DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

Vehicle Disposal and Sales Program 

Within U.S. Border Patrol’s 

San Diego Sector 

Office of Audits 

OIG-05-47 September 2005
Office of Inspector General 

U.S. Department of Homeland 

Security 

Washington, DC 20528 

Preface 

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

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

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

our office as part of our DHS oversight responsibilities to promote economy, effectiveness, and 

efficiency within the Department. 

At the request of Bob Filner, the U.S. House of Representatives member for the 51st District of 

California, this report assesses the fleet vehicle disposal and sales activities of the U.S. Border 

Patrol’s San Diego Sector. It is based on interviews with employees and officials from the U.S. 

Border Patrol’s San Diego Sector, U.S. Customs and Border Protection, and General Service 

Administration, as well as direct observations, and a review of applicable documents. 

The recommendations herein have been developed to the best knowledge available to our office, 

and have been discussed in draft with those responsible for implementation. It is our hope that 

this report will result in more effective, efficient, and economical operations. We express our 

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

Richard L. Skinner 

Inspector General 
Table of Contents/Abbreviations 

 Executive Summary.........................................................................................................................1 

Background......................................................................................................................................4 

Results of Audit ...............................................................................................................................4 

 The Sector’s Management of an Aging Vehicle Fleet............................................................... 4 

Recommendations..............................................................................................................11 

 Management Comments and OIG Analysis ...................................................................... 12 

Vehicle Sales and Transfers.....................................................................................................12 

Recommendations..............................................................................................................17 

 Management Comments and OIG Analysis ...................................................................... 18 

Appendices 

Appendix A: Purpose, Scope, and Methodology......................................................................19 

Appendix B: Management’s Response to the Draft Report...................................................... 21 

Appendix C: Major Contributors to this Report .......................................................................30 

Appendix D: Report Distribution.............................................................................................. 31 

Abbreviations 

ATV All Terrain Vehicle 

CBP U.S. Customs and Border Protection 

BIA Bureau of Indian Affairs 

CFR Code of Federal Regulations 

DHS Department of Homeland Security 

DRMO Defense Reutilization and Marketing Office 

FPI Federal Prison Industries 

FSC Federal Supply Classification 

GSA General Services Administration 

INS Immigration and Naturalization Service 

OIG Office of Inspector General 

SAP System Application Products 

Sector U. S. Border Patrol – San Diego Sector 

VMIS Vehicle Management Information System
Audit OIG Report 

Department of Homeland Security 

Office of Inspector General 

Executive Summary 

At the request of Bob Filner, the U.S. House of Representatives member for 

the 51st District of California, we audited the fleet vehicle disposal and sales 

activities of the U.S. Border Patrol’s San Diego Sector (Sector). The 

Congressman’s request was primarily spurred by a constituent’s assertions 

that (1) vehicles were prematurely disposed of after major restoration work; 

(2) vehicles were reported as inoperable and downgraded to scrap although 

the majority were actually in good condition; (3) useable vehicles reported as 

inoperable or in poor condition were sold to scrap dealers with major 

components intact; (4) vehicles downgraded to salvage were sold to select 

individuals and companies at extremely low prices without following 

traditional sales procedures; and (5) vehicles and heavy-duty equipment were 

improperly transferred to an Indian Tribe. (See Appendix A for additional 

information on the purpose, scope and methodology of the audit.) 

This report describes the results of our audit of the Sector’s overall 

management of fleet vehicles and focuses primarily on management 

procedures, practices, and processes. Most of these procedures, practices, and 

processes were carried over from the Sector’s legacy agency, the Immigration 

and Naturalization Service (INS), prior to the establishment of U.S. Customs 

and Border Protection (CBP) on March 1, 2003. 

We confirmed the validity of the five assertions by Congressman Filner’s 

constituent and confirmed that the Sector did not manage its aging fleet of 

vehicles in an effective manner or ensure that government funds were 

expended in the most economical way, as follows: 

1. The Sector performed major restoration and expensive work on fleet 

vehicles that were subsequently sold while retaining lesser-maintained 

vehicles. INS approved and the Sector expended over $750,000 to restore 

129 vehicles; however, the Sector subsequently sold 23 of the 90 vehicles 

sampled. 

2. The Sector downgraded operable vehicles to scrap and in some instances, 

disposed of these vehicles with major components intact although major 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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repairs to the components had been accomplished. In other instances, the 

Sector reportedly cannibalized scrapped vehicles for parts but did not 

3. document the disposition of the cannibalized parts and could not locate 

the parts or otherwise account for them. 

4. The Sector downgraded operable vehicles to scrap and auctioned them at 

local small lot sales even though an interagency agreement between INS 

and the Federal Prison Industries (FPI) dictated that repairable or operable 

Border Patrol vehicles be transported to a FPI facility. 

5. The Sector did not follow procedures for local small lot sales of vehicles, 

but sold the majority of vehicles at auction to one wrecking company. 

6. The Sector transferred excess equipment through the Bureau of Indian 

Affairs (BIA) to an Indian Tribe Fire Protection District to circumvent the 

costs it would have incurred by returning the property to the Defense 

Reutilization and Marketing Office (DRMO), the entity from which the 

property was originally acquired. Further, the Sector did not comply with 

applicable Surplus Property Donation Program guidelines and General 

Services Administration (GSA) regulations. 

While disposal and sales practices needed improvement, it was noteworthy 

that in response to a severe shortage of serviceable vehicles to meet the 

Border Patrol’s operational readiness standards, the Sector recommended a 

stopgap solution in 2001 for restoring its aging Ford Bronco vehicle fleet. 

Although we questioned the disposal of some of the restored Ford Broncos, as 

recently as March 17, 2005, the Sector reported to CBP that 69 of the 129 

vehicles remained operational in the Sector’s fleet. 

CBP is currently undertaking an effort to standardize vehicle fleet 

management CBP-wide; however, additional improvements are needed and 

we made five recommendations to help strengthen controls over the Sector’s 

vehicle fleet. These recommendations may be useful to CBP as it evaluates 

how effectively other Border Patrol Sectors are managing their fleet vehicles 

and as it implements its CBP-wide fleet vehicle management system. 

In response to our draft report, CBP agreed with our overall observation that 

under INS, the Sector did not manage its aging fleet in an effective manner or 

ensure that government funds were expended in the most economical way. 

CBP indicated that it has improved controls over vehicle disposal and sales 

procedures by creating a CBP-wide Fleet Management Program. CBP 

concurred with our recommendations and indicated that its CBP Motor 

Vehicle Management Handbook, CIS HB 5200-14, scheduled for release and 

distribution during the first quarter of fiscal year 2006, will incorporate our 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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recommendations. In addition to the Handbook, CBP Fleet Management 

Branch has worked directly with the Sector to ensure compliance with CBP 

procedures. The actions taken or planned by CBP, together with increased 

Fleet Management Branch oversight, should result in improvements to Sector 

and CBP-wide management of motor vehicle fleets. 

The complete text of CBP’s response to our draft report is included herein as 

Appendix B. We considered the technical comments provided with CBP’s 

response and made changes to the final report when deemed appropriate. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector 

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Background 

In fiscal year 2000, the Sector operated a fleet of approximately 1,800 

vehicles to fulfill its mission of facilitating the flow of legal immigration and 

goods, while preventing the illegal trafficking of people and contraband over 

66 linear miles of the United States’ southwestern border. At that time, over 

90 percent of the vehicles were out of warranty, the operational readiness of 

fleet vehicles had declined to 77.1 percent, Sector stations were falling short 

of the recommended two vehicles to every three agents, and repair costs were 

increasing. 

Budget constraints led to a drastic reduction in the Sector’s allocation of 

replacement vehicles for fiscal year 2000. To increase its operational 

readiness, the Sector proposed a stopgap solution in an October 25, 2000, 

memorandum to INS. The proposal, called the Bronco Body-off/Frame-up 

Restoration Program (Restoration Program), recommended restoration and 

rehabilitation of 100 of the 482 Ford Broncos in the Sector’s aging fleet. The 

proposal requested $1.0 million in INS funding based on anticipated costs of 

$10,000 per vehicle for frames, transmissions, engines, and suspension 

packages. Sector management affirmed that one benefit of the Restoration 

Program was the recapture of costs since the ultimate sale of restored vehicles 

would demand a higher sales price. INS approved $750,000 for the 

Restoration Program. In subsequent years, the Sector returned to a more 

normalized vehicle replacement program and increased its fleet to 

approximately 2,100 vehicles by 2003. 

INS and GSA fleet management guidelines and regulations controlled the 

Sector’s vehicle disposal and sales activities, an interagency agreement 

between the INS and FPI covered the handling of excess fleet vehicles, and 

Sector policies and practices governed the management of its fleet. 

Results of Audit 

The Sector’s Management of an Aging Vehicle Fleet 

The Sector did not expend restoration/repair funds in the most economical 

way or effectively manage aging fleet vehicles. Specifically, the Sector: 

(1) performed major vehicle restorations and expensive repairs but 

subsequently disposed of those vehicles in lieu of lesser-maintained ones, 

(2) downgraded other operable vehicles to scrap, and in some instances, 

disposed of them with major components intact although major repairs to the 

components had been accomplished, and (3) cannibalized scrapped vehicles 

for parts but lacked documentation on the disposition of the parts. These 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector 

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deficiencies occurred because INS did not provide sufficient control or 

oversight of the Sector’s maintenance and disposal processes, decisions, and 

actions, and the Sector focused its efforts on keeping aging vehicles 

operational in order to meet mission requirements without necessarily 

examining the best ways to satisfy their operational readiness goals. 

Inadequate INS oversight and Sector management of repair and disposal 

processes likely resulted in a decreased operational readiness posture and 

resulted in an ineffective and inefficient use of vehicle repair/restoration 

funds. 

Vehicle Restoration Activities. In response to a severe shortage of 

serviceable vehicles to meet the Border Patrol’s operational readiness 

standards, the Sector recommended a stopgap solution in 2001 for restoring its 

aging vehicle fleet. The Sector received $750,000 from INS for the 

Restoration Program and performed major restoration work on its best 

1994-1996 Ford Broncos to extend the service lives of its fleet. However, in 

2003, the Sector transferred many of these vehicles to FPI in Bastrop, Texas 

to be sold at auction even though it kept other lesser-maintained vehicles. 

Although we questioned the disposal of some of the Ford Broncos, as recently 

as March 17, 2005, the Sector reported to CBP that 69 of the 129 restored 

vehicles remained operational in the Sector’s fleet. 

• We reviewed the costs involved in restoring 90 of 129 Ford Broncos, their 

use, and ultimate disposition. Based on the extensive nature of the work 

performed, the number of months of usage, and the mileage put on the 

vehicles after having been restored, the Sector prematurely disposed of 

23 vehicles that had incurred total repair costs of $224,885. Each vehicle 

had major restoration work accomplished on engines, transmissions, 

suspension systems, exhaust systems, and brake systems at an average cost 

of $9,778. On average, the Sector used each vehicle for 19 months and 

drove them about 14,000 miles before forwarding the vehicles to FPI for 

sale in 2003. 

We also noted that transfers to FPI in 2003 did not give consideration to 

the overall operational condition of the vehicles but were based primarily 

on an INS-generated “Hit List”. The list assisted the Sector in selecting 

vehicles to be transferred but was prepared by INS based on vehicle model 

year and odometer readings only. Of the 23 vehicles transferred, 

19 appeared on the “Hit List” while the Sector independently forwarded 

the 4 remaining vehicles to FPI. The Sector had no explanation as to why 

the four vehicles not on the “Hit List” were transferred. Further, the Sector 

did not request that lesser maintained and lesser operationally ready 

vehicles be substituted for vehicles on the “Hit List”. Additionally, the 

Sector had no documentation to indicate that INS or FPI had been 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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informed of the major restoration work accomplished on those vehicles. 

Thus, the potential existed for the vehicles to have been under-valued 

when sold by FPI. 

• We judgmentally sampled and reviewed documentation for an additional 

92 vehicles not included in the Restoration Program but subsequently 

transferred to FPI. The review entailed examination of the costs and 

timing of major vehicle repairs and vehicle usage after the repairs. The 

Sector performed major repair work on eight vehicles at an average cost of 

$1,844 within 14 months of the transfer and usage averaged about 13,000 

miles each after the repairs were completed. Two of the eight vehicles 

were repaired 2 months before transfer at a combined cost of $2,867. The 

Sector did not consider the operational condition of the vehicles before it 

took disposal action. 

Disposing of restored vehicles while retaining lesser-maintained vehicles at 

the same time was an indication of the need for better Sector management of 

the maintenance and disposal processes and may have affected the operational 

readiness of the Sector. The Sector should consider maintenance and repair 

history, including major component repairs or replacements, before taking 

disposal action. In addition, benefit/cost analysis may be a useful tool in 

determining whether vehicles should be disposed of or repaired. If disposal 

action is warranted, the Sector should ensure that it does not expend 

restoration/repair funds on those vehicles before disposal. 

Scrapped Vehicles. The Sector downgraded operable vehicles to scrap and 

disposed of them locally, contrary to an April 1999 interagency agreement 

between INS and FPI. This action likely resulted in less sales revenue than 

otherwise would have been generated by FPI. In addition, these vehicles did 

not meet the Code of Federal Regulation (CFR) definition of scrap and should 

have been disposed of using GSA’s disposal guidelines. 

In an August 18, 1992, memorandum from GSA’s Western Regional 

Administrator, the Sector received specific guidelines for vehicle disposal 

activities. According to the memorandum, once GSA declared a vehicle to be 

of no commercial value, based on input from the Sector, the vehicle would be 

released to the local office for disposition. If justified, a small lot sale could be 

held, or the vehicles could be sold as scrap if no buyers expressed interest in a 

small lot sale. According to 41 CFR § 102-36.40, scrap is defined as property 

having no value except for its basic material content. The same section of the 

regulation defines salvage as property having a value greater than its basic 

material content but for which repair or rehabilitation is clearly impractical or 

uneconomical. The Sector reported some vehicles as scrap to INS 

Headquarters that more accurately should have been characterized as salvage. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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According to a February 6, 1995, Sector memorandum to staff, which 

addressed the monetary distinction between a salvage or scrap vehicle, 

salvage was not the same as scrap inasmuch as an operable vehicle (salvage) 

would command a higher price than one listed as inoperable (scrap). Further, 

according to the memorandum, salvaged vehicles could be operated in public 

roadways with the word Salvage typed on the front of the vehicle title. 

INS directed the Sector to transport operable vehicles to FPI for auction once 

the April 1999 interagency agreement was instituted. Additional 

correspondence between the Sector and INS Headquarters reaffirmed the 

criteria that the vehicles be operable (salvage) so as to be driven on and off of 

the transport truck and that the Sector not transport scrap vehicles or those 

lacking sufficient resale value to cover the transport cost. 

During fiscal year 2002, the Sector downgraded 131 operable vehicles to 

scrap and notified GSA that those vehicles would be disposed of through 

scrap auctions. While the Sector’s actions may have been the quickest and 

easiest to dispose of excess vehicles, the vehicles met the definition of salvage 

instead of scrap and should have been transported to FPI: 

• Eleven vehicles had major repairs or maintenance services performed 

within 18 months of the auctions. The number and cost composition were 

as follows: five vehicles had repair costs ranging from $1,000 to $2,000; 

five vehicles had repair costs ranging from $2,001 to $3,000; and one 

vehicle had repair costs of over $3,500. Each of the 11 vehicles had 

limited usage subsequent to the repairs. For example, during a November 

2002 auction, the Sector sold a 1995 vehicle for $758. The two latest 

available Government Vehicle Work Orders, dated April 5, 2001 and May 

9, 2001, showed the vehicle’s odometer readings as 52,433 and 53,701, 

respectively, and indicated service and repairs including a standard safety 

check, new front tires, oil change with new filter, new front brakes with 

adjustment to rear brakes plus replacement of anti-lock braking system 

sensors, power steering pump, degreasing of engine, and repair to hood 

hinge. A November 26, 2002 Certificate to Obtain Title noted the 

odometer reading to be 54,188 miles.1

 As indicated, the Sector drove this 

vehicle less than 1,755 miles from April 2001 to November 2002 when 

title transferred to a private party for vehicle use on public roadways. 

1

 An INS “Report of Personal Property for Sale” dated September 10, 2001 noted the odometer reading as 85,328 miles. 

Based on Government Vehicle Work Orders and the Certificate to Obtain Title, the OIG concluded that the mileage 

reported on the Report of Personal Property for Sale was in error. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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• Seven high mileage vehicles were reported within the Sector to be in 

overall fair condition while GSA was informed that the same vehicles 

were scrap. Four of these vehicles had major repairs performed within 

18 months of being auctioned and were also included in the bullet above. 

• Seven operating sedan-type vehicles were auctioned at nominal amounts 

because new replacement vehicles were received. No documentation in the 

Sector’s files evidenced high mileage or maintenance concerns for these 

vehicles. 

At a minimum, once the Sector determined that vehicles were no longer 

required to meet its operational needs, it should have shipped the vehicles to 

FPI based on the INS/FPI agreement or sold them at small lot sales following 

GSA guidelines. 

Cannibalized Vehicles. While the Sector’s staff said that they scrapped both 

operable and inoperable vehicles with major repaired components intact, 

primarily Ford Broncos, they also reportedly cannibalized (removed) useable 

parts and components from some vehicles prior to disposing of the vehicles 

for their metal content (scrap) value. 

• Sector staff said they evaluated every Ford Bronco in its fleet for structural 

and body integrity and chose 129 vehicles for the Restoration Program. 

Sector staff also said that vehicles not in the program were cannibalized to 

provide parts for Restoration Program vehicles, but little documentation 

could be found to indicate that major parts used in the Restoration 

Program came from other vehicles. Further, while we found indications 

that major parts and components had been cannibalized, the Sector 

generally could not account for these parts and components on 

Government Vehicle Work Orders. Review of the Sector’s records and the 

records of the two wrecking companies to whom scrapped vehicles were 

sold gave an indication that parts were cannibalized as follows: 

o One company paid $10 per ton for each scrapped vehicle. The curb 

weight of a standard equipped Ford Bronco was generally 4,350 

pounds, excluding weight attributable to fluids, wheels, and optional 

equipment, such as the upgraded suspension systems installed by the 

Border Patrol. A summary of disposal records from the wrecking 

company indicated that 32 scrapped Ford Broncos weighed under the 

expected norm of 4,350 pounds, as follows: 25 vehicles weighed less 

than 3,800 pounds; four vehicles weighed between 3,800 pounds and 

4,000 pounds; and nine vehicles weighed between 4,001 pounds and 

4,125 pounds. We concluded that these vehicles weighed substantially 

less than a standard equipped Ford Bronco because components were 

removed. Further, the salvage yard described some vehicles as 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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“shells.” Despite the evidence indicating that major components had 

been removed from scrapped vehicles, Sector records documented 

only five vehicles on which parts or components were reinstalled. 

o Another company paid a set amount of $20 per vehicle regardless of 

the scrapped vehicle’s weight or completeness. The Sector scrapped 50 

inoperable vehicles with major repaired or restored components 

installed with less than 10,000 miles of usage when disposed of as 

scrap. The Sector’s records indicated that only two components had 

been removed and reinstalled into another fleet vehicle. 

We determined that the Sector installed only new/rebuilt major 

components, i.e., engines, transmissions, rear ends, etc., into the 129 

vehicles included in the Restoration Program. We also reviewed the 

maintenance history records of 250 Ford Broncos that were sold to 

wrecking companies as scrap. According to the maintenance history 

records and the aforementioned underweight of vehicles scrapped, useable 

components existed and were removed from vehicles. However, while the 

Sector reported that cannibalized parts were often used, it did not always 

document which fleet vehicles were cannibalized and which fleet vehicles 

were repaired using the cannibalized parts and components. At least 

80 Ford Broncos had major repaired components that could have been 

removed or were removed based on scrapped vehicle weights and repair 

histories. However, little documentation existed to show the disposition or 

location of these parts. 

• The Sector also scrapped 66 non-operable all terrain vehicles (ATVs) 

during the period covered by our audit and reportedly cannibalized useable 

parts from these vehicles before disposing of the vehicles. The 

maintenance histories of the ATV inventory showed instances where 

major components, i.e., new/rebuilt engines, starters, etc., were installed in 

fleet ATVs for authorized repairs within a relatively short time period 

prior to being scrapped. However, as with other vehicles in the Sector’s 

fleet, the Sector did not always document which ATVs were cannibalized 

for parts and components and which ATVs were repaired. 

Overall, the Sector lacked operational controls or procedures that required 

documenting on Government Vehicle Work Orders the removal of parts and 

components from one vehicle to be reinstalled on another. Specifically, the 

Sector could not account for major operable/recently repaired components, 

e.g., engines and transmissions that were subsequently removed from vehicles 

or ATVs before scrapping those vehicles. Furthermore, the Sector had no 

inventory of parts that had been cannibalized and Sector officials said that it 

had no formal policy on cannibalizing components. This may have 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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contributed to the lack of documentation recording such actions but does not 

explain the lack of any working, on-hand inventory of cannibalized parts. 

While INS Headquarters endorsed and funded the Restoration Program, and it 

believed that useable parts would be removed from one vehicle and reinstalled 

on another, INS had no policy on the general practice of cannibalization. In 

addition, Sector records gave little indication that cannibalization occurred. 

Further, due to the lack of documentation supporting the removal of 

components from scrap vehicles being reinstalled into other fleet vehicles, and 

a lack of working on-hand inventory of cannibalized parts and components, 

parts and components were susceptible to misuse or misappropriation. 

Lastly, the Sector did not properly account for vehicle maintenance services 

and repairs. Specifically, the individual history files set up for each vehicle did 

not include hundreds of Government Vehicle Work Orders, some up to two 

years old. The Sector’s failure to maintain these records inhibited its ability to 

accurately determine the service level of the fleet and to make sound repair or 

replacement decisions. 

Conclusion. According to property management guidelines provided in 

41 CFR § 102-36.45(b)(1), an agency should promote the use of available 

excess property to the maximum extent practicable and continuously monitor 

its property to ensure maximum use. Further, agencies are required to develop 

and maintain a system to prevent and detect non-use, improper use, and 

unauthorized disposal or destruction of property. The issues discussed in this 

finding highlight the need for the Sector to better manage its vehicle fleet. 

The Sector needs to maintain current status information reflecting each of the 

vehicle’s projected operational use based on periodic maintenance services or 

major component replacements. In addition, the Sector should specifically 

identify vehicles selected for disposal and require a designated authorization 

level before any major repairs are performed. Further, if CBP authorizes parts 

to be cannibalized, the Sector needs guidelines and controls over cannibalized 

parts and components to ensure that they are adequately documented in 

Government Vehicle Work Orders and are properly accounted for and 

inventoried. Lastly, all Government Vehicle Work Orders should be included 

in vehicle history files so that the Sector can make informed repair decisions. 

Subsequent to our fieldwork, CBP provided additional documentation and 

information on actions already taken or in process to improve the Sector’s 

management of its vehicle fleet. 

• CBP officials said that its automated system, System Application Products 

(SAP), has greatly improved the Sector’s management over fleet vehicles. 

CBP has a contractor-developed Data Matrix Program to determine if 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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repairs are cost effective or if a reclassification of salvage or scrap is 

warranted. However, based on the documentation provided by CBP, the 

SAP does not specifically determine service life extensions resulting from 

major repairs or replacement of major components such as engines and 

transmissions. 

• CBP officials said that it did not convert all of the Sector’s individual fleet 

records due to systems configuration incompatibility between SAP and 

legacy INS system(s) and incomplete or inaccurate vehicle data. CBP 

indicated that as part of the contractor-developed Data Matrix Program, it 

now monitors vehicle life cycles from procurement to disposal for all 

vehicles acquired after April 2004 and requires that all vehicle repairs over 

$2,500 be approved by CBP Headquarters. 

• Sections of the 1996 U. S. Customs Service’s Vehicle Management 

Handbook currently serves as one of the formal policies for all CBP 

entities. Additionally, CBP uses legacy U. S. Custom Service’s Vehicle 

Management Information System (VMIS). Like SAP, VMIS collects 

specific repair and maintenance data per vehicle. Data entries posted into 

SAP and VMIS for fleet vehicles acquired post-April 2004 allow CBP to 

determine the current vehicle status and projected operational use based on 

periodic maintenance services or major component replacements. Further, 

as of April 28, 2005, CBP’s new Fleet Management Handbook reflecting 

current policies and practices such as the SAP system was still undergoing 

final review and had not been issued to field offices. 

The conclusions in this finding and the following recommendations consider 

the additional information provided by CBP subsequent to our fieldwork. 

Recommendations 

We recommend that the Commissioner, Bureau of Customs and Border 

Protection: 

Recommendation #1: Require the Sector to evaluate vehicle age, mileage, 

maintenance and repair history, general physical appearance, and the 

condition of the chassis and suspension for fleet vehicles not tracked in SAP 

or VMIS, before requesting CBP approval to perform repairs in excess of 

$2,500 or to reclassify fleet vehicles as salvage or scrap. 

Recommendation #2: Develop a policy on cannibalizing scrap vehicles for 

useable parts and components, and if cannibalization is authorized by CBP, 

establish specific guidelines and controls to ensure that such parts and 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector 

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components are adequately documented in Government Vehicle Work Orders 

and are properly accounted for and inventoried. 

Recommendation #3: Require the Sector to include all Government Vehicle 

Work Orders in applicable history files when maintenance services and repairs 

are performed. 

Management Comments and OIG Analysis 

CBP concurred with Recommendations 1 through 3 stating that its CBP Motor 

Vehicle Management Handbook, CIS HB 5200-14, scheduled for release and 

distribution during the first quarter of fiscal year 2006, will incorporate the 

OIG’s recommendations to (1) evaluate vehicle repair and replacement 

criteria, (2) provide specific criteria for cannibalizing CBP vehicles and 

ensuring that parts are properly accounted for and inventoried, and (3) include 

all Government Vehicle Work Orders in applicable history files when 

maintenance services and repairs are performed. CBP’s Fleet Management 

Branch staff has worked directly with the Sector Vehicle Officer to ensure 

compliance with CBP procedures and CBP plans to issue the Handbook by 

December 31, 2005. 

The actions taken and planned by CBP meet the intent of the three 

recommendations. With the issuance of the CBP Motor Vehicle Management 

Handbook and continuing CBP oversight, CBP can better assess if the Sector 

effectively manages its fleet of vehicles and expends government funds in the 

most economical manner. 

Vehicle Sales and Transfers 

To expedite the disposal process as replacement vehicles arrived, the Sector 

improperly downgraded vehicles to scrap and auctioned them at local small 

lot sales, obtaining GSA authorization to conduct small lot sales based on 

representations that the operable vehicles were scrap. This was contrary to 

GSA regulations. Also a formal agreement between INS and FPI required the 

transfer of excess vehicles to FPI as replacement vehicles arrived in the 

Sector. In addition, the Sector transferred excess equipment through BIA to an 

Indian Tribe Fire Protection District without the statutory authority to do so 

thereby circumventing the applicable Surplus Property Donation Program 

guidelines. Downgrading vehicles to scrap and auctioning them at local small 

lot sales resulted in a substantial loss of sales revenue and gave the appearance 

of wrongdoing since most of the auctioned vehicles were sold to a single 

wrecking company. By transferring equipment to an Indian Tribe Fire 

Protection District, other federal and state agencies were not afforded the 

opportunity to claim the excess property. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

Page 12 
Small Lot Sales. The Sector obtained GSA authorization to conduct small lot 

sales based on representations that the vehicles were scrap, i.e., no 

commercial value, and that many of the vehicles were missing parts. In 

addition, the Sector informed GSA that sales conducted in compliance with 

GSA guidelines would be uneconomical or impractical and that the storage of 

the vehicles was creating a severe parking space shortage for the Sector’s 

operational fleet. In a November 17, 2003 memorandum to the OIG, a Sector 

fleet management official stated that while vehicles may have been operable, 

some had structural frame cracks and were made inoperable by intentionally 

cutting out sections of the frame in obvious locations that could not be 

repaired. The memorandum stated that this action was taken to ensure that the 

vehicles were not resold to third parties. 

The Sector downgraded 131 vehicles to scrap and conducted five small lot 

sales in 2002. The Sector marketed the sales by facsimile transmittal to five or 

six companies or individuals 2 to 3 days in advance of the auction. One 

wrecking company purchased 92 of the 131 vehicles and another wrecking 

company purchased 32. Further, the company that purchased the majority of 

the vehicles was licensed by the State of California as a dealer of used 

automobiles rather than an auto dismantler. The Certificate to Obtain Title 

prepared by the Sector for the auctioned vehicles bore the stamp Salvage Only 

allowing the vehicles to be registered and operated on public roadways. 

Despite the Sector’s representations that all vehicles determined to be scrap 

were inoperable or made inoperable prior to the auction, the used automobile 

dealer resold the vehicles in the retail market at a substantial profit. 

We reviewed 43 of the 92 vehicles purchased by one company in 2002, and 

determined that the 43 vehicles were resold to the public for $70,518 more 

than the company paid the Sector. Two examples of vehicles purchased at 

auction and resold to the public are shown below: 

• Six 1997 Chevrolet Tahoes were sold at a December 15, 2002, auction for 

$1,510 each. Five of the vehicles were resold for $4,000 each and one for 

$3,632. 

• Two 1995 and two 1996 Ford Broncos were sold at the same auction for 

$210 each and subsequently resold to the public--three for $2,500 each 

and one for $2,455. 

We did not determine whether the company incurred any repair or restoration 

costs prior to reselling the vehicles that it had purchased at auction. 

The Sector circumvented formal disposal processes in at least two ways. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector 

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• First, the Sector failed to follow the small lot sales processes outlined in 

January 1988 by the Department of Justice.2 Specifically, notification of 

the sale was to be provided to prospective bidders and posted in prominent 

locations at least 14 days prior to the sale and inspection of the vehicles 

was to be permitted for at least 2 days. In addition, the Sector was required 

to set a minimum price as a standard for evaluating the bids received. 

• Second, operable vehicles should have been transferred to FPI as agreed to 

in April 1999 thus ensuring that (1) top dollar was received for INS 

vehicles sold at auction and (2) sale proceeds were properly accounted for 

and deposited in an INS account. However, only one vehicle was sent to 

FPI between 1999 and 2002. 

Downgrading operable vehicles to scrap and auctioning them at local small lot 

sales was contrary to INS directions to the Sector, likely resulted in a 

substantial loss of sales revenue, and gave the appearance of deliberate 

wrongdoing since the Sector did not follow established small lot sales 

procedures. 

Transfers to the Federal Prison Industries. An April 14, 1999, interagency 

agreement between INS and FPI required the transfer of excess vehicles to 

FPI as replacement vehicles arrived in the Sector. According to the terms of 

the agreement, FPI would prepare the transferred vehicles for sale and 

perform minor maintenance and other work as deemed necessary to ensure 

that top dollar was received at auction. INS was required to provide FPI a 

condition report of each vehicle shipped. FPI agreed to use an INS-developed 

Vehicle Pre-Sale Inspection Checklist to inspect and report the condition of 

each vehicle to INS and to suggest other repairs that could be made to increase 

sale proceeds. INS was then supposed to report each transferred vehicle to 

GSA and coordinate with GSA and FPI to ensure that each vehicle was sold 

and that sale proceeds were properly accounted for and deposited in an INS 

account. 

While the Sector reported 72 new vehicle acquisitions in 2000, 87 in 2001, 

and 343 in 2002, it transferred only one vehicle to FPI before 2003. Instead, 

the Sector classified many of its aging fleet vehicles as scrap and disposed of 

them locally. The Sector began adhering to the terms of the agreement in 2003 

when it transferred 151 excess vehicles to FPI. Of those 151 vehicles, 84 

appeared on the INS “Hit List” and 67 did not. Since the Sector did not 

document the overall condition or the maintenance histories of the vehicles 

2

 INS and U.S. Border Patrol were operating entities under the Department of Justice until March 1, 2003, when DHS 

was established. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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transferred to FPI, we could not determine whether the vehicles were the least 

operationally ready, or whether FPI sales revenues were maximized at the 

time the vehicles were sold. 

The Sector’s failure to adhere to the terms of the 1999 agreement until 2003, 

and the fact that beginning in 2003, the Sector independently transferred 67 

vehicles to FPI that were not on the “Hit List”, reflected a need for better 

management oversight of Sector disposal and sales activities. Further, by 

classifying the condition of excess vehicles as scrap prior to 2003, the Sector 

circumvented compliance with the agreement and may not have generated the 

sales revenue from small lot sales that would have been generated by FPI. 

Transfer of Excess Equipment. The Sector transferred excess equipment 

through BIA to an Indian Tribe Fire Protection District to circumvent the costs 

it would have incurred by returning the property to DRMO, the entity from 

which the property was originally acquired. The excess equipment fell under 

Federal Supply Classification (FSC) Group 24 (Tractors); Group 38 

(Construction, Mining, Excavating and Highway Maintenance Equipment); 

and Group 62 (Lighting Fixtures and Lamps). Further, the Sector did not 

comply with applicable Surplus Property Donation Program guidelines and 

GSA regulations. As a result, other federal and state agencies were denied the 

opportunity to claim the Sector’s excess property. DRMO was unaware that 

the Sector transferred the property to the Indian Tribe. 

The Sector acquired some of its FSC Group 24 (tractors) and FSC Group 38 

(water trucks, dump truck, fuel truck, cherry picker, bulldozer, and dozers) 

equipment from DRMO. Once it deemed the equipment excess, the Sector 

was responsible for the costs of returning the equipment to DRMO. 

In 2003, the Sector transferred 27 heavy-duty equipment items to a local 

Indian Tribe Reservation Fire Protection District through BIA to minimize the 

disposal costs it would have incurred if the property items were shipped back 

to DRMO. Some of the equipment, such as light towers, was classified as 

open inventory when discussions initially started directly with the Tribe’s 

representatives in January 2003. The second group of heavy-duty truck, 

trailers, tractors, and bulldozers was classified as available for sale. However, 

prior to the transfer in June 2003, the Sector indicated that the light towers and 

heavy-duty equipment were inoperable or scrap. The Sector prepared and 

submitted property transfer reports with equipment itemized in the 

Instructions or Remarks section “Transfer of Vehicles to Bureau of Indian 

Affairs for fire fighting efforts.” None of the equipment met the FSC Group 

42 classification of fire fighting equipment or safety and rescue equipment. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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According to 41 CFR § 102-36.145, agencies can make direct transfers of 

property without GSA participation provided the transferring agency has the 

statutory authority to do so and the receiving entity is an eligible recipient. 

The Sector did not have the statutory authority to transfer excess property to 

the Indian Tribe, even using BIA as an intermediary in the transfer. 

According to 41 CFR § 102-36.210, the Sector is required to report excess 

property to promote reuse by the Government and to enable federal agencies 

to benefit from the continued use of property already paid for with taxpayers' 

money. Further, the reporting of excess property to GSA helps assure that 

information on available property is accessible and disseminated to the widest 

range of reuse customers. In addition, 41 CFR § 102-36.35 requires that 

excess property be offered for use elsewhere within an agency. If the property 

is no longer needed within an agency, it is declared excess and reported to 

GSA for possible transfer to eligible recipients, including other federal 

agencies. If GSA determines that no federal requirements exist for the excess 

property, it becomes surplus property and is available for donation to state and 

local public agencies and other eligible non-federal activities through the 

Surplus Property Donation Program. These regulations require that surplus 

property be distributed to eligible recipients by an agency established by each 

state for this purpose. 

While the Sector minimized excess property disposal costs, it did not comply 

with applicable guidelines and regulations governing the disposition of such 

property. By doing so, the Sector circumvented the prescribed priorities for 

federal and state agency claims to surplus property. 

Conclusion. The Sector managed its vehicle fleet without higher-level 

oversight as indicated by its failure to (1) follow the small lot sales processes 

outlined in January 1988 by the Department of Justice and (2) adhere to the 

interagency agreement between INS and FPI for nearly 4 years. Further, the 

Sector: (1) classified vehicles as poor and inoperative and improperly 

disposed of them through local small lot sales rather than sending them to FPI; 

(2) disposed of vehicles not identified by INS on its “Hit List;”, and (3) did 

not comply with property disposal regulations when it transferred vehicles and 

equipment to the Indian Tribe. Consequently, the Sector gave the appearance 

of wrongdoing and may have lost revenue that otherwise could have been 

generated if established regulations, policies, agreements, and guidelines had 

been followed. 

CBP provided us additional information subsequent to the audit fieldwork. 

We considered that additional information in developing our findings, 

conclusions, and recommendations. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector 

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• CBP pointed out that it engaged a contractor to replace the local small lot 

sales procedures. The contract covers June 1, 2004, through June 30, 

2008; includes disposal of salvage and scrap vehicles; and mandates 

specific practices based on the CFR for full and free competition in the 

auction process. CBP also provided sections of the 1996 U. S. Customs 

Service’s Vehicle Management Handbook. The Handbook does not 

address the transfer of vehicles to FPI or sales conducted by a contractor. 

However, the new CBP Fleet Management Handbook, once issued, should 

address management policies, procedures, and agreements applicable to 

the Sector’s vehicle fleet and should have provisions allowing CBP to 

monitor Sector compliance with specific guidance relative to vehicle sales 

and transfers. Until the new handbook is available, CBP communicates 

current policies, procedures, and practices through channels such as CBP’s 

“Information Notices”, and its monthly newsletter “High Beam”. 

• CBP renewed its agreement with FPI in December 2004 wherein 

salvageable fleet vehicles are to be forwarded to FPI for sale. Further, 

CBP implemented formal internal procedures that assign responsibilities 

for complying with the provisions of the agreement. 

• CBP indicated that the SAP system has a module where prerequisites must 

be met before a SF 120 Excess Property form can be generated. As part of 

the SAP system approval process, the Fleet Management Branch Personal 

Property Specialist is the authorizing official. The workflow in SAP 

system uses the property code to send the disposal document to the 

appropriate CBP official for review and approval. 

Recommendations 

We recommend that the Commissioner, Bureau of Customs and Border 

Protection: 

Recommendation #4: Monitor Sector compliance with vehicle sale and 

transfer policies, procedures, and practices currently based on CBP’s 

information notices and monthly newsletters and ultimately to be based on its 

new Fleet Management Handbook. 

Recommendation 5: Require the Sector to submit to the appropriate CBP 

Headquarters approving official properly prepared SF 120 Excess Property 

Forms for surplus property not tracked in SAP. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Management Comments and OIG Analysis 

CBP concurred with the Recommendations 4 and 5 and indicated that its Fleet 

Management Branch staff has worked directly with the Sector Vehicle Officer 

to ensure compliance with CBP procedures. CBP said that the recommended 

actions will be addressed in the CBP Motor Vehicle Management Handbook, 

CIS HB 5200-14, that is planned for issuance by December 31, 2005. 

For Recommendation 4, CBP stated that its Fleet Management Branch staff 

monitors Sector and all of CBP compliance by generating SAP daily vehicle 

reports, annual self-inspections that sample disposals, and a 100 percent 

annual inventory. For Recommendation 5, CBP indicated that the Sector now 

works directly with the Fleet Management Branch staff and that it requires an 

official SF-120 for excess property be prepared in SAP regardless of whether 

or not the item is recorded in SAP. 

The actions taken or planned by CBP, together with increased Fleet 

Management Branch oversight should result in improvements to the way the 

Sector disposes of excess vehicles and equipment. 

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Appendix A 

Purpose, Scope, and Methodology 

Purpose, Scope, and Methodology 

At the request of Bob Filner, the U.S. House of Representatives member for 

the 51st District of California, we assessed the fleet vehicle disposal and sales 

activities of the U.S. Border Patrol’s San Diego Sector (Sector). The purpose 

of the audit was to determine whether: 

• Vehicles were prematurely disposed of after major restoration work; 

• Vehicles were reported as inoperable and downgraded to scrap although 

the majority were actually in good condition; 

• Useable vehicles reported as inoperable or in poor condition were sold to 

scrap dealers with major components intact; 

• Vehicles downgraded to salvage were sold to select individuals and 

companies at extremely low prices without following traditional sales 

procedures; and 

• Vehicles and heavy-duty equipment were improperly transferred to an 

Indian Tribe. 

We visited the Sector’s Headquarters in Chula Vista, California and three 

separate Sector maintenance stations in Chula Vista, Imperial Beach, and San 

Ysidro. We focused our review on vehicles acquired before 2000 and major 

repairs to and disposal of those vehicles between 1999 and 2002. For the 

period under audit, the Sector operated a vehicle fleet of about 1,800 vehicles. 

We reviewed INS and GSA fleet management guidelines and regulations, 

including an interagency agreement between INS and FPI. We also reviewed 

Sector policies and practices governing the management of its fleet, including 

the Sector’s implementation of the INS-approved Bronco Body-off/Frame-up 

Restoration Program. We interviewed key Sector and GSA personnel, and for 

vehicles included within the scope of the audit, we reviewed and analyzed 

documentation for those vehicles downgraded to scrap/salvage and either sold 

for their metal content value or sold in small lot sales. Maintenance and repair 

histories were reviewed and the subsequent use of vehicles was determined. 

We also assessed the Sector’s practice of cannibalizing useable parts and 

components from inoperable vehicles as well as the associated record keeping 

and accounting controls for such actions. Lastly, we reviewed the 

documentation and correspondence associated with the transfer of heavy-duty 

equipment to an Indian Tribe Fire Protection District. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Appendix A 

Purpose, Scope, and Methodology 

Audit work was conducted between October 2003 and May 2005 and 

performed under the authority of the Inspector General Act of 1978, as 

amended, and according to Government Auditing Standards issued by the 

Comptroller General of the United States. 

Throughout the audit, we worked closely with Sector officials and kept Sector 

and CBP officials informed of audit progress. Subsequent to audit fieldwork, 

we discussed potential findings with officials from CBP and the Sector. CBP 

provided us with additional information not available in the Sector to reflect 

ongoing and planned fleet vehicle management initiatives. CBP provided 

comments on how those initiatives would address many of the control 

weaknesses identified at the Sector. CBP inputs and additional information 

were considered in drafting this report and revisions were made as 

appropriate, based on the information provided. The cooperation and 

courtesies extended to our audit team by CBP and the Sector were 

appreciated. 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector 

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Appendix B 

Management Responses to the Draft Report 

Management’s Response to the Draft Report

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Appendix B 

Management Responses to the Draft Report 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Appendix B 

Management Responses to the Draft Report 
Appendix B 

Management Responses to the Draft Report 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

Appendix B 

Management Responses to the Draft Report 

Page 25 
Appendix B 

Management Responses to the Draft Report 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

Appendix B 

Management Responses to the Draft Report 

Page 27 
Appendix B 

Management Responses to the Draft Report 

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Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

Appendix B 

Management Responses to the Draft Report 

Page 29 
Appendix C 

Major Contributors to this Report 

Major Contributors to this Report 

Robert Lastrico, Field Office Director, San Francisco Field Office 

Curtis Johnson, Auditor, San Francisco Field Office 

Joseph Artes, Special Agent in Charge, San Diego Field Office 

James Black, Assistant Special Agent In-Charge, San Diego Field Office 

Robin Clements, OIG Investigator, San Diego Field Office 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Appendix D 

Report Distribution 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

General Counsel 

Executive Secretariat 

Assistant Secretary, Public Affairs 

Under Secretary, Border and Transportation Security 

Commissioner, Customs and Border Protection 

Director, Citizenship and Immigration Service 

Customs and Border Protection, Audit Liaison 

Citizenship and Immigration Service, Audit Liaison 

Border and Transportation Security, Audit Liaison 

DHS GAO/OIG Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as Appropriate 

The Honorable Bob Filner, U.S. House of Representatives 

Vehicle Disposal and Sales Program Within the U. S. Border Patrol’s San Diego Sector

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Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General (OIG) 

at (202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at 

www.dhs.gov/oig. 

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of 

criminal or noncriminal misconduct relative to department programs or operations, 

call the OIG Hotline at 1-800-323-8603; or write to Department of Homeland 

Security, Washington, DC 20528, Attn: Office of Inspector General, Investigations 

Division – Hotline. The OIG seeks to protect the identity of each caller and writer.