U.S. CUSTOMS SERVICE

Enforcement Oversight

Issues

Statement of Norman J. Rabkin

Director, Administration of Justice Issues

General Government Division

United States General Accounting Office

GAO Testimony

Before the Committee on Finance

U. S. Senate

For Release on Delivery

Expected at

10:00 a.m. EDT

on Tuesday

May 18, 1999

GAO/T-GGD-99-99

Statement

U.S. Customs Service: Enforcement

Oversight Issues

Page 1

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss work we have done addressing

efforts by the U.S. Customs Service to interdict drugs, allocate inspectional

personnel, and develop performance measures. For the most part, our

testimony is based on products we have issued on each of these subjects

since 1997. You also asked us to discuss Customs’ action plan for resolving

management problems. Our discussion of the action plan is based on (1)

interviews with Customs officials from its Office of Planning, Management

Inspection Division, and Office of Strategic Trade and (2) our examination

of the several versions of the plan.

Created in 1789, the U.S. Customs Service is one of the federal

government’s oldest agencies. Customs is responsible for collecting

revenue from imports and enforcing customs and other U.S. laws and

regulations. Customs collects revenues of about $22 billion annually while

processing an estimated 15 million import entries and 450 million people

who enter the country. A major goal of Customs is to prevent the

smuggling of drugs into the country by creating an effective drug

interdiction, intelligence, and investigation capability to disrupt and

dismantle smuggling organizations. Customs’ workforce totals almost

20,000 employees at its headquarters, 20 Customs Management Centers, 20

Special Agent-in-Charge offices, and 301 ports of entry around the country.

Our work on Customs’ efforts to interdict drugs has focused on four

distinct areas: (1) internal controls over Customs’ low-risk cargo entry

programs; (2) the missions, resources, and performance measures for

Customs’ aviation program; (3) the development of a specific technology

for detecting drugs; and (4) Customs drug intelligence capabilities.

In July 1998, at the request of Senator Dianne Feinstein, we reported on

Customs’ drug-enforcement operations along the Southwest border of the

United States.1

 Our review focused on low-risk, cargo entry programs in

use at three ports—Otay Mesa, California; Laredo, Texas; and Nogales,

Arizona. To balance the facilitation of trade through ports with the

interdiction of illegal drugs being smuggled into the United States,

Customs initiated and encouraged its ports to use several programs to

identify and separate low-risk shipments from those with apparently

higher smuggling risk. One such program is the Line Release Program,

designed to expedite cargo shipments that Customs determined to be

 

1

 Customs Service Drug Interdiction: Internal Control Weaknesses and Other Concerns With Low-Risk

Cargo Entry Programs (GAO/GGD-98-175, July 31, 1998).

Drug Interdiction

Low-Risk Cargo Entry

Programs
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 2

repetitive, high volume, and low risk for narcotics smuggling. The Line

Release Program was first implemented on the Northern border in 1986

and was expanded to most posts along the Southwest border by 1989. This

program requires importers, brokers (companies who process the

paperwork required to import merchandise), and manufacturers to apply

for the program and to be screened by Customs to ensure that they have

no past history of narcotics smuggling and that their prior shipments have

been in compliance with trade laws and Customs’ commercial importing

regulations. In 1996, Customs implemented the Land Border Carrier

Initiative Program, which required that the Line Release shipments across

the Southwest border be transported by Customs-approved carriers and

driven by Customs-approved drivers. After the Carrier Initiative Program

was implemented, the number of Southwest Border Line Release

shipments dropped significantly.

At each of the three ports we visited, we identified internal control

weaknesses in one or more of the processes used to screen Line Release

applicants for entry into the program. These weaknesses included (1) an

absence of specific criteria for determining applicant eligibility at two of

the three ports, (2) incomplete documentation of the screening and review

of applicants at two of the three ports, and (3) lack of documentation of

supervisory review for aspects of the applicant approval process. During

our review, Customs representatives from northern and southern landborder cargo ports approved draft Line Release volume and compliance

eligibility criteria for program applicants and draft recertification

standards for program participants.

The Three Tier Targeting Program—a method of targeting high-risk

shipments for narcotics inspection—was used at the three Southwest

border ports that we visited. According to officials at the three ports, they

lost confidence in the program’s ability to distinguish high- from low-risk

shipment because of two operational problems. First, there was little

information available in any database for researching foreign

manufacturers. Second, local officials doubted the reliability of the

designations. They cited examples of narcotics seizures from shipments

designated as “low-risk” and the lack of a significant number of seizures

from shipments designated as “high-risk.” Customs suspended this

program until more reliable information is developed for classifying lowrisk importations.

One low-risk entry program—the Automated Targeting System—was being

pilot tested at Laredo. It was designed to enable port officials to identify

and direct inspectional attention to high-risk shipments. That is, the
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 3

Automated Targeting System was designed to assess shipment entry

information for known smuggling indicators and thus enable inspectors to

target high-risk shipments more efficiently. Customs is evaluating the

Automated Targeting System for expansion to other land-border cargo

ports.

In September 1998, we reported on Customs’ aviation program missions,

resources, and performance measures.2 Since the establishment of the

Customs Aviation Program in 1969, its basic mandate to use air assets to

counter the drug smuggling threat has not changed. Originally, the

program had two principal missions:

• border interdiction of drugs being smuggled by plane into the United

States and

• law enforcement support to other Customs offices as well as other federal,

state, and local law enforcement agencies.

In 1993, the administration instituted a new policy to control drugs coming

from South and Central America. Because Customs aircraft were to be

used to help carry out this policy, foreign counterdrug operations became

a third principal mission for the aviation program. Since then, the program

has devoted about 25 percent of its resources to the border interdiction

mission, 25 percent to foreign counterdrug operations, and 50 percent to

other law enforcement support.

Customs Aviation Program funding decreased from about $195 million in

fiscal year 1992, to about $135 million in fiscal year 1997—that is, about 31

percent in constant or inflation-adjusted dollars. While available funds

decreased, operations and maintenance costs per aircraft flight hour

increased. Customs Aviation Program officials said that this increase in

costs was one of the reasons they were flying fewer hours each year. From

fiscal year 1993 to fiscal year 1997, the total number of flight hours for all

missions decreased by over one-third, from about 45,000 hours to about

29,000 hours.

The size of Customs’ fleet dropped in fiscal year 1994, when Customs took

19 surveillance aircraft out of service because of funding reductions. The

fleet has remained at about 114 since then.3

 The number of Customs 

2

 Customs Service: Aviation Program Missions, Resources, and Performance Measures (GAO/GGD-98-

186, Sept. 9, 1998).

3

 Customs’ fleet should increase because additional aircraft were funded in the Fiscal Year 1999

Omnibus Consolidated and Emergency Supplemental Appropriations Act, P.L. 105-277, 112 Stat 2681-

553, 2681-583.

Aviation Program
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 4

Aviation Program onboard personnel decreased, from a high of 956 in

fiscal year 1992 to 745 by the end of fiscal year 1997.4

Customs has been using traditional law enforcement measures to evaluate

the aviation program (e.g., number of seizures, weight of drugs seized,

number of arrests). These measures, however, are used to track activity,

not measure results or effectiveness. Until 1997, Customs also used an air

threat index as an indicator of its effectiveness in detecting illegal air

traffic.5 However, Customs has discontinued use of this indicator, as well

as some other performance measures, because Customs determined that

they were not good measures of results and effectiveness. Having

recognized that these measures were not providing adequate insights into

whether the program was producing desired results, Customs said it is

developing new performance measures in order to better measure results.

However, its budget submission for fiscal year 2000 contained no new

performance measures.

The pulsed fast neutron analysis (PFNA) inspection system is designed to

directly and automatically detect and measure the presence of specific

materials (e.g., cocaine) by exposing their constituent chemical elements

to short bursts of subatomic particles called neutrons. Customs and other

federal agencies are considering whether to continue to invest in the

development and fielding of this technology.

The Chairman and the Ranking Minority Member of the Subcommittee on

Treasury and General Government, Senate Committee on Appropriations,

asked us to provide information about (1) the status of plans for field

testing a PFNA system and (2) federal agency and vendor views on the

operational viability of such a system. We issued the report responding to

this request on April 13, 1999.6

Customs, the Department of Defense (DOD), the Federal Aviation

Administration (FAA), and Ancore Corporation—the inspection system

inventor—recently began planning to field test PFNA. Because they were

in the early stage of planning, they did not expect the actual field test to

begin until mid to late 1999 at the earliest. Generally speaking, agency and

 

4

 Staffing for the Aviation program is expected to grow to 817 in fiscal year 2000, according to Customs’

latest budget justification.

5

 The air threat index used various indicators, such as the number of stolen and/or seized aircraft, to

determine the potential threat of air drug smuggling.

6

 Terrorism and Drug Trafficking: Testing Status And Views on Operational Viability of Pulsed Fast

Neutron Analysis Technology (GAO/GGD-99-54, Apr. 13, 1999).

Pulsed Fast Neutron

Analysis Inspection System
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 5

vendor officials estimated that a field test covering Customs’ and DOD’s

requirements will cost at least $5 million and that the cost could reach $8

million if FAA’s requirements are included in the joint test. Customs

officials told us that they are working closely with the applicable

congressional committees and subcommittees to decide whether Customs

can help fund the field test, particularly given the no-federal-cost language

of Senate Report 105-251.7

 In general, a complete field test would include

(1) preparing a test site and constructing an appropriate facility; (2)

making any needed modifications to the only existing PFNA system and its

components;8

 (3) disassembling, shipping, and reassembling the system at

the test site; and (4) conducting an operational test for about 4 months.

According to agency and Ancore officials, the test site candidates are two

seaports in California (Long Beach and Oakland) and two land ports in El

Paso, Texas.

Federal agency and vendor views on the operational viability of PFNA

vary. While Customs, DOD, and FAA officials acknowledge that laboratory

testing has proven the technical feasibility of PFNA, they told us that the

current Ancore inspection system would not meet their operational

requirements. Among their other concerns, Customs, DOD, and FAA

officials said that a PFNA system not only is too expensive (about $10

million to acquire per system), but also is too large for operational use in

most ports of entry or other sites. Accordingly, these agencies question the

value of further testing. Ancore disputes these arguments, believes it can

produce an operationally cost-effective system, and is proposing that a

PFNA system be tested at a port of entry. The Office of National Drug

Control Policy has characterized neutron interrogation as an “emerging” or

future technology that has shown promise in laboratory testing and thus

warrants field testing to provide a more informed basis for deciding

whether PFNA has operational merit.

At the request of the Subcommittee on National Security, International

Affairs and Criminal Justice, House Committee on Government Reform

and Oversight,9

 in June 1998 we identified the organizations that collect

and/or produce counterdrug intelligence, the role of these organizations,

the federal funding they receive, and the number of personnel that support

 

7

 Senate Report 105-251 (July 1998) on the fiscal year 1999 Treasury and General Government

Appropriations bill directs the Commissioner of Customs to enter into negotiations with the private

sector to conduct a field test of the PFNA technology at no cost to the federal government.

8

 The existing (prototype) PFNA system is located at the vendor’s plant in Santa Clara, CA.

9

 This is now the Subcommittee on National Security, Veterans’ Affairs and International Relations of

the House Committee on Government Reform.

Federal Counterdrug

Intelligence Coordination

Efforts
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 6

this function.10 We noted that more than 20 federal or federally funded

organizations, including Customs, spread across 5 cabinet-level

departments and 2 cabinet-level organizations, have a principal role in

collecting or producing counterdrug intelligence. Together, these

organizations collect domestic and foreign counterdrug intelligence

information using human, electronic, photographic, and other technical

means.

Unclassified information reported to us by counterdrug intelligence

organizations shows that over $295 million was spent for counterdrug

intelligence activities during fiscal year 1997 and that more than 1,400

federal personnel were engaged in these activities. The Departments of

Justice, the Treasury, and Defense accounted for over 90 percent of the

money spent and personnel involved. Customs spent over $14 million in

1997 on counterdrug intelligence, and it is estimated that 63 percent of its

309 intelligence research specialists’ duties involved counterdrug

intelligence matters.

Among its many missions, Customs is the lead agency for interdicting

drugs being smuggled into the United States and its territories by land, sea,

or air. Customs’ primary counterdrug intelligence mission is to support its

own drug enforcement elements (i.e., inspectors and investigators) in their

interdiction and investigation efforts. Customs is responsible for producing

tactical, operational, and strategic intelligence concerning drug-smuggling

individuals, organizations, transportation networks, and patterns and

trends. In addition to providing these products to its own drug

enforcement elements, Customs is to provide this information to other

agencies with drug enforcement or intelligence responsibilities. Customs is

also responsible for analyzing the intelligence community’s reports and

integrating them with its own intelligence. Customs’ in-house collection

capability is heavily weighted toward human intelligence, which comes

largely from inspectors and investigators who obtain information during

their normal interdiction and investigation activities.

In 1998, we reported on selected aspects of the Customs Service’s process

for determining its need for inspectional personnel—such as inspectors

 

10 Drug Control: An Overview of U.S. Counterdrug Intelligence Activities (GAO/NSIAD-98-142, June 25,

1998).

Resource Allocation
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 7

and canine enforcement officers—for the commercial cargo or land and

sea passengers at all of its 301 ports.11

Customs officials were not aware of any formal agencywide efforts prior to

1995 to determine the need for additional cargo or passenger inspectional

personnel for its 301 ports. However, in preparation for its fiscal year 1997

budget request and a new drug enforcement operation called Hard Line,12

Customs conducted a formal needs assessment. The needs assessment

considered (1) fully staffing all inspectional booths and (2) balancing

enforcement efforts with the need to move complying cargo and

passengers quickly through the ports. Customs conducted two subsequent

assessments for fiscal years 1998 and 1999. These assessments considered

the number and location of drug seizures and the perceived threat of drug

smuggling, including the use of rail cars to smuggle drugs. However, all

these assessments were

• focused exclusively on the need for additional personnel to implement

Hard Line and similar initiatives,

• limited to land ports along the Southwest border and certain sea and air

ports considered to be at risk from drug smuggling,

• conducted each year using generally different assessment factors, and

• conducted with varying degrees of involvement by Customs’ headquarters

and field units.

We concluded that these limitations could prevent Customs from

accurately estimating the need for inspectional personnel and then

allocating them to ports. We further concluded that, for Customs to

implement the Results Act successfully, it had to determine its needs for

inspectional personnel for all of its operations and ensure that available

personnel are allocated where they are needed most.13

We recommended that Customs establish an inspectional personnel needs

assessment and allocation process, and Customs is now in the process of

responding to that April 1998 recommendation. Customs has awarded a

contract for the development of a resource allocation model, and Customs

 

11 Customs Service: Process for Estimating and Allocating Inspectional Personnel (GAO/GGD-98-107,

Apr. 30, 1998); Customs Service: Inspectional Personnel and Workloads (GAO/GGD-98-170, Aug. 14,

1998); and Customs Service: Inspectional Personnel and Workloads (GAO/T-GGD-98-195, Aug. 14,

1998).

12 Operation Hard Line was Customs’ effort to address border violence and drug smuggling through

intensified inspections, improved facilities, and advances in technology.

13 Government Performance and Results Act of 1993, P.L. 103-62.
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 8

officials told us that the model was delivered in March 1999 and that they

are in the early stages of deciding how to use the model and implement a

formal needs assessment system.

Under the Results Act, executive agencies are to develop strategic plans in

which they, among other things, define their missions, establish resultsoriented goals, and identify strategies they plan to use to achieve those

goals. In addition, agencies are to submit annual performance plans

covering the program activities set out in the agencies’ budgets (a practice

which began with plans for fiscal year 1999); these plans are to describe

the results the agencies expect to achieve with the requested resources

and indicate the progress the agency expects to make during the year in

achieving its strategic goals.

The strategic plan developed by the Customs Service addressed the six

requirements of the Results Act. Concerning the elements required, the

mission statement was results oriented and covered Customs’ principal

statutory mission—ensuring that all goods and persons entering and

exiting the United States do so in compliance with all U.S. laws and

regulations. The plan’s goals and objectives covered Customs’ major

functions—processing cargo and passengers entering and cargo leaving

the United States. The plan discussed the strategies by which Customs

hopes to achieve its goals. The strategic plan discussed, in very general

terms, how it related to annual performance plans. The plan discussed

some key factors, external to Customs and beyond its control, that could

significantly affect achievement of the strategic goals, such as the level of

cooperation of other countries in reducing the supply of narcotics.

Customs’ strategic plan also contained a listing of program evaluations

used to prepare the plan and provided a schedule of evaluations to be

conducted in each of the functional areas.

In addition to the required elements, Customs’ plan discussed the

management challenges it was facing in carrying out its core functions,

including information and technology, finance, and human resources

management. However, the plan did not adequately recognize Customs’

need to improve

• financial management and internal control systems,

• controls over seized assets,

• plans to alleviate Year 2000 problems,14 and

 

14 Customs has established effective Year 2000 program management controls, including structures and

processes for Year 2000 testing, contingency planning, and Year 2000 status reporting. See Year 2000

Performance Measures
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 9

• plans to improve computer security.15

We reported that these weaknesses could affect the reliability of Customs’

performance data.

Further, our initial review of Customs’ fiscal year 2000 performance plan

showed that it is substantially unchanged in format from the one presented

for 1999. Although the plan is a very useful document for decisionmakers,

it still does not recognize Customs’ need to improve its internal control

systems, control over seized assets, or plans to improve computer security.

You asked us to comment on the performance measures proposed by

Customs, which are to assess whether Customs is achieving its goals.

Customs has included 26 performance measures in its fiscal year 2000

performance plan. These measures range from general information on the

level of compliance of the trade community with trade laws and Customs’

regulations (which Customs has traditionally used) to very complex

measures, such as transportation costs of drug smuggling organizations.

Many of these complex measures were still being developed by Customs

when the fiscal year 2000 performance plan was issued. In addition,

Customs did not include performance targets for 8 of the 26 measures in

its fiscal year 2000 plan.

You asked us to discuss Customs’ action plan, which is a document

comprised of action items to resolve management problems.

Commissioner Kelly originated the action plan; all assistant commissioners

and office directors were asked to submit a list of actual or perceived

management problems in Customs. The action plan is organized around 31

categories ranging from “integrity” to the “Mod Act implementation,” and

the May 1999 version had 219 items under the 31 categories. Since 16 of the

items are listed under more than one category, there are 203 discrete

items. For each action item, the plan currently includes the (1) date

initiated, (2) responsible office(s), and (3) status. If more than one office is

responsible for an action, one of the offices is designated as the lead office.

Twenty-one offices within Customs are responsible for taking the lead on

resolving the action items. The number of items that the offices are

 Computing Crisis: Customs Has Established Effective Year 2000 Program Controls (GAO/AIMD-99-37,

Mar. 29, 1999).

15 See Customs Service: Comments on Strategic Plan and Resource Allocation Process (GAO/T-GGD-98-

15, Oct. 16, 1997); and Results Act: Observations on Treasury’s Fiscal Year 1999 Annual Performance

Plan (GAO/GGD-98-149, June 30, 1998).

Action Plan
Statement

U.S. Customs Service: Enforcement Oversight Issues

Page 10

responsible for ranges from 1 to 37. The first action plan was issued in

February 1999 and has since been updated three times.

According to the plan, it is Customs’ intention to implement all action

items included in the plan by 2000. Customs’ Director for Planning is to

manage and monitor the plan on an ongoing basis. He told us that items

are usually added at the behest of the Commissioner. The Management

Inspection Division (part of the Office of Internal Affairs) is responsible for

verifying and validating the items that have been reported as completed,

including determining whether the action taken was effective. The action

plan of May 7—the latest version available—shows that 91 of the 203 items

had been completed; 110 were ongoing, pending, or scheduled; and 2 had

no description of their status.

Overall, use of this kind of management tool can be very helpful in

communicating problems and proposed solutions to executives, managers,

and the Customs Service workforce, as well as to other groups interested

in Customs such as this Committee and us.

Mr. Chairman, this completes my statement. I would be pleased to answer

any questions.
Page 11 GAO/T-GGD-99-99
Page 12 GAO/T-GGD-99-99
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