DHS MANAGEMENT

Enhanced Oversight 

Could Better Ensure 

Programs Receiving 

Fees and Other 

Collections Use 

Funds Efficiently

Report to Congressional Requesters

July 2016

GAO-16-443

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-443, a report to 

congressional requesters.

July 2016

DHS MANAGEMENT

Enhanced Oversight Could Better Ensure Programs 

Receiving Fees and Other Collections Use Funds 

Efficiently 

Why GAO Did This Study

The uncertain budgetary environment 

highlights the need for DHS to 

effectively manage and oversee 

billions of dollars in fees and other 

collections from users of homeland 

security program services. Each DHS 

component is responsible for 

administering, managing, and 

reviewing their respective programs to 

ensure that, consistent with law and 

policy, rates charged to users of 

program services are set to collect 

amounts sufficient to recover program 

costs and ensure efficient operations, 

but not in excess of operational needs.

GAO was asked to review DHS’s 

management and oversight of these 

programs. This report examines the 

extent to which (1) DHS components

receive fees and other collections to 

recover program costs and manage 

any differences, as appropriate; (2)

DHS components have processes in 

place to manage unobligated 

balances; and (3) DHS ensures 

components review their programs and 

monitors component action to address

any management and operational 

deficiencies.

GAO analyzed DHS financial 

information for 38 programs receiving 

fees and other collections in fiscal year 

2014, examined DHS fee reviews and 

study results, and interviewed agency 

officials.

What GAO Recommends

GAO recommends that DHS ensure 

components document processes for 

managing differences in collections 

and costs, establish balance targets, 

and conduct program reviews and 

address identified deficiencies. DHS 

concurred with the recommendations.

What GAO Found

The Department of Homeland Security (DHS) received $15 billion in fees and 

other collections across 38 programs in fiscal year 2014 that help fund homeland 

security functions, such as the screening and inspection of persons and goods

entering the United States. Our analysis of DHS collections and cost data 

showed that 14 of the 38 programs receiving fees and other collections in fiscal 

year 2014 collected amounts that fully covered identified program costs. Of the 

remaining 24 programs, collections for 20 programs partially covered identified 

program costs, and DHS did not provide cost data, or we determined such data 

may not be reliable, for 4 programs. DHS components have taken action to 

address the estimated $6 billion difference between collections and identified 

program costs, with 6 programs comprising about 85 percent of the difference.

However, components did not document processes for managing differences and 

making decisions on how to address the estimated $726 million difference across 

the 10 remaining programs. Such documentation of processes and decisions 

could help improve transparency and accountability over cost recovery efforts.

DHS components have processes in place to manage unobligated balances 

carried over across fiscal years for 25 programs, with such balances totaling $2.6 

billion at fiscal year-end 2014. These processes generally focused on ensuring 

continuity of program operations rather than efficiently using funds. For example, 

while components established targets for minimum balances for 21 of these 25 

programs, none of the components established processes and related maximum 

targets to manage excessive unobligated carryover balances. Establishing such 

management processes and targets for minimum and maximum balances would 

enable components to show that management actions will be sufficient and 

appropriate to ensure the efficient use of funds—such as the Immigration

Examinations Fee Account, which had an approximately $983 million unobligated

balance as of fiscal year end 2014, and the User Fee Facility program account 

for small airports which has an unobligated balance of $14 million that has 

exceeded 100 percent of total operating costs each year from fiscal year 2010 

through fiscal year 2014.

DHS does not ensure that all components review their programs or monitor 

component actions to address management and operational deficiencies 

identified in those reviews. GAO found that three of the seven DHS components 

that have fee or other collection programs did not conduct such reviews for 6 of 

their programs, and that components had not taken recommended actions to 

address 9 of 20 deficiencies identified through program reviews as of fiscal yearend 2014. Further, DHS did not report the extent to which components are 

conducting such reviews or any proposals to address identified management and 

operational deficiencies. DHS oversight to ensure that components complete 

these reviews and report the results for all programs would enable Congress and 

others to receive information necessary to better ensure that fee and other 

collection programs are operating effectively and efficiently. 

View GAO-16-443. For more information, 

contact Andrew Von Ah at (213) 830-1011 or 

vonaha@gao.gov.
Page i GAO-16-443 DHS Management

Letter 1

Background 9

Collections for Over One-Third of Programs Fully Covered 

Identified Costs, but DHS Has Not Consistently Documented 

Cost Recovery Processes and Decisions 14

DHS Processes to Manage Unobligated Carryover Balances Are 

Intended to Ensure Continuity of Program Operations More 

Than Efficient Use of Such Balances 23

DHS Does Not Ensure Components Conduct Program Reviews 

and Does Not Monitor Components’ Actions to Address 

Identified Management and Operational Deficiencies 36

Conclusions 43

Recommendations for Executive Action 44

Agency Comments and Our Evaluation 45

Appendix I Department of Homeland Security (DHS) Programs Receiving Fees 

and Other Collections in Fiscal Year 2014 48

Appendix II Department of Homeland Security Programs Receiving Fee and 

Other Collections with Identified Program Costs Exceeding 

Collections for FY 2014 57

Appendix III Department of Homeland Security Programs Receiving Fee and 

Other Collections by Amount of Unobligated Carryover Balance 

as the of End of FY 2014 59

Appendix IV Status of Actions Taken by DHS Components to Address Identified 

Deficiencies and Recommended Actions Reported in Biennial Fee 

Reviews 61

Appendix V Comments from the Department of Homeland Security 71

Contents
Page ii GAO-16-443 DHS Management

Appendix VI GAO Contact and Staff Acknowledgments 75

Related GAO Products 76

Tables

Table 1: Summary and Status of Actions Initiated to Increase Cost 

Recovery for Six Department of Homeland Security (DHS) 

Programs as of April 2016 17

Table 2: Reasons Cited by Department of Homeland Security 

(DHS) Component Officials for Not Addressing the 

Difference between Program Costs and Collections in 

Fiscal Year 2014 20

Table 3: Reviews Conducted by Department of Homeland 

Security (DHS) Components since Fiscal Year 2012 37

Table 4: Legislative Authority, Description, and Financial 

Information for Department of Homeland Security (DHS) 

Programs Receiving Fees and Other Collections in Fiscal 

Year 2014 48

Table 5: Department of Homeland Security (DHS) Programs 

Receiving Fees and Other Collections with Identified 

Costs Exceeding Collections for Fiscal Year 2014 57

Table 6: Department of Homeland Security (DHS) Programs 

Receiving Fee and Other Collections by Total Amount of 

Unobligated Balances Carried over from the End of Fiscal 

year 2014 to the Beginning of Fiscal Year 2015 59

Table 7: Status of Actions Taken by Department of Homeland 

Security (DHS) Components to Address Identified 

Deficiencies and Recommended Actions Reported in 

Fiscal Years 2012 and 2014 Biennial Fee Reviews 61

Figures

Figure 1: Department of Homeland Security (DHS) Fees and 

Other Collections by Component for Fiscal Year 2014 13

Figure 2: Immigration Examinations Fee Account (IEFA) 

Unobligated Carryover Balances by Fee Type from Fiscal 

Years 2010 through 2014 28
Page iii GAO-16-443 DHS Management

Figure 3: Unobligated Carryover Balances from Federal Protective 

Service’s (FPS) Fee Programs Available to Cover 

Identified Program Costs Incurred for the Basic Security 

and Oversight Program, Fiscal Years 2011 through 2014 31

Figure 4: Unobligated Carryover Balances from U.S. Customs and 

Border Protection’s (CBP) User Fee Facility Program 

Available to Cover Identified Program Costs Incurred, 

Fiscal Years 2011 through 2014 34

Abbreviations

AQI Agricultural Quarantine Inspection program

CBP U.S. Customs and Border Protection 

Coast Guard U.S. Coast Guard 

CFO Chief Financial Officer 

CFO Act Chief Financial Officers Act of 1990 

COBRA Consolidated Omnibus Budget and Reconciliation Act

DHS Department of Homeland Security 

FEMA Federal Emergency Management Agency 

FPS Federal Protective Service 

ICE U.S. Immigration and Customs Enforcement 

IEFA Immigration Examinations Fee Account 

IOAA Independent Offices Appropriations Act of 1952 

IUF Immigration Inspection User Fee 

NPPD National Protection and Programs Directorate 

OCFO Office of the Chief Financial Officer 

OMB Office of Management and Budget 

TSA Transportation Security Administration 

USCIS U.S. Citizenship and Immigration Services

USDA U.S. Department of Agriculture

Winter Study 2014-2015 User Fee Winter Study

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-16-443 DHS Management

441 G St. N.W.

Washington, DC 20548

July 21, 2016

The Honorable Scott Perry

Chairman

The Honorable Bonnie Watson Coleman

Ranking Member

Subcommittee on Oversight and Management Efficiency

Committee on Homeland Security

House of Representatives

The Honorable Jeff Duncan

House of Representatives

In fiscal year 2014, the Department of Homeland Security (DHS) received 

fees and other collections totaling approximately $15 billion that 

contributed to its approximately $60 billion in budget authority available to 

execute its mission-critical activities related to preventing terrorism, 

securing the nation’s borders, and enforcing and administering 

immigration laws, among other things.1 DHS’s reliance on resources 

derived from fees and other collections highlights the need for DHS to 

ensure it has processes in place to comprehensively manage and 

oversee its portfolio of 38 programs that derive some or all resources 

from these sources.

 1

Budget authority is authority provided by federal law to enter into financial obligations that 

will result in immediate or future outlays involving federal government funds. The basic 

forms of budget authority include appropriations, borrowing authority, contract authority, 

and authority to obligate and expend offsetting receipts and collections. As the term is 

used in this report, a “fee” is a user fee or user charge assessed to users for goods or 

services provided by the federal government and generally apply to federal programs or 

activities that provide special benefits to identifiable recipients above and beyond what is 

normally available to the public and that normally relate to the cost of the goods or 

services provided. In addition, the term “other collections” as used in this report refers to 

any fines, duties, taxes, trust fund receipts, and interagency transfers received by DHS. In 

some instances, the term “programs” is used generally to describe the programs and 

activities through which DHS receives fees and other collections.

Letter
Page 2 GAO-16-443 DHS Management

Within DHS, each component is responsible for administering, managing, 

and reviewing its portfolio of programs.2 The Office of the Chief Financial 

Officer (OCFO) is responsible for the fiscal management, integrity, and 

accountability of the department and, among other things, provides 

guidance and oversight for the department’s resource management 

systems to ensure that funds necessary to carry out its missions are 

obtained, allocated, and expended in accordance with departmental 

priorities and relevant laws and policies. As such, the OCFO is 

responsible for ensuring that the DHS components administering 

programs receiving fees and other collections do so in a manner 

consistent with applicable statutory authorities and federal guidance. This 

includes providing components with guidance for maintaining appropriate 

levels of unobligated balances to ensure programs are resilient to 

revenue instability and surges in program activity, and do not overcharge 

program users beyond the costs of services provided. Such guidance is 

intended to help ensure that balances do not fall so low as to impair the 

efficient management of operations or rise too high so as to suggest fee 

collections do not align with operational needs. In addition, DHS OCFO 

has responsibility for ensuring components provide decision makers and 

stakeholders with timely and accurate financial information in order to 

inform the budget formulation and regulatory processes.

We have previously reported on DHS’s management and oversight of its 

overall resources, as well as management and oversight of resources 

derived from specific fees and other collections. For example, DHS 

management remains on our high-risk list. We have found that while 

DHS’s efforts to strengthen and integrate its management functions have 

resulted in it meeting or partially meeting five of GAO’s criteria for removal 

from the high-risk list, DHS continues to face challenges in ensuring 

strong management practices and effective oversight in meeting its 

mission needs, and concluded that progress was needed to mitigate the 

risks that management weaknesses posed to mission accomplishment 

 2

The following seven DHS components administer programs receiving fees and other 

collections: U.S. Customs and Border Protection (CBP), U.S. Citizenship and Immigration 

Services (USCIS), Transportation Security Administration (TSA), Federal Emergency 

Management Agency (FEMA), U.S. Immigration and Custom Enforcement (ICE), National 

Protection and Programs Directorate (NPPD), and U.S. Coast Guard (Coast Guard). 
Page 3 GAO-16-443 DHS Management

and the efficient and effective use of the department’s resources.3 In 

regard to management for programs receiving fees or other collections, 

we have previously found that changes to the management of collections 

can affect the efficiency, equity, and revenue adequacy of, and reduce 

administrative burden on, programs.4 Specifically, we reported in May 

2011, that the National Protection and Programs Directorate’s (NPPD)

Federal Protective Service (FPS)—an agency funded primarily by 

reimbursable agreements with federal customer agencies for services—

did not review its rates to develop an informed, deliberate design, and 

that although expenses incurred through the protection of federal facilities 

vary, FPS did not know the extent to which some facilities subsidized 

others.5 Additionally, in March 2013 we found that, among other things, 

U.S. Customs and Border Protection’s (CBP) share of fee collections from 

the Agricultural Quarantine Inspection program (AQI) did not properly 

align with its costs of conducting AQI inspection activities, and 

recommended that the U.S. Department of Agriculture, in consultation 

with CBP, ensure that fee collections are allocated consistent with each 

agency’s program costs.6 Some recommendations addressing the 

 3

In our February 2015 high-risk update report, we found that DHS had met two criteria and 

partially met the remaining three criteria. DHS subsequently met an additional criterion—

establishing a framework for monitoring progress—and therefore as of March 2016, has 

met three criteria and partially met the remaining two criteria. Specifically, DHS has met 

our criteria relating to leadership commitment, development of an action plan, and 

monitoring; and has partially met our criteria relating to capacity (having sufficient 

resources), and demonstrated progress. See GAO, High-Risk Series: An Update, 

GAO-15-290 (Washington, D.C.: Feb. 11, 2015), and GAO, Department of Homeland 

Security: Progress Made, but Work Remains in Strengthening Acquisition and Other 

Management Functions, GAO-16-507T (Washington, D.C.: March 16, 2016). 

4

GAO, Federal User Fees: A Design Guide, GAO-08-386SP (Washington, D.C.: May 29,

2008). 

5

GAO, Budget Issues: Better Fee Design Would Improve Federal Protective Service’s and 

Federal Agencies’ Planning and Budgeting for Security, GAO-11-492 (Washington, D.C.: 

May 20, 2011).

6

GAO, Agricultural Quarantine Inspection Fees: Major Changes Needed to Align Fee 

Revenues with Program Costs, GAO-13-268 (Washington, D.C.: Mar. 1, 2013).
Page 4 GAO-16-443 DHS Management

management challenges we identified have been addressed.7

Understanding DHS components’ processes for aligning collections with 

identified program costs, estimating and managing unobligated balances 

carried over from one fiscal year to another, and DHS OCFO’s process 

for overseeing its portfolio of programs receiving fees and other 

collections provides valuable insights into how effectively the department 

anticipates program needs and ensures the efficient use of its resources 

derived from fees and other collections.

You asked us to review the approach DHS uses to manage and oversee 

its portfolio of programs receiving fees and other collections to ensure 

management and operational challenges are identified and resolved. This 

report addresses the extent to which: (1) fees and other collections cover 

program costs and DHS components have taken appropriate actions to 

manage any differences between program costs and collections; (2) DHS 

components have processes in place to manage unobligated carryover 

balances, and have taken appropriate actions to ensure the efficient use 

of such unobligated carryover balance; and (3) DHS OCFO ensures 

components review programs receiving fees and other collections and 

monitors component actions to address identified management and 

operational deficiencies.

In conducting our work, we identified 38 programs receiving fees and 

other collections by interviewing DHS OCFO officials and by reviewing 

relevant budget documents for fiscal year 2014—the most recent fiscal 

year with complete data at the time we started our review—and DHS 

 7

Specifically, in April 2014, Federal Protective Service (FPS) addressed our 

recommendations by finalizing its Activity Based Cost Model Independent Verification and 

Validation Report that, along with FPS’s fiscal year 2015 congressional budget justification 

(CBJ), outlined the purpose and rate setting procedures for FPS fees and demonstrated 

FPS’s ability to conduct regular, timely, and substantive fee reviews. In October 2015, the 

Animal and Plant Health Inspection Service within the Department of Agriculture amended 

its user fee regulations to improve fee alignment, among other things, by adding new fee 

categories, adjusting current fees charged for inspection services provided in connection 

with arrivals at United States ports of entry, and adjusting or removing caps (i.e. limits on 

amounts that may be charged) on fees associated with commercial cargo vessels, and 

railcars. See 80 Fed. Reg. 66,748 (Oct. 29, 2015). As of May 2016, of the eighteen

recommendations in the March 2013 report, ten have been implemented, three have been

closed as not implemented, and five remained open.
Page 5 GAO-16-443 DHS Management

studies and reviews of programs receiving fees and other collections.8

We obtained financial information from seven components administering

these 38 programs—including collections, unobligated carryover 

balances, and program costs identified for each program9 from 

components’ respective financial accounting systems.10 To assess the 

reliability of these data, we (1) conducted interviews with agency officials 

responsible for producing the data; (2) reviewed the extent to which 

components have procedures and controls for ensuring that the data 

maintained in their financial systems are consistent and accurate; (3) 

examined the data for obvious errors and inconsistencies; (4) compared 

the data with DHS’s Congressional Budget Justification for fiscal year 

2015; and (5) reviewed related GAO reports, DHS biennial fee reviews, 

related DHS Inspector General reports, and independent public 

accounting firm reports related to these data. In addition, for program 

costs identified by the components, we reviewed documentation—such 

as past GAO reports and biennial reviews—describing how program 

 8

For a complete listing of the DHS fee and collection programs we identified, see 

appendix I. For purposes of this review, a single fee program may be comprised of 

multiple individual fees. In some instances, a fee program may be jointly administered by 

multiple DHS components or by a DHS component and a non-DHS department or agency 

and in which case the DHS component may not be authorized to obligate and expend 

certain amounts collected through the program. 

9

For the purposes of this report, the term “identified program costs” refers to the direct and 

indirect (i.e. full) costs associated with collecting and administering a fee or other 

collections program, as well as the provision of services associated with or supported by a 

fee, as identified by DHS components. See, e.g. Office of Management and Budget 

(OMB) User Charges, OMB Circular No. A-25, § 6(d) (1993); see also OMB, Preparation, 

Submission and Execution of the Budget, OMB Circular No. A-11, § 51 (revised 2015) 

(addressing, among other things, the determination of program costs). For more 

information on accounting for program costs, see GAO, Managerial Cost Accounting 

Practices: Implementation and Use Vary Widely across 10 Federal Agencies, 

GAO-07-679 (Washington, D.C.: July 20, 2007); Managerial Cost Accounting Practices: 

Leadership and Internal Controls Are Key to Successful Implementation, GAO-05-1013R

(Washington, D.C.: Sept. 2, 2005). According to our review of component documentation, 

such as biennial fee reviews, program costs identified by components, may include but 

are not limited to; the direct and indirect costs associated with specific activities or tasks, 

such as administrative costs, salaries and expenses, and inspection and screening 

services. For some programs, such as CBP’s Harbor Maintenance Fee program, identified 

program costs are not directly linked to a CBP program. Rather, pursuant to DHS’s annual 

appropriations acts, a specified amount of CBP’s appropriation is derived from the Harbor 

Maintenance Trust Fund for administrative expenses related to collecting the Harbor 

Maintenance Fee. See, e.g., Pub. L. No. 113-76, div. F, 128 Stat. 5, 248-49 (2014).

10Unobligated carryover balances are the amount of an agency’s budget authority carried 

over from prior fiscal years that remains legally available for obligation. 
Page 6 GAO-16-443 DHS Management

costs are identified, and interviewed knowledgeable component officials 

about the limitations of these data. We identified limitations to the cost 

data provided by components such as the inability to accurately estimate 

and report direct and indirect cost, and note these limitations in the body 

of our report.11 We determined the data were sufficiently reliable for the 

purposes of our report to convey the general magnitude of collections, 

identified program costs, and unobligated carryover balances.

To determine the extent that program collections recovered identified 

costs, and DHS components haven taken appropriate actions to manage 

any differences, we first compared amounts DHS collected in fiscal year 

2014 to identified program costs for each of the 38 programs. We then 

compared our analysis of these differences across programs to those 

programs for which DHS and its components had identified a need to 

increase cost recovery as documented in DHS biennial fee review 

reports, annual agency budget submissions, proposals for legislative or 

regulatory change, and discussion with DHS OCFO and component 

officials. In addition, we reviewed and assessed available DHS 

component documentation of processes and analysis guiding the 

rationale for decisions and actions taken to address differences between 

collections and program costs, compared to tenets of the DHS Fiscal 

years 2014-2018 Strategic Plan, project management guidance, and 

Standards for Internal Control in the Federal Government, which provides 

guidance to agencies to achieve their mission goals and improve 

transparency and accountability.12 We also interviewed relevant DHS 

officials regarding the impacts of differences between collections and 

 11GAO has previously reported that DHS components face challenges in accounting for 

and identifying program costs. See GAO-15-290 and GAO, Flood Insurance: More 

Information Needed on Subsidized Properties, GAO-13-607 (Washington, D.C.: July 3, 

2013). The scope of this report did not include a review of DHS components’ financial 

accounting systems and cost data. OMB Circular A-25 provides that in reviewing user 

fees, full cost shall be determined or estimated using the best available records of the 

agency, and new cost accounting systems do not need to be established solely for this 

purpose.

12Project Management Institute, Inc. A Guide to the Project Management Body of 

Knowledge (PMBOK® Guide), Fifth Edition, 2013. PMBOK is a trademark of Project 

Management Institute, Inc. We have used A Guide to the Project Management Body of 

Knowledge to provide criteria in previous reports, including GAO, Nonproliferation and 

Disarmament Fund: State Should Better Assure the Effective Use of Program Authorities, 

GAO-13-83 (Washington, D.C.: Nov. 30, 2012). GAO, Standards for Internal Control in the 

Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999).
Page 7 GAO-16-443 DHS Management

program costs and actions taken to pursue increases in cost recovery for 

certain fee and collection programs.

To determine the extent to which DHS components have processes in 

place to manage unobligated carryover balances and ensure efficient use 

of these funds, we first analyzed the size and composition of any 

unobligated balances DHS components carried over from the end of fiscal 

year 2014 to the beginning of fiscal year 2015 for each of the 38 

programs. We then discussed with DHS component officials the extent 

that they had processes in place to manage unobligated carryover 

balances, to include targets for minimum unobligated carryover balances 

necessary to ensure continuity of operations and targets for maximum 

balances to ensure efficient use of resources. To determine the extent 

components had managed their programs to targets for minimum 

balances, we compared the amount of unobligated carryover balance 

from the end of fiscal year 2013 and the amount obligated in the first 

quarter of fiscal year 2014 for each program as described in DHS’s 

Contingency Plan.

13 Further, as components had not identified maximum 

unobligated carryover balance targets for programs, we compared 

unobligated carryover balances as of the end of fiscal year 2013 to 

identified program costs for fiscal year 2014 and conducted interviews 

with DHS component officials to determine the extent carryover balances 

may or may not be excessive to operational needs of each program. We 

compared component management of unobligated carryover balances 

with criteria identified in our past work on evaluating carryover balances 

and managing revenue instability (e.g., annual fluctuations in fee 

collections).14

To determine the extent that DHS OCFO ensures components review 

programs and monitors action to address identified management and 

operational deficiencies, we analyzed the extent that DHS components 

 13DHS, DHS User Fees: Fiscal Year 2014 Contingency Plan, First Quarter, Fiscal Year 

2014 Report to Congress, (Washington, D.C.: June 23, 2014). 

14GAO, Budget Issues: Key Questions to Consider When Evaluating Balances in Federal 

Accounts, GAO-13-798 (Washington, D.C.: Sept. 30, 2013). In developing those criteria, 

we identified common themes and factors that contribute to fluctuations in carryover 

balances and worked with stakeholders such as the Office of Management and Budget to 

develop a list of questions on four broad topics for congressional committees, managers, 

and others to consider when examining such balances government-wide. See also 

GAO-13-798 and GAO, Federal User Fees: Fee Design Options and Implications for 

Managing Revenue Instability, GAO-13-820 (Washington, D.C.: Sept. 30, 2013). 
Page 8 GAO-16-443 DHS Management

reviewed programs receiving fees and other collections on a biennial 

basis and made recommendations to address any identified deficiencies 

consistent with the Chief Financial Officers Act of 1990 (CFO Act) and 

implementing guidance in Office of Management and Budget (OMB) 

Circular A-25.15 To determine the extent the DHS OCFO reports, as 

appropriate, on the results of components’ biennial fee reviews and 

resulting proposals, we also reviewed DHS OCFO’s Agency Financial 

Report for Fiscal Year 2014 and DHS quarterly reports for programs 

receiving fees and other collections. We interviewed DHS OCFO and 

relevant component officials regarding the extent DHS components 

comply with biennial reporting requirements for each of the 38 programs 

receiving fees and other collections, identify any management and 

operational deficiencies, and track the implementation status of 

recommended actions consistent with Standards for Internal Controls in 

the Federal Government.

16 We also interviewed OMB staff to obtain the 

agency’s perspective on the extent DHS is compliant with biennial 

reporting requirements and takes actions consistent with relevant OMB 

policies and guidance. We also reviewed documentation relating to 

 15Pursuant to the Chief Financial Officers Act of 1990 (CFO Act), an agency’s CFO is to 

review, on a biennial basis, the fees, royalties, rents, and other charges imposed by the 

agency for services and things of value it provides, and make recommendations on 

revising those charges to reflect costs incurred by the agency in providing those services 

and things of value. See Pub. L. No. 101-576, § 205(a), 104 Stat. 2838, 2841-45 (1990); 

codified in relevant part at 31 U.S.C. § 902(a)(8). OMB Circular A-25 provides, among 

other things, that agencies are to review user charges biennially, to include (1) assurance 

that existing charges are adjusted to reflect unanticipated changes in costs or market 

values and (2) a review of other programs within the agency to determine whether fees 

should be initiated for government services or goods for which it is not currently charging 

fees, and discuss the results of the reviews and any resulting proposals in the annual 

report required by the CFO Act. See OMB Circular No. A-25, §8(e); 31 U.S.C. § 902(a)(6). 

OMB Circular A-25 also provides that when the imposition of a fee is prohibited or 

restricted by existing law, agencies are to review activities periodically and recommend 

legislative changes when appropriate. See id. at § 6. While the CFO Act generally is 

applied to fees—as defined in OMB Circular A-25—charged by government agencies to 

nongovernmental entities, the act’s provision requiring biennial review provides a useful 

leading practice for the review of intragovernmental and reimbursable agreements, such 

as FPS’s Basic Security and Oversight fees and CBP’s User Fee Facility program. We 

have previously reported that there are benefits that could be realized by an agency that 

applies the principles of OMB Circular A-25 to fee programs that are not specifically 

governed by the Circular. See GAO-08-386SP and GAO-11-492. Moreover, we have 

previously reported that OMB staff stated that they believe OMB Circular A-25 provides 

good management principles for setting and reviewing user fees that can be applied to 

independent entities. See GAO, Federal User Fees: Key Considerations for Designing and 

Implementing Regulatory Fees, GAO-15-718 (Washington, D.C.: Sept. 16, 2015). 

16GAO/AIMD-00-21.3.1.
Page 9 GAO-16-443 DHS Management

results of DHS studies of programs receiving fees and other collections 

including DHS’s 2012 Fee Structure Review and 2014-2015 User Fee 

Winter Study (Winter Study) to determine the extent management 

challenges were identified and actions were taken to address these 

challenges. In addition, we interviewed DHS OCFO officials regarding the 

actions DHS has taken to address management challenges identified as 

part of department-wide fee portfolio reviews.

We conducted this performance audit from February 2015 to July 2016 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

The various types of fees and other collections received by federal 

agencies are, in general, governed by two authorities—an authority to 

charge a fee and an authority to retain and obligate fee collections.17 An 

agency’s authority to charge fees or establish other collections is derived 

either from the general statutory authority to assess user charges 

pursuant to the Independent Offices Appropriation Act of 1952 (IOAA) or 

from a statutory provision authorizing or directing an agency to establish a 

particular fee or other collection.18 IOAA provides that, in general, each 

service or thing of value provided by an agency to a person is to be selfsustaining to the extent possible, and provides the head of each agency 

with authority to prescribe regulations to establish the charge for a service 

or thing of value provided by the agency. Fees assessed under IOAA 

 17See GAO-13-820. An obligation is a definite commitment that creates a legal liability of 

the government for the payment of goods and services ordered or received, or a legal duty 

on the part of the United States that could mature into a legal liability by virtue of actions 

on the part of the other party beyond the control of the United States. Payment on an 

obligation may be made immediately or in the future.

18See 31 U.S.C. § 9701 (IOAA); see also, e.g., 49 U.S.C. § 44940 (establishing TSA’s 

Passenger Civil Aviation Security Service Fee, including the rate at which the fee is 

assessed and purpose to which collections may be used).

Background

Authority to Receive and 

Obligate Fees and Other 

Collections
Page 10 GAO-16-443 DHS Management

must be (1) fair and (2) based on costs to the government, the value of 

the service or thing to the recipient, public policy or interest serviced, and 

other relevant facts. Without additional statutory authority to retain fee 

collections, however, such collections are deposited as miscellaneous 

receipts in the U.S. Treasury and are not available to the agency 

collecting the fees.19 OMB Circular A-25 establishes federal policy 

regarding fees assessed in accordance with IOAA and provides guidance 

for agency implementation of charges and disposition of such 

collections.20 More specifically, agencies must apply the provisions of 

OMB Circular A-25 to fees assessed pursuant to IOAA. For fees 

assessed pursuant to another statutory authority, OMB Circular A-25 

provides guidance to agencies that is intended to be applied only to the 

extent permitted by law and to the extent it is not inconsistent with a 

controlling statute.21 In many instances, agencies receive specific 

authority through authorizing or appropriations legislation to collect fees 

and retain and obligate the collections. Such legislation may establish a 

specified rate or amount to be assessed, how the fee is to be calculated, 

the method and timing of collection, the authorized purposes for which fee 

collections may be used, and the degree of flexibility an agency has to set 

and revise fee rates through the regulatory process. Regardless of 

whether a fee program is established under the authority of IOAA or some 

other statute, we have reported on the benefits agencies could realize by 

applying the principles of OMB Circular A-25 to their programs receiving 

fees and other collections.

Congress—through the authorization and appropriations processes—

oversees DHS funding typically at the account level and may, through 

enacted legislation, specify the purpose for which appropriated funds may 

be used, restrict the amount or purpose for which the funds can be used, 

and require that an agency report on activities conducted at the account 

 19See 31 U.S.C. § 3302.

20In general, OMB Circular A-25 covers all federal activities that convey special benefits to 

recipients beyond those accruing to the general public.

21See GAO-08-386SP and GAO-11-492. Moreover, we have previously reported that 

OMB staff recognize that OMB Circular A-25 provides good management principles for 

setting and reviewing user fees. See GAO-15-718. 

Roles and Responsibilities
Page 11 GAO-16-443 DHS Management

or program level.22 For each program receiving fees or other collections, 

DHS or its components must be provided with authority to (1) conduct the 

activity for which the fee or other collection is authorized, (2) collect the 

fee or other collection at authorized levels, and (3) obligate and expend 

the funds collected. Furthermore, the degree of flexibility a DHS 

component has with respect to managing its programs receiving fees and 

other collections depends upon the statutory authority upon which the fee 

or other collection is based. For example, in cases where a statute 

prescribes a specific amount the agency is to charge, component officials 

may lack the flexibility to adjust the amount charged through the 

regulatory process and instead must submit a legislative proposal seeking 

statutory changes if it is determined that circumstances warrant an 

adjustment.

DHS OCFO has responsibility to oversee the department’s budget 

formulation process in order to ensure, among other things, that DHS 

resources from fees and other collections are used and managed in 

accordance with applicable laws and policies. To this end, DHS OCFO is 

to ensure components comply with the biennial reporting requirements 

and other applicable provisions of the CFO Act and OMB Circular A-25. 

For example, the CFO Act provides that, among other things, an agency’s 

CFO is to review the fees, royalties, rents, and other charges imposed by 

the agency for services and things of value it provides on a biennial basis, 

and make recommendations on revising those charges to reflect costs 

incurred by the agency.23 In addition, DHS OCFO periodically conducts 

department-wide reviews of its portfolio of programs receiving fees and 

 22An appropriation account is the basic unit of an appropriation and typically encompasses 

a number of activities or projects. A program, project, or activity is an element within a 

budget account that, in general, is intended to provide a meaningful representation of the 

operations financed by a specific budget account.

23See 31 U.S.C. § 902(a)(8). OMB Circular A-25 provides, among other things, that 

agencies are to review user charges biennially, to include (1) assurance that existing 

charges are adjusted to reflect unanticipated changes in costs or market values and (2) a 

review of other programs within the agency to determine whether fees should be initiated 

for government services or goods for which it is not currently charging fees, and discuss

the results of the reviews and any resulting proposals in the annual report required by the 

CFO Act. See OMB Circular No. A-25, §8(e); 31 U.S.C. § 902(a)(6). Circular A-25 also 

provides that when the imposition of a fee is prohibited or restricted by existing law, 

agencies are to review activities periodically and recommend legislative changes when 

appropriate. See OMB Circular No. A-25, § 6. We have previously reported that agencies 

may fulfill reporting obligations under these provisions through the submission of agency 

performance and accountability reports. See GAO-08-386SP. 
Page 12 GAO-16-443 DHS Management

other collections to identify ways to minimize the effects of increasing 

fiscal constraints on DHS’s mission and reduce reliance on annual 

appropriations. DHS OCFO has completed two such reviews. In fiscal 

year 2012, DHS OCFO conducted a Fee Structure Review that 

considered whether opportunities existed to increase flexibility in the 

discretionary budget in fiscal years 2014 through 2018 from both existing 

programs receiving fees and other collections and prospective new fees. 

The study focused on the amount of costs recovered by programs from 

collections for activities that are funded jointly by collections and annual 

appropriations for fiscal years 2014 through 2018. In March 2015, DHS 

completed the 2014-2015 User Fee Winter Study (Winter Study). 

According to DHS OCFO officials, this study was initiated as part of the 

DHS Secretary’s “Unity of Effort” initiative,24 and the results of the Winter 

Study were expected to inform DHS’s fiscal year 2017 budget formulation 

process and educate internal DHS stakeholders on DHS’s portfolio of 

programs receiving fees and other collections. According to the Winter 

Study Terms of Reference, the purpose of the Winter Study was to 

provide DHS with an opportunity to consider broadly the use of user fees 

and similar financing alternatives—such as fines and trust funds—across 

DHS to examine how the use of these fees and other collections further 

key policy objectives and whether there is a need for greater cohesion in 

the management, budgeting, and oversight of user fees. Specifically, the 

goals of the study were to consider how to (1) best leverage resources 

from its fees and other collections across DHS; (2) examine how the use 

of fees and other collections further key policy objectives; and (3) 

strengthen management, budgeting, and oversight of user fees and other 

collections. According to DHS officials, to achieve these goals, 

representatives from each DHS component met on an ad hoc basis as 

part of the Winter Study working group. More specifically, the Winter 

Study sought to identify the current amounts of user fees and other 

collections and respective legal authorities, the intended degree of cost 

recovery, the history of previous requests for fee adjustments, and best 

practices among components. Findings and recommendations from the 

Fee Structure Review and Winter Study are discussed later in this report.

DHS components have responsibility for the collection and obligation of 

fees and other collections in accordance with applicable laws and 

 24See DHS, Secretary of Homeland Security, Strengthening Departmental Unity of Effort, 

Memorandum for DHS Leadership (Washington, D.C.: Apr. 22, 2014). 
Page 13 GAO-16-443 DHS Management

policies. CBP and the Federal Emergency Management Agency (FEMA) 

collected more than half of the approximately $15 billion DHS received 

from fees and other collections in fiscal year 2014, as shown in figure 1, 

with the Transportation Security Administration (TSA), U.S. Citizenship 

and Immigration Services (USCIS), and NPPD programs also collecting in 

excess of a billion dollars. Appendix I provides details on each of the 38 

programs receiving fees and other collections, including general 

authorities, amounts collected in fiscal year 2014, and descriptions of the 

programs and purposes for which collections may be used.

Figure 1: Department of Homeland Security (DHS) Fees and Other Collections by Component for Fiscal Year 2014
Page 14 GAO-16-443 DHS Management

Our analysis of DHS collections and cost data showed that 14 of the 38 

programs receiving fees and other collections in fiscal year 2014 collected 

amounts that fully covered identified program costs.25 Of the remaining 24 

programs, collections for 20 programs partially covered identified program 

costs, and DHS did not provide cost data, or we determined such data 

may not be reliable, for 4 programs. For the 14 programs with full cost 

recovery, collections exceeded identified program costs by approximately 

$1.4 billion, and DHS did not rely on annual appropriations to cover any 

program costs. The $1.4 billion in collections that exceeded program 

costs was maintained in several ways, such as unobligated carryover 

balances, maintained in reserve funds, or deposited to the Treasury in 

accordance with applicable laws. For the 20 programs that had identified 

program costs exceeding collections in fiscal year 2014, costs exceeded 

collections by an estimated $6 billion. (See app. II.) A fee or collection 

may be assessed at a rate that either partially or fully recovers costs from 

the user, or it may be assessed according to some other basis, such as 

market value of the benefit provided. If a fee or collection is set at a rate 

that does not achieve full-cost recovery, the difference is generally funded 

through amounts received in an agency’s annual appropriations acts. 

According to component documentation, annual appropriations covered 

about 97 percent of the estimated $6 billion difference, unobligated 

carryover balances covered about 3 percent of the estimated difference, 

and transfers of collections from one fee program to another fee program 

 25For these programs, collections covered or exceeded all identified program costs 

incurred. 

Collections for Over 

One-Third of Programs 

Fully Covered Identified 

Costs, but DHS Has Not 

Consistently 

Documented Cost 

Recovery Processes and 

Decisions

Collections for 14 

Programs Fully Covered 

Identified Costs, and 

Components Cited Actions 

to Increase Cost Recovery 

for 10 Additional Programs
Page 15 GAO-16-443 DHS Management

covered less than 1 percent of the estimated difference in fiscal year 

2014.

For the 4 remaining programs, either DHS component officials cited 

reasons they could not provide cost data or we determined such data 

may not be reliable. For example, a CBP official stated that CBP’s activity 

based costing model does not capture costs for the Harbor Maintenance 

Fee, which is administered by another agency, and the Merchandise 

Processing Fee, from which CBP deposits collections in the general fund 

to offset CBP’s salaries and expenses appropriation.26 In addition, CBP 

does not collect cost or volume data at the level of detail needed to fully 

identify the costs associated with the 78 specific fees included under the 

Miscellaneous Fees Collections account that collectively constitute less 

than 1 percent of CBP’s total collections as reported in its biennial review. 

For the fourth remaining program—TSA’s Aviation Security Infrastructure 

Fee (Air Carrier Fee)—TSA reported that the statutes governing the Air 

Carrier Fee and the Passenger Civil Aviation Security Service Fee specify 

that collections from these programs be used to offset the authorized 

 26In response to our request for data on identified program costs for the Harbor 

Maintenance Fee and Merchandise Processing Fee, CBP provided these data but did not 

provide supporting documentation. Due to a lack of documentation we were unable to 

verify the reliability of the data, and thus these data are excluded from our report. We 

previously reported on the Harbor Maintenance Fee and made recommendations to the 

Department of Defense’s Army Corps of Engineers and CBP to work together to, among 

other things, develop information on CBP’s costs to collect and administer the Harbor 

Maintenance Trust Fund, for inclusion in the Army Corps’ annual report to Congress on 

the Harbor Maintenance Trust Fund. In addition, we recommended that CBP, among other 

things, report on the program costs associated with Merchandise Processing Fees in its 

biennial fee report. CBP has addressed these recommendations. Based on CBP’s recent 

biennial fee report, we found that in fiscal year 2013, collections accounted for 

approximately .002 percent and 68 percent of costs for these programs, respectively. See 

appendix I for additional information about these programs. Also see, GAO, Federal User 

Fees: Substantive Reviews Needed to Align Port-Related Fees with the Programs They 

Support, GAO-08-321 (Washington, D.C.: Feb. 22, 2008). 
Page 16 GAO-16-443 DHS Management

costs of providing civil aviation security services and, hence, TSA only 

tracks the costs of these programs in aggregate.

27

Of the 20 programs with costs exceeding collections, DHS (or the U.S. 

Department of Agriculture for one program) initiated actions intended to 

increase cost recovery for 6 fee programs, comprising about 85 percent 

of the estimated $6 billion difference in fiscal year 2014. One of the 

programs—TSA’s Passenger Civil Aviation Security Service Fee—

accounted for nearly 76 percent of the difference. Most recently, DHS 

submitted legislative proposals with its fiscal year 2017 budget 

submission to increase fees for three programs that support the provision 

of civil aviation security services (the Passenger Civil Aviation Security 

Service Fee), customs-related inspections (the Consolidated Omnibus 

Budget and Reconciliation Act [COBRA] Fee), and inspection and 

detention services at air and sea ports of entry (the Immigration 

Inspection User Fee [IUF]). DHS reported that the proposals to increase 

collections for these programs would accomplish such things as reduce 

reliance on annual appropriations, fund additional CBP officers, and 

contribute to deficit reduction as a portion of collections would go directly 

to the general fund of the Treasury. Additionally, DHS pursued regulatory 

adjustments to one program that provides for the registration of 

commercial vessels (Coast Guard’s Commercial Vessel Documentation 

Fee) and the Department of Agriculture amended the regulation for one 

program through which CBP conducts inspectional activities for 

international arrival of passengers, conveyances, animals, plants, and 

agricultural goods at port of entry (AQI Fee). In addition, at DHS’s 

request, OMB authorized a rate adjustment for one program that provides 

law enforcement services on federally controlled property (FPS’s Basic 

Security and Oversight Fees). See table 1 for the status of actions taken 

by DHS or the U.S. Department of Agriculture to increase cost recovery 

 27See 49 U.S.C. § 44940. TSA reported that in fiscal year 2014, collections from both the 

Air Carrier Fee and Passenger Civil Aviation Security Service Fee helped to offset the 

approximately $6.8 billion in identified program costs. For purposes of this report, these 

costs are listed in app. I under the Passenger Civil Aviation Security Service Fee. The 

Bipartisan Budget Act of 2013 repealed TSA’s authority to collect the Air Carrier Fee, 

beginning October 1, 2014. See Pub. L. No. 113-67, § 601(a), 127 Stat. 1165, 1187 

(2013) (repealing 49 U.S.C. § 44940(a)(2)). The President’s fiscal year 2017 budget 

request proposes to reinstate the Air Carrier Fee.
Page 17 GAO-16-443 DHS Management

or contribute to the reduction of the federal deficit for the 6 fee programs 

as of April 2016.28

Table 1: Summary and Status of Actions Initiated to Increase Cost Recovery for Six Department of Homeland Security (DHS) 

Programs as of April 2016

Program Action initiated

Transportation Security 

Administration’s (TSA) 

Passenger Civil Aviation 

Security Service Feea

Fiscal year 2014 identified program costs exceeding collections: $4.7 billion

Actions Taken: TSA officials reported that since 2002, TSA has submitted at least eight legislative 

proposals to increase fees for its aviation security programs to address increasing costs. The 

Bipartisan Budget Act of 2013, enacted December 26, 2013, amended 49 U.S.C. § 44940 by 

modifying the passenger security fee from a per enplanement structure ($2.50 per enplanement with

a maximum one-way trip fee of $5.00) to a structure that increased the passenger security fee to a 

flat $5.60 per one-way trip, with a maximum of $11.20 per round trip, effective July 1, 2014. In 

accordance with the statute, as amended, a specified amount of collections each fiscal year through 

2025 will contribute to deficit reduction with the balance offsetting TSA’s aviation security costs.

The President’s fiscal year 2017 budget request and DHS’s Fiscal Year 2017 Congressional Budget 

Justification propose an increase to $6.60 per one-way trip with a round trip limit of $13.20 in the 

second quarter of fiscal year 2017, which is estimated to generate approximately $489 million in new 

revenue to further offset TSA’s fiscal year 2017 appropriation.

Status: Proposed increase in 2017 budget has not been enacted.

U.S. Customs and Border 

Protection’s (CBP) 

Consolidated Omnibus Budget 

and Reconciliation Act 

(COBRA) and Express 

Consignment User Feesb

Fiscal year 2014 identified program costs exceeding collections: $185 million

Actions Taken: The 2016 and 2017 budgets reflected legislative proposals to increase fees for both 

COBRA and the Express Consignment User Fee, as well as authority to increase fees annually, as 

needed to adjust for inflation. For example, the legislative proposals described in the 2017 budget 

would increase the current customs inspection fee by $2.00, bringing the new fee amount to $7.50, 

and increase other COBRA fees by a proportional amount. Moreover, proposed legislation would 

include an increase of $0.36 in the Express Consignment User Fee—which is managed within the 

COBRA fee account and was created to reimburse CBP for costs incurred through the provision of 

inspection services to express consignment carriers. The 2017 Budget estimated that the proposed 

increase would generate approximately $276 million in additional revenue, which would allow CBP to 

recover more costs associated with customs-related inspections, and reduce wait times by supporting 

the hiring of up to 840 new CBP officers.

Status: Changes proposed for fiscal year 2016 were not enacted, and changes proposed for fiscal 

year 2017 have not been enacted.

 28Notwithstanding the proposed modifications discussed here and in table 1, the DHS 

appropriations acts for fiscal years 2015 and 2016 included language prohibiting the use 

of appropriated funds to pay the salaries and expenses of personnel who prepare or 

submit certain appropriations language as part of the President’s budget submission to 

Congress for programs under the jurisdiction of the Appropriations Subcommittees on 

DHS that assumes revenues or reflects a reduction from the previous year due to user fee 

proposals that have not been enacted into law prior to the submission of the budget 

unless such budget submission identifies which additional spending reductions should 

occur in the event the user fees proposals are not enacted prior to the convening of a 

conference committee for the ensuing fiscal year’s appropriations act. See Pub. L. No. 

114-113, div. F, § 562, 129 Stat. 2242, 2521-22 (2015); Pub. L. No. 114-4, § 561, 129 

Stat. 39, 72 (2015).
Page 18 GAO-16-443 DHS Management

Program Action initiated

CBP’s Immigration Inspection 

User Fee (IUF)c Fiscal year 2014 identified program costs exceeding collections: $230 million

Actions Taken: The 2016 and 2017 budgets reflected legislative proposals to increase the IUF fee 

and to remove an exemption on certain populations from being subject to the fee such that the fee 

would be applied to all sea passengers. In addition, the 2016 legislative proposal sought authority to 

increase the fees annually as needed to adjust for inflation. Additionally, both budgets also explained

that lifting the exemptions will bring fee collections more in line with the costs of conducting sea

passenger inspections as well as help modernize and create more efficient and effective business 

operations in the cruise environment. The 2017 budget proposal estimated that the proposed 

increase would generate approximately $270 million in additional fee collections and would fund 

approximately 1,230 new CBP officers, which will reduce wait times at air and sea ports of entry, 

especially as cruise volumes are projected to grow in future years.

Status: Changes proposed for fiscal year 2016 were not enacted, and changes proposed for fiscal 

year 2017 have not been enacted.

U.S. Department of Agriculture 

and CBP’s Agricultural 

Quarantine Inspection Fees 

(AQI)d

Fiscal year 2014 identified program costs exceeding collections: $135 million

Actions Taken: In October 2015, the Animal and Plant Health Inspection Service within the 

Department of Agriculture amended its regulations to, among other things, improve alignment of AQI 

fee collections and costs by adding new fee categories, adjusting current fees charged for certain 

services provided in connection with arrivals at ports in the customs territories of the United States, 

and adjusting or removing fee caps associated with commercial trucks, vessels, and railcars. In effect 

as of December 2015, the regulation resulted in CBP receiving an increased amount from the 

Department of Agriculture to recover costs incurred for the provision of agricultural inspection 

activities.

Status: Fee modified through the federal rulemaking process.

National Protection and 

Programs Directorate/Federal 

Protective Service’s (FPS) 

Basic Security and Oversight 

Feese

Fiscal year 2014 identified program costs exceeding collections: $12 million

Actions Taken: FPS requested that the Office of Management and Budget (OMB) authorize a $0.04 

basic security fee increase from $0.74 to $0.78 and a 2 percent adjustment in the oversight fee from 

6 percent to 8 percent for fiscal year 2017. DHS reported that these adjustments will sustain essential 

security operations, and maintain FPS’s capacity to rapidly surge personnel to protect federal 

facilities.

Status: Fee adjustment authorized by OMB effective beginning in fiscal year 2017.

U.S. Coast Guard’s (Coast 

Guard) Commercial Vessel 

Documentation Feef

Fiscal year 2014 identified program costs exceeding collections: $2 million

Actions Taken: In fiscal year 2014, the Coast Guard amended its regulations pertaining to vessel 

documentation fees by breaking out and separately charging an annual renewal fee that will more 

accurately reflect the actual costs of providing the annual documentation renewal services. According 

to Coast Guard officials, the economic downturn in previous fiscal years resulted in decreased 

collections. For example, in fiscal year 2008, officials said recreation vessel fee collections decreased 

by $2 million. In response, the Coast Guard reduced costs by reassigning staff to other positions 

within the agency, and during this time service delivery slowed and backlogs of requested services

grew. According to a Coast Guard official, although fees are now sufficient to cover the cost of 

operations, the unit has not fully recovered from the loss of personnel, and backlogs in registration 

applications remain. Over time the Coast Guard expects that the additional fee collections generated 

from the separate Renewal Fee will allow the agency to recover from personnel losses and decrease 

processing backlogs.

Status: Separate renewal fee established through federal rulemaking process.

Source: GAO analysis of Department of Homeland Security data. | GAO-16-443

a

See Pub. L. No. 113-67, § 601(b), 127 Stat. at 1187 (amending 49 U.S.C. § 44940). The statute 

identifies approximately $15.8 billion in fee collections that, over a 12-year period beginning in fiscal 

year 2014 and continuing through fiscal year 2025, will contribute to deficit reduction. See 49 U.S.C. § 

44940(i) (identifying, among other things, the specific amount to be credited as offsetting receipts and 

deposited in the general fund of the Treasury each fiscal year, 2014 through 2025). In addition, the 
Page 19 GAO-16-443 DHS Management

first $250 million in fees collected each fiscal year are, consistent with existing law, to be deposited in 

the Aviation Security Capital Fund for use in supporting aviation security related airport capital 

improvement projects or for other purposes specified in statute. See 49 U.S.C. §§ 44923(h), 44940(i).

b

See 19 U.S.C. § 58c(a), 19 C.F.R. § 24.22 (COBRA Fees); 19 U.S.C. § 58c(b)(9) (Express 

Consignment User Fees).

c

The administration of the IUF program is shared among two DHS components, CBP and U.S. 

Immigration and Custom Enforcement (ICE). In accordance with a memorandum of understanding 

between the two components, CBP retains about 83 percent of fee collections and ICE receives the 

remaining 17 percent.

d

See 80 Fed. Reg. 66,748 (Oct. 29, 2015).

e

For the purposes of this report, FPS’s Basic Security and Oversight Fees are considered as one 

program because these collections are used to cover FPS’s base operating expenses.

f

See 79 Fed. Reg. 47,015 (Aug. 12, 2014) (providing, among other things, that while the Coast Guard 

previously included the cost of providing annual Certificate of Documentation renewals as part of its 

overhead costs, the fees collected in relation to the costs did not cover operating and overhead costs 

associated with providing annual renewal services and, therefore, the final rule breaks out and 

separately charges the annual renewal fee).

DHS components have plans to address cost recovery issues for 4 

additional fee programs, according to component officials. Specifically, 

TSA has plans to amend regulations to increase fees for two fee 

programs—the Security Threat Assessments for Hazmat Drivers, and the 

Commercial Aviation and Airport Fee and Other Security Threat

Assessment Fee—as it seeks to harmonize the entire set of TSA’s vetting 

and credentialing fees, which includes seven different programs, by fiscal 

year 2018, according to TSA officials and documentation. In addition, ICE 

officials told us they plan to submit a legislative proposal to increase 

spending authority to cover program costs for the Student and Exchange 

Visitor Program (SEVP) in fiscal year 2017. According to ICE 

documentation, the proposed increase is necessary to fund the costs of 

future mission requirements and to invest in modernization initiatives for 

the program, among other things. Finally, USCIS issued a proposed rule 

to adjust most fees within the Immigration Examinations Fee Account to 

address the difference between costs and collections.29

 29See 81 Fed. Reg. 26,904 (May 4, 2016) (providing the proposed rule would remain open 

for public comment through July 5, 2016).
Page 20 GAO-16-443 DHS Management

DHS component officials did not document the analyses and processes 

they used to manage differences between identified program costs and 

collections for the remaining 10 programs receiving fees and other 

collections or document decisions related to cost recovery. For 6 of the 10 

programs, component officials had identified deficiencies related to the 

difference between program costs and collections and made 

recommendations to address them in fee studies and biennial fee 

reviews, but did not document the reasons that they did not pursue the 

recommended actions. For the remaining 4 programs, component officials 

said that they did not document reasons for not addressing the 

differences because they did not consider it required or necessary.30

Reasons cited for not documenting the processes for managing and 

making decisions on how to address the estimated $726 million difference 

included that some fees and other collections are set in statute and not 

intended to cover full program cost and that some fees and other 

collections had other funds available to cover the difference between 

identified program costs and collections in fiscal year 2014 (see table 2).

Table 2: Reasons Cited by Department of Homeland Security (DHS) Component Officials for Not Addressing the Difference 

between Program Costs and Collections in Fiscal Year 2014 

DHS component Fee program

Difference

between identified

program costs and

collections (millions) Reasons cited by component officialsa

U.S. Customs and 

Border Protection 

(CBP)

Land Border Inspection 

Feesb 645 The fee collections are not intended to fully recover program costs and are relatively small, comprising less 

than 1 percent of CBP’s total fee collections. 

U.S. Coast Guard 

(Coast Guard)

Merchant Mariner 

Licensing Documentation 

Feea

25 The fee is not intended to fully recover program costs 

CBP Immigration Enforcement 

Finesb 23 Amounts collected through the assessment of fines are not intended to fully recover program costs, as the fines 

are intended to serve as a deterrent and monetary 

penalty for, among other circumstances, foreign 

nationals who fail to depart the United States if so 

ordered and air carriers transporting passengers to the 

United States that violate elements of immigration law.

 30For the Fraud Prevention and Detection Program, USCIS documented a reprogramming 

notification to increase spending authority for the account in fiscal year 2014. However, 

USCIS did not document to what extent this action would address the difference for this 

account.

Components Did Not 

Document Processes and 

Decisions Used in 

Managing Differences 

between Collections and 

Identified Costs for the 

Remaining 10 Programs
Page 21 GAO-16-443 DHS Management

DHS component Fee program

Difference

between identified

program costs and

collections (millions) Reasons cited by component officialsa

Coast Guard Commercial Vessel 

Inspection Fee

15 The fee is not intended to fully recover program costs 

and a statutory cap on the amount that may be charged 

impacts agency ability to recover the full costs of its 

services.

U.S. Immigration and 

Customs Enforcement 

(ICE)

Breached Bond 

Detention Fund

8 The receipts from penalties and amounts available to 

the fund are set in statute and not intended to fully 

recover program costs.

Coast Guard Overseas Inspection and 

Examination Fee

3 The fee is not intended to fully recover program costs 

and a statutory cap on the amount that may be charged 

impacts Coast Guard’s ability to recover full costs of its 

services.

CBP User Fee Facility Feeb 2 Unobligated carryover balances from prior year fee 

collections are sufficient to recover the difference 

between program costs and collections. 

U.S. Citizenship and 

Immigration Services 

(USCIS)

Fraud Prevention and 

Detection Fee

2 USCIS management decision to draw down the 

available unobligated carryover balance in the account. 

National Protection 

and Programs 

Directorate/Federal 

Protective Service

Building-Specific Security 2 Unobligated carryover balances from prior years were 

sufficient to cover the difference between buildingspecific security costs and collections.

ICE Enforcement and 

Removal Operations Fee

<1 The fee is not intended to fully recover program costs.

Source: GAO analysis of DHS data.| GAO-16-443

Note: The data include review of DHS fee studies and biennial fee reviews and interviews with DHS 

component officials. 

a

The reasons cited are solely those of DHS component officials and do not reflect further analysis by 

GAO.

b

Fee programs for which DHS and its components identified deficiencies and recommended actions 

to address cost recovery in fee studies or biennial fee reviews.

While we were able to determine—through a review of data, DHS fee 

studies, biennial fee reviews, and through interviews—why components 

decided not to take actions to address differences in collections and 

program costs for these 10 programs, components have not documented 

the processes, analyses, and resulting decisions in a way that would 

enable systematic oversight of these decisions or inform management in 

their decision making. For example, CBP officials stated that the 

component has an informal decision-making process, with a goal to 

prioritize action to increase cost recovery for the three fee programs with 

the highest volume of fee collections across its portfolio of fees and other 

collections (AQI, COBRA fees, and IUF). However, CBP has not 

documented its decision-making process, making it difficult for 
Page 22 GAO-16-443 DHS Management

stakeholders to determine why action was initiated for some fee and 

collection programs and not others such as the Land Border Inspection 

Fee, which is a fee that while small relative to the rest of CBP’s fee 

program portfolio, comprised nearly 10 percent—or $645 million—of the 

difference in identified program costs over collections for the overall DHS 

fee program portfolio in fiscal year 2014.31

DHS has emphasized the importance of documenting processes and 

analysis to inform decision makers and achieve agency goals in the DHS 

Fiscal years 2014-2018 Strategic Plan. Specifically, the strategic plan 

states that DHS’s Unity of Effort initiative to integrate DHS organizations 

can be achieved through documenting processes and analysis to provide 

transparency and relevant information to DHS decision makers. Standard 

practices for project management also support this practice to better 

ensure that programs are operating efficiently and effectively.32 In 

addition, Standards for Internal Control in the Federal Government calls 

for agencies to help ensure transparency and accountability over agency 

resource decisions by clearly documenting significant events—such as 

decisions for addressing differences in collections and program costs—in 

a form readily available for examination.33

Component officials said that DHS OCFO had not provided requirements 

or guidance to document the processes, analyses, and decisions 

regarding the management of fee and other collection programs. DHS 

OCFO officials said that they do not provide such guidance because they 

have delegated fee management and oversight responsibilities to 

component officials. Without documentation, transparency is lacking 

regarding whether component decisions not to address differences in 

program collections and costs are reasonable and appropriate, 

particularly where DHS or its components have identified and reported 

deficiencies and recommended actions to address them. Further, DHS 

OCFO may lack complete information to determine why components 

 31CBP receives an annual appropriation to cover costs associated with salaries and 

expenses based on the agency’s estimated total collections. Land Border Inspection Fee 

collections are then used to reimburse CBP’s annual appropriation for expenses incurred 

in providing inspection services at land border points of entry. See 8 U.S.C. § 1356(q).

32Project Management Institute, A Guide to the Project Management Body of Knowledge

(PMBOK ® Guide), Fifth Edition, 2013.

33See GAO/AIMD-00-21.3.1. 
Page 23 GAO-16-443 DHS Management

initiated actions for some fee programs set in statute, but not others—or 

to assess how decisions for managing individual component program 

portfolios align with effective practices for managing the overall DHS 

portfolio.

DHS component officials said that they have established targets for a 

minimum level of unobligated balance to carry over from one fiscal year to 

the next for most programs. Specifically, these officials said that they 

established such targets for 21 of 25 programs with unobligated balances 

carried over to fiscal year 2014 based on historical trends in collections 

and projected program costs. Component officials stated that for most 

programs, these targets are set at levels to sustain a program’s 

operations for the first quarter of the succeeding fiscal year; with some 

components adjusting targets based on differences in administering fees 

and other collections, spending authority, and statutory limitations. DHS 

component officials did not identify targets for minimum unobligated 

carryover balances for the remaining four programs that were funded by 

collections from insurance premiums or reimbursable agreements. 

Specifically, FEMA officials said that such targets were not necessary for 

the National Flood Insurance Fund as FEMA has borrowing authority to 

cover the difference between the costs of program operations and 

DHS Processes to 

Manage Unobligated 

Carryover Balances 

Are Intended to 

Ensure Continuity of 

Program Operations 

More Than Efficient 

Use of Such 

Balances

DHS Components 

Established and Met 

Targets for Minimum 

Unobligated Carryover 

Balances to Ensure 

Continuity of Operations 

for Most Programs
Page 24 GAO-16-443 DHS Management

collections from insurance premiums.34 FPS officials said that they had 

not established such targets for its three programs—Basic Security and 

Oversight, Building Specific, and Reimbursable Agency Specific—

because officials lacked the data and cost models to do so for these 

program operations funded by reimbursable agreements between FPS 

and other federal agencies.35 DHS OCFO officials stated that 

responsibility for managing unobligated carryover balances is delegated 

to components as, according to officials, component management is in 

the best position to determine the appropriate amount of unobligated

carryover balance needed to ensure efficient program operations. Our 

analysis of DHS OCFO data showed that DHS components carried over 

unobligated balances totaling $2.6 billion from fiscal year 2014 to fiscal 

year 2015 across the 25 fees and other collections. 36 (See app. III.) 

Our analysis comparing amounts of unobligated carryover balances to 

agency criteria showed that components generally met minimum targets 

set to sustain program operations or relied on other mitigation 

 34The Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act) instituted 

provisions to help strengthen the future financial solvency and administrative efficiency of 

the National Flood Insurance Program (NFIP), which is primarily funded by the National 

Flood Insurance Fund, to reduce reliance on its authority to borrow funds from the 

Treasury to cover any differences between the costs of program operations and premium 

collections. See Pub. L. No. 112-141, div. F, tit. II, subtit. A, 126 Stat. 405, 916 (2012). 

Among other things, the Biggert-Waters Act required the establishment of a National 

Flood Insurance Reserve Fund as a separate account, which FEMA established in 2013. 

See Pub. L. No. 112-141, § 100212, 126 Stat. at 922 (codified as amended at 42 U.S.C. § 

4017a). In addition, the Homeowner Flood Insurance Affordability Act of 2014 generally 

required the imposition and collection of additional premium surcharges for residential 

properties, nonresidential properties, and secondary residences, to be deposited in the 

national Flood Insurance Reserve Fund. See Pub. L. No. 113-89, § 8, 128 Stat. 1020, 

1023-24 (2014). According to a FEMA official, NFIP is to rely only on the reserve fund to 

cover any differences between costs and collections before acting on its authority to 

borrow from the Treasury.

35FPS officials reported in June 2016 that work to develop the Activity Based Cost Model 

and Fee Analysis has provided the baseline data to determine carryover requirements.

We discuss FPS management of unobligated carryover balances later in this report.

36The remaining 13 of 38 fee programs do not maintain carryover balances for various 

reasons. For example, the Coast Guard’s annual appropriation generally provides for 1-

year funding and thus the Coast Guard is not authorized to maintain unobligated carryover 

balances for its five fee programs. TSA began collecting its TSA’s Pre✓TM Application 

Program fee in fiscal year 2014, and as of November 2015, had not yet accumulated a 

carryover balance. See appendix III for additional information. Statutes governing the 

implementation of fee programs may limit the level of agency control in managing 

unobligated carryover balances. See GAO-13-820.
Page 25 GAO-16-443 DHS Management

strategies.37 Specifically, our comparison of unobligated carryover 

balances from fiscal year 2013 and amounts obligated in the first quarter 

of fiscal year 2014 showed that components carried over unobligated 

balances sufficient to ensure continuity of operations for 19 of the 21 fee 

and other collections programs that had targets for minimum unobligated 

carryover balances in place, and CBP officials cited other mitigation 

strategies to sustain operations for the remaining two programs. 

Unobligated carryover balances for CBP’s COBRA and Land Border 

Inspection Fee programs did not cover about 48 percent (approximately 

$31 million) and about 70 percent (approximately $5 million), respectively, 

of first quarter fiscal year 2014 obligations. However, CBP officials said 

that they did not rely on unobligated carryover balances to sustain 

operations for these programs as the reimbursable structure of its 

COBRA and Land Border Inspection Fees allows CBP to address funding 

shortages through the use of CBP’s annual appropriations, as available.38

DHS components have taken some steps to manage potential excess 

unobligated carryover balances, but have not established targets for the 

maximum level of unobligated carryover balance or a process that uses 

these targets to ensure efficient use of funds. DHS component officials 

had identified actions to manage excess unobligated carryover balances 

for seven programs that have grown—or have the potential to grow 

beyond levels these officials deemed necessary to ensure efficient 

program operations.39 Component officials cited actions underway to 

 37DHS also assessed the need for components to implement shortfall mitigation strategies 

for 32 of the 38 DHS programs receiving fees or other collections on the basis of fiscal 

year 2013 unobligated carryover amounts and first quarter obligations for fiscal year 2014, 

among other things. On the basis of its findings, DHS concluded in its DHS User Fees: 

Fiscal year 2014 Contingency Plan (Contingency Plan) that such strategies did not need 

to be implemented to address shortfalls in revenues for any of its programs due to 

differences between actual and budgeted collections of user fees. See DHS, DHS User 

Fees: Fiscal Year 2014 Contingency Plan, First Quarter, Fiscal Year 2014 Report to 

Congress (Washington, D.C.: June 23, 2014).

38We have previously reported that the rationale for maintaining a reserve balance as a 

buffer against a complete program shutdown is not as compelling when a fee-funded 

program also has access to annual appropriations as Congress has an opportunity to 

weigh its funding priorities on an annual basis. See GAO-13-268. 

39The seven programs include: CBP’s Electronic System for Travel Authorization, User 

Fee Facility fee; FPS’s Basic Security and Oversight fees, Building-Specific fee, and 

Reimbursable Agency-Specific fee; ICE’s Student and Exchange Visitor Program (SEVP); 

and USCIS’s Immigration Examination Fee Account.

DHS Components Have 

Not Established 

Management Processes to 

Ensure Efficient Use of 

Unobligated Carryover 

Balances
Page 26 GAO-16-443 DHS Management

manage excess unobligated carryover balances by, among other things, 

redirecting fee resources, adjusting fee rates, and submitting proposals to 

increase spending limits.40 However, the processes established by DHS 

components to manage unobligated carryover balances do not include 

reasonable and appropriate targets for these excess balances.

We have previously reported that it is important for agencies to assess 

reserves for reasonableness, set clear goals—such as maximum reserve 

levels—and clarify how the reserve will be implemented to help ensure 

agency accountability and transparency.41 DHS component officials 

stated that targets for maximum unobligated carryover balances have not 

been established for their respective programs because the 

establishment of such targets is complicated by factors component 

officials deemed beyond the agency’s control. They cited factors such as 

the level of unobligated balances for some programs being the result of 

rates and spending limits set in statute and annual fluctuations in program 

users and associated collections. However, actions have been taken in 

the past to address some of these factors by submitting legislative 

proposals to adjust rates and spending limits, and by developing models 

that project fluctuations in program use and collections. DHS OCFO said 

that it delegates the responsibility for managing fee and collection 

programs, including establishing an appropriate range of unobligated 

carryover balance, to the components as they are best positioned to 

understand the factors affecting the management of the programs.

We have previously reported that agencies managing fee accounts 

should have a robust strategy to estimate and manage a carryover 

balance that assesses how effectively agencies anticipate program needs 

and ensure the most efficient use of resources. If an agency does not 

have a robust strategy in place to manage carryover balances, or is 

unable to adequately explain or support the reported carryover balance, 

 40For example, CBP and ICE officials documented actions underway to reduce excess 

carryover balances for the Electronic System for Travel Authorization and SEVP by 

requesting an increase in spending limits and developing a plan to spend down excess 

balances on program enhancements in accordance with statutes. However, because the 

planned actions have not been implemented and maximum targets have not been 

established for these programs, it is unclear whether these actions will be sufficient to 

ensure unobligated carryover balances are maintained at levels necessary to ensure 

efficient program operations.

41GAO-13-820.
Page 27 GAO-16-443 DHS Management

then a more in-depth review is warranted as balances may rise to 

unnecessarily high levels, producing potential opportunities for those 

funds to be used more efficiently elsewhere.42 Lacking criteria for 

maximum levels of unobligated carryover that should be in place and 

documented processes for managing such balances, it is unclear whether 

steps taken by components to manage excess balances will be sufficient 

to ensure efficient program operations, as highlighted in the following 

examples.

USCIS has not established targets for a maximum unobligated carryover 

balance to determine the extent that additional actions may be needed to 

reduce or redirect excess amounts included in the approximately $983 

million in unobligated carryover balance in its IEFA as of the end of fiscal 

year 2014. As shown in figure 2, the $983 million balance was comprised 

of approximately $516 million derived from nonpremium processing 

collections used to fund program operations related to the processing of 

immigration benefit applications while the remaining $467 million was 

derived from premium processing collections used primarily to support 

USCIS’ Transformation initiative to move from manual to electronic 

processing systems.43

 42GAO-13-798.

43The IEFA is comprised of USCIS fee collections from two sources: (1) fees collected for 

processing applications for immigration benefits (i.e., nonpremium processing fees), which 

USCIS uses to fund program operations; and (2) premium processing fees collected for 

expedited review of certain applications, which, until fiscal year 2014, USCIS used 

exclusively to fund its ongoing Transformation effort. See 8 U.S.C. § 1356(m)-(n), (u). 

USCIS’s Immigration 

Examinations Fee Account 

(IEFA)
Page 28 GAO-16-443 DHS Management

Figure 2: Immigration Examinations Fee Account (IEFA) Unobligated Carryover 

Balances by Fee Type from Fiscal Years 2010 through 2014

USCIS has taken actions to manage the growth in the unobligated 

carryover balance for the nonpremium processing fee, by using it to fund 

the increasing difference between identified program costs and fee 

collections.44 These actions have resulted in nonpremium balances 

declining to levels below the minimum target level of $750 million 

identified by USCIS to mitigate potential shortfalls in fee collections to 

cover program costs, as shown in figure 2. USCIS officials reported that 

they are in the process of developing an analytical methodology for 

determining an appropriate maximum level of carryover for any year given 

the cash flow, deferred revenue, and reserve fund considerations, but 

stated that they have been challenged to identify a maximum level 

because program funding requirements fluctuate with levels of pending 

 44In addition, USCIS also attributed the decrease in the nonpremium balance to the 

growth in base costs and forgone revenue due to fee waivers, both of which have 

increased since USCIS last adjusted fees in November 2010.
Page 29 GAO-16-443 DHS Management

caseload. In addition, USCIS issued a proposed rule in May 2016 to 

address the difference between costs and collections within IEFA, 

including most IEFA nonpremium fees.

It is unclear, however, the extent that USCIS action will address the 

increasing growth of the premium processing side of IEFA. USCIS 

estimated that the unobligated carryover balance for the premium 

processing fee could continue to grow to $1.1 billion by fiscal year 2020, 

as fee collections are expected to exceed Transformation initiative 

funding requirements.45 Therefore, USCIS reported that it has begun to 

reduce the growing balance by expanding the use of these premium fee 

collections to fund onetime infrastructure improvements that support 

adjudication services other than Transformation, such as its Financial 

Systems Modernization project. USCIS estimated in its spending plan that 

expanding the use of premium processing fee collections will result in an 

unobligated carryover balance for premium processing of about $341 

million by the end of fiscal year 2020. However, USCIS has not 

established a maximum target for the appropriate amount of unobligated 

carryover balance that should be maintained consistent with actions that 

could be taken under the spending plan and that ensure efficient use of 

funds. According to USCIS officials, the agency is currently implementing 

its fiscal year 2016 operating plan that discusses planned uses of 

premium processing collections, and is based on its assessment of 

projected collections, planned Transformation program requirements, and 

other appropriate infrastructure requirements. However, USCIS has not 

identified maximum targets for the unobligated carryover balance needed 

for both nonpremium processing and premium fees within the IEFA. 

Without such targets, USCIS may not be able to determine the extent that 

expanding uses for premium processing fee collections is sufficient to 

achieve appropriate balance within the premium processing program.

NPPD’s FPS has not established targets to determine the extent that the 

approximately $193 million of unobligated carryover balance as of fiscal 

year end 2014 was appropriate to fund operations across its three 

 45Specifically, USCIS projects premium processing fee revenue will exceed 

Transformation funding requirements from fiscal years 2015 through 2020, with planned 

general expenditures levels below $200 million annually from fiscal years 2015 and 2018 

and from between $60 and $70 million annually from fiscal year 2019 and 2020. 

NPPD/FPS’s Collection 

Programs
Page 30 GAO-16-443 DHS Management

collection programs.46 Our analysis of FPS data showed that the 

unobligated carryover balance for the Basic Security and Oversight Fees 

increased at a greater rate than identified program costs for each of the 

three collection programs from fiscal year 2011 through 2014, rising from 

a low of about 17 percent of identified program costs in fiscal year 2011 to 

a high of about 45 percent in fiscal year 2014. (See fig. 3.)

 46FPS operations are fully funded by offsetting collections from customer agencies 

receiving FPS services for basic security and oversight, security for specific buildings and 

facilities, and security for specific tenants in facilities. All FPS security collections are 

available to FPS, without fiscal year limitation, for necessary expenses related to the 

protection of federally owned and leased buildings and for FPS operations. See, e.g., Pub. 

L. No. 114-113, div. F, 129 Stat. at 2504. FPS’s current fee structure includes three fees: 

(1) Basic Security and Oversight, which covers a wide range of security and law 

enforcement services including general law enforcement, building security assessments, 

and criminal investigations; (2) Building-Specific, which covers security costs for an entire 

facility; and (3) Reimbursable Agency-Specific, which covers costs to secure a specific 

tenant within a facility. 
Page 31 GAO-16-443 DHS Management

Figure 3: Unobligated Carryover Balances from Federal Protective Service’s (FPS) 

Fee Programs Available to Cover Identified Program Costs Incurred for the Basic 

Security and Oversight Program, Fiscal Years 2011 through 2014

Note: Unobligated carryover balance amounts are as of the beginning of the fiscal year, while 

identified program costs are as of the end of the fiscal year.

According to FPS officials, the increase in unobligated carryover balances 

across its collection programs can be attributed to hiring delays and

FPS’s decision to maintain spending at fiscal year 2011 levels to help 

fund enhance security operations and reserve requirements, such as 

surge-related activities and information technology investments that are 
Page 32 GAO-16-443 DHS Management

going through the acquisition process.47 FPS reported in its 

Congressional Budget Justification for Fiscal Year 2017 that it is working 

on a sustainable revenue model whereby collections from other agency 

customers sustain the cost requirements of the same year, as reliance on 

unobligated carryover balances and recoveries is a short-term fix and not 

a sustainable long-term solution.48 In July 2015, FPS informed its 

customer agencies that it will increase the rates for its collection programs 

in fiscal year 2017 to, among other things, maintain its capacity to rapidly 

surge personnel to protect federal facilities during periods of heightened 

vulnerability.49

FPS has not determined at what point its unobligated carryover balance 

would be insufficient or continue to be in excess of need to address the 

projected growth in cost for program operations, surge activities, and 

long-term capital investment decisions. FPS officials said they are 

evaluating the recommendation made by an independent audit firm to 

maintain a minimum of 1 to 2 month operating reserve based on the firm’s 

analysis of FPS’s average cash flow; however, FPS has yet to determine 

whether this recommendation for the size of the program’s operating 

reserve is appropriate to meet its future operating needs given recent 

increases in the agency’s surge operations. Without evaluating the impact 

of the fee increase on its fee balances and establishing targets for both 

 47FPS reported that its authority to recover the cost of its security operations at facilities 

allows the component to use unobligated carryover balances associated with all three of 

its fee programs—Basic Security and Oversight, Building Specific, and Reimbursable 

Agency-Specific—to help fund FPS operating expenses for which fees are not directly 

charged, such as potential liabilities, replacement of equipment and infrastructure, and 

investment in new and improved systems.

48Specifically, FPS reported that it relies on unobligated carryover balances to address 

differences between program costs and collections resulting from increases in base 

program operations—such as increased personnel costs resulting from surge activities, 

life-cycle replacement costs for information technology systems, and the costs of technical 

countermeasures (i.e., security equipment).

49According FPS’s July 21, 2015, Memorandum to Customer Agencies, there will be a 

$0.04 increase in the rate charged for basic security, increasing the total rate from $0.74 

to $0.78, and a 2 percent adjustment in the rate charged for oversight, increasing from 6 

percent to 8 percent, effective for fiscal year 2017. These rates were last adjusted in 2012. 

FPS officials said that while increased collections will be used to fund an additional 121 

personnel to perform surge-related activities through its Rapid Protection Force and is 

estimated to reduce reliance on unobligated carryover balances by approximately $10 

million in fiscal year 2017, FPS will continue to rely on unobligated carryover balances to 

fund new and unanticipated expenses. 
Page 33 GAO-16-443 DHS Management

minimum and maximum unobligated carryover balances, stakeholders 

lack reasonable assurance that FPS is managing its resources to ensure 

that its carryover balances do not grow beyond levels necessary ensure 

efficient program operations, or fall below levels necessary to ensure 

continuity of program operations, meet reserve requirements for potential 

surge operations, and make effective capital investment decisions.

CBP has not established a target for the maximum unobligated carryover 

balance necessary for its User Fee Facility program or taken action 

necessary to reduce the approximately $14 million balance as of fiscal 

year end 2014 within the collection program that, while relatively small, 

consistently constituted over 100 percent of the program’s operational 

costs each year from fiscal years 2010 through 2014.50 Our analysis of 

CBP data showed that the unobligated carryover balance amounted to 

about 160 percent of total identified program costs in fiscal year 2014, 

exceeding these program costs by approximately $7 million. Our analysis 

further showed that unobligated carryover balances within this fee 

program ranged from a high of over $17 million in fiscal year 2013 to a 

low of about $15 million in fiscal year 2012.51 (See fig. 4.)

 50The User Fee Facility Program funds CBP customs inspection services performed at 

participating small airports in accordance with rates set through memorandums of 

agreement (MOA) signed by the agency and the concerned airport authority, which must 

be in an amount equal to the expenses incurred in providing the customs services 

rendered and, therefore, may be adjusted as costs and requirements change. See 19 

U.S.C. § 58b(b).

51CBP reported that collections can vary drastically from year to year due to late payments 

from user fee facilities.52CBP officials stated that until recently, CBP did not have the 

system capacity to bill actual direct and indirect costs incurred at each User Fee Facility 

and that the rate charged to small airports may likely be inconsistent with the grade of the 

officer providing customs services. Beginning in fiscal year 2013, CBP began charging 

user fee facilities 15 percent for indirect costs per OMB recommendation for agencies that 

are unable to identify indirect costs. 

CBP’s User Fee Facility 

Program
Page 34 GAO-16-443 DHS Management

Figure 4: Unobligated Carryover Balances from U.S. Customs and Border 

Protection’s (CBP) User Fee Facility Program Available to Cover Identified Program 

Costs Incurred, Fiscal Years 2011 through 2014

Note: Unobligated carryover balance amounts are as of the beginning of the fiscal year, while 

identified program costs are as of the end of the fiscal year. Identified program costs for fiscal years 

2011 and 2012 do not include indirect costs.

CBP officials cited several reasons for the excess unobligated carryover 

balance within the User Fee Facility program. These reasons were that 

CBP did not request reimbursement for the full costs of providing customs 

services and outdated rates in customer memorandums of agreement 

(MOA),52 funds may not have been transferred from the Treasury account 

holding program collections to the CBP program accounts incurring 

 52CBP officials stated that until recently, CBP did not have the system capacity to bill 

actual direct and indirect costs incurred at each User Fee Facility and that the rate 

charged to small airports may likely be inconsistent with the grade of the officer providing 

customs services. Beginning in fiscal year 2013, CBP began charging user fee facilities 15 

percent for indirect costs per OMB recommendation for agencies that are unable to 

identify indirect costs. 
Page 35 GAO-16-443 DHS Management

indirect costs for customs services,53 and statutory limitations on how 

CBP may use User Fee Facility collections.54

CBP has taken some action to address these causes of excess 

unobligated carryover balances in the program. In 2012, CBP began 

piloting a new module within its financial system that captures actual 

salary benefit and overtime costs for each user fee airport facility and bills 

actual expenses for reimbursement from the program on a monthly basis. 

Moreover, CBP officials said that CBP is in the process of identifying how 

existing policy, regulations, and MOAs with small airports need to be 

modified to implement the new billing module.55 CBP officials stated that, 

once fully implemented, the pilot system to bill based on actual expenses, 

as well as CBP efforts to revise MOAs to adjust charges for about 6 of the 

50 facilities served under the User Fee Facility program, may reduce 

unobligated carryover balance over time, but did not document analysis 

showing a target balance or timeframe for completed action.

CBP also has not taken action to assess other reasons for the excess 

unobligated carryover balance in the User Fee Facility program, including 

whether rates charged to facilities are too high and should be reduced. 

CBP has not commissioned a comprehensive study to analyze small 

airport operations, costs, and activities to determine how to better align 

the fee with cost, as recommended in its most recent biennial fee review. 

Rather, CBP officials stated that CBP will primarily rely on its new billing 

system to manage the excess carryover balance associated with the 

program. Moreover, CBP has not identified an appropriate maximum level 

of unobligated carryover, studied the potential impacts of its efforts to 

address the causes of the excess unobligated carryover balance, or 

 53According to a CBP Budget Directorate official, indirect costs may not have been moved 

from the User Fee Facility account and applied to administrative accounts, thereby 

inflating the program’s unobligated carryover balance.

54Fees collected through the User Fee Facility program are available only for expenses 

incurred in providing customs services at a participating airport, including expenses 

incurred for the salaries and expenses of individuals employed to provide such services, 

and not for any other purpose. See 19 U.S.C. § 58b(e). 

55User Fee Facility charges are based on actual costs incurred by CBP for each officer 

assigned to the airport on a full-time basis and the associated travel, transportation, and 

training costs, as well as per diem and cost-of-living allowances. According to CBP, the 

MOAs include provisions for payment of a flat initial start-up fee and an annual recurring 

fee per officer position of $140,874 for the first year and $123,438 for subsequent years.
Page 36 GAO-16-443 DHS Management

determined the need to take further action to ensure proper fee alignment 

and efficient use of funds. Without evaluating the impact of actions taken 

to manage excess unobligated carryover balances, or whether additional 

actions are needed to align the fee rate with costs charged to the 

program, stakeholders lack reasonable assurance that CBP is managing 

unobligated carryover balances to ensure they do not continue to rise 

beyond levels necessary for efficient program operations.

DHS OCFO distributes instructions to components for submitting the 

results of biennial reviews of their fee and other collections programs to 

DHS, but does not provide oversight to ensure that components conduct 

these reviews. Pursuant to the CFO Act and consistent with implementing 

guidance in OMB Circular A-25, an agency’s CFO is to review, on a 

biennial basis, the fees and other charges imposed by the agency for 

services and things of value it provides and make recommendations on 

revising the charges to reflect costs incurred in providing such services 

and things of value.56 In addition, federal programs are subject to 

Standards for Internal Control in the Federal Government which states 

that agencies should ensure that ongoing monitoring occurs during the 

 56See 31 U.S.C. § 902(a)(8); OMB Circular No. A-25, § 8(e).

DHS Does Not 

Ensure Components 

Conduct Program 

Reviews and Does 

Not Monitor 

Components’ Actions 

to Address Identified 

Management and 

Operational 

Deficiencies

DHS Does Not Provide 

Oversight to Ensure That 

All Components Review 

and Report on Programs 

Receiving Fees and Other 

Collections
Page 37 GAO-16-443 DHS Management

course of normal operations to help evaluate program effectiveness.57

Our review of DHS and component records showed that while four 

components submitted results of reviews conducted for each of their 

respective fee and other collections programs, three components did not, 

as shown in table 3. Specifically, CBP, NPPD, TSA, and the Coast Guard 

reviewed and reported results for all of their collective 30 programs, but 

FEMA, ICE, and USCIS did not review 6 of the remaining 8 programs.

Table 3: Reviews Conducted by Department of Homeland Security (DHS) 

Components since Fiscal Year 2012

Component

Total number

of fee and other

collections programs 

Number of fee

and other collections

programs reviewed

U.S. Customs and Border 

Protection 13 13

Federal Emergency 

Management Agency 2 0

U.S. Immigration and Customs 

Enforcement 3 1

National Protection and 

Programs Directorate 3 3

Transportation Security 

Administration 9 9

U.S. Coast Guard 5 5

U.S. Citizenship and 

Immigration Services 3 1

Total 38 32

Source: GAO analysis of DHS data. | GAO-16-443

Note: Data are from reviews conducted by DHS components.

FEMA, ICE, and USCIS officials cited three reasons for not conducting 

biennial reviews for their programs. Specifically, these officials stated that 

biennial review and reporting requirements in the CFO Act do not apply to 

programs with rates set in statute, to accounts that are too small relative 

 57GAO/AIMD-00-21.3.1.
Page 38 GAO-16-443 DHS Management

to other programs to warrant resources spent on a review, and to 

programs that are not structured as traditional user fees.58

However, we have previously reported that consistent with OMB Circular 

A-25 and statements of OMB staff, agencies should review and report on 

any government service provided for which an agency receives revenue 

in accordance with the CFO Act, regardless of the relative size of the fee 

or whether rates are set in statute or by the agency through regulation.59

Further, some DHS components—such as CBP, have conducted biennial 

reviews for programs receiving collections that are not traditionally 

considered fees or other charges—such as Immigration Enforcement 

Fines. Such actions help ensure that decision makers have complete 

information about program costs and activities. For example, we have 

reported that the CFO Act’s biennial review provisions provide decision 

makers with comprehensive information necessary to support robust 

deliberations about fee financing.60

Absent oversight to ensure that components are conducting regular 

comprehensive reviews, agencies and Congress may not be aware of 

opportunities to, as appropriate, improve fee design and management 

processes and that, if left unaddressed, could contribute to inefficient use 

 58More specifically, ICE officials stated that they do not conduct biennial fee reviews for 

the Enforcement and Removal Operations fee program, and USCIS officials said they do 

not conduct reviews for the H1-B Nonimmigrant Petitioner program and Fraud Prevention 

and Detection program because they do not believe the CFO Act’s review and reporting 

requirements apply to programs with rates set in statute and because these programs are 

small relative to other fee programs. In addition, USCIS officials said they do not consider 

the latter two programs to be traditional user fee programs subject to the CFO Act’s review 

and reporting requirements. ICE officials also stated that they did not review the Breached 

Bond Detention Fund, and FEMA officials said they did not review the Radiological 

Emergency Preparedness Program and the National Flood Insurance Fund, because they 

do not consider these programs to be traditional user fee programs subject to the CFO 

Act’s review and reporting requirements.

59GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2010). 

60We have previously reported that the general benefits of user fee reviews are that they: 

(1) help to ensure that Congress, stakeholders, and agencies have complete information 

about changing costs and whether a fee needs to be changed; (2) help agencies 

determine if they are prepared for any spikes or surges in demand; (3) help agencies and 

fee payers avoid a sudden increase in fee rates due to misalignment between costs and 

collections; (4) provide opportunities for stakeholder input; and (5) promote understanding 

and acceptance of the fee. See GAO-11-492.
Page 39 GAO-16-443 DHS Management

of government resources. For example, TSA officials stated that 

information from biennial fee reviews of the Passenger Civil Aviation 

Security fee—a fee with a rate set in statute—enabled TSA to inform 

congressional stakeholders of an increasing gap between fee collections 

and aviation security program costs.61 Information derived from biennial 

fee reviews may similarly inform congressional stakeholders and provide 

similar benefits to fee programs, regardless of whether the rate charged is 

set in statute. In addition, Coast Guard officials stated that its biennial fee 

reviews of the Commercial Vessel Documentation Fee program—a 

relatively small fee program collecting fees averaging about $2 million 

annually from fiscal years 2010 through 2014—are important because the 

Coast Guard is generally authorized to maintain funds for obligation only 

during the fiscal year in which they become available (1-year authority) 

and thus cannot carryover unobligated balances into subsequent fiscal 

years. As such, biennial fee reviews help the Coast Guard to ensure fee 

collections are sufficient to cover program costs, and provide information 

to relevant stakeholders about the need to adjust fee rates.

Furthermore, we have previously concluded that a regular process of 

reviewing fee programs could reveal and help address challenges 

identified by agencies in a more timely and systematic manner.62 For 

example, FEMA reported that the Radiological Emergency Preparedness 

Program, a program for which FEMA does not conduct biennial fee 

reviews because it does not consider the program to be a traditional user 

fee, faced challenges accurately estimating costs, resulting in FEMA 

refunding nearly $14 million to Radiological Emergency Preparedness 

 61Specifically, TSA officials explained that, consistent with OMB Circular A-25, TSA began 

submitting legislative proposals in fiscal year 2010 to adjust the statutorily-set fee rate to 

cover a greater portion of the costs of TSA’s aviation security activities. The Bipartisan 

Budget Act of 2013, enacted in December 2013 increased and restructured the passenger 

security fee but also provided that a set amount of the fee collected, increasing each fiscal 

year through 2025 (as amended), will be designated for deficit reduction and will not be 

available to offset aviation security costs).See Pub. L. No. 113-67, § 607, 127 Stat. at 

1187-88 (amending 49 U.S.C. § 44940).

62GAO, Federal User Fees: Additional Analyses and Timely Reviews Could Improve 

Immigration and Naturalization User Fee Design and USCIS Operations, GAO-09-180

(Washington, D.C.: Jan. 23, 2009). 
Page 40 GAO-16-443 DHS Management

Program users from fiscal year 2013 through 2015.63 A regular review 

may have helped the agency identify the issue sooner and avoid having 

to issue refunds. Moreover, without regular comprehensive reviews, 

agencies and Congress may miss opportunities to improve fee design 

and management processes which, if left unaddressed, could contribute 

to inefficient use of government resources.

With regard to reporting, our review of DHS’s CFO Act report—The 

Department of Homeland Security’s Agency Financial Report for Fiscal 

Year 2014 (Agency Financial Report)—showed that DHS OCFO did not 

report the extent to which all components are conducting such reviews or 

any proposals to address management and operational deficiencies 

identified by components, such as those relating to the adjustment of fee 

and other collection rates. OMB Circular A-25 provides that agencies are 

to discuss the results of biennial fee reviews and any resulting proposals, 

such as adjustments to fee rates, in the annual report submitted pursuant 

to the CFO Act.64 The Agency Financial Report did not include this 

information, and instead included a listing of DHS components and some 

of the programs they administer that receive fees and other collections. 

DHS OCFO officials stated that more detailed information on 

components’ biennial fee reviews was included in the quarterly user fee 

reports DHS submitted to Congress and referenced in the Agency 

Financial Report. In addition, DHS OCFO officials stated that duplicating 

this information in the Agency Financial Report would not have provided 

additional useful information to decision makers. However, the quarterly 

reports did not include information on any proposals to address 

 63FEMA reported in its Congressional Budget Justification for Fiscal Year 2016 that, in 

fiscal year 2013, the Radiological Emergency Preparedness Program undertook a cost 

study to better refine its cost models. FEMA further reported that in fiscal year 2014, it 

refunded $5.1 million of carryover user fee collections to nuclear power station licensees 

as a result of Radiological Emergency Preparedness Program’s increased ability to 

produce transparent cost estimates, and that in fiscal year 2015 it will refund $3.7 million 

of carryover user fee collections to industry. Furthermore, FEMA also reported that 

automating the model should lead to more accurate price estimates, and consequently to 

cost-efficient bills to industry and smaller future refunds.

64See OMB Circular No. A-25, § 8(e); 31 U.S.C. § 902(a)(6) (requiring each agency’s CFO 

to submit an annual report to the agency head and director of OMB). See also OMB 

Circular No. A-11, § 51.13 (directing agencies, as they formulate their annual budget 

submissions, to refer to OMB Circular A-25 for information and requirements regarding 

user charges). We have previously reported that this discussion may be included in 

agency performance and accountability reports. See GAO-08-386SP.
Page 41 GAO-16-443 DHS Management

management and operational deficiencies, and as of July 2015, DHS was 

no longer under direction to submit quarterly user fee reports.65

Additionally, our review showed that DHS did not discuss in any of these 

reports the six programs receiving fees and other collections for which 

reviews were not conducted. Our review of The Agency Financial Report

for fiscal year 2015 also found that the report did not include proposals to 

address management and operational deficiencies or other information 

from reviews of these programs. DHS OCFO officials stated that the 

department has not determined how it will report on the results of biennial 

fee reviews and any resulting proposals to adjust fee and other collection 

rates in the future, and needs to seek guidance from OMB on how the 

department should report on biennial fee reviews in future agency 

financial reports. Without transparency of fee program operations 

provided in the Agency Financial Report, or by other means, Congress 

and other stakeholders lack reasonable assurance that DHS OCFO has 

complete information on management and operational deficiencies to 

ensure components are making informed decisions regarding the actions 

needed to address such deficiencies.

DHS OCFO has not established a process to actively monitor the status 

of components’ efforts to address the management and operational 

deficiencies that have been identified across programs, such as those 

deficiencies relating to cost recovery and excess unobligated carryover 

balances. According to DHS OCFO officials, the oversight and monitoring 

of actions to address identified deficiencies is delegated to components 

because components are responsible for administering programs and are 

best positioned to understand the statutes governing the programs as 

well as the factors—such as changing economic conditions—affecting 

program implementation.

However, we found that while components have recommended actions to 

address identified management and operational deficiencies, some 

components have not taken action to implement these recommended 

actions or otherwise addressed longstanding deficiencies. Specifically, 

our analysis of biennial fee reviews conducted by components since fiscal 

 65See S. Rpt. No. 113-198, at 20 (June 16, 2014) (explaining that the Committee no 

longer requires DHS to submit quarterly updates on user fees as originally directed in the 

conference report accompanying Public Law 111-83).

DHS Does Not Monitor 

Component Actions to 

Address Identified 

Program Management and 

Operational Deficiencies
Page 42 GAO-16-443 DHS Management

year 2014 showed that components recommended 48 actions for 20 

identified deficiencies across 18 programs receiving fees and other 

collections. (See app. IV.) Components most often identified deficiencies 

related to aligning fee rates to recover a greater share of program costs. 

Specifically, 12 of the 20 deficiencies related to recovering greater shares 

of program cost through collections by adjusting rates and spending caps 

or establishing charges for additional services. Another 5 deficiencies 

involved existing rates that may not distribute costs among users in an 

equitable manner. Two deficiencies identified challenges related to 

managing unobligated carryover balances. The remaining deficiency 

identified a difference in program collections and costs that could be 

addressed by recognizing other revenue sources, such as available 

unobligated carryover balances. However, components have not taken 

action to address 9 of these 20 deficiencies. For example, components 

have not addressed 5 of the deficiencies related to cost recovery, 

resulting in a difference between identified program costs and collections 

of around $700 million for the related programs since these deficiencies 

were identified in fiscal year 2014.66 If left unaddressed, these 

deficiencies may lead to management and operational challenges, such 

as the inequitable distribution and inefficient use of funds.

DHS OCFO identified the need for greater oversight of the DHS fee 

portfolio through its Winter Study. Specifically, the Winter Study found 

considerable variation across components relating to the development

and budgeting of user fees and other collections, and recommended as 

first steps towards greater standardization and coordination (1) the 

establishment of a framework for developing fee proposals, and (2) a 

department-wide fee governance council comprising Chief Financial 

Officers from components responsible for collecting fees and other 

collections as well as representatives from DHS OCFO and DHS Office of 

General Counsel. In January 2016, DHS formally established the DHS 

Fee Governance Council for the purpose of advising and assisting the 

DHS OCFO in establishing a consistent program for the financial 

management functions, activities, and policies relating to fees across 

 66Specifically, the five fee and other collections programs were CBP’s Immigration 

Enforcement Fines and Land Border Inspection Fees, and the Coast Guard’s Commercial 

Vessel Inspection Fee, Merchant Mariner Licensing Documentation Fee, and Overseas 

Inspection and Examination Fee. CBP’s Land Border Inspection Fee accounted for about 

90 percent of the difference between identified program costs and collections in fiscal year 

2014.
Page 43 GAO-16-443 DHS Management

DHS. Moreover, in accordance with its charter, the Fee Governance 

Council is to establish a governance and oversight structure for fees and 

other collections across DHS, developing policy guidance on issues such 

as, how fees and other collections are established, updated, or changed, 

and how regular fee reviews are conducted.

While the establishment of a department-wide fee council is a positive 

step, DHS has not determined whether DHS OCFO will use this venue to 

issue guidance to components or provide oversight to ensure appropriate 

actions are taken to address management and operational deficiencies, 

such as those relating to cost recovery and excess carryover. Standards 

for Internal Control in the Federal Government state that policies and 

procedures should provide reasonable assurance that ongoing monitoring 

and evaluation are institutionalized in an agency’s operations, and require 

that findings from audits and other reviews are promptly resolved.67

Further we have previously reported that evaluating and reporting on 

results is a key practice that can assist interagency efforts in identifying 

areas for policy and operational improvement.68 Without oversight of 

components’ decision making processes—including tracking and 

reporting on the status of recommendations to address deficiencies—

DHS cannot provide stakeholders with reasonable assurance that the 

agency is actively managing its portfolio of fees and other collections to 

mitigate the impact of management and operational deficiencies. 

Enhancing DHS’s oversight of its component agencies’ actions to address 

identified deficiencies could ensure that deficiencies are addressed in a 

timely manner and help DHS determine whether widespread 

management challenges are causing deficiencies to not be addressed 

and whether additional guidance should be provided to address these 

challenges.

The uncertain budgetary environment highlight the need for DHS and its 

components to effectively manage, use, and oversee the approximately 

$15 billion in collections by DHS components across 38 homeland 

security-related programs. DHS and components have taken steps for 

some programs to strengthen management and oversight, such as by 

 67GAO/AIMD-00-21.3.1. 

68GAO, Results-Oriented Government: Practices That Can Help Enhance and Sustain 

Collaboration among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).

Conclusions
Page 44 GAO-16-443 DHS Management

adjusting fees and other collections to cover a higher proportion of 

identified program costs, establishing some targets for minimum levels of 

unobligated carryover balances, conducting fee reviews, and establishing 

a DHS Fee Governance Council. However, opportunities remain for DHS 

OCFO and components to improve the transparency and accountability 

for management decisions and processes across all programs in the DHS 

portfolio. For example, ensuring that for all fee and other collections 

programs DHS OCFO and components are (1) documenting decisions 

about whether or not to take action, as appropriate, to address 

differences between program costs and collections; (2) establishing 

targets for appropriate minimum and maximum unobligated carryover 

balances; (3) conducting fee reviews; and (4) tracking and reporting the 

status of recommended actions would allow the DHS Fee Governance 

Council, the DHS OCFO, or others to provide oversight and ensure that 

management practices and decisions are appropriate and effective to 

ensure continuity of operations and equity in amounts charged to users of 

program services. Further, regularly reviewing and reporting the results of 

fee and other collections programs to agency heads, OMB, and Congress 

could also enhance information available to the annual budget process 

and better inform decisions to adjust fees or aspects of program 

operations through changes in legislation or regulation.

To ensure effective management and oversight of DHS programs 

receiving fees and other collections, we recommend that the Secretary of 

Homeland Security direct the DHS Chief Financial Officer to use some 

means, such as the DHS Fee Governance Council, to ensure that 

component management take the following actions for each fee and other 

collections program that they administer:

• document the processes and analyses for assessing and, as 

appropriate, for managing the difference between program costs and 

collections and document resulting decisions;

• establish processes for managing unobligated carryover balances, to 

include targets for minimum and maximum balances for programs that 

lack such processes and targets;

• conduct reviews to identify any management and operational 

deficiencies; and

• take action to track and report on management and operational 

deficiencies—including reasons supporting any decisions to not 

pursue recommended actions—identified in fee reviews or through 

other means.

Recommendations for 

Executive Action
Page 45 GAO-16-443 DHS Management

Further we recommend that the Secretary of Homeland Security direct 

the DHS Chief Financial Officer to discuss the results of biennial fee 

reviews and any resultant proposals in the annual Agency Financial 

Report, annual performance report, or other reporting mechanism, 

consistent with the CFO Act and OMB Circular A-25.

We provided a draft of this report to DHS for review and comment. DHS 

provided written comments, which are reproduced in appendix V. In its 

comments, DHS concurred with the five recommendations and described 

actions under way or planned to address them. DHS also provided 

technical comments, which we incorporated as appropriate. 

DHS stated that through the DHS Fee Governance Council, chaired by 

the Deputy DHS Chief Financial Officer, guidance will be developed and 

disseminated to (1) document the processes and analyses for assessing 

and, as appropriate, for managing the difference between program costs 

and collections and document resulting decisions; (2) establish processes 

for managing unobligated carryover balances, to include targets for 

minimum and maximum balances for programs that lack such processes 

and targets; (3) conduct reviews to identify any management and 

operational deficiencies; and (4) take action to track and report on 

management and operational deficiencies—including reasons supporting 

any decisions to not pursue recommended actions—identified in fee 

reviews or through other means. DHS estimated that these actions would 

be completed by July 31, 2017. Once guidance is developed and 

disseminated to components, components take appropriate actions to 

implement this guidance, and tools are developed to measure and assess 

changes in fee balances, these actions should address the intent of our 

recommendations to ensure effective management of DHS fee programs.

In regard to our second recommendation, however, DHS stated that 

GAO’s characterization of DHS components’ planning processes for 

managing carryover balances is not entirely accurate. Specifically, DHS 

stated that GAO characterizes these processes as being too heavily 

focused on ensuring continuity of program operations rather than efficient 

use of funds, when in fact components actively manage carryover 

balances to ensure effective use of program funds. DHS cited as an 

example USCIS’ fee account annual operating plan development process 

that is used to guide resource deployment to best achieve mission critical 

goals.

Agency Comments 

and Our Evaluation
Page 46 GAO-16-443 DHS Management

Our report does not state that DHS components were too heavily focused 

on ensuring continuity of operations, only that components placed more 

focus in this area than managing efficient use of funds. In general, we 

found that while components had identified minimum balances for most 

programs and mitigation strategies for when balances may fall below 

these minimums, components had not identified maximum balances and 

mitigation strategies for when balances grow above these maximums.

DHS stated that USCIS is taking additional actions to address our second 

recommendation by prototyping new tools to measure and assess fee 

account carryover balances, cash flow, and changes to fee balances. 

DHS estimated that this action would be completed by September 30, 

2016.

Regarding our fifth recommendation, that the DHS Chief Financial Officer 

discuss the results of biennial fee reviews and any resultant proposals in 

the annual Agency Financial Report, annual performance report, or other 

reporting mechanism, consistent with the CFO Act and OMB Circular A25, DHS concurred, stating that DHS is in the process of developing a 

consolidated tracking system for the results of biennial fee reviews and 

any resultant proposals. In addition, DHS stated that DHS OCFO’s 

Financial Management Division will ensure that the results of biennial fee 

reviews and any resultant proposals are discussed in the annual DHS 

Agency Financial Report. DHS estimated that these actions would be 

completed by July 31, 2017. These actions should address the intent of 

the recommendation and better position DHS to ensure the effective 

oversight of programs receiving fees and other collections.

We are sending copies of this report to the Secretary of Homeland 

Security and the Office of Management and Budget, and appropriate 

congressional committees. In addition, the report is available at no charge 

on the GAO website at http://www.gao.gov.
Page 47 GAO-16-443 DHS Management

If you or your staff have any questions concerning this report, please 

contact me at (213) 830-1011 or vonaha@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. GAO staff who made significant contributions 

to this report are listed in appendix IV.

Andrew Von Ah 

Acting Director, Homeland Security and Justice
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 48 GAO-16-443 DHS Management

In fiscal year 2014, the Department of Homeland Security (DHS) received 

fees and other collections totaling approximately $15 billion from 38 

programs with an estimated $17 billion in identified program costs. For 

these 38 programs, table 4 describes the legal authorities, program 

descriptions and financial information in terms of total collections and 

identified program costs for fiscal year 2014.

Table 4: Legislative Authority, Description, and Financial Information for Department of Homeland Security (DHS) Programs 

Receiving Fees and Other Collections in Fiscal Year 2014 

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA)

Radiological Emergency 

Preparedness Program 

(REPP) Fee

42 U.S.C. § 5196e;

44 C.F.R. § 354.4

A fee imposed for Nuclear Regulatory Commission 

licenses of commercial nuclear power plants to support 

REPP, a program that ensures the public health and safety 

of citizens living near commercial nuclear power plants will 

be adequately protected in the event of a nuclear power 

station incident and also informs and educates the public 

about radiological emergency preparedness. Fee 

collections are only available for FEMA and its contractor 

support of state and local government preparedness 

activities that take place beyond the nuclear power plant.

37 33

National Flood Insurance 

Fund (NFIF)

42 U.S.C. § 4017

42 U.S.C. § 4014(a)

42 U.S.C. § 4015

The NFIF is a fee and premium-generated fund that 

supports the National Flood Insurance Program (NFIP) 

and provides flood insurance on a national basis. Funding 

for the NFIP is derived from offsetting collectionsb from two 

primary sources:

• Policy fee income, paid by flood insurance policy 

holders that support floodplain management, flood 

mapping, insurance operations, and NFIP 

management.

• Flood insurance premiums, used to pay claims and 

flood-related grants, and that provide funding to 

support the operating and administrative costs 

associated with maintaining the program.

3,757 2,594

NATIONAL PROTECTION AND PROGRAM DIRECTORATE/FEDERAL PROTECTIVE SERVICE (FPS)

Basic Security and 

Oversight Feesc

40 U.S.C. § 586(c); 41

C.F.R. § 102.85.35

Reimbursable agreements between FPS and another 

federal agency to fund law enforcement services on 

federally controlled property, preliminary investigations of 

incidents, and capture and arrest of suspects. It also 

includes 24-hour security alarm monitoring, nationwide 

dispatch services, facility security assessments, and 

assistance to Federal Security Committees.

330 341

Appendix I: Department of Homeland 

Security (DHS) Programs Receiving Fees 

and Other Collections in Fiscal Year 2014
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 49 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

Building-Specific Security

40 U.S.C. § 586(c); 41 

C.F.R. § 102.85.35

Reimbursable agreements between FPS and another

federal agency to fund services provided in accordance 

with countermeasure security requirements generated 

through a facility security assessment or a customer 

request specific to a particular building; the charge 

includes an oversight fee to fund FPS oversight and 

overhead costs, and building costs are distributed to 

tenants based on the square footage assigned to them in 

the General Services Administration Occupancy 

Agreements.

503 505

Reimbursable AgencySpecific Security

40 U.S.C. § 586(c); 41 

C.F.R. § 102-85.135

Negotiated reimbursable agreements between FPS and 

another federal agency to fund the same services 

performed as part of building-specific security, but 

configured to meet the security needs of an individual 

customer agency rather than the needs of a multi-tenant 

facility. Reimbursements consist of the estimated direct 

cost of the security services requested, plus the oversight 

and overhead costs as with the building specific oversight 

fee.

413 403

TRANSPORTATION SECURITY ADMINISTRATION (TSA)

Air Cargo Fee

Pub. L. No. 108-90, § 520, 

117 Stat. 1137, 1156 

(2003); 49 C.F.R. subchpt. 

C

A fee imposed for each individual that applies for or 

renews a security threat assessment to screen or have 

unescorted access to screened cargo, to recover the costs 

of conducting security threat assessments.

4 4

Alien Flight School Fee

49 U.S.C. § 44939(g); 

Pub. L. No. 108-90, § 520, 

117 Stat. 1137, 1156 

(2003); 49 C.F.R. § 1552.5

A fee imposed on non-U.S. citizens applying for training at 

Federal Aviation Administration certified flight schools

subject to security threat assessments to recover the costs 

of reviewing and assessing biographic and biometric 

information.

5 5

Aviation Security 

Infrastructure Fee (Air 

Carrier Fee)

49 U.S.C. § 44940(a)(2),

as enacted through Pub. L. 

No. 107-71, §118, 115 

Stat. 597, 624 (2001); 49 

C.F.R. pt. 1511

A fee imposed on air carriers (based on the amount a 

carrier spent for passenger and property screening during 

calendar year 2000 and for which, industry-wide, was set 

to recover $420 million annually) to help offset costs 

associated with the provision of civil aviation security 

services.d

379 e

Commercial Aviation and 

Airport Fee and Other 

Security Threat 

Assessment Feesf

Pub. L. No. 108-90, § 520, 

117 Stat. 1137, 1156 

(2003); 49 C.F.R. subchpt. 

C, 28 C.F.R. § 20.31(e)

A fee imposed for each regulated individual seeking 

unescorted access to secure areas at U.S. airports, to 

operate aircraft to, from, or between general aviation 

airports closest to the National Capital Region, and to work 

as a flight crew member on aircraft operating under twelvefive or private charter security programs, to recover the 

cost of conducting security threat assessments.

7 7
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other

Collections in Fiscal Year 2014

Page 50 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

General Aviation at 

Reagan National Airport 

Fee

Pub. L. No. 108-176, § 

823, 117 Stat. 2490, 2595 

(2003); Pub. L. No. 108-

90, § 520, 117 Stat. 1137, 

1156 (2003); 49 C.F.R. 

§1562.27

A fee imposed on airport operators for each passenger 

and crewmember on fixed based operations arriving at and 

departing from Washington Reagan National Airport 

(DCA), to recover the cost of conducting security threat 

assessments.

<1 <1

Hazardous Materials 

Endorsement Fee

49 U.S.C. § 5103a; Pub. L. 

No. 108-90, § 520, 117 

Stat. 1137, 1156 (2003); 

72 Fed. Reg. 3,492 (Jan 

25, 2007); 49 C.F.R. pt. 

1572, subpt. E

A fee imposed for each applicant that applies to obtain, 

renew, or transfer a Hazardous Materials Endorsement 

(HME) on his or her state-issued Commercial Drivers’

License (CDL) to recover the costs of conducting security 

threat assessments implemented under the Hazardous 

Materials Endorsement Threat Assessment program. 

19 23

Passenger Civil Aviation 

Security Service Fee

449 U.S.C. § 44940(a)(1), 

(c); 49 C.F.R. § 1510.5

A fee imposed on passengers of U.S. and foreign-flagged 

air carriers for air transportation that originates at airports 

in the United States, to help offset costs associated with 

the provision of civil aviation security services (as 

described in the statute) except to the extent fees collected 

are deposited into the Aviation Security Capital Fund or 

are credited as offsetting receiptsg and deposited into the 

general fund of the Treasury for purposes of deficit 

reduction.h

2,087 6,800e

Transportation Worker 

Identification Credential 

(TWIC) Fee

46 U.S.C. § 70105; Pub. L. 

No. 108-90, § 520, 117 

Stat. 1137, 1156 (2003); 

72 Fed. Reg. 3,492 (Jan. 

25, 2007); 49 C.F.R. pt. 

1572, subpt. F

A fee imposed for each applicant that applies to obtain, 

renew, or replace, a TWIC to recover the costs of 

implementing the TWIC program, including costs of 

conducting security threat assessment and credentialing 

services. 

70 63

TSA Pre✓TM Application 

Program Fee

Pub. L. No. 107-71, § 

109(a), 115 Stat. 597, 613 

(2001); Pub. L. No. 109-

90, § 540, 119 Stat. 2064, 

2088-89 (2005); 78 Fed. 

Reg. 72,922 (Dec. 4, 

2013)

A fee imposed on applicants to TSA’s expedited screening 

program, to recover the costs of implementing the 

program, including the costs of security threat 

assessments conducted for each applicant.

50 30
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 51 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

U.S. CITIZENSHIP AND IMMIGRATION SERVICES (USCIS)

Fraud Prevention and 

Detection Fee

8 U.S.C. §§ 1184(c)(12)-

(13), 1356(v); 8 C.F.R. § 

103.7(b)(1)(i)(DDD)-(EEE)

A fee imposed on nonimmigrant petitioners to fund the 

costs of activities related to preventing and detecting fraud 

for all immigration benefit types, including efforts to 

oversee and enhance policies and procedures pertaining 

to the performance of law enforcement background checks 

on applicants and petitioners. USCIS receives one-third of 

the revenue, and the remaining revenue is shared between 

the Department of Labor and the Department of State.

45 47

H-1B Nonimmigrant 

Petitioner Fee

8 U.S.C. §§ 

1101(a)(15)(i)(B), 

1184(c)(9), (11), 1356(s); 8 

C.F.R. § 

103.7(b)(1)(i)(CCC)-(EEE).

See also Pub. L. No. 111-

230, § 402(b)-(c), 124 Stat. 

2485, 2487-88 (2010)

A fee imposed on an employer for certain petitions for 

nonimmigrant workers under the H‐1B program that is 

used to offset a portion of the costs of contract activities 

(mail, filing, biometric, and data entry) and facility rent 

expenses supporting the processing of H‐1B petition 

processing. USCIS receives 5 percent of the H‐1B 

Nonimmigrant Petitioner Fee collections; the remaining 

revenue is shared between the Department of Labor and 

the National Science Foundation.

17 13

Immigration Examinations 

Fee Account

8 U.S.C. § 1356(m)-(n); 8 

C.F.R. § 103.7(b)(1)(i)

8 U.S.C. § 1356(u); 8 

C.F.R. § 103.7(b)(1)(i)(RR)

Fees charged to applicants and petitioners seeking 

immigration benefits to:

• Fund the cost of providing adjudication and 

naturalization services, including the cost of 

similar services provided without charge to 

asylum applicants or other immigrants (referred to 

in this report as non‐premium processing fees); 

and

• Fund certain premium‐processing services for 

business customers, and to make infrastructure 

improvements in the adjudications and customer‐

service processes (referred to in this report as 

premium processing fees).

2,786 2,979

U.S. COAST GUARD (Coast Guard)

Commercial Vessel 

Documentation Fee

46 U.S.C. § 2110, 31 

U.S.C. § 9701; 46 C.F.R. 

pt. 67

A fee imposed on commercial vessel owners to recover 

the costs of services provided and reimburse the Coast 

Guard for the costs of collecting the fees.

2 4

Commercial Vessel 

Inspection Fee

46 U.S.C. § 2110, 31 

U.S.C. § 9701; 46 C.F.R. § 

2.10-101

A fee imposed on commercial vessel owners, including 

large corporations, small businesses, and individual private 

owners who have vessels requiring a Certificate of 

Inspection and those foreign vessel owners/ operators 

required to have a Certificate of Compliance, to recover 

the costs of providing vessel inspection services and to 

reimburse Coast Guard for the costs of collecting the fees.

10 25
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 52 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

Merchant Mariner 

Licensing Documentation 

Fee

46 U.S.C. § 2110, 31 

U.S.C. § 9701; 46 C.F.R. § 

10.219

A fee imposed on United States merchant mariners related 

to credentialing activities to recover costs of services 

provided and reimburse the Coast Guard for the cost of 

collecting these fees.

8 33

Overseas Inspection and 

Examination Fee

46 U.S.C. § 2110, 31 

U.S.C. § 9701; 46 C.F.R. § 

2.10-120

A fee imposed on commercial vessel owners, including 

large corporations, small businesses, and individual private 

owners who have vessels requiring Coast Guard 

Certification, requesting inspection services at non-US 

locations, to recover the costs of providing services and to 

reimburse the Coast Guard for the costs of collecting the 

fees.

1 4

Recreational Vessel 

Documentation Fee

46 U.S.C. § 2110, 31 

U.S.C. § 9701; 46 C.F.R. 

pt. 67

A fee imposed on owners of recreational vessels to 

recover the costs of services provided and reimburse 

Coast Guard for the costs of collecting the fees.

4 3

U.S. CUSTOMS AND BORDER PROTECTION (CBP)

Agriculture Quarantine 

Inspection User Fees

21 U.S.C. § 136a; 7 C.F.R. 

§ 354.3

A fee imposed on five modes of international passenger 

and conveyance transportation: (1) commercial aircraft 

(passenger and aircraft inspection); (2) seagoing vessels; 

(3) trucks with single entry; (4) trucks operating under a 

multiple entry transponder; and (5) loaded rail cars, to 

recover the costs of providing inspection activities for the 

international arrival of passengers, conveyances, animals, 

plants, and agricultural goods at ports of entry. 

363 497

Consolidated Omnibus 

Budget Reconciliation Act

(COBRA) Fee

19 U.S.C. § 58c, 31 U.S.C. 

§ 9701; 19 C.F.R. § 24.22

A fee imposed to recover costs incurred for processing air 

and sea passengers, commercial trucks, railroad cars, 

private aircraft and vessels, commercial vessels, dutiable 

mail packages, broker permits, barges and bulk carriers 

from Canada and Mexico, cruise vessel passengers, and 

ferry vessel passengers.

686 870

Electronic System for 

Travel Authorization Fee

8 U.S.C. § 1187(h)(3)(B); 8 

C.F.R. § 217.5(h)

A fee imposed on individuals intending to travel to the 

United States for admission as a nonimmigrant visitor 

under the Visa Waiver Program to recover the costs of 

providing and implementing the automated electronic 

travel authorization system that collects biographical and 

other information to evaluate, in advance of travel, the 

eligibility of the applicant to travel to the United States 

under the Visa Waiver Program, and whether such travel 

poses a law enforcement or security risk.

54 42

Global Entry Fee

8 U.S.C. § 1365b (k)(3), 31 

U.S.C. § 9701; 8 C.F.R. § 

103.7(b)(1)(ii)(M)

A fee imposed on applicants to Global Entry, DHS’s 

international registered traveler program that incorporates 

technologies, such as biometrics and e-passports, and 

security threat assessments to expedite screening and 

processing of international passengers.

87 60
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 53 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

Harbor Maintenance Fee

26 U.S.C. §§ 4461, 9505, 

31 U.S.C. § 9701;

19 C.F.R. § 24.24

A fee imposed on importers, domestic shippers, Foreign 

Trade Zone admission applicants, and passenger vessel 

operators using federal navigation projects, collected by 

CBP and available for expenses incurred by the Army 

Corps of Engineers in the operation and maintenance of 

certain U.S. channels and harbors and by CBP for costs 

associated with collecting the fee.

3 NAi

Immigration Enforcement 

Fines

Pub. L. No. 104-208, Div. 

C, § 382, 110 Stat. 3009 

(1996); 8 U.S.C. § 

1330(b); 8 C.F.R. § 280.53

Fines levied against foreign nationals for failure to depart 

the United States if so ordered, as well as on carriers 

transporting passengers to the United States that violate 

elements of immigration law, that fund activities to 

enhance enforcement under title 8 of the U.S. Code, 

including the identification, investigation, apprehension, 

detention, and removal of criminal aliens.

1 24

Immigration Inspection 

User Fees

8 U.S.C. § 1356(d)-(e), (h); 

8 C.F.R. pt. 286

Fees imposed on international passengers traveling to the 

United States for expenses incurred in providing inspection 

detention, and related services at air and sea ports of

entry.

610 840

Land Border Inspection 

Fees

8 U.S.C. § 1356(q), 31 

U.S.C. § 9701; 8 C.F.R. § 

103.7(b)(ii)

Fees imposed on U.S. citizens, lawful permanent residents 

of the U. S., or other eligible non-immigrants, and non-U. 

S. citizens who meet documentation and entry 

requirements to recover the costs incurred for inspection 

services provided at land border ports of entry.

32 678

Merchandise Processing 

Fee (MPF)

19 U.S.C. § 58c (a)(9)-

(10), 31 U.S.C. § 9701; 19 

C.F.R. § 24.23 (b)

A fee imposed on merchandise imported into the United 

States to offset costs (salaries and expenses) incurred for 

the processing of merchandise that is formally and 

informally entered or released into the United States.

2,256 NAj

Miscellaneous User Fees

19 U.S.C. §§ 1524, 

1641(h), 31 U.S.C. §9701; 

19 C.F.R.§111.96

15 U.S.C. § 1124, 19 

U.S.C. § 1524, 31 U.S.C. § 

9701; 19 C.F.R. pt. 133

19 U.S.C. § 1524, 31 

U.S.C. § 9701, 46 U.S.C. § 

60105; 19 C.F.R. § 4.98

Fees imposed and from which CBP is reimbursed or 

repaid for salaries and expenses associated with 

administering 78 miscellaneous fees, three of which 

comprise 76 percent of all miscellaneous fee collections:

• Custom House Broker License Fee, which is a fee on

customs brokers for services related to obtaining a 

brokers permit;

• Recording Trademark/Patent Fee, which is a fee on 

importers for trademark protection by recording 

trademarks, trade names, and copyrights registered 

by the U.S. Patent and Trademark Office with CBP; 

and

• Navigation Fee, which is a fee on vessel owners for 

providing services related to entry, clearance, and 

preparation of paperwork for vessels not required to 

pay the COBRA user fee. 

0 NAk
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 54 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

Puerto Rico Trust Fundl

48 U.S.C. §§ 740, 1469c

Duties and taxes collected by CBP on behalf of the 

government of Puerto Rico applicable to goods imported 

into the territory and from which CBP is reimbursed for 

expenses incurred for the performance of its mandatory 

customs activities and U.S. Immigration and Customs 

Enforcement (ICE) is reimbursed for investigative and 

enforcement duties performed in Puerto Rico. The balance 

of CBP’s collections, after costs, is paid into the treasury of 

Puerto Rico to be expended as required by law for the 

government and benefit thereof.

180 31

User Fee Facility Fee

19 U.S.C. §§ 58b, 

58c(b)(9)(A)(i); 19 C.F.R. § 

122.15 

A fee imposed on participating small airports and other 

facilities to fully reimburse CBP for customs inspection 

services. The fee charged under this program is set forth in 

a memorandum of agreement between CBP and the user 

fee facility, which may be adjusted annually as costs and 

requirements change.

8 10

Virgin Islands Deposit 

Fund (VIDF)

48 U.S.C. §§ 1406i, 1469c

Duties and taxes collected by CBP on behalf of the 

government of the U.S. Virgin Islands applicable to goods 

imported into the U.S. Virgin Islands and from which CBP 

is reimbursed for expenses incurred in carrying out its 

customs activities as well as in the performance of 

inspection services for air passengers departing the U.S. 

Virgin Islands for the continental United States and Puerto 

Rico.

12 9

U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT (ICE)

Breached Bond Detention 

Fund

8 U.S.C. §§ 1255(i)(3), 

1356(r); 8 C.F.R. § 103.6

The fund, which is derived from all recovered breached 

cash and surety bonds in excess of the $8 million posted in 

immigration cases, is available to ICE for expenses 

incurred in the collection of breached bonds, bond 

management, litigation activities to obtain compliance from 

surety companies found to be delinquent in their 

obligations, and for expenses associated with the 

detention of criminal and illegal aliens.

50 58m

Enforcement and Removal 

Operations Fee

31 U.S.C. § 9701;

8 C.F.R. §§ 

103.7(b)(1)(ii)(F), 241.6

A fee imposed on applicants seeking an Administrative 

Stay of Deportation to fund detention beds and related 

costs within the Enforcement and Removal Operations 

directorate’s Custody Operations Program.

2 2

Immigration Inspection 

User Fee

8 U.S.C. § 1356(h); 8 

C.F.R. pt. 286

A fee imposed for passengers arriving on commercial 

aircraft and vessels at U.S.-operated air and sea ports of 

entry that finances a portion of the costs of ICE operations 

to deter, detect, detain, adjudicate, and remove 

passengers attempting to make an unauthorized landing or 

to unlawfully bring foreign nationals into the United States 

through air and sea ports.

128 163
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 55 GAO-16-443 DHS Management

Fee or collection 

program and authority Description

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

Student and Exchange 

Visitor Program (SEVP) 

Fee

8 U.S.C. § 1372(e); 8 

C.F.R. §§ 214.2(f)(19), 

(m)(20), 214.13

A fee imposed on nonimmigrant foreign students and 

exchange visitor program participants, to reimburse for 

expenses incurred in carrying out SEVP, which is intended 

to enhance national security by collecting, maintaining, and 

providing reliable information on foreign students, 

exchange visitors, and the schools and exchange 

programs that host them to assist in keeping our nation 

safe while facilitating the participation of students and 

exchange visitors in the academic programs in the United 

States.

141 144

Source: GAO analysis of DHS data.| GAO-16-443

a

For the purposes of this report, the term “identified program costs” refers to the direct and indirect 

(i.e., full) costs associated with the collection, distribution, and provision of services as identified by 

DHS components. According to our review of component documentation, such as biennial fee 

reviews, program costs identified by components may include, but are not limited to, the direct and 

indirect costs associated with specific activities or tasks, such as administrative costs, salaries and 

expenses, and inspection and screening services. We identified limitations of to the cost data 

provided by components such as the inability to accurately estimate and report direct and indirect 

cost, and note these limitations in the body of our report.

b

Offsetting collections are amounts received by the federal government during the fiscal year 

authorized by law to be credited to appropriation or fund expenditure accounts. Offsetting collections 

are generally available for obligation to meet the account’s purpose without further legislative action.

c

For the purposes of this report, FPS’s Basic Security and Oversight Fees are considered as one 

program because these collections are used to cover FPS’s base operating expenses.

d

Since its establishment, TSA had collected, both the Passenger Civil Aviation Security Service Fee 

and Air Carrier Fee to offset the costs of aviation security (that is, both fee collections offset the same 

identified program costs). The Bipartisan Budget Act of 2013, however, repealed TSA’s authority to 

collect the Aviation Security Infrastructure Fee beginning October 1, 2014. See Pub. L. No. 113-67, § 

601(a), 127 Stat. 1165, 1187 (2013) (repealing 49 U.S.C. § 44940(a)(2)).

e

In fiscal year 2014, TSA collections from both the Passenger Civil Aviation Security Service Fee and 

the Air Carrier Fee offset the approximately $6.8 billion in identified program costs listed in this table 

under the Passenger Civil Aviation Security Service Fee.

f

In fiscal year 2013, TSA merged the finances of the Commercial Aviation and Airport and Other 

Security Threat Assessment fee programs. Because our reporting time frame is from 2010 through 

2014, as appropriate, the finances of these programs are discussed jointly for the purposes of this 

report.

g

Offsetting receipts are amounts received by the federal government during the fiscal year that offset 

against gross outlays but are not authorized to be credited to expenditure accounts. Offsetting 

receipts are deposited in receipt accounts and, unlike offsetting collections, cannot be used without 

being appropriated.

h

See 49 U.S.C. §§ 44923(h) (providing that the first $250 million collected in passenger security fees 

shall be available for deposit in the Aviation Security Capital Fund) and 44940(i) (providing that 

passenger security fee collections in the amounts specified in this subsection shall be credited as 

offsetting receipts and deposited in the general fund of the Treasury).

i

In response to our request for data on identified program costs the for the Harbor Maintenance Fee, 

CBP provided these data but did not provide supporting documentation. Due to a lack of 

documentation we were unable to verify the reliability of the data, and thus these data are excluded 

from our report. However, CBP reported in its 2014 biennial fee report that its expenditures in fiscal 

year 2013 for its Harbor Maintenance Trust Fund were about $3 million.

j

In response to our request for data on identified program costs the for the Merchandise Processing 

Fees, CBP provided these data but did not provide supporting documentation. Due to a lack of 

documentation we were unable to verify the reliability of the data, and thus these data are excluded 
Appendix I: Department of Homeland Security 

(DHS) Programs Receiving Fees and Other 

Collections in Fiscal Year 2014

Page 56 GAO-16-443 DHS Management

from our report. However, CBP reported in its 2014 biennial fee report that its program costs for the 

Merchandise Processing Fees were about $ 1 billion.

k

According to CBP officials, data on program cost were not provided because the component does 

not collect cost or volume data at a the level of detail needed to fully identify the connecting costs 

associated with specific fees within the fee program.

l

According to CBP officials, the Puerto Rico Trust Fund (PRTF) and Virgin Islands Deposit Fund 

(VIDF) accounts operate differently than DHS’s portfolio of fees and other collections. The PRTF and 

VIDF consist of customs duties collected in Puerto Rico and the U.S. Virgin Islands, respectively. 

CBP is required to act as the sole customs authority in both of the territories and is authorized to 

reimburse itself from the funds for the cost of carrying out customs activities. The balance in each 

fund is then remitted to the treasury of that territory. The trust funds are the sole source of funding for 

CBP to carry out its mandatory customs activities in Puerto Rico and the U.S. Virgin Islands.

mAccording to ICE officials, ICE expended $58M in breached bond funding in fiscal year 2014 for 

expenses incurred in the collection of breached bonds, bond management, litigation activities to 

obtain compliance from surety companies found to be delinquent in meeting their obligations, and for 

expenses associated with the detention of criminal and illegal aliens.
Appendix II: Department of Homeland Security 

Programs Receiving Fee and Other Collections 

with Identified Program Costs Exceeding 

Collections for FY 2014

Page 57 GAO-16-443 DHS Management

Table 5: Department of Homeland Security (DHS) Programs Receiving Fees and Other Collections with Identified Costs 

Exceeding Collections for Fiscal Year 2014 

DHS component Program

Collections

(dollars in millions)

Identified

program costsa

(dollars in millions)

Transportation Security 

Administration (TSA)

Passenger Civil Aviation Security 

Service Fee 

2,087 6,800

U.S. Customs and Border Protection 

(CBP)

Land Border Inspection Fees 32 678

CBP Immigration Inspection User Fees (IUF) 610b 840

U.S. Citizenship and Immigration 

Services (USCIS)

Immigration Examinations Fee Account 2,786 2,979

CBP Consolidated Omnibus Budget 

Reconciliations Act Fee (COBRA)

686 870

CBP Agricultural Quarantine Inspection User 

Fees 

363 497

U.S. Immigration and Customs 

Enforcement (ICE)

IUF 128 163

U.S. Coast Guard (Coast Guard) Merchant Mariner Licensing 

Documentation Fee

8 33

CBP Immigration Enforcement Fines 1 24

Coast Guard Commercial Vessel Inspection Fee 10 25

National Protection and Programs 

Directorate (NPPD)/ Federal 

Protective Service (FPS)

Basic Security and Oversight Fees 330 341

ICE Breached Bond Detention Fund 50 58c

TSA Hazardous Materials Endorsement Fee 19 23

ICE Student and Exchange Visitor Program 

Fee

141 144

Coast Guard Overseas Inspection and Examination 

Fee

1 4

Coast Guard Commercial Vessel Documentation Fee 2 4

CBP User Fee Facility Fee 8 10

USCIS Fraud Prevention and Detection 45 47

NPPD/FPS Building-Specific Security 503 505

TSA Commercial Aviation and Airport Fee 

and Other Security Threat Assessment 

Feesd

7e 7

ICE Enforcement and Removal Operations 

Fee

2f 2

Source: GAO analysis of DHS data.| GAO-16-443

a

For the purposes of this report, the term “identified program costs” refers to the direct and indirect 

(i.e. full) costs associated with the collection, distribution, and provision of services as identified by 

DHS components. According to our review of component documentation, such as biennial fee 

Appendix II: Department of Homeland 

Security Programs Receiving Fee and Other 

Collections with Identified Program Costs 

Exceeding Collections for FY 2014
Appendix II: Department of Homeland Security 

Programs Receiving Fee and Other Collections 

with Identified Program Costs Exceeding 

Collections for FY 2014

Page 58 GAO-16-443 DHS Management

reviews, program costs identified by components may include, but are not limited to, the direct and 

indirect costs associated with specific activities or tasks, such as administrative costs, salaries and 

expenses, and inspection and screening services. We identified limitations to the cost data provided 

by components such as the inability to accurately estimate and report direct and indirect cost, and 

note these limitations in the body of our report.

b

The administration of the Immigration Inspection User Fee program is shared among two DHS 

components, U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs 

Enforcement (ICE). In accordance with a memorandum of understanding between the two 

components, CBP receives about 83 percent of fee collections and ICE receives the remaining 17 

percent.

c

According to ICE officials, ICE expended $58M in breached bond funding in fiscal year 2014 for 

expenses incurred in the collection of breached bonds, bond management, litigation activities to 

obtain compliance from surety companies found to be delinquent in meeting their obligations, and for 

expenses associated with the detention of criminal and illegal aliens.

d

In fiscal year 2013, TSA merged the finances of the Commercial Aviation and Airport and Other 

Security Threat Assessment Fee programs. Because our reporting timeframe is from 2010 through 

2014, as appropriate, the finances of these programs are discussed jointly for the purposes of this 

report.

e

In fiscal year 2014, TSA’s Commercial Aviation and Airport Fee and Other Security Threat 

Assessment Fees’ identified program costs exceeded collections. More specifically, the fee 

collections totaled $6.63 million, with $6.98 million in identified program costs.

f

In fiscal year 2014, ICE’s Enforcement and Removal Operations Fee’s identified program costs 

exceeded collections. More specifically, the fee collections totaled $1.68 million, with $1.82 million in 

identified program costs.
Appendix III: Department of Homeland Security 

Programs Receiving Fee and Other Collections 

by Amount of Unobligated Carryover Balance 

as the of End of FY 2014

Page 59 GAO-16-443 DHS Management

Our analysis of DHS data showed that DHS components had unobligated 

balances carried over from fiscal year 2014 to the beginning of fiscal year 

2015 totaling $2.6 billion across 25 of the 38 programs receiving fees and 

other collections, as shown in table 6.

Table 6: Department of Homeland Security (DHS) Programs Receiving Fee and Other Collections by Total Amount of 

Unobligated Balances Carried over from the End of Fiscal year 2014 to the Beginning of Fiscal Year 2015

DHS component Fee or collection program

Unobligated

carryover balance

(dollars in millions)

U.S. Citizenship and Immigration Services 

(USCIS)

Immigration Examinations Fee Account 983

Federal Emergency Management Agency 

(FEMA)

National Flood Insurance Fund 845

U.S. Immigration and Customs Enforcement 

(ICE)

Student and Exchange Visitor Program (SEVP) 

Fee

145

National Protection and Programs Directorate 

(NPPD)/ Federal Protective Service (FPS)

Basic Security and Oversight Fees 72

U.S. Customs and Border Protection (CBP) Puerto Rico Trust Fund (PRTF) 71

NPPD/ FPS Reimbursable Agency-Specific Security 69

CBP Consolidated Omnibus Budget Reconciliation Act 

(COBRA) Fee

57

CBP Global Entry Application Fee 54

USCIS Fraud Prevention and Detection Fee 53

CBP Electronic System for Travel Authorization Fee 52

NPPD/ FPS Building-Specific Security 52

ICE Immigration Inspection User Feea (IUF) 28

Transportation Security Administration (TSA) Transportation Worker Identification Credential 

Fee

21

USCIS H-1B Nonimmigrant Petitioner Fee 15

CBP User Fee Facility Fee 14

ICE Breached Bond Detention Fund 14

CBP Immigration Inspection User Fees 12

CBP Land Border Inspection Fees 11

TSA Hazardous Materials Endorsement Fee 9

TSA Alien Flight School Fee 8

TSA Air Cargo Fee 5

FEMA Radiological Emergency Preparedness Program 

Fee

4

CBP Immigration Enforcement Fines 1

TSA General Aviation at Reagan National Airport Fee 1

Appendix III: Department of Homeland 

Security Programs Receiving Fee and Other 

Collections by Amount of Unobligated 

Carryover Balance as the of End of FY 2014
Appendix III: Department of Homeland Security 

Programs Receiving Fee and Other Collections 

by Amount of Unobligated Carryover Balance 

as the of End of FY 2014

Page 60 GAO-16-443 DHS Management

DHS component Fee or collection program

Unobligated

carryover balance

(dollars in millions)

TSA Commercial Aviation and Airport Fee and Other 

Security Threat Assessment Fees

1

ICE Enforcement and Removal Operations Fee < 1b

CBP Agricultural Quarantine Inspection User (AQI) 

Feesc 0

CBP Virgin Islands Deposit Fund 0

TSA TSA Pre✓TM Application Program Fee 0

CBP Merchandise Processing Fee 0

CBP Harbor Maintenance Feed 0

CBP Miscellaneous User Fees 0

TSA Aviation Security Infrastructure Fee (Air Carrier 

Fee)

0

TSA Passenger Civil Aviation Security Service Fee 0

U.S. Coast Guard (Coast Guard) Commercial Vessel Documentation Fee 0

Coast Guard Commercial Vessel Inspection Fee 0

Coast Guard Merchant Mariner Licensing Documentation Fee 0

Coast Guard Overseas Inspection and Examination Fee 0

Coast Guard Recreational Vessel Documentation Fee 0

Source: GAO analysis of Department of Homeland Security component data. | GAO-16-443

a

The administration of the Immigration Inspection User Fee (IUF) program is shared among two DHS 

components, U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs 

Enforcement (ICE). In accordance with a memorandum of understanding between the two 

components, CBP receives about 83 percent of fee collections and ICE receives the remaining 17 

percent. For the purposes of this report, we counted the IUF program as one fee program, but 

separated reporting on unobligated carryover balances for each component to determine the extent 

each component has processes in place to manage its portion of fee collections to ensure the 

efficient use of funds.

b

The unobligated carryover balance for ICE’s Enforcement and Removal Operations Fee was an 

estimated $400,000.

c

Although CBP does not maintain an unobligated carryover balance for the AQI User Fees, the U.S. 

Department of Agriculture maintains a balance within an Animal Plant Health Inspection Service 

account, according to CBP officials.

d

Although CBP does not maintain an unobligated carryover balance for the Harbor Maintenance Fee, 

the Harbor Maintenance Trust Fund, to which those fees are deposited, had a balance of over $8 

billion at the end of fiscal year 2014.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 61 GAO-16-443 DHS Management

DHS components identified 20 deficiencies across 18 programs receiving 

fees and other collections and recommended 48 actions across 23 

programs in biennial fee reviews conducted in fiscal year 2012 or 2014. 

Our analysis showed that DHS components took action to address 11 of 

these 20 deficiencies through changes in agency regulation, proposed 

changes to legislation, or other actions as shown in table 7.

Table 7: Status of Actions Taken by Department of Homeland Security (DHS) Components to Address Identified Deficiencies 

and Recommended Actions Reported in Fiscal Years 2012 and 2014 Biennial Fee Reviews 

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

NATIONAL PROTECTION AND PROGRAMS DIRECTORATE (NPPD)/Federal Protective Service (FPS)

Basic Security and 

Oversight Feesa ♒ • Adjust fee structure 

through regulation to 

establish a basic 

security fee schedule 

that bases rates on a 

set range of building 

security profiles.

✗ NPPD has not addressed the basic security fee 

equitability deficiency identified in the biennial 

fee review of FPS programs. Specifically, the 

biennial fee review concluded that the single 

$0.74 basic security rate per rentable square foot 

charged to all FPS customers does not account 

for varying costs associated with specific 

services and facilities.b

In July 2015, the Office of Management and 

Budget (OMB) authorized a $0.04 basic security 

fee increase from $0.74 to $0.78 per rentable 

square foot and a 2 percent increase in the 

oversight fee from 6 percent to 8 percent. 

However, this adjustment does not address the 

equitability deficiency identified in FPS’s biennial 

fee review. 

Building-Specific 

Security Fee

♒ • Adjust fee structure 

through regulation to 

establish standard 

rates for buildingspecific security, as 

opposed to the current 

structure of customerspecific contracts.

✗ NPPD has not addressed the building-specific 

security equitability deficiency identified in the 

biennial fee review of FPS programs. 

Specifically, the biennial fee review concluded 

that the contract-based structure for buildingspecific and reimbursable agency-specific 

security did not ensure that customers paid 

similar rates for receiving similar services. 

Reimbursable AgencySpecific Security Fee♒ • Adjust fee structure 

through regulation to 

establish standard 

rates for reimbursable 

agency-specific 

security, as opposed to 

the current structure of 

customer-specific 

contracts.

✗ NPPD has not addressed the reimbursable 

agency-specific security equitability deficiency 

identified in the biennial fee review of FPS 

programs. Specifically, the biennial fee review 

concluded that the contract-based structure for 

building-specific and reimbursable agencyspecific security did not ensure that customers 

paid similar rates for receiving similar services.

Appendix IV: Status of Actions Taken by 

DHS Components to Address Identified 

Deficiencies and Recommended Actions 

Reported in Biennial Fee Reviews
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 62 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

TRANSPORTATION SECURITY ADMINISTRATION (TSA)

Air Cargo Fee n/a • Complete 

Standardized Vetting, 

Adjudication, and 

Redress (SVAR) 

review and regulatory 

effort among TSA’s 

vetting programs to 

align fee rates for 

similar services and 

adjust rates through 

regulation.

In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to streamline the 

transportation security vetting process to a single 

application and credential card, harmonizing the 

list of disqualifying offenses, and establishing 

one fee rate across the vetting and credentialing 

programs. TSA anticipates that SVAR will 

culminate in fiscal year 2018 with finalized 

regulatory amendments.

Alien Student Flight 

School Fee

n/a • Complete the SVAR 

review and regulatory 

effort among TSA’s 

vetting programs to 

align fee rates for 

similar services and 

adjust rates through 

regulation.

In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to streamline the 

transportation security vetting process to a single 

application and credential card, harmonizing the 

list of disqualifying offenses, and establishing 

one fee rate across the vetting and credentialing 

programs. TSA anticipates that SVAR will 

culminate in fiscal year 2018 with finalized 

regulatory amendments.

Commercial Aviation 

and Airport Fee and 

Other Security Threat 

Assessment Feesc

$d • Adjust fee rates 

through regulation.

• Complete the SVAR 

review and regulatory 

effort among TSA’s 

vetting programs to 

align fee rates for 

similar services and 

adjust rates through 

regulation.e

✓ In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to address the cost recovery 

issues identified in the Commercial Aviation and 

Airport Fee and Other Security Threat 

Assessment Fees biennial fee reviews by 

streamlining the transportation security vetting 

process to a single application and credential 

card, harmonizing the list of disqualifying 

offenses, and establishing one fee rate across 

the vetting and credentialing programs. TSA 

anticipates that SVAR will culminate in fiscal 

year 2018 with finalized regulatory amendments.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 63 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

$f • Adjust fee rates 

through regulation.

✓ In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to address the cost recovery 

issues identified in the Commercial Aviation and 

Airport Fee and OSTA Fees biennial fee reviews 

by streamlining the transportation security vetting 

process to a single application and credential 

card, harmonizing the list of disqualifying 

offenses, and establishing one fee rate across 

the vetting and credentialing programs. TSA 

anticipates that SVAR will culminate in fiscal 

year 2018 with finalized regulatory amendments.

General Aviation at 

Reagan National 

Airport Fee

n/a • Complete the SVAR 

review and regulatory 

effort among TSA’s 

vetting programs to 

align fee rates for 

similar services and 

adjust rates through 

regulation.

In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to streamline the 

transportation security vetting process to a single 

application and credential card, harmonizing the 

list of disqualifying offenses, and establishing 

one fee rate across the vetting and credentialing 

programs. TSA anticipates that SVAR will 

culminate in fiscal year 2018 with finalized 

regulatory amendments.

Hazardous Materials 

Endorsement Fee

n/a • Complete the SVAR 

review and regulatory 

effort among TSA’s 

vetting programs to 

align fee rates for 

similar services and 

adjust rates through 

regulation.

In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to streamline the 

transportation security vetting process to a single 

application and credential card, harmonizing the 

list of disqualifying offenses, and establishing 

one fee rate across the vetting and credentialing 

programs. TSA anticipates that SVAR will 

culminate in fiscal year 2018 with finalized 

regulatory amendments.

Transportation Worker 

Identification 

Credential Fee

n/a • Complete the SVAR 

review and regulatory 

effort among TSA’s 

vetting programs to 

align fee rates for 

similar services and 

adjust rates through 

regulation.

In 2012, TSA commenced the SVAR effort to 

review and address variations in the application 

and implementation processes of its vetting and 

credentialing fee programs. TSA officials stated 

that SVAR intends to streamline the 

transportation security vetting process to a single 

application and credential card, harmonizing the 

list of disqualifying offenses, and establishing 

one fee rate across the vetting and credentialing 

programs. TSA anticipates that SVAR will 

culminate in fiscal year 2018 with finalized 

regulatory amendments.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 64 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

U.S. CITIZENSHIP AND IMMIGRATION SERVICES (USCIS)

Immigration 

Examinations Fee 

Account (IEFA)

¤ • Apply unobligated 

carryover balance 

amounts from IEFA or 

Fraud Prevention and 

Detection fee 

programs.

• Recognize decreased 

IEFA personnel costs 

due to vacancy and 

attrition.

• Assume realization of 

anticipated recoveries 

of prior year unpaid 

obligations.

• Assume net revenue 

from Temporary 

Protected Status 

program and include in 

overall IEFA 

collections.

✓ USCIS officials stated that the IEFA had 

sufficient unobligated carryover balance to meet 

fiscal year 2014 program costs without requiring 

the agency to take any of the other corrective 

actions recommended. In addition, USCIS 

issued a proposed rule in May 2016 to address 

the difference between costs and collections 

within IEFA, including most nonpremium fees. 

U.S. COAST GUARD (Coast Guard)

Commercial Vessel 

Documentation Fee

$ • Adjust fee rates 

through regulation.

• Conduct a study to 

determine whether 

documentation 

services provided at no 

charge should be 

considered chargeable 

services.

✓ In August 2014, the Coast Guard amended its 

vessel documentation regulations to establish a 

$26 annual fee for renewals of commercial and 

recreational endorsements that allows the vessel 

documentation program to fully recover costs.

Commercial Vessel 

Inspection Fee

$ • Adjust fee rates 

through regulation.

✗ According to a Coast Guard official, a regulatory 

proposal is underway to update or restructure 

vessel inspection fees, including overseas 

inspection and examination fees. The Coast 

Guard initially posted a notice of inquiry seeking 

public comment on factors to consider for this 

process in December 2010; however, according 

to the official, progress in proposing regulation 

has been delayed by the scope of the required 

cost study.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 65 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

Merchant Mariner 

Licensing 

Documentation Fee

$ • Restructure fee 

program through 

regulation to ensure 

each credentialing 

endorsement has an 

associated fee.

• Establish fees for 

course management 

through regulation.

• Establish fees for 

international 

endorsements through 

regulation.

• Establish fees for 

medical suitability 

evaluations through 

regulation.

• Receive authorization 

to develop nextgeneration 

credentialing 

information technology 

system.

✗ According to a Coast Guard official, the Coast 

Guard is considering a regulatory proposal to 

establish new fees as recommended in the 

biennial fee review. The official stated the Coast 

Guard will complete an ongoing effort to refine 

collection processes for the existing fees before 

proceeding with the proposal.

Overseas Inspection 

and Examination Fee

$ • Adjust fee rate through 

regulation.

✗ According to a USCG official, a regulatory 

proposal is underway to update or restructure 

vessel inspection fees, including overseas 

inspection and examination fees. USCG initially 

posted a notice of inquiry seeking public 

comment on factors to consider for this process 

in December 2010; however, according the 

official, progress in proposing regulation has 

been delayed by the scope of the required cost 

study.

Recreational Vessel 

Documentation Fee

$ • Adjust fee rates 

through regulation.

• Conduct a study to 

determine whether 

documentation 

services provided at no 

charge should be 

considered chargeable 

services.

✓ In August 2014, the Coast Guard amended its 

vessel documentation regulations to establish a 

$26 annual fee for renewals of commercial and 

recreational endorsements that allows the vessel 

documentation program to fully recover costs.

According to Coast Guard officials, fee 

collections must fully fund recreational vessel 

documentation program costs. Prior to 

establishing the renewal fee, the Coast Guard 

met this requirement by reducing program costs, 

which, according to a USCG official, lead to an 

application backlog and delayed service delivery.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 66 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

U.S. CUSTOMS AND BORDER PROTECTION (CBP)

Agricultural Quarantine 

Inspection (AQI) User 

Fee 

$ • Adjust fee rates 

through regulation.

• Adjust fee caps 

through regulation.

• Change payment 

schedule.

• Report recommended 

fee adjustments to 

Congress.

• Consolidate 

Consolidated Omnibus 

Budget Reconciliation 

Act (COBRA) Fees, 

Immigration Inspection 

User Fees (IUF), and a 

portion of AQI fees 

through a legislative 

proposal.

✓ In October 2015, the U.S. Department of 

Agriculture, which retains 39 percent of AQI 

collections, amended AQI regulations to recover 

costs of current program activity by adding new 

fee categories and adjusting current fee rates for 

certain AQI services provided in connection with 

certain commercial vessels, commercial trucks, 

commercial railroad cars, commercial aircraft, 

and international passengers arriving at ports in 

the customs territory of the United States. This 

regulatory amendment also adjusted or removed 

fee caps associated with commercial trucks, 

commercial vessels, and commercial railcars.

Consolidated Omnibus 

Budget Reconciliation 

Act (COBRA) Fees

$ • Consolidate COBRA 

Fees, Immigration 

User Fees, and a 

portion of AQI Fees 

through a legislative 

proposal.

✓ In fiscal years 2013 through 2017, CBP 

submitted legislative proposals to address cost 

recovery that would increase COBRA 

commercial air and sea vessel passenger fee 

rates by $2.00 to a rate of $7.50 per 

passenger— with proportional rate increases 

and cap adjustments across the other COBRA 

fees.

CBP reported that these proposals will allow the 

agency to recover more program costs 

associated with customs-related inspections, and 

reduce customs-related inspection wait times by 

supporting the hiring of up to 900 new CBP 

officers.

Immigration 

Enforcement Fines 

$ • Implement a system to 

regularly adjust fine 

rates through 

regulation.

✗ A CBP official stated that the agency prioritizes 

pursuing rate adjustments to increase cost 

recovery for its three largest fee programs (AQI, 

COBRA, and IUF) over taking corrective action 

to address deficiencies identified in its other fee 

programs (Immigration Enforcement Fines, Land 

Border Inspection Fees, and Merchandise 

Processing Fees).
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 67 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

Immigration Inspection 

User Fees

$ • Adjust fee rates 

through a legislative

proposal.

• Change payment 

schedule.

• Report recommended 

fee adjustments to 

congress.

• Consolidate COBRA 

Fees, Immigration 

User Fees, and a 

portion of AQI Fees 

though a legislative 

proposal.

✓ In fiscal years 2013 through 2017, CBP 

submitted legislative proposals to address cost 

recovery that would increase IUF rates by $2.00 

to a rate of $9.00 per passenger and remove the 

exemption that charges a $3.00 rate to sea 

vessel passengers traveling from a U.S. state, 

territory, or possession; Canada, Mexico, or 

adjacent island.

The proposal states that lifting these fee 

exemptions will bring fee collections more in line 

with the costs of conducting sea passenger 

inspections, and together with the proposed fee 

increase, would reduce wait times at air and sea 

ports of entry by supporting the hiring of 

approximately 1, 230 new CBP officers.

Land Border Inspection 

Fees 

$ • Consolidate and 

harmonize fees to 

improve cost data 

through regulation.

• Use improved cost 

data to adjust fee rates 

through federal 

rulemaking process.

• Subsidize border 

crossings through a 

legislative proposal, as 

charging each 

pedestrian crosser 

would be an 

impractical practice for 

CBP to administer.

• Conduct a study to 

determine appropriate 

rate structure.

✗ A CBP official stated that the agency prioritizes 

pursuing rate adjustments to increase cost 

recovery for its three largest fee programs (AQI, 

COBRA, and IUF) over taking corrective action 

to address deficiencies identified in its other fee 

programs (Immigration Enforcement Fines, Land 

Border Inspection Fees, and Merchandise 

Processing Fees).
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 68 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

Merchandise 

Processing Fee (MPF)

♒ • Align fee rates with 

inspection costs 

through a legislative 

proposal.

• Adjust fee caps to 

ensure charges align 

with inspection costs 

through a legislative 

proposal.

• Report recommended 

fee adjustments to 

Congress.

• Expand definition of 

customs revenue 

functions through a 

legislative proposal to 

reflect activity-driven 

cost recovery criteria.

✗ A CBP official stated that the agency prioritizes 

pursuing rate adjustments to increase cost 

recovery for its three largest fee programs (AQI, 

COBRA, and IUF) over taking corrective action 

to address deficiencies identified in its other fee 

programs (Immigration Enforcement Fines, Land 

Border Inspection Fees, and Merchandise 

Processing Fees).

User Fee Facility Fee ♒ Conduct a study to analyze 

user fee facility operations, 

costs, and activities in order 

to better align fee rates with 

program costs.

✓ Statute governing the User Fee Facilities 

program only permits CBP to recover costs for 

customs inspection services and not immigration 

or agricultural inspection services. Rates are set 

through a memorandum of agreement (MOA) 

signed by CBP and the concerned airport 

authority.

CBP’s biennial fee review of the User Fee 

Facilities program states that the rate charged to 

airports might not align with the grade of the 

deployed officer, as some deployed officers 

perform immigration or agricultural services, or 

both, while on duty and record hours to other 

activity codes in addition to the User Fee 

Facilities activity code.

CBP officials stated that the agency is revising 

MOAs to ensure that costs charged to airports 

equitably align with services provided. As of 

November 2015, CBP is undergoing this process 

for about 6 of the 49 facilities served under the 

User Fee Facilities program. CBP officials state 

that such adjustments may better align rates to 

the cost of services provided.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 69 GAO-16-443 DHS Management

Fee program

Deficiencies 

identified by 

components

Actions recommended by 

components

Action 

taken Actions taken to address deficiencies

↷ Amend statute to allow 

CBP to collect for all 

services provided by 

deployed officers.

✓ According to CBP officials, the growth in the 

Small Airports carryover balance can be 

attributed to a lack of systems capability to bill 

actual direct and indirect program costs. Thus, 

according to CBP officials, the agency did not 

seek reimbursement for indirect costs incurred 

from fiscal years 2004—when the current Small 

Airport rates were established— through 2012.

In 2012, CBP began piloting a new module 

within its financial system that captures actual 

salary benefit and overtime costs for each user 

fee airport facility and bills actual expenses on a 

monthly basis. CBP officials stated that the pilot 

system, once fully implemented, may reduce 

carryover over time.

CBP also officials stated that the process of 

revising MOAs to better align rates to the cost of 

services provided could stem the growth of the 

User Fee Facility carryover balance over time.

U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT (ICE)

Student and Exchange 

Visitor Program 

(SEVP)

↷ Increase fee for fiscal year 

2018 in order to meet target 

for minimum carryover 

balance

✓ In June 2015, ICE reported in its SEVP Fee 

Model Briefing that SEVP spending authority is 

less than fee collections, a status which, over 

time, has the potential to increase carryover 

balance to unjustifiable levels. According to ICE 

officials, the agency plans to address this 

deficiency in fiscal year 2017 by submitting a 

legislative proposal outside of the budget 

formulation process to increase SEVP spending 

authority. ICE officials stated that the agency has 

generally been successful in requesting these

spending authority increases, in part because 

ICE conducts in-depth fee studies that model 

optimal unobligated balance levels.

Totals 20 48

Legend:

n/a = not applicable

♒ = rate equitability issues;

$ = adjust rates or establish charges to recover greater share of costs;

¤ = apply other resources to meet difference between collections and costs;

↷ = carryover balance management;

✓ = recommended action taken by component; and

✗ = recommended action not taken by component.

Source: GAO review of biennial fee reviews provided by DHS components. | GAO-16-443

a

For the purposes of this report, FPS’s Basic Security and Oversight Fees are considered as one 

program because these collections are used to cover FPS’s base operating expenses.
Appendix IV: Status of Actions Taken by DHS 

Components to Address Identified Deficiencies 

and Recommended Actions Reported in 

Biennial Fee Reviews

Page 70 GAO-16-443 DHS Management

b

In the President’s fiscal year 2017 budget request DHS recommended retaining the current fee 

structure with a fee increase, and in accordance with OMB Circular A-25, FPS will conduct a review 

of its fees and fee structure every two years.

c

Although TSA merged the finances for the Commercial Aviation and Airport and Other Security 

Threat Assessment Fee programs in fiscal year 2013, these fees were separate programs when TSA 

conducted its biennial fee reviews. This analysis considers these as one fee program with separate 

deficiencies in its Commercial Aviation and Airport Fee and OSTA portions to retain consistency 

across our report, where the finances of these programs are discussed jointly.

d

Deficiency identified by TSA specific to the Commercial Aviation and Airport Fee program.

e

TSA recommended this action in its biennial fee reviews for both Commercial Aviation and Airport 

Fee program and Other Security Threat Assessment Fees. This analysis considers it one shared 

recommendation because TSA merged these fees near the outset of its SVAR effort.

f

Deficiency identified by TSA specific to the Other Security Threat Assessment fees program.
Appendix V: Comments from the Department 

of Homeland Security

Page 71 GAO-16-443 DHS Management

Appendix V: Comments from the Department 

of Homeland Security
Appendix V: Comments from the Department 

of Homeland Security

Page 72 GAO-16-443 DHS Management
Appendix V: Comments from the Department 

of Homeland Security

Page 73 GAO-16-443 DHS Management
Appendix V: Comments from the Department 

of Homeland Security

Page 74 GAO-16-443 DHS Management
Appendix VI: GAO Contact and Staff 

Acknowledgments

Page 75 GAO-16-443 DHS Management

Andrew Von Ah, (213) 830-1011 or vonaha@gao.gov

In addition to the contact named above, Lacinda “Cindy” Ayers, Assistant 

Director, and Michelle Woods, Analyst-in-Charge, managed this review. 

Wendy Dye and Jesse Tow made significant contributions to the work. 

Dominick Dale, Roshni Dave, Lorraine Ettaro, Eric Hauswirth, James 

Kernen, Thomas F. Lombardi, Susan Murphy, Laurel Plume, Amanda 

Postiglione, and Amelia Shachoy also contributed to this report.

Appendix VI: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments
Related GAO Products

Page 76 GAO-16-443 DHS Management

Department of Homeland Security: Progress Made, but Work Remains in 

Strengthening Acquisition and Other Management Functions, 

GAO-16-507T. Washington, D.C.: March. 16, 2016.

Federal User Fees: Key Considerations for Designing and Implementing 

Regulatory Fees, GAO-15-718. Washington, D.C.: September 16, 2015.

High-Risk Series: An Update, GAO-15-290. Washington, D.C.: February 

11, 2015.

Budget Issues: Key Questions to Consider When Evaluating Balances in 

Federal Accounts, GAO-13-798. Washington, D.C.: September 30, 2013.

Federal User Fees: Fee Design Options and Implications for Managing 

Revenue Instability. GAO-13-820. Washington, D.C.: September 30, 

2013.

Agricultural Quarantine Inspection Fees: Major Changes Needed to Align 

Fee Revenues with Program Costs. GAO-13-268. Washington, D.C.: 

March 1, 2013.

Budget Issues: Better Fee Design Would Improve Federal Protective 

Service’s and Federal Agencies’ Planning and Budgeting for Security. 

GAO-11-492. Washington, D.C.: May 20, 2011.

Federal User Fees: Additional Analyses and Timely Reviews Could 

Improve Immigration and Naturalization User Fee Design and USCIS 

Operations. GAO-09-180. Washington, D.C.: January 23, 2009.

Federal User Fees: A Design Guide. GAO-08-386SP. Washington, D.C.: 

May 29, 2008.

Federal User Fees: Substantive Reviews Needed to Align Port-Related 

Fees With the Programs They Support. GAO-08-321. Washington, D.C.: 

February 22, 2008.

Federal User Fees: Key Aspects of International Air Passenger Inspection 

Fees Should Be Addressed Regardless of Whether Fees Are 

Consolidated. GAO-07-1131. Washington, D.C.: September 24, 2007.

Results-Oriented Government: Practices That Can Help Enhance and 

Sustain Collaboration among Federal Agencies, GAO-06-15. Washington, 

D.C.: October 21, 2005.

Related GAO Products

(441272)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537.

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube.

Subscribe to our RSS Feeds or E-mail Updates. 

Listen to our Podcasts and read The Watchblog.

Visit GAO on the web at www.gao.gov.

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.