Office of Inspector General 

DEPARTMENT OF HOMELAND SECURITY 

AUDIT OF PASSENGER PROCESSING 

REENGINEERING

Office of Audits

OIG-04-25 March 2004

Preface 

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

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

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

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

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

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

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

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

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

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

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

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

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

Clark Kent Ervin

Inspector General

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

Contents

Abbreviations ...................................................................................................................................2

Introduction......................................................................................................................................3

Results in Brief ................................................................................................................................4

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

Overall Federal Passenger Operations Not Reengineered ...............................................................5

Modernization Acquisition Strategy Needed ...................................................................................8

Appendices 

Appendix 1: Purpose, Scope and Methodology....................................................................10

Appendix 2: Interim Memorandum to BTS..........................................................................11

Appendix 3: Overview of Legacy IT Systems......................................................................14

Appendix 4: DHS Current Systems Inventory .....................................................................15

Appendix 5: Recommendations............................................................................................16

Appendix 6: Management Comments ..................................................................................17

Appendix 7: Major Contributors to this Report....................................................................19

Appendix 8: Report Distribution ..........................................................................................20

Audit of Passenger Processing Systems Reengineering Page 1 
Contents

Abbreviations 

APHIS 

ATF 

CIS 

BTS 

CAPPS II 

CBP 

CCD 

CLASS 

CUSTOMS 

DHS 

EPIC 

FAA 

FINCEN 

IAFIS 

ICE 

INS 

INTERPOL 

IRS 

IT 

NCIC 

NLETS 

NADDIS 

OIG 

POSTAL 

RCMP 

TSA 

US-VISIT 

USSS 

Animal and Plant Health Inspection Service 

Bureau of Alcohol, Tobacco, & Firearms 

Bureau of Citizenship and Immigration Service 

Border and Transportation Security 

Computer Assisted Passenger Prescreening System 

Bureau of Customs and Border Protection 

Consular Consolidated Database 

Consular Lookout and Support System 

United States Customs Service 

Department of Homeland Security 

El Paso Intelligence Center 

Federal Aviation Administration 

Financial Crimes Enforcement Network 

Integrated Automated Fingerprint Information System 

Bureau of Immigration and Customs Enforcement 

Immigration and Naturalization Service 

International Criminal Police Organization-Interpol 

Internal Revenue Service 

Information Technology 

National Crime Information Center 

National Law Enforcement Telecommunication System 

Narcotics and Dangerous Drugs Information System 

Office of Inspector General 

United States Postal Service 

Royal Canadian Mounted Police 

Transportation Security Administration 

United States Visitor Immigrant Status Indicator Technology 

United States Secret Service 

Page 2 Audit of Passenger Processing Systems Reengineering 
OIG

Department of Homeland Security 

Office of Inspector General 

Introduction 

On March 1, 2003, the inspectional responsibilities and systems for international 

travel were transferred to the Border and Transportation Security (BTS) 

Directorate in the Department of Homeland Security (DHS). At that time, the 

legacy agencies had various projects underway to modernize their automated 

passenger processing systems. The four primary legacy agencies were the United 

States Customs Service (Customs), the Immigration and Naturalization Service 

(INS), the Transportation Security Administration (TSA), and the Animal and 

Plant Health Inspection Service (APHIS). On September 2, 2003 DHS announced 

a new initiative called “One Face at the Border” that will consolidate the border 

inspection functions of Customs, INS and APHIS within the Bureau of Customs 

and Border Protection (CBP). 

One of the critical functions of DHS is to control people entering and leaving 

the United States. This is necessary to prevent terrorism, narcotics smuggling, 

illegal alien smuggling, enforce trade laws, and collect revenue, while facilitating 

international travel. Over the next five years, DHS will invest billions of dollars 

to modernize the passenger processes and systems from the legacy bureaus. An 

acquisition strategy based on a reengineered vision of how DHS will process 

international travelers, in alignment with the enterprise architecture, could result 

in better and more definitive contract requirements. This would increase the 

probability of achieving mission requirements while reducing cost. 

This audit was included in our fiscal year 2003 annual audit plan. The 

objective of the audit was to determine whether DHS passenger processes were 

appropriately reengineered prior to the development of new systems. The audit 

work was conducted from April 17 to September 29, 2003 at the following offices 

in Washington, D.C.: BTS, CBP, TSA, Immigration and Customs Enforcement 

(ICE), Citizenship and Immigration Service (CIS) and the departmental offices. 

Work was conducted at the Office of National Risk Assessment in Maryland, the 

CBP Data Center in Virginia, and the International Airport in Houston, too. A 

more detailed description of our objective, scope, and methodology is provided in 

Appendix 1. 

Audit of Passenger Processing Systems Reengineering Page 3 
Results in Brief

Background

DHS has initiated several efforts to realign certain operations and systems of DHS 

components related to passenger processing. However, DHS did not conduct 

business-processing reengineering for the overall federal passenger processing 

requirements. Further, DHS did not have an overall modernization acquisition 

strategy for the legacy Customs, INS, TSA, and APHIS systems related to 

passenger processing. The OIG communicated its preliminary audit findings to 

the Under Secretary for BTS in a memorandum dated August 28, 2003, which 

is attached as Appendix 2. The OIG recommended that BTS direct a business 

process reengineering effort to establish a clear vision of operations that could 

provide the basis for policy decisions and an overall systems acquisition strategy. 

The DHS response, dated March 10, 2004, agreed with the recommendations and 

is included in Appendix 6. 

On March 1, 2003 DHS assumed responsibility for securing our nation’s 

borders and transportation systems through the BTS Directorate. To carry out 

the responsibility of securing the nation’s borders, the inspection functions of 

Customs, INS, and APHIS were transferred to the CBP, a new bureau in BTS. 

CBP has a workforce of over 40,000 employees. As of May 1, 2003, there were 

a total of 16,700 inspectors at over 300 ports of entry in the United States and 

at several stations overseas. During FY 2002, the legacy Customs inspectors 

processed 414.9 million people and 130.2 million conveyances entering the 

United States. 

The Administration’s homeland security strategy includes a “smart border” 

initiative addressing the need for a seamless, integrated information-sharing 

system that allows for coordinated communication for the entry, movement and 

exit of hundreds of millions of individuals and conveyances. The 2004 budget 

provides $330 million to implement a new Entry-Exit Tracking System, now 

known as US-VISIT, which would track the arrival and departure of non-US 

citizens. US-VISIT will modernize selected INS legacy systems dealing with the 

entry and exit of non-United States citizens. 

To improve collaboration and enhance the government’s ability to thwart terrorist 

attacks as well as bring terrorists to justice, the President directed the Federal 

Bureau of Investigation, the Central Intelligence Agency and DHS to develop the 

Page 4 Audit of Passenger Processing Systems Reengineering 
nation’s first unified Terrorist Threat Integration Center. Additionally, the State 

Department is changing the way it collects information for visas at the consulates 

with new initiatives for collecting biometrics in collaboration with CIS. For a 

broad overview of passenger processing systems, see Appendices 3 and 4. 

Overall Federal Passenger Operations Not Reengineered 

Over the next few years, DHS plans to spend billions of dollars modernizing its 

passenger processing systems. Yet, DHS has not conducted a business process 

reengineering of all federal operations needed to clear people entering and leaving 

the United States. Transition groups are developing new ways of doing business 

and realigning certain operations and systems. Federal passenger processing 

systems are inter-related; therefore, the modernization of any legacy function 

could impact other systems and processes. Reengineering now could result in 

major savings later and ensure a greater probability of achieving overall mission 

success. 

The Clinger-Cohen Act1 requires agency heads to analyze their agency’s mission 

and, based on the analysis, revise it as well as administrative processes, as 

appropriate, before making significant investments in information technology 

to be used in support of those missions. Reengineering is the fundamental 

rethinking and radical redesign of the business process to achieve dramatic 

improvements in critical, contemporary measures of performance, such as cost, 

quality, service and speed. Also, reengineering is the examination and change of 

strategy, processes, technology and organization. It focuses on redesigning the 

process as a whole in order to achieve the greatest possible benefits. 

Prior to March 1, 2003, the Departments of Justice, Treasury, and Transportation 

each had a major passenger processing modernization project planned. At Justice, 

INS was working on incorporating biometric technology in an automated entry/ 

exit information system to integrate electronic arrival and departure manifests 

and electronic visa data. At Treasury, Customs was planning an Enforcement 

Modernization that would include passenger processing. At Transportation, TSA 

was planning the Computer Assisted Passenger Prescreening System (CAPPS II) 

to confirm the identities of air travelers and to flag would-be travelers who may 

pose a threat. Currently, DHS is proceeding with the modernization of selected 

TSA and INS legacy passenger systems. Decisions have not yet been made on the 

modernization of the legacy Customs and APHIS passenger operations. A number 

1

 Division E, Public Law 104-106. 

Audit of Passenger Processing Systems Reengineering Page 5 
of organizations provide and need data on people entering and leaving the United 

States. Such organizations include schools, foreign agencies, carriers, other 

federal agencies, and DHS components. 

Additionally, the passenger modernization efforts should be closely coordinated 

with the modernization of the cargo, case management, and performance 

measurement systems. Communication, coordination, and cooperation are critical 

to the success of DHS modernization. 

The use of multiple systems by legacy agencies to manage the flow of people in 

and out of the United States has resulted in an uncoordinated border management 

effort. In addition, the use of manual data processing has resulted in information 

that is inaccurate, incomplete, and untimely. Therefore, the long-term vision for 

the US-VISIT program is the implementation of standard business processes, 

policies, technology, and information systems at all land, sea, and air ports of 

entry. The program objective is to facilitate travel, secure our nation and combat 

terrorism by improving the processes, policies, and systems utilized to collect 

information on foreign nationals who travel to the United States. A recent General 

Accounting Office report2

 concluded that the US-VISIT is a high-risk program. 

Some of the reasons for this assessment are: 

• The milestones are challenging. 

• The scope is large and complex. 

• The potential cost is significant. 

• Existing systems have known problems. 

• The operational context is unsettled. 

Systems integration is one of the most challenging aspects of the program. There 

are a number of systems currently in place today that support various aspects 

of border management. Additional system interfaces may be required over and 

above the interfaces initially defined in the project baseline. Some of the risk 

in developing US-VISIT can be reduced if the federal operations for controlling 

people entering and leaving the United States are first reevaluated. This would 

include: 

• Determining the requirements and needs of the various internal and 

external stakeholders; 

• Reengineering the business processes; 

2

 Homeland Security, Risks Facing Key Border and Transportation Security Program Need to Be Addressed, GAO-03-1083. 

Page 6 Audit of Passenger Processing Systems Reengineering 
• Defining system requirements that capture data once and seamlessly share 

information; 

• Establishing a high level vision of how international travelers will be 

cleared; and, 

• Coordinating with other organizations that will interface with DHS 

passenger systems.

In September 2003, the department announced the “One Face at the Border” 

initiative that combines the inspection processes of legacy Customs, INS and 

APHIS. In the future, CBP officers will interact with the traveling public and 

facilitate the entry of legitimate goods at the nation’s ports of entry. The new CBP 

officer position will unify the duties and responsibilities of the legacy inspectors. 

This will result in the need for a single data terminal for inspectors to access the 

data needed to clear people and cargo entering and leaving the United States. 

Therefore, the new DHS systems for clearing passengers and cargo will need to 

share a common infrastructure and be transparent to the CBP officer in the field. 

Modernizing the legacy organizations, processes, and systems presents a major 

challenge to DHS. Information systems should be built once and re-used within 

other DHS domains, based on the new organization’s mission, structure and 

logistics. A reengineering effort is essential to the development of cost-effective 

processes that meet the needs of all stakeholders. 

Recommendation 1. The Under Secretary for Border and Transportation 

Security should initiate a business process reengineering effort to establish 

a clear vision of the overall federal operations that will be used to clear 

people entering and leaving the United States. 

Management Comments: BTS plans to initiate a business process 

reengineering effort to establish a clear vision of the overall federal 

operations to be used for clearing people entering and leaving the United 

States by December 31, 2004. 

OIG Comment: The actions planned by BTS satisfy the intent of our 

recommendation. 

Audit of Passenger Processing Systems Reengineering Page 7 
Modernization Acquisition Strategy Needed 

Currently, DHS does not have an overall acquisition strategy for the 

modernization of the legacy Customs, INS, TSA, and APHIS systems related 

to passenger processing. As these bureaus have been only recently united in 

DHS, there has not yet been sufficient planning as to how, when, or if the various 

modernization efforts should be continued. Further, due to the urgency of the 

need to control people entering and exiting the United States, there is significant 

pressure to achieve results quickly. The procurement of multibillion dollar 

systems which are critical to the success of the DHS mission require strategic 

planning and the application of the best system acquisition practices of the 

federal government. Failure to develop a comprehensive acquisition strategy 

could result in acquiring systems that cost too much and do not fully meet 

mission requirements. US-VISIT will be the first major BTS IT procurement. 

BTS officials felt that this procurement could be the model for future system 

acquisitions. 

The Clinger Cohen Act provides an acquisition management framework based 

on the use of rigorous and disciplined processes for planning, managing and 

controlling the acquisition of Information Technology (IT) resources. The 

Act establishes a comprehensive approach for executive agencies to improve 

the acquisition and management of their information resources by: (1) 

focusing information resource planning to support their strategic missions; (2) 

implementing a capital planning and investment control process that links to 

budget formulation and execution; and, (3) rethinking and restructuring the way 

they do their work before investing in information systems. Capital planning and 

investment control is a decision-making process for ensuring that IT investments 

integrate strategic planning, budgeting, acquisition and the management of IT in 

support of agency missions and business needs. 

The Services Acquisition Reform Act of 20033 states that the authority and 

functions of the Chief Acquisition Officer includes monitoring the performance 

of acquisition programs of the executive agency, evaluating the performance 

measurements, and advising the head of the executive agency regarding the 

appropriate business strategy to achieve the mission of the executive agency. 

Through acquisition planning, an organization can ensure that reasonable planning 

is conducted and that all aspects of the total acquisition effort are included in the 

planning process. 

3 Title 14 of Public Law 108-136. 

Page 8 Audit of Passenger Processing Systems Reengineering 
Recommendation 2. Based on the business process reengineering 

results, the Under Secretary for Border and Transportation Security should 

work with the Chief Acquisition Officer and Chief Information Officer 

to develop an overall departmental acquisition strategy for passenger 

information technology systems. 

Management Comments: Based on the results of the business process 

reengineering effort, BTS will develop an overall departmental acquisition 

strategy in coordination with the Offices of the Chief Acquisition Officer 

and the Chief Information Officer by June 30, 2005. 

OIG Comment: The actions planned by BTS satisfy the intent of our 

recommendation. 

Audit of Passenger Processing Systems Reengineering Page 9 
Appendix 1 

Purpose, Scope and Methodology 

The objective of the audit was to determine if DHS passenger processes were 

appropriately reengineered prior to the development of new systems. The audit 

scope included all DHS systems used to control people entering and leaving the 

United States. The audit was conducted between April 2003 and September 2003 

in accordance with generally accepted government auditing standards. 

To accomplish the audit objective responsible DHS officials were interviewed, 

system documentation was obtained, passenger operations were observed, and 

relevant reports were reviewed. Specifically: 

• The auditors met with responsible officials in CBP, ICE, TSA, and the 

Department to obtain a basic understanding of how the current and 

planned passenger processing IT systems work and how they interface. 

• The auditors observed passenger processing at the Houston airport in order 

to analyze how the legacy INS, APHIS, and Customs Inspectors use the 

current IT systems to clear passengers. 

• The auditors reviewed the operations of the CBP and ICE transition 

management offices to determine their effect on the passenger inspection 

process. 

• The auditors requested copies of reengineering reports for any current or 

planned systems. 

• The auditors reviewed the preliminary documents on the DHS enterprise 

architecture. 

Page 10 Audit of Passenger Processing Systems Reengineering 
________________________________________________________________________ 

Appendix 2 

Interim Memorandum to BTS

 DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

Washington, DC 20528 

August 28, 2003 

MEMORANDUM 

TO: Mr. Asa Hutchinson, Under Secretary 

FROM: Clark Kent Ervin 

Acting Inspector General 

Under Secretary for Border and Transportation Security (BTS) 

SUBJECT: Audit of Passenger Processing System Reengineering 

On April 17, 2003, the Office of the Inspector General (OIG) began an audit of passenger 

processing system reengineering. The objective of the audit was to determine if the Department 

of Homeland Security (DHS) passenger processes were appropriately reengineered prior to the 

development of new systems. The audit scope included all DHS systems used to control people entering 

and leaving the United States. We plan to issue a draft report for comments by September 30. TThe 

purpose of this memorandum is to make you aware of issues that need immediate action. On August 

19 and 20, 2003 we briefed staff from CBP, ICE, TSA, US VISIT, the Departmental CIO, and BTS 

Operations on the results of our audit. 

We have completed our fieldwork, and on August 19 and 20, 2003 we briefed representatives from the 

following offices on the results of our audit: 

Customs and Border Protection (CBP), 

Immigration and Customs Enforcement (ICE), 

Transportation Security Administration (TSA), 

US Visitor and Immigration Status Indicator Technology (US VISIT), 

Departmental Chief Information Officer (CIO), and 

BTS Operations. 

Audit of Passenger Processing Systems Reengineering Page 11 
Appendix 2 

Interim Memorandum to BTS 

The objective of the audit was to determine if Homeland Security passenger processes were 

appropriately reengineered prior to the development of new systems. The audit scope included all 

Homeland Security systems used to control people entering and leaving the United States. Essentially, 

various groups throughout BTS are developing new ways to conduct business in alignment with its new 

mission and organizational structure. These include initiatives such as, “One Face at the Border,” US 

VISIT, CBP Enforcement Modernization, Computer Assisted Passenger Prescreening System (CAPPS 

II), and Bureau of Citizenship and Immigration Services (BCIS) biometrics research. While efforts 

are being made to realign certain operations and systems, DHS has not conducted a business process 

reengineering effort to determine the overall federal requirements for clearing people entering and 

leaving the United States. The Information Technology Management Reform Act of 1996 (ClingerCohen Act, Division E of PL 104-106) requires agency heads to analyze their agency’s missions and, 

based on the analysis, revise the agency’s mission and administrative processes, as appropriate, before 

making significant investments in information technology to be used in support of those missions. Such 

a reengineering effort is essential to the development of cost-effective processes that meet the needs of 

all the stakeholders. Further, DHS does not have an overall acquisition strategy for the modernization of 

the legacy Immigration, Customs, Agriculture, and TSA systems related to passenger processing. 

Our audit report will recommend that BTS direct a business process reengineering effort to establish 

a clear vision of operations that can provide the basis for of policy decisions and an overall systems 

acquisition strategy. Such efforts are important because comparatively small reengineering now could 

result in major savings later, and ensure a greater probability of achieving maximum overall mission 

success. Action on this recommendation needs to begin now because DHS is scheduled to release a 

request for proposal for US VISIT in November 2003. There is still time to obtain the benefits of a 

reengineering effort and acquisition strategy without delaying US VISIT. We suggest that the process 

include the following steps: 

Business Process Reengineering: 

• Appoint a single individual in BTS to be in charge of the effort. 

• Assign full time staff. An expert in business process reengineering could help facilitate the 

effort. 

• Leverage the work that has already been conducted throughout DHS. Conceivably, one of the 

major efforts underway could serve as the starting point for further analysis, obviating the need 

to start from scratch. 

• Task system owners to document the requirements and needs of the various internal and external 

stakeholders. 

• Coordinate and communicate with owners of non-Homeland Security systems that will interface 

with Homeland Security passenger systems. 

• Incorporate lessons learned from other major modernization efforts. 

Page 12 Audit of Passenger Processing Systems Reengineering 
Appendix 2 

Interim Memorandum to BTS 

• Define system requirements that capture data once and seamlessly share information. 

• To the extent possible, reengineer the business processes to align with a “one face at the border” 

approach. 

• Establish a high level vision of how travelers will be cleared and controlled by the federal 

government. 

Systems Acquisition Strategy: 

• Establish a comprehensive long-term systems acquisition strategy. 

• Define the scope, timing, and interrelationships of the systems to be acquired, and issue guidance 

on how lessons learned and reengineering results are to be incorporated into all subsequent 

requests for proposals. 

In order for this effort to be relevant to the US VISIT program and to avoid delaying its implementation, 

action will have to be initiated by BTS quickly. 

If you have any questions, or would like to discuss our concerns further, please contact me, or ask your 

staff to contact my Assistant Inspector General for Audits, Richard Berman, at (202) 254-4100. 

cc: Gordon England, Deputy Secretary 

Steven I. Cooper, Chief Information Officer 

Robert C. Bonner, Commissioner, Customs and Border Security 

Michael J. Garcia, Assistant Secretary, Immigration and Customs Enforcement 

Admiral James M. Loy, Administrator, Transportation Security Administration 

Jim Williams, Program Director, US VISIT 

Randy Beardsworth, Director, BTS Operations 

Stewart Verdery, Assistant Secretary, BTS 

Audit of Passenger Processing Systems Reengineering Page 13 
Appendix 3

Passenger Processing Overview

Page 14 Audit of Passenger Processing Systems Reengineering 
Appendix 4 

DHS Current Systems Inventory 

Audit of Passenger Processing Systems Reengineering Page 15
Appendix 5 

Recommendations 

Recommendation 1. 

The Under Secretary for Border and Transportation Security should initiate a business 

process reengineering effort to establish a clear vision of the overall federal operations 

that will be used to clear people entering and leaving the United States. 

Recommendation 2. 

Based on the business process reengineering results, the Under Secretary for Border 

and Transportation Security should work with the Chief Acquisition Officer and Chief 

Information Officer to develop an overall departmental acquisition strategy for passenger 

information technology systems. 

Page 16 Audit of Passenger Processing Systems Reengineering 
Appendix 6 

Management Comments 

Audit of Passenger Processing Systems Reengineering Page 17
Appendix 6

Management Comments

Page 18 Audit of Passenger Processing Systems Reengineering 
Appendix 7 

Major Contributors to this Report 

George Tabb, Field Office Director 

Gene Wendt, Houston Field Audit Manager 

J. Eric Barnett, Auditor-In-Charge 

Linda Howarton, Auditor 

LaTrina McCowin, Auditor 

DeWayne Bailey, Auditor 

Carlos Berrios, Referencer 

Audit of Passenger Processing Systems Reengineering Page 19 
Appendix 8 

Report Distribution 

Department of Homeland Security 

Office of Border and Transportation Security

Office of Chief Information Officer

Office of Chief Procurement Officer

Bureau 

Customs and Border Protection 

Immigration and Customs Enforcement 

Transportation Security Administration 

Citizenship and Immigration Services 

United States Visitor and Immigrant Status Indicator Technology Program 

Audit Liaisons:

Customs and Border Protection

Immigration and Customs Enforcement 

Transportation Security Administration 

Office of Management and Budget 

OIG Budget Examiner 

Page 20 Audit of Passenger Processing Systems Reengineering 

Additional Information and Copies 

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

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

www.dhs.gov. 

OIG Hotline 

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

or noncriminal misconduct relative to department programs or operations, call the OIG 

Hotline at 1-800-323-8603; write to Department of Homeland, Washington, DC 20528, 

Attn: Office of Inspector General, Investigations Division – Hotline. The OIG seeks to 

protect the identity of each writer and caller.