Department of Homeland Security
 

Independent Review of the U.S. Coast Guard’s 

Reporting of FY 2011 Drug Control Performance 

Summary Report 

OIG-12-32 January 2012
 
 

 

            

 

Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

JAN 30 2012

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 as part of our 

oversight responsibilities to promote economy, efficiency, and effectiveness within the Department. 

This report presents the results of the review of the Performance Summary Report of the U.S. Coast 

Guard for the year ended September 30, 2011, for the Office of National Drug Control Policy. We 

contracted with the independent public accounting firm KPMG LLP to perform the review. The 

U.S. Coast Guard prepared the Performance Summary Report and management assertions to comply 

with requirements of the Office of National Drug Control Policy Circular, Drug Control Accounting, 

dated May 1, 2007. KPMG LLP is responsible for the attached independent accountants’ report 

dated January 20, 2012, and the conclusions expressed in it. We do not express an opinion on the 

Performance Summary Report and management’s assertions. 

We trust 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. 

Anne L. Richards 

Assistant Inspector General for Audits 
 

KPMG LLP 

Suite 12000 

1801 K Street, NW 

Washington, DC 20006 

Independent Accountants’ Report 

Acting Inspector General 

U.S. Department of Homeland Security 

We have reviewed the accompanying Performance Summary Report of the U.S. Department of Homeland 

Security’s (DHS) United States Coast Guard (USCG) for the year ended September 30, 2011. We have 

also reviewed the accompanying management’s assertions for the year ended September 30, 2011. 

USCG’s management is responsible for the Performance Summary Report and the assertions. 

Our review was conducted in accordance with attestation standards established by the American Institute 

of Certified Public Accountants, and applicable standards contained in Government Auditing Standards, 

issued by the Comptroller General of the United States. A review is substantially less in scope than an 

examination, the objective of which is the expression of an opinion on the Performance Summary Report 

and management’s assertions. Accordingly, we do not express such an opinion. 

Management of USCG prepared the Performance Summary Report and management’s assertions to 

comply with the requirements of the Office of National Drug Control Policy (ONDCP) Circular, Drug 

Control Accounting, dated May 1, 2007 (the Circular). 

Based on our review, nothing came to our attention that caused us to believe that (1) the Performance 

Summary Report for the year ended September 30, 2011, is not presented, in all material respects, in 

conformity with the Circular, or that (2) management’s assertions referred to above are not fairly stated, in 

all material respects, based on the criteria set forth in the Circular. 

This report is intended solely for the information and use of management of DHS and USCG, the DHS 

Inspector General, the ONDCP, and the U.S. Congress, and is not intended to be and should not be used by 

anyone other than these specified parties. 

January 20, 2012 

KPMG LLP is a Delaware limited liability partnership, 

the U.S. member firm of KPMG International Cooperative 

(“KPMG International”), a Swiss entity. 
U.S. Department of Commandant 2100 Second Street, S.w. 

Homeland Security United States Coast Guard Washington, DC 20593-7681 

Staff Symbol: DCC-81 

Phone: (202) 372-1340 United States Emaittimothy.g.meyers@uscg .mil 

Coast Guard 

7110 

January 17,2012 

Mr. John D. Shiffer 

Department of Homeland Security 

Director of Financial Management 

Office of the Inspector General 

Dear Mr. Shiffer, 

In accordance with the Office of National Drug Control Policy Circular: Annual Accounting of 

Drug Control Funds dated May 1,2007, enclosed is the Coast Guard's final FY 2011 

Perfonnance Summary Report. 

If you require further assistance on this infonnation, please contact LCDR Timothy Meyers, 

202-372-1340. 

Sincerely, 

Captain, U.S. Coast 

S Guard 

Chief. Office of Perfonnance Management & 

Assessment 

Enclosure (1) FY 2011 Perfonnance Summary Report 

Copy: DHS Budget Office 
Enclosure (1) to letter dated January 20, 2012 

Drug Budget
 

United States Department of Homeland Security
 

United States Coast Guard
 

Performance Summary Report FY 2011
 

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Page 1 of 6
 
 

Enclosure (1) to letter dated January 20, 2012 

I. PERFORMANCE INFORMATION 

Decision Units: Primary Outcome Measure 

NOTE: Although the Coast Guard appropriation is apportioned along budget decision 

unit lines (i.e., Acquisitions, Construction & Improvements (AC&I), Operating Expenses 

(OE), Research Development Testing and Evaluation (RDT&E), and Reserve Training 

(RT)), the Coast Guard does not manage performance along decision unit lines. This is 

impractical due to the multi-mission performance of our assets, which transcends budget 

decision units. 

The Coast Guard’s drug interdiction performance is best summarized by the lead outcome 

measure of the program. This measure is the central focus of its Performance Summary 

Report. The Coast Guard Maritime Law Enforcement Program has a suite of metrics that 

support the lead outcome measure. The lead outcome measure and its supporting metrics 

suite were validated during a 2007 Office of Management and Budget (OMB) Program 

Assessment and Rating Tool (PART) Evaluation. In FY 2009, the Coast Guard 

transitioned the methodology by which it calculates its primary outcome measure as 

recommended by the 2007 Independent Program Evaluation by the Center for Naval 

Analyses. The Coast Guard transitioned from the Interagency Assessment of Cocaine 

Movement (IACM) to the Consolidated Counter Drug Database (CCDB) as the 

authoritative source for estimating illicit drug flow through the transit zone. The change in 

methodology permits the Coast Guard to evaluate its performance on a quarterly basis. 

Historically, CCDB cocaine movement estimates are higher than the IACM because it 

includes all confidence maritime flow (IACM does not count low confidence data), which 

translates to a lower performance result for cocaine removal rate. Additionally, DHS 

leadership reviewed and approved this metric as a Coast Guard Management metric in 

2010. This metric is included as part of the Coast Guard’s annual budget submission. 

Measure: Cocaine Removal Rate (Removal rate for cocaine from non-commercial vessels 

in the maritime transit zone (CCDB)). 

Table 1: Cocaine Removal Rate 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2011 FY 2012 

Actual Actual Actual Actual Actual Target Target 

16.6% 13.2% 15.0% 13.5% 11.6% 15.5% 16.5% 

(1) Describe the measure. In doing so, provide an explanation of how the measure (a) reflects the purpose of 

the program, (b) contributes to the National Drug Control Strategy, and (c) is used by management of the 

program. This description should include sufficient detail to permit non-experts to understand what is being 

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Enclosure (1) to letter dated January 20, 2012 

measured and why it is relevant to the agency’s drug control activities.1 

The goal of the Coast Guard’s Drug Interdiction program is to reduce the supply of illegal 

drugs within the United States by denying smugglers the use of air and maritime routes by 

projecting an effective law enforcement presence in and over the six million square mile 

transit zone of the Caribbean Sea, the Gulf of Mexico and the Eastern Pacific Ocean. The 

Coast Guard’s primary outcome measure, the Cocaine Removal Rate, indicates how 

effective the program is at disrupting the flow of cocaine traveling via non-commercial 

maritime means toward the United States. The more cocaine bound for the United States 

that the Coast Guard removes, the less supply of cocaine available within the United States. 

The cocaine removal rate is calculated by dividing the total amount of cocaine removed 

(drugs interdicted, jettisoned, scuttled) by the Coast Guard by the total estimated noncommercial maritime movement of cocaine towards the United States. Both of these 

assessments are captured and validated in the CCDB. 

The 2010 National Drug Control Strategy maintains the interagency, transit zone removal 

rate goal for cocaine at 40% by 2015; a goal originally set in the 2007 National Drug 

Control Strategy. With over 80% of the cocaine moving through the transit zone via noncommercial maritime means, the national goal is achievable with a higher Coast Guard 

cocaine removal rate, assuming no decrease in domestic and international partner agency 

performance to achieve that 40% goal. Maritime Law Enforcement program managers 

monitor the cocaine removal rate, watching for both changes in Coast Guard removals as 

well as increases or decreases in flow. Any changes are diagnosed to determine the cause 

and to develop strategies and tactics to continue to increase the removal rate. Factors that 

can impact the removal rate include, but are not limited to, changing modes, tactics and 

routes by the drug trafficking organizations (DTOs); increased or decreased patrol effort by 

the Coast Guard or its drug interdiction partner agencies/nations; the availability, quality 

and timeliness of tactical intelligence; new or upgraded diplomatic and legal tools; and the 

fielding of new capabilities (National Security Cutter and HC-144A aircraft, for example). 

(2) Provide narrative that examines the FY 2011 actual performance results with the FY 2011 target, as well 

as prior year actual results. If the performance target was not achieved for FY 2011, the agency should 

explain why this is the case. If the agency has concluded it is not possible to achieve the established target 

with available resources, the agency should include recommendations on revising or eliminating the target. 

In FY 2011, there was an observed reduction in cocaine flow being smuggled through the 

transit zone via non-commercial means (652 Metric Tons (MT) in FY 2011 compared to 

682 MT in FY 2010). Of the FY 2011 non-commercial maritime flow, the Coast Guard 

removed 75.5 MT of cocaine, down from its FY 2010 total of 91.8 MT. Relative to the 

total estimated movement of non-commercial cocaine destined to the United States in FY 

2011 captured in the CCDB, the Coast Guard removed 11.6% of this estimated flow, 

falling short of its target of 15.5%. Comparatively, the Coast Guard’s cocaine removal rate 

was 13.5% in FY 2010. 

1 Requirements 1 through 4 in this section are drawn from the Office of National Drug Control Policy 

Circular: Drug Control Accounting, dated May 1, 2007. 

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Enclosure (1) to letter dated January 20, 2012 

Although the total number of Coast Guard interdiction and disruption events (for all drugs) 

increased slightly in FY 2011 (122 in FY 2010 to 129 in FY 2011), the number of Coast 

Guard cocaine removal events dropped in FY 2011 (97 in FY 2010 to 90 in FY 2011). 

Reduced availability of surface and air (detection and interdiction) assets continued to 

hinder counter-drug mission performance in the drug transit zone. The advancing age of 

the Coast Guard’s cutter fleet leads to increased unscheduled maintenance days and 

casualties, reducing the number of deployable assets available to support Joint Interagency 

Task Force South (JIATF-S). Through the 2011 Department of Homeland Security (DHS) 

Statement of Intent, the Coast Guard planned to provide 2,190 cutter days and 4,700 

Maritime Patrol Aircraft (MPA) hours to JIATF-S, but was only able to provide 1,823 

cutter days and 4,416 MPA hours for FY 2011 or approximately 83% of intended cutter 

days and 94% of intended MPA hours. 

In addition to reduced asset and resource availability, the following also contributed to the 

Coast Guard missing its FY 2011 Cocaine Removal Rate target: 

•	 Smaller average load size per Coast Guard cocaine removal event (839 kg in FY 

2011 compared to 946 kg in FY 2010)2 and 

•	 Increasingly sophisticated and evolving Transnational Criminal Organization 

tactics (e.g. greater use of self-propelled semi- and fully-submersibles). 

(3) The agency should describe the performance target for FY 2012 and how the agency plans to meet this 

target. If the target in FY 2011 was not achieved, this explanation should detail how the agency plans to 

overcome prior year challenges to meet targets in FY 2012. 

The Coast Guard’s target for FY 2012 is to remove 16.5% percent of the cocaine moving 

via non-commercial maritime means towards the United States. This target was developed 

by examining historical trends, as well as forecasting asset and resource availability along 

with the estimated flow of cocaine. The Coast Guard works cooperatively with other 

federal agencies to carry out the National Drug Control Strategy, including support for the 

JIATF-S counter drug detection and monitoring mission. To increase interdiction 

capability and capacity, the Coast Guard has several initiatives which are expected to come 

to fruition in FY 2012. Two National Security Cutters (BERTHOLF and WAESCHE) will 

be available for deployment to the JIATF-S Area of Responsibility. The Coast Guard and 

the U.S. Navy (USN) will continue to pursue expansion of Airborne Use of Force 

capability with the USN expecting to deploy AUF helicopters during nighttime operations 

in FY 2012 to improve the interdiction and “end game” prosecution of drug traffickers 

using go-fast vessels. The Coast Guard’s Research and Development Center is creating a 

visible marking device to assist in the recovery of jettisoned contraband, facilitating an 

increase in actionable intelligence through additional prosecutions and more accurate load 

size estimates within the CCDB. The Coast Guard will continue its counter drug hidden 

compartment detection course at the Maritime Law Enforcement Academy in FY 2012, 

which will improve boarding teams’ ability to investigate, search, locate, and access hidden 

2 The FY 2010 Performance Summary Report discussed average cocaine load size per event—this statistic 

considered all Coast Guard drug removal events. Using the FY 2010 methodology, the average cocaine load 

size per Coast Guard drug removal event would still be on the decline (585 kg in FY 2011 compared to 753 

kg in FY 2010). 

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Enclosure (1) to letter dated January 20, 2012 

compartments on suspect vessels. With go-fast type vessels remaining the primary means 

of conveyance by DTOs operating in and around the littorals, the Coast Guard will 

continue to expand its use of bilateral agreements, as well as provide training programs and 

engage in professional exchanges to enhance partner nation capability and to support 

Theater Security Cooperation initiatives. Such engagement strengthens ties with source and 

transit zone partner nations and increases their maritime law enforcement competency and 

capability throughout the transit zone. Based on its baseline of performance and the 

expanded capabilities mentioned, the Coast Guard expects that it can achieve its FY 2012 

target. 

(4) The agency should describe the procedures used to ensure performance data for this measure are accurate, 

complete, and unbiased in presentation and substance. The agency should also describe the methodology used 

to establish targets and actual results, as well as the data source(s) used to collect information. 

The data used to calculate the Coast Guard’s Cocaine Removal Rate is drawn from the 

interagency-validated CCDB. The amount of cocaine removed by the Coast Guard is the 

sum of all cocaine that is physically seized by Coast Guard personnel and all cocaine lost 

to the DTOs due to the Coast Guard’s efforts. The latter amount is at times an intelligencebased estimate of the quantity of cocaine onboard a given vessel that is burned, jettisoned, 

or scuttled in an attempt to destroy evidence when Coast Guard presence is detected. 

Cocaine removals are drawn from the CCDB. Data entered into the CCDB are approved 

through a quarterly, interagency vetting process. Although the cocaine removals are 

originally reported in kilograms, the Coast Guard converts the removal to metric tons to 

compute the Cocaine Removal Rate. The estimated non-commercial maritime flow of 

cocaine towards the United States is extracted from the CCDB. All data contained in the 

CCDB are deemed to be as accurate, complete and unbiased in presentation and substance 

as possible. 

At least annually, the Coast Guard’s Maritime Law Enforcement Program and Deputy 

Commandant for Operations’ Office of Performance Management and Assessment review 

all the assumptions that factor into the setting of its out-year targets, and makes 

adjustments as necessary. Revisions to the targets are reported via the Department of 

Homeland Security’s Future Year Homeland Security Program database. 

The Maritime Law Enforcement Program last updated its out-year performance targets in 

March 2011 in conjunction with normal target setting timelines. The key factors that drive 

the target setting process are the estimated out-year cocaine flow, the projected availability 

of Coast Guard resources (major cutters, long range MPA, Law Enforcement Detachments 

(LEDET) and Airborne Use of Force (AUF) helicopters), and any anticipated changes in 

Coast Guard capabilities, authorities, or partnerships that may impact cocaine removals. 

II. MANAGEMENT’S ASSERTIONS 

The Report should include a letter in which an accountable agency official makes the 

following assertions regarding the information presented above: 

(1) Performance reporting system is appropriate and applied – The agency has a 

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Enclosure (1) to letter dated January 20, 2012 

system to capture performance information accurately and that system was properly 

applied to generate the performance data. 

The Coast Guard performance reporting system is appropriate and applied. It was 

reviewed in a 2007 Independent Program Evaluation by the Center for Naval Analyses and 

a 2007 OMB PART evaluation. Both reviews verified the appropriateness and application 

of the performance reporting system, and the Coast Guard has made all significant changes 

recommended to ensure continued validity. The metric was also reviewed and approved by 

DHS leadership in 2010. 

(2) Explanations for not meeting performance targets are reasonable – The 


explanation(s) offered for failing to meet a performance target and for any
 

recommendations concerning plans and schedules for meeting future targets are 


reasonable. 


The Coast Guard did not meet its FY11 performance target. The explanations offered for 

failing to meet the target are reasonable. The Coast Guard’s FY 2011 performance target 

satisfied OMB Circular A-11 guidance for establishing targets. 

(3) Methodology to establish performance targets is reasonable and applied – The 

methodology described above to establish performance targets for the current year is 

reasonable given past performance and available resources. 

The Coast Guard methodology to establish performance targets is reasonable and applied. 

The Coast Guard uses a quantitative and qualitative process that reviews intelligence, 

logistics, strategic and operational policy, capability, emerging trends, past performance, 

and capacity variables impacting mission performance to establish performance targets. 

Targets generated by the program manager are reviewed independently by performance 

and budget oversight offices at Coast Guard Headquarters, as well as the DHS Office of 

Program Analysis and Evaluation, prior to entry into budget documents and the DHS 

Future Year Homeland Security Program database. 

(4) Adequate performance measures exist for all significant drug control activities 

The 2007 OMB PART of the Coast Guard Drug Interdiction Program and 2007 

Independent Program Evaluation by the Center for Naval Analyses validated the adequacy 

of Coast Guard performance measures. 

The agency has established one acceptable performance measure that covers all four 

budget decision units for which a significant amount of obligations ($1,000,000 or 50 

percent of the agency drug budget, whichever is less) were incurred in the previous fiscal 

year. 

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Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Chief Financial Officer 

Chief Information Officer 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Office of National Drug and Control Policy 

Associate Director for Planning and Budget 

United States Coast Guard 

Commandant 

Chief Financial Officer 

Chief Information Officer 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 
 

 

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