Plan.

•	 The Consolidated Statements of Changes in Net Position represent those accounting transactions that caused 

the net position of the balance sheet to change from the beginning to the end of the reporting period. CBP’s 

net cost of operations serves to reduce the net position.

•	 The Combined Statements of Budgetary Resources illustrate how and in what amounts budgetary resources 

were made available, as well as their status at the end of FY 2012.

•	 The Consolidated Statements of Custodial Activity present non-entity (financial activity conducted by CBP 

on behalf of others) revenue and refunds using a modified cash basis.
97

Financial Statements

Financial Section

U.S. Customs and Border Protection

Consolidated Balance Sheets

As of September 30, 2012 and 2011

(in Thousands)

2012 2011

ASSETS (Note 2) 

Intra-governmental:

Fund Balance with Treasury (Note 3) $ 6,248,505 $ 6,991,419

Accounts Receivable 17,788 14,519

Advances and Prepayments (Note 11) 175,601 155,073

Total Intra-governmental $ 6,441,894 $ 7,161,011

Cash and Other Monetary Assets (Note 4) 3,632 4,172

Accounts Receivable, Net (Note 5) 202,180 142,977

Taxes, Duties and Trade Receivables, Net (Note 6) 2,700,465 2,731,765

Inventory and Related Property, Net (Note 7) 190,712 171,785

General Property, Plant and Equipment, Net (Note 9) 6,337,045 6,022,928

Other Assets (Note 11) 233 79

TOTAL ASSETS $ 15,876,161 $ 16,234,717

Stewardship PP&E (Note 10)

LIABILITIES (Note 12)

Intra-governmental:

Accounts Payable $ 238,091 $ 299,955

Other

Due to the Treasury General Fund 2,783,682 2,817,065

Accrued FECA Liability (Note 12) 153,378 147,352

Other Employment Liabilities (Note 12) 674 2,076

Employee Benefits and Taxes 119,128 110,827

Advances From Others 2,024 8,531

Total Intra-governmental $ 3,296,977 $ 3,385,806

Accounts Payable 241,941 388,033

Environmental & Disposal Liabilities (Notes 12 and 14) 17,610 16,472

Other

Accrued Payroll and Benefits (Note 13) 1,638,595 1,572,106

Refunds Payable (Note 15) 176,910 131,413

Injured Domestic Industries (Note 15) 140,374 431,545

Liabilities for Deposit Accounts & Antidumping/Countervailing Duties 203,369 155,667

Legal Contingent Liabilities (Note 17) 374,452 386,266

TOTAL LIABILITIES $ 6,090,228 $ 6,467,308

Commitments and Contingencies (Note 17)

NET POSITION:

Unexpended Appropriations 3,809,738 4,253,612

Cumulative Results of Operations – Earmarked Funds (Note 18) 434,672 1,000,085

Cumulative Results of Operations – Other Funds 5,541,523 4,513,712

TOTAL NET POSITION $ 9,785,933 $ 9,767,409

TOTAL LIABILITIES AND NET POSITION $ 15,876,161 $ 16,234,717

The accompanying notes are an integral part of these financial statements.
98 U.S. Customs and Border Protection • Performance and Accountability Report

Financial Statements

U.S. Customs and Border Protection

Consolidated Statements of Net Cost

For the Years Ended September 30, 2012 and 2011

(in Thousands)

2012 2011

Office of Field Operations Border Security Inspections and 

Trade Facilitation at Ports of Entry 

Gross Cost $ 6,609,914 $ 6,519,881

Less: Earned Revenue 161,474 155,789

Net Program Costs $ 6,448,440 $ 6,364,092

Border Security and Control Between Ports of Entry

Gross Cost 4,634,941 4,887,323

Less: Earned Revenue 110,197 116,780

Net Program Costs $ 4,524,744 $ 4,770,543

Border Security Fencing, Infrastructure and Technology

Gross Cost 362,052 91,204

Less: Earned Revenue 167 2,179

Net Program Costs $ 361,885 $ 89,025

Automation Modernization

Gross Cost 315,615 218,644

Less: Earned Revenue (1) 5,224

Net Program Costs $ 315,616 $ 213,420

Air and Marine Operations

Gross Cost 700,205 607,865

Less: Earned Revenue 6,296 14,524

Net Program Costs $ 693,909 $ 593,341

Total Gross Cost 12,622,727 12,324,917

Less: Total Earned Revenue 278,133 294,496

Net Cost of Operations (Notes 19 and 20) $ 12,344,594 $ 12,030,421

The accompanying notes are an integral part of these financial statements.
99

Financial Statements

Financial Section

The accompanying notes are an integral part of these financial statements.

U.S. Customs and Border Protection

Consolidated Statement of Changes In Net Position

For the Year Ended September 30, 2012

(in Thousands)

FY 2012

Earmarked Funds All Other Funds Consolidated 

Total

Cumulative Results of Operations:

Beginning Balances $ 1,000,085 $ 4,513,712 $ 5,513,797

Adjustment:

Change in Accounting Principle (Note 22) (639,940) 639,940 --

Beginning Balances, as adjusted 360,145 5,153,652 5,513,797 

Budgetary Financing Sources:

Appropriations Used -- 8,390,572 8,390,572

Non-exchange Revenue (Note 21) 573,856 8,340 582,196

Transfers In/Out Without Reimbursement (Note 21) (2,218,859) 2,459,986 241,127

Other Financing Sources (Non-exchange):

Transfers In/Out Without Reimbursement -- 60,926 60,926

Imputed Financing -- 645,076 645,076

Other (Note 21) 2,851,583 35,512 2,887,095

Total Financing Sources $ 1,206,580 $ 11,600,412 $ 12,806,992

Net Cost of Operations (1,132,053) (11,212,541) (12,344,594)

Net Change $ 74,527 $ 387,871 $ 462,398

Cumulative Results of Operations $ 434,672 $ 5,541,523 $ 5,976,195

Unexpended Appropriations:

Beginning Balance $ -- $ 4,253,612 $ 4,253,612

Budgetary Financing Sources:

Appropriations Received (Note 24) -- 8,051,909 8,051,909

Appropriations Transferred In/Out -- 5,770 5,770

Other Adjustments -- (110,981) (110,981)

Appropriations Used -- (8,390,572) (8,390,572)

Total Budgetary Financing Sources $ -- $ (443,874) $ (443,874)

Total Unexpended Appropriations $ -- $ 3,809,738 $ 3,809,738

Net Position $ 434,672 $ 9,351,261 $ 9,785,933
100 U.S. Customs and Border Protection • Performance and Accountability Report

Financial Statements

U.S. Customs and Border Protection

Consolidated Statement of Changes In Net Position

For the Year Ended September 30, 2011

(in Thousands)

FY 2011

Earmarked Funds All Other Funds Consolidated 

Total

Cumulative Results of Operations:

Beginning Balances $ 890,204 $ 4,236,068 $ 5,126,272

Budgetary Financing Sources:

Appropriations Used -- 8,825,940 8,825,940

Non-exchange Revenue (Note 21) 497,951 7,730 505,681

Transfers In/Out Without Reimbursement (Note 21) (1,666,692) 1,864,347 197,655

Other Financing Sources (Non-exchange):

Transfers In/Out Without Reimbursement -- 40,556 40,556

Imputed Financing -- 710,128 710,128

Other (Note 21) 2,208,076 (70,090) 2,137,986

Total Financing Sources $ 1,039,335 $ 11,378,611 $ 12,417,946

Net Cost of Operations (929,454) (11,100,967) (12,030,421)

Net Change $ 109,881 $ 277,644 $ 387,525

Cumulative Results of Operations $ 1,000,085 $ 4,513,712 $ 5,513,797

Unexpended Appropriations:

Beginning Balance $ -- $ 5,104,867 $ 5,104,867

Budgetary Financing Sources:

Appropriations Received (Note 24) -- 8,341,154 8,341,154

Appropriations Transferred In/Out -- 6,196 6,196

Other Adjustments -- (372,665) (372,665)

Appropriations Used -- (8,825,940) (8,825,940)

Total Budgetary Financing Sources $ -- $ (851,255) $ (851,255)

Total Unexpended Appropriations $ -- $ 4,253,612 $ 4,253,612

Net Position $ 1,000,085 $ 8,767,324 $ 9,767,409

The accompanying notes are an integral part of these financial statements.
101

Financial Statements

Financial Section

U.S. Customs and Border Protection

Combined Statements of Budgetary Resources

For the Years Ended September 30, 2012 and 2011

(in Thousands)

2012 2011

Budgetary Resources:

Unobligated balance, brought forward, October 1 $ 2,268,372 $ 2,646,476

Adjustment to unobligated balance brought forward, October 1 (Note 22) (639,940) -- 

Unobligated balance brought forward, October 1, as adjusted $ 1,628,432 $ 2,646,476

Recoveries of prior year unpaid obligations 351,236 607,416

Other changes in unobligated balance (93,385) (78,518)

Unobligated balance from prior year budget authority, net $ 1,886,283 $ 3,175,374

Appropriations (Note 24) 13,719,063 12,362,539

Spending authority from offsetting collections 1,618,346 1,458,775

Total Budgetary Resources $ 17,223,692 $ 16,996,688

Status of Budgetary Resources:

Obligations incurred (Note 23) $ 15,912,828 $ 14,728,316

Unobligated balance, end of year:

Apportioned 638,510 627,800

Unapportioned 672,354 1,640,572

Total unobligated balance, end of year $ 1,310,864 $ 2,268,372

Total Status of Budgetary Resources $ 17,223,692 $ 16,996,688

Change in Obligated Balance:

Unpaid obligations, brought forward, October 1 (gross) $ 4,713,167 $ 5,061,440

Uncollected customer payments from Federal sources, 

brought forward, October 1 (163,896) (172,288)

Obligated balance, start of year (net), before adjustments $ 4,549,271 $ 4,889,152

Obligated balance, start of year (net), as adjusted $ 4,549,271 $ 4,889,152

Obligations incurred (Note 23) 15,912,828 14,728,316

Outlays (gross) (16,117,279) (14,469,173)

Change in uncollected customer payments from Federal sources 1,276 8,392

Recoveries of prior year unpaid obligations (351,236) (607,416)

Obligated balance, end of year

Unpaid obligations, end of year (gross) 4,157,480 4,713,167

Uncollected customer payments from Federal sources, end of year (162,620) (163,896)

Obligated balance, end of year (net) $ 3,994,860 $ 4,549,271

Budget Authority and Outlays, Net:

Budget authority, gross $ 15,337,409 $ 13,821,314

Actual offsetting collections (1,619,622) (1,467,167)

Change in uncollected customer payments from Federal sources 1,276 8,392

Budget authority, net $ 13,719,063 $ 12,362,539

Outlays, gross $ 16,117,279 $ 14,469,173

Actual offsetting collections (1,619,622) (1,467,167)

Outlays, net $ 14,497,657 $ 13,002,006

Distributed offsetting receipts (3,499,993) (2,764,695)

Agency outlays, net $ 10,997,664 $ 10,237,311

The accompanying notes are an integral part of these financial statements.
102 U.S. Customs and Border Protection • Performance and Accountability Report

U.S. Customs and Border Protection

Consolidated Statements of Custodial Activity

For the Years Ended September 30, 2012 and 2011

(in Thousands)

2012 2011

Revenue Activity (Note 28):

Sources of Cash Collections:

Duties $ 30,532,909 $ 29,253,905 

User Fees 1,583,511 1,513,925

Excise Taxes 3,104,632 2,893,631

Fines and Penalties 61,597 62,163

Interest 58,422 48,540

Miscellaneous 137,582 114,375

Total Cash Collections $ 35,478,653 $ 33,886,539

Accrual Adjustments (+/-) 149,686 351,197

Total Custodial Revenue $ 35,628,339 $ 34,237,736

Disposition of Collections:

Transferred to Others:

Treasury General Fund Accounts $ 22,114,679 $ 20,960,680 

U.S. Department of Agriculture 9,344,681 9,869,544

U.S. Army Corps of Engineers 1,539,799 1,469,109

Other Federal Agencies 87,683 66,635

Government of Puerto Rico 14,615 7,369

Government of the U.S. Virgin Islands -- 1,946

Non-Federal Other 119,976 111,370

(Increase)/Decrease in Amounts Yet to be Transferred 156,437 403,455

Refunds and Drawbacks (Note 28) 2,250,469 1,347,628

Total Disposition of Collections $ 35,628,339 $ 34,237,736

Net Custodial Activity $ -- $ --

The accompanying notes are an integral part of these financial statements.

Financial Statements
Financial Section 103

1. Significant Accounting Policies

Reporting Entity

U.S. Customs and Border Protection (CBP) was created on March 1, 2003, and is a component of the U.S. Department 

of Homeland Security (DHS). CBP is the unified border agency whose priority mission is the prevention of terrorists and terrorists’ weapons from entering the U.S. In addition to its priority mission, CBP works to protect 

America and its citizens by carrying out its traditional missions more effectively using innovative approaches. 

These traditional missions include enforcing United States trade, immigration and other laws at the borders. 

Trade-related mission activities include protecting American businesses from theft of their intellectual property 

and unfair trade practices; regulating and facilitating international trade; collecting import duties; enforcing trade 

laws related to admissibility; regulating trade practices to collect the appropriate revenue; and maintaining export 

controls. Other traditional missions include controlling the borders by apprehending individuals attempting to 

enter the United States illegally; stemming the flow of illegal drugs and other contraband; protecting agriculture 

and economic interests from harmful pests and diseases; processing all people, vehicles and cargo entering the 

United States; and coordinating with the Department of Defense and others to protect the National Capital Region.

Substantially all duty, tax, and fee revenues collected by CBP are remitted to various general fund accounts maintained by the U.S. Department of the Treasury (Treasury), U.S. Department of Agriculture, and U.S. Army Corps 

of Engineers. Treasury further distributes these revenues to other Federal agencies in accordance with various laws 

and regulations. CBP transfers the remaining revenue (generally less than 1 percent of revenues collected) directly 

to other Federal agencies, the Government of Puerto Rico and the U.S. Virgin Islands. Refunds of revenues collected from import/export activity are recorded in separate accounts established for this purpose and are funded 

through a permanent indefinite appropriation. These activities reflect the non-entity or custodial responsibilities 

that CBP, as an agency of the Federal Government, has been authorized by law to enforce.

During Fiscal Year (FY) 2009, CBP received funding under the American Recovery and Reinvestment Act. This 

funding was available for obligation during FY 2009 and 2010. This funding was for the procurement and deployment of non-intrusive inspection systems, tactical communications equipment and radios; expedited development 

and deployment of border security technology on the Southwest border; and for planning, management, design, 

alteration and construction of CBP owned land border ports of entry.

Basis of Accounting and Presentation

These financial statements have been prepared from CBP accounting records in conformity with generally 

accepted accounting principles (GAAP). The Federal Accounting Standards Advisory Board (FASAB), which was 

designated the official accounting standard-setting body of the Federal Government by the American Institute 

of Certified Public Accountants, is responsible for identifying the GAAP hierarchy for Federal reporting entities. 

FASAB has identified the hierarchy to be used in Statement of Federal Financial Accounting Standards (SFFAS) 34, 

Notes to Financial Statements
104 U.S. Customs and Border Protection • Performance and Accountability Report

The Hierarchy of Generally Accepted Accounting Principles, including the Application of Standards Issued by the Financial 

Accounting Standards Board.

The statements consist of the Consolidated Balance Sheet, Consolidated Statement of Net Cost, Consolidated 

Statement of Changes in Net Position, Combined Statement of Budgetary Resources, and Consolidated Statement 

of Custodial Activity. All statements are prepared in accordance with Office of Management and Budget (OMB) 

Circular A-136. In FY 2012, changes to the presentation of the Combined Statements of Budgetary Resources were 

made, in accordance with guidance provided in OMB Circular A-136 and as such, activity and balances reported 

on the FY 2011 Combined Statements of Budgetary Resources have been reclassified to conform to the presentation 

in the current year.

These financial statements should be read with the understanding that CBP is a component of a sovereign entity; 

for which budgetary resources cannot be liquidated without the enactment of an appropriation, and that payment 

of liabilities other than for contracts can be abrogated by the sovereign entity.

These financial statements, with respect to the Consolidated Balance Sheet, Consolidated Statement of Net Cost 

and Consolidated Statement of Changes in Net Position, are reported using the accrual basis of accounting. Under 

the accrual basis of accounting, revenues are recognized when earned and expenses are recognized when a liability is incurred without regard to receipt or payment of cash. The Combined Statement of Budgetary Resources 

is reported using the budgetary basis of accounting. Budgetary accounting facilitates compliance with legal constraints and controls over the use of Federal funds. It generally differs from the accrual basis of accounting in that 

obligations are recognized when new orders are placed, contracts awarded and services received that will require 

payments during the same or future period. CBP non-entity revenue and refunds are reported on the Consolidated 

Statement of Custodial Activity using a modified cash basis. With this method, revenue from cash collections are 

reported separately from receivable accruals and cash disbursements are reported separately from payable accruals.

In accordance with OMB Circular A-136, intra-CBP transactions and balances have been eliminated from the 

Consolidated Balance Sheet, Consolidated Statement of Net Cost, and the Consolidated Statement of Changes in Net 

Position. As provided for by OMB Circular A-136, the Combined Statement of Budgetary Resources is presented on 

a combined basis; therefore, intra-CBP transactions and balances have not been eliminated from this statement.

Earmarked Funds

SFFAS No. 27, Identifying and Reporting Earmarked Funds, requires CBP to separate dedicated collections into two categories, earmarked and fiduciary activity. See Note 18, Earmarked Funds, for specific required disclosures related 

to CBP’s earmarked funds.

Notes to Financial Statements
Financial Section 105

Notes to Financial Statements

CBP has program management responsibility for the following earmarked funds:

Appropriation Title

70X5087 CBP - Immigration User Fees

70X5089 Land Border Inspection Fees

70X5451 Enforcement Fines Account

70X5543 International Registered Traveler

70X5595 Electronic Systems for Travel Authorization Fees

70X5694 Small Airport User Fees

70X5695 Customs User Fees Account

70X8870 Harbor Maintenance Fee Collections

Assets and Liabilities

Intra-governmental assets and liabilities result from activity with other Federal agencies. All other assets and 

liabilities result from activity with parties outside the Federal Government, such as domestic and foreign persons, 

organizations or governments.

Fund Balance with Treasury, Cash and Other Monetary Assets

Entity Fund Balance with Treasury are the amounts remaining as of September 30, 2012 and 2011 from which 

CBP is authorized to make expenditures and pay liabilities resulting from operational activity, except as restricted 

by law. Non-entity Fund Balance with Treasury represents funds available to pay refunds and drawback claims of 

duties, taxes, fees, and other non-entity amounts to be distributed to the Treasury General Fund and other Federal 

accounts in a future period.

Advances and Prepayments

Intra-governmental advances and prepayments consist of amounts paid to Federal agencies prior to CBP receipt of 

goods and services. Advances and prepayments to the public consist primarily of travel and salary advances and 

prepaid rent.

Accounts Receivable

Intra-governmental accounts receivable represent amounts due from Federal agencies. These receivables are 

expected to be fully collected. Accounts receivable from reimbursable services and user fees represent amounts 

due from non-Federal sources for services performed. By law, collections of these receivables can be credited to 

the appropriation accounts from which the related costs were paid. These receivables are net of amounts deemed 

uncollectible which are determined by considering the debtor’s current ability to pay, payment record, as well 

as the probable recovery of amounts from secondary sources, such as sureties, and an analysis of aged receivable 

activity. The user fee receivable is based on a calculated estimate using historical user fee collections.
106 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

Title 19 of the United States Code, chapter 1, section 58c, authorizes CBP, formerly known as the United States 

Customs Service, to collect user fees for services provided in connection with the processing of commercial air 

and commercial vessel passengers, loaded or partially loaded railroad cars carrying passengers or commercial 

flights arriving into the Customs territory as defined in general note 2 of the Harmonized Tariff Schedule of the 

United States (some exceptions apply).

Title 8 of the United States Code, chapter 12, subchapter II, part IX, section 1356, authorizes CBP to collect immigration user fees for inspection or pre-inspection of passengers arriving at a port of entry in the United States (as 

defined in Title 8, chapter 12, subchapter I, section 1101) aboard a commercial aircraft and commercial vessel 

(some exceptions apply). Receivables accrue for commercial airline and commercial vessel user fees on a quarterly 

basis. Payment is due any time within thirty-one days after the quarter in which the fees are collected, except 

the July and August fees collected from airline passengers shall be made ten days before the end of the fiscal year. 

Each quarterly payment shall include any collection made in the preceding quarter that was not remitted with the 

previous payment. Railroad car fees accrue on a monthly basis and the payments are due to CBP on or before the 

date that is 60 days after the applicable month.

Due to the Treasury General Fund

Due to the Treasury General Fund is the offsetting liability to non-entity collections and non-entity receivables.

Taxes, Duties, and Trade Receivables

Taxes, Duties and Trade Receivables consist of duties, user fees, fines and penalties, refunds and drawback overpayments, and interest associated with import/export activity, which have been established as a specifically identifiable, legally enforceable claim which remain uncollected as of year-end. These receivables are net of amounts 

deemed uncollectible which were determined by considering the debtor’s payment record and ability to pay, the 

probable recovery of amounts from secondary sources, such as sureties, and an analysis of aged receivable activity. CBP’s non-entity receivables are described in more detail in Note 6, Taxes, Duties and Trade Receivables, Net.

Inventory and Related Property

Inventory and Related Property consists of aircraft parts, vessel parts, Office of Technology Innovation and 

Acquisition (OTIA) parts, and CBP uniforms classified as operating materials and supplies to be used in CBP’s 

operations. Aircraft and OTIA parts and materials are recorded at average unit cost, and vessel parts and uniforms 

are recorded using the First-In-First-Out valuation method. Both methods approximate actual acquisition costs. 

When ultimately used in CBP operations, an operating expense is recorded.
Financial Section 107

Notes to Financial Statements

Seized and Forfeited Property

Prohibited seized and forfeited property results primarily from CBP criminal investigations and passenger/cargo 

processing. Seized property is not considered an asset of CBP and is not reported as such in CBP’s financial statements; however, CBP has a stewardship responsibility until disposition of the seized items are determined. Nonprohibited seized property, including monetary instruments, real property and tangible personal property of 

others in the actual or constructive possession of CBP will be transferred to the Treasury Forfeiture Fund and is not 

presented in the accompanying CBP Consolidated Balance Sheet or Note 8, Seized and Forfeited Property.

Forfeited property is property for which the title has passed to the U.S. Government. As noted above, non-prohibited forfeited property or currency become assets of the Treasury Forfeiture Fund. However, prohibited forfeited 

items, such as narcotics and firearms, are held by CBP until disposed or destroyed. In accordance with SFFAS No. 3, 

Accounting for Inventory and Related Property, analysis of changes in seized and forfeited property of prohibited items 

are disclosed in Note 8, Seized and Forfeited Property.

General Property, Plant, and Equipment

CBP capitalizes property, plant and equipment, excluding land, with an acquisition value of $50 thousand or 

greater, and a useful life of two years or greater. CBP capitalizes all land.

Expenditures for normal repairs and maintenance are charged to expense as incurred. When expenditures greater 

than $50 thousand extend an asset’s useful life they are capitalized.

Depreciation and amortization are computed using the straight line method over the estimated useful lives of the 

assets ranging from 4 to 30 years for equipment and software, 2 to 30 years for leasehold improvements, and 5 

to 40 years for buildings, structures and land improvements. Amortization of capitalized software begins on the 

date of acquisition if purchased or when the module or component has been successfully tested if contractor or 

internally developed.

Accounts Payable

A portion of the accounts payable balance related to commercial/travel activities is estimated and recorded through 

an accrual. This estimate is created using a historical ratio of subsequent disbursements to undelivered orders. The 

ratio is then applied to the year end undelivered order balance to arrive at estimated accounts payable.

Accrued Annual, Sick, and Other Leave and Compensatory Time

Annual leave, compensatory time and other leave time are accrued when earned. The accrual is presented as a 

component of the payroll and benefits liability in the Consolidated Balance Sheet and is adjusted for changes in 
108 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

compensation rates and reduced for annual leave taken. Sick leave is expensed when used. For additional information see Note 13, Accrued Payroll and Benefits.

Pension Costs, Other Retirement Benefits, and Other Post-Employment Benefits

Most CBP employees hired prior to January 1, 1984 participate in the Civil Service Retirement System (CSRS). CBP 

contributes 7 percent of base pay for regular employees, and 7.5 percent for law enforcement agents. Employees 

hired after December 31, 1983 are automatically covered by the Federal Employees’ Retirement System (FERS) and 

Social Security. A primary feature of FERS is that it offers a savings plan to which CBP automatically contributes 1 

percent of base pay and matches any employee contributions up to an additional 4 percent of base pay. For most 

employees hired after December 31, 1983, CBP also contributes the employees’ matching share for Social Security. 

For the FERS basic benefit, CBP contributes 11.9 percent of base pay for regular employees and 26.3 percent for law 

enforcement agents. The pay base for determining CBP contributions to CSRS and FERS for inspectors and canine 

officers include regular pay and up to a maximum of $17.5 thousand in certain overtime earnings for FY 2012 and 

2011. CBP recognizes the full costs of its employees’ pension benefits; however, the liability associated with these 

costs is recognized by the Office of Personnel Management (OPM).

Similar to Federal retirement plans, OPM, rather than CBP, reports the liability for future payments to retired 

employees who participate in the Federal Employees Health Benefits Program and the Federal Employees Group 

Life Insurance Program.

A liability for other post-employment benefits, which includes all types of benefits to former or inactive (but not 

retired) employees, their beneficiaries, and covered dependents, is also recognized. For additional information see 

Note 13, Accrued Payroll and Benefits.

Workers’ Compensation

A liability is recorded for actual and estimated future payments to be made for workers’ compensation pursuant 

to the Federal Employees’ Compensation Act (FECA). The FECA program is administered by the U.S. Department 

of Labor (DOL), which initially pays valid claims and subsequently seeks reimbursement from Federal agencies 

employing the claimants. Reimbursement to DOL on payments made usually occurs approximately two years 

subsequent to the actual disbursement. Budgetary resources for this intra-governmental liability are made available to CBP as part of its annual appropriation from Congress in the year in which the reimbursement takes place. 

The liability under which unemployment compensation is recorded is entitled Other Employment Liabilities; the 

liability under which unfunded FECA is recorded is entitled Accrued FECA Liability and actuarial FECA is recorded 

in Accrued Payroll and Benefits in the accompanying Consolidated Balance Sheet.

Additionally, the actuarial liability due to the public includes the expected liability for death, disability, medical 

and miscellaneous costs for approved compensation cases. The liability is determined using a method that utilizes 

historical benefit payment patterns related to a specific incurred period to predict the ultimate payments related 
Financial Section 109

Notes to Financial Statements

to that period. Based on information provided by DOL, DHS allocates the actuarial liability to its components and 

department offices based on the payment history for the components and department offices. The accrued liability 

is not covered by budgetary resources and will require future funding. For additional information see Note 13, 

Accrued Payroll and Benefits.

Unexpended Appropriations

Unexpended appropriations represent the amount of CBP unexpended appropriated spending authority as of fiscal 

year-end that is unliquidated or is unobligated and has not lapsed, been rescinded or withdrawn.

Cumulative Results of Operations

Cumulative Results of Operations primarily represent the excess of user fee revenues over related expenses. It also 

reflects the net investment in Property, Plant and Equipment, Inventory and Related Property, and transfers in of 

equipment, and materials and supplies from other Federal agencies without reimbursement. Also, included as a 

reduction in Cumulative Results of Operations, are liabilities incurred, which will require funding from future 

appropriations, such as accumulated annual and other leave earned but not taken, accrued workers’ compensation and contingent liabilities. The portion of Cumulative Results of Operations attributable to earmarked funds 

is shown separately on both the Consolidated Balance Sheet and the Consolidated Statement of Changes in Net 

Position. For additional information see Note 18, Earmarked Funds.

Revenue, Financing Sources, and Expense Recognition

CBP entity activities are financed principally through appropriations, exchange revenue and non-exchange revenue. Appropriations used are recognized as a financing source when expenses are incurred or assets are purchased. 

Exchange revenues from reimbursable services and intra-governmental reimbursable activity are recognized as 

earned when the goods or services are provided and reflect the full cost of the goods or services provided. Nonexchange revenue from user fees is recognized as earned in accordance with the Consolidated Omnibus Budget 

Reconciliation Act of 1985, as amended. CBP may retain the user fee revenues and expend them as authorized 

by law for CBP inspector overtime and other activities directly related to the services to which the fees relate. An 

imputed financing source is also recognized to offset costs incurred by CBP but funded by another Federal source, 

generally in the period in which the cost was incurred. Expenses are recognized when goods or services are 

received, when inventory is used, or assets are depreciated or amortized.

The FY 2012 and 2011 activities reported on the Consolidated Statement of Net Cost contain all resource costs 

assigned from CBP cost centers. An activity-based costing system derives an estimate of the agency’s cost by activity performed. The key driver behind CBP’s allocation of cost to activity is labor hours. Each pay period, all CBP 

personnel log their time to one or more of several hundred distinct activities. Time recorded by operational cost 
110 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

center is also used to assign mission support and overhead costs to field operational cost center activities. The time 

and attendance system used to record personnel labor hours is COSS (Customs Overtime Scheduling System).

Non-entity Revenue is recognized when the cash CBP is entitled to collect on behalf of the Federal Government 

is earned. Primarily, these revenue collections result from current fiscal year activities. The significant types of 

revenues collected and related disbursements are described below:

•	 Duties: amounts collected on imported goods.

•	 User fees: amounts collected for certain services as provided by law.

•	 Excise taxes: amounts collected on imported distilled spirits, wines and tobacco products, and other miscellaneous taxes collected.

•	 Fines and penalties: amounts collected for violations of laws and regulations.

•	 Refunds: payments made to importers/exporters are primarily identified when the import entries are liquidated, a process in which CBP makes final determination of duties, taxes, fees and interest owed on each 

entry and compares it to the estimated amount previously determined and paid by the importer/broker. 

Interest is included in the refund generally for the period of time between when the estimated amounts were 

received from the importer/broker and the time the entry is liquidated. When a refund is identified prior to 

liquidation, the refund from this remittance is funded from the duty, tax or fee collections rather than from 

the Refunds and Drawback Account.

•	 Drawback: a remittance, in whole or in part, of duties, taxes or fees. Drawback typically occurs when the 

imported goods on which duties, taxes or fees have been previously paid are subsequently exported from the 

United States or destroyed prior to entering the commerce of the United States. Depending on the type of 

claim, the claimant has up to six or eight years from the date of importation to file for drawback.

A financing source for refunds and drawback is recognized when payment is made. The financing source, representing the permanent, indefinite appropriation account used to fund the disbursement, is recorded as a decrease 

in the amount transferred to Treasury General Fund Accounts reported on the Statement of Custodial Activity.

A transfer to the Treasury General Fund is recognized when the non-entity revenue, collected on behalf of the 

Federal Government, is deposited into various receipt Treasury accounts designated for the particular type of 

revenue collected.

An accrual adjustment is included to adjust cash collections and refund disbursements with the net increase or 

decrease of accrued Non-entity Accounts Receivable, net of uncollectible amounts and refunds payable.

Use of Estimates

Management has made certain estimates and assumptions in the reporting of assets, liabilities and note disclosures 

in the Consolidated Balance Sheet, Consolidated Statement of Net Cost, Consolidated Statement of Changes in Net 
Financial Section 111

Notes to Financial Statements

Position, Combined Statement of Budgetary Resources, Consolidated Statement of Custodial Activity and accompanying notes. Actual results could differ from these estimates. Significant estimates include: year-end accruals of 

accounts payable, contingent legal and environmental liabilities, accrued workers’ compensation, allowance for 

doubtful accounts receivable, allowance for doubtful taxes, duties and trade receivables, accruals for construction 

projects, retirement and post-retirement benefits assumptions, and certain non-entity receivables and payables 

related to custodial activities.

Taxes

CBP, as a Federal component, is not subject to Federal, state or local income taxes and accordingly, no provision for 

income taxes has been recorded in the accompanying financial statements.

Reclassification

In FY 2012, CBP made certain reclassifications to FY 2011 balances to conform to FY 2012 presentation.
112 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

2. Non-entity Assets

Non-entity assets as of September 30, 2012 and 2011, consist of the following (in thousands):

2012 2011

Intra-governmental:

Fund Balance with Treasury (Note 3) $ 593,749 $ 803,540

Public

Cash and Other Monetary Assets (Note 4) 3,272 3,844 

Accounts Receivable, Net 493 476 

Taxes, Duties and Trade Receivables, Net (Note 6) 2,700,465 2,731,765

Total Public $ 2,704,230 $ 2,736,085 

Total Non-entity Assets 3,297,979 3,539,625 

Total Entity Assets 12,578,182 12,695,092 

Total Assets $ 15,876,161 $ 16,234,717 

Non-entity Fund Balance with Treasury as of September 30, 2012 and 2011 includes approximately $191.5 million and $152.9 million (deposit funds) in duties collected by CBP for U.S. Virgin Islands, U.S. Department of 

Agriculture and antidumping/countervailing duties and $220.0 million and $512.6 million (special funds) for 

Injured Domestic Industries as of September 30, 2012 and 2011, respectively. These assets are directly offset with 

liabilities as of September 30, 2012 and 2011.

Non-entity Fund Balance with Treasury consists of special and deposit funds, permanent appropriations, and 

miscellaneous receipts that are available to pay non-entity liabilities. Taxes, Duties and Trade receivables from the 

public represent amounts due from importers for goods and merchandise imported to the United States and, upon 

collection, will be available to pay the accrued intra-governmental liability Due to the Treasury General Fund, 

which equaled $2.8 billion as of September 30, 2012 and 2011.
113

Notes to Financial Statements

Financial Section

3. Fund Balance with Treasury

Fund Balance with Treasury as of September 30, 2012 and 2011 consists of the following (in thousands):

2012 Entity Non-entity Total

Trust Funds $ 236 $ -- $ 236 

Special Funds 295,915 220,029 515,944 

General Funds 4,625,073 182,263 4,807,336

Other Funds 722,940 -- 722,940 

Deposit Funds 10,592 191,457 202,049

Total $ 5,654,756 $ 593,749 $ 6,248,505

2011 Entity Non-entity Total

Trust Funds $ 290 $ -- $ 290

Special Funds 932,906 512,645 1,445,551 

General Funds 5,249,869 137,993 5,387,862 

Other Funds 3,111 -- 3,111 

Deposit Funds 1,703 152,902 154,605

Total $ 6,187,879 $ 803,540 $ 6,991,419

Trust funds are both receipt accounts and expenditure accounts that are designated by law as a trust fund. The 

entity trust fund balances result from CBP authority to use the proceeds from general order items sold at auction to 

offset specific costs incurred by CBP relating to their sale, and to use available funds from the Harbor Maintenance 

Fee Trust Fund to offset administrative expenses related to the collection of the Harbor Maintenance Fee.

Special funds are receipt funds used for specific purposes. Entity amounts comprising the special fund balances 

result from CBP authority to assess and collect passenger and conveyance-related user fees, CBP authority to assess 

and collect fees associated with services performed at certain small airports or other facilities, and CBP authority to retain amounts needed to offset costs associated with collecting duties, taxes, and fees for the Government 

of Puerto Rico. As of September 30, 2012 and 2011, CBP User Fees account includes approximately $67.3 million 

and $714.3 million, respectively; CBP Services at Small Airports account contained approximately $17.6 million 

and $15.9 million, respectively; Refunds, Transfers and Expenses of Operation of Puerto Rico account contained 

approximately $37.7 million and $51.9 million, respectively; and Immigration User Fees of $84.5 million and 

$95.0 million, respectively. Non-entity fund balance represents amounts collected in connection with antidumping and countervailing duties of $220.0 million and $512.6 million as of September 30, 2012 and 2011, respectively. 

Of which $140.4 million and $431.5 million are eligible for payment to qualifying Injured Domestic Industries as 

of September 30, 2012 and 2011, respectively. The remaining amount is Due to the Treasury General Fund.

General funds consist of amounts appropriated annually by Congress to fund the operations of CBP. The non-entity 

general fund balance represents permanent, indefinite appropriations to pay refunds and drawback claims of 

duties, taxes, or fees. The balance is presented as a non-entity balance because the refund and drawback payments 

are associated with CBP custodial activity of collecting revenue on behalf of the Federal Government.
114 U.S. Customs and Border Protection • Performance and Accountability Report

The entity deposit fund balance represents amounts received as an advance that are not accompanied by an order. 

Once the order is received, the deposit fund balance is decreased.

Status of Fund Balance with Treasury as of September 30, 2012 and 2011 consists of the following (in thousands):

2012 Entity Non-entity Total

Unobligated Balance

Available $ 638,350 $ -- $ 638,350

Unavailable 452,325 220,029 672,354 

Obligated Balance not yet Disbursed 3,812,597 182,263 3,994,860 

Non-budgetary FBWT 751,484 191,457 942,941 

Total $ 5,654,756 $ 593,749 $ 6,248,505

2011 Entity Non-entity Total

Unobligated Balance

Available $ 627,610 $ -- $ 627,610

Unavailable 1,127,927 512,645 1,640,572

Obligated Balance not yet Disbursed 4,411,278 137,993 4,549,271 

Non-budgetary FBWT 21,064 152,902 173,966 

Total $ 6,187,879 $ 803,540 $ 6,991,419

Portions of the Unobligated Balance Unavailable include amounts appropriated in prior fiscal years that are not 

available to fund new obligations. However, the amounts can be used for upward and downward adjustments for 

existing obligations in future years.

The Obligated Balance not yet Disbursed represents amounts designated for payment of goods or services ordered, 

but not received, or goods and services received but for which payment has not yet been made.

The Non-budgetary Fund Balance with Treasury includes $639.9 million in user fees that are restricted by law 

for use until made available as provided in Appropriation Acts. See additional information in the Adjustment to 

Unobligated Balance, Brought Forward, October 1 Note (Note 22).

CBP returned to Treasury $213.4 million and $79.7 million for indefinite no-year authority and retained $182.3 

million and $138.1 million in authority for obligations pursuant to public law during both the years ending 

September 30, 2012 and 2011, respectively.

In accordance with Public Law 101-510, CBP is required to automatically cancel obligated and unobligated balances 

of appropriated funds five years after a fund expires. Obligations that have not been paid at the time an appropriation is canceled may be paid from an unexpired appropriation that is available for the same general purpose. As of 

September 30, 2012, CBP canceled $94.0 million from FY 2007 annual appropriations. As of September 30, 2011, 

CBP canceled $80.7 million from FY 2006 annual appropriations.

Notes to Financial Statements
115

4. Cash and Other Monetary Assets

Cash and Other Monetary Assets as of September 30, 2012 and 2011, consist of the following (in thousands):

2012 Entity Non-entity Total

Imprest Funds $ 160 $ -- $ 160 

Undeposited Collections 200 3,272 3,472 

Total $ 360 $ 3,272 $ 3,632

2011 Entity Non-entity Total

Imprest Funds $ 190 $ -- $ 190 

Undeposited Collections 138 3,844 3,982 

Total $ 328 $ 3,844 $ 4,172

Undeposited collection balances represent timing differences between when cash relating to duties, taxes, fees, 

and other trade related collections are received and the deposit occurs in a future period. Cash can either be distributed to the General Fund, other Federal agencies, other governments, or returned to the importer/broker.

5. Accounts Receivable, Net

Receivables with the public as of September 30, 2012 and 2011 are as follows (in thousands):

2012

Receivable Category Gross Receivable Amounts 

Uncollectible

Total Net 

Receivables

Reimbursable Services $ 4,204 $ -- $ 4,204 

Customs User Fees 139,032 (3,751) 135,281 

Immigration User Fees 78,429 (15,734) 62,695 

Total $ 221,665 $ (19,485) $ 202,180 

2011

Receivable Category Gross Receivable Amounts 

Uncollectible

Total Net 

Receivables

Reimbursable Services $ 5,953 $ -- $ 5,953 

Customs User Fees 101,789 (4,035) 97,754 

Immigration User Fees 54,339 (15,069) 39,270 

Total $ 162,081 $ (19,104) $ 142,977 

Financial Section

Notes to Financial Statements
116 U.S. Customs and Border Protection • Performance and Accountability Report

6. Taxes, Duties, and Trade Receivables, Net

Receivables as of September 30, 2012 and 2011 are as follows (in thousands):

2012

Receivable Category Gross Receivable Amounts 

Uncollectible

Total Net 

Receivables

Duties $ 2,284,738 $ (131,347) $ 2,153,391

Excise Taxes 142,685 (8,021) 134,664 

User Fees 197,613 (9,025) 188,588

Fines/Penalties 445,238 (394,396) 50,842 

Interest 541,130 (478,438) 62,692

Antidumping/Countervailing Duties 1,169,953 (1,060,247) 109,706 

Refunds and Drawback 1,461 (879) 582 

Total $ 4,782,818 $ (2,082,353) $ 2,700,465

2011

Receivable Category Gross Receivable Amounts 

Uncollectible

Total Net 

Receivables

Duties $ 2,352,720 $ (147,551) $ 2,205,169 

Excise Taxes 164,325 (8,349) 155,976 

User Fees 148,479 (2,150) 146,329 

Fines/Penalties 437,141 (350,518) 86,623 

Interest 453,070 (405,266) 47,804

Antidumping/Countervailing Duties 885,087 (795,299) 89,788

Refunds and Drawback 657 (581) 76 

Total $ 4,441,479 $ (1,709,714) $ 2,731,765 

CBP assesses duties, taxes and fees on goods and merchandise brought into the United States from foreign countries. At the time importers bring merchandise into the United States, they are required to file CBP entry documents. Generally, within 10 working days after CBP releases the merchandise into the U.S. commerce, the 

importer is to submit an entry document with payment of estimated duties, taxes and fees. CBP allows periodic 

monthly payment that requires payment of estimated duties, taxes and fees on the 15th work day of the month 

following release. A receivable of $2.4 billion was recorded for 1,061,495 entries and 1,004,970 entries for merchandise released into commerce on or before September 30, 2012 and 2011, respectively. It is CBP’s policy to track 

and demand payment of unpaid estimated duties, taxes and fees receivable amounts by establishing a liquidated 

damage case which generally results in a fine and penalty type receivable.

A fine or penalty is established when a violation of import/export law is discovered. CBP assesses a liquidated 

damage or penalty for these cases to the maximum extent of the law. After receiving the notice of assessment, the 

importer or surety has 60 days to either file a petition requesting a review of the assessment or make payment of 

the assessed amount. Until this process has been completed, CBP records an allowance on fines and penalties of 

approximately 88.8 percent of the total assessment based on historical experience of fines and penalties mitigation 

and collection. Duties and taxes receivable are non-entity assets for which there is an offsetting liability due to the 

Treasury General Fund.

Notes to Financial Statements
117

7. Inventory and Related Property, Net

Operating Materials and Supplies

Operating Materials and Supplies consist of parts and materials to repair and maintain CBP aircraft, vessels, and 

OTIA projects used for enforcement activities. In addition, CBP purchased a stock of uniforms in FY 2012 to be 

issued for the CBP academies and as needed by officers and agents. OTIA operating materials and supplies as of 

September 30, 2012 and 2011 includes $25.1 million and $30.2 million for steel used to repair Border Patrol tactical infrastructure and $26.4 million and $21.2 million in spare parts used to repair systems maintained by OTIA. 

CBP defines operating materials and supplies categorized as “Held for Repair” as items that are usable by CBP after 

repair. CBP defines operating materials and supplies categorized as “Excess, Obsolete, and Unserviceable” to consist 

of items that are no longer usable by CBP.

Operating Materials and Supplies as of September 30, 2012 and 2011 consist of the following (in thousands):

2012 2011

Aircraft Parts

Items Held for Use $ 105,732 $ 93,771 

Items Held for Repair 15,114 18,563 

Excess, Obsolete, and Unserviceable Items 5,535 2,766

Total Aircraft Parts $ 126,381 $ 115,100 

Vessel Parts

Items Held for Use $ 6,585 $ 4,921 

Items Held for Repair 129 10 

Excess, Obsolete, and Unserviceable Items 35 318

Total Vessel Parts $ 6,749 $ 5,249

OTIA Parts

Items Held for Use $ 40,938 $ 44,970 

Items Held for Repair 10,516 5,665

Excess, Obsolete, and Unserviceable Items 8 801 

Total OTIA Parts $ 51,462 $ 51,436

Uniforms

Items Held for Use $ 6,120 $ --

Total Uniforms $ 6,120 $ --

Total $ 190,712 $ 171,785 

Financial Section

Notes to Financial Statements
118 U.S. Customs and Border Protection • Performance and Accountability Report

8. Seized and Forfeited Property

This schedule is presented for material categories of prohibited (non-valued) seized and forfeited property only. 

These items are retained and ultimately destroyed by CBP and are not transferred to the Department of the 

Treasury Forfeiture Fund or other Federal agencies. The ending balance for firearms includes only those seized 

items that can actually be used as firearms. Illegal drugs are presented in kilograms and a portion of the weight 

includes packaging, which often cannot be reasonably separated from the weight of the drugs since the packaging 

must be maintained for evidentiary purposes. Firearms are presented in number of cases.

Analysis of Changes in Prohibited (Non-valued) Seized Property, September 30, 2012

Category

Unit of 

Measurement

Balance 

October 1 New Seizures Remissions New Forfeitures Adjustments*

Balance 

September 30

Illegal Drugs

Cannabis 

(marijuana) Kilograms 2,086 1,242,474 0 (1,244,141) 1,632 2,051

Cocaine Kilograms 74 19,186 0 (19,206) 29 83

Heroin Kilograms 3 1,900 0 (1,897) (2) 4

Ecstasy Kilograms 1 152 0 (151) 16 18

Steroids Kilograms 165 546 0 (605) 41 147

Firearms Number 

of Cases 2,989 1,814 (427) (1,124) (140) 3,112

Analysis of Changes in Prohibited (Non-valued) Seized Property, September 30, 2011

Category

Unit of 

Measurement

Balance 

October 1 New Seizures Remissions New Forfeitures Adjustments*

Balance 

September 30

Illegal Drugs

Cannabis 

(marijuana) Kilograms 1,857 1,385,602 0 (1,387,482) 2,109 2,086

Cocaine Kilograms 169 26,999 0 (27,020) (74) 74

Heroin Kilograms 8 1,892 0 (1,897) 0 3

Ecstasy Kilograms 9 451 0 (451) (8) 1

Steroids Kilograms 578 312 0 (722) (3) 165

Firearms Number 

of Cases 1,482 4,446 (1,340) (1,502) (97) 2,989

* Adjustments are the result of changes due to inventory counts, changes in legal status or property type, and/or 

discontinuance of cases.

Notes to Financial Statements
119

Analysis of Changes in Prohibited (Non-valued) Forfeited Property, September 30, 2012

Category

Unit of 

Measurement

Balance 

October 1 New Forfeitures Transfers Destroyed Adjustments*

Balance 

September 30

Illegal Drugs

Cannabis 

(marijuana) Kilograms 120,467 1,244,141 (912) (428,978) (793,483) 141,235

Cocaine Kilograms 23,931 19,206 (386) (19,899) 1,969 24,821

Heroin Kilograms 2,368 1,897 (2) (1,518) 23 2,768

Ecstasy Kilograms 1,058 151 (1) (308) 21 921

Steroids Kilograms 293 605 0 (558) 0 340

Firearms Number 

of Cases 1,011 1,124 (1,196) (5) 91 1,025

Analysis of Changes in Prohibited (Non-valued) Forfeited Property, September 30, 2011

Category

Unit of 

Measurement

Balance 

October 1 New Forfeitures Transfers Destroyed Adjustments*

Balance 

September 30

Illegal Drugs

Cannabis 

(marijuana) Kilograms 116,025 1,387,482 (711) (537,859) (844,470) 120,467

Cocaine Kilograms 24,601 27,020 (881) (22,579) (4,230) 23,931

Heroin Kilograms 6,085 1,897 (135) (2,223) (3,256) 2,368

Ecstasy Kilograms 1,107 451 0 (481) (19) 1,058

Steroids Kilograms 17 722 0 (446) 0 293

Firearms Number 

of Cases 647 1,502 (1,563) (7) 432 1,011

* Adjustments are the result of changes due to inventory counts, changes in legal status or property type, and/or 

discontinuance of cases.

Financial Section

Notes to Financial Statements
120 U.S. Customs and Border Protection • Performance and Accountability Report

9. General Property, Plant, and Equipment, Net

Property, Plant and Equipment as of September 30, 2012 and 2011 consist of the following (in thousands):

2012

Categories

Useful Life 

(in years) Acquisition Cost

Accumulated 

Depreciation/

Amortization

Net

Book Value

Land and Land Rights N/A $ 167,863 $ -- $ 167,863

Improvements to Land 5–40 2,056,320 (360,213) 1,696,107

Construction in Progress N/A 1,173,411 -- 1,173,411

Buildings, Other Structures and Facilities* 6–40 1,498,697 (262,844) 1,235,853

Equipment:

ADP Equipment 5 468,506 (371,101) 97,405

Aircraft 12–20 1,329,544 (711,036) 618,508

Vessels 5–30 42,800 (18,875) 23,925

Vehicles 4–8 400,462 (311,633) 88,829

Other Equipment 5–15 1,772,657 (1,077,729) 694,928

Leasehold Improvements 2–30 381,040 (185,468) 195,572

Internal Use Software 5 1,021,115 (774,811) 246,304

Internal Use Software - In Development N/A 98,340 -- 98,340

Total $ 10,410,755 $ (4,073,710) $ 6,337,045

2011

Categories

Useful Life 

(in years) Acquisition Cost

Accumulated 

Depreciation/

Amortization

Net

Book Value

Land and Land Rights N/A $ 156,931 $ -- $ 156,931

Improvements to Land 5–40 1,960,132 (256,343) 1,703,789

Construction in Progress N/A 979,308 -- 979,308

Buildings, Other Structures and Facilities* 6–40 1,218,736 (222,849) 995,887

Equipment:

ADP Equipment 5 410,867 (311,668) 99,199

Aircraft 12–20 1,253,151 (655,920) 597,231

Vessels 5–30 42,189 (18,451) 23,738

Vehicles 4–8 428,662 (310,014) 118,648

Other Equipment 5–15 1,660,832 (884,382) 776,450

Leasehold Improvements 2–30 325,688 (152,078) 173,610

Internal Use Software 5 945,367 (695,587) 249,780

Internal Use Software - In Development N/A 148,357 -- 148,357

Total $ 9,530,220 $ (3,507,292) $ 6,022,928

* Includes four multi-use heritage assets located in Puerto Rico with an acquisition value of $534 thousand.

Notes to Financial Statements
121

10. Stewardship PP&E

CBP’s Stewardship PP&E is comprised of heritage assets located in the United States, including the Commonwealth 

of Puerto Rico. CBP aggregates its personal property heritage assets as collection of documents and artifacts and 

reflects its multi-use heritage assets as number of physical units. Information related to heritage assets at September 

30, 2012 and 2011 consists of the following:

2012

Categories Beginning 

Balance Additions Withdrawals Adjustments Total

Collection-type Assets

Documents 1 -- -- -- 1

Artifacts 1 -- -- -- 1

Multi-use Heritage Assets 4 -- -- -- 4

Total Stewardship PP&E 6 -- -- -- 6

2011

Categories Beginning 

Balance Additions Withdrawals Adjustments Total

Collection-type Assets

Documents 1 -- -- -- 1

Artifacts 1 -- -- -- 1

Multi-use Heritage Assets 4 -- -- -- 4

Total Stewardship PP&E 6 -- -- -- 6

CBP possesses a wide range of documents and artifacts which are unique due to historical, cultural, artistic, 

or architectural significance. These assets are used to preserve and to provide education on CBP’s history and 

tradition. Documents consist of dated tariff classifications, CBP regulations, ledgers of Collectors of Customs, 

and Customs pamphlets. Artifacts include antique scales, dated pictures of Customs Inspectors, aged tools used 

to sample imported commodities such as wood bales and bulk grain, and dated Customs uniforms, badges, 

and stamps.

As of September 30, 2012 and 2011, CBP maintains four Customs houses, designated as multi-use heritage assets, 

located in Puerto Rico valued at $534 thousand which are fully depreciated. All multi-use heritage assets are 

reflected on the Consolidated Balance Sheet. Deferred maintenance and repairs and condition information for 

heritage assets are presented in the required supplementary information.

Financial Section

Notes to Financial Statements
122 U.S. Customs and Border Protection • Performance and Accountability Report

11. Other Assets

Advances and Prepayments

Intra-governmental advances and prepayments as of September 30, 2012 and 2011, totaling $175.6 million and 

$155.1 million, respectively, consist primarily of advances to UNICOR for vehicle purchases.

Other

Other assets consists of advances and prepayments with the public from employee travel and salary advances and 

prepaid rent as of September 30, 2012 and 2011, totaling $62 thousand and $79 thousand, respectively, and capital 

assets no longer in service, pending disposal, as of September 30, 2012, totaling $171 thousand.

12. Liabilities Not Covered by Budgetary Resources

Liabilities Not Covered by Budgetary Resources as of September 30, 2012 and 2011, consist of the following 

(in thousands):

2012 2011

Intra-governmental:

Accrued FECA Liability $ 153,378 $ 147,352 

Other Employment Liabilities 674 2,076 

Due to the Treasury General Fund 2,782,953 2,816,790 

Total Intra-governmental $ 2,937,005 $ 2,966,218

Public:

Accrued Payroll and Benefits:

Accrued Unfunded Leave (Note 13) $ 395,363 $ 415,318

Actuarial FECA Liability (Note 13) 882,292 821,599

Environmental and Disposal Liabilities (Note 14) 17,610 16,472

Legal Contingent Liabilities 374,452 386,266 

Total Public $ 1,669,717 $ 1,639,655

Total Liabilities Not Covered by Budgetary Resources 4,606,722 4,605,873

Total Liabilities Covered by Budgetary Resources 1,483,506 1,861,435

Total Liabilities $ 6,090,228 $ 6,467,308

Liabilities not covered by new budget authority or other budgetary resources represent amounts owed in excess of 

available appropriated or other amounts. Available budgetary resources include new budget authority, unobligated 

balances of budgetary resources at the beginning of the year or net transfers of prior year balances during the year, 

spending authority from offsetting collections, and recoveries of unexpired budget authority through downward 

adjustments of prior year obligations.

Notes to Financial Statements
123

13. Accrued Payroll and Benefits

The payroll and benefits liability as of September 30, 2012 and 2011 consists of the following (in thousands):

2012 2011

Accrued Funded Payroll and Benefits $ 360,940 $ 335,189 

Accrued Unfunded Leave 395,363 415,318 

Actuarial FECA Liability 882,292 821,599 

Total $ 1,638,595 $ 1,572,106 

Actuarial workers compensation liability claims incurred for the benefit of CBP employees under FECA are administered by DOL and are ultimately paid by CBP. Future workers’ compensation estimates are generated from an 

application of actuarial procedures developed by DOL.

14. Environmental & Disposal Liabilities

CBP is required to remediate contamination in accordance with Federal laws in order to protect human health and 

the environment. These laws include the Comprehensive Environmental Response, Compensation and Liability 

Act, the Resource Conservation and Recovery Act, the Oil Pollution Act, the Clean Water Act, the Toxic Substances 

Control Act, and the Clean Air Act.

Estimated environmental liabilities include expected future cleanup costs and those associated with site characterization, sampling, risk assessment, removal of contamination sources, treatment, containment, and monitoring. 

These costs are recognized and disclosed in accordance with SFFAS No. 5; SFFAS No. 6; Technical Releases No. 

2, 10, and 11, and DHS policy directives and memorandum. CBP records the estimated cost of environmental 

liabilities that are probable and measurable to the current operating period. For those probable sites where future 

liability is unknown or no reasonable estimate of the cost to clean up a particular site could be made, the cost of 

studies necessary to evaluate response or remediation requirements is reported.

CBP’s environmental cleanup liability as of September 30, 2012 and 2011 was $17.6 million and $16.5 million, 

respectively. There were no material changes in total estimated cleanup costs due to changes in law or technology. 

Notable changes in estimated liabilities include:

•	 Estimates of liability are presented in FY 2012 dollars and have been appropriately escalated to account 

for inflation.

•	 Inventory of liabilities modified due to Due Care Review process.

Financial Section

Notes to Financial Statements
124 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

15. Other Liabilities

CBP considers $87.3 million and $84.8 million of the accrued FECA Liability, $882.3 million and $821.6 million 

of the actuarial FECA Liability, and $353.0 million and $356.8 million of the Legal Contingent Liabilities as noncurrent as of September 30, 2012 and 2011, respectively. CBP considers all remaining Other Liabilities as current.

Refunds Payable

Refunds Payable consists of amounts owed for refunds of duty and other trade related activity and drawback claims. 

These liabilities, all considered current year liabilities, are principally funded from the Refunds and Drawback 

account.

CBP accrues a liability for refunds and drawback claims approved at year-end, but paid subsequent to year-end. 

Payments made to importers/exporters are primarily identified when the import entry is liquidated, a process in 

which CBP makes a final determination of duties, taxes and fees owed on the entry. Due to non-liquidation of the 

entries, the amount to be refunded is undetermined. Therefore, a historical calculated average was used to determine a ratio for estimating the payable to be recorded. Using this average, CBP has estimated $46.6 million and 

$28.6 million as of September 30, 2012 and 2011, respectively, as a payable.

The September 30, 2012 and 2011, accrued liability consists of the following (in thousands):

2012 2011

Refunds $ 131,980 $ 105,680

Drawback Claims 44,930 25,733

Total $ 176,910 $ 131,413

Injured Domestic Industries

The Continued Dumping and Subsidy Offset Act (CDSOA) of 2000 (P.L. 106-387, Title X), enacted in FY 2001, calls for 

CBP to collect and disburse monies received in connection with antidumping and countervailing duty orders and 

findings to qualifying Injured Domestic Industries (IDI). Antidumping duties are collected when it is determined 

that a class or kind of foreign merchandise is being released into the U.S. economy at less than its fair value to the 

detriment of a U.S. industry. Countervailing duties are collected when it is determined that a foreign government 

is providing a subsidy to its local industries to manufacture, produce, or export a class or kind of merchandise 

for import into the U.S. commerce to the detriment of a U.S. industry. Due to the repeal of the CDSOA in the 

Deficit Reduction Omnibus Reconciliation Act of 2005, only duties on entries filed prior to October 1, 2007 will 

eventually be distributed to affected U.S. companies pursuant to rulings by the U.S. Department of Commerce. 

As of September 30, 2012 and 2011, CBP recorded a liability of $140.4 million and $431.5 million, respectively. 

CBP makes annual payments of antidumping/countervailing duties to qualifying injured domestic industries. In 

FY 2012, CBP disbursed $332.0 million in CDSOA funds from FY 2006 through FY 2010 that had been previously 

held under pending litigation.
Financial Section 125

Notes to Financial Statements

16. Leases

Operating Leases

CBP leases various facilities and equipment under leases accounted for as operating leases. The leased items consist 

of offices, warehouses, vehicles and other equipment. Much of the office space occupied by CBP is either owned 

by the Federal Government or is leased by the General Services Administration (GSA) from commercial sources. 

CBP is not committed to continue to pay rent to GSA beyond the period occupied providing proper advance notice 

to GSA unless the rental agreement is non-cancelable.

The following schedule, by years, shows the future minimum rental payments required under operating 

leases that have initial or remaining non-cancelable lease terms in excess of one year, as of September 30, 2012 

(in thousands):

Fiscal Year

Facilities, 

Vehicles, and 

Equipment

2013 $ 171,711

2014 168,842

2015 165,646

2016 153,988

2017 142,829

Beyond 2017 968,024

Total Future Lease Payments $ 1,771,040
126 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

17. Commitments and Contingencies

Legal Contingent Liabilities

CBP is party to various administrative proceedings, legal actions, and claims brought by or against it. Any financially unfavorable administrative or court decision will normally be funded from either: (1) CBP appropriation for 

refunds and drawback for trade litigation issues; (2) various claims and judgment funds maintained by Treasury; 

or (3) CBP salary and expense appropriation.

The range of estimated contingent liabilities for all probable and estimable litigation related claims as of September 

30, 2012 and 2011 were $374.5 million to $616.5 million and $386.3 million to $616.6 million, respectively. 

Asserted and pending legal claims for which loss is reasonably possible range from an estimated $473.5 million 

to $575.6 million and $574.0 million to $586.8 million as of September 30, 2012 and 2011, respectively. As of 

September 30, 2012, CBP had 7 cases considered reasonably possible for which no estimate could be made.

As disclosed in the Other Liabilities note, $353.0 million and $356.8 million of the Legal Contingent Liabilities is 

considered non-current as of September 30, 2012 and 2011, respectively.

Duty and Trade Refunds

There are various other trade issues resolved by other Federal agencies, such as the Department of Commerce, 

which may result in refunds of duties, taxes and fees from the Refunds and Drawback Account. Until such time as a 

decision is reached by the other Federal agencies, CBP does not have sufficient information to estimate a contingent 

liability amount. All known refunds as of September 30, 2012 and 2011 have been recorded.

Loaned Aircraft

CBP is liable to the Department of Defense for damage or loss to aircraft on loan. CBP had 16 aircraft loaned 

from the Department of Defense with an acquisition value of $94.4 million, as of September 30, 2012 and 

2011, respectively.
Financial Section 127

Notes to Financial Statements

18. Earmarked Funds

Earmarked funds are financed by specifically identified revenues and other financing sources. These funds are 

required by statue to be used for designated activities or purposes and must be accounted for separately from the 

Federal Government’s General Fund.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

In April 1986, the President signed the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985, which 

authorized CBP to collect user fees for certain services. The law initially established processing fees for air and sea 

passengers, commercial trucks, rail cars, private vessels and aircraft, commercial vessels, dutiable mail packages, 

and CBP broker permits. An additional fee category, contained in tax reform legislation, for processing barges and 

bulk carriers for Canada and Mexico, was added later that year. The collection of the COBRA fees for CBP services 

began on July 7, 1986.

In addition to the collection of user fees, other changes in CBP procedures were enacted due to the COBRA statute. 

Most importantly, provisions were included for providing non-reimbursable inspectional overtime services and 

paying for excess pre-clearance costs from the COBRA user fee collections.

The Customs and Trade Act of 1990 amended the COBRA legislation to provide for the hiring of inspectional personnel, the purchasing of equipment, and the covering of related expenses with any surplus monies available after 

overtime and excess pre-clearance costs are satisfied. Expenditures from the surplus can only be used to enhance 

the service provided to those functions for which fees are collected. This legislation took effect on October 1, 1990.

19 USC Section 58c contains the Fees for certain Customs services. The authority to use these funds is contained 

in the annual Department of Homeland Security Appropriations Act.

Immigration User Fees (IUF)

Joint Resolution (H.J. Res. 738), making continuing appropriations for FY 1987 (the “1987 Act”) (Public Laws 

99-500 and 99-591), established the Immigration User Fee Account (IUFA) [requiring] the [collection] of a $5 

fee charged to each passenger arriving in the United States from foreign locations aboard commercial aircraft 

and commercial vessels except passengers whose journeys originated in the United States, Canada, Mexico, a 

territory or possession of the United States, or an adjacent island. The 1987 Act directed the Immigration and 

Naturalization Service (INS), beginning in FY 1987, to collect an immigration user fee for each passenger arriving 

in the United States by commercial air or sea conveyance (with limited exceptions). This law was codified in 8 

U.S.C. 1103, 1356, section 286, the Immigration and Nationality Act (INA).
128 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

In 1993, Congress amended section 286 of the INA by raising the immigration user fee from the original $5 to $6 

with the passage of Public Law 103-121. In 2002, in Public Law 107-77, Congress increased the immigration user 

fee from $6 to $7.

Also in Public Law 107-77, Congress amended section 286(e) of the INA to authorize the Attorney General to 

charge and collect a user fee from certain previously exempt commercial vessel passengers. Prior to the enactment 

of this law, commercial vessel passengers whose journeys originated in Canada, Mexico, a State, territory or possession of the United States, or an adjacent island, were statutorily exempt from paying the immigration user fee 

prescribed by section 286(d) of the INA. While these vessel passengers were exempt from paying the fee, the INS 

was still required to provide inspection services.

The IUFA was also established as a repository for fines imposed to prevent unauthorized landing and unlawful 

transport of aliens into the United States, penalties for document fraud, 31 Act overtime, and liquidated damages 

and expenses collected. All deposits into the IUFA are available until expended.

In FY 2003, with the formation of the DHS, CBP collects and shares the revenue from the immigration user fees 

with Immigration and Customs Enforcement (ICE). CBP maintains approximately 82.6 percent of the user fee, 

while the other 17.4 percent is turned over to ICE.
Financial Section 129

Notes to Financial Statements

The following tables present condensed data relating to CBP earmarked funds (disclosed in note 1) as of and for 

the years ended September 30, 2012 and 2011 (in thousands):

2012

Balance Sheet COBRA IUF All Others Total

Assets

Fund Balance with Treasury $ 67,342 $ 84,521 $ 106,333 $ 258,196 

Taxes, Duties, & Trade Receivables, Net 122,869 -- 1 122,870

Other Assets 135,481 62,696 442 198,619

Total Assets $ 325,692 $ 147,217 $ 106,776 $ 579,685

Liabilities and Net Position

Liabilities $ 144,323 $ -- $ 690 $ 145,013

Cumulative Results of Operations 181,369 147,217 106,086 434,672

Total Liabilities and Net Position $ 325,692 $ 147,217 $ 106,776 $ 579,685

Statement of Net Cost

Gross Cost $ 472,024 $ 577,384 $ 84,330 $ 1,133,738

Less: Earned Revenue -- -- 1,685 1,685

Net Cost of Operations $ 472,024 $ 577,384 $ 82,645 $ 1,132,053

Statement of Changes in Net Position

Net Position Beginning of Period $ 796,302 $ 134,256 $ 69,527 $ 1,000,085

Adjustments (639,940) -- -- (639,940)

Net Position Beginning Balances, Adjusted 156,362 134,256 69,527 360,145

Net Costs of Operations (472,024) (577,384) (82,645) (1,132,053)

Non-exchange Revenue 463,107 -- 110,749 573,856

Net Transfers In/Out (2,099,772) (119,087) -- (2,218,859)

Other (Note 21) 2,133,696 709,432 8,455 2,851,583

Change in Net Position $ 25,007 $ 12,961 $ 36,559 $ 74,527

Net Position End of Period $ 181,369 $ 147,217 $ 106,086 $ 434,672

2011

Balance Sheet COBRA IUF All Others Total

Assets

Fund Balance with Treasury $ 717,398 $ 94,986 $ 71,751 $ 884,135

Taxes, Duties, & Trade Receivables, Net 85,885 -- 401 86,286

Other Assets 97,892 39,270 573 137,735

Total Assets $ 901,175 $ 134,256 $ 72,725 $ 1,108,156

Liabilities and Net Position

Liabilities $ 104,873 $ -- $ 3,198 $ 108,071

Cumulative Results of Operations 796,302 134,256 69,527 1,000,085

Total Liabilities and Net Position $ 901,175 $ 134,256 $ 72,725 $ 1,108,156

Statement of Net Cost

Gross Cost $ 407,059 $ 468,394 $ 56,276 $ 931,729

Less: Earned Revenues -- -- 2,275 2,275

Net Cost of Operations $ 407,059 $ 468,394 $ 54,001 $ 929,454

Statement of Changes in Net Position

Net Position Beginning of Period $ 789,574 $ 75,434 $ 25,196 $ 890,204

Net Costs of Operations (407,059) (468,394) (54,001) (929,454)

Non-exchange Revenue 405,519 -- 92,432 497,951

Net Transfers In/Out (1,552,209) (114,483) -- (1,666,692)

Other (Note 21) 1,560,477 641,699 5,900 2,208,076

Change in Net Position $ 6,728 $ 58,822 $ 44,331 $ 109,881

Net Position End of Period $ 796,302 $ 134,256 $ 69,527 $ 1,000,085
130 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

19. Intra-governmental Costs and Exchange Revenue

Intra-governmental costs represent exchange transactions made between two reporting entities within the Federal 

Government and are presented separately from costs with the public (exchange transactions made between the 

reporting entity and a non-Federal entity). Intra-governmental exchange revenue is disclosed separately from 

exchange revenue with the public. The criteria used for this classification requires that the intra-governmental 

expenses relate to the source of goods and services purchased by the reporting entity and not to the classification of related revenue. With intra-governmental costs, the buyer and seller are both Federal entities. If a Federal 

entity purchases goods or services from another Federal entity and sells them to the public, the exchange revenue 

would be classified as “with the public,” but the related costs would be classified as intra-governmental. The 

purpose of this classification is to enable the Federal Government to provide consolidated financial statements, 

and not to match public and intra-governmental revenue with costs that are incurred to produce public and 

intra-governmental revenue.
Financial Section 131

Notes to Financial Statements

The Consolidated Statement of Net Cost reflects intra-governmental and public cost and exchange revenue as summarized below for the years ended September 30, 2012 and 2011 (in thousands):

2012 2011

Border Security Inspections and Trade Facilitation at Ports of Entry

Intra-governmental Costs $ 2,138,553 $ 2,026,646

Public Costs 4,471,361 4,493,235

Total Border Security Inspections and Trade Facilitation at 

Ports of Entry Costs $ 6,609,914 $ 6,519,881

Less: Intra-governmental Earned Revenue 66,508 86,882

Less: Public Earned Revenue 94,966 68,907

Total Border Security Inspections and Trade Facilitation at 

Ports of Entry Revenue $ 161,474 $ 155,789

Border Security and Control Between Ports of Entry

Intra-governmental Costs 1,506,562 1,519,180

Public Costs 3,128,379 3,368,143

Total Border Security and Control Between Ports of Entry Costs $ 4,634,941 $ 4,887,323

Less: Intra-governmental Earned Revenue 56,732 65,127

Less: Public Earned Revenue 53,465 51,653

Total Border Security and Control Between Ports of Entry Revenue $ 110,197 $ 116,780

Border Security Fencing, Infrastructure, and Technology

Intra-governmental Costs 85,315 28,350

Public Costs 276,737 62,854

Total Border Security Fencing, Infrastructure, and Technology Costs $ 362,052 $ 91,204

Less: Intra-governmental Earned Revenue 167 1,215

Less: Public Earned Revenue -- 964

Total Border Security Fencing, Infrastructure, and Technology Revenue $ 167 $ 2,179

Automation Modernization

Intra-governmental Costs 14,455 67,963

Public Costs 301,160 150,681

Total Automation Modernization Costs $ 315,615 $ 218,644

Less: Intra-governmental Earned Revenue -- 2,913

Less: Public Earned Revenue (1) 2,311

Total Automation Modernization Revenue $ (1) $ 5,224

Air and Marine Operations

Intra-governmental Costs 191,259 188,949

Public Costs 508,946 418,916

Total Air and Marine Operations Costs $ 700,205 $ 607,865

Less: Intra-governmental Earned Revenue 2,698 8,100

Less: Public Earned Revenue 3,598 6,424

Total Air and Marine Operations Revenue $ 6,296 $ 14,524

Net Cost of Operations $ 12,344,594 $ 12,030,421
132 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

20. Sub-Organization Program Costs/Program Costs 

by Strategic Goal

CBP is the unified border agency whose priority mission is the prevention of terrorism and terrorist weapons from 

entering the U.S. CBP meets these responsibilities by:

1. Enforcing the laws governing the flow of merchandise or commerce across the borders of the U.S.; 

2. Assessing and collecting duties, taxes and fees on imported and other goods and services; and 

3. Enforcing drug-related and other laws and regulations of the U.S. on behalf of Federal agencies and/or in 

conjunction with various states, local agencies and foreign countries.

Operating costs are summarized in the Consolidated Statement of Net Cost by mission or major line of activity, as 

applicable to the reporting period. The net cost of operations is the gross (i.e. total) cost incurred by CBP less any 

exchange (i.e. earned) revenue.

The strategic goals identified in the following tables changed between FY 2011 and 2012 due to the issuance of the 

DHS Strategic Plan for fiscal years 2012 through 2016. The DHS Strategic Plan is the result of the DHS Quadrennial 

Homeland Security Review (QHSR), which established a unified, strategic framework for homeland security missions and goals. The FY 2011 presentation was not restated in the FY 2012 format because the FY 2012 strategic 

goals are not applicable for FY 2011 reporting.

In addition, “Anti-Terrorism” was identified as a subprogram under “Border Security Inspections and Trade 

Facilitation at Ports of Entry” for FY 2011. In FY 2012, anti-terrorism is part of a strategic goal (“Fostering a Safe & 

Secure Homeland”); therefore, “Anti-Terrorism” is no longer broken out as a sub-program.
Financial Section 133

Notes to Financial Statements

For the year ended September 30, 2012 (in thousands):

2012

Schedule of Net Cost 

by Program and 

Responsibility Segment

Fostering a 

Safe & Secure 

Homeland

Enforcing & 

Administering 

Our Immigration 

Laws

Ensuring 

Resilience 

to 

Disasters

Providing Essential 

Support National, 

Economic and 

Homeland Security

Intra-Entity 

Eliminations

Consolidated 

Total

Border Security Inspections 

and Trade Facilitation at 

Ports of Entry

Gross Costs:

Passenger Processing $ 2,553,008 $ 1,802,565 $ -- $ -- $ 543,065 $ 3,812,508

Trade Compliance 2,181,611 -- -- 764,588 360,738 2,585,461

Outbound 242,459 -- -- -- 30,514 211,945

Total Gross Costs $ 4,977,078 $ 1,802,565 $ -- $ 764,588 $ 934,317 $ 6,609,914

Less: Earned Revenue 1,004,037 408,924 -- 139,287 1,390,774 161,474

Net Program Costs $ 3,973,041 $ 1,393,641 $ -- $ 625,301 $ (456,457) $ 6,448,440

Border Security and Control 

Between Ports of Entry

Gross Costs $ 5,109,073 $ -- $ -- $ -- $ 474,132 $ 4,634,941

Less: Earned Revenue 147,833 -- -- -- 37,636 110,197

Net Program Costs $ 4,961,240 $ -- $ -- $ -- $ 436,496 $ 4,524,744

Border Security Fencing, 

Infrastructure and 

Technology

Gross Costs $ 315,932 $ 32,919 $ 2 $ 13,199 $ -- $ 362,052

Less: Earned Revenue 137 22 -- 8 -- 167

Net Program Costs $ 315,795 $ 32,897 $ 2 $ 13,191 $ -- $ 361,885

Automation Modernization

Gross Costs $ 205,639 $ 80,028 $ 8 $ 29,940 $ -- $ 315,615

Less: Earned Revenue (1) -- -- -- -- (1)

Net Program Costs $ 205,640 $ 80,028 $ 8 $ 29,940 $ -- $ 315,616

Air and Marine Operations

Gross Costs $ 722,285 $ -- $ 229 $ -- $ 22,309 $ 700,205

Less: Earned Revenue 8,614 -- 30 -- 2,348 6,296

Net Program Costs $ 713,671 $ -- $ 199 $ -- $ 19,961 $ 693,909

Net Cost of Operations $ 10,169,387 $ 1,506,566 $ 209 $ 668,432 $ -- $ 12,344,594
134 U.S. Customs and Border Protection • Performance and Accountability Report

For the year ended September 30, 2011 (in thousands):

2011

Schedule of Net Cost 

by Program and 

Responsibility Segment

Protect our 

Nation from 

Dangerous 

People

Protect our 

Nation from 

Dangerous 

Goods

Protect Critical 

Infrastructure

Intra-Entity 

Eliminations

Consolidated 

Total

Border Security Inspections 

and Trade Facilitation at 

Ports of Entry

Gross Costs:

Passenger Processing $ 1,743,138 $ 1,945,652 $ -- $ 333,948 $ 3,354,842

Trade Compliance 209 2,482,474 -- 224,758 2,257,925

Anti-Terrorism 132,750 684,421 -- 73,979 743,192

Outbound -- 180,239 -- 16,317 163,922

Total Gross Costs $ 1,876,097 $ 5,292,786 $ -- $ 649,002 $ 6,519,881

Less: Earned Revenue 210,614 594,177 -- 649,002 155,789

Net Program Costs $ 1,665,483 $ 4,698,609 $ -- $ -- $ 6,364,092

Border Security and Control 

Between Ports of Entry

Gross Costs $ 5,373,817 $ -- $ -- $ 486,494 $ 4,887,323

Less: Earned Revenue 603,274 -- -- 486,494 116,780

Net Program Costs $ 4,770,543 $ -- $ -- $ -- $ 4,770,543

Border Security Fencing, 

Infrastructure and 

Technology

Gross Costs $ 100,283 $ -- $ -- $ 9,079 $ 91,204

Less: Earned Revenue 11,258 -- -- 9,079 2,179

Net Program Costs $ 89,025 $ -- $ -- $ -- $ 89,025

Automation Modernization

Gross Costs $ 20,242 $ 212,689 $ 7,477 $ 21,764 $ 218,644

Less: Earned Revenue 2,272 23,877 839 21,764 5,224

Net Program Costs $ 17,970 $ 188,812 $ 6,638 $ -- $ 213,420

Air and Marine Operations

Gross Costs $ 668,373 $ -- $ -- $ 60,508 $ 607,865

Less: Earned Revenue 75,032 -- -- 60,508 14,524

Net Program Costs $ 593,341 $ -- $ -- $ -- $ 593,341

Net Cost of Operations $ 7,136,362 $ 4,887,421 $ 6,638 $ -- $ 12,030,421

Notes to Financial Statements
135

21. Non-exchange Revenues and Transfers In/Out 

Without Reimbursement

Non-exchange Revenue represents amounts collected from user fees that CBP may retain and expend as authorized by law, and is identified in Non-exchange Revenue and Other. Transfers In/Out Without Reimbursement are 

amounts of funds collected and transferred from CBP receipt accounts to expenditure accounts within CBP and to 

other Federal agencies.

Non-exchange Revenue reported under Budgetary Financing Sources includes Land Border Inspection Fees, 

Immigration Enforcement Fees, International Registered Traveler Program Fees, Electronic Systems for Travel 

Authorization Fees, Customs User Fees, and amounts from Abandoned and Seized Goods. These amounts are 

identified as Budgetary Financing Sources because CBP recognizes budget authority related to the collections. 

Non-exchange Revenue reported under Other Financing Sources as Other, includes Immigration User Fees, User 

Fees for Small Airports, and Customs Merchandise Processing Fees, which represent revenue reported in receipt 

accounts for which CBP does not have available budgetary authority. Also reported under Other Financing Sources 

as Other, is the accounts receivable related portion of Customs User Fees.

22. Adjustment to Unobligated Balance, 

Brought Forward, October 1

The adjustment to unobligated balance, brought forward, October 1, 2011 consists of $639.9 million in COBRA 

User Fees that resulted from a temporary fee increase and elimination of the North American Free Trade Agreement 

(NAFTA) country exemptions from 1994 to 1997. The fees are restricted by law for use until made available as 

provided in Appropriation Acts. The FY 2012 reporting change resulted from new guidance received from OMB 

in August 2012, which included creating a new unavailable receipt account for CBP to report these additional fees 

and reducing budgetary resources rather than reporting as an unapportioned balance.

CBP will report the $639.9 million in user fees as “Non-budgetary” Fund Balance with Treasury until the collections are either withdrawn by Treasury from CBP’s account or made available to CBP by law.

Financial Section

Notes to Financial Statements
136 U.S. Customs and Border Protection • Performance and Accountability Report

Notes to Financial Statements

23. Apportionment Categories of Obligations Incurred: 

Direct vs. Reimbursable Obligations

Apportionment categories are determined in accordance with the guidance provided in OMB Circular A-11, 

Preparation, Submission and Execution of the Budget. Category A represents resources apportioned for calendar quarters. 

Category B represents resources apportioned for other time periods, activities, projects, objectives or any combination thereof (in thousands).

2012 Apportionment 

Category A

Apportionment 

Category B

Exempt from 

Apportionment Total

Obligations Incurred - Direct $ 8,761,186 $ 3,714,385 $ 1,820,615 $ 14,296,186

Obligations Incurred - Reimbursable 1,536,596 80,046 -- 1,616,642

Total Obligations Incurred $ 10,297,782 $ 3,794,431 $ 1,820,615 $ 15,912,828 

2011 Apportionment 

Category A

Apportionment 

Category B

Exempt from 

Apportionment Total

Obligations Incurred - Direct $ 8,283,686 $ 3,767,571 $ 1,188,774 $ 13,240,031 

Obligations Incurred - Reimbursable 1,347,191 141,094 -- 1,488,285 

Total Obligations Incurred $ 9,630,877 $ 3,908,665 $ 1,188,774 $ 14,728,316 

24. Appropriations

As of September 30, 2012 and 2011, the Combined Statements of Budgetary Resources consist of appropriations 

totaling $13.7 billion and $12.4 billion, respectively. This differs from the Consolidated Statements of Changes 

in Net Position as of September 30, 2012 and 2011, which consist of appropriations received totaling $8.0 billion and $8.3 billion, respectively. This difference is due to CBP’s non-entity activity, which as of September 30, 

2012 and 2011 consists of $1.8 billion and $1.3 billion, respectively, for Refund and Drawback activity, $3.5 billion and $2.8 billion, respectively, for user/inspection fees and subsidy activity, which are not reported on the 

Consolidated Statements of Changes in Net Position, $17.0 million in rescissions, which are reported separately on 

the Consolidated Statements of Changes in Net Position, and $362.1 million in non-expenditure transfers, which 

are reported separately on the Consolidated Statements of Changes in Net Position.

Permanent indefinite appropriations refer to the appropriations that result from permanent public laws, which 

authorize CBP to retain certain receipts. The amount appropriated depends upon the amount of the receipts rather 

than on a specific amount. CBP has a permanent and indefinite appropriation, which is used to disburse tax and 

duty refunds and duty drawbacks. Although funded through an appropriation, refund and drawback activity is, in 

most instances, reported as a custodial activity. Refunds are custodial revenue-related activity in that refunds are a 

direct result of importer overpayments of duties, taxes and fees. Federal tax revenue received from taxpayers is not 

available for use in the operation of CBP and is not reported on the Consolidated Statements of Net Cost. Likewise, 

the refunds of overpayments are not available for use by CBP in its operations. Refunds and drawback disbursements totaled $2.3 billion and $1.3 billion for fiscal years ended September 30, 2012 and 2011, and are presented as 

a use of custodial revenue on the Consolidated Statements of Custodial Activity. This appropriation is not subject to 
Financial Section 137

Notes to Financial Statements

budgetary ceilings established by Congress. CBP’s refund payable at year-end is not subject to funding restrictions. 

Refund payment funding is recognized as appropriations are used.

25. Legal Arrangements Affecting the Use of 

Unobligated Balances

Unobligated balances, whose period of availability has expired, are not available to fund new obligations. Expired 

unobligated balances are available to pay for current period adjustments to obligations incurred prior to expiration. 

For a fixed appropriation account, the balance can be carried forward for five fiscal years after the period of availability ends. For a no-year account, the unobligated balance is carried forward indefinitely until (1) specifically 

rescinded by law; or (2) the head of the agency concerned or the President determines that the purposes for which 

the appropriation was made have been carried out and disbursements have not been made against the appropriation for two consecutive years.

Included in the cumulative results of operations for special funds is $1.2 billion at September 30, 2012, that represents CBP’s authority to assess and collect user fees relating to merchandise and passenger processing, to assess 

and collect fees associated with the services performed at certain small airports or other facilities, retain amounts 

needed to offset costs associated with collecting duties, and taxes and fees for the government of Puerto Rico. 

These special fund balances are restricted by law and in their use to offset specific costs incurred by CBP. The passenger fees in the COBRA User Fee Account, totaling approximately $68.4 million, as of September 30, 2012 are 

restricted by law in its use to offset specific costs incurred by CBP.

The entity trust fund balances result from CBP’s authority to use the proceeds from general order items sold at 

auction to offset specific costs incurred by CBP relating to their sale, to use available funds in the Salaries and 

Expense Fund to offset specific costs for expanding border and port enforcement activities, and to use available 

funds from the Harbor Maintenance Trust Fund to offset administrative expenses related to the collection of the 

Harbor Maintenance Fee.
138 U.S. Customs and Border Protection • Performance and Accountability Report

26. Explanation of Differences Between the SBR and the 

Budget of the U.S. Government

The table below documents the material differences between the FY 2011 Combined Statement of Budgetary 

Resources and the actual amounts reported for FY 2011 in the Budget of the United States Government. Since the 

FY 2012 financial statements are reported prior to the Budget of the United States Government, CBP is reporting for FY 2011 only. Typically, the Budget of the United States Government with the FY 2012 actual data is 

published in February of the subsequent year. Once published, the FY 2012 actual data will be available at OMB 

website, www.whitehouse.gov/omb.

Differences between the SBR and the Budget of the U.S. Government (in thousands):

2011 Budgetary 

Resources

Obligations 

Incurred

Distributed 

Offsetting 

Receipts

Net Outlays

Combined Statement of 

Budgetary Resources $ 16,996,688 $ 14,728,316 $ 2,764,695 $ 10,237,311

Differences:

Expired Appropriation Not Included in 

President’s Budget (444,755) (106,848) -- --

Refunds and Drawbacks Not Included in 

President’s Budget (70X0505) (1,186,381) (1,186,381) -- (1,178,322)

Injured Domestic Industries Not Included 

in President’s Budget (20X5688) (638,450) (125,805) -- (125,805)

Offsetting Receipts Not Included in the 

Treasury Annual Report -- -- 56,282 2,764,695

Miscellaneous (3,000) (2,000) 1,000 --

Total Differences (2,272,586) (1,421,034) 57,282 1,460,568 

Budget of the U.S. Government $ 14,724,102 $ 13,307,282 $ 2,821,977 $ 11,697,879

Expired authority represents funding for which CBP no longer has budget authority. Refund and Drawback and the 

Injured Domestic Industries activity is exempt from apportionment per OMB Circular A-11 and therefore is not 

included in the President’s Budget.

27. Undelivered Orders at the End of Period

An undelivered order exists when a valid obligation has occurred and funds have been reserved, but the goods or 

services have not been delivered and have not been prepaid. Undelivered orders for the period ended September 

30, 2012 and 2011 (in thousands):

2012 2011

Unpaid $ 3,314,498 $ 3,997,996 

Upward/Downward Adjustment of Prior Period (314,629) (569,687)

Total Undelivered Orders at the End of Period $ 2,999,869 $ 3,428,309 

Notes to Financial Statements
Financial Section 139

28. Custodial Revenues

Custodial Revenue consists of duties, user fees, excise taxes, fines and penalties, refunds and drawback overpayments and interest associated with import/export activity which have been established as a specifically identifiable, 

legally enforceable claim and remain uncollected as of year-end. These receivables are net of amounts deemed 

uncollectible which were determined by considering the debtor’s payment record and willingness to pay, the 

probable recovery of amounts from secondary sources, such as sureties and an analysis of aged receivable activity. 

Primarily, revenue collections result from current fiscal year activity.

The increase in refund activity during FY 2012 is due to the October 1, 2011 enactment of the Trade Adjustment 

Assistance Extension Act of 2011 (HR2832) and the United States-Colombia Trade Promotion Agreement 

Implementation Act (HR 3078) which were retroactive to January 1, 2011. In addition, as noted in the Other 

Liabilities note, CBP disbursed $332.0 million in CDSOA funds from FY 2006 through FY 2010 that had been previously held under pending litigation. Disbursements from the Refunds and Drawback account for the fiscal year 

ended September 30, 2012 and 2011 (in thousands):

2012 2011

Refunds $ 1,511,468 $ 661,562

Drawback 739,001 686,066

Total $ 2,250,469 $ 1,347,628

Amounts refunded during FY 2012 and 2011 identified by entry year consist of the following (in thousands):

Entry Year 2012 Entry Year 2011

2012 $ 951,810 2011 $ 719,917

2011 707,087 2010 270,903

2010 89,277 2009 89,591

2009 37,503 2008 67,732

Prior Years 464,792 Prior Years 199,485

Total $ 2,250,469 Total $ 1,347,628

The total amount of antidumping and countervailing duties varies from year to year, depending on decisions from 

Department of Commerce. Antidumping and countervailing duty refunds (included in total refunds presented 

above) and associated interest refunded for the fiscal years ended September 30, 2012 and 2011, consisted of the 

following (in thousands):

2012 2011

Antidumping and Countervailing Duty Refunds $ 133,994 $ 113,932

Interest 7,036 7,945

Total $ 141,030 $ 121,877

Notes to Financial Statements
140 U.S. Customs and Border Protection • Performance and Accountability Report

29. Reconciliation of Net Cost of Operations to Budget

The following table presents CBP’s reconciliation of net cost of operations to budgetary accounts for the years 

ended September 30, 2012 and 2011 (in thousands).

2012 2011

Resources Used to Finance Activities:

Budgetary Resources Obligated

Obligations Incurred $ 15,912,828 $ 14,728,316 

Less: Spending Authority from Offsetting Collections and Recoveries 1,969,582 2,066,191

Obligations Net of Offsetting Collections and Recoveries $ 13,943,246 $ 12,662,125

Less: Offsetting Receipts 3,499,993 2,764,695

Net Obligations $ 10,443,253 $ 9,897,430

Other Resources

Transfers In/Out Without Reimbursement 60,926 40,556

Imputed Financing from Costs Absorbed by Others 645,076 710,128

Other (Note 21) 2,887,095 2,137,986

Net Other Resources Used to Finance Activities $ 3,593,097 $ 2,888,670

Total Resources Used to Finance Activities $ 14,036,350 $ 12,786,100

Resources Used to Finance Items Not Part of the Net Cost of Operations

Change in Budgetary Resources Obligated for Goods, Services and Benefits 

Ordered, But Not Yet Provided $ (403,627) $ (397,968)

Resources That Fund Expenses Recognized in Prior Periods 33,171 5,148

Budgetary Offsetting Collections and Receipts That Do Not Affect Net Cost 

of Operations (570,282) (561,946)

Resources That Finance the Acquisition of Assets or Liquidation of Liabilities 983,638 1,025,765

Tax Revenue Refunds and Other Resources or Adjustments to Net Obligated 

Resources That Do Not Affect Net Cost of Operations 2,204,916 1,293,721

Total Resources Used to Finance Items Not Part of the Net Cost of Operations $ 2,247,816 $ 1,364,720

Total Resources Used to Finance the Net Cost of Operations $ 11,788,534 $ 11,421,380

Components of the Net Cost of Operations That Will Not Require or 

Generate Resources in the Current Period:

Components Requiring or Generating Resources in Future Periods

Increase in Annual Leave Liability and Environmental Liability $ 1,138 $ 25,902

Change in Actuarial FECA Liability, Legal Contingent Liabilities and Other 66,718 53,831

Total Components of Net Cost of Operations That Will Require or 

Generate Resources in Future Periods $ 67,856 $ 79,733

Components Not Requiring or Generating Resources

Depreciation and Amortization $ 629,967 $ 610,797

Revaluation of Assets or Liabilities (18,760) (10,360)

Other Non-Budgetary Resources (123,003) (71,129)

Total Components of Net Cost of Operations That Will Not Require or 

Generate Resources $ 488,204 $ 529,308

Total Components of Net Cost of Operations That Will Not Require or 

Generate Resources in the Current Period $ 556,060 $ 609,041

Net Cost of Operations $ 12,344,594 $ 12,030,421

Notes to Financial Statements
Financial Section 141

Deferred Maintenance and Repairs

Deferred maintenance and repairs are maintenance and repairs that were not performed when they should have 

been or were scheduled to be performed, and were delayed until a future period. Maintenance and repairs include 

preventive maintenance, normal repairs, replacement of parts and structural components, and other activities 

needed to preserve the asset so that it will continue to provide acceptable service and achieve its useful life.

An assessment of “fair” means the facility/equipment condition meets minimum standards but requires additional 

maintenance or repair to prevent further deterioration, increase operating efficiency and to achieve normal life 

expectancy. An assessment of “good” means the facility/equipment condition is above minimum standards, but 

requires preventative maintenance or normal repairs to maintain the design intent of the building or equipment 

so that it continues to provide acceptable service and achieves the expected useful life. An assessment of “poor” 

means the facility/equipment does not meet most maintenance standards and requires frequent repairs to prevent 

accelerated deterioration and to provide a minimal level of operating function. In some cases, this includes condemned or failed facilities. Deferred maintenance on property, plant and equipment as measured by condition 

assessment survey, is comprised of (in thousands):

2012

Condition 

Assessment

Deferred 

Maintenance 

and Repairs

Building and Structures Poor to Good $ 97,802

Vehicles Good --

Equipment Good --

Multi-Use Heritage Assets Good --

Collections (documents and artifacts) Poor to Good --

Total $ 97,802

2011

Condition 

Assessment

Deferred 

Maintenance 

and Repairs

Building and Structures Poor to Good $ 94,000

Vehicles Good 31

Equipment Good 42

Multi-Use Heritage Assets Good --

Collections (documents and artifacts) Poor to Good --

Total $ 94,073

Statement of Budgetary Resources (SBR)

The total Budgetary Resources of $17.2 billion for FY 2012 includes new budget authority, unobligated balances 

at the beginning of the year and transferred in/out, spending authority from offsetting collections, recoveries of 

prior year obligations and adjustments.

Required Supplementary Information
142 U.S. Customs and Border Protection • Performance and Accountability Report

Schedule of Budgetary Resources by Major Budget Accounts:

As of September 30, 2012 (in thousands): Salaries & 

Expense

Air & 

Marine BSFIT Construction

Automation Other Total

Budgetary Resources 

Unobligated balances brought forward, Oct 1 $ 295,328 $ 79,856 $ 403,880 $ 52,217 $ 90,036 $ 1,347,055 $ 2,268,372

Adjustment to unobligated balance 

brought forward, Oct 1 -- -- -- -- -- (639,940) (639,940)

Unobligated balance brought forward,

Oct 1, as adjusted $ 295,328 $ 79,856 $ 403,880 $ 52,217 $ 90,036 $ 707,115 $ 1,628,432

Recoveries of prior year unpaid obligations 138,966 25,950 71,894 83,846 21,331 9,249 351,236

Other changes in unobligated balance (90,371) (1,613) -- (1,401) -- -- (93,385)

Unobligated balance from prior year 

budget authority, net 343,923 104,193 475,774 134,662 111,367 716,364 1,886,283

Appropriations 9,054,230 503,966 378,100 236,596 329,275 3,216,896 13,719,063

Spending authority from 

offsetting collections: 1,583,428 4,905 372 -- -- 29,641 1,618,346

Total budgetary resources $10,981,581 $ 613,064 $ 854,246 $ 371,258 $ 440,642 $3,962,901 $ 17,223,692

Status of Budgetary Resources

Obligations incurred (Note 23) $ 10,713,308 $ 543,287 $ 447,086 $ 329,756 $ 341,398 $ 3,537,993 $15,912,828

Unobligated balance, end of year:

Apportioned 26,551 68,239 404,624 91 99,173 39,832 638,510

Unapportioned 241,722 1,538 2,536 41,411 71 385,076 672,354

Total unobligated balance, end of year 268,273 69,777 407,160 41,502 99,244 424,908 1,310,864

Total status of budgetary resources $10,981,581 $ 613,064 $ 854,246 $ 371,258 $ 440,642 $3,962,901 $ 17,223,692

Change in Obligated Balances

Unpaid obligations brought forward, 

Oct 1 (gross) $ 1,851,440 $ 615,779 $ 688,048 $ 1,075,435 $ 244,740 $ 237,725 $ 4,713,167

Uncollected customer payments from Federal 

sources brought forward, Oct 1 (162,650) (301) -- -- -- (945) (163,896)

Obligated balance, start of year (net),

before adjustments $ 1,688,790 $ 615,478 $ 688,048 $ 1,075,435 $ 244,740 $ 236,780 $ 4,549,271

Obligated balance, start of year (net), 

as adjusted 1,688,790 615,478 688,048 1,075,435 244,740 236,780 4,549,271

Obligations incurred (Note 23) 10,713,308 543,287 447,086 329,756 341,398 3,537,993 15,912,828

Outlay (gross) (10,664,058) (528,485) (418,374) (626,659) (387,803) (3,491,900) (16,117,279) 

Change in uncollected customer payments 

from Federal sources 1,593 (62) (167) -- -- (88) 1,276

Recoveries of prior year unpaid obligations (138,966) (25,950) (71,894) (83,846) (21,331) (9,249) (351,236)

Obligated balance, end of year

Unpaid obligations, end of year (gross) 1,761,724 604,631 644,866 694,686 177,004 274,569 4,157,480

Uncollected customer payments from 

Federal sources, end of year (161,057) (363) (167) -- -- (1,033) (162,620)

Obligated balance, end of year (net) $ 1,600,667 $ 604,268 $ 644,699 $ 694,686 $ 177,004 $ 273,536 $ 3,994,860

Budget Authority and Outlays, Net:

Budget authority, gross $ 10,637,658 $ 508,871 $ 378,472 $ 236,596 $ 329,275 $3,246,537 $ 15,337,409

Actual offsetting collections (1,585,021) (4,843) (205) -- -- (29,553) (1,619,622)

Change in uncollected customer payment 

from Federal sources 1,593 (62) (167) -- -- (88) 1,276

Budget authority, net $ 9,054,230 $ 503,966 $ 378,100 $ 236,596 $ 329,275 $3,216,896 $ 13,719,063

Outlays, gross $10,664,058 $ 528,485 $ 418,374 $ 626,659 $ 387,803 $3,491,900 $ 16,117,279

Actual offsetting collections (1,585,021) (4,843) (205) -- -- (29,553) (1,619,622)

Outlays, net 9,079,037 523,642 418,169 626,659 387,803 3,462,347 14,497,657

Distributed offsetting receipts -- -- -- -- -- (3,499,993) (3,499,993)

Agency outlays, net $ 9,079,037 $ 523,642 $ 418,169 $ 626,659 $ 387,803 $ (37,646) $ 10,997,664

Required Supplementary Information (Unaudited)
143

Schedule of Budgetary Resources by Major Budget Accounts:

As of September 30, 2011 (in thousands): Salaries & 

Expense

Air & 

Marine BSFIT Construction

Automation Other Total

Budgetary Resources 

Unobligated balances brought forward, Oct 1 $ 549,343 $ 135,464 $ 324,659 $ 225,908 $ 108,113 $1,302,989 $ 2,646,476

Unobligated balance brought forward,

Oct 1, as adjusted $ 549,343 $ 135,464 $ 324,659 $ 225,908 $ 108,113 $1,302,989 $ 2,646,476

Recoveries of prior year unpaid obligations 237,751 55,455 103,071 176,085 26,884 8,170 607,416

Other changes in unobligated balance (75,228) -- -- (3,290) -- -- (78,518)

Unobligated balance from prior year 

budget authority, net 711,866 190,919 427,730 398,703 134,997 1,311,159 3,175,374

Appropriations 8,486,385 515,293 423,533 152,924 346,393 2,438,011 12,362,539

Spending authority from 

offsetting collections: 1,429,332 1,954 -- -- -- 27,489 1,458,775

Total budgetary resources $ 10,627,583 $ 708,166 $ 851,263 $ 551,627 $ 481,390 $ 3,776,659 $16,996,688

Status of Budgetary Resources

Obligations incurred (Note 23) $10,332,256 $ 628,311 $ 447,383 $ 499,410 $ 391,353 $ 2,429,603 $ 14,728,316

Unobligated balance, end of year:

Apportioned 15,933 63,475 379,740 253 77,188 91,211 627,800

Unapportioned 279,394 16,380 24,140 51,964 12,849 1,255,845 1,640,572

Total unobligated balance, end of year 295,327 79,855 403,880 52,217 90,037 1,347,056 2,268,372

Total status of budgetary resources $ 10,627,583 $ 708,166 $ 851,263 $ 551,627 $ 481,390 $ 3,776,659 $16,996,688

Change in Obligated Balances

Unpaid obligations brought forward, 

Oct 1 (gross) $ 2,040,587 $ 654,213 $ 739,478 $1,231,305 $ 214,525 $ 181,332 $ 5,061,440

Uncollected customer payments from Federal 

sources brought forward, Oct 1 (167,926) (519) -- -- -- (3,843) (172,288)

Obligated balance, start of year (net),

before adjustments $ 1,872,661 $ 653,694 $ 739,478 $1,231,305 $ 214,525 $ 177,489 $ 4,889,152

Adjustment to obligated balance, 

start of year (net) -- -- -- -- -- -- --

Obligated balance, start of year (net), 

as adjusted 1,872,661 653,694 739,478 1,231,305 214,525 177,489 4,889,152

Obligations incurred (Note 23) 10,332,256 628,311 447,383 499,410 391,353 2,429,603 14,728,316

Outlay (gross) (10,283,652) (611,290) (395,743) (479,194) (334,254) (2,365,040) (14,469,173)

Change in uncollected customer payments 

from Federal sources 5,276 218 -- -- -- 2,898 8,392

Recoveries of prior year unpaid obligations (237,751) (55,455) (103,071) (176,085) (26,884) (8,170) (607,416)

Obligated balance, end of year

Unpaid obligations, end of year (gross) 1,851,440 615,779 688,047 1,075,436 244,740 237,725 4,713,167

Uncollected customer payments from 

Federal sources, end of year (162,650) (301) -- -- -- (945) (163,896)

Obligated balance, end of year (net) $ 1,688,790 $ 615,478 $ 688,047 $ 1,075,436 $ 244,740 $ 236,780 $ 4,549,271

Budget Authority and Outlays, Net:

Budget authority, gross $ 9,915,717 $ 517,247 $ 423,533 $ 152,924 $ 346,393 $2,465,500 $13,821,314

Actual offsetting collections (1,434,608) (2,172) -- -- -- (30,387) (1,467,167)

Change in uncollected customer payment 

from Federal sources 5,276 218 -- -- -- 2,898 8,392

Budget authority, net $ 8,486,385 $ 515,293 $ 423,533 $ 152,924 $ 346,393 $2,438,011 $12,362,539

Outlays, gross $10,283,652 $ 611,290 $ 395,743 $ 479,194 $ 334,254 $2,365,040 $ 14,469,173

Actual offsetting collections (1,434,608) (2,172) -- -- -- (30,387) (1,467,167)

Outlays, net 8,849,044 609,118 395,743 479,194 334,254 2,334,653 13,002,006

Distributed offsetting receipts -- -- -- -- -- (2,764,695) (2,764,695)

Agency outlays, net $ 8,849,044 $ 609,118 $ 395,743 $ 479,194 $ 334,254 $ (430,042) $ 10,237,311

Required Supplementary Information (Unaudited)

Financial Section
144 U.S. Customs and Border Protection • Performance and Accountability Report

Custodial Activity

Substantially all duty, tax and fee revenues collected by CBP are remitted to various General Fund accounts maintained by Treasury and U.S Department of Agriculture. Treasury further distributes these revenues to other Federal 

agencies in accordance with various laws and regulations. CBP transfers the remaining revenue (less than one percent of revenues collected) directly to other Federal agencies, the Governments of Puerto Rico and the U.S. Virgin 

Islands. Refunds of revenues collected from import/export activities are recorded in separate accounts established 

for this purpose and are funded through permanent indefinite appropriations. These activities reflect the nonentity, or custodial, responsibilities that CBP, as an agency of the Federal government, has been authorized by law 

to enforce.

CBP reviews selected documents to ensure all duties, taxes and fees owed to the Federal government are paid and 

to ensure regulations are followed. If CBP determines that duties, taxes, fees, fines or penalties are due in addition 

to estimated amounts previously paid by the importer/violator, the importer/violator is notified of the additional 

amount due. CBP regulations allow the importer/violator to file a protest on the additional amount due for review 

by the Port Director. A protest allows the importer/violator the opportunity to submit additional documentation 

supporting their claim of a lower amount due or to cancel the additional amount due in its entirety. During the 

protest period, CBP does not have a legal right to importer/violator’s assets, and consequently CBP recognizes 

accounts receivable only when the protest period has expired or an agreement is reached. For FY 2012 and 2011, 

CBP had the legal right to collect $2.7 billion of receivables. In addition, there were $2.6 billion and $2.3 billion 

representing records still in the protest phase for FY 2012 and 2011, respectively. CBP recognized as write-offs $78.4 

million and $109.0 million of assessments that the Department has statutory authority to collect at September 30, 

2012 and 2011, but has no future collection potential. Most of this amount represents fines, penalties and interest.

Required Supplementary Information (Unaudited)
Financial Section 145

Independent Auditors’ Report

The independent audit of CBP’s consolidated financial statements was conducted by KPMG LLP, and follows in 

its entirety.

Auditors’ Report
146 U.S. Customs and Border Protection • Performance and Accountability Report
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Other Accompanying 

Information

This section includes CBP’s Schedule of Spending and information on CBP’s Revenue Gap, Revenue Collections, 

Improper Payments Information, and Summary of Financial Statement Audit and Management Assurances. The 

section is unaudited.
170 U.S. Customs and Border Protection • Performance and Accountability Report

Schedule of Spending

For the Year Ended September 30, 2012 

(in Thousands): 2012

What Money is Available to Spend?

Total Resources $ 17,223,692

Less: Amount Available but Not Agreed to be Spent 638,510

Less: Amount Not Available to be Spent 672,354

Total Amounts Agreed to be Spent $ 15,912,828

How was the Money Spent?

Salaries and Expenses

Personnel Compensation and Benefits $ 8,246,702

Contractual Services and Supplies 2,015,430

Acquisition of Assets 399,271

Refunds 2,378

Other 277

Automation Modernization

Personnel Compensation and Benefits 13,193

Contractual Services and Supplies 243,240

Acquisition of Assets 131,370

Construction

Personnel Compensation and Benefits 24,064

Contractual Services and Supplies 138,601

Acquisition of Assets 463,994

BSFIT

Personnel Compensation and Benefits 25,833

Contractual Services and Supplies 207,261

Acquisition of Assets 184,352

Refunds 928

Air & Marine

Contractual Services and Supplies 396,203

Acquisition of Assets 132,282

Other

Personnel Compensation and Benefits 1,118,251

Contractual Services and Supplies 139,103

Acquisition of Assets 13,447

Refunds 2,221,099

Total Spending $ 16,117,279

Amounts Remaining to be Spent* $ (204,451)

Total Amounts Agreed to be Spent $ 15,912,828

* Amounts Remaining to be Spent is a negative amount because Total Spending represents gross outlays in the current year, 

regardless of when the obligations were incurred, and Total Amounts Agreed to be Spent represents obligations incurred in the 

current year.

Other Accompanying Information
171

Other Accompanying Information (Unaudited)

Revenue Gap

The Entry Summary of Trade Compliance Measurement (TCM) program collects objective statistical data to determine the compliance level of commercial imports with U.S. trade laws, regulations and agreements, and is used to 

produce a dollar amount for Estimated Net Under-collections, and a percent of Revenue Gap. The Revenue Gap is a 

calculated estimate that measures potential loss of revenue owing to noncompliance with trade laws, regulations, 

and trade agreements using a statistically valid sample of the revenue losses and overpayments detected during 

TCM entry summary reviews conducted throughout the year.

FY 2012 

(Estimated) FY 2011 (Actual)

Revenue Gap $ 484.0 mil $ 342.0 mil

Revenue Gap of all collectable 

revenue for year (%) 1.2% 0.9%

Over-Collection $ 65.0 mil $ 64.0 mil

Under-Collection $ 549.0 mil $ 406.0 mil

Overall Trade Compliance Rate (%) 96.5% 96.7%

The preliminary overall compliance rate for FY 2012 is 96.47 percent. The final overall trade compliance rate and 

estimated revenue gap for FY 2012 will be issued in February 2013.

Petitioned and Protested Schedule

An analysis of the changes in petitioned and protested assessed amounts during FY 2012 and 2011 is as follows 

(in thousands):

2012

Balance 

October 1

Additional 

Assessments

Protest in Favor 

of Debtor

Net Reduction 

Administrative 

Process

Additional 

Receivable

Balance 

September 30

Duties $ 212,000 $ 189,374 $ (4,685) $ (77,164) $ -- $ 319,525 

Taxes 688 1,049 -- (1,424) -- 313

Fees 1,167 9,822 (67) (2,635) -- 8,287

Fines/Penalties 1,583,741 901,794 (181,751) (112) (377,025) 1,926,647

Interest 185,336 3,883 (2,889) (13,926) -- 172,404

Antidumping/

Countervailing 

Duty

293,242 (29,518) (5,125) (54,483) -- 204,116

Refunds and 

Drawback 6,810 3,565 (431) (5,318) -- 4,626

Totals $ 2,282,984 $ 1,079,969 $ (194,948) $ (155,062) $ (377,025) $ 2,635,918

Other Accompanying Information
172 U.S. Customs and Border Protection • Performance and Accountability Report

Other Accompanying Information (Unaudited)

2011

Balance 

October 1

Additional 

Assessments

Protest in Favor 

of Debtor

Net Reduction 

Administrative 

Process

Additional 

Receivable

Balance 

September 30

Duties $ 250,802 $ 99,114 $ (12,043) $ (125,873) $ -- $ 212,000 

Taxes 4,899 (4,018) (22) (171) -- 688

Fees 720 1,997 (88) (1,462) -- 1,167

Fines/Penalties 1,355,194 681,399 (267,234) (184,199) (1,419) 1,583,741

Interest 235,929 (12,672) (8,120) (29,801) -- 185,336

Antidumping/

Countervailing 

Duty

567,345 (169,573) (26,295) (78,235) -- 293,242

Refunds and 

Drawback 6,375 2,592 (108) (2,049) -- 6,810

Totals $ 2,421,264 $ 598,839 $ (313,910) $ (421,790) $ (1,419) $ 2,282,984

CBP reviews selected entry documentation to determine whether importer payment estimates of duties, taxes and 

fees were accurate or whether additional supplemental amounts are owed and should be billed. CBP regulations 

allow the importer 90 days (or 180 days for entries on or after December 18, 2004) from the bill date to file a protest and application with the Port Director challenging the assessment of supplemental duties, taxes and fees and 

requesting further review of the protest by CBP Office of Regulations and Rulings. If the Port Director denies the 

protest and application for further review, the protestor has an additional 60 days from the denial date for a review 

of the application by the Commissioner of CBP. Consequently, CBP recognizes accounts receivables only when the 

protested period has elapsed or when a protest decision has been rendered in CBP’s favor.

Additionally, importers and their sureties also have the option to petition for relief after receipt of CBP’s notice that 

a fine or penalty has been assessed when a violation of law or regulation is discovered. The importer or surety has 

60 days to file a petition for relief or make payment of the assessed amount. If a petition is received and CBP finds 

there are extenuating circumstances such as an incorrect assessment, which warrants mitigation, relief is granted 

as prescribed by CBP’s mitigation guidelines and directives. Consequently, CBP recognizes accounts receivables 

only when the petition period has elapsed or when a petition decision has been rendered.

Accounts Receivable with Public, Net

An aging of Accounts Receivable with the Public as of September 30, 2012 and 2011 is as follows (in thousands):

Aged Period

2012 < or = 90 days 91 days –1 year 1–2 years 2–3 years 3+ years Total

Reimbursable Services $ 532 $ 1,595 $ 914 $ 110 $ 1,053 $ 4,204

User Fees 196,201 755 80 1,447 18,978 217,461 

Gross Receivables $196,733 $ 2,350 $ 994 $ 1,557 $ 20,031 $ 221,665 

Less Uncollectible 

Amounts -- -- 77 601 18,807 19,485

Net Receivables $ 196,733 $ 2,350 $ 917 $ 956 $ 1,224 $ 202,180
173

Other Accompanying Information (Unaudited)

Aged Period

2011 < or = 90 days 91 days –1 year 1–2 years 2–3 years 3+ years Total

Reimbursable Services $ 754 $ 2,262 $ 669 $ 1,823 $ 445 $ 5,953 

User Fees 134,891 196 2,349 2,873 15,819 156,128

Gross Receivables $ 135,645 $ 2,458 $ 3,018 $ 4,696 $ 16,264 $ 162,081

Less Uncollectible 

Amounts -- -- 686 2,010 16,408 19,104 

Net Receivables $ 135,645 $ 2,458 $ 2,332 $ 2,686 $ (144) $ 142,977 

Taxes, Duties, and Trade Receivables, Net

An analysis of the changes in accounts receivable during FY 2012 and 2011 is as follows (in thousands):

2012

Receivable 

Category

Balance 

October 1

Receivables 

Recorded During 

the Fiscal Year

Collections Write-offs Adjustments Balance 

September 30

Duties $ 2,352,720 $ 18,175,762 $ (16,529,393) $ (4,975) $ (1,709,377) $ 2,284,737

Excise Taxes 164,325 869,796 (793,251) -- (98,185) 142,685

Fees 148,479 2,066,555 (1,937,872) -- (79,549) 197,613

Fines/

Penalties 437,141 795,557 (57,804) (52,184) (677,472) 445,238

Interest 453,070 120,385 (17,499) (8) (14,818) 541,130

Antidumping/ 

Countervailing 

Duty

885,087 515,730 (253,739) (33) 22,908 1,169,953

Refunds/

Drawback 657 2,808 (1,960) -- (43) 1,462

Totals $ 4,441,479 $22,546,593 $ (19,591,518) $ (57,200) $ (2,556,536) $ 4,782,818

Less: 

Uncollectible 

Amounts 1,709,714 2,082,353

Net 

Receivables $ 2,731,765 $ 2,700,465

Other Accompanying Information
174 U.S. Customs and Border Protection • Performance and Accountability Report

Other Accompanying Information (Unaudited)

2011

Receivable 

Category

Balance 

October 1

Receivables 

Recorded During 

the Fiscal Year

Collections Write-offs Adjustments Balance 

September 30

Duties $ 2,161,519 $ 17,639,980 $(15,925,225) $ (718) $ (1,522,836) $ 2,352,720

Excise Taxes 121,282 815,445 (712,529) (1) (59,872) 164,325 

Fees 133,176 1,615,100 (1,532,181) -- (67,616) 148,479

Fines/

Penalties 454,475 784,709 (56,649) (108,223) (637,171) 437,141

Interest 350,652 165,083 (8,881) (7) (53,777) 453,070 

Antidumping/ 

Countervailing 

Duty

551,270 689,341 (225,565) -- (129,959) 885,087 

Refunds/

Drawback 586 715 (502) -- (142) 657 

Totals $ 3,772,960 $ 21,710,373 $(18,461,532) $(108,949) $ (2,471,373) $ 4,441,479

Less: 

Uncollectible 

Amounts 1,314,313 1,709,714

Net 

Receivables $ 2,458,647 $ 2,731,765

An aging of accounts receivables as of September 30, 2012 and 2011 is as follows (in thousands):

Aged Period

2012 < or = 90 days 91 days –

1 year 1–2 years 2–3 years 3+ years Total

Duties $ 2,132,980 $ 10,990 $ 8,370 $ 44,184 $ 88,214 $ 2,284,738

Excise Taxes 133,617 83 45 2,009 6,931 142,685

User Fees 187,877 8,743 129 255 609 197,613

Fines/Penalties 81,914 73,239 66,057 42,535 181,493 445,238

Interest 87 25,870 55,890 68,606 390,677 541,130

Antidumping/ 

Countervailing Duty -- 179,314 211,519 245,164 533,956 1,169,953

Refunds and Drawback -- 476 78 -- 907 1,461

Gross Receivables $ 2,536,475 $ 298,715 $ 342,088 $ 402,753 $ 1,202,787 $ 4,782,818

Less: Uncollectible 

Amounts 75,837 271,812 315,225 376,021 1,043,458 2,082,353

Net Receivables $ 2,460,638 $ 26,903 $ 26,863 $ 26,732 $ 159,329 $ 2,700,465

Aged Period

2011 < or = 90 days 91 days –

1 year 1–2 years 2–3 years 3+ years Total

Duties $ 2,187,728 $ 7,676 $ 23,046 $ 21,968 $ 112,302 $ 2,352,720

Excise Taxes 155,031 26 1,851 1,589 5,828 164,325 

User Fees 147,411 95 183 429 361 148,479 

Fines/Penalties 51,547 61,810 77,719 97,460 148,605 437,141 

Interest 69 26,750 42,243 55,438 328,570 453,070 

Antidumping/ 

Countervailing Duty 1,555 126,917 198,524 159,727 398,364 885,087 

Refunds and Drawback 2 208 4 171 272 657

Gross Receivables $ 2,543,343 $ 223,482 $ 343,570 $ 336,782 $ 994,302 $ 4,441,479 

Less: Uncollectible 

Amounts 47,757 193,995 302,160 293,952 871,850 1,709,714

Net Receivables $ 2,495,586 $ 29,487 $ 41,410 $ 42,830 $ 122,452 $ 2,731,765 
175

CBP Collections by Category

(In thousands)

Duties

2008

(Unaudited)

2009

(Unaudited)

2010

(Unaudited)

2011

(Unaudited)

2012

(Unaudited)

Consumption Entries $ 27,543,807 $ 22,759,054 $ 25,312,699 $ 29,522,341 $ 30,860,080

Warehouse Withdrawals 76,910 61,638 54,214 41,907 38,676

Mail Entries 4,223 3,132 3,354 3,159 2,028

Passenger Baggage Entries 3,888 3,217 3,616 3,652 4,085

Crew Baggage Entries 8 5 9 6 5

Military Baggage Entries 1 2 2 3 5

Informal Entries 54,537 47,596 56,200 63,689 65,543

Vessel Repair Entries 43,315 39,240 21,521 30,381 16,710

Other Duties 41,277 33,237 9,747 8,359 18,868

Total Duties $ 27,767,966 $ 22,947,121 $ 25,461,362 $ 29,673,497 $ 31,006,000

Miscellaneous

Violations of CBP Law 69,993 59,709 60,380 61,532 52,451

Testing, Inspecting & Grading 5,114 39 58 64 4,157

Miscellaneous Taxes 20,082 19,413 20,382 21,845 21,745

USDA Collections 112,319 110,425 120,637 120,704 131,680

Harbor Maintenance Fee 1,467,405 1,125,008 1,221,712 1,469,109 1,539,799

Fees 8,134 8,397 7,817 5,904 7,392

User Fee Account 2,633,600 2,258,027 2,440,275 2,779,483 3,439,523

Unclaimed Funds 372 276 188 164 469

Recoveries 9 7 -- -- --

Interest 23,987 30,623 13,555 35,577 40,173

Other CBP Receipts 15,325 22,331 15,329 13,838 22,412

Total Miscellaneous $ 4,356,340 $ 3,634,255 $ 3,900,333 $ 4,508,220 $ 5,259,801

Internal Revenue Taxes 2,372,762 2,468,617 2,782,240 2,796,788 2,995,140

Total Collections $ 34,497,068 $ 29,049,993 $ 32,143,935 $ 36,978,505 $ 39,260,941

These schedules will not equal amounts reported on the Consolidated Statement of Custodial Activity due to 

timing adjustments and entity collections which are not reported on the Consolidated Statement of Custodial 

Activity but are included in this schedule.

Other Accompanying Information (Unaudited)

Other Accompanying Information
176 U.S. Customs and Border Protection • Performance and Accountability Report

CBP Collections by Major Processing Port Locations

(In thousands)

2008

(Unaudited)

2009

(Unaudited)

2010

(Unaudited)

2011

(Unaudited)

2012

(Unaudited)

Boston $ 473,272 $ 399,974 $ 352,710 $ 345,490 $ 363,497

Buffalo-Niagara Falls 219,508 242,514 342,659 294,659 317,012

Ogdensburg 150,884 119,537 132,890 132,567 147,013

Portland, Maine 62,549 55,795 54,993 60,124 62,517

Providence 80,518 75,706 82,532 112,008 126,627

St. Albans 32,817 43,030 46,778 46,145 50,206

Baltimore 637,952 544,222 615,025 629,569 654,950

Philadelphia 588,607 456,252 422,253 448,508 461,559

Newark 4,642,846 4,036,961 4,347,759 5,025,814 5,219,277

JFK Airport 1,216,836 863,404 961,149 1,017,668 981,040

Charleston 1,002,353 820,601 858,098 1,043,719 1,184,188

Miami 634,894 520,283 600,506 771,770 803,266

San Juan 108,981 106,167 101,368 117,235 125,899

St. Thomas 17,145 15,301 16,720 14,948 12,550

Savannah 1,550,580 1,408,693 1,643,027 1,985,424 2,047,913

Tampa 516,533 358,532 425,038 447,629 492,541

Wilmington 328,933 267,905 294,996 304,612 266,326

Norfolk 709,807 634,642 604,357 704,551 736,196

NFC Indianapolis/Washington 1,941,618 1,107,891 1,418,106 1,650,976 1,870,288

Mobile 196,619 157,615 168,661 180,997 185,049

New Orleans 1,145,196 942,917 1,011,820 1,232,590 1,303,706

Dallas/Ft Worth 460,147 409,354 428,898 527,570 574,583

El Paso 173,202 140,143 139,378 144,829 152,491

Houston 909,631 764,115 735,314 919,704 1,116,282

Laredo 411,218 371,492 424,299 583,472 656,435

Port Arthur 33,725 33,665 28,584 30,079 20,869

Nogales 82,410 73,703 84,353 96,259 94,566

Los Angeles 8,387,589 7,468,426 8,565,244 9,715,689 10,268,894

San Diego 294,529 218,071 216,275 221,490 252,688

Anchorage 116,518 106,594 124,792 134,253 118,389

Honolulu 43,013 32,732 32,816 36,089 37,192

Portland 443,190 318,839 303,922 312,337 365,043

San Francisco 1,161,110 1,035,916 1,115,329 1,301,094 1,405,650

Seattle 1,264,836 1,122,774 1,145,325 1,307,307 1,354,234

Chicago 1,664,181 1,407,416 1,602,089 1,916,811 2,009,737

Cleveland 1,528,043 1,293,102 1,490,599 1,710,571 1,810,848

Detroit 563,036 446,972 528,280 625,148 677,489

Milwaukee 37,766 24,687 24,786 23,183 31,130

Minneapolis 198,610 170,645 187,866 244,880 265,195

Pembina 23,635 23,254 23,483 25,078 31,373

St. Louis 282,539 273,758 304,941 364,369 426,942

Great Falls 159,692 136,393 135,917 171,290 179,291

Total Revenues Collected $ 34,497,068 $ 29,049,993 $ 32,143,935 $ 36,978,505 $ 39,260,941

These schedules will not equal amounts reported on the Consolidated Statement of Custodial Activity due to 

timing adjustments and entity collections which are not reported on the Consolidated Statement of Custodial 

Activity but are included in this schedule.

Other Accompanying Information (Unaudited)
177

Summary of Financial Statement Audit and 

Management Assurances

Table 1 and Table 2 below provide a summary of the financial statement and management assurances for FY 2012.

Table 1: FY 2012 Summary of the Financial Statement Audit

Audit Opinion Unqualified

Restatement No

Material Weakness Beginning 

Balance New Resolved Consolidated Ending Balance

Custodial Revenue and 

Drawback Controls 1 0 0 0 1

Total Material 

Weaknesses 1 0 0 0 1

In FY 2012, the Independent Auditor’s consolidated financial statement report identified one material weakness, 

Custodial Revenue and Drawback Controls, for CBP.

Other Accompanying Information (Unaudited)

Other Accompanying Information
178 U.S. Customs and Border Protection • Performance and Accountability Report

Table 2: FY 2012 Summary of Management Assurances

Effectiveness of Internal Control Over Financial Reporting (FMFIA Section 2)

Statement of Assurance Qualified

Material Weakness Beginning 

Balance New Resolved Consolidated Reassessed Ending 

Balance

Custodial Revenue and 

Drawback Controls 1 0 0 0 0 1

Total Material Weaknesses 1 0 0 0 0 1

Effectiveness of Internal Controls Over Operations (FMFIA Section 2)

Statement of Assurance Qualified

Material Weakness Beginning 

Balance New Resolved Consolidated Reassessed Ending 

Balance

0 0 0 0 0 0

Total Material Weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA Section 4)

Statement of Assurance Systems conform except for the below non-conformance(s)

Non-Conformances Beginning 

Balance New Resolved Consolidated Reassessed Ending 

Balance

Financial Systems Security 1 0 0 0 0 1

Core Financial Systems 1 0 0 0 0 1

Information Technology 

Infrastructure 0 1 0 0 0 1

Total Non-Conformances 2 1 0 0 0 3

Compliance with Federal Financial Management Improvement Act (FFMIA)

CBP

Overall Substantial Compliance No

1. System Requirements No

2. Accounting Standards Yes

3. USSGL at Transaction Level No

Other Accompanying Information (Unaudited)
Other Accompanying Information 179

Improper Payments Information Act of 2002 (IPIA)

The Improper Payments Information Act (IPIA) of 2002 was amended by the Improper Payments Elimination and 

Recovery Act (IPERA) of 2010.

CBP identified and performed a risk assessment on all ten programs, three of which were identified as high risk. 

The Custodial CDSOA and Wool Manufacturers payment testing has not identified any improper payments in the 

past three years of testing. As a result OMB granted relief from testing this program until FY 2013. CBP performed 

sample payment testing on the remaining two high risk programs. The Custodial Refund and Drawback payment 

testing yielded an estimated improper payment amount of $171 thousand of the $1.3 billion, or less than 0.01 

percent, disbursed during fiscal year 2011. The Border Security Fencing payment testing yielded an estimated 

improper payment amount of $67 thousand of the $197 million testing population, or 0.03 percent, disbursed 

during fiscal year 2011.

Overpayments Recaptured Outside of Payment Recapture Audits

Agency Source Amount 

Identified CY

Amount 

Recovered 

CY

Amount 

Identified PY

Amount 

Recovered 

PY

Cumulative 

Amount Identified 

(CY+PYs)

Cumulative 

Amount Recovered 

(CY+PYs)

IPIA Sampling $ 13,214 $ 8,392 $ 496 $ 1,441 $ 258,969** $ 254,147

Self-Reporting $ 205,854 $ 165,750 $ 112,381 $ 112,381 $ 380,299 $ 340,195***

Public Reporting $ 88,425 $ 88,425 $ 990,276 $ 990,276 $ 1,344,931 $ 1,344,931

** Amount is reduced by $2,104 from a PY that was deemed invalid *** $40,104 collected on 10/1/12

Disposition of Recaptured Funds

Program or 

Activity

Type of 

Payment 

(Contract, 

Grant, Benefit, 

Loan, or Other)

Agency 

Expenses to 

Administer 

the Program

Payment 

Recapture 

Auditor Fees

Financial 

Management 

Improvement 

Activities

Original 

Purpose

Office of 

Inspector 

General

Returned to 

Treasury

CBP Mission Contract $ 0 $ 2,098 $ 0 $ 6,294 $ 0 $ 0

Payment Recapture Audit Targets

Program or 

Activity

Type of 

Payment 

(Contract, 

Grant, Benefit, 

Loan, or Other)

CY Amount 

Identified

CY Amount 

Recovered

CY Recovery 

Rate (Amount 

Recovered/

Amount 

Identified)

CY + 1 

Recovery 

Rate Target

CY + 2 

Recovery 

Rate Target

CY + 3 

Recovery 

Rate Target

CBP Mission Contract $ 13,214 $ 8,392 64% 100% 100% 100%

Other Accompanying Information (Unaudited)
180 U.S. Customs and Border Protection • Performance and Accountability Report

Aging of Outstanding Overpayments

Program or 

Activity

Type of 

Payment 

(Contract, 

Grant, Benefit, 

Loan, or Other)

CY Amount 

Outstanding 

(0–6 months)

CY Amount 

Outstanding 

(6 months to 

1 year)

CY Amount 

Outstanding 

(over 1 year)

CBP Mission Contract $ 44,926 $ 0 $ 0

CBP also identified amounts for recovery during the Improper Payment Information Act (IPIA) review of FY 2011 

disbursements. The IPIA results are as follows (dollars in thousands):

Amounts Identified 

as Improper 

Payments

Amounts Identified 

for Recovery

Amounts 

Recovered

Custodial Refund and Drawback $ 2,953 $ 0 $ 0

Border Security Fencing $ 15,273 $ 0 $ 0

Totals $ 18,226 $ 0 $ 0

Recoveries for Custodial Refund and Drawback Program payments are restricted by regulations governing collections of duty, taxes, and fees associated with trade-related activity. Recovery of the improper payments for Border 

Security Fencing is not required as both payments were for Prompt Payment Interest that was earned but not paid.

Improper Payment Reduction Outlook

(In millions)

Source of 

Recovery

Amount 

Identified 

(CY) ($000)

Amount 

Recovered 

(CY) ($000)

Amount 

Identified 

(PY) ($000)

Amount 

Recovered 

(PY) ($000)

Cumulative 

Amount Identified 

(CY+PYs) ($000)

Cumulative 

Amount Recovered 

(CY+PYs) ($000)

High-Dollar 

Overpayments 

Reporting

$ 0.3 $ 0.3 $ 1.1 $ 1.1 $ 1.5 $ 1.5

IPIA High-Risk 

Program Testing $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0 $ 0.0

Post Payment 

Reviews $ > 0.1 $ > 0.1 $ > 0.1 $ > 0.1 $ 0.3 $ 0.3

CBP Totals $ 0.3 $ 0.3 $ 1.1 $ 1.1 $ 1.8 $ 1.8

Other Accompanying Information (Unaudited)
Other Accompanying Information 181

Other Accompanying Information (Unaudited)

Payment Recapture Audit Reporting

CBP contracted the audit recovery work for disbursements made during FY 2011. The results of the recovery audit 

efforts continue to identify negligible recovery amounts. The recovery audit results are reported below:

Program or 

Activity

Type of Payment 

(Contract, Grant, 

Benefit, Loan, 

or Other)

Amount Subject 

to Review for CY

Reporting

Actual Amount 

Reviewed and 

Reported (CY)

Amounts 

Identified for 

Recovery (CY)

Amounts 

Recovered (CY)

CBP Mission Contract $ 2,184,993,111 $ 2,184,993,111 $ 13,214 $ 8,392

% of Amount 

Recovered 

out of Amount 

Identified (CY)

Amount 

Outstanding (CY)

% of Amount 

Outstanding out 

of Amount 

Identified (CY)

Amount 

Determined Not to 

be Collectable (CY)

% of Amount 

Determined Not 

to be Collectable 

out of Amount 

Identified (CY)

Amounts 

Identified for 

Recovery (PY)

64 $ 4,822 36 $ 0 0 $ 247,859

Amounts 

Recovered (PY)

Cumulative 

Amounts 

Identified for 

Recovery (CY+PY)

Cumulative 

Amounts 

Recovered (CY+PY)

Cumulative 

Amounts 

Outstanding 

(CY+PY)

Cumulative 

Amounts 

Determined Not 

to be Collectable

(CY+PY)

$ 245,755 $ 258,969* $ 254,147 $ 4,822 $ 0

*Amount in column “Cumulative Amounts Identified for Recovery (CY+PY)” is reduced by $2,104 from a PY that was 

deemed invalid

Improper Payment (IP) Reduction Outlook

(In millions)

2011 2011 2011 2012 2012 2012 2012 2012 2013 2013 2013 2014 2014 2014 2015 2015 2015

Program PY

Outlays PY % PY $ CY

Outlays CY IP % CY IP $

CY Overpayment 

$

CY

Underpayment 

$

CY + 

1 est. 

Outlays

CY + 1 

IP %

CY + 1 

IP $

CY + 

2 est. 

Outlays

CY + 2 

IP %

CY + 2 

IP $

CY + 

3 est. 

Outlays

CY + 3 

IP %

CY + 3 

IP $

Refund & 

Drawback $1,343 0.01 $.2 $1,909 0.10 $2 $0 $0 $1,300 0.15 $2 $1,300 0.15 $2 $1,300 0.15 $2

Border 

Security 

Fencing

$197 0.03 $0 $173 0.03 $0 $0 $0 $159 0.03 $0 $157 0.03 $0 unavailable -- --

The forecast of activity related to Refund and Drawback depends on indeterminable factors including the volume of trade 

activity and various trade related issues addressed and ruled on by the Department of Commerce.
182 U.S. Customs and Border Protection • Performance and Accountability Report

Office of Inspector General (OIG) Report on 

Major Management Challenges

The DHS OIG’s report on Major Management Challenges Facing the Department of Homeland Security, OIG-13-09, 

dated November 14, 2012, and the agency’s progress addressing these challenges are addressed at the DHS consolidated level and are incorporated into the DHS Fiscal Year 2012 Annual Financial Report, which can be found at: 

www.dhs.gov/performance-accountability.

Other Accompanying Information (Unaudited)
183

Acronyms

ABTC Agricultural/Biological Terrorism 

Countermeasures

ACAS Air Cargo Advance Screening

ACE Automated Commercial Environment

ACS Automated Commercial System

ACTT Alliance to Combat 

Transnational Threats

AD/CVD Antidumping and Countervailing Duties

Ag-Bio Agriculture Bioterrorism

ALM Active Lane Management

AMOC Air Marine Operations Center

AMSCO Analytical Management Systems 

Control Office

APHIS Animal and Plant Health 

Inspection Service

APIS Advance Passenger 

Information System

ARO Admissibility Review Office

ASO Alien Smuggling Organizations

ATEP Alien Transfer and Exit Program

ATS Automated Targeting System

ATSP Automated Targeting 

System - Passenger

BIC Border Intelligence Centers

BSI Border Security Initiative

CAE Component Acquisition Executive

CBIG Caribbean Border Interagency Group

CBP U.S. Customs and Border Protection

CBSA Canadian Border Services Agency

CDS Comprehensive Consequence 

Delivery System

CDSOA Continued Dumping and Subsidy 

Offset Act

CEE Centers of Excellence and Expertise

CFO Chief Financial Officer

CIA Central Intelligence Agency

CLP Carrier Liaison Program

COA Certificates of Authorization

COAC Commercial Operations 

Advisory Committee

COBRA Consolidated Omnibus 

Budget Reconciliation

COS Chief of Staff

COSS Customs Overtime Scheduling System

COTR Contracting Officer 

Technical Representative

CPSC Consumer Product Safety Commission

CSA Canada Self-Assessment

CSI Container Security Initiative

CSRS Civil Service Retirement System

CTAC Commercial Targeting and 

Analysis Center

C-TPAT Customs-Trade Partnership 

Against Terrorism

DCL Dedicated Commuter Lane

Acronyms
184 U.S. Customs and Border Protection • Performance and Accountability Report

Acronyms

DCM Drawback Compliance Measurement

DCR Diversity and Civil Rights

DEA Drug Enforcement Administration

DHS Department of Homeland Security

DIS Digital Imaging System

DOJ Department of Justice

DOL Department of Labor

DOS Department of State

eGIS Enterprise Geospatial 

Information Services

ELMO Enforcement Link Mobile Operations

EPA Environmental Protection Agency

ERP Enterprise Resource Planning

ESTA Electronic System for 

Travel Authorization

FASAB Federal Accounting Standards 

Advisory Board

FAST Free and Secure Trade

FBI Federal Bureau of Investigation

FDAU Fraudulent Document Analysis Unit

FECA Federal Employees’ Compensation Act

FERS Federal Employees’ Retirement System

FFMIA Federal Financial Management 

Improvement Act

FISMA Federal Information Security 

Management Act of 2002

FMFIA Federal Managers’ Financial 

Integrity Act

FOB Forwarding Operating Bases

FPF Fines, Penalties and Forfeitures

FPO Fraud Prevention Officer

FPP Fraud Prevention Program

FSIS Food Safety Inspection Service

FY Fiscal Year

FYHSP Future Year Homeland 

Security Program

GAAP Generally Accepted 

Accounting Principles

GAO Government Accountability Office

GE Global Entry

GOES Global Online Enrollment System

GOM Government of Mexico

GPRA Government Performance and 

Results Act

GPRMA Government Performance and Results 

Modernization Act

GSA General Services Administration

HRM Human Resources Management

HSGP Homeland Security Grant Program

IA Internal Affairs

IAP Immigration Advisory Program

IBET Integrated Border Enforcement Teams
185

Acronyms

ICAD Intelligence Computed 

Assisted Detection

ICE Immigration and Customs Enforcement

ICS International Container Security

IDI Injured Domestic Injuries

ILU International Liaison Unit

IMA Integrated Mission Analysis

INTERPOL International Criminal 

Police Organization

INA Immigration and Nationality Act

IPR Intellectual Property Rights

IRS Internal Revenue Service

ISA Importer Self-Assessment

ISA-PS Importer Self-Assessment - 

Product Safety

ITDS International Trade Data System

IUF Immigration User Fees

IUFA Immigration User Fee Account

IWS Interoperability Web Service

JOD Joint Operations Directorate

JSP Joint Security Program

JTT Joint Targeting Teams

LOB Lines of Business

MEA Multi-role Enforcement Aircraft

MID Management Inspection Division

MLU Mexican Liaison Units

MPC Mobile Processing Center

MRA Mutual Recognition Arrangement

MSS Mobile Surveillance System

NAAP National Annual Audit Plan

NCBFAA National Customs Brokers and 

Forwarders Association of America

NCTC National Counterterrorism Center

NEI National Export Initiative

NARP National Agriculture Release Program

NII Non-Intrusive Inspection

NMFS National Marine Fisheries Service

NTCC National Targeting Center - Cargo

NTCP National Targeting Center - Passenger

OA Office of Administration

OAM Office of Air and Marine

OASISS Operation Against Smugglers Initiative 

on Safety and Security

OBP Office of Border Patrol

OCA Office of Congressional Affairs

OCC Office of Chief Counsel

OES Office of Executive Secretariat

OFO Office of Field Operations

OGA Other Government Agencies

OIG Office of Inspector General

Acronyms
186 U.S. Customs and Border Protection • Performance and Accountability Report

OIIL Office of Intelligence and 

Investigative Liaison

OIT Office of Information and Technology

OMB Office of Management and Budget

OPA Office of Public Affairs

OPD Office of Program Development

OPP Office of Policy and Planning

OPSG Operation Stonegarden

OSI Office of Strategic Integration

OT Office of International Trade

OTIA Office of Technology Innovation 

and Acquisition

OTD Office of Training and Development

OTM Other Than Mexican

OTR Office of Trade Relations

PAP Partnership Action Plan

PAR Performance and Accountability Report

PDN Paso Del Norte

PGA Participating Government Agency

PMF Performance Management Framework

POE Port of Entry

PPAMH Personal Property Asset 

Management Handbook

PPBA Planning, Programming, Budgeting, 

and Accounting

PPQ Plant Protection and Quarantine

PRD Personal Radiation Detectors

PTI Priority Trade Issues

QHSR Quadrennial Homeland Security Review

RED Re-Engineering Team

RFID Radio Frequency Identification

RIID Radiation Isotope 

Identification Devices

RPM Radiation Portal Monitor

RR Rules and Regulations

SAR Search and Rescue

SBREFA Small Business Regulatory 

Enforcement Fairness Act

SENTRI Secure Electronic Network for Traveler 

Rapid Inspection

SF Standard Form

SFFAS Statement of Federal Financial 

Accounting Standards

SFI Secure Freight Initiative

SIP Self-Inspection Program

SLT State, Local, and Tribal Office

SOG Special Operations Group

SRT Special Response Team

StAMP Strategic Air and Marine Plan

STB Single Transaction Bond

STC South Texas Campaign

SWB Southwest Border

Acronyms
C3

TCM Trade Compliance Measurement

TCO Transnational Criminal Organization

TDY Temporary Duty

TECS The Enforcement 

Communication System

TPVT Textile Production Verification Team

TSA Transportation Security Agency

TSDB Terrorist Screening Data Base

UAS Unmanned Aircraft System

UGS Underground Sensors

USBP United States Border Patrol

USCG U.S. Coast Guard

USDA U.S. Department of Agriculture

VACIS Vehicle and Cargo Inspection System

VWP Visa Waiver Program

WHTI Western Hemisphere Travel Initiative

WMD/Es Weapons of Mass Destruction/Effects

XML Extensible Markup Language

Acronyms

Acronyms
Office of Administration

1331 Pennsylvania Avenue

Room 950, National Place

Washington, DC 20229

Please visit the U.S. Customs and Border Protection web site at

www.cbp.gov

To report suspicious activity, call

1–800–BE ALERT

April 2013