Office of Inspector General 

DEPARTMENT OF HOMELAND SECURITY 

Review of the Status of
 


Department of Homeland Security
 


Efforts to Address Its
 


Major Management Challenges
 


Office of Audits
 


OIG-04-21 March 2004
 


Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was established 

by the Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector 

General Act of 1978. This is one of a series of audit, inspection, investigative, and special reports 

prepared by the OIG periodically as part of its oversight responsibility with respect to DHS to 

identify and prevent fraud, waste, abuse, and mismanagement. 

This report is the result of an assessment of the strengths and weaknesses of the program, 

operation, or function under review. It is based on interviews with employees and officials of 

relevant agencies and institutions, direct observations, and a review of applicable documents. 

The recommendations herein, if any, have been developed on the basis of the best knowledge 

available to the OIG, and have been discussed in draft with those responsible for implementation. 

It is my hope that this report will result in more effective, efficient, and/or economical operations. 

I express my appreciation to all of those who contributed to the preparation of this report. I express my appreciation to all of those who contributed to the preparation of this report.

Clark Kent Ervin

Inspector General

Contents
 


Introduction......................................................................................................................................2
 


Results in Brief ................................................................................................................................3
 


Consolidating the Department’s Components .................................................................................4
 


Contract Management ......................................................................................................................7
 


Grants Management .........................................................................................................................9
 


Financial Management...................................................................................................................10
 


Information Technology Management...........................................................................................18
 


Human Capital Management .........................................................................................................22
 


Intelligence Matters .......................................................................................................................22
 


Border Security ..............................................................................................................................26
 


Transportation Security..................................................................................................................44
 


Appendices 

Appendix 1: Status of Key Legacy OIG Recommendations .........................................................61
 


Appendix 2: Abbreviations and Acronyms ....................................................................................70
 


Appendix 3: Purpose, Scope and Methodology.............................................................................74
 


Appendix 4: Report Distribution ...................................................................................................75
 


Status on the Department Management Challenges Page 1
 
OIG
 
 Department of Homeland Security 

Office of Inspector General 

Introduction 

On March 1, 2004, it was one year since almost 180,000 employees and 

22 disparate agencies combined to form the Department of Homeland Security 

(DHS) in one of the largest government reorganizations ever. The reorganization 

had elements of a merger, divestiture, acquisition, and startup. Because of 

the size and complexity of the effort, the existing challenges already faced by 

the incoming components, and the importance of the department’s mission, 

the General Accounting Office (GAO) designated the implementation and 

transformation of DHS as a “high risk.” GAO also noted that successful 

transformations of large organizations under even less complicated situations 

could take from 5 to 7 years. 

The Office of Inspector General (OIG), as one of its first tasks, consulted with 

the legacy OIGs whose staffs OIG inherited and identified major management 

challenges facing the department. These challenges were then used in setting 

OIG priorities for audits, inspections, and evaluations of DHS programs and 

operations, and developing OIG’s performance plans. As part of OIG’s fiscal year 

(FY) 2004 performance plan, which may be found on OIG’s web site, we included 

an assessment of the department’s progress in addressing these challenges. This 

report presents that assessment, and includes the status of key recommendations 

still open at the beginning of the period; observations from OIG audits and 

inspections completed or nearing completion; and discussions with DHS officials 

on major DHS program initiatives and accomplishments during the year. 

Much of the information presented in this report is based on information provided 

by DHS officials, and which OIG has not had a chance to verify. Consequently, 

the report does not constitute an audit according to generally accepted government 

auditing standards, nor does the report contain specific recommendations, other 

than those made in OIG reports cited herein. Nevertheless, OIG believes this 

document provides a valuable compendium of issues related to, and DHS’ 

progress in addressing, the major management challenges facing DHS. 

Page 2 Status on the Department Management Challenges
 

Results in Brief
 

DHS has made significant progress in addressing all of its management 

challenges. However, some of the planned improvements will take years to 

develop and implement, and much remains to be done. For example: 

§ DHS has taken steps to consolidate many of its support service operations, 

including financial management, contracting, and human resources, but the 

operations are still not under central control, and contracts management 

and information technology present formidable challenges. 

§ DHS has taken steps to consolidate its preparedness grant programs 

under one component, and generally has been timely in awarding “first 

responder” funds; however, state and local grant recipients have been 

slow in spending the funds, and an effective grants management system is 

needed. 

§ Financial management functions provided by 19 separate service providers 

during FY 2003 are now provided by 10 service providers, including 4 

outside DHS; however, development and implementation of a single, 

integrated financial management system are still years away. 

§ DHS has developed and distributed for public comment proposed human 

resource regulations that will dramatically affect DHS employees and 

could serve as a model for the whole federal government; however, 

finalizing and implementing these regulations will be challenging. 

§ DHS has made major strides in protecting U.S. borders, including 

beginning implementation of the United States Visitor and Immigrant 

Status Indication Technology System (US-VISIT) program, which will 

provide the capability to record entry and exit information on foreign 

visitors who travel through U.S. air, sea, and land ports of entry. However, 

the challenges are immense, and it will take years to address them fully. 

Two of the greatest homeland security challenges facing DHS over the past 

year have been the ongoing effort to implement the Aviation and Transportation 

Security Act of 2001 (ATSA) and the Maritime Transportation Security Act of 

2002 (MTSA). To this end, the Transportation Security Administration (TSA) 

and the United States Coast Guard (Coast Guard) have made great progress in 

implementing critical components of the legislation and, as a result, our nation’s 

defense against international terrorism has never been stronger. Despite the 

Status on the Department Management Challenges Page 3
 
progress that has been made over the past year, tight legislative deadlines, 

funding difficulties, a shortage of trained and qualified personnel to oversee 

and implement the legislation, delays in the acquisition and implementation 

of technological solutions, and a shortage of critical infrastructure to support 

homeland security initiatives, continue to challenge the department. 

Information technology (IT) also remains a major management challenge for 

DHS. IT systems and tools are fundamental to supporting programs and activities 

across the department—from counter-terrorism, to border protection, to internal 

department operations. Effectively managing the IT assets is not only critical to 

achieving performance goals and the greatest possible returns on investments, 

it is also required by law. With central responsibility for ensuring effective IT 

management pursuant to the Clinger-Cohen Act and related statutes, the Chief 

Information Officer (CIO) is working to establish department-wide IT strategies 

and a consolidated framework for meeting mission needs. Key areas of focus 

include IT security, integrating systems, and ensuring effective information 

sharing. 

In February 2004, DHS issued its first strategic plan, with goals and objectives 

directly linked to accomplishing the three objectives of the President’s National 

Strategy for Homeland Security. These goals and objectives, together with 

specific measures of effectiveness, which are still being developed, will provide 

an important impetus for further progress in meeting DHS’ management 

challenges. 

The OIG will continue to track the department’s progress in these areas. Our 

FY 2004 performance plan, which addresses many aspects of DHS’ management 

challenges, can be found on our website at www.dhs.gov. 

Consolidating the Department’s Components 

Perhaps the biggest challenge facing DHS is integrating 22 separate components 

into a single, effective, efficient, and economical department. DHS has made 

notable progress in this area, but there is much to be done, and OIG has concerns 

that structural and resource problems are inhibiting progress in certain support 

functions. 

Support Functions 

On March 1, 2003, DHS faced the daunting task of supporting 22 different 

components receiving services from nine different parent agencies. To provide 

Page 4 Status on the Department Management Challenges
 
continuity of service, DHS signed Memoranda of Understanding (MOU) with 

each of the parent agencies to continue that support. Then, on May 1, the Under 

Secretary for Management established a transition team to consolidate support 

services throughout the department. The team identified 255 unique services in 

the 22 components and DHS headquarters resulting in 3,457 separate services 

requirements. The services were catalogued under eight lines of business: 

administrative services, human resources, information technology, procurement, 

financial management, civil rights, legal, and security. 

According to DHS officials, by October 2003, the department was supporting 

1463 of the 3457 services, and they expect that most of the services will be 

provided by DHS by the end of FY 2004. In addition, DHS has made significant 

progress in consolidating services under fewer service providers within the 

department: 

§ 19 financial management service providers were reduced to 10; 

§ 13 separate contracting offices were reduced to 8; 

§ 22 human resource offices were reduced to 7; 

§ 8 different payroll systems were reduced to 3, and the DHS expects to pay 

all of its employees using one system by the end of the year; and 

§ 22 property management systems have been consolidated to 3. 

Of particular note was the establishment in July 2003 of an integrated project 

team to realign and transform support services for the 68,000 mission delivery 

employees assigned to the Bureau of Immigration and Customs Enforcement 

(ICE), the Bureau of Customs and Border Protection (CBP), and the Bureau of 

Citizenship and Immigration Services (CIS). This was especially difficult because 

ICE was highly decentralized, and CBP was highly centralized. The team was 

to develop a basis for shared services, consolidate services where appropriate to 

realize economies of scale, and ensure accountability. The result was that CIS, 

ICE, and CBP each became primary service providers for selected services. For 

example, CBP provides facilities acquisition and management, ICE provides 

supervisory leadership training, and CIS provides records management. For some 

services, however, the three components remain self-supporting. Those services 

include procurement, personal property, budget, and labor and employee relations. 

Among the next steps in implementing the tri-bureau shared services arrangement 

are implementation of a governance charter, establishment of performance 

Status on the Department Management Challenges Page 5
 
metrics and performance reporting systems, and establishment of “continuous 

improvement” teams. 

Further, DHS has undertaken a new resource transformation initiative called 

“eMerge2

”1. This effort is to result in a consolidated enterprise solution for 

DHS administrative functions, including accounting, acquisition, budgeting, and 

procurement. IT management challenges are discussed later in this report. 

OIG is concerned, however, that structural and resource problems are inhibiting 

progress in the areas of financial management, contracts management, and 

information technology, as discussed in the related sections below. 

Program Integration 

The Federal Emergency Management Agency (FEMA) was the only existing 

federal agency that was integrated in its entirety into DHS. While the newly 

created directorate is titled “Emergency Preparedness and Response” (EP&R), 

it consists primarily of FEMA. In many respects, moving the entire agency into 

the department made integration easier; however, there have been problems. 

FEMA’s primary missions have been preparedness for, mitigation of, response to, 

and recovery from natural and man-made disasters. Almost all of FEMA’s efforts 

have been focused on natural disasters. Transition to DHS meant that EP&R had 

to maintain its ability to respond to natural disasters and, in addition, increase its 

ability to respond to terrorist attacks. 

EP&R has been successful in maintaining its mission to respond to natural 

disasters. On September 24, 2003, the Deputy Inspector General testified before 

the Subcommittee on Clean Air, Climate Change, and Nuclear Safety, Committee 

on Environmental and Public Works that FEMA has not missed a step in 

responding to disasters since becoming part of the department. 

In shifting toward terrorism preparedness, EP&R has increased its emphasis on 

activities unique to dealing with terrorist attacks. For example, it has trained and 

equipped the 28 urban search and rescue task forces to respond to weapons of 

mass destruction attacks. OIG has not yet reviewed EP&R’s efforts in these areas, 

but we will begin a review of the urban search and rescue response system this 

year. 

 “eMerge2” is the Electronically Managing Enterprise Resources for Government Effectiveness & Efficiency program. 

Page 6 Status on the Department Management Challenges 

1 
EP&R also acquired other agencies’ preparedness and response assets when DHS 

was created. These assets include the strategic national stockpile, the national 

disaster medical system, nuclear incident response teams, domestic emergency 

support teams, and the National Domestic Preparedness Office. According to a 

senior EP&R official, the largest integration challenge has been integrating the 

Department of Health and Human Services (HHS)’s strategic national stockpile 

into EP&R. As shown by the financial statement audit, responsibility for the 

stockpile is bifurcated and unclear. DHS proposes to return the stockpile to HHS. 

OIG will continue to monitor integration of these assets into EP&R. 

One agency profoundly affected by the creation of DHS was the Immigration 

and Naturalization Service (INS), previously housed within the Department of 

Justice (DOJ). As a result of the Homeland Security Act of 2002 (HSA), INS 

was abolished and legacy components of INS now reside in ICE, CIS, and CBP. 

OIG is conducting evaluations of ICE and CIS, and we have extensive audit 

work under way in CBP. We will evaluate the effectiveness of their respective 

programs, and those of the other component organizations within DHS, as part of 

our performance plan. 

Contract Management 

A major challenge for the department is the identification and management of its 

procurements. DHS has made progress in reducing the number of contracting 

offices, and has taken numerous steps to promote efficient and effective 

procurements. 

For example, DHS has established a Strategic Sourcing Group (SSG) to 

implement a department-wide approach to acquiring goods and services. The 

SSG established commodity councils that are identifying the department’s needs 

for each commodity and developing more efficient purchasing mechanisms 

to address those needs. So far, DHS has established 14 commodity councils, 

covering among other things, office supplies, weapons and ammunition, uniforms, 

electricity, and airport services. 

DHS also established the Investment Review Board (IRB), chaired by the Deputy 

Secretary, as the executive review board that provides acquisition oversight 

over the department’s investments and conducts portfolio management. The 

IRB conducts systematic reviews of investment preparations and approves key 

decisions. It also serves as a forum for discussing investment issues and resolving 

problems requiring senior management attention. 

Status on the Department Management Challenges Page 7
 
DHS has won awards for its Federal Technical Data Solution program. This 

program is a part of the Integrated Acquisition Environment E-Gov Program 

and represents a partnership among the General Services Administration, the 

Department of Defense, the Office of Management and Budget (OMB), and DHS. 

This program will be used to disseminate all Sensitive But Unclassified (SBU) 

information associated with an active acquisition or solicitation to approved 

business partners, promoting full competition in a secured environment. 

Nevertheless, formidable challenges remain. DHS needs to begin integrating 

the procurement functions of its component organizations to ensure that 

good management controls are consistently applied. Several of the incoming 

procurement organizations have lacked important management controls. For 

example, during its first year of operation, TSA relied extensively on contractors 

to accomplish its mission, but some contracts were written without clearly defined 

deliverables, and TSA lacked the staff to provide adequate oversight. As a result, 

the cost of those initial contracts ballooned. TSA is in the process of devising 

policies and procedures that require adequate procurement planning, contract 

structure, and contract oversight. Also, FEMA has just recently discovered that it 

has not been reporting or tracking procurements let by its disaster field offices. 

Other components of the department have some large, complex, high-cost 

procurement programs under way that need to be closely managed. For example, 

Customs’ Automated Commercial Environment (ACE) project will cost $5 

billion, and the Coast Guard’s Deepwater Capability Replacement Project will 

cost $17 billion and take two to three decades to complete. Further, to support 

the aforementioned US-VISIT program, DHS will soon award a contract for the 

development of an automated system for tracking and controlling the entry and 

exit of all aliens entering and leaving the country through air, land, and sea ports. 

It is anticipated that this will be a multi-billion dollar program implemented 

over the next 10 years. OIG will be reviewing these major procurements on an 

ongoing basis. 

DHS has also struggled to prepare a sufficiently detailed and accurate listing 

of its procurements. The data DHS has received to date has come from 22 

different sources, does not provide total contract award information, and has not 

been independently validated. While efforts are under way to bring all of DHS’ 

procurements under the umbrella of one comprehensive reporting system, data 

for FY 2003 and FY 2004 have not been reported in detail sufficient to manage 

the procurement universe and have not been independently validated to assure 

accuracy and consistency. 

Page 8 Status on the Department Management Challenges
 
Grants Management 

DHS inherited a variety of grant programs that provide money for disaster 

preparedness, response, recovery, and prevention. Significant shortcomings had 

been identified in many of these programs in the past, and the potential for overlap 

and duplicate funding has grown as the number of grant programs has grown. 

For example, OIG reported that many items authorized for purchase under the 

program are also authorized for purchase under the State Homeland Security 

Grant Program.2 In addition, preparedness grant programs were located in 

different department directorates, creating challenges related to inter-departmental 

coordination, performance accountability, and fiscal accountability. Furthermore, 

DHS program managers needed to develop meaningful performance measures 

to determine whether the grant programs have actually enhanced state and local 

capabilities to respond to terrorist attacks and natural disasters. 

DHS has made significant strides in this area, particularly in consolidating the 

preparedness grant programs. However, problems remain, and means must be 

found to ensure that first responder funds are being used effectively and getting to 

those who need them in a timely manner. 

Consolidation of Preparedness Grants 

DHS has taken steps to consolidate the two principal offices responsible for 

administering the grant awarding process for emergency responders and state and 

local coordination: the Office of Domestic Preparedness, and the Office of State 

and Local Government Coordination. This consolidation addresses the need to tie 

all DHS terrorism preparedness programs together into a cohesive overall national 

preparedness program. We applaud this effort. 

DHS is also in the process of creating the Grants Management Council. It is 

intended to be a group of senior DHS managers to provide advice on issues 

regarding DHS grant programs. It will include identifying innovative approaches 

to promote effective business practices that ensure the timely delivery and proper 

stewardship of federal assistance funds. The first meeting was held on February 

10, 2004. We support this effort and will participate in an advisory role. 

Preparedness and First Responder Grants 

Based on the FY 2001 through FY 2005 budget requests, over $14 billion in 

assistance will be made available for grant programs during the 5-year period. 

2 Assistance to Firefighters Grant Program (Audit report number OIG-ISP-01-03, September 2003) 

Status on the Department Management Challenges Page 9 
DHS estimates that there are more than 80 grant programs3 now under its 

managerial control, and many of them fund preparedness and first responders. 

We recently completed fieldwork related to a review of Office for Domestic 

Preparedness (ODP) first responder grant distribution and spending. We found 

that states, local jurisdictions, and first responder organizations have been slow to 

spend ODP first responder grant funds, although, in many cases, the funds have 

been obligated. In many cases the states have specific plans in place and know 

who will get the money and what they will buy. In addition, state and jurisdiction 

officials agreed that spending the funds wisely was more important than spending 

them quickly. Nevertheless, there is room for improvement. 

We found that, as of February 10, 2004, the majority of the $2.4 billion in 

FY 2002 and 2003 first responder grant funds awarded have not been drawn 

down. The 56 states and territories that had been awarded the funds had drawn 

down only 36% of FY 2002 awards and about 13% of FY 2003 awards. 

In addition to delays caused by planning requirements, we identified numerous 

other reasons for delayed spending. For example, local governments’ processes 

for grant approval and procurement often cause delays. Some delays, such as 

equipment delivery backlogs, are unavoidable. 

For the most part, delays were not due to ODP’s processing and approving 

grant applications, and states generally were pleased with ODP’s performance. 

However, DHS needs to require more meaningful reporting by grantees, and 

develop performance standards, so that it can track their progress more accurately; 

work with grantees to collect and identify best practices and strategies that speed 

spending; and assist state planning efforts by accelerating the development 

of federal guidelines for first responder capabilities, equipment, training, and 

exercises. 

OIG is planning a continuing series of audits of preparedness and first responders 

grant programs to assess states’ management of the grants. 

Further, DHS is tasked with producing a detailed national assessment of 

the terrorist threat as a basis for federal spending and regularly updating the 

assessment in the future. By January 31, 2004, ODP collected homeland security 

strategies from each of the states. However, it remains to be determined how the 

data in these state strategies can be used to obtain a national picture of the terrorist 

3 The number of programs is surprisingly large due in part to separate appropriations in the same and different years and name 

changes that all get counted as separate grants, even though they are for the same or similar purposes. 

Page 10 Status on the Department Management Challenges 
threat, as well as, how reliable the data behind the strategies is. OIG will conduct 

an audit of the homeland security strategies data collection this year. 

Grants Management System 

DHS is faced with developing an effective, integrated grants management and 

accounting system, but is still a long way from accomplishing that objective. 

While grants managed by the Science and Technology (S&T) Directorate, ICE, 

the Information Analysis and Infrastructure Protection (IAIP) Directorate, and 

ODP fire grants, are processed under MOUs with FEMA, other components’ 

grants are managed by outside agencies: 

§ DOJ processes the ODP grants, except for fire grants. 

§ The Federal Aviation Administration (FAA) processes the TSA aviation 

grants. 

§ The Department of Energy (DOE) processes S&T grants and contracts 

with Oak Ridge National Labs. 

DHS’ Grants Policy and Oversight Office has been inventorying DHS grants, no 

small task, as well as collecting the regulations and relevant laws for each, and 

identifying awarding offices, servicing offices, grants management systems, and 

administrative staff. This office was also spearheading the e-grants initiative until 

DHS’ Resource Management Transformation Office took over that responsibility 

in September 2003. 

Progress in this area may have been hampered by inadequate resources. About 63 

FY 2002 grants and more than 83 FY 2003 grants were integrated into DHS, yet 

the Grants Policy and Oversight Office was staffed by only one full-time person 

for much of the past year. The problem is receiving additional attention and 

funding in FY 2004. OIG will continue to monitor DHS’ progress in this regard. 

Financial Management 

The most immediate financial management challenge for DHS has been the 

orderly transition of the financial operations of its inherited components and the 

development of plans for its own integrated financial management system. As 

noted above, DHS has made significant progress in these areas. Further, DHS 

was presented with the challenge of preparing its first set of financial statements 

for audit, and met that challenge under difficult circumstances. Finally, DHS has 

Status on the Department Management Challenges Page 11
 
the challenge of collecting more than $22 billion in duties, excise taxes, fines, 

penalties, and other revenues. 

Integration and Reporting of Financial Information 

OIG’s audit contractor, KPMG LLP (KPMG), recently completed an audit of 

DHS’ financial statements as of September 30, 2003, and for the 7 months then 

ended, as required by the Accountability of Tax Dollars Act of 2002. Despite 

limited staff with many other responsibilities, DHS officials agreed to accept 

the challenge of a financial statement audit, even though it added strain on its 

relatively limited resources. They recognized that an audit would establish a solid 

baseline from which DHS could plan for and build good financial management 

processes. With this audit, DHS now has that solid baseline for measuring 

improvement. 

KPMG gave a qualified opinion on the consolidated balance sheet and statement 

of custodial activity, meaning that, except for certain items described below, they 

were presented fairly and free of material misstatements. KPMG was unable to 

provide an opinion on the remaining statements for the reasons discussed below. 

The qualification on the balance sheet related to: 

§ The lack of sufficient documentation provided prior to the completion of 

KPMG’s audit procedures to support $2.9 billion in property, plant, and 

equipment at the Coast Guard; 

§ KPMG’s inability to observe sufficient physical counts of operating 

materials and supplies at Coast Guard or otherwise verify the valuation of 

operating materials reported in the amount of $497 million; and 

§ The lack of sufficient, actuarial documentation provided prior to the 

completion of KPMG’s audit procedures to support retirement benefits 

recorded at $3.3 billion at the Secret Service and post-employment 

benefits recorded at $201 million at the Coast Guard. 

The Coast Guard’s financial statements had never been audited at the level of 

detail required at DHS, where the Coast Guard became a larger bureau relative 

to its executive department. It is not uncommon for a large established agency 

such as the Coast Guard to require additional time to get its processes and systems 

in place to facilitate a financial statement audit at this level of detail. The Secret 

Service has obtained actuarial report on its retirement benefits liability, and 

Page 12 Status on the Department Management Challenges
 
believes it has recorded the correct amount. Coast Guard has likewise done the 

same for its post-employment benefits liability. 

KPMG was unable to provide an opinion on the consolidated statements of net 

cost and changes in net position, the combined statement of budgetary resources, 

and the consolidated statement of financing for several reasons. First, several 

“legacy” agencies (agencies from which component entities or functions were 

transferred to DHS) submitted accounting and financial information over which 

DHS had limited control. Consequently, the auditors were unable to complete 

procedures relating to revenue, costs, and related budgetary transactions reported 

by the legacy agencies to DHS. In addition, KPMG was unable to complete audit 

procedures over certain revenues, costs, and related budgetary transactions at the 

Coast Guard, prior to the completion of the DHS consolidated audit. 

DHS inherited 18 material weaknesses from the Customs Service, the INS, 

FEMA, and TSA. KPMG determined that nine of the material weaknesses were 

corrected or partially corrected. The remaining ones were consolidated into 

seven DHS material weaknesses or reclassified to a reportable condition or other 

matter for management’s attention. The seven material weaknesses included the 

following 

§ Financial Management and Personnel: DHS’ Office of the Chief 

Financial Officer (OCFO) needs to establish financial reporting roles and 

responsibilities, assess critical needs, and establish standard operating 

procedures (SOPs). These conditions were not unexpected for a newly 

created organization, especially one as large and complex as DHS. The 

Coast Guard and the Strategic National Stockpile had weaknesses in 

financial oversight that have led to reporting problems, as discussed 

further below. 

§ Financial Reporting: Key controls to ensure reporting integrity were 

not in place, and inefficiencies made the process more error prone. At 

the Coast Guard, the financial reporting process was complex and laborintensive. Several DHS bureaus lacked clearly documented procedures, 

making them vulnerable to the loss of key people. 

§ Financial Systems Functionality and Technology: The auditors found 

weaknesses across DHS in its entity-wide security program management 

and in controls over system access, application software development, 

system software, segregation of duties, and service continuity. Many 

Status on the Department Management Challenges Page 13
 

bureau systems lacked certain functionality to support the financial 

reporting requirements. 

§ Property, Plant, and Equipment (PP&E): The Coast Guard was unable 

to support $2.9 billion in PP&E due to insufficient documentation 

provided prior to the completion of KPMG’s audit procedures, including 

documentation to support its estimation methodology. TSA lacked a 

comprehensive property management system and adequate policies and 

procedures to ensure the accuracy of its PP&E records. 

§ Operating Materials and Supplies (OM&S): Internal controls over 

physical counts of OM&S were not effective at the Coast Guard. The 

Coast Guard also had not recently reviewed its OM&S capitalization 

policy, leading to a material adjustment to its records when an analysis 

was performed. 

§ Actuarial Liabilities: The Secret Service did not record the pension 

liability for certain of its employees and retirees, and when corrected, the 

auditors had insufficient time to audit the amount recorded. The Coast 

Guard also was unable to provide, prior to the completion of KMPG’s 

audit procedures, sufficient documentation to support $201 million in postservice benefits. 

§ Transfers of Funds, Assets, and Liabilities to the Department: DHS lacked 

controls to verify that monthly financial reports and transferred balances 

from legacy agencies were accurate and complete. 

Other reportable conditions included the following: 

§ Drawback Claims on Duties, Taxes, and Fees: The CBP’s accounting 

system lacked automated controls to detect and prevent excessive 

drawback claims and payments. 

§ Import Entry In-bond: CBP lacked an effective compliance measurement 

program to compute an estimate of underpayment of related duties, taxes, 

and fees. 

§ Acceptance and Adjudication of Immigration and Naturalization 

Applications: The CIS’ process for tracking and reporting the status of 

applications and related information was inconsistent and inefficient. CIS 

did not perform cycle counts of its work in process that would facilitate 

Page 14 Status on the Department Management Challenges
 
the accurate calculation of deferred revenue and reporting of related 

operational information. 

§ Fund Balance with Treasury (FBWT): The Coast Guard did not perform 

required reconciliations for FBWT accounts and lacked written SOPs to 

guide the process, primarily as the result of a new financial system that 

substantially increased the number of reconciling differences. 

§ Intra-governmental Balances: Several DHS bureaus had not developed 

and adopted effective SOPs or established systems to track, confirm, and 

reconcile intra-governmental balances and transactions with their trading 

partners. 

§ Strategic National Stockpile (SNS): The SNS accounting process was 

fragmented and disconnected, largely due to operational challenges caused 

by the laws governing the SNS. A $485 million upwards adjustment had 

to be made to value the SNS in DHS’ records properly. 

§ Accounts Payable and Undelivered Orders: CIS, ICE, TSA, and the Coast 

Guard had weaknesses in their processes for accruing accounts payable 

and /or reporting accurate balances for undelivered orders. 

Further, KPMG identified weaknesses in the DHS’ reporting process for the 

Federal Managers’ Financial Integrity Act of 1982 and instances of noncompliance with the Federal Information Security Management Act. KPMG 

also noted instances where DHS was not in full compliance with Office of 

Management and Budget Circular A-133, subpart D – Federal Agencies and PassThrough Entities and Appendix B, Compliance Supplement. 

Revenue Collection 

CBP is not only responsible for border security and narcotics interdiction, it 

is also responsible for enforcing trade regulations and collecting associated 

revenues. Annually, the United States collects more than $24 billion in customs 

duties, excise taxes, fines, penalties and other revenue. While it is paramount that 

DHS ensure that the nation’s ports are secure from terrorist activities, it is also 

important that the revenue base is protected. 

CBP’s compliance measurement program targets importers to assess trade 

compliance and project the revenue base, along with the associated revenue gap. 

The revenue gap is the difference between the dollar amount of import duties, 

Status on the Department Management Challenges Page 15
 
taxes, and fees that CBP could have collected under current operations had all 

goods been entered in full compliance, and the actual amount of revenue collected 

by CBP. Using this information, CBP estimated the revenue gap to be $170 

million for FY 2003. However, the reliability of the compliance measurement 

data is questionable. We identified discrepancies in the data used to establish 

the compliance rate, for example import data varied depending on the database 

accessed. Accordingly, the compliance rate may be imprecise. 

The Treasury OIG had conducted a review of CBP’s international mail operations. 

Each year a huge volume of international mail transported by foreign postal 

administrators - approximately 160 million letters and parcels - enters the United 

States at 13 international mail branches (IMB). These IMBs are dispersed 

throughout the country, but are often co-located with international airports, 

seaports, and land ports. In addition to examining the mail for implements of 

terror and other contraband, CBP examines the mail to identify dutiable parcels. 

Treasury OIG reported that information on values from the mail declarations is 

often inaccurate and reliance on such information has resulted in CBP’s losing 

revenue. CBP has taken measures to improve the collectability of mail revenue. 

These measures include: 

§ Using the mail survey results to target where the greatest potential for 

revenue in mail packages is located based on type of mail, country of 

origin, etc.; 

§ Revising its International Mail Operations and Enforcement Handbook to 

standardize operations at all IMBs; and, 

§ Monitoring incoming mail to ensure that international mail is delivered to 

CBP for inspection. 

However, since receipt of the mail at the IMB is the primary mission of the United 

States Postal Service (USPS), CBP must work cooperatively with the Postal 

Service to ensure that adequate processes are in place at the IMBs to ensure that 

all mail is delivered to CBP for inspection, and outstanding duties are collected 

from the USPS. 

Both ICE and CIS perform an integral role in collecting and accounting for the 

more than $1 billion in application fees from non-citizens seeking entry into the 

U.S. In fulfilling its mission, CIS processes millions of actions and requests that 

are documented in paper files. The systems that track these applications are nonintegrated, and many are ad hoc. As a result, CIS must perform regular data calls 

Page 16 Status on the Department Management Challenges
 
to obtain information on its pending application inventory, which is important in 

measuring performance. This situation and the lack of regular cyclical inventories 

of this work-in-process has caused CIS to halt normal business operations for 

up to two weeks in past years in order to report deferred revenue accurately. 

“Deferred revenue” is a financial measure of pending applications and is material 

to the Department’s financial statements. Also, DHS’ financial statement audit 

found that CIS lacks standard operating procedures to track and report the status 

of applications and related information. The challenge for CIS is to move from 

paper based and non-integrated processes to an integrated case management 

system, which CIS is planning to implement. 

CBP processes drawback claims on duties, taxes, and fees. “Drawback” is a 

remittance of duties, taxes, or fees previously paid by an importer. Drawback 

typically occurs when the imported goods on which duties, taxes, or fees have 

been previously paid, are subsequently exported from the U.S., or destroyed prior 

to entering the U.S. commerce. The Automated Commercial System (ACS), 

which accounts for the revenue, lacks controls to detect and prevent excessive 

drawback claims and payments. Additionally, ACS does not have the capability 

to compare, verify, and track essential information on drawback claims to the 

entries or export documentation upon which the drawback claim is based. 

Further, drawback review policies do not require drawback specialists to review 

all related drawback claims against the associated entries to determine whether, 

in the aggregate, an excessive amount was claimed. Accordingly, CBP must rely 

on a manual sampling approach to compare, verify, and match entries and export 

documentation to drawback claims submitted by importers. As a result, the 

inherent risk of fraudulent claims or claims made in error is high. 

CBP is also responsible for collecting user fees from air passengers and 

commercial vessels arriving in the United States, as required by Consolidated 

Omnibus Reconciliation Act. The retailer of the passengers’ tickets must collect 

the user fee and remit payment to CBP quarterly. The fees are designed to pay for 

the costs of inspection services provided by CBP, which now includes INS and the 

Animal and Plant Health Inspection Service (APHIS) inspection processes. CBP 

tracks the fees in a database and follows up with delinquent carriers. However, 

the list of retailers that are liable for payment cannot be reconciled with the user 

fees that are due. CBP has no viable method to identify all parties selling tickets 

subject to the fee. Accordingly, CBP cannot impose penalties on the ticket seller 

not collecting the fee. 

Status on the Department Management Challenges Page 17
 

To comply with the reporting requirements of the ATSA, CBP mandated the 

use of Advanced Passenger Information System (APIS) to target people who 

could threaten homeland security. However, the APIS is utilized only by the 

enforcement branch of CBP, and the information gathered on arriving passengers, 

which includes the country of origin, is not shared with the financial staff 

responsible for collecting the user fees. CBP collects information regarding 

the number of passengers on each vessel by reviewing flight or ship manifest 

information that is entered into the Entry Clearance Arrival Record (ECAR) 

system. The information entered in ECAR does not include information 

regarding country of origin, and thereby does not specify the fee required from 

the passenger. As a result, CBP may not be collecting all the passenger user fees 

mandated by law from people entering the U.S. 

Between FY 1998 and FY 2002, the former Customs Service collected $1.1 

billion from the airlines. Now that CBP’s inspection workforce has expanded to 

include INS and APHIS inspection services it important that CBP ensure that the 

appropriate revenues are collected and are adequate to cover the costs of services 

provided. 

Similarly, TSA is also required by statute to impose a fee on passengers of air 

carriers and may impose a fee on air carriers for the difference between TSA’s 

costs of providing civil aviation security services, and the amount of passenger 

fees collected. These fees are designed to pay for the costs of providing civil 

aviation security services including: costs of screening personnel and their 

supervisors; equipment; federal law enforcement officers; and civil aviation 

security research and development. TSA should also ensure that the appropriate 

revenues are collected and are adequate to cover the costs of services provided. 

Information Technology Management 

IT remains a major management challenge for the Department. IT systems and 

tools are fundamental to the programs and activities across the department used 

to accomplish its wide-ranging missions—from counter-terrorism to border 

protection to supporting internal department operations. Effectively managing 

the IT assets is not only critical to successfully achieving performance goals and 

maximizing returns on investments, it is also required by legislation. With central 

responsibility for ensuring effective IT management pursuant to the ClingerCohen Act and related legislation, the CIO is working to establish departmentwide IT strategies and a consolidated framework for meeting mission needs. Key 

Page 18 Status on the Department Management Challenges
 

areas of focus include IT security, integrating systems, and ensuring effective 

information sharing. 

Securing the IT Infrastructure 

To meet requirements of the Federal Information Security Management Act 

(FISMA), the CIO is charged with developing and implementing a departmentwide information security management program that addresses the risks and 

vulnerabilities facing DHS’ IT systems. Based on its annual FISMA evaluation, 

OIG reported in September 2003 that DHS has made some progress in 

establishing a framework for an IT systems security program. Such progress 

includes establishing IT security policies and procedures and creating an 

organizational unit headed by a Chief Information Security Officer to govern 

information security department-wide. DHS also has instituted an Information 

Systems Security Board to ensure systems security and effective IT portfolio 

management as part of its overall capital planning and investment control process. 

Currently, DHS must rely on its component organizations to follow its established 

policies and procedures for implementing the IT security program. However, 

as part of its 2003 FISMA evaluation, OIG reported that none of the DHS 

components had a fully functioning IT security program, and there were a number 

of key security areas that required management attention. Specifically, while 

42% of DHS’ systems had security plans, only 37% of the systems had been 

certified and accredited and only 39% had been assessed for risk. Further, only 

21% of DHS’ system controls had been tested and evaluated, and only 11% of its 

systems had contingency plans. Based on these findings, OIG recommended in its 

evaluation report that the CIO designate information security a material weakness 

at DHS. OIG made 5 additional recommendations in its FISMA evaluation to 

assist DHS in establishing an effective information security program. 

To address its information security needs, DHS has developed an information 

technology security program strategic plan, with identified major program areas, 

goals, and objectives, for migrating to a unified information security infrastructure 

over the next 5 years. The plan outlines eight distinct security program areas: 

program management and integration; compliance and oversight; security 

architecture; continuity planning for critical department assets; information 

security, training, education, and awareness; security policy; security operations; 

and national security systems and computer security management. DHS 

considers the first four of these security program areas as material weaknesses and 

Status on the Department Management Challenges Page 19
 
anticipates completing specific initiatives and achieving mature capabilities in all 

program areas by the end of FY 2005. 

Systems Integration 

Another challenge for the CIO is in establishing a department-wide IT 

infrastructure for effective communications and information exchange among its 

approximately 180,000 employees, largely drawn from the 22 legacy agencies. In 

this context, the CIO is charged with identifying IT assets and consolidating and/ 

or integrating hundreds of systems from the transferred agencies. 

Taken together, DHS organizational elements have over 100 disparate, redundant, 

and non-integrated systems used to support a range of administrative functions, 

such as accounting, acquisition, budgeting, and procurement. To address 

these issues, DHS has established the “eMerge2

” program, scheduled for 

implementation by September 2006. Program goals include implementing DHSwide enterprise solutions to increase efficiency and effectiveness significantly, 

while optimizing investments. Based upon recent OIG discussions with 

management officials, the program’s design and acquisition phase is on schedule, 

and DHS has identified requirements, and has issued a request for proposals, for 

enterprise-wide solutions to meet mission requirements. 

Further, the CIO must ensure that individual technology investments are aligned 

with an overarching, department-wide framework for IT. To this end, the 

CIO has a stated goal of implementing “one network, one infrastructure” by 

December 2005. To establish the network, the CIO has established the Enterprise 

Infrastructure Board that meets periodically to discuss strategies for connecting 

the department networks, which include local area networks, metropolitan area 

networks, and wide area networks. The Enterprise Infrastructure Board is 

comprised of a number of project teams, such as the Network Security Board, 

which is tasked with implementing an initiative to institute the firewalls, 

routers, switches, and other technologies needed to secure DHS networks. DHS 

is enhancing ICE’s “backbone” to create the department-wide network that 

establishes data communications between all of its organizational elements. 

With release of the first version of enterprise architecture in September 2003, 

the CIO made progress toward the goal of one DHS infrastructure. However, 

this version only outlines a very general transition strategy that must be broken 

down further for the architecture to be implemented. Nonetheless, the enterprise 

architecture team is working with several large project offices, e.g., ACE and 

US-VISIT, to determine alignment to its transition strategy so that these project 

Page 20 Status on the Department Management Challenges
 
offices can begin building to the target architecture. Work is currently under 

way on version 2 of the enterprise architecture. One of the objectives of DHS’ 

enterprise architecture team is to make the transition strategy in version 2 more 

detailed and easier to implement. 

Information Sharing 

Interagency coordination and information sharing are critical to support DHS 

counter-terrorism, law enforcement, and emergency preparedness and response 

activities—several of the core reasons for which DHS was founded. In some 

instances, systems enhancements and integration are required to facilitate the 

communications and exchange across federal, state, and local government and 

industry lines. For example, DHS faces a major challenge of working with 

intelligence and law enforcement agencies to standardize and consolidate multiple 

terrorist watch lists to control and protect U.S. borders and apprehend terrorists 

in the homeland. Traditionally, terrorist watch list information has been compiled 

and maintained in disparate federal agency databases, with no assurance that any 

one list contains all of the identified names of potential terrorists. State and local 

law enforcement officials typically have not had access to terrorist watch list 

information. 

Following the terrorist attacks of September 11, 2001, the Congress passed, and 

the President signed, several pieces of legislation, including the Enhanced Border 

Security and Visa Entry Reform Act of 2002 and the USA PATRIOT Act of 

2001, which requires terrorist information sharing, as well as standardization and 

consolidation of individual agency watch list systems. 

DHS also has a key role in terrorist watch list consolidation. Specifically, the CIO 

has the primary responsibility within the department for ensuring that the Terrorist 

Screening Center’s (TSC) technical requirements are compatible with the various 

systems that DHS currently uses or is developing to thwart terrorist activities. 

The CIO has been coordinating with TSC representatives since the mid-October 

2003 to provide requirements, technology, and communications support to the 

TSC. The CIO will have ongoing involvement in this effort, as DHS plans and 

implements changes to the screening and intelligence systems it uses to access 

the TSC database. One goal is to implement “real-time” connections between the 

systems that DHS and the TSC use in the terrorist screening process. Ultimately, 

biometric identifiers are to be introduced to support the terrorist screening 

process. 

Status on the Department Management Challenges Page 21
 
A number of DHS components, including TSA, CBP, CIS, and ICE, are major 

customers of TSC and also have significant roles in the consolidation efforts. 

If and when implemented, TSA’s Computer-Assisted Passenger Prescreening 

System (CAPPS II) will enhance DHS’ name-checking capabilities. CAPPS 

II will eventually connect with TSC systems. Together with officials from the 

Information Analysis and Infrastructure Protection (IAIP) directorate who are 

assisting the TSC, these DHS organizations have a vested interest in addressing 

the various concerns that have arisen related to consolidation of the terrorist 

screening process. These concerns include ensuring that the new system is 

designed to accommodate the various mission requirements of participating 

agencies, and that the flow of terrorist information data is not interrupted or 

delayed as new processes and systems are implemented. 

Human Capital Management 

HSA gave DHS special authorization to design a human capital management 

system that fit its unique missions. On April 1, 2003, DHS announced that 

it would assemble a diverse team of employees from across DHS, the Office 

of Personnel Management (OPM), and representatives of the major unions to 

design DHS’ human capital management system. This team developed a range 

of options for pay and classification, performance management, labor relations, 

discipline and employee appeals that was presented to the Secretary and the 

Director of OPM. 

The decisions of the Secretary and the Director were published as proposed 

regulations in the Federal Register on February 20, 2004, with a request for 

public comment within 30 days. These new regulations will affect not only DHS 

employees, but possibly the entire civilian workforce, as the DHS system is used 

as a model for other civil service personnel systems. 

Intelligence Matters 

DHS challenges include establishing effective working relationships with the 

Terrorist Threat Information Center (TTIC) and TSC; fully staffing the IAIP 

directorate; developing common standards for information sharing with relevant 

federal, state, local, and “first responder” entities; and identifying, validating, 

cataloguing, and prioritizing critical U.S. infrastructure protection. OIG will 

examine these areas as part of its FY 2004 performance plan. 

Page 22 Status on the Department Management Challenges
 

Agency Roles 

HSA4 made the Under Secretary for IAIP responsible for, among other things, 

accessing, receiving, and analyzing law enforcement information, intelligence 

information, and other information from agencies of the federal government, state 

and local government agencies, including law enforcement agencies, and private 

sector entities, and integrating such information in order to: identify and assess 

the nature and scope of terrorists threats to the homeland; detect and identify 

threats of terrorism against the United States; and understand such threats in light 

of actual and potential vulnerabilities of the homeland. 

The TTIC and TSC were created after IAIP was established. The TTIC is 

managed and funded by the Director of Intelligence and TSC is managed and 

funded by the FBI. While the TTIC and the TSC are working toward building 

an integrated intelligence analysis capability, there is still confusion within the 

federal government and among state and local governments about the respective 

roles of the TTIC, TSC, and the Information Analysis (IA) component of IAIP. 

IAIP officials told OIG that, as a full member of the Intelligence Community (IC), 

IA is committed to working with and through TTIC and the TSC both to obtain 

and to make threat related information concerning the homeland accessible to the 

appropriate parties. IA officials stated that it is currently fulfilling its mandate to 

provide independent analysis of domestic threat related information provided to it 

by its fellow members of the Intelligence Community (including TTIC) and other 

DHS components. IA officials stated also that it is fulfilling its responsibility to 

use that analysis to coordinate with Infrastructure Protection (IP) so as to protect 

potential targets and create information products to warn relevant state and local 

government officials and private sector leaders. 

IAIP officials said that TTIC is responsible for collecting all threat related 

information concerning the homeland from the IC and creating “broad picture” 

reports, while the TSC is responsible for maintaining the database of known or 

suspected terrorists submitted by a number of federal agencies. These missions, 

while different, do require a great deal of communication and cooperation 

between the entities. No one party is responsible for establishing clear guidance 

on the role of each organization in establishing information and collection 

requirements. Rather, the parties must work together to develop understanding as 

to their respective roles and as best practices. 

4

 Homeland Security Act of 2002 section 201. 

Status on the Department Management Challenges Page 23 
To protect and advance DHS equities, the deputies of both the TTIC and TSC 

are DHS employees. Additionally, analysts from DHS are assigned to both the 

TTIC and the TSC. These analysts and the Deputy Directors represent DHS 

interests within each organization, meet with senior leadership, and share with 

DHS/IA threat related information, as well as areas of concern and suggestions for 

improvement. 

As part of OIG’s FY 2004 performance plan, we will evaluate the challenges 

and results to date from DHS’ efforts to standardize and consolidate the various 

agencies’ terrorists watch lists. We will also assess DHS’ role in TTIC and TSC 

and the degree to which DHS IAIP needs are met through those organizations. 

IAIP Directorate Staffing 

The IAIP is understaffed. IAIP inherited positions from five legacy organizations 

at its inception, many of which were vacant. IAIP began to hire new employees 

in May 2003, and put into place an aggressive hiring strategy, recruiting talent 

both from the government and the private sector. During FY 2004, IAIP expects 

to complete hiring to its initial authorization, and simultaneously to begin to hire 

its FY 2004 staffing complement. Those positions will be both internal to IAIP 

and external placements, which have been verified as requirements, e.g., the 

TTIC, TSC, and field positions. 

Information Sharing 

In addition to producing intelligence, DHS must develop common standards 

for information sharing. Standards must include, at a minimum, a definition of 

the communications methods and protocols for sharing information and a set of 

common and consistent policies for retaining and disseminating shared data. 

DHS, through IAIP and the Science and Technology (S&T) directorate, are 

developing approaches for acquiring and implementing information sharing 

systems. DHS is currently working with various members of the IC to develop 

an existing product further that will allow for sharing and collaboration between 

organizations based on policies in a memorandum of agreement. Also, S&T is 

in the process of developing a Threat Vulnerability Integration System, using 

industry standard protocols through which each agency that provides intelligence 

to IAIP can submit information using its own format. Despite the differences in 

the underlying information sources, DHS expects the system to provide for an 

integrated analysis capability. Additionally, IAIP officials stated that a team is 

Page 24 Status on the Department Management Challenges
 
researching systems to transfer data from unclassified to classified networks and 

will be reporting its findings soon. 

Creating new processes and requirements creates a challenge. However, IAIP 

officials say that they are not facing obstacles that would prevent information 

sharing among DHS and its IC and law enforcement community partners. As 

DHS matures, processes will become more advanced and fluid. IA officials 

stated that they are currently receiving the threat related information needed to 

assess threats to the nation. Some major milestones as IA continues to grow are 

ensuring prompt access to all relevant internal and external information sources; 

developing robust outreach from IA to all IC and law enforcement partners 

and customers; establishing advanced exchange policies and procedures with 

all partner organizations; completing a collection management plan to engage 

federal, state and local entities in collecting and assembling information; and 

ensuring full IA decision-making participation with IC and law enforcement 

partners on intelligence requirements, tasking, and collection management. 

Infrastructure Protection 

Identifying, validating, cataloging, and prioritizing critical infrastructure, most 

of which is owned by the private sector, and key assets, such as national symbols 

and monuments, are vital to implementing a national infrastructure protection 

plan. Once the critical infrastructure and key assets are prioritized into a national 

list, the list will serve as a baseline for making decisions concerning which actions 

should be taken first to safeguard critical infrastructure and key assets. 

The IAIP has solicited data from state and local partners on certain critical 

infrastructure and key assets and is compiling this data into a national asset 

database. IAIP officials told OIG that the effort to categorize and prioritize 

potential terrorist targets and develop lists of critical infrastructure is on schedule 

and due to be completed no later than July 1, 2004. The identification of the 

national asset list is an ongoing effort and will result in adjustments to priorities 

as terrorist tactics and capabilities evolve and interdependencies are identified. 

The course of action that is under way will aid the grant allocation process as 

other DHS components depend on prioritized critical infrastructure information to 

determine which assets to harden first and which homeland security technologies 

to develop. IAIP officials told OIG that the IAIP has already provided a critical 

assets list to ODP for two sets of grant allocations. 

Status on the Department Management Challenges Page 25
 
Border Security 

CBP and ICE share responsibility for ensuring the security of our borders. CBP 

focuses on security at and between the ports of entry along the border, and is 

responsible for enforcing customs and immigration laws, with emphasis on the 

movement of goods and people. Employees from the former Customs Service, 

INS, APHIS, and the Border Patrol work together to accomplish this mission. 

ICE focuses on enforcement of immigration and customs laws. The inspectors 

and agents place heavy reliance on various information systems and high 

technology equipment to secure the borders against terrorists, weapons of mass 

destruction, illicit narcotics, and other illegal activity. Prior to the formation 

of DHS, OIGs at DOJ and Treasury, as well as the GAO, identified numerous 

deficiencies in the systems used to track aliens, and in the deployment, use, and 

operational effectiveness of the equipment used to carry out the border security 

mission. To a great extent, these challenges remain, and are discussed below. 

Entry/Exit Control Issues at Land Ports of Entry 

Historically, development of a national entry-exit system has focused on 

establishing a process for air passengers at airport ports of entry (POEs). Airport 

POEs offer many logistical and control features that facilitate an entry/exit system 

that may not be duplicated at land POEs. Implementing the US-VISIT Program 

at land POEs will be a complex project that will have to identify operating 

requirements and develop integration and operability strategies with other 

systems. The sheer volume of daily traffic at the POEs also challenges the USVISIT program at the land POEs. This traffic cannot be significantly impeded 

without causing significant economic and political problems. 

US-VISIT is required to be implemented at the top 50 land POEs by December 

31, 2004, and at remaining land POEs by December 31, 2005. The US-VISIT 

system is to provide the capability to record entry and exit information on foreign 

visitors who travel through United States air, sea and land ports, and will apply 

to non-immigrants holding non-immigrant visas. By reconciling entry and exit 

records, US-VISIT will identify visitors who have overstayed their period of 

admission. 

US-VISIT officials anticipate that $330 million appropriated for US-VISIT 

implementation will be released soon. GAO has reviewed US-VISIT’s 

expenditure plan and will report to Congress in March 2004. Once Congress 

approves the expenditure plan, the funds will be released. 

Page 26 Status on the Department Management Challenges 
An integrated project team (IPT) will be used in the implementation of US-VISIT 

at land border POEs. IPT members will come from CBP, ICE, TSA, and DOJ, 

information technology, and other areas. The IPT team, which should be in 

place by the end of March 2004, will finalize US-VISIT’s draft deployment plan 

for bringing ports online through a phased rollout. The IPT team will address 

operational issues of implementing US-VISIT at land POEs. Also, a new federal 

regulation must be published to allow US-VISIT to be implemented at land POEs. 

The US-VISIT Program Office has initiated a public relations effort to facilitate 

implementation of US-VISIT on both the northern and southern borders. The 

Border Guidance Network will enable US-VISIT officials to explain the USVISIT process, provide implementation updates, debunk myths about US-VISIT, 

and allay fears. The network includes local chambers of commerce, trucking 

associations, bridge and tunnel operators, etc. Through the network, the USVISIT Program Office will be able to work with and hear comments from groups 

that will be affected by the implementation of US-VISIT at land POEs. 

Environmental assessments have been completed for the top 50 land POEs to 

clear the way for construction. While new lanes are not planned, land POEs may 

need upgrades to secondary inspection facilities, networking capabilities, and the 

installation of antennas for radio frequency (RF) technology in existing travel 

lanes. 

The US-VISIT Program Office is working to finalize plans to expand RF 

technology to land border inbound and outbound travel lanes. While officials 

there would like to deploy RF technology in all lanes, funds are an issue, so 

the office is looking at having RF technology in at least one inbound and one 

outbound lane at each land POE. The RF token will record an individual’s 

entry to and exit from the United States. US-VISIT is also trying to determine 

the best way to provide the RF token to the traveler e.g., attached to the Form 

I-94, attached to the passport, or attached to/integrated into the B1/B2/bordercrossing cards (BCC). If the RF token is integrated into the B1/B2/BCC rather 

than creating a sticker to place on existing cards, a card replacement plan will be 

needed. 

To facilitate travel through land POEs, US-VISIT will be deployed at secondary 

inspection areas for land POEs rather than at primary inspection areas like air 

and sea POEs. Non-immigrant visa holders are currently referred to secondary 

inspection for completion of the Form I-94 at land POEs. So, US-VISIT will not 

create an entirely new inconvenience for non-immigrants. Travelers using the 

Secure Electronic Network for Travelers’ Rapid Inspection (SENTRI) Program 

Status on the Department Management Challenges Page 27
 
should not be affected by the implementation of US-VISIT at land POEs. These 

pre-registered, “low-risk” drivers and passengers will continue to use the same 

travel lanes, except US-VISIT will now be able to track their exits as well. 

Neither Canadian nor Mexican citizens are likely to see a large increase in lines 

and waiting times at border crossings. Most Canadians are not required to have 

visas to enter the United States and will therefore not be subject to US-VISIT 

requirements. Only Canadian and Mexican citizens entering the United States 

under visas will be registered in US-VISIT. Mexican citizens carrying B1/B2/ 

BCC cards will have to declare whether they are entering the United States under 

the provision of the B1/B2 visa or under the BCC. Mexican citizens entering 

under a BCC and not going more than 25 miles past the border will not be subject 

to US-VISIT requirements. US-VISIT will coordinate with CPB on the method 

for best ensuring that Mexican citizens properly declare their travel intentions at 

the POEs. 

Primary Inspections at Air Ports of Entry 

The goal of the primary inspection is to admit legitimate travelers into the U.S. 

quickly and refer high-risk travelers and inadmissible aliens to a secondary 

inspection for a more detailed review. The DOJ OIG reported that CBP needs 

to improve: (1) the operational capability to perform passenger analyses prior 

to flight arrival; (2) the lookout system capability to provide primary inspectors 

with critical information such as stolen passports; (3) control of passengers who 

were referred for secondary inspections to prevent them from leaving the airport 

without appearing; (4) enforcement of the requirement for primary inspectors to 

query lookout databases; and (5) training provided to inspectors. CBP has made 

progress in each of these areas, as discussed below. 

§ Lookout System. Crucial to the function of CBP is the ability to link 

immigration documents to people at POEs and to share data with 

other agencies in order to detect fraudulent documents. CBP uses the 

National Automated Immigration Lookout System (NAILS), a part of 

the Interagency Border Inspection System (IBIS), to provide information 

to inspectors at POEs. CBP is cooperating with the DOS and other 

DHS components to ensure the integrity of the data share system and in 

communicating policy changes to all employees. 

§ Passenger Analyses. CBP has increased the use of APIS to check 

passenger information against the combined federal law enforcement 

database, known as IBIS, which contains data from 22 federal agencies. 

Page 28 Status on the Department Management Challenges
 
CBP also checks names against the FBI’s National Crime Information 

Center (NCIC) wanted persons list. In conjunction with the new ATSA 

requirements, CBP also upgraded and expanded its APIS system. ATSA 

requires all airlines flying into the U.S. to provide CBP with advance 

passenger information, the passenger manifest, and personal name and 

record data. The airline must transmit this data electronically to CBP 

upon take-off from foreign airports. Using the data, CBP is better able 

to identify persons posing a potential threat prior to their arrival at 

U.S. airports. CBP officials state that they have moved aggressively to 

achieve compliance from all air carriers as soon as possible. In less than 

a year they achieved a 99% compliance rate. CBP, through its combined 

customs and immigration authorities, uses that information to evaluate 

and determine which arriving passengers pose a potential threat risk. In 

conjunction with the new legislative requirement, CBP also upgraded and 

expanded its systems to ensure that APIS could keep up with the expanded 

workflow. 

§ System Training/Use. Due to the increased need to process alien 

information into a number of intelligence databases, CBP has initiated 

the training of new and experienced inspectors on the lookout system. It 

is the intent of CBP that additional system training increase inspector 

proficiency. CBP reports that it has revised training given to inspectors 

for their passenger analytical unit, rover team, and counter-terrorism 

airport response teams. CBP officials also state that CBP is training 

personnel in the proper use of the former INS’s Automated Biometric 

Identification System (IDENT) and the Federal Bureau of Investigation’s 

(FBI) Integrated Automated Fingerprint Identification System (IAFIS) to 

identify previous immigration violators, criminals and terrorists. This is in 

addition to training on lookout and APIS computer intelligence systems. 

§ Secondary Inspections: The DOJ OIG reported the need for improving 

airport secondary inspection facilities. Since it is the responsibility of 

the airlines to provide suitable facilities for inspections, CBP should 

timely and substantively communicate to the airlines any deficiency in the 

workspace provided. CBP officials state that CBP commissioned a task 

force in December 2003 to look at air facilities of the future. This group, 

working with TSA and ICE, is working on recommendations to increase 

the physical security of the airport facility, and the technical requirements 

for a secure exit solution. 

Status on the Department Management Challenges Page 29
 

§ Training. CBP is currently training personnel in the proper use of lookout 

and APIS computer intelligence systems, analyzing travel patterns and 

passenger identifications to determine trends, and educating inspectors on 

how to increase computer proficiency. 

Deferred Inspections 

People seeking entry into the U.S. are required to pass through a primary 

inspection where inspectors examine documents, perform immigration and 

customs database queries, and question travelers. If an immediate decision 

regarding admissibility cannot be made, inspectors have the discretion to defer 

the inspection. The person is then allowed into the country and must report to the 

appropriate INS district office at a later date to complete the inspection. 

DOJ OIG reported that immigration officials failed to track these inspections 

to completion or to penalize people who fail to appear. Even though database 

systems existed that were capable of capturing and reporting the occurrences and 

outcomes of deferred inspections. 

CBP has made progress in addressing some of the recommendations made in 

the DOJ OIG report. CBP has established tougher criteria for determining who 

is eligible for deferred inspection. Those in “high-risk” groups can no longer 

receive deferred inspections. For instance, people with criminal records, who 

were previously allowed to receive deferred inspections in some circumstances, 

can no longer defer inspection because those with criminal records are 

inadmissible. Also, the authority to grant deferred inspections has been raised 

to a higher level. In addition, CBP has emphasized that deferred inspections 

were designed to deal with cases involving resolution of minor administrative 

deficiencies, usually forms or other paperwork, of those who would otherwise be 

admissible into the U.S. Finally, different thresholds have been established for 

allowing deferred inspections based on the current Homeland Security Advisory 

System threat level (i.e., different procedures during orange vs. yellow threat 

level). 

In tracking and documenting deferred inspections, CBP has revised Form I546, the primary document for initiating, authorizing, and tracking deferred 

inspections, to require more information. The deferred inspection form is now 

electronic, rather than handwritten. Also, CBP moved many deferred inspection 

offices to port locations because prior locations are not part of DHS. 

Page 30 Status on the Department Management Challenges
 

If a person fails to appear for deferred inspection, CBP creates a lookout in 

the NAILS, and the person’s name and information is referred to ICE for 

investigation. If that person then attempts to re-enter the U.S. at a later date, 

the NAILS lookout will notify inspections personnel, and the person will not be 

allowed to enter. 

Risk Management Approach for Inspecting Passengers at Sea 

Ports of Entry 

A DOJ OIG report found that the current capabilities for collecting, analyzing, 

and sharing inspection data are insufficient for supporting an effective risk 

management strategy. Methods used at the time of the report to record and 

maintain inspection data made it difficult to conduct the type of analysis required 

by an effective risk management strategy, not only at sea POEs that use manual 

methods, but also at seaports using automated databases. In addition, the report 

found that not all inspection data is complete or accurate, limiting the extent 

to which immigration officials may be able to draw reliable conclusions about 

immigration risks within the seaport environment. Finally, the seaports cannot 

share or exchange inspection data easily. This further limits the ability to identify 

any regional or national trends regarding immigration risks and to develop 

subsequently an appropriate inspection strategy for addressing these risks. 

Some cruise ship carriers voluntarily transmit passenger and crew manifest 

information electronically through APIS prior to arrival at the POE or destination. 

APIS is a nationwide automated system capable of performing database queries 

on passengers and crewmembers prior to their arrival in or departure from the 

United States. CBP, TSA, and the Coast Guard are coordinating APIS regulations 

that should be published in 30-60 days and will make the submission mandatory. 

As APIS data is received, a sea passenger analysis unit at each POE queries 

against IBIS and the NCIC wanted persons database. The results of these queries 

are used to identify persons of interest to interview and inspect at the POE. CBP 

is sharing APIS data with the Coast Guard, and the two agencies are working 

together to integrate APIS with the Coast Guard’s Electronic Notice of Arrival 

System. This integration is expected to be complete in FY 2004. This will 

enhance both agencies’ ability to identify passengers, crewmembers, and cargo for 

more thorough inspection. 

Status on the Department Management Challenges Page 31
 

Integrated Fingerprint Systems 

Considerable effort has been expended over a long period of time to integrate the 

IDENT and IAFIS into an effective tool to identify illegal aliens apprehended 

entering the country. The integrated tool will be especially useful to identify 

aliens with outstanding criminal warrants and those on terrorist watch lists. The 

most recent DOJ OIG report acknowledged that the integration project had made 

considerable progress, but that there were serious concerns regarding program 

management, lack of program prioritization, and weak long-range planning. 

The Justice Management Division within DOJ was the project manager for this 

effort, coordinating activities of INS and FBI. With the establishment of DHS, 

it is unclear what agency is acting as the project manager and where program 

responsibility lies within DHS. The previous DOJ OIG report identified this 

situation as potentially detrimental to future integration efforts and likely to result 

in further delays. 

The DOJ Justice Management Division is anticipating full integration completion 

by the fall of 2008. This fully integrated IDENT system will be used by the USVISIT program to process all visitors to the United States. Concern has been 

raised regarding the need for daily NCIC updates into the IDENT system and 

whether the FBI should have access to fingerprints collected by the US-VISIT 

biometric system. 

As of February 18, 2004, 55 sites have been deployed with the recently upgraded 

version of the software (i.e., 10 fingerprints are captured once and processed 

simultaneously in one report from both IDENT and IAFIS). This includes 29 

border patrol stations and 26 POEs. Ten prints capability has also been deployed 

to an additional 58 sites, including 30 ICE investigations offices, which allow 

them to capture and submit electronically prints to IAFIS only. There is also an 

effort to redeploy IAFIS stand alone units, originally deployed to Border Patrol 

and Inspections sites, to 20 ICE detention and removal locations to provide them 

connectivity to the FBI’s IAFIS system. 

In addition, the US-VISIT program has budgeted funds to continue deployment 

and use of the integrated IDENT/IAFIS functionality to support criminal 

identification and booking. However, the US-VISIT program has not initiated 

deployment with these funds, as there are concerns over the fingerprint image 

quality produced with the integrated version. In a joint effort, DOJ and DHS 

have been analyzing image quality data over the past few months in an effort 

to determine whether the increase in poorer quality images was the result of 

software, hardware, training, or physical set up. As part of this analysis, in 

Page 32 Status on the Department Management Challenges
 
January 2004, DHS deployed a new scanner at a few sites that had no previous 

electronic ten print capabilities. The preliminary data has shown significant 

increase in image quality. DHS has directed the IDENT contractor to provide a 

software solution that is compatible with more scanners than the current version, 

which works with just one type of scanner. DHS is waiting for an estimate of 

how long this solution will take to implement. 

Northern Border Issues 

In February 2002 the DOJ OIG reported that northern border patrols required 

additional personnel, equipment and intelligence support to perform enforcement 

operations to the extent required for maximizing border security. CBP is 

responsible for the security of the U.S.-Canadian border that includes waterways 

and vast stretches of wilderness with minimal law enforcement presence. CBP 

operates and manages of 86 official POEs, as well as numerous unofficial 

crossings and public land straddled by national parks. Sufficient personnel, close 

lines of communication, collaboration, and adequate equipment, and its use are 

needed to ensure adequate security at the northern border. 

CBP plans to increase the number of border patrol agents and inspectors on 

the northern border. Also, CBP has negotiated with Canada to allow the Royal 

Canadian Mounted Police to use the IBIS intelligence system when processing 

border crossings. Along with this, CBP plans to incorporate aerial surveillance 

and sensor technology that would increase the effectiveness of the border patrol 

agents and inspectors. 

Student Visa Tracking 

The concerns associated with visa violators, especially students, continue to be 

a national security issue. Previous DOJ OIG reports identified several issues 

associated with the Student and Exchange Visitor Information System (SEVIS) 

that included computer difficulties, the timeliness, accuracy and completeness of 

the data in the system, the certification of schools that accept foreign students, 

training of contractors and immigration and ICE personnel, oversight of 

contractors conducting school site visits, oversight of schools’ compliance with 

SEVIS requirements, procedures for identifying and referring potential instances 

of student or school fraud, and resource levels for investigating potential fraud. 

The issues identified by the DOJ OIG reports indicate that there are potential 

areas where fraud or non-compliance with policies and procedures could lead to 

breaches of national security. 

Status on the Department Management Challenges Page 33
 
SEVIS is an automated process developed to collect, maintain, and manage 

information about international foreign students and exchange visitors during their 

stay in the United States. SEVIS was designed to respond to the national security 

concerns raised by the DOJ OIG, Congress and the law enforcement community 

by improving data accuracy and collection. SEVIS increases the ability of ICE 

to maintain up-to-date information on foreign students and exchange visitors to 

ensure that they arrive in the United States, show up and register at the designated 

school or exchange program, and properly maintain their status during their 

stay. It does so by combining input from government sources as well as schools 

specially certified to lawfully enroll foreign students. 

The USA PATRIOT Act required that SEVIS be implemented at schools for new 

foreign students by January 1, 2003. Schools were given until August 1, 2003, to 

enter all current students into SEVIS and to report their enrollment. 

Also, as part of the requirements of the SEVIS program, Congress has mandated 

that it be fully funded by user fees. ICE has proposed a fee regulation, with the 

fee set at a level designed to fund the Student and Exchange Visitors Program 

(SEVP) and compliance efforts related to SEVIS. The proposed regulation was 

signed by the Secretary on February 19, 2004, and is under review by the Office 

of Management and Budget. In addition to student fees, SEVP receives limited 

funding from fees paid by schools in conjunction with applications for school 

certifications (Form I-17). This fee is currently in place. 

The DOJ OIG reviewed the INS’ system for monitoring and tracking foreign 

students and reported that SEVIS would address many, but not all, of its 

problems.5

 DOJ OIG also evaluated INS’ progress in implementing SEVIS 

and reported deficiencies in: capabilities for accessing the SEVIS system; the 

processes for certifying schools as eligible to accept foreign students; training 

of contractors, school and ICE personnel; oversight of contractors conducting 

school site visits; the timeliness, accuracy and completeness of data in the 

system; oversight of schools’ compliance with SEVIS requirements; procedures 

for identifying and referring potential instances of student or school fraud; and 

resource levels for investigation of potential fraud.6 

5

 “Contacts with Two September 11 Terrorists: A Review of the INS’s Admissions of Mohamed Atta and Marwan Alshehhi, 

its Processing of their Change of Status Applications, and its Efforts to Track Foreign Students in the United States” DOJ 

OIG, May 2002 

6

 “Follow-up Review on the Immigrations and Naturalization Service’s Efforts to Track Foreign Students in the United States 

through the Student and Exchange Visitor Information System,” DOJ OIG Report Number I-2003-003, March 2003. 

Page 34 Status on the Department Management Challenges
 
Responsibility for SEVIS transferred to ICE on March 1, 2003. Following the 

transfer of SEVIS from CIS to ICE, SEVP was established in May 2003 and 

became operational in June 2003 with 10 full-time positions. The SEVP Office 

assumed responsibility for administering SEVIS at that time. ICE’s Compliance 

Enforcement Unit (CEU) is responsible for enforcement investigations. 

SEVP has addressed the access problems. All Department of State consular 

posts now have the capability to view SEVIS information. There is an interface 

between the SEVIS system and the Department of State’s Consular Consolidated 

Database (CCD). Consular officers access CCD, which is populated with key 

SEVIS information. A nightly interface of data updates any changes to a student’s 

SEVIS record. All POEs have access to SEVIS in secondary inspection areas. 

The SEVIS helpdesk is available to assist in resolving any computer problems 

that do arise. 

While authority to issue school certifications currently lies with CIS, both CIS 

and ICE are working to formally transfer this authority to SEVP. Although a 

delegation of authority transferring complete adjudicatory authority to SEVP 

has not yet been signed, under a mutual agreement between CIS and ICE, SEVP 

began adjudication of certain school certification applications on November 1, 

2003. The School Certification Unit (SCU) within the SEVP Office initially has 

10 full-time positions, which officials believe to be enough for the short term. 

Once the student fee regulation is approved, managers will be able to staff this 

area fully. Ultimately, SEVIS will be fully fee funded. The school fee is currently 

being charged. The student fee will be charged following approval of the 

proposed fee regulation, which is now under Office of Management and Budget’s 

final review. 

Based on data provided by SEVP officials, as of January 30, 2004, approximately 

700 schools are in the certification and approval process, over 8,900 schools have 

been certified as eligible to accept foreign students, and 750,558 active students’ 

and exchange visitors’ names are in SEVIS. 

The SEVP Office is looking at ways to improve the school certification process. 

Under the current process, contractors are used to conduct on-site investigations 

at schools and government personnel evaluate both the contractor report and the 

application for certification in making a decision whether a school should be 

certified. The SEVP Office has developed a statement of work to ensure that an 

improved certification process is comprehensive, efficient, and effective. Once 

the contract is awarded, the contractor will have 6 months to complete the tasks 

laid out in the statement of work. These tasks include conducting an independent 

Status on the Department Management Challenges Page 35
 
assessment of the current certification process; reviewing and developing school 

certification criteria; developing a complete training package for contractors, 

school personnel and ICE/SEVP staff; developing a strategic plan for the 

certification process; and determining the charges for school certification and recertification. To assist contractors in effectively conducting school site visits, the 

SEVP Office is looking at developing 10-12 different site visit checklists tailored 

for different types of schools. Currently only one checklist is used for all schools. 

Currently, everyone in the SCU is located at headquarters; however, SEVP 

officials would like to move some school certification adjudicators into field 

locations eventually. This would allow adjudicators to become familiar with 

schools in a particular area, as well as with state laws, which must be taken into 

account when certifying schools. Also, a delegation of authority is necessary 

to give ICE the authority to adjudicate the school certification applications. 

Headquarters personnel are able to view information in SEVIS, but most 

are unable to adjudicate applications because the delegation of authority for 

adjudication remains with CIS. Only those adjudicators who were previously at 

CIS are currently able to adjudicate school applications. 

Recertification is required for schools every 2 years and includes a site visit. 

The SEVP Office is looking at recertification procedures, including options for 

making the recertification site visit more interactive, with school staff having 

SEVIS responsibility rather than simply verifying that the school exists and is 

legitimate. Recertification may include a review of the school’s SEVIS data for 

timeliness, accuracy and completeness and for compliance with SEVIS reporting 

requirements. A large recertification push will begin in May 2004 as many 

schools reach the two-year mark. 

Schools were required to have all continuing students entered into SEVIS by 

August 1, 2003. The SEVIS response team, a 24-hour hotline, was activated 

in the month of August 2003 to provide customer support to incoming foreign 

students and POEs if information was not correct in or was missing from SEVIS. 

During the time the hotline was operational, the SEVIS team had 24-hour access 

to school representatives if necessary. The SEVIS response team was activated 

again for January 2004; however, some of the response team staff was released 

early because they were not needed. SEVP officials attributed this to the system’s 

being used properly, people’s being aware of and educated about SEVIS, the 

system’s being accurate, and schools’ complying with SEVIS requirements. 

ICE’s CEU is responsible for enforcement investigations, which include 

investigation of aliens suspected of failing to maintain the terms of their student 

Page 36 Status on the Department Management Challenges
 
status, as reported in SEVIS. The SEVP Office is establishing an SEVP Liaison 

Program for working with the CEU to identify student violators. Investigators in 

the CEU pull reports from SEVIS weekly for a list of possible student violators. 

The list is then vetted to create a “credible leads” list. Currently, investigators in 

the CEU do final vetting of the list and often find, during the investigation, that 

administrative or technical errors resulted in someone’s being placed on the list. 

Under the SEVP Liaison Program, an SEVP CEU liaison will do a “final scrub” 

of the data for administrative and/or technical errors before a final list is sent to 

the CEU for investigation. Standard operating procedures for the program are 

currently being finalized, and this revised process should begin in March 2004. 

Identification, Location, and Removal Non-immigrant Overstays 

Immigration officials have experienced significant problems identifying, locating, 

and removing non-immigrant aliens who have overstayed their visas, who 

have violated a notice to appear, or are otherwise reported to be out of status. 

Immigration officials have also been largely unsuccessful at removing nondetained aliens with final removal orders, removing only 13% of these aliens 

according to a report issued by the DOJ OIG (DOJ report number, I-2003-004, 

February 2003.) Moreover, INS was deficient at removing important subgroups, 

removing only 6% of the non-detained aliens from countries that sponsor 

terrorism, 35% of non-detained criminal aliens, and only 3% of non-detained 

aliens denied asylum. The 2003 report followed up on a DOJ OIG report, issued 

March 1996, I-96-03, which found INS removed 11% of non-detained aliens. 

Some of the key DOJ OIG recommendations included: establishing annual goals 

for apprehending and removing absconders and other non-detained aliens with 

final orders; identifying the resources needed to achieve annual and strategic 

performance goals, and ensure that resources are applied to all case types; 

completing the rulemaking titled Requiring Aliens Ordered Removed from the 

United States to Surrender to the Immigration and Naturalization Service for 

Removal; and implementing with the Executive Office for Immigration Review a 

shared data system, similar to IBIS, for case tracking to identify and process aliens 

with final orders. 

ICE has taken steps to address the recommendations cited in the report. In FY 

2003, ICE asserts that removal of all aliens increased over 21% from FY 2002, 

and absconder removals increased by over 46%. ICE developed a 6-year plan that 

aligns its long-term detention and removal strategies with the resources that are 

required to fulfill them. This plan was used to construct the FY 2005 President’s 

Budget request. Once the FY 2005 budget is enacted, this 6-year plan will be 

Status on the Department Management Challenges Page 37
 
revised and ICE will then set annual performance targets and develop future 

budget requests. 

Further, ICE’s Compliance Enforcement Office is now tasked to identify and 

locate overstays by using information provided by SEVIS and the National 

Security Entry Exit Registration System (NSEERS) databases, and the office 

is expected to use similar data from US-VISIT. In addition, ICE has created a 

program element specifically for fugitive operations. Guidance was provided to 

field offices on the use of personnel for fugitive operations, and employee costs 

associated with the program are being tracked. 

On May 9, 2002, INS published a second proposed rule, titled Requiring Aliens 

Ordered Removed from the United States to Surrender to the Immigration and 

Naturalization Service for Removal, that would broaden notification methods and 

require all properly notified aliens to surrender within 30 days. This new rule bars 

properly notified aliens who do not comply with the surrender requirements from 

applying for administrative relief from removal or from returning legally to the 

United States for 10 years. The rule applies to aliens currently in immigration 

proceedings. DOJ OIG reported that as of January 2003, the proposed rule was 

not final. ICE reports that a final version of the Surrender Rule is complete and 

awaiting approval from DHS for publication. 

The proposed budget for FY 2005 supports an increase of over $100 million 

for ICE’s Detention and Removal Program. This includes an additional $50 

million to expand the program to apprehend alien fugitives and includes 236 new 

positions. However, even when these additional resources are obtained, ICE will 

face challenges in training and deploying the new agents as hiring and training 

this number of agents will be a lengthy process. It will take 6 months to a year 

of on-the-job training to prepare the new agents adequately to handle a normal 

caseload. ICE will have to determine where to locate personnel to maximize the 

impact on the outstanding casework with respect to national priorities. ICE also 

faces a challenge in integrating the information contained in a number of “stovepiped” databases that are utilized to identify and track the fugitives and overstays. 

Institutional Removal Program (IRP) 

Under immigration law, most criminal aliens, including aggravated felons, are 

deportable. In many cases, these aliens are incarcerated at federal, state and local 

facilities serving out criminal sentences. The IRP is a national program that aims 

to: identify removable criminal aliens in federal, state and local correctional 

facilities; ensure they are not released into the community; and remove them 

Page 38 Status on the Department Management Challenges
 
from the United States upon completion of their sentences. This program was 

developed with the cooperation of the Executive Office for Immigration Review 

(EOIR) in 1988. Under this program, ICE identifies and processes appropriate 

cases for removal from the inmate population. The cases are scheduled for 

hearings with the cooperation of EOIR either on site at the penal facility or 

through telephonic or video hearings. In this manner, when the alien has 

completed service of the criminal sentence, the immigration hearing has already 

been completed and the alien may immediately be removed upon coming into ICE 

custody. The intent is to process aliens while in federal, state and local custody 

to allow for their immediate removal upon release. Based on DOJ OIG reporting, 

immigration officials have not determined the nationwide population of foreignborn inmates, particularly at the county level. Without this information, they 

cannot properly quantify the resources needed to identify and process fully all 

deportable inmates. In addition, the report found that IRP interviews of foreignborn inmates to determine deportability were minimal to non-existent. As a 

result, many potentially deportable foreign-born inmates passed through county 

jails virtually undetected. 

The DOJ OIG reviewed the IRP process at the state and local level and the 

inherent difficulties faced by the INS in coordinating with non-federal agencies 

and reported that the INS had not effectively managed the IRP and expended 

millions of dollars annually to detain criminal aliens due to failures in the IRP 

process.7 The DOJ OIG recommended that INS: identify the total foreign-born 

inmate population at the county, state and federal levels; determine the resources 

for the IRP to cover the population fully; assess the risks involved with not 

providing full coverage; strengthen IRP program management by accounting for 

program expenses and dedicating resources to the program; implement a multiyear plan to provide an expanded Detention Enforcement Officer position to staff 

the IRP; and request that the Office of Justice Programs change current State 

Criminal Alien Assistance Program8

 (SCAAP) grant provisions to require, as a 

grant condition, the full cooperation of state and local governments in the INS’ 

efforts to process and deport incarcerated aliens. 

On November 25, 2003, ICE addressed these recommendations by stating 

that they plan to issue a contract to identify the number foreign-born inmate 

population (the contract has since been awarded) and have created specific 

funding codes for the IRP to help track resources. Additionally, the FY 2005 

7

, “The Immigration and Naturalization Service, Institutional Removal Program”, DOJ OIG Report No. 02-41, September 

2002. 

8

 SCAAP is a DOJ grant program established to help state and local governments defray the cost of incarcerating criminal 

aliens. FY04 appropriations are approximately $290 million. 

Status on the Department Management Challenges Page 39
 
budget request of $30 million will significantly enhance IRP effectiveness, and 

states that IRP will continue to work closely with the Office of Justice Program 

on proposed changes to the SCAAP to leverage the cooperation and assistance of 

local incarceration facilities in reporting and processing the foreign-born inmates 

population. 

Currently, the IRP is due to move from ICE’s investigations office to ICE’s 

detention and removal office (DRO), once resources ($30 million) identified in the 

FY 2005 budget request are appropriated on or after October 1, 2004. A working 

group has been established to facilitate this transition; however, most of planning 

work is still in its preliminary stage. 

OIG recently initiated an audit of this program. The scope of the audit includes 

IRP activities since October 1, 2002. 

Detention Space Management 

In 2000, the INS apprehended 1.8 million aliens, many of whom are held 

temporarily before being voluntarily returned to Mexico. The number of aliens 

who must be detained for formal removal or other immigration proceedings 

has grown, from 72,154 in 1994 to 188,547 during 2001. To obtain additional 

detention space, the INS relied on outside contractors (state and local 

governments and for-profit entities) to house detainees. It is estimated that almost 

70% of the detainees are housed in non-federal detention facilities. The DOJ 

OIG audits of Intergovernmental Service Agreements for Detention Space with 

various local governments found several instances of significant dollar findings 

for unsupported costs that were submitted by contractors. One of the primary 

findings related to two counties was that the average detainee jail day rates were 

inflated because the entities understated average daily population that was used to 

determine the rate. 

The audits referenced above primarily address cost recovery issues and do not 

focus on how ICE is currently addressing detention space management issues or 

ICE’s integration into DHS. A senior DRO official stated that the move into DHS 

has had a positive effect on the DRO programs in that ICE is now solely a law 

enforcement agency. Prior to the creation of DHS, INS was alternating its focus 

and resources between immigration services and enforcement. 

DRO recognized the need for more, as well as improved, detention oversight. 

During the integration into DHS, DRO took the initiative to reorganize and create 

a “Detention Management Division,” which includes the “Detention Acquisition 

Page 40 Status on the Department Management Challenges
 
and Support Unit” and “Detention Compliance Unit.” These units are directly 

tasked with correcting and controlling issues related to the detention process. 

On June 27, 2003, DRO released its strategic plan identifying specific strategic 

goals and objectives. One of the primary goals identified in the strategic plan 

is the provision of safe, secure, and humane confinement of persons detained in 

accordance with immigration law. The related objectives include optimization of 

detention space for cost efficiency. In addition, DRO intends to utilize alternative 

methods to detention, such as electronic monitoring, better to utilize its resources 

while maintaining compliance with immigration law. Another objective is to 

develop transportation and logistics systems to support detention and removal 

operations more efficiently. 

However, the DRO strategic plan identifies a number of additional weaknesses 

that must be addressed. DRO lacks reliable models to determine what the 

workload-to-personnel ratio should be, and DRO also does not currently have 

adequate financial and resource tracking systems to conduct detailed analysis of 

costs and resources. Also, staff and detention resources have not kept pace with 

the increase in caseload. DRO has suffered from diversified and inconsistent 

interpretation of policy and guidance within and between regions and districts. 

DRO envisions further the development and deployment of national operations 

and management plans which will have a positive impact on DRO operations. 

DHS’s FY 2005 budget request includes an additional $5 million for bed space 

to accommodate a higher volume of apprehended criminal aliens, which should 

result in a higher appearance rate at immigration proceedings and a greater 

number of removals and fewer absconders. The budget request also includes $11 

million for DRO’s initiative for alternatives to detention to provide the resources 

necessary to establish community supervision operations. The premise for this 

initiative is that effective control of persons released into the community during 

immigration proceedings or while awaiting removal will stem the growth of the 

fugitive population. 

Management of Unaccompanied Alien Juveniles in DHS Custody 

A DOJ OIG report issued in 2001 identified several issues that indicated that 

the welfare and safety of alien juveniles in INS custody may be jeopardized 

because of problems with policies, procedures, data systems, conditions of 

confinement, management oversight, and housing. The DOJ OIG report made 28 

recommendations to improve the INS’ juvenile program. Unaccompanied alien 

juveniles in INS custody were managed by INS until HSA established DHS and 

Status on the Department Management Challenges Page 41
 
transferred most of the alien juvenile custody responsibilities to HHS. The full 

range of care and custody issues regarding alien juveniles in federal custody are 

now managed by several agencies, including CBP, ICE, HHS’ Office of Refugee 

Resettlement (ORR), and DOJ’s Executive Office of Immigration Review. The 

welfare and safety of juveniles in federal custody has always been a concern but 

now that concern is magnified by the difficulties of managing a program across 

departmental boundaries. 

Responsibility for administering the juvenile program in DHS resides in the 

DRO. In addition, most INS functions associated with the care and housing 

of unaccompanied juveniles in federal custody as a result of their immigration 

status were transferred by HSA to ORR. A DRO official said that the transfer of 

responsibility for juvenile custody management to ORR has not gone smoothly or 

quickly. Despite the transfer of care and placement responsibilities to HHS by the 

HSA, DRO still retains much of the responsibilities for juveniles. ORR and DRO 

are working on a MOU that will spell out roles and responsibilities between the 

two agencies, but according to the DRO official, the development of the MOU has 

been very slow. Given the difficulty the two agencies are having in drafting the 

MOU, they have elected to develop a “statement of principles” as an interim step. 

This document will be a concept paper describing general operational policies 

between the two agencies. DRO officials expect the statement of principles to be 

concluded by the end of March, but did not have an estimated date for completing 

the MOU. 

One of the many challenges still facing DHS is the development of long-range 

program objectives and strategies for the juvenile program. DHS has policies 

and procedures in place for managing juveniles in its custody from the time of 

apprehension until placement in a juvenile detention facility. However, these 

policies and procedures were carried forward from legacy INS manuals, and DHS 

still does not have a full set of policies and procedures to govern the transfer of 

apprehended juveniles to HHS. Because of the reorganization of immigration 

functions within DHS, and the transfer of most functions to HHS, these policies 

and procedures must be reviewed and modified to adopt them to the new 

operational environment. 

Further complicating current juvenile program activities is that DRO, which has 

responsibility for administering the DHS juvenile program, is located within ICE 

and separated from CBP, which apprehends and takes initial custody of juveniles. 

There is no established chain of command to enforce juvenile program policies 

and procedures between CBP and ICE. 

Page 42 Status on the Department Management Challenges
 
Since the issuance of the DOJ OIG report and prior to the formation of DHS, the 

DOJ OIG and INS closed eight recommendations. Little attention has been given 

to closing the remaining open recommendations. This is not surprising given 

the lack of the development of the MOU between DHS and HHS, the chain of 

command issues between ICE and CBP, and the department’s yet to be developed 

long-range plans for the juvenile program. 

We analyzed the remaining open recommendations and found some of the 

responsibilities still remain with DHS, some with HHS, and one will require joint 

action. 

Transportation Security 

Two of the greatest homeland security challenges facing DHS over the past year 

has been the ongoing effort to implement ATSA and the MTSA. To this end, 

TSA and the Coast Guard have made great progress in implementing critical 

components of the legislation and, as a result, our nation’s defense against 

international terrorism has never been stronger. 

However, despite the progress that has been made over the past year, tight 

legislative deadlines, a shortage of trained and qualified personnel to oversee 

and implement the legislation, delays in the acquisition and implementation 

of technological solutions, and a shortage of critical infrastructure to support 

homeland security initiatives, continue to challenge TSA and the Coast Guard. 

Implementation Of ATSA 

On November 19, 2001, ATSA was enacted, creating the TSA within DOT. TSA 

was delegated the responsibilities for: 

§ Federal security screening operations for passenger air transportation; 

§ Developing standards for the hiring and retention of security screening 

personnel; 

§ Training and testing security screening personnel; and 

§ Hiring and training personnel to provide security screening at over 400 

commercial airports in the United States. 

Status on the Department Management Challenges Page 43
 

In addition, the ATSA established two critical deadlines for federalizing the 

screening workforce and for screening all checked baggage: 

§ First, TSA was required to have enough federal screeners in place to 

conduct the screening of passengers and their carry-on property at all 

commercial airports by November 19, 2002. 

§ Second, TSA was required to have a sufficient number of explosives 

detection systems (EDS) in place to screen all checked baggage by 

December 31, 2002. 

Since TSA was built from the ground up, there was little existing infrastructure 

in place, and TSA had to rely extensively on contractors to support its mission 

and meet mandated deadlines. The agency hired contractors to help hire and 

train passenger and baggage screeners. NCS Pearson was hired to recruit, 

assess, and hire the nationwide screener workforce, as well as to provide human 

resources support for all TSA employees. Lockheed Martin provided support 

for the federalization of passenger screeners and upgrading passenger screening 

checkpoints under contract with TSA. Boeing Services Company was hired to 

execute TSA’s EDS deployment strategy for meeting the December 31, 2002, 

deadline, as well as to train a workforce estimated at 21,600 to operate the 

checked baggage screening equipment. 

Although TSA met the deadline for federalizing the screening workforce, due 

to the fast paced hiring, training and deployment of screeners, TSA was not 

able consistently to maintain the highest quality of training nationwide. From 

mid-September through mid-October 2002, TSA trained, on average, over 

5,000 screeners each week. Despite TSA’s and Boeing’s best efforts to meet 

the December 31st deadline, they acknowledged that approximately 5% of the 

airports would not be able to meet the deadline due to significant issues relating to 

construction necessary to complete the equipment installation. 

Consequently, HSA granted a one-year extension to the checked baggage 

screening deadline for those airports not meeting the original deadline. HSA also 

required the Under Secretary of Transportation for Security (now TSA) to submit 

every 30 days a report to Congress describing the progress made toward meeting 

the checked baggage screening requirements at each airport. 

Page 44 Status on the Department Management Challenges
 

Screener Recruitment 

In February 2003, the DOT OIG issued an audit report on TSA’s screener security 

program. They found that while TSA had made tremendous strides in hiring and 

training a qualified and professional workforce to conduct passenger and checked 

baggage screening at the nation’s commercial airports, additional actions were 

needed. The DOT OIG recommendations included the need for TSA to: develop 

detailed and justifiable staffing plans for each airport; evaluate the supervisory 

positions for each airport and establish a policy for relocating extra supervisory 

screeners to airports where shortages exist; develop better controls for contract 

oversight, ensure contractors provide reliable data, and closely monitor contractor 

performance and costs; and expand future Federal Managers Financial Integrity 

Act (FMFIA) reporting of control weakness to include TSA’s lack of contract 

oversight for all major contracts. 

To address these recommendations, TSA reports it has taken the following 

actions: 

§ Staffing plans have been developed for airports to transition from fulltime to a mix of full and part-time staffing models and TSA is now in the 

process of converting the screening workforce to between 20-30% parttime employees at each airport. 

§ A “right sizing” effort has begun to determine the right number of 
 


supervisory and lead screeners necessary at airports.
 


§ Contract management teams have been established on each of TSA’s 

major programs. 

TSA’s lack of contract management oversight for major contracts was reported 

as a material weakness in its FY 2003 FMFIA Report. TSA is taking steps to 

address that weakness, such as increasing the size of its contract management staff 

and developing policies and procedures to better manage its contracts. Also, the 

Defense Contract Audit Agency (DCAA) has performed over 130 contract audits 

for TSA and supports contract administration in six functional areas. 

We are currently reviewing TSA’s management of the screener recruitment 

program, focusing on how costs were incurred and managed. At TSA’s request, 

DCAA is conducting a concurrent review of costs incurred by the primary 

contractor for the assessment centers, NCS Pearson. The Defense Contract 

Management Agency (DCMA) was also asked to assist and strengthen all contract 

Status on the Department Management Challenges Page 45
 
oversight functions. The OIG and DCAA are coordinating efforts on both 

audits, with DCAA focusing on the contractor’s role and contract costs incurred, 

while OIG focuses on TSA’s management of both its recruitment effort and its 

contractors. 

DHS OIG recently issued a report on TSA’s background checks for screeners.9 

We found that TSA completed up to 4 background checks for each of the nearly 

56,000 screener appointees, as well as for thousands of unsuccessful applicants. 

In total, over 360,000 background checks were conducted by contractors. 

However, TSA was responsible for managing the contractors’ work, tracking 

background check progress and completion, making final suitability decisions, 

and terminating employees who failed the checks. The deadlines were short, and 

the scale of hiring was large. Despite contractor support, TSA was not able to 

manage the background checks in an orderly and consistent manner. 

As a result of TSA’s poor management and oversight of its contractors, thousands 

of airport security screeners began working without completed background 

checks, including 85 convicted felons who were later fired. In addition, after 

these problems were brought to TSA’s attention, the agency, in an effort to fix the 

problem, then erroneously fired 169 screeners who had clean backgrounds. 

The OIG’s report on background checks made 12 recommendations including: 

§ Completing screener position risk designations; 

§ Completing the comparison study of the effectiveness of OPM and private 

sector background checks; 

§ Ensuring that all screeners undergo a fingerprint based criminal history 

records check and receiving a favorable adjudication before they begin 

training and work; and 

§ Creating a personnel security tracking system that provides management 

with accurate, timely, and integrated information on the status of security 

investigations. 

TSA has taken corrective action to address some of the issues raised in the OIG’s 

report. For example, processes have been implemented to ensure that fingerprint 

based criminal history checks are conducted for each candidate and that they are 

9 ”Review of Background Checks for Federal Passenger and Baggage Screeners at Airports”, Transportation Security 

Administration (Report No. OIG-04-08, January 2004) 

Page 46 Status on the Department Management Challenges 
successfully adjudicated before the candidate is hired. Screener candidates are 

also subjected to a procedure that checks their criminal and credit history and 

compares their names against specific watch lists. 

The DOT OIG also found that during the time of greatest hiring TSA provided 

minimal oversight of NCS Pearson’s processing of new employees and entering 

their data into the personnel system. At the time, TSA had very little existing 

infrastructure in place to provide the much needed contract oversight. There were 

significant and widespread problems with individual pay, benefits, withholdings, 

and leave accruals. TSA changed its human resources support contractor in 

January 2003, and directed the contractor to separately track costs for correcting 

identified errors or deficiencies in the personnel files. 

Furthermore, from February to December 2002, overall cost of the contract 

grew from $104 million to an estimated $729 million. Part of the growth can 

be attributed to changes in the estimated size of the TSA workforce and the 

immensity of the task at hand. However, TSA’s lack of management oversight 

and cost controls over the contract also contributed to the rising costs. 

TSA has requested $150 million for recruitment, qualification and examination of 

screeners and other professional, administrative, technical and support personnel 

in its FY 2005 budget. 

Screener Training 

TSA’s task of hiring and training a large federalized security workforce of 

approximately 56,000 screeners was unprecedented. The agency overcame many 

challenges in order to accomplish this feat. However, the success in converting 

a private workforce to a federal one did not come easily or without problems. 

Due to the hectic pace of hiring and training a workforce of that size within just 

a few months, TSA was not able to consistently maintain the highest quality of 

classroom and on-the-job training. 

In the DOT OIG’s audit report on TSA’s screener security program, two 

recommendations were made to address deficiencies in TSA’s screener 

workforce training program. First, TSA must develop performance standards 

for the screening workforce that link performance assessments with the 

results of operational testing. The second recommendation suggested specific 

improvements to strengthen recurrent and advanced technology training. A DHS 

OIG review of screener performance led to additional specific recommendations 

for improvements in screener training. 

Status on the Department Management Challenges Page 47
 
To ensure the screener workforce has the knowledge and skills necessary to 

keep the flying public safe, ATSA requires screeners to be subjected to an annual 

proficiency review. Essentially, screeners must be re-certified every year. The 

law states that a screener may remain in that capacity only if he or she: continues 

to meet all qualifications and standards required to perform a screening function; 

has a satisfactory record of performance; and demonstrates current knowledge 

and skills necessary to perform screening functions vigilantly and effectively. Recertification consists of the knowledge and skills assessment program and the final 

rating on the performance agreement. 

Within the knowledge and skills assessment program, there are 3 modules that 

evaluate a screener’s job knowledge, image proficiency, and practical skills 

demonstration: 

§ The job knowledge module is referred to as the standardized proficiency 

review (SPR) and is a computerized, 50 question multiple-choice test. 

The SPR is either passenger or baggage screener specific and is used to 

evaluate a screener’s knowledge of standard operating procedures. 

§ The image proficiency module includes a computerized test that consists 

of 100 images and is used to evaluate a screener’s skill and ability in 

detecting threat/prohibited items within x-ray images of baggage. 

§ The practical skills demonstration module is a hands-on simulated work 

sample used to evaluate a screener’s knowledge, skill, and ability when 

performing specific screener tasks along with their ability to provide 

customer service. 

Results of these tests are based on a “Pass/Fail” system. If screeners fail any of 

these modules, they will receive study time and/or remediation and one retest 

opportunity. Both passenger and baggage screeners must pass the job knowledge 

and practical skills demonstration modules. In addition, passenger screeners must 

pass the image proficiency module. 

On December 12, 2003 TSA’s Office of Workforce Performance and Training 

issued interim guidance to the Federal Security Directors (FSD) on recurrent 

training. In addition to updating recurrent training standards, this office is 

developing a screener training management directive to establish a national 

policy relative to all screener training requirements. Each FSD is responsible 

for establishing a training program schedule that meets the intent of the standard 

as well as the specific performance and developmental needs of each screener. 

Page 48 Status on the Department Management Challenges
 
According to the guidance, scheduled duty time is to be used by the FSDs to 

accomplish recurrent, administrative, and professional development training. For 

both screening procedure review and x-ray interpretation, additional practice is 

recommended. 

TSA acknowledges that more screener training is needed and is in the process of 

providing new and improved screener training. For example, 2 computer based 

training courses have been developed to provide technical skills and enhance xray interpretation skills. In addition, training videos on x-ray operations, metal 

detectors, and physical bag search have been sent out to the field. The agency has 

allocated $145 million for training in its FY 2005 budget. 

Screener Performance 

DHS OIG’s recently concluded audit of screening procedures at selected airports 

consisted of undercover tests of screener and equipment performance. Results 

of testing indicate the need for system-wide improvement in the following areas: 

training, equipment and technology, policy and procedures, and management 

and supervision. Between November 2001 and July 2002, the DOT OIG had 

conducted similar tests of airport security; however, the DOT testing was 

completed prior to the federalization of the screening workforce. 

Shortly after TSA was established, the Office of Internal Affairs and Program 

Review (OIAPR) was created. The mission of this office is to ensure the 

integrity of TSA’s programs and operations. To accomplish this mission, OIAPR 

developed program objectives to evaluate the performance of TSA’s hired and 

trained screener workforce and to assess the adequacy of security systems and 

controls at commercial airports nationwide. As part of its mission, OIAPR is also 

responsible for conducting covert testing to assess the effectiveness of aviation 

security. As required by law, screeners who fail an operational test must undergo 

remedial training before they are permitted to return to the position at which they 

failed the test. 

To its credit, TSA has some initiatives under way that should help improve 

screener performance. One such initiative is the implementation of an enhanced 

version of the Threat Image Projection (TIP) System. TIP is a system that 

superimposes threat images on x-ray screens during actual operations and records 

whether screeners correctly identify the threat object. By frequently exposing 

screeners to images of a variety of dangerous objects, TIP provides continuous onthe-job training and immediate feedback and remediation. TIP allows supervisors 

to monitor screener performance and improvement closely. The enhanced 

Status on the Department Management Challenges Page 49
 
version is much more comprehensive then the previous version which consisted 

of just a few hundred images. Now, the TIP library consists of approximately 

2,400 images. Deployment of the expanded TIP library on all Tip-Ready x-ray 

machines is nearly completed. 

Another initiative is TSA’s plan to focus special attention on those airports with 

below par performance on covert testing. TSA will establish teams of industrial 

engineers, trainers, performance consultants, and technology and management 

experts who will identify the causes for poor performance at these airports and 

work with FSDs to devise and implement solutions. Follow-up will include 

additional covert testing to determine whether screener performance has improved 

and FSD accountability for any continued performance deficiency. 

Screening Deadline for Checked Baggage 

ATSA mandated that all United States airports have sufficient explosives detection 

systems to screen all checked baggage by December 31, 2002. TSA entered into 

a $508 million contract (with $862 million in options through calendar year 2007) 

with Boeing Services Company to execute its deployment strategy for meeting the 

December 31st deadline. Boeing was tasked to complete airport site assessments 

at over 400 airports scheduled between July and November 2002; submit a 

proposal to TSA on the right mix of equipment for each airport and where the 

equipment would be installed; modify facilities to accommodate the equipment; 

install and make the equipment operational; maintain the equipment; and train 

about 21,600 people to operate the checked baggage screening equipment. 

This requirement to screen all checked baggage was interpreted to include the use 

of both EDS and Explosives Trace Detection (ETD) machines. EDS machines are 

TSA certified and use computed tomography (CT) technology to detect explosives 

in checked baggage automatically. This technology, similar to that used in 

medical CT scans, uses transmission images (“slices”) taken at many different 

angles through an object to produce a three-dimensional image of the object. 

ETD machines are devices designed to detect trace amounts of explosives residue 

by analyzing a swab rubbed against the item, such as passengers’ checked and 

carry-on baggage. The device will alarm if it detects the presence of explosives 

particles. ETD’s dependence on an operator’s ability to collect explosives 

particles before the machine can begin to perform its detection functions makes it 

vulnerable to human error. 

Although TSA and Boeing worked feverishly to meet this deadline, about 5% 

of the required airports were unable to meet the deadline. HSA granted a 1-

Page 50 Status on the Department Management Challenges 
year extension to the checked baggage screening deadline for those airports 

not meeting the original deadline. HSA also required the Under Secretary of 

Transportation for Security (now TSA) to submit a report to Congress every 30 

days describing the progress made toward meeting the checked baggage screening 

requirements at each airport. 

OIG found that TSA’s monthly report to the Congress on deployment of EDS 

and ETD devices described the progress of installing and deploying electronic 

screening systems based solely on delivery, installation, and site acceptance 

testing of the equipment. TSA did not take into account airports that would 

not meet the deadline due to other factors, such as insufficient screening staff, 

ongoing construction, and/or physical space constraints. In addition, OIG 

reviewed TSA’s October 2003 monthly report and, based on a sampling of airports 

in an ongoing review of EDS installations, concluded that more airports should be 

added to the report since they would not be able to screen all checked baggage by 

the December 31, 2003 deadline due to these other factors. TSA identified even 

more airports that should be reported and added all to its December 2003 and 

January 2004 reports to the Congress. 

Integrating EDS into Baggage Handling Systems 

In May 2002, TSA reported to Congress on its deployment strategy for meeting 

the December 31, 2002, deadline to screen all checked baggage. A two-phased 

approach was planned. The initial phase involved an interim solution to meet the 

deadline where some airports would use EDS, with ETD machines used only for 

resolving alarms; others would use ETD exclusively; and some would use a mix 

of EDS and ETD to screen checked baggage. An interim solution was selected 

because it was not possible for manufacturers to produce enough EDS machines 

to screen all checked baggage; and, even if they could, there would not be enough 

space in airport lobbies to install the EDS machines. Further, it was not possible 

to complete the necessary modifications to baggage handling facilities to integrate 

EDS into the baggage handling systems 

In the second phase, TSA will integrate the EDS machines into the baggage 

handling systems at selected airports. The air carriers’ conveyor belts will 

directly feed EDS machine conveyor belts without human intermediaries. As 

an automated system, this will minimize human involvement (thereby limiting 

possible human error), dramatically speed throughput, and increase effectiveness 

and efficiency. A major issue is funding the next phase of EDS integration. Thus 

far, nearly all EDS equipment has been lobby installed. TSA’s second phase is 

by far the most costly aspect of full implementation. The task will involve not 

Status on the Department Management Challenges Page 51
 
simply moving the machines from lobbies to baggage handling facilities, but will 

require major facility modifications. 

Airport operators are now applying to TSA for letters of intent (LOI) for 

assistance in funding construction to support EDS integration. TSA has been 

given legislative authority to fund up to 75% of the necessary infrastructure 

changes. The LOIs do not cover the cost or installation of the machines, but 

instead covers facility modification costs. Currently, over 100 of the 429 

commercial airports have EDS machines. It is uncertain how many of these 

airports will be able to receive TSA funding to support installation of an in-line 

system, nor is it known how many will fund an in-line system without TSA 

support. To date, 36 formal requests for LOIs supporting an in-line screening 

solution have been received. In addition, at least a dozen LOI inquiries have also 

been made. According to TSA, the agency has committed $259.4 million for FY 

2003 and FY 2004 reimbursements. 

TSA’s total budget request for FY 2005 for the purchase and installation of EDS 

and ETD equipment is $400 million. In addition to this amount, prior year 

resources are available to support EDS in-line integration. According to TSA, 

their spending plan for EDS in-line integration for FY 2005 totals $601.7 million, 

which includes $512.4 million for EDS purchase, installation, and reimbursement 

to LOI airports for required facility modifications. It also includes $37.5 million 

for technical support and $23.4 million for purchase and installation of EDS 

equipment for AIP airports. 

Screening Air Cargo 

In addition to mandating the screening of all passengers and property, including 

cargo, mail, and carry-on and checked baggage that is carried on passenger 

aircraft, ATSA also requires having a system in place “as soon as practicable” 

to screen, inspect, or otherwise ensure the security of cargo on all-cargo aircraft. 

Since the tragic events of September 11th, TSA has focused most of its efforts on 

meeting deadlines for passenger and baggage screening requirements. Both TSA 

and CBP have responsibility for the screening of cargo depending on whether it is 

domestic or inbound international cargo. CBP has no authority to target or inspect 

domestic shipments of cargo except in connection with investigations. 

Domestic Cargo 

Cargo can be transported on passenger or all-cargo aircraft only if certain 

requirements are met. A “known shipper” program is used to screen cargo. A 

Page 52 Status on the Department Management Challenges 
“known shipper” is one who has a customer record and either an established 

shipping contract or business history. As previously reported by the DOT OIG, 

cargo from a known shipper is transported on passenger aircraft. TSA has not 

authorized air carriers to transport cargo from unknown shippers on a passenger 

plane. 

Cargo screening is the responsibility of the air carrier, not TSA. Indirect Air 

Carriers (IAC) tender cargo to the air carriers and certify whether the cargo is 

from a known or unknown shipper. In addition, some IACs can screen cargo if 

approved by FAA/TSA. The effectiveness of this program is dependent on the 

reliability and truthfulness of the IAC and air carriers. 

The DOT OIG’s report “Audit of the Cargo Security Program”, dated September 

19, 2002, identified several deficiencies in the known shipper program. One 

of the DOT OIG’s recommendations was to develop a strategic plan to achieve 

the goal of screening all cargo. TSA issued its “Air Cargo Strategic Plan” in 

November 2003. In their own words, this plan “...details a multiphase, riskbased blueprint for implementing a comprehensive air cargo security approach by 

applying existing capabilities and pursuing emerging technologies.” 

According to TSA, the known shipper program (as originally defined by FAA) has 

been modified to require that air carriers and indirect air carriers undergo more 

stringent scrutiny. In addition, a certain percentage of known shipper cargo must 

be inspected prior to transport. The agency also stated that it is in the process of 

deploying its known shipper database that, among other things, will centralize 

data and allow air carriers and IACs to check a current list of known shippers 

before accepting a package for transport. OIG is currently reviewing the known 

shipper program. 

Inbound International Cargo 

As required by ATSA, TSA took over the responsibility for civil aviation 

security functions from FAA. TSA works closely with the International Civil 

Aviation Organization, a specialized agency of the United Nations, to strengthen 

international cargo security standards and to ensure compliance with them 

throughout the international aviation system. TSA relies upon the air cargo 

inspection processes being accomplished at the foreign departure points and must 

abide by rules and laws of each country. Each country is bound by a separate 

international security agreement and a TSA approved security plan. Inspection 

methods and the level of inspections performed may vary from country to country. 

Status on the Department Management Challenges Page 53
 
Both CBP and TSA have responsibilities for international cargo security. TSA’s 

responsibility begins with assessments of foreign airports and air carriers for 

compliance with the international cargo security standards. TSA is required by 

law10 to assess the effectiveness of the security measures at foreign airports that: 

are served by U.S. airlines; are a point of departure for foreign airlines traveling 

to the U.S.; pose a high risk of introducing danger to international travel; and are 

considered appropriate by TSA. Federal regulation11 requires foreign air carriers 

operating in the U.S. to submit security programs to TSA for their operations, to, 

from, and within the U.S. TSA does not have authority at the foreign points of 

departure to inspect or examine shipments or containers. 

CBP is focused on ensuring security for all imports entering the United States, 

while facilitating trade and inspections for air cargo at domestic airports. CBP 

relies heavily on the advanced information it receives electronically through the 

automated manifest system (AMS) to select cargo for inspection. In the sea and 

land environment, this selection is made using the automated targeting system 

(ATS) . 

On December 5, 2003, CBP published the final Trade Act regulations in the 

Federal Register. The rules require advance transmission of electronic cargo 

information to CBP and provided for various effective dates, depending upon 

the mode of transportation. For the air mode of transportation, manifests must 

be transmitted four hours prior to the plane’s arrival. For North American Free 

Trade Agreement, Central American, and South American countries the required 

transmission is at the point of takeoff. However, the implementation of this 

requirement has been delayed. CBP officials note that on March 4, 2004, a 

notice was published that provides for the implementation of air cargo manifest 

requirements later this year to fulfill the security needs but permits time for the air 

industry to update their systems in order to comply. 

TSA’s FY 2005 budget includes $55 million to continue air cargo security 

research and development, including identifying more efficient and effective 

technologies that can better detect threats in or from air cargo. For example, 

TSA is researching an innovative technology intended for use at airport screening 

checkpoints. This x-ray technology has the potential to provide screeners with 

high-resolution 3-D images that can be rotated on the screening monitor for 

optimal viewing, enabling screeners to identify both explosives and weapons. 

10 49 U.S.C., Chapter 449.
 
 11 Title 49 Code of Federal Regulations (CFR) Part 1546.
 


Page 54 Status on the Department Management Challenges 
This technology might significantly enhance current screening checkpoint 

capabilities. 

In its FY 2005 budget submission, TSA said that it will continue advanced 

research to improve detection capability, performance, and efficiency to inspect 

more bags, and counter emerging threats. This includes human factors research; 

in-house development and testing of EDS, ETD, metal detectors, and other 

emergent security technologies; biometrics for access controls and passenger 

baggage tracking; and vulnerability assessments of explosive threats to aircraft, 

ferries, trains, buses and other modes of transportation. 

Implementation Of MTSA 

The 361 public ports in the United States are an integral part of our nation’s 

commerce and public transportation system, accounting for 95% of the U.S. 

foreign trade. They encompass 26,000 miles of navigable waterways and more 

than 3,500 marine terminals (port facilities). Passenger ferry and cruise ship 

terminals embarked 119 million passengers and 32 million vehicles during 2003. 

According to the Coast Guard, the total volume of goods imported and exported 

through U.S. ports is expected to more than double over the next 20 years. 

The Coast Guard is the lead DHS component responsible for developing, 

implementing, and overseeing MTSA implementation. To date, the Coast Guard 

has overcome many challenges in its efforts to implement MTSA requirements. 

These challenges include: 

§ Working cooperatively with the 103-member International Maritime 

Organization to resolve sovereignty issues associated with the adoption of 

the new International Ship and Port Facility Security Code; 

§ Convincing the International Maritime Organization to accelerate 

implementation of Safety of Navigation regulations requiring automatic 

identification systems fitted aboard vessels by December 31, 2004; 

§ Implementing final rules for area maritime security committees, 
 


assessments, and plans; and, 
 


§ Completing MTSA, area, vessel and facility security plans by July 1, 

2004. 

Status on the Department Management Challenges Page 55
 

Although the Coast Guard has achieved success in meeting initial MTSA 

milestone dates, its ability to meet its self-imposed date of December 31, 2004, 

will hinge on its ability to overcome a number of obstacles, including a shortage 

of personnel and problems with its training program. 

Meeting MTSA Deadlines for Security Assessments and Plans 

Implementing federal regulations now require owners and operators of certain 

port facilities and vessels to conduct security assessments and develop security 

plans12. These plans must then be submitted to the cognizant captain of the port 

by December 31, 2003. According to the MTSA, owners and operators of vessels 

and facilities which fail to adhere to these regulatory requirements will be liable to 

the United States for a civil penalty of not more than $25,000 for each violation13. 

According to the Coast Guard, the maritime industry has experienced difficulty 

meeting these MTSA requirements and, as of January 31, 2004, the noncompliance rate remained above 50%. Further, while many of the submitted plans 

met minimum compliance requirements, many were found to be missing critical 

pieces of information. Coast Guard officials state that they have since stepped up 

efforts to get industry compliance and, as a result, by the end of February 2004, 

submission rates had increased to more than 97%. 

Staff Requirements to Implement and Enforce MTSA 

The Coast Guard estimates that they need 700 active duty and civilian billets to 

implement and enforce MTSA. However, funding for these additional billets 

was not included in the Coast Guard’s FY 2004 budget. As a stopgap measure, 

the Coast Guard is recalling 450 reservists to active duty. While many of these 

reservists have received the requisite training, experience, and certification to 

perform their maritime security and marine inspection duties and responsibilities, 

many others have not. This is evidenced by Coast Guard’s plans to train 

approximately 400 new vessel and facility inspectors during FY 2004. Further, 

Coast Guard officials have said that reservists who complete the formalized 

training will be sent back to their respective units to provide an unspecified 

amount of on-the-job training to prospective inspectors. The Coast Guard has 

yet to specify how long the on-the-job training must be or how long it will take 

for them to obtain the required training, experience, and certification needed to 

enforce MTSA requirements properly. 

12 33CFR104 & 33CFR105.
 
 13 MTSA Part 102, Section 70117 and 33 CFR 104.310.
 


Page 56 Status on the Department Management Challenges 
Port Security Procedures 

As a result of the events of September 11, 2001, seaport security and the cargo 

that enters into the United States at our seaports have become prominent issues. 

CBP has taken positive steps to address the terrorist threat, including initiatives 

to increase the involvement of industry in the area of port security to reduce the 

vulnerability of ports to terrorist activities. These initiatives include the Container 

Security Initiative (CSI) and Customs Trade Partnership Against Terrorism (CTPAT). 

OIG is currently conducting an audit of CSI, focusing on the issues associated 

with the pre-screening element, such as reliance on inspections of cargo 

containers conducted by foreign officials and safeguarding these containers after 

inspection, prior to lading. We also plan to review C-TPAT to determine whether 

CBP has implemented adequate management controls over the program to ensure 

that participants are meeting program requirements and that program objectives 

are met. 

In an ongoing audit, we concluded that, although CBP has addressed many of 

these issues, problems still exist. 

Screening International Mail 

Each year a huge volume of international mail transported by foreign postal 

administrators - approximately 160 million letters and parcels - enters the United 

States at 13 international mail branches (IMBs). These IMBs are dispersed 

throughout the country, but are often co-located with international airports, 

seaports, and land ports. International mail is subject to CBP examination14, and 

IMBs are staffed with CBP inspectors, mail specialists, and mail technicians who 

inspect the mail for implements of terror and contraband. CBP uses automated 

screening equipment, such as x-ray and radiation detection devices, as well as 

dogs, to assist inspectors in examining the mail. 

While receipt of the mail at the IMB is a USPS mission, Treasury OIG reported 

that CBP needs to work closely with USPS to ensure that all mail is delivered to 

IMBs for inspection. CBP also needs to ensure that adequate inspector resources 

and screening equipment is in place and effectively used to identify potential 

threats. 

14 However, CBP does not examine international mail that is in-transit through the U.S. The legal authority to review intransit mail is under review within the Executive Branch. 

Status on the Department Management Challenges Page 57
 
Controls Over Hazardous Materials 

CBP faces significant challenges in operating hazardous materials (HAZMAT) 

program. HAZMAT cargo is inherently dangerous to handle. Conducting 

HAZMAT cargo examinations requires personnel specifically trained for such 

duties. According to CBP management, the ACE computer system, when fully 

deployed and operational, will provide the performance data with which to 

measure the success of the program and determine how to allocate HAZMAT 

resources best. 

Other Transportation Modes 

TSA focused its first years of effort on aviation security. However, ATSA 

mandates that TSA be responsible for security in all modes of transportation, 

including non-aviation modes such as rail, highway, mass transit, cruise lines, 

and ferries. TSA has to date given relatively little attention to other modes. TSA 

is working on a national transportation system security plan that will address all 

modes of transportation under a single security strategy so that security efforts 

are consistent, coordinated, and will meet identified goals. Also, TSA is drafting 

MOUs with other DHS components to determine how they will coordinate work 

in the future. OIG’s FY 2004 performance plan includes an examination of TSA’s 

efforts to secure non-aviation modes of transportation. 

Page 58 Status on the Department Management Challenges
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

Customs Border OIG-03-058 ACE Management 12/12/2002 

Ensure that the CMO Web Portal is available to Customs and contractor staff where ACE development work is being conducted as requiredby the contract and that it is populated with thenecessary information. 

Open 

Customs High Technology OIG-01-084 Narcotics Interdiction: Non-Intrusive Inspection Technology 8/10/2001 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 2 open key recommendations and4 closed. 

Open 

Customs High Technology OIG-03-068 Use of Trace Detection Equipment 3/24/2003 Ensure that the trace detection equipment is redeployed to the most optimum sites within assigned locations. Closed Customs High Technology OIG-03-068 Use of Trace Detection Equipment 3/24/2003 Ensure that inspectors are adequately trained on the use of the trace detection equipment. Closed Customs High Technology OIG-03-068 Use of Trace Detection Equipment 3/24/2003 Ensure that the trace detection equipment is utilized and its usage and maintenance recorded. Closed Customs High Technology OIG-03-073 Strategic Plan for Deploying Radiation Detection Equipment 3/27/2003 Due to the sensitive nature of the information contained in the report, all recommendations are omitted from this abstract. However, there are 2 closed key recommendations. Closed Customs IT OIG-02-083 

Information Technology: Controls Over LawEnforcement Data 

8/7/2002 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there is 1 open key recommendation. 

Open 

Appendix 1

Status of Key OIG Recommendations

Status on the Department Management Challenges Page 59
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

Customs IT OIG-03-027 

Trade & Passenger Processing: IPR Enforcement Strategyand ManagementControls 

5/8/2002 

Establish policy and procedures to ensure thatall original IPR recordation fi les containing trademarks, trade names, and copyrights areproperly maintained. 

Open 

Customs IT OIG-03-064 

Financial Management:Review of EDP General and Selected Application Controls 

12/12/2002 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 6 fi ndings supporting Material Weakness with 11 recommendations; there is 1 finding classifi ed as reportable condition with 1 recommendation. Additionally, there are four findings reported as ManagementLetter with 12 recommendations. 

Open 

Customs Maritime Security OIG-03-074 

Security, Inspection, and Targeting of Vessel Containers At U.S. Seaports 

4/18/2003 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 10 closed key recommendations. 

Closed 

Customs Other Border Security OIG-03-065 Trade Processing: The National HAZMAT Program 3/17/2003 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 2 open key recommendations and1 closed. 

Open 

Customs Other Border Security OIG-03-071 Enforcement Operations for Inbound Railcars at Port Huron, MI 3/26/2003 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 2 open key recommendations and5 closed. 

Open 

Appendix 1

Status of Key OIG Recommendations

Page 60 Status on the Department Management Challenges
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

Customs Other Border Security OIG-CA-03-002 Protecting the Public: Staffing Challenges Along The Northern Border 10/31/2002 Continue to identify and implement innovative approaches to staffi ng challenges. Closed Customs Other Border Security OIG-03-069 Enforcement of Export Controls 12/12/2002 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there is 1 open recommendation. 

Open 

INS Info Sec 03-08 

FY 2002 Evaluation: Government InformationSecurity Reform Act 

11/12/2002 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 4 open key recommendations. 

Open 

Secret

Service 

Information

Technology OIG-03-002 

Information Technology: Controls Over LawEnforcement Data 

10/28/2002 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 4 open key recommendations. 

Open 

TSA Financial Management QC-2003-016 FY 2002 Financial Statements 1/27/2003 Test actual effectiveness of security controls through a comprehensive security test and evaluation process. Open TSA Financial Management QC-2003-016 FY 2002 Financial Statements 1/27/2003 

Establish a self-assessment process tocontinually monitor internal control andaccounting systems in order to comply withFMFIA. 

Open 

Appendix 1

Status of Key OIG Recommendations

Status on the Department Management Challenges Page 61
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

TSA Transportation Security L-SC-2002-113 TSA’s Cargo Security Program 9/19/2002 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 7 open recommendations and2 closed. 

Open 

TSA Transportation Security L-SC-2003-024 Proposed Aviation Security Technologies 2/28/2003 

Promote the use of radio frequency identifi cation technology to process, reconcile, and track passenger and baggage informationrapidly and reliably. 

Closed 

TSA Transportation Security L-SC-2003-024 Proposed Aviation Security Technologies 2/28/2003 Continue to evaluate and test in the airport environment explosives trace detection technologies. Closed TSA Transportation Security L-SC-2003-026 TSA’s Screener Security Program 2/28/2003 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 6 open key recommendations. 

Open 

TSA Transportation Security SC-2003-24 Security Technologies 2/28/03 

Promote development of monitoring equipment, exit lanes arches, and radiofrequency identifi cation technology for surveillance and detection applications theairport environment. 

Open 

TSA Transportation Security SC-2003-24 Security Technologies 2/28/03 Conduct tests to determine the best application of materials for reinforcing aircraft cabins. Open 

Appendix 1

Status of Key OIG Recommendations

Page 62 Status on the Department Management Challenges
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

TSA Transportation Security SC-2003-24 Security Technologies 2/28/03 Develop software changes to strengthen Mode- S transponders and evaluate systems to down linked cabin-cockpit data. Open TSA Transportation Security SC-2003-29 Transportation Security 3/14/2003 Suspend the use of Bluetooth Technology on aircraft until it has been evaluated by the FAA. Open 

CBP 

Border

Security

Immigration 

03-15 Primary Inspections at Air Ports of Entry (POE) 2/1/2003 

Due to the sensitive nature of the informationcontained in the report, all recommendationsare omitted from this abstract. However, there are 3 closed recommendations. 

Closed 

ICE 

Border

Security

Immigration 

02-41 Institutional Removal Program (IRP) 9/1/2002 

Make a comprehensive determination of theforeign-born inmates and identify resourcesneeded to implement IRP down to the county level; determine the risks of not implementingIRP fully. 

Open 

ICE 

Border

Security

Immigration 

02-41 Institutional Removal Program (IRP) 9/1/2002 Strengthen program management’s oversight of expenses and utilization of resources. Open 

ICE 

Border

Security

Immigration 

01-29 Deferred Inspections at Airports 9/1/2001 Establish policies and procedures that ensure inspection of personnel with criminal records. Closed 

Appendix 1

Status of Key OIG Recommendations

Status on the Department Management Challenges Page 63
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

ICE 

Border

Security

Immigration 

01-29 Deferred Inspections at Airports 9/1/2001 Standardize inspection policies and procedures that allow for consistent completion of Form I- 546 Closed 

ICE 

Border

Security

Immigration 

01-29 Deferred Inspections at Airports 9/1/2001 

Expand Form I-546 to capture data to includelocal address and phone numbers, dateand country of birth, and alien registrationnumber. 

Closed 

ICE 

Border

Security

Immigration 

01-29 Deferred Inspections at Airports 9/1/2001 Implement a service-wide automated tracking system for the deferred inspection program. Closed 

ICE 

Border

Security

Immigration 

01-03 Airport Inspection Facilities 12/1/2000 Coordinate with other Federal agencies to upgrade existing facilities. Closed 

CBP 

Border

Security

Immigration 

I-2000-015 

Use of Risk Managementat Seaports (IdentifyChallenges) 

3/1/2000 

Implement a Seaport risk managementstrategy, only after implementing better methods to collect, analyze and shareinspection data. 

Closed 

CBP 

Border

Security

Immigration 

I-2000-015 

Use of Risk Managementat Seaports (IdentifyChallenges) 

3/1/2000 Establish a program to control the quality and ensure integrity of all inspection data. Closed 

Appendix 1

Status of Key OIG Recommendations

Page 64 Status on the Department Management Challenges
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

CBP & ICE 

Border

Security

Immigration 

I-2003-005 

Status of IDENT/IAFISIntegration of US-VISITOffi ce 

6/1/2003 

Develop an MOU with the Department ofJustice to facilitate the deployment, operationand management of the program integration. 

Open 

CBP & ICE 

Border

Security

Immigration 

I-2003-005 

Status of IDENT/IAFISIntegration of US-VISITOffi ce 

6/1/2003 

Establish and maintain updated tactical andstrategic milestones for the project integration to ensure its earliest completion. 

Open 

ICE 

Border

Security

Immigration 

I-2001-09 

Review of UnaccompaniedJuveniles in INS Custody 

9/1/2001 

Implement procedures to record and accountfor all juveniles detained or transported whilein INS custody. 

Open 

ICE 

Border

Security

Immigration 

I-2001-09 

Review of UnaccompaniedJuveniles in INS Custody 

9/1/2001 Establish and implement physical security procedures for all juveniles in INS custody. Open 

ICE 

Border

Security

Immigration 

I-2001-09 

Review of UnaccompaniedJuveniles in INS Custody 

9/1/2001 

Establish an INS continuing education programto include training for work with juveniles andthe terms of the FLORES agreement. 

Open 

ICE 

Border

Security

Immigration 

I-2003-03 

INS Effort to Track Foreign Student in US(SEVIS) - Follow-up audit 

3/1/2003 Appoint a program manager to manage and coordinate foreign student tracking issues. Closed 

ICE 

Border

Security

Immigration 

I-2003-03 

INS Effort to Track Foreign Student in US(SEVIS) - Follow-up audit 

3/1/2003 

Develop a school recertifi cation program, which outlines responsibilities, training, andsite visits for SEVIS. 

Closed 

Appendix 1

Status of Key OIG Recommendations

Status on the Department Management Challenges Page 65
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

ICE 

Border

Security

Immigration 

I-2003-03 

INS Effort to Track Foreign Student in US(SEVIS) - Follow-up audit 

3/1/2003 

Establish a unit in each District responsiblefor making on-site verifi cations of approved schools. 

Open 

ICE 

Border

Security

Immigration 

I-2003-03 

INS Effort to Track Foreign Student in US(SEVIS) - Follow-up audit 

3/1/2003 Develop a training plan, with milestones, for SEVIS at both the schools and INS Offi ces. Closed 

ICE 

Border

Security

Immigration 

I-2003-03 

INS Effort to Track Foreign Student in US(SEVIS) - Follow-up audit 

3/1/2003 

Develop and expand the SEVIS network toinclude all service centers, POEs, districtoffi ce and consular posts. 

Closed 

ICE 

Border

Security

Immigration 

I-2003-04 

Removal of Aliens Whom Have Been Issued FinalOrders 

2/1/2003 

Develop a Removal Plan that outlines methods and milestones for achieving the 2012 goalof “100% removal of all aliens whom havereceived fi nal orders.” 

Closed 

ICE 

Border

Security

Immigration 

I-2003-04 

Removal of Aliens Whom Have Been Issued FinalOrders 

2/1/2003 

Identify the resources needed (for all casetypes) to achieve the 100% removal of allaliens whom have received fi nal orders. 

Closed 

ICE 

Border

Security

Immigration 

I-2003-04 

Removal of Aliens Whom Have Been Issued FinalOrders 

2/1/2003 

Complete the current rulemaking on Requiring Aliens Ordered Removed from the U.S. to Surrender to Immigration and NaturalizationSafety for Removal. 

Closed 

ICE 

Border

Security

Immigration 

I-2002-06 Improved Control of Nonimmigrant Overstays 4/1/2002 Improve coordination and compliance with airlines on collection of departure records to reduce the number of overstays. Closed 

Appendix 1

Status of Key OIG Recommendations

Page 66 Status on the Department Management Challenges
 

DHS

Component 

Management

Challenge 

Report

Number Report Title Date Issued Recommendation Status 

ICE 

Border

Security

Immigration 

I-2002-06 Improved Control of Nonimmigrant Overstays 4/1/2002 

Initiate and maintain a quality control programfor NIIS data to ensure compliance with theIllegal Immigration Reform and Immigrant Responsibility Act and the Visa Waiver Pilot Program. 

Closed 

ICE 

Border

Security

Immigration 

I-2002-06 Improved Control of Nonimmigrant Overstays 4/1/2002 Analyze compiled overstay data and implement program management procedures to develop a strategy to reduce this problem. Closed 

CBP 

Border

Security

Immigration 

I-2002-04 Improve Northern Border Security (Follow-up) 2/1/2002 

Improve the utilization of resources (human& material) by improving methods of datacollection and analysis on illegal activity onthe northern border. 

Open 

CBP 

Border

Security

Immigration 

I-2002-04 Improve Northern Border Security (Follow-up) 2/1/2002 Initiate a process to determine the intelligence analysis needs necessary to deal with northern border illegal activity. Open 

CBP 

Border

Security

Immigration 

I-2002-04 Improve Northern Border Security (Follow-up) 2/1/2002 Implement a process to routinely assess the human resource needs along the northern border and a plan to meet those needs. Open 

Appendix 1

Status of Key OIG Recommendations

Status on the Department Management Challenges Page 67
 

Appendix 2 

Abbreviations and Acronyms 

ACE Automated Commercial Environment 

ACS Automated Commercial System 

AMS Automated manifest system 

APHIS Animal and Plant Health Inspection Service 

APIS Advanced Passenger Information System 

ATS automated targeting system 

ATSA Aviation and Transportation Security Act of 2001 

BCC border crossing cards 

CAPPS II Computer-Assisted Passenger Prescreening System 

CAT computerized axial tomography 

CBP Customs and Border Protection 

CCD consular consolidated database 

CES centralized examination stations 

CEU Compliance Enforcement Unit 

CFR code of federal regulations 

CIO Chief Information Officer 

CIS Bureau of Citizenship and Immigration Services 

Coast Guard United States Coast Guard 

COOP continuity of operations plan 

CSI Container Security Initiative 

CT computed tomography 

C-TPAT Customs Trade Partnership Against Terrorism 

DCAA Defense Contract Audit Agency 

DCMA Defense Contract Management Agency 

DHS Department of Homeland Security 

DHS/IA Department of Homeland Security Office of Information Analysis 

DOE Department of Energy 

DOJ Department of Justice 

DOJ OIG Department of Justice Office of Inspector General 

DOT Department of Transportation 

DOT OIG Department of Transportation Office of Inspector General 

DRO Detention and Removal Office 

Page 68 Status on the Department Management Challenges
 
Appendix 2 

Abbreviations and Acronyms 

ECAR 

EDS 

EMerge2 

EOIR 

EP&R 

ETD 

FAA 

FBI 

FBWT 

FEMA 

FTE 

FISMA 

FMFIA 

FSD 

FY 

GAO 

HAZMAT 

HCC 

HHS 

HSA 

IA 

IAC 

IAFIS 

IAIP 

IBIS 

IC 

ICE 

IDENT 

IMB 

INS 

IP 

Entry Clearance Arrival Record system
 


explosives detection systems
 


Electronically Managing Enterprise Resources for Government Effectiveness & 
 


Efficiency program
 


Executive Office of Immigration Review
 


Emergency Preparedness and Response Directorate
 


explosives trace detection machines
 


Federal Aviation Administration
 


Federal Bureau of Investigation
 


fund balance with Treasury
 


Federal Emergency Management Agency
 


Full-time equivalent positions
 


Federal Information Security Management Act
 


Federal Managers Financial Integrity Act 
 


federal security director
 


fiscal year 
 


United States General Accounting Office 
 


hazardous materials.
 


hazardous cargo coordinators
 


Department of Health and Human Services
 


The Homeland Security Act of 2002
 


DHS Office of Information Analysis
 


indirect air carriers
 


Integrated Automated Fingerprint Identification System
 


Information Analysis and Infrastructure Protection Directorate
 


Interagency Border Inspection System 
 


Intelligence Community
 


Bureau of Immigration and Customs Enforcement 
 


Automated Biometric Identification System
 


international mail branches
 


Immigration and Naturalization Service 
 


DHS Office of Infrastructure Protection 
 


Status on the Department Management Challenges Page 69
 
Appendix 2 

Abbreviations and Acronyms 

IPR image proficiency review 

IPT integrated project team 

IRB Investment Review Board 

IRP Institutional Removal Program 

IT information technology 

KPMG KPMG LLP 

LE law enforcement 

LOI letters of intent 

MARAD Maritime Administration 

MOU memoranda of understanding 

MRU manifest review unit 

MTSA Maritime Transportation Security Act of 2002 

NAFTA North American Free Trade Agreement 

NAILS National Automated Immigration Lookout System 

NCIC National Crime Information Center 

NII non-intrusive inspection 

NSEERS National Security Entry Exit Registration System 

OCFO Office of the Chief Financial Officer 

ODP Office of Domestic Preparedness 

OIAPR Office of Internal Affairs and Program Review 

OIG Office of Inspector General 

OM&S operating materials and supplies 

OMB Executive Office of the President Office of Management and Budget 

OPM Office of Personnel Management 

ORR Office of Refugee Resettlement of the Department of Health and Human Services 

POE port of entry 

PP&E property, plant, and equipment 

RF radio frequency 

RFID radio frequency identification 

Page 70 Status on the Department Management Challenges
 
Appendix 2 

Abbreviations and Acronyms 

S&T Science and Technology Directorate 

SBU sensitive but unclassified 

SCAAP State Criminal Alien Assistance Program 

SCU School Certification Unit 

SENTRI Secure Electronic Network for Travelers’ Rapid Inspection 

SEVIS Student and Exchange Visitor Information System 

SEVP Student and Exchange Visitor Program 

SNS Strategic National Stockpile 

SOPs standard operating procedures 

SPR Standardized Proficiency Review 

SSG Strategic Sourcing Group 

The Secret Service United States Secret Service 

TIP Threat Image Projection System 

Treasury United States Treasury OIG 

TSA Transportation Security Administration 

TSC Terrorist Screening Center 

TTIC Terrorist Threat Integration Center 

U.S. The United States of America 

USA PATRIOT Act The Uniting and Strengthening America by Providing Appropriate Tools Required 

to Intercept and Obstruct Terrorism Act of 2001 

USPS United States Postal Service 

US-VISIT United States Visitor and Immigrant Status Indication Technology 

Status on the Department Management Challenges Page 71 
Appendix 3 

Purpose, Scope and Methodology 

The purpose of this review was to identify the efforts of the department to 

combine and integrate its functions into a more effective and efficient operation 

and their timetables for completion, as well as to assess the DHS’ progress in 

addressing other management challenges. 

We identified the major management challenges facing the department in our first 

Semiannual Report to the Congress on April 30, 2003. This report summarized 

the management challenges and key recommendations from the work of OIGs 

officials who oversaw departments or parts thereof that are now incorporated into 

DHS. These OIG officials detailed the applicable component’s top management 

challenges and other significant issues relating to the effectiveness, efficiency, 

and/or economy of the components’ respective programs and operations. 

This status report is based on data in OIG recommendation tracking files, 

fieldwork already completed or underway, and meetings with senior staff in each 

of the directorates and major components. This status review was conducted 

between January 14, 2004, and March 3, 2004. 

Page 72 Status on the Department Management Challenges 
Appendix 4 

Report Distribution 

Department of Homeland Security 

Under Secretaries 

Agency Heads 

Chief of Staff, Deputy Secretary 

DHS OIG Liaison 

Office of Management and Budget 

Homeland Bureau Chief 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees as Appropriate 

Status on the Department Management Challenges Page 73
 



Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General (OIG) 

at (202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at 

www.dhs.gov. 

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal 

or noncriminal misconduct relative to department programs or operations, call the OIG 

Hotline at 1-800-323-8603; write to Department of Homeland, Washington, DC 20528, 

Attn: Office of Inspector General, Investigations Division – Hotline. The OIG seeks to 

protect the identity of each writer and caller.