type: other

jurisdiction: US

text: b' UNCLASSIFIED\n\n\n United States Department of State\n\n and the Broadcasting Board of Governors\n\n Office of Inspector General\n\nOffice of Inspector General\n\n\n Office of Audits\n\n\n\n Audit of Department of State\n\n Use of Consular Fees Collected\n\n in Support of the Border Security Program\n\n\n Report Number AUD-FM-12-39, August 2012\n\n\n\n\n Important Notice\n\n This report is intended solely for the official use of the Department of State or the\n Broadcasting Board of Governors, or any agency or organization receiving a copy\n directly from the Office of Inspector General. No secondary distribution may be\n made, in whole or in part, outside the Department of State or the Broadcasting Board\n of Governors, by them or by other agencies of organizations, without prior\n authorization by the Inspector General. Public availability of the document will be\n determined by the Inspector General under the U.S. Code, 5 U.S.C. \xc2\xa7 552. Improper\n disclosure of this report may result in criminal, civil, or administrative penalties.\n\n\n\n UNCLASSIFIED\n\n\x0c United States Department of State\n and the Broadcasting Board of Governors\n\n Office of Inspector General\n\n\n\n\n PREFACE\n\n\n This report was prepared by the Office of Inspector General (OIG) pursuant to the Inspector\nGeneral Act of 1978, as amended, and Section 209 of the Foreign Service Act of 1980, as\namended. It is one of a series of audit, inspection, investigative, and special reports prepared by\nOIG periodically as part of its responsibility to promote effective management, accountability\nand positive change in the Department of State and the Broadcasting Board of Governors.\n\n This report is the result of an assessment of the strengths and weaknesses of the office, post,\nor function under review. It is based on interviews with employees and officials of relevant\nagencies and institutions, direct observation, and a review of applicable documents.\n\n The recommendations therein have been developed on the basis of the best knowledge\navailable to the OIG and, as appropriate, have been discussed in draft with those responsible for\nimplementation. It is my hope that these recommendations will result in more effective,\nefficient, and/or economical operations.\n\n I express my appreciation to all of those who contributed to the preparation of this report.\n\n\n\n\n Harold W. Geisel\n Deputy Inspector General\n\x0c UNCLASSIFIED\n\n\n\nAcronyms\n\nCA Bureau of Consular Affairs\nCBJ Congressional Budget Justification\nCWSS Consular Workload Statistical System\nDS Bureau of Diplomatic Security\nDV Diversity Immigrant Visa\nFAH Foreign Affairs Handbook\nFAM Foreign Affairs Manual\nH&L H and L Visa\nICASS International Cooperative Administrative Support Services\nIV Immigrant Visa\nMRV Machine Readable Visa\nOBO Bureau of Overseas Buildings Operations\nOIG Office of Inspector General\nRM Bureau of Resource Management\nRM/BP Bureau of Resource Management, Office of State Programs, Operations, and\n Budget\nTDY temporary duty\nU.S.C. United States Code\nWHA Bureau of Western Hemisphere Affairs\nWHTI Western Hemisphere Travel Initiative\nWSP Worldwide Security Protection\n\n\n\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n Table of Contents \n\nSection Page\n\n\nExecutive Summary .........................................................................................................................1 \n\n\nBackground\xe2\x80\xa6. .................................................................................................................................3 \n\n\nObjective\xe2\x80\xa6\xe2\x80\xa6. .................................................................................................................................9 \n\n\nAudit Results ..................................................................................................................................9 \n\n\n Finding A. OIG Could Not Determine Whether All Border Security Funds Were Used \n\n in Accordance With Mission Priorities ................................................................................9 \n\n Finding B. OIG Could Not Determine How Some Border Security Funds Were Used \n\n and Found That Other Funds Were Not Used in Accordance With Guidelines or \n\n Financial Instructions.........................................................................................................17 \n\n\nList of Recommendations ..............................................................................................................32 \n\n\nAppendices \n\n\n A. Scope and Methodology................................................................................................33 \n\n B. CA Post Allotment Funding Matrix ..............................................................................46 \n\n C. Bureau of Consular Affairs Response...........................................................................48 \n\n D. Bureau of Diplomatic Security Response .....................................................................52 \n\n E. Bureau of Resource Management Response .................................................................54 \n\n\nMajor Contributors to This Report ................................................................................................58 \n\n\n\n\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n Executive Summary\n The terrorist attacks against the United States on September 11, 2001, demonstrated the\nimportance of having a robust system to process visa requests from people wanting to enter the\nUnited States. The National Commission on Terrorist Attacks Upon the United States1 reported\nthat the hijackers made detectable false statements on visa applications. Since those attacks\noccurred, the complexity of consular operations has increased greatly. Currently, the\nDepartment of State\xe2\x80\x99s (Department) Border Security Program supports activities related to\nconsular relations, security, information resource management, and consular training. These\nactivities are needed to help secure America\xe2\x80\x99s borders from terrorists, criminals, or individuals\nwhose presence in the United States would violate immigration law. The Department\xe2\x80\x99s Border\nSecurity Program relies on funding from six consular-related fees and surcharges.\n\n The purpose of this audit was to determine to what extent consular fees collected by the\nDepartment were used during FY 2010 for mission priorities of the Border Security Program and\nin accordance with Department guidelines. The Office of Inspector General (OIG) conducted\nfieldwork for this audit at the Bureaus of Consular Affairs (CA), Resource Management (RM),\nWestern Hemisphere Affairs (WHA), East Asian and Pacific Affairs, South and Central Asian\nAffairs, and Diplomatic Security (DS). OIG also conducted fieldwork at Mexico City, Mexico;\nBeijing and Guangzhou, China; and New Delhi, India. In addition, OIG obtained additional\ninformation from officials in Mumbai, India. During FY 2011, the Department transitioned the\nfunding for certain post expenditures to the International Cooperative Administrative Support\nServices2 (ICASS) program with the intent of improving controls over the use of the border\nsecurity funds at overseas posts. OIG did not audit the new process, since it was not within the\nscope period of the audit.\n\n OIG found that the Border Security Program did not have a centralized program\nmanagement structure. Although CA was considered the \xe2\x80\x9clead bureau\xe2\x80\x9d for the Border Security\nProgram, it did not exercise authority to oversee all aspects of the program. In addition, OIG\nfound that the program-related roles and responsibilities were not clearly defined; funding\ndecisions were not based on prioritization factors; and overall accomplishments were not being\ntracked. The Department also did not have sufficient guidance on the use of the funds and did\nnot have an adequate process in place to monitor Border Security Program expenditures.\n\n OIG could not determine whether the Department was using border security funds in\naccordance with mission priorities because the Department did not have a detailed,\ncomprehensive program plan that identified Border Security Program priorities. OIG also could\nnot ensure that some border security funds were used in accordance with Department guidance\nbecause some bureaus moved funds from border security accounts to general accounts, thereby\nlosing the funds\xe2\x80\x99 identities.\n1\n The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United\nStates, issued on July 22, 2004.\n2\n According to the Foreign Affairs Handbook (FAH) (6 FAH-5 H-010, \xe2\x80\x9cICASS Functions\xe2\x80\x9d), \xe2\x80\x9cICASS is the principal\nmeans by which the U.S. Government provides and shares the cost of common administrative support needed to\nensure effective operations\xe2\x80\x9d at overseas posts. ICASS \xe2\x80\x9cprovides a full range of administrative services,\xe2\x80\x9d including\nmotor pool, purchasing and contracting, and accounting.\n 1\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n\n For expenditures that it was able to test, OIG found that border security funds were\ngenerally being used for consular-related activities. However, some expenditures were made for\nitems that did not comply with CA guidelines or other approved financial instructions.\nSpecifically, of the 431 expenditures, totaling about $2.1 million, tested from funds allotted to\nposts by CA and regional bureaus, OIG found that 71 expenditures, totaling about $166,000,\nwere not made in accordance with CA\xe2\x80\x99s formal guidelines or other approved financial\ninstructions and had not been approved separately by CA or the regional bureaus. Of the 30\nexpenditures OIG tested from funds allotted to posts by DS, OIG found that the expenditures\ngenerally complied with DS-approved post spending plans.\n\n Of the 269 domestic CA expenditures tested, totaling about $497 million, OIG found that\n187 expenditures, totaling about $280 million, were not spent in accordance with CA\xe2\x80\x99s\nguidelines or lacked sufficient documentation to determine how the funds were used. In\naddition, OIG tested 35 domestic DS expenditures, totaling about $15.5 million, and found that\nthree expenditures, totaling approximately $3.4 million, were not made in compliance with DS\nspending plans.\n\n OIG found that the individuals filling all of the overseas positions funded by the Border\nSecurity Program were performing consular work. However, of the 57 consular positions tested\nthat were not funded by the Border Security Program, 55 individuals filling those positions were\nperforming work similar to individuals in positions funded by the Border Security Program. The\nDepartment had not yet converted the 55 positions so that they would be funded from the Border\nSecurity Program.\n\nManagement Comments\n\n In its draft of this report, OIG made seven recommendations. Six recommendations\npertained to improving the program management structure of the Border Security Program, and\none recommendation pertained to expenditures erroneously charged to the program.\n\n Specifically, OIG recommended that CA formalize its authority over the Border Security\nProgram and establish a program management structure that would include developing clear\nroles and responsibilities for the parties involved in the Border Security Program, establishing\nprocesses to prioritize funding requests, developing comprehensive goals, preparing\ncomprehensive guidance on the use of border security-related funds, and developing a\nmonitoring process to ensure funds are used in accordance with applicable guidelines. OIG also\nrecommended that DS refund $2.1 million erroneously charged to the Border Security Program.\n\n In its July 24, 2012 response (see Appendix C) to the draft report, CA agreed with the six\nrecommendations directed to it and indicated that it had begun addressing some of the\nrecommendations. For example, CA stated that it was \xe2\x80\x9cin the process of revising\xe2\x80\x9d the Foreign\nAffairs Manual (FAM) to describe the Assistant Secretary\xe2\x80\x99s responsibilities to oversee the\nDepartment\xe2\x80\x99s use of consular fee revenue, including the allocation of consular fees to other\nbureaus. CA also stated that it had \xe2\x80\x9crevamped the budget formulation process\xe2\x80\x9d in FY 2011 to\ninclude a review by CA\xe2\x80\x99s Comptroller\xe2\x80\x99s Office. CA plans to implement Service Level\n 2\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nAgreements with bureaus to formalize roles and responsibilities and \xe2\x80\x9cthe process for prioritizing\nBorder Security Program funding requests.\xe2\x80\x9d CA also stated that it is \xe2\x80\x9csignificantly revising the\npost allotment process, including updating the CA Post Allotment Funding Matrix.\xe2\x80\x9d In addition,\nCA \xe2\x80\x9crecently created a bureau-wide internal review program, which focuses on financial\nmanagement.\xe2\x80\x9d Finally, CA stated that it had volunteered to be a \xe2\x80\x9cpilot bureau for the new multi-\nyear strategic planning requirements\xe2\x80\x9d developed under the Department\xe2\x80\x99s Quadrennial Diplomacy\nand Development Review.\n\n Based on the response, OIG considers the six recommendations directed to CA resolved,\npending further action. CA also suggested revisions to the report, which OIG considered and\nincorporated as appropriate.\n\n In its June 18, 2012, response (see Appendix D) to the draft report, DS indicated that it\nhad performed additional research and determined that it had not charged the Border Security\nProgram for a number of invoiced items. As a result, according to DS, the Border Security\nProgram actually owed DS additional funds.\n\n OIG confirmed that DS had in fact provided documentation to CA to support this\nconclusion. A CA official stated that CA had agreed to reimburse DS for the amount DS had\nrequested. Based on this information, OIG considers Recommendation 5 closed.\n\n In its June 14, 2012, response (see Appendix E), RM suggested revisions to the report,\nwhich OIG considered and incorporated as appropriate.\n\n On May 18, 2012, WHA informally provided additional documentation by e-mail to\nsupport certain exceptions that the audit had identified in Mexico City. OIG considered the\nadditional documentation and modified the reported exceptions as appropriate.\n\n Background\n\n The terrorist attacks on the United States in September 2001 underscored the importance\nof consular work in today\xe2\x80\x99s global environment. None of the measures in place at the time were\nable to stop the terrorist attacks. The 9/11 Commission Report stated that the hijackers had made\ndetectable false statements on visa applications. The report also stated that at the time of the\nattacks, the Department\xe2\x80\x99s consular officers were not considered full partners in the national\ncounterterrorism effort. Since those attacks, the complexity of consular operations has increased\ngreatly. The purpose of the Department\xe2\x80\x99s Border Security Program is to protect Americans\noverseas and contribute to the security of the Nation\xe2\x80\x99s borders. The Border Security Program is\nintended to be a core element of the coordinated national effort to deny individuals who threaten\nthe country entry into the United States and to facilitate the entry of legitimate travelers. The\nactivities performed by the Department related to border security include the following:\n\n \xef\x82\xb7 Adjudicating non-immigrant visa requests from foreign tourists, students, individuals\n conducting business, and Government officials at missions abroad.\n \xef\x82\xb7 Screening and adjudicating persons seeking immigrant visas.\n 3\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n \xef\x82\xb7 Providing routine and emergency assistance to American citizens overseas.\n \xef\x82\xb7 Ensuring American travelers are aware of dangerous situations abroad.\n \xef\x82\xb7 Adjudicating passport applications and issuing or denying passports to American\n citizens wanting to travel abroad.\n\n The Department\xe2\x80\x99s Border Security Program supports domestic and overseas consular\noperations and has five fundamental objectives:\n\n \xef\x82\xb7 Make accurate and timely information available to personnel.\n \xef\x82\xb7 Ensure worldwide, redundant connectivity.\n \xef\x82\xb7 Furnish staff with modern equipment and software.\n \xef\x82\xb7 Safeguard the integrity of consular processes.\n \xef\x82\xb7 Provide sufficient qualified staff trained in consular processes and anti-fraud\n techniques. \xc2\xa0\n\nConsular Fees Collected and Retained\n\n The Department receives funds for consular operations, including staff salaries,\nequipment, and supplies, from two major sources: funds appropriated by Congress and fees\ncollected for consular services that Congress permits the Department to retain. A CA official\nstated that since FY 2008, the amount annually appropriated directly to CA through the\nDiplomatic and Consular Programs appropriation has remained relatively stable at approximately\n$320,000. These appropriated funds have historically been used for CA-managed administrative\noverhead, including travel, training, and office supplies. In FY 2012, CA received an additional\n$18 million in appropriated funds for salary costs that had been funded previously by regional\nbureaus using appropriated funds. These salary costs will be funded from the Border Security\nProgram fees in the future.\n\n The Department also receives funds for consular services from fees that Congress permits\nthe Department to collect and retain and to apply directly to its operations. Consular fees consist\nof charges for visa and passport services, as well as for other consular services provided.\nAccording to the United States Code (U.S.C.),3 the head of each agency can prescribe regulations\nestablishing a charge for a service provided by the agency. Each charge should be fair and based\non the costs to the Government, the value of the service to the recipient, public policy or interest\nserved, or other relevant facts.\n\n The Department retains a portion of the consular fees that it collects and remits the\nremaining portion to the U.S. Department of the Treasury. Prior to 1994, the Department did not\nretain any of the consular fees collected. Subsequently, Congress authorized the Department to\nretain Machine Readable Visa (MRV) fees to help fund consular operations related to border\nsecurity. Currently, the Department is also authorized to collect and retain other fees to fund\n\n\n\n\n3\n 31 U.S.C. \xc2\xa7 9701, \xe2\x80\x9cFees and charges for Government services and things of value.\xe2\x80\x9d\n 4\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nconsular-related activities. The amounts collected are treated as an offsetting collection4 for the\nDepartment. However, the Department is not authorized to retain all of the consular fee revenue\nit collects. For instance, in FY 2010, the Department collected approximately $2.62 billion5 in\nfee revenue and was allowed to retain about 70 percent of the fees (or approximately\n$1.8 billion). The remaining fees were remitted to the Department of the Treasury.\n\n The six consular fees and surcharges (referred to collectively as \xe2\x80\x9cfees\xe2\x80\x9d) that fund the\nBorder Security Program are shown in Table 1.\n\n Table 1. Department-Retained Consular Fees Used for the Border Security Program\n Type of Fee Purpose of Fee\n Machine Readable A fee charged for processing machine readable non-immigrant visas. These\n Visa (MRV) fees finance much of the Department\xe2\x80\x99s Border Security Program.\n Western Hemisphere A fee to cover the costs of meeting increased demand for passports as a\n Travel Initiative result of WHTI. This program implements the requirements of the\n (WHTI) Passport Intelligence Reform and Terrorism Prevention Act of 2004, which mandates\n Surcharge that the Secretary of Homeland Security, in consultation with the Secretary\n of State, develop and implement a plan to require U.S. citizens and certain\n non-U.S. citizens to present a passport or other secure documentation\n denoting identity and citizenship when entering the United States.\n Passport Security Part of the passport fee, this surcharge helps recover the costs of increased\n Surcharge border security, including the costs of enhanced biometric passport features.\n Immigrant Visa (IV) This surcharge, which is charged in addition to immigrant visa fees, is to\n Security Surcharge recover the costs of enhanced border security costs related to immigrant\n visas.\n Diversity Immigrant This surcharge is used to recover the costs of allocating and processing\n Visa (DV) Lottery applications for visas to be used under the Diversity Lottery Program.\n Surcharge Fee\n H and L (H&L) Visa A fee collected from visa applications related to employment within the\n Fraud Prevention and United States. The fee finances the fraud prevention components of the\n Detection Fee Border Security Program.\n Source: Prepared by OIG based on information from the FY 2012 Congressional Budget Justification, the Department\xe2\x80\x99s\n Foreign Affairs Manual, and the United States Code.\n\n\n The amount of consular fees collected and retained by the Department for the Border\nSecurity Program during FYs 2008\xe2\x80\x932011 is provided in Table 2.6\n\n\n\n\n4\n Office of Management and Budget Circular No. A-11, Preparation, Submission, and Execution of the Budget,\nstates that an offsetting collection is a payment to the \xe2\x80\x9cGovernment that, by law, is credited directly to the\nexpenditure account\xe2\x80\x9d and is deducted from the agency\xe2\x80\x99s budget authority. Usually, the funds are \xe2\x80\x9cauthorized to be\nspent for the purposes of the account without further action by Congress. The authority to spend offsetting\ncollections is a form of budget authority.\xe2\x80\x9d\n5\n This amount reflects all consular collections for FY 2010. Border Security Program fees are part of the amount\ncollected.\n6\n Border Security Program consular fees are no-year funds, meaning that the funds are available without fiscal year\nlimitation.\n 5\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n Table 2. Fees Collected and Retained for the Border Security Program by Fee Type \xe2\x80\x93\n FYs 2008-2011 (Amounts in thousands)\n Type of\n Fee FY 2008 FY 2009 FY 2010 FY 2011\n MRV $926,703 $819,296 $976,834 $1,239,349\n WHTI 308,502 253,548 265,748 262,870\n Passport 256,609 247,108 302,652 440,661\n IV 23,553 23,046 38,729 52,685\n DV 20,912 21,560 24,026 27,131\n H&L 45,188 35,548 37,859 40,825\n Total $1,581,467 $1,400,106 $1,645,848 $2,063,521\n Source: Prepared by CA.\n\n\nResponsible Bureaus\n\n The Department\xe2\x80\x99s Border Security Program consists of a number of cross-cutting\nactivities to secure America\xe2\x80\x99s borders, such as consular relations, diplomatic security,\ninformation resource management, and training. Therefore, the border security-related fees are\nused by functional bureaus, regional bureaus, and posts. Some of the entities more significantly\ninvolved in the Department\xe2\x80\x99s Border Security Program and their duties pertaining to the program\nare as follows:\n\n \xef\x82\xb7\t Bureau of Consular Affairs \xe2\x80\x93 CA is the lead bureau for the Department\xe2\x80\x99s Border\n Security Program. CA\xe2\x80\x99s mission is to protect the lives and interests of American citizens\n abroad and to strengthen the security of U.S. borders through the vigilant adjudication of\n visas and passports. CA is responsible for deploying automated systems and developing\n and implementing policies, procedures, and processes that coordinate with other agencies\n across the Federal Government in support of homeland security goals. In 2009, CA\n created the Office of the Comptroller to \xe2\x80\x9censure that CA resources, at a Bureau level,\n were strategically tracked, leveraged, and utilized to further the goals of both CA\xe2\x80\x9d and\n the Department. The Office of the Comptroller is responsible for leading \xe2\x80\x9call strategic\n activities related to contracting, budgeting, accounting, resource management, and\n outreach related to resources.\xe2\x80\x9d\n\n \xef\x82\xb7\t Bureau of Diplomatic Security \xe2\x80\x93 As the Department\xe2\x80\x99s law enforcement arm, DS is a\n vital component of the Border Security Program\xe2\x80\x99s efforts related to consular fraud\n investigations. DS investigates visa and passport fraud cases and carries out related\n enforcement functions. Regional Security Officers are the main DS representatives at\n posts overseas. Through a memorandum of understanding with CA, Regional Security\n Officers at posts have specific individuals who focus on consular fraud issues.\n\n\n\n\n 6\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n \xef\x82\xb7\t Foreign Service Institute \xe2\x80\x93 The Foreign Service Institute provides training for consular\n officers, consular agents, locally employed staff,7 and systems staff who support\n automated consular systems. The training covers the protection of American citizens\n abroad, including crisis planning and victim assistance; visa adjudication policies and\n procedures; interviewing techniques; name checks; fraud prevention; and leadership and\n management principles. The Foreign Service Institute also uses border security funds for\n administrative support related to conducting this training.\n\n \xef\x82\xb7\t Bureau of Administration \xe2\x80\x93 The Bureau of Administration uses border security funds to\n provide for facilities maintenance, custodial services, and utilities at the National Visa\n and National Passport Center in New Hampshire, the Kentucky Consular Center, and the\n Charleston Passport Center in South Carolina. Border security funds are also used to\n lease domestic consular facilities.\n\n \xef\x82\xb7\t Bureau of Information Resource Management \xe2\x80\x93 The Bureau of Information Resource\n Management provides system monitoring, technical support, and systems software\n programming.\n\n \xef\x82\xb7\t Regional Bureaus and Posts \xe2\x80\x93 Regional bureaus are responsible for posts in the regions\n covered by the bureau. For the Border Security Program, during FY 2010, regional\n bureaus received border security funds to support consular operations at overseas posts.\n For instance, the regional bureaus received funds to pay for the start-up and recurring\n costs associated with American consular officers and salaries of locally employed staff at\n the posts for which they are responsible. Regional bureaus allocate these funds directly\n to their posts.\n\nFY 2010 Border Security Program Expenditures\n\n During FY 2010, the Department expended approximately $1.2 billion of the $1.6 billion\nin consular fees collected for the Border Security Program, as detailed in Table 3. Border\nsecurity fees support consular-related activities in the Department, including salaries and benefits\nfor consular officers and locally employed staff performing consular functions around the world.\n\n\n\n\n7\n \xe2\x80\x9cLocally employed staff\xe2\x80\x9d is the general term used for Foreign Service Nationals and Ordinarily Resident\nAmerican-Citizen employees. Eligible Family Members are also hired locally and considered to be part of locally\nemployed staff.\n 7\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n Table 3. FY 2010 Expenditures From Fees Collected for the Border\n Security Program by Fee Type\n Amount Expended\n Type of Fee (In thousands)\n MRV $685,168\n WHTI 208,085\n Passport 250,583\n IV 21,847\n DV 17,266\n H&L 26,367\n Total $1,209,316\n Source: Prepared by OIG from the Department\'s FY 2010 Expense Database.\n\n\n For FY 2010, the Department used Border Security Program consular fees on several\ndifferent categories of budget object codes.8 As shown in Figure 1, the largest amount of\nexpenditures was for a budget object code called \xe2\x80\x9cOther Contractual Services,\xe2\x80\x9d which included\nitems such as off-site MRV fee collection, armored car service, and guard services.\n\n Figure 1. Amount Expended by Budget Object Codes\n\n Other Contractual Services\n 1% ($474,364,000)\n 1% 0% Salaries and Benefits\n ($381,051,000)\n 12% Printing ($183,297,000)\n 39%\n 15%\n Telephone Services\n ($138,382,000)\n Supplies ($14,025,000)\n 32%\n Travel ($13,432,000)\n\n Other ($4,764,000)\n\n\n Source: Prepared by OIG from the Department\'s FY 2010 Expense Database.\n\n\n\n\n8\n A budget object code is a type of accounting classification used by the Department to identify the kinds of services\nor materials for which payments were made.\n 8\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n Objective\n The overall objective of this audit was to determine to what extent consular fees collected\nby the Department were used for mission priorities of the Border Security Program and in\naccordance with Department guidelines.\n\n Audit Results\n\nFinding A. OIG Could Not Determine Whether All Border Security Funds\nWere Used in Accordance With Mission Priorities\n OIG could not determine whether the Department was using border security funds in\naccordance with mission priorities. Although the Department had developed high-level\nobjectives for the Border Security Program, it did not have a detailed, comprehensive program\nplan for the Border Security Program that identified program priorities. OIG was unable to\ndetermine whether the Department was using border security funds for priority items because the\nDepartment\xe2\x80\x99s management structure for the Border Security Program was decentralized.\nAlthough CA was considered the \xe2\x80\x9clead\xe2\x80\x9d bureau for the Border Security Program, it did not\nexercise authority to oversee all aspects of the Border Security Program. In addition, OIG found\nthat the program-related roles and responsibilities were not clearly defined; funding decisions\nwere not based on prioritization factors; and overall accomplishments were not being tracked.\n\n Without a centralized management structure, it is difficult for an organization to easily\nprioritize needs. A program plan would assist CA to more effectively plan activities related to\nthe Border Security Program and would provide a baseline from which CA could measure\nprogress in addressing border security issues. The Department needs to make long-term plans\nfor the Border Security Program to maximize the impact of every dollar spent.\n\nDepartment Has Established Broad Objectives for the Border Security Program\n\n The Department\xe2\x80\x99s FY 2010 Congressional Budget Justification (CBJ) stated that the\nBorder Security Program was a critical element in the Department\xe2\x80\x99s fundamental mission of\nprotecting Americans overseas and safeguarding the Nation\xe2\x80\x99s borders. The CBJ listed five broad\nobjectives for the Border Security Program:\n\n Information Technology\n Enhance data sharing and data analysis initiatives with other agencies and\n increase the effectiveness and efficiency of the applicant screening process\n through name checks and biometric technologies (fingerprint scanning, facial\n recognition). Give consular officials access to information on individuals\n applying for passports or visas.\n\n\n\n\n 9\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n Connectivity\n Provide worldwide and redundant connectivity in support of passport and visa\n adjudication, including sufficient bandwidth to support the Consular Consolidated\n Database (CCD) and other data sharing and remote management initiatives.\n\n Infrastructure\n Provide the most modern equipment and software to support consular operations.\n Ensure an effective replacement and refresh schedule and development of\n software programs to meet workload and legislative requirements.\n\n Integrity\n Strengthen the integrity of passport and visa issuance processes and products\n through improvements to the documents themselves, enhancements in\n information storage and retrieval, expanded training in anti-fraud techniques and\n procedures, and a comprehensive anti-fraud program.\n\n Human Resources\n Supply a sufficient number of qualified staff to fill new and vacant consular\n positions. Work with the Department to hire, train, and assign personnel to meet\n increasing workload demands and program growth domestically and overseas.\n\n CA and DS included strategic goals relating to the Border Security Program objectives in\ntheir bureau plans. For instance, CA\xe2\x80\x99s FY 2010 Bureau Strategic Plan included four strategic\ngoals that related to the Border Security Program: (1) provide passport services to the American\npublic, (2) enhance the security of the visa process, (3) transition to a fully electronic visa\nprocess, and (4) prohibit travel of terrorists. DS included a strategic goal in its FY 2010 Bureau\nStrategic Plan that related to the Border Security Program: detect and counter attempts to\ncommit U.S. visa and passport fraud.\n\n The five Border Security Program objectives generally aligned with the border security\nstrategic goals developed by CA and DS. For example, the Border Security Program\nInformation Technology objective aligned with CA\xe2\x80\x99s strategic goal of transitioning to a fully\nelectronic visa process. Likewise, the Integrity objective aligned with CA\xe2\x80\x99s strategic goal of\nenhancing the security of the visa process, as well as DS\xe2\x80\x99s strategic goal of detecting and\ncountering attempts to commit U.S. visa and passport fraud.\n\nDepartment Does Not Have a Detailed Program Plan for the Border Security Program\n\n Although the Department had developed broad program objectives, it did not have a\ndetailed overall program plan for the Border Security Program. In its FY 2010 CBJ, the\nDepartment provided information on how it planned to spend funds, such as MRV support costs\nand passport operations. Although this information is useful for high-level budget\ndeterminations, it does not provide the type of information or level of detail that a program plan\nshould provide.\n\n\n 10\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n Strategic planning relates to an organization\xe2\x80\x99s process of defining strategies or directions\nand making decisions on allocating the organization\xe2\x80\x99s resources to pursue the strategies. A\nstrategic plan is usually prepared at a high level, while a business or program plan is normally\ndeveloped for a specific service or program. One important component of a successful program\nis a detailed program plan, which provides the program\xe2\x80\x99s foundation. Specifically, a program\nplan should include the following components:\n\n \xef\x82\xb7 Details on strategy.\n \xef\x82\xb7 Goals and priorities.\n \xef\x82\xb7 A scorecard to measure and manage the plan, including key indicators.\n\n The focus of the Department\xe2\x80\x99s formal strategic planning process was at the bureau and\npost levels. While having the focus at these levels may be appropriate for developing a strategic\nplan for the Department, it is important for programs to have specific program plans, which link\nto high-level strategic plans, that provide the level of detail needed to assist program\nmanagement to make informed, evidence-based decisions; prioritize resources; measure\nprogress; and align the use of resources with policies.\n\nBorder Security Program Lacked a Centralized Program Structure\n\n OIG was unable to determine whether the Department was using border security funds\nfor priority items because the Border Security Program did not have a centralized program\nstructure. A number of bureaus and posts received funds from the Border Security Program, but\nthe funded projects were being managed decentrally. Although the Border Security Program\nexpended over $1.2 billion in FY 2010, the Department had not formally designated a program\nmanagement office that included a manager responsible for the program, had not defined all of\nthe participants\xe2\x80\x99 roles and responsibilities in the context of the Border Security Program, did not\nhave a sufficient process in place to prioritize budget needs, and did not sufficiently track Border\nSecurity Program accomplishments and measure progress toward meeting Border Security\nProgram goals. Without a centralized program management structure, the Department cannot\nensure that overall goals of the program are coordinated.\n\n Designated Program Management Office and Program Manager Needed\n\n The Department had identified the Under Secretary for Management as having authority\nfor the executive direction of the Border Security Program. However, the Department had not\nformally designated any bureau or office with responsibility for overall program management.\nAlthough CA was considered the \xe2\x80\x9clead\xe2\x80\x9d bureau for the Border Security Program and had the\nmost significant management role, it did not have the formal authority needed to oversee all\naspects of the program\xe2\x80\x93specifically, projects being managed by other bureaus or offices\xe2\x80\x93or to\nmonitor expenditures of border security funds.\n\n The Under Secretary for Management stated that CA was responsible for the Border\nSecurity Program and therefore should be considered the program manager for the Department\xe2\x80\x99s\n\n\n 11\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nentire Border Security Program. According to the FAM,9 the Assistant Secretary for Consular\nAffairs \xe2\x80\x9c[m]anages the worldwide consular function; ensures responsive and efficient provision\nof consular services abroad\xe2\x80\x9d and \xe2\x80\x9cpresents and justifies resource requirements for the Bureau.\xe2\x80\x9d\nAlthough the FAM states that CA had the authority to manage consular activities worldwide,\nneither the FAM nor the Foreign Affairs Handbook (FAH) had formally identified CA as the\nprogram manager for the Border Security Program.\n\n To achieve program success, CA should be formally designated as the Border Security\nprogram manager. As the program manager, CA should provide overall direction and oversight\nof the program\xe2\x80\x99s implementation, including maintaining control over the program\xe2\x80\x99s budget and\nensuring that the program\xe2\x80\x99s overall goals are achieved.\n\n Roles and Responsibilities for Implementing the Border Security Program Needed\n\n A number of bureaus were responsible for Border Security Program activities. For\nexample, the Department\xe2\x80\x99s CBJ stated that DS provides resources to conduct criminal\ninvestigations concerning passport and visa fraud and identification document fraud; the Foreign\nService Institute provides consular training; the Bureau of Information Resource Management\nprovides system monitoring, operating, and technical support and system software programming;\nand the Bureau of Administration provides facilities maintenance, custodial services, and utilities\nat domestic locations. To be successful, a program needs an organizational structure and clearly\ndefined roles and responsibilities. The Department had not developed formal, comprehensive\npolicies that defined all participants\xe2\x80\x99 roles and responsibilities within the context of the Border\nSecurity Program.\n\n Process To Identify and Manage Border Security Program Priorities Needed\n\n The Department did not base its border security funding decisions on priority factors.\nThe bureaus that received funding from the Border Security Program prepared annual funding\nrequests that detailed the planned usage of the funds. To develop a budget plan for the upcoming\nfiscal year, the regional bureaus, CA, and DS obtained information from posts separately. For\nexample, CA obtained requests for overseas Border Security Program funding from posts using\nthe Web-based Consular Affairs Post Allotment System.10 CA reviewed the information in its\npost allotment system and determined which funding requests it would include in the CA border\nsecurity budget request. A CA official stated that CA prioritizes its resource needs in its annual\nbudget request. Regional bureaus sent their own data call requests to posts in their regions\nrequesting information on funding needs to support border security-funded consular positions at\npost. Once the regional bureaus approved the posts\xe2\x80\x99 requests for Border Security Program\nfunding, the information was submitted to the Bureau of Resource Management, Office of State\nPrograms, Operations, and Budget (RM/BP). DS also requested information from posts and\nfrom DS program managers on funding needs and developed a funding request based on the data\nreceived. DS submitted its request for Border Security Program funding to both CA and RM/BP.\n\n9\n 1 FAM 251.1, \xe2\x80\x9cAssistant Secretary for Consular Affairs\xe2\x80\x93Responsibilities.\xe2\x80\x9d \n\n10\n The Consular Affairs Post Allotment System allows officers at posts to initiate, justify, and track their respective \n\nfunding requests from \xe2\x80\x9ccradle to grave.\xe2\x80\x9d\n\n 12\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nRM/BP officials stated that RM/BP had reviewed the request in the context of CA\xe2\x80\x99s full Border\nSecurity Program proposal.\n\n The Department did not have a comprehensive process to evaluate the importance of the\nrequests from posts or bureaus to ensure that funds were used for high-priority needs. During\nFY 2010, RM/BP was responsible for allotting border security funds to the bureaus involved in\nthe Border Security Program. RM/BP, in consultation with CA, based the funding decisions on\nthe requests for funding and on what had been allotted the previous year.\n\n Border security funds were provided to posts from three different sources: the regional\nbureaus provided funds to be used for items such as recurring benefit costs for consular officers\nand salaries of some locally employed staff; CA provided funds to be used for salaries and\nbenefits of certain consular positions overseas as well as for costs incurred for specific travel,\ncertain contracts, and special supplies unique to consular work; and DS provided funds to be\nused for recurring benefits and operational costs in support of visa and passport investigations.\nCA provided border security funds to posts based on a post\xe2\x80\x99s request. CA did not use a standard\nmethodology for providing these funds to posts. CA officials stated that CA compared the\ninformation submitted by posts on the Consular Affairs Post Allotment System with historical\nand personnel data to determine the amount to fund rather than using standardized factors to\nprioritize posts\xe2\x80\x99 requests. DS also provided border security funds to posts for investigative needs\nrelated to the Assistant Regional Security Officer\xe2\x80\x93Investigator program.11\n\n During the audit, CA officials stated that RM and the Under Secretary for Management\nhad authorized CA to have additional control over border security funding to posts. For\nexample, during FY 2011, CA was authorized to provide funds to posts for consular-related\nICASS costs that had previously been allotted to the regional bureaus, which then sub-allotted\nthe funds to posts. OIG did not audit the revised process, since it was not within the scope\nperiod of the audit; however, according to an RM/BP official, this was part of an initiative to\ncentralize management of Border Security Program requirements and resources. The Under\nSecretary for Management also stated that the intent of utilizing the ICASS program for the\nBorder Security Program was to improve the controls over the use of the border security funds at\noverseas posts. CA will also soon be allowed to allot funds directly to posts for the salaries of\nlocally employed staff in consular sections rather than have RM/BP allot the funds first to the\nregional bureaus, which in turn would sub-allot the funds to posts. Within the next 2 years, CA\nplans to allot funds directly to posts for the salaries of all individuals assigned to the consular\nsection.\n\n\n\n\n11\n Assistant Regional Security Officer\xe2\x80\x93Investigators are the DS representatives at posts overseas who conduct\ncriminal investigations related to the illegal issuance or use of passports or visas.\n 13\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n According to the Project Management Institute,12 as part of a successful program, the\nprogram manager should manage budgets at the program level. The program\xe2\x80\x99s resource needs\nshould be prioritized so that funds can be used in the most efficient and effective manner. In\norder to prioritize activities, program managers should implement a systematic process to select\nprojects and allocate resources to these\nprojects in order to maximize value added.\nThe program manager should develop overall Maintenance and Repair Program\nplans that bridge different projects and focus Management Model\nresources on the program\xe2\x80\x99s key priorities.\n The Department has other programs that it\n As the program manager, CA should could use as a basis for the Border Security\n Program structure. Officials from the Bureau\nhave the authority to approve border security of Consular Affairs stated that they had met\nproject budgets and to allot funds as with officials from the Bureau of Overseas\nappropriate to border security projects. Buildings Operations (OBO) to discuss\nDuring the development of budgets or OBO\xe2\x80\x99s maintenance and repair program,\nspending plans, CA should provide high-level which incorporates many of the characteristics\n of a centralized program. For example,\nguidance to the bureaus on the types of\nactivities that will be funded. Funding \xef\x82\xb7\t OBO has been delegated overall authority\ndecisions should be based on standardized for maintenance and repair of overseas\npriority factors that CA has developed. real property.\n \xef\x82\xb7\t Roles and responsibilities for OBO, the\n There is little transparency into how regional bureaus, and posts have been\n established.\nother bureaus are using the border security \xef\x82\xb7\t Formal policies and procedures for\nfunds. CA had begun to take a leadership role program activities are available.\nin developing budgets with other bureaus that \xef\x82\xb7\t OBO has developed a documented\nreceive funding from the Border Security process for posts to request funds and has\nProgram and in improving transparency. In established an electronic application for\n posts to submit requests.\nFY 2010, RM/BP worked with bureaus to\n \xef\x82\xb7\t OBO has specific, standardized factors\ndevelop border security-related budget that it uses to prioritize requested\nrequests. RM/BP would confer with CA projects.\nofficials about the budget requests received \xef\x82\xb7\t OBO makes the decision on which\nfrom other bureaus and ensure that CA agreed projects to fund and generally bases its\nwith the requests prior to finalizing the decision on a prioritized list of projects.\n \xef\x82\xb7\t OBO has formal monitoring processes in\nallotments.\n place, including on-site audits of post\xe2\x80\x99s\n expenditures by headquarters-based\n In FY 2011, CA revamped the budget auditors and visits by headquarters-based\nreview process by beginning to hold managers who review the adequacy of\n\xe2\x80\x9chearings,\xe2\x80\x9d in which officials from bureaus funding received and any unmet needs.\nand CA offices met with CA\xe2\x80\x99s Comptroller to \xef\x82\xb7\t OBO tracks its efforts to reduce the\n backlog of maintenance and repair and\njustify the bureaus\xe2\x80\x99 and CA\xe2\x80\x99s border security- reports this information annually in the\nrelated budget requests. These hearings Long-Range Overseas Maintenance Plan.\nprovided an opportunity for CA officials to\nunderstand other bureaus\xe2\x80\x99 needs and plans for\nthe funds, specifically those funds related to border security. A CA official stated that this\n\n12\n The Project Management Institute is a not-for-profit association for the project management profession.\n 14\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nprocess included an analysis of the fund requests and could potentially lead to reduced funding\nbased on the analysis. While CA officials stated that they believed the revised Border Security\nProgram budgeting process proved to be useful, they also stated that they would strive for greater\ntransparency and were adjusting the budget review process during FY 2012.\n\n Accomplishments Need Tracking and Progress Needs Measuring\n\n Although some bureaus and posts that received Border Security Program funds had\nestablished specific performance indicators for their respective Border Security Program\nactivities, the Department had not established comprehensive performance goals and indicators\nfor the program as a whole that could be used to report on accomplishing the purpose of the\nprogram: protecting Americans overseas and contributing to the security of the Nation\xe2\x80\x99s borders.\n\n Measuring performance against program goals is an essential part of program\nmanagement, according to Federal accounting standards.13 Program planning provides a base\nfrom which progress can be measured. The program should measure its accomplishments by\nreporting what was provided and what was achieved with the resources used. Measuring\nperformance is a means of improving program efficiency and effectiveness and program results.\n\n A CA official stated that the Department had not developed useful metrics for measuring\nwhether border security had improved. Another CA official stated that it was challenging to\ndetermine useful indicators showing that the borders are more secure. For example, it is difficult\nto develop an indicator that the Department can use to affirmatively link its border security\nactivities to the prevention of a terrorist attack. However, the CA official stated that CA was in\nthe process of rethinking its goals and was striving to develop goals to better track the successes\nof the Border Security Program. Although it may be difficult to establish useful goals,\nestablishing goals and tracking the accomplishment of those goals are essential parts of any\nprogram.\n\nProgram Planning and Centralized Management Structure Allow for Efficient and\nEffective Use of Resources\n\n The Department\xe2\x80\x99s lack of clarity in the management structure for the Border Security\nProgram has led to ad hoc program management. Formalizing CA\xe2\x80\x99s role as the program\nmanager for the Border Security Program should improve the management of the program.\nWithout a transparent and comprehensive program plan for the Border Security Program, the\nDepartment does not have clearly defined roles and responsibilities for the program participants.\nA program plan would assist CA in more effectively planning activities related to the program\nbased on priorities and would provide a baseline from which CA could measure progress in\naddressing border security issues. Program planning allows an organization to align resources\nand guide decision-making to accomplish priorities and improve outcomes. Without a program\nplan guiding the Border Security Program, it will be difficult to prioritize program needs.\n\n\n\n13\n Statement of Federal Financial Accounting Concepts 1, \xe2\x80\x9cObjectives of Federal Financial Reporting.\xe2\x80\x9d\n 15\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nRecommendation 1. OIG recommends that the Bureau of Consular Affairs (CA)\nformalize its authority over the Border Security Program by modifying the Foreign\nAffairs Manual (1 FAM 250) to recognize CA\xe2\x80\x99s role as the overall program management\noffice for the Border Security Program.\n\nCA Response: CA agreed with this recommendation, stating that it is revising the FAM\nto include language describing the Assistant Secretary\xe2\x80\x99s authority to oversee the\nDepartment\xe2\x80\x99s use of consular fee revenue. The FAM revision will also describe the\nAssistant Secretary\xe2\x80\x99s authority to establish policies and procedures that ensure that\nconsular fees are used properly. CA stated that it planned to submit all proposed\nrevisions for appropriate clearances during August 2012.\n\nOIG Reply: OIG considers this recommendation resolved. The recommendation can be\nclosed when OIG reviews and accepts documentation showing that the revised language\nhas been published in the FAM.\n\nRecommendation 2. OIG recommends that the Bureau of Consular Affairs develop\nclear roles and responsibilities for all parties involved in the Border Security Program and\ncodify this information in the Foreign Affairs Manual.\n\nCA Response: CA agreed with this recommendation, stating that it plans to develop\nService Level Agreements with Department bureaus that receive consular fee funding,\nwhich will \xe2\x80\x9cformalize the roles and responsibilities of all parties involved in the Border\nSecurity Program.\xe2\x80\x9d CA further stated that it \xe2\x80\x9canticipates developing and implementing\xe2\x80\x9d\nthe Service Level Agreements in FY 2013 and will work to codify the procedures in the\nFAM.\n\nOIG Reply: OIG considers this recommendation resolved. This recommendation can be\nclosed when OIG reviews and accepts documentation showing the Service Level\nAgreements procedure that formalizes the Border Security Program\xe2\x80\x99s roles and\nresponsibilities and documentation showing that the procedures have been codified in the\nFAM.\n\nRecommendation 3. OIG recommends that the Bureau of Consular Affairs develop\nprocesses to prioritize Border Security Program funding requests and oversee the\nallocation of funding for prioritized projects of the Border Security Program.\n\nCA Response: CA agreed with this recommendation, stating that in FY 2011 it had\n\xe2\x80\x9crevamped\xe2\x80\x9d the budget process, requiring partner bureaus and CA directorates to submit\n\xe2\x80\x9cdetailed budget justifications and participate in formal hearings.\xe2\x80\x9d CA also stated that it\nplans to use the Service Level Agreements to \xe2\x80\x9cformalize the process for prioritizing\nBorder Security Program funding requests.\xe2\x80\x9d\n\nOIG Reply: OIG considers this recommendation resolved. This recommendation can be\nclosed when OIG reviews and accepts documentation showing the processes for\n\n 16\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n submitting budget justifications and for prioritizing Border Security Program funding\n requests.\n\n Recommendation 4. OIG recommends that the Bureau of Consular Affairs develop\n comprehensive performance goals and indicators for the Border Security Program and a\n process to measure the program\xe2\x80\x99s accomplishments.\n\n CA Response: CA agreed with this recommendation, stating that it had \xe2\x80\x9cpursued a more\n comprehensive strategic planning process in order to develop an integrated CA-wide\n plan.\xe2\x80\x9d CA further stated that it plans to expand the strategic planning initiatives to the\n Border Security Program.\n\n OIG Reply: OIG considers this recommendation resolved. This recommendation can be\n closed when OIG reviews and accepts documentation showing Border Security Program\n specific performance goals and indicators and a process to measure the program\xe2\x80\x99s\n accomplishments, including work performed by other bureaus or posts.\n\nFinding B. OIG Could Not Determine How Some Border Security Funds\nWere Used and Found That Other Funds Were Not Used in Accordance With\nGuidelines or Financial Instructions\n\n OIG could not ensure that some border security funds were used in accordance with CA\xe2\x80\x99s\nformal guidelines or other approved financial instructions because several bureaus had moved\nfunds from border security accounts to general accounts, thereby losing the Border Security\nProgram fund identity. For expenditures that it was able to test, OIG found that border security\nfunds were generally being used for consular-related activities. However, some expenditures\nwere made for items that were not in compliance either with CA\xe2\x80\x99s guidelines or with other\napproved financial instructions. Specifically, of the 431 expenditures, totaling about\n$2.1 million, made from funds allotted by CA and regional bureaus to overseas posts that were\ntested, OIG found 174 expenditures, totaling about $434,000 (approximately 21 percent), made\nfor items that were not allowed by CA\xe2\x80\x99s guidelines or the budgets and advice of allotments14\napproved by the regional bureaus. Of the 174 expenditures for which OIG had concerns, OIG\nfound that CA had approved 103 expenditures, totaling about $268,000. Therefore, 71\nexpenditures, totaling about $166,000, of the 431 expenditures tested were not in accordance\nwith CA\xe2\x80\x99s guidelines or approved financial instructions and had not been separately approved by\nCA or the regional bureaus. OIG also tested 30 expenditures, totaling approximately $5,600,\nfrom funds allotted by DS to overseas posts and found that posts generally complied with DS-\napproved post spending plans.\n\n Of the 269 CA expenditures tested domestically, totaling about $497 million, OIG\nidentified 187 expenditures, totaling about $280 million (approximately 56 percent), that were\n14\n After the Department receives its apportionment authority, funds are made available through \xe2\x80\x9callotments.\xe2\x80\x9d\nAllotment authorities are issued at the highest aggregate funding level to major bureaus, such as the regional\nbureaus. The subdivision of funds by a regional bureau to its posts, for example, is accomplished by issuing an\nadvice of allotment.\n 17\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nnot spent strictly in accordance with CA guidelines or for which OIG could not determine how\nthe funds were used. For example, funds retained from the Passport Security Surcharge were\nsupposed to be used only for secure mail and postage. However, CA used approximately $169\nmillion (68 expenditures) for other passport-related costs. In addition, of the 35 DS expenditures\ntested domestically, totaling $15.5 million, three expenditures, totaling approximately\n$3.4 million (approximately 22 percent), were not in compliance with DS spending plans. These\nthree expenditures should have been charged to Worldwide Security Protection (WSP) funds15\nrather than to border security funds.\n\n OIG also found that staff who filled all of the 51 overseas positions funded by the Border\nSecurity Program were performing consular-related work. However, staff filling 55 of the 57\nconsular positions tested that were not funded by the Border Security Program were performing\nwork similar to staff filling positions funded by the Border Security Program. The Department\nhad not yet converted \xe2\x80\x9clegacy\xe2\x80\x9d positions16 funded from appropriated funds to the Border\nSecurity Program. As of March 2012, the Department was in the process of transferring the\nfunding for these legacy positions from appropriated funds to border security funds.\n\n OIG found that only CA had developed formal guidelines on how border security funds\ncould be used, and this guidance needed to be updated. None of the other bureaus included in\nthe audit had developed formal guidance on how border security funds could be used. Instead,\nthe other bureaus reviewed the budget requests submitted by the posts to determine the types of\nexpenditures that could be funded using Border Security Program fees. Because CA did not\nhave program management authority for the Border Security Program, CA\xe2\x80\x99s guidelines applied\nonly to funds allotted to CA (and subsequently sub-allotted to posts). In addition, the\nDepartment did not have a process in place to monitor the use of the funds. Without sufficient\nguidance and proper oversight of expenditures, there was no assurance that the border security\nfunds would be used only for border security-related expenditures.\n\nBorder Security Program Funds Were Commingled With Other Funds\n\n Federal accounting standards17 state that \xe2\x80\x9creliable information on the costs of federal\nprograms and activities is crucial for effective management of government operations.\xe2\x80\x9d Federal\nagencies should be able to determine the costs of providing specific programs and activities and\nthe composition of those costs. OIG was unable to determine how some of the consular fees\ncollected for the Border Security Program were used, and so it was unable to ensure that these\nexpenditures were made in accordance with CA guidelines or other approved financial\ninstructions.\n\n The Department uses certain codes to identify and account for the funds it receives and\nhow those funds are used. Currently, funds collected for one type of border security-related\n\n15\n WSP is funded and earmarked within the Department\xe2\x80\x99s Diplomatic and Consular Programs appropriation. A\n\nportion of the WSP is used by DS to fund its Diplomatic Readiness Initiative needs. \n\n16\n CA defines \xe2\x80\x9clegacy\xe2\x80\x9d positions as positions established prior to 1995 that are still paid from appropriated funds. \n\n17\n Statement of Federal Financial Accounting Standards No. 4, \xe2\x80\x9cManagerial Cost Accounting Standards and\n\nConcepts.\xe2\x80\x9d\n\n 18\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nconsular fee, H&L, have a unique appropriation code (19X5515). The Department accounts for\nthe funds collected from the remaining types of fees by using specific point limitations under\nthe Diplomatic and Consular Programs appropriation.18 According to the FAH,19 accounting\ncodes provide essential information about transactions and allow for the summarization of\nexpenditures for accounting and management purposes. Commingling funds from one account\nwith funds from another account lessens the integrity of financial information in the\nDepartment\xe2\x80\x99s accounting system. Commingling funds also does not provide a useful audit trail\non how the funds were used.\n\n OIG noted that several bureaus had moved funds allotted from one of the border security-\nrelated point limitations to other bureau accounts. For instance, during FY 2010, CA transferred\n$8.7 million of MRV fees, appropriation code 19X0113.6, to the general Diplomatic and\nConsular Programs fund. A CA official explained that this transfer was done because the\namount of funds appropriated to CA was limited and CA needed to use the MRV fees to fund\nCA operating costs. The official also stated that the estimated amount to transfer was based on\npast experience and that if CA did not spend the entire amount during the period covered, the\nextra funds would be transferred back to the MRV point limitation. However, once the funds\nwere moved to the general Diplomatic and Consular Programs appropriation, the funds lost their\nMRV identity. As a result, it would no longer be possible to determine how the funds were used\nand what, if any, extra funds would be transferred back to the MRV account.\n\n OIG noted that during FY 2010 WHA received $48.8 million of MRV funds for certain\npersonnel-related costs. Similar to CA, WHA transferred $46.1 million of the MRV funds to its\ngeneral Diplomatic and Consular Program appropriation. WHA allotted funds from the general\naccount to posts for post operations, including consular-related activities. However, because the\nfunds were no longer uniquely identifiable, a post official stated that it would be difficult to\ndetermine how the MRV fees were used. Although OIG did not perform testing at the Bureau of\nEuropean and Eurasian Affairs or the Bureau of African Affairs, CA officials stated that similar\nto WHA, those two bureaus also commingled funds.\n\nNot All Nonpersonnel Border Security Funds Were Used in Accordance With CA\nGuidelines or Other Financial Instructions\n\n OIG tested nonpersonnel expenditures overseas and domestically to determine whether\nthe funds were expended in accordance with CA\xe2\x80\x99s formal guidelines or other approved financial\ninstructions. OIG found that of the 431 expenditures, totaling about $2.1 million, from funds\nallotted by CA and regional bureaus to overseas posts that were tested, 174 expenditures, totaling\n\n\n\n\n18\n A point limitation is a decimal suffix added to the appropriation account symbol. For example, the appropriation\ncode for the Department\xe2\x80\x99s general Diplomatic and Consular Programs appropriation is 19X0113. However, by\nadding a point limitation to this appropriation code, such as 19X0113.Y for Western Hemisphere Travel Initiative\nfees, the Department is able to track the border security fund types separately. Each fee type has a unique\naccounting identification.\n19\n 4 FAH-1 H-113, \xe2\x80\x9cAccount Classification Structure.\xe2\x80\x9d\n 19\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nabout $434,000, did not comply with CA\xe2\x80\x99s Post Allotment Funding Matrix20 (see Appendix B)\nor the budgets and advice of allotments approved by the regional bureaus. OIG also found that\nof the 174 expenditures, 103 expenditures, totaling about $268,000, were approved by CA for\npurchases that were not in accordance with CA\xe2\x80\x99s guidelines. However, of the 174 expenditures,\n71 expenditures, totaling about $166,000, were not in accordance with CA\xe2\x80\x99s guidelines or other\napproved financial instructions and had not been approved separately by CA or the regional\nbureaus. Of the 71 expenditures, 67 were from one post that was using border security funds\nallotted by CA for costs associated with consular staff, such as lease payments, and that should\nhave been paid from border security funds allotted by the regional bureaus. OIG also tested 30\nexpenditures from funds allotted to DS and then were sub-allotted to posts and found that the\nexpenditures were generally in accordance with DS-approved post spending plans.\n\n OIG found that of the 269 CA expenditures tested domestically, totaling about\n$497 million, 187 expenditures, totaling about $280 million (approximately 56 percent), were\nnot used in accordance with CA\xe2\x80\x99s Consular Fee Authorities guidelines or OIG was unable to\ndetermine how the funds were used. However, most of the expenditures were used for consular-\nrelated activities. Also, of the 35 DS expenditures tested domestically, totaling $15.5 million,\nDS had erroneously made three charges, totaling about $3.4 million (approximately 22 percent),\nagainst border security funds rather than against WSP funds.\n\n Nonpersonnel Expenditures at Overseas Posts\n\n OIG tested FY 2010 border security nonpersonnel expenditures at three overseas posts:\nChina, India, and Mexico. OIG selected two separate samples of nonpersonnel expenditures, one\nsample of the expenditures from the funds allotted by the regional bureaus and CA, and another\nsample of the expenditures from the funds allotted by DS. (Details on the samples chosen are\npresented in Appendix A, \xe2\x80\x9cDetailed Sampling Methodology and Results at Selected Posts and\nBureaus.\xe2\x80\x9d)\n\n Funds Allotted by CA and Regional Bureaus. OIG tested 431 border security-related\nnonpersonnel expenditures from the funds allotted by the regional bureaus and CA. To\ndetermine the allowability of the expenditures from CA-allotted funds, OIG used CA\xe2\x80\x99s Post\nAllotment Funding Matrix.\n\n The regional bureaus did not have formal guidance on the types of activities that were\nallowable from regional bureau-allotted funds. Therefore, OIG used the bureau-approved post\nbudgets and advices of allotment to determine the allowability of regional bureau-allotted border\nsecurity funds. Posts may use regional bureau-allotted funds to pay for the initial, nonrecurring\ncosts related to bringing a consular officer to post, such as purchasing residential and office\nfurniture and preparing housing for the employee, as well as for consular officers\xe2\x80\x99 recurring\nexpenses, such as education allowances and residential utilities.\n\n20\n The Post Allotment Funding Matrix is a CA document that provides guidelines on the types of items for which\nposts can and cannot use the CA-allotted funds. For example, posts are permitted to spend the funds to obtain a fax\nor Internet connection for consular agents, but posts may not use the funds for basic office equipment, including\nprinters and shredders.\n 20\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n As shown in Table 4, OIG found that of the 431 expenditures tested, 174 expenditures\n(approximately 40 percent) either did not comply with CA guidelines or regional bureau-\napproved budget requests or the post was unable to provide sufficient documentation to support\nthe expense. For 103 of the 174 expenditures, CA had approved posts\xe2\x80\x99 requests to use the funds\nfor items that were not allowed by CA guidelines. The remaining 71 expenditures, totaling about\n$166,000, did not comply with the CA guidelines or approved post budget requests (or no\nsupport was provided by post), and post did not obtain approval from CA or the regional bureau\nfor the expenditures.\n\nTable 4. Results of Testing Overseas Nonpersonnel Expenditures From Funds Allotted by\nCA and the Regional Bureaus\n\n China Mexico India Total\n Number of Expenditures 867 1,366 2,205 4,438\n Amount of Expenditures $567,532 $799,214 $1,822,547 $3,189,293\n Number Tested 64 224 143 431\n Amount Tested $381,461 $510,663 $1,194,393 $2,086,517\n Total Number of Exceptions 13 144 17 174\n Total Dollar Amount of Exceptions $40,371 $319,553 $74,107 $434,031\n Number of Exceptions Not in Compliance With 11 77 15 103\n Guidance but Allowed by CA\n Dollar Amount of Exceptions Not in Compliance $29,067 $169,334 $69,892 $268,293\n With Guidance but Allowed by CA\n Number of Exceptions Not in Compliance with 2 67 2 71\n Guidance and Not Allowed by CA or the\n Regional Bureau\n Dollar Amount of Exceptions Not in Compliance $11,304 $150,219 $4,215 $165,738\n With Guidance and Not Allowed by CA or the\n Regional Bureau\nSource: Prepared by OIG based on the results of its testing.\n\n Although CA\xe2\x80\x99s Post Allotment Funding Matrix lists the types of expenditures allowed\nand not allowed using CA-allotted border security funds, CA approved some expenditures that,\naccording to the matrix, were identified as not allowed. For example, the matrix indicates that\nfunds should not be used for temporary duty (TDY) support for constituent posts. All of the\nexceptions noted by OIG that were allowed by CA were related to TDY travel. For example, CA\napproved requests from Mexico and China for certain TDY travel between constituent posts in-\ncountry and other requests for TDY support to Haiti. CA also approved expenditures related to a\nTDY travel request from India for a site visit to Yemen.\n\n In general, China and India used the border security funds they received in accordance\nwith CA guidelines and approved budgets, or they obtained approval from CA for using the\nfunds in other ways, as shown in Table 4. OIG tested 64 expenditures, totaling $381,461, in\nChina and identified 13 expenditures, totaling $40,371, that were not in accordance with the\nguidelines. Of the 13 expenditures, China had requested and obtained CA approval for 11\nexpenditures relating to TDY travel. The remaining two expenditures, totaling $11,304, were\n 21\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nalso for TDY travel, but post did not request the approval of CA or the regional bureau for these\nexpenditures. OIG tested 143 expenditures, totaling approximately $1.2 million, in India and\nidentified 17 expenditures, totaling $74,107, that were not in accordance with the guidelines. Of\nthe 17 expenditures, India requested and obtained CA approval for 15 expenditures relating to\nTDY travel. The remaining two expenditures, totaling $4,215, were also related to TDY travel,\nbut the post did not obtain the approval of CA or the regional bureau for these expenditures.\n\n Mexico made a number of expenditures from funds allotted by CA that were not allowed\nby CA guidelines or approved separately by CA. OIG tested 224 expenditures, totaling\n$510,663, and identified 144 expenditures, totaling $319,553, that were not in accordance with\nCA guidelines. Of the 144 expenditures, Mexico had requested and obtained CA approval for\n77 expenditures relating to TDY travel. However, Mexico did not obtain approval for the\nremaining 67 expenditures, totaling $150,219. Many of the 67 expenditures were for janitorial\nservices; electricity; lease payments; TDY travel outside Mexico; and routine office supplies\nsuch as mouse pads, copier paper, tape, and toner. Based on information contained in CA\xe2\x80\x99s Post\nAllotment Funding Matrix, discussions with CA officials, and information in the regional\nbureau\xe2\x80\x99s approved budget for post, the post should have requested and used regional bureau-\nallotted border security funds to pay for these items. Embassy staff stated that they believed post\ncould use the border security funds to pay any costs associated with consular staff. For example,\npost used the fees to pay for consular staff training courses, even though the courses were\nunrelated to border security or consular activities such as Equal Employment Opportunity\ntraining. CA was aware that Mexico was using funds for certain items that were not allowed by\nCA guidelines. CA advised Mexico to use the border security funds allotted by the regional\nbureaus, not the CA-allotted funds, for these activities.\n\n Funds Allotted by DS. OIG tested 30 overseas border security-related nonpersonnel\nexpenditures from the funds allotted by DS. DS did not have formal guidelines on how border\nsecurity funds that it allotted to posts were to be used. Therefore, to determine the allowability\nof the expenditures from DS-allotted funds, OIG used DS-approved post budgets. DS allows\nposts to use border security funds for costs associated with supporting the Assistant Regional\nSecurity Officer-Investigator positions at each post, such as residential utilities, office supplies,\nand education allowances. DS also provides border security funds to post for the salaries and\nbenefits of locally employed staff investigators.\n\n As shown in Table 5, OIG found that posts generally complied with approved budgets\nand spent the majority of DS border security funds on allowable items. Of the 30 expenditures\ntested, totaling approximately $5,600, OIG identified two expenditures, totaling $343\n(approximately 6 percent), that did not comply with the DS-approved post budget. Officials at\none post were unable to provide sufficient supporting documentation for one of the expenditures\ntested. The other expenditure was considered an exception because post used DS-allotted funds\nto pay a utility bill for a consular position that should have been paid with funds allotted by CA.\nAlthough the utility bill was not funded from the correct allotment, the expenditure was a cost\nthat could have been paid using border security-related funds.\n\n\n\n 22\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\nTable 5. Results of Testing Overseas Nonpersonnel Expenditures From DS Allotted Funds\n\n Number of Amount of Number Amount Number of Amount of\n Mission Expenditures Expenditures Tested Tested Exceptions Exceptions\n China 134 $50,171 10 $1,256 0 0\n Mexico 624 $150,259 10 $1,871 2 $343\n India 474 $136,868 10 $2,521 0 0\n Total 1,232 $337,298 30 $5,648 2 $343\nSource: Prepared by OIG based on the results of its testing.\n\n Domestic Nonpersonnel Expenditures\n\n OIG tested FY 2010 border security nonpersonnel expenditures at two domestic bureaus:\nCA and DS. CA used border security funds domestically to pay for U.S. postal charges,\ncontractor support for consular work related to visa and passport operations, and access to\nsearchable databases containing information on U.S. and foreign companies. DS used border\nsecurity funds for guard services at domestic consular facilities and for investigative support for\nvisa and passport fraud, including purchasing equipment and providing training for investigators.\n(Details on the sample chosen are provided in Appendix A.)\n\n Funds Allotted to CA. OIG tested 269 border security-related nonpersonnel\nexpenditures from funds allotted to CA. To determine the allowability of the domestic CA\nexpenditures, OIG used CA\xe2\x80\x99s Consular Fee Authorities guidelines. As shown in Table 6, CA\xe2\x80\x99s\nguidelines limit how CA can use border security funds domestically.\n\nTable 6. CA\xe2\x80\x99s Consular Fee Authorities Guidelines\n\n Fee Type Fee Collection Purpose Fee Usage\n MRV Recovery of costs of providing consular All consular activities as well as\n services. reimbursement to the Federal\n Bureau of Investigation for name\n checks and fingerprint checks.\n WHTI Recovery of costs of meeting increased Personnel, overtime, contractual\n demand for passports as a result of actions services, and passport books and\n taken in compliance with WHTI. passport cards.\n Passport Payment of consular services in support of Secure mail and postage.\n border security.\n IV Payment of consular services in support of IV-related costs under the Border\n border security. Security Program.\n DV Recovery of costs of allocating DVs, Kentucky Consular Center and\n including the cost of processing all overseas operations related to the\n applications for DVs. DV program.\n H&L Prevention and detection of visa fraud, Programs or activities to prevent and\n including primarily fraud applications for H detect visa fraud.\n and L visas.\nSource: Worksheet provided by CA.\n\n 23\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n As shown in Table 7, of the 269 expenditures tested, 187 expenditures (approximately\n70 percent), totaling almost $280 million, were not spent strictly in accordance with CA\nguidelines or OIG could not determine how the funds were used. Although OIG found that a\nnumber of the expenditures tested did not comply with CA\xe2\x80\x99s Consular Fee Authorities\nguidelines, OIG noted that most of the questioned expenditures were used for consular-related\nactivities.\n\nTable 7. Results of Testing Domestic Nonpersonnel Expenditures From Funds Allotted to\nCA\n Fee Number of Amount of Number Amount Number of Amount of\n Type Expenditures Expenditures Tested Tested Exceptions Exceptions\n MRV 18,715 $291,767,717 21 $128,246,638 4 $8,693,000\n WHTI 548 $122,153,240 111 $101,944,581 111 $101,944,581\n Passport 81 $250,582,746 80 $250,582,138 68 $168,836,446\n IV 205 $12,230,735 19 $10,475,684 0 0\n DV 193 $570,968 7 $151,862 4 $94,683\n H&L 88 $5,225,687 31 $5,197,812 0 0\n Total 19,830 $682,531,093 269 $496,598,715 187 $279,568,710\nSource: Prepared by OIG based on results of its testing.\n\n\n As described in Finding B, \xe2\x80\x9cBorder Security Funds Were Commingled With Other\nBureau Funds,\xe2\x80\x9d OIG was unable to determine how funds related to four MRV sample items,\ntotaling about $8.7 million, were spent because CA transferred money to another fund. In\naddition, Western Hemisphere Travel Initiative (WHTI) fees are collected and retained to cover\nthe costs associated with the increased demand for passports as a result of the requirement that\ncitizens who travel to western hemisphere locations, such as Canada and Mexico, must have\npassports or other secure documentation denoting identity and citizenship when entering the\nUnited States. However, CA did not limit the use of WHTI fees in this manner and was unable\nto show that the 111 expenditures tested, totaling about $102 million, were used only for the\nincreased costs of complying with WHTI. For example, CA used WHTI fees to support general\npassport operations, such as purchasing passport card supplies and supporting the costs of\noperating passport centers. A CA official stated that the Office of the Legal Adviser had\ninterpreted the legislation broadly, allowing the Department to use WHTI funds for items that\nwere not specifically related to the increased demand for passports created because of the\nrequirement for citizens to have a passport to travel to western hemisphere locations.\n\n CA\xe2\x80\x99s Consular Fee Authorities guidelines state that funds retained from the Passport\nSecurity Surcharge should be used only for secure mail and postage. However, OIG found that\nCA used approximately $169 million of Passport Security Surcharge funds for other types of\npassport-related costs, such as costs for printing passports and purchasing ink ribbons, film\noverlays, and secure-coating material.\n\n According to CA\xe2\x80\x99s Consular Fee Authorities guidelines, Diversity Immigrant Visa (DV)\nfees should be used only for expenditures specifically related to the DV program. However, CA\nwas unable to provide documentation showing that four of the expenditures sampled, totaling\n\n 24\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nabout $95,000, were used specifically for DV-related costs. CA paid for contractor-provided\nfraud prevention support that was not related to the DV program.\n\n Funds Allotted to DS. OIG tested 35 border security-related nonpersonnel expenditures\nfrom the funds allotted to DS. DS had not developed formal guidelines on the types of domestic\nDS activities that could be paid for from the Border Security Program funds. DS officials stated\nthat border security expenditures should fall into two categories: guard services for domestic\nconsular facilities and investigative support for the visa program. OIG used a copy of DS\xe2\x80\x99s\nspending plans to assess the allowability of the DS expenditures tested.\n\n As shown in Table 8, the DS border security-related expenditures were generally in\ncompliance with DS\xe2\x80\x99s spending plans. OIG found that of the 35 expenditures tested, totaling\napproximately $15.5 million, only three expenditures, totaling approximately $3.4 million\n(approximately 22 percent), were not in compliance with DS\xe2\x80\x99s spending plans.\n\nTable 8. Results of Testing Domestic Nonpersonnel Expenditures From Funds Allotted to\nDS\n Number of\n Fee Number of Amount of Expenditures Amount Number of Amount of\n Type Expenditures Expenditures Tested Tested Exceptions Exceptions\n MRV 4,527 $18,860,180 29 $14,502,300 3 $3,421,014\n H&L 665 $1,926,213 6 $1,001,561 0 0\n Total 5,192 $20,786,393 35 $15,503,861 3 $3,421,014\nSource: Prepared by OIG based on the results of its testing.\n\n\n DS is responsible for guard service contracts for the Department\xe2\x80\x99s domestic locations,\nincluding domestic consular offices. When consular offices are collocated with other\nDepartment operations, the costs of the guard services related to the consular space are charged\nseparately from the costs of the guard services for the other space. DS uses border security fees\nto fund the portion of the guard service contract related to consular space and WSP funds for the\nremaining costs.\n\n DS erroneously made three charges, totaling $3.4 million, against border security funds\nfor costs related to guard services that should have been paid using WSP funds. When DS noted\nthe error, rather than correcting the transactions in the accounting system, it used WSP funds to\npay for the consular portion of guard services charged in other invoices. However, DS had\ncharged only a total of $1.4 million of consular costs to the WSP funds, leaving an outstanding\namount of approximately $2.1 million that had not been refunded from WSP to the Border\nSecurity Program.\n\nConsular Personnel Overseas Were Not Always Funded From Border Security Funds\n\n Funds for local staff payroll costs and certain allowances provided to American\nemployees overseas are allotted to each post. OIG planned to perform tests of the expenditures\nmade for salaries and benefits. However, the information included in the expenditure reports\n\n 25\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nfrom the Department\xe2\x80\x99s accounting system did not provide the level of detail needed to determine\nthe name of the employee paid. For example the \xe2\x80\x9cvendor name\xe2\x80\x9d section of the expenditure\nreport for most of the payroll expenditures included either \xe2\x80\x9cCapps Payroll,\xe2\x80\x9d which is the\nAmerican payroll system, or \xe2\x80\x9cRfmsempl,\xe2\x80\x9d which is the designation used for Foreign Service\nNational staff paid through the Foreign Service National Payroll system.\n\n OIG attempted to obtain details on the FY 2010 expenditures from the accounting\nsystem\xe2\x80\x99s helpdesk and from Payroll Customer Support at the Charleston Financial Service\nCenter in South Carolina. Helpdesk personnel stated that they were unable to assist in this effort,\nand Payroll Customer Support Unit officials stated that it would be a \xe2\x80\x9cmassive task\xe2\x80\x9d to provide\nadditional details. Without having detailed information on payment recipients, neither OIG nor\nthe Department could ensure that Border Security Program funds were used for employees\nperforming work on border security-related issues.\n\n OIG developed an alternative testing methodology for personnel-related expenditures.\nOIG wanted CA to provide a list of all employees funded using Border Security Program funds,\nbut CA was unable to provide a complete and accurate list of American and local staff by\nlocation. A CA official stated that the Department could not easily compile a list of consular\nemployees because the employees worked in various bureaus and posts.\n\n OIG used data from CA\xe2\x80\x99s Consular Workload Statistical System21 (CWSS) for selecting\na sample of positions to be tested at five overseas locations: Beijing and Guangzhou (China),\nMexico City (Mexico), and New Delhi and Mumbai (India). Although this system identifies\nCA-funded positions overseas by post (both American direct hire and local staff), OIG found that\nthe information in the system was not reliable. For example, OIG found three instances at\nConsulate Mumbai in which consular positions were listed as unfilled for FY 2010. However,\ndocumentation from post indicated that the positions were in fact filled.22 OIG also found\ninstances in which the CWSS database listed employees as MRV funded. However, the human\nresource documents at posts showed that the positions were funded from appropriated funds.\n\n Using the information from posts, OIG tested 108 consular positions, some funded from\nthe Border Security Program and some funded from appropriated funds (see Appendix A). CA\ndid not provide specific guidelines on when consular employees should be funded or should not\nbe funded using Border Security Program funds. Therefore, for the positions that were funded\nusing Border Security Program funds, OIG ensured that the employees were performing\nconsular-related activities. For the consular employees who were not being funded using Border\nSecurity Program funds, OIG determined whether the employees were performing activities\nsimilar to activities of employees whose positions were funded from the Border Security\nProgram. As shown in Table 9, all of the staff in consular positions funded with Border Security\nProgram funds were performing consular work. However, of the 57 positions tested that were\n\n21\n CWSS, also referred to as the \xe2\x80\x9cconsular package,\xe2\x80\x9d is used by CA and other bureaus and posts to track information\nrelated to productivity, efficiency, and management goals and strategies at consular sections. Both CA and posts\ncan enter information into CWSS. CWSS collects data and workload statistics for the previous fiscal year.\n22\n Data are entered annually into the CWSS schedules. A CA official stated that the data provide a \xe2\x80\x9csnapshot in\ntime\xe2\x80\x9d of what occurred at post during the year.\n 26\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\nfunded from appropriated funds, 55 staff members in these positions were performing work that\ncould have been paid for using Border Security Program funds. The use of appropriated funds\nfor these similar positions occurred because the Department had not converted legacy positions\nfunded from appropriated funds to the Border Security Program funds.\n\nTable 9. Results of Testing the Funding of Overseas Consular Positions\n Number of Border Number of\n Number of Security-Funded Number of Appropriation-\n Border Security- Positions Not Appropriation- Funded Positions\n Funded Related to Funded Related to\n Post Positions Tested Consular Work Positions Tested Consular Work\n Beijing 9 0 14 14\n Guangzhou 5 0 15 15\n Mexico\n City 10 0 13 11\n Mumbai 15 0 6 6\n New Delhi 12 0 9 9\n Total 51 0 57 55\nSource: Prepared by OIG based on the results of its testing.\n\n\n The Department was aware that some consular legacy positions were still being funded\nusing appropriated funds. As new consular positions were created, the positions were funded\nfrom the Border Security Program. During FY 2012, the Under Secretary for Management\ninstructed CA to fund all consular positions from the Border Security Program. CA planned to\ntransfer the funding for the legacy positions during FY 2012 and FY 2013. For FY 2012, CA\nwas working to transfer the funding for the local staff to the Border Security Program.\nAdditionally, a CA official stated that CA planned to make arrangements to fund all overseas\nAmerican direct hire consular positions from the Border Security Program in FY 2013. Because\nthe Department was taking steps to address this issue, OIG is not making any formal\nrecommendations.\n\nDepartment Does Not Have Sufficient, Consistent Guidance on the Use of Border Security\nFunds\n\n The authorizing legislation for each fee type used for border security activities includes\nbasic information on how the fees can be used. For instance, the authorizing legislation for\nMRV states that fees collected are for recovering the costs of providing consular services and\nwill be available for the same purposes.23 The authorizing legislation for WHTI states that the\nfees collected can be used for the \xe2\x80\x9cincreased demand for passports as a result of actions taken to\ncomply\xe2\x80\x9d with the requirements that all U.S. citizens should present a passport or other secure\ndocumentation when entering the United States from any location,24 including from Canada and\nMexico.\n\n\n23\n Pub. L. No. 107-173, as amended, sec. 103, \xe2\x80\x9cMachine-Readable Visa Fees.\xe2\x80\x9d \n\n24\n Pub. L. No. 109-167, as amended, sec. 2, \xe2\x80\x9cAuthority of Secretary of State to establish and collect a surcharge to\n\ncover the costs of meeting the increased demand for passports.\xe2\x80\x9d \n\n 27\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n While information in the public laws is useful, the laws do not provide the level of detail\nneeded to effectively manage border security expenditures. In general, OIG found that the\nDepartment had not developed sufficient guidance on how border security funds should be used.\nOf the five bureaus included in the audit, only one bureau, CA, had developed formal guidelines\non how border security funds should be used. Because CA did not exercise program\nmanagement authority for the Border Security Program, CA\xe2\x80\x99s guidelines did not apply to funds\nallotted to other bureaus. None of the other bureaus or posts audited had developed formal\nguidelines on the use of border security funds. CA should be responsible for establishing and\nmaintaining program-related standards, processes, and procedures.\n\n Even though CA had developed some guidelines on the use of CA-allotted border\nsecurity funds, these guidelines did not accurately reflect how CA allowed the funds to be used.\nAs discussed in Finding B, CA approved requests from posts to spend border security funds on\nitems that were not allowed by the CA guidelines. CA officials stated that the domestic\nguidelines did not reflect certain expenditures that CA considered to be allowable. For instance,\nCA\xe2\x80\x99s domestic guidelines state that the Passport Security Surcharge should be used only for\nsecure mail and postage. However, a CA official stated that the Passport Security Surcharge\nlegislation25 authorizes the Department to charge surcharges for consular services in support of\nenhanced border security that are in addition to the passport and immigrant visa fees. The CA\nofficial further stated that the Passport Security Surcharge could therefore be used for other\nitems, such as the enhancement of passport documents, secure mail/postage, and security\nfeatures. During OIG\xe2\x80\x99s audit, CA officials acknowledged that CA\xe2\x80\x99s guidance should be updated\nto reflect its current usage of this fee type.\n\n A key factor in helping an agency achieve desired outcomes and minimize operational\nproblems is to implement appropriate internal controls. Internal controls are an integral\ncomponent of an organization that assist in ensuring that an agency complies with laws and\nregulations. Internal control activities include having policies and procedures to help ensure that\nproper actions are taken by the organization. Policies and procedures are the link between what\nshould be done and what is actually done in day-to-day operations. Written policies and\nprocedures allow employees to understand their responsibilities and allow management to guide\noperations without constant management involvement.\n\nDepartment Does Not Have an Adequate Centralized Process for Monitoring the Use of\nBorder Security Program Funds\n\n OIG did not find any bureau or office that had been overseeing all expenditures made\nfrom the Border Security Program fund or ensuring that bureaus and posts were using the funds\nin accordance with requirements. RM has a high-level responsibility to monitor all Department\nfunds, but RM is not responsible for ensuring that specific expenditures are made for allowable\npurposes. Bureaus are responsible for monitoring at this level of detail. Even though CA is\nconsidered the \xe2\x80\x9clead\xe2\x80\x9d bureau for the Border Security Program, a CA official stated that CA did\nnot know whether bureaus and posts were using border security funds properly in support of the\nprogram. CA did not obtain any information from bureaus and posts on how funds were used\n\n25\n 8 U.S.C. \xc2\xa7 1714, \xe2\x80\x9cSurcharges related to consular services.\xe2\x80\x9d\n 28\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nand did not have access to information on other bureau and post expenditures in the\nDepartment\xe2\x80\x99s accounting system.\n\n According to CA officials, consular managers at posts have key roles in overseeing the\nprovision of consular services, including maintaining strong internal controls and accountability\nfor fees. CA has implemented two methods for monitoring consular activities at post: the\nConsular Management Assistance Team works collaboratively with posts to ensure the post is\nproperly maintaining management controls and effectively utilizing resources, and the Regional\nConsular Officer program provides oversight, mentoring, and guidance for small, isolated\nconsular sections. Neither method considers the allowability of post border security-related\nexpenditures. CA could take advantage of these methods to have greater coverage of border\nsecurity expenditures at post. However, to ensure sufficient coverage of all border security-\nrelated expenditures, the Department should develop a process to monitor these expenditures that\nis centrally managed by a program manager.\n\n In addition, program managers need information that would be useful for planning,\ncontrolling, and conducting Government operations. During meetings, Department officials told\nthe OIG audit team that there was no standard financial reporting related to the use of the border\nsecurity funds. While each bureau or post that uses these funds has access to information on its\nown expenditures in the accounting system, nothing aggregates the information in a manner that\ncan be useful to managers. CA needs information on overall expenditures to ensure that the\nprogram is working effectively and efficiently and that funds are being used in accordance with\nbudgetary and legal guidance.\n\n An agency\xe2\x80\x99s internal control process should generally be designed to ensure that ongoing\nmonitoring occurs in the course of normal operations. Monitoring should be performed\ncontinually and be ingrained in the agency\xe2\x80\x99s operations. An important component of strong\nprogram management is the establishment of proper oversight of the projects performed as part\nof the overall program. The program manager should monitor the various projects to ensure that\noverall goals, budgets, and benefits are achieved.\n\nReliable Cost Information Is Essential for Effective Management\n\n Managers should be accountable for the integrity, performance, and stewardship of the\nprograms they oversee. Reliable and timely cost information helps managers ensure that\nresources are spent appropriately and alerts them to waste and inefficiency. Information on the\ncosts of Federal programs is crucial for effective management of Government operations.\n\n Because the Department could not easily determine how all border security funds were\nused, it could not ensure that the funds were used properly. The lack of sufficient Department\nguidance on allowable border security expenditures and limited adherence to the CA guidance\nincrease the likelihood that improper payments could be made or that waste, fraud, or abuse\ncould occur and not be detected. Without proper oversight of budget requests and approvals, of\nthe expenditures being made, and of the users\xe2\x80\x99 adherence to guidance, there is no assurance that\nborder security funds will be used effectively and efficiently.\n\n 29\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nRecommendation 5. OIG recommends that the Bureau of Diplomatic Security refund\nthe $2.1 million erroneously charged to the Border Security Program fund from the\nWorldwide Security Protection fund.\n\nDS Response: DS concurred with this recommendation, stating that \xe2\x80\x9cafter further\nresearch,\xe2\x80\x9d it had \xe2\x80\x9cdiscovered that a total of 67 FY 2010 invoices were erroneously\ncharged against\xe2\x80\x9d the WSP account. The error occurred, according to DS, when \xe2\x80\x9cthe\nprevious contracting officer\xe2\x80\x99s representative transposed the award lines for MRV and\nWSP from the account.\xe2\x80\x9d Based on its calculations, DS stated that the Border Security\nProgram owes WSP approximately $1 million.\n\nOIG Reply: OIG confirmed, through a review of supporting documentation provided by\nDS related to its research, that the documentation DS had provided to CA supported this\nconclusion. A CA official stated that CA had agreed to reimburse DS for the amount\ncalculated. Therefore, OIG considers this recommendation closed.\n\nRecommendation 6. OIG recommends that the Bureau of Consular Affairs develop\nDepartment-wide guidance on the use of border security-related funds and disseminate\nthe guidance to all bureaus and posts that receive border security funds.\n\nCA Response: CA agreed with this recommendation, stating that it plans to include\n\xe2\x80\x9cguidance on the development of budget requests\xe2\x80\x9d for border security funds by partner\nbureaus in the planned Service Level Agreements. CA also stated that it is \xe2\x80\x9csignificantly\nrevising the post allotment process, including updating the CA Post Allotment Funding\nMatrix to ensure continuity, transparency, and conformity to standard operating\nprocedures.\xe2\x80\x9d\n\nOIG Reply: OIG considers this recommendation resolved. OIG will close this\nrecommendation when it reviews and accepts formal guidance from CA on the use of\nborder security funds and when the new guidance has been disseminated to all bureaus\nand posts that receive border security funds.\n\nRecommendation 7. OIG recommends that the Bureau of Consular Affairs develop and\nimplement a comprehensive monitoring process, to include periodic reviews of\nexpenditures, for the Border Security Program that will ensure that border security funds\nare used in accordance with guidelines.\n\nCA Response: CA agreed with this recommendation, stating that it had \xe2\x80\x9crecently created\na bureau-wide internal review program, which focuses on financial management and\ncontract administration oversight within [CA].\xe2\x80\x9d CA further stated that it plans to expand\nthe program to include evaluating whether overseas posts are spending border security\nfunds \xe2\x80\x9cin accordance with Department guidelines\xe2\x80\x9d and that it also plans to \xe2\x80\x9cadd a review\nsection to the Bureau Service Level Agreements\xe2\x80\x9d that will \xe2\x80\x9cindicate how often the\nreviews will occur.\xe2\x80\x9d\n\n\n 30\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nOIG Reply: OIG considers this recommendation resolved. OIG will close this\nrecommendation when it reviews and accepts documentation showing that an internal\nmonitoring process related to the use of border security funds has been implemented.\n\n\n\n\n 31\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n List of Recommendations \n\nRecommendation 1. OIG recommends that the Bureau of Consular Affairs (CA) formalize its\nauthority over the Border Security Program by modifying the Foreign Affairs Manual (1 FAM\n250) to recognize CA\xe2\x80\x99s role as the overall program management office for the Border Security\nProgram.\n\nRecommendation 2. OIG recommends that the Bureau of Consular Affairs develop clear roles\nand responsibilities for all parties involved in the Border Security Program and codify this\ninformation in the Foreign Affairs Manual.\n\nRecommendation 3. OIG recommends that the Bureau of Consular Affairs develop processes\nto prioritize Border Security Program funding requests and oversee the allocation of funding for\nprioritized projects of the Border Security Program.\n\nRecommendation 4. OIG recommends that the Bureau of Consular Affairs develop\ncomprehensive performance goals and indicators for the Border Security Program and a process\nto measure the program\xe2\x80\x99s accomplishments.\n\nRecommendation 5. OIG recommends that the Bureau of Diplomatic Security refund the $2.1\nmillion erroneously charged to the Border Security Program fund from the Worldwide Security\nProtection fund.\n\nRecommendation 6. OIG recommends that the Bureau of Consular Affairs develop\nDepartment-wide guidance on the use of border security-related funds and disseminate the\nguidance to all bureaus and posts that receive border security funds.\n\nRecommendation 7. OIG recommends that the Bureau of Consular Affairs develop and\nimplement a comprehensive monitoring process, to include periodic reviews of expenditures, for\nthe Border Security Program that will ensure that border security funds are used in accordance\nwith guidelines.\n\n\n\n\n 32\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n Appendix A\n Scope and Methodology\n\n The purpose of this audit was to determine to what extent consular fees collected by the\nDepartment of State (Department) were used for mission priorities of the Border Security\nProgram and in accordance with Department guidelines.\n\n The Office of Inspector General (OIG) conducted fieldwork for this audit from\nSeptember 2011 to February 2012 at the following Washington, DC, bureaus: Consular Affairs\n(CA), Resource Management (RM), Western Hemisphere Affairs (WHA), East Asian and\nPacific Affairs, South and Central Asian Affairs, and Diplomatic Security (DS). OIG also\nconducted fieldwork at Mexico City, Mexico; Beijing and Guangzhou, China; and New Delhi,\nIndia. In addition, OIG obtained information from officials in Mumbai, India, via\nvideoconference.\n\n OIG conducted this performance audit in accordance with generally accepted government\nauditing standards. Those standards require that OIG plan and perform the audit to obtain\nsufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions\nbased on its audit objectives. Although data provided were not always complete and accurate (as\ndetailed in various sections of this report), OIG concluded that the data were sufficiently reliable\nfor the purposes of the report. OIG therefore believes that the evidence obtained provides a\nreasonable basis for its findings and conclusions based on the audit objective.\n\n OIG issued the draft report for comment on May 25, 2012. After the draft audit report\nwas issued, OIG met with the Under Secretary for Management on July 9, 2012, who requested\nthat OIG modify the report to redirect six recommendations (Nos. 1, 2, 3, 4, 6, and 7) from the\nUnder Secretary to CA. OIG modified the report as appropriate and reissued the draft report to\nCA for comments on July 12, 2012.\n\n To obtain background for the audit, OIG researched and reviewed public laws and United\nStates Code sections related to consular fees, Government Accountability Office guidance, the\nDepartment\xe2\x80\x99s Foreign Affairs Manual and Foreign Affairs Handbook, Department cables, bureau\nand post strategic plans, budget-related documents, and other Department guidance and reports.\n\n During the audit, OIG performed work to determine to what extent consular fees\ncollected by the Department were used for mission priorities of the Border Security Program and\nin accordance with Department guidelines. OIG focused its work on certain consular fees that\nthe Department indicated were used specifically for the Border Security Program:\n\n \xef\x82\xb7 Machine Readable Visa (MRV) Fee\n \xef\x82\xb7 Western Hemisphere Travel Initiative (WHTI) Passport Surcharge\n \xef\x82\xb7 Passport Security Surcharge\n \xef\x82\xb7 Immigrant Visa (IV) Security Surcharge\n \xef\x82\xb7 Diversity Immigrant Visa (DV) Lottery Surcharge\n\n 33\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n \xef\x82\xb7 H and L (H&L) Visa Fraud Prevention and Detection Fee\n\n To accomplish the audit objective, OIG gained an understanding of the Border Security\nProgram. Specifically, OIG interviewed Department officials to obtain an understanding of the\nprocess for requesting and allotting border security funds to bureaus and posts; spending border\nsecurity-related consular fees, both domestically and overseas; monitoring expenditures; and\nestablishing goals or priorities for the program. OIG also gained an understanding of bureaus\xe2\x80\x99\nroles and responsibilities. Additionally, OIG interviewed Department and post officials to gain\nan understanding of the process to determine funding for personnel-related costs.\n\n OIG obtained the Department\xe2\x80\x99s FY 2010 expenditure database and identified the universe\nof Border Security Program expenditures that were both obligated and expended in FY 2010.\nOIG developed a sampling methodology to test border security expenditures and developed a\nplan for ensuring overseas consular positions were funded correctly. (Information on the\nsampling methodology and the plan are detailed in the section \xe2\x80\x9cDetailed Sampling Methodology\nand Results\xe2\x80\x9d in this appendix.) OIG reviewed supporting documentation for a selected sample of\nexpenditures in CA and DS; reviewed supporting documentation for a sample of expenditures at\nBeijing (China), Mexico City (Mexico), and New Delhi (India); and reviewed documentation\nrelated to the funding source for a sample of American and locally employed staff from the\nconsular sections at each of these posts.\n\nPrior OIG Reports\n\n In its review of internal OIG audit and inspection reports relating to border security\nexpenditures, OIG identified one audit report related to expenditures of consular fees.1 However,\nsince the report was issued in 1998, OIG determined that the findings would not be relevant to\nthe current audit. Although OIG identified inspection reports related to CA, these reports did not\ninclude findings specifically related to Border Security Program expenditures.\n\nUse of Computer-Processed Data\n\n The audit team used computer-processed data from the Department during this audit.\nOIG obtained FY 2010 consular fee expenditure information from the Global Financial\nManagement System, identified nonpersonnel expenditures by consular fee type for FY 2010,\ngenerated a sample of nonpersonnel related expenditures for testing, and tested the Border\nSecurity Program expenditure data from the Global Financial Management System. Issues\nidentified during fieldwork are detailed in the Audit Results section, Finding B, \xe2\x80\x9cOIG Could Not\nDetermine How Some Border Security Funds Were Used and Found That Other Funds Were Not\nUsed in Accordance With Guidelines or Financial Instructions.\xe2\x80\x9d Other than the work described,\nOIG did not audit the data from these systems.\n\n OIG determined that payroll expenditures could not be identified by employee name,\nnumber, or other criteria within the Global Financial Management System. Because of the\n\n1\n Expenditure of Machine Readable Visa Fees (98-FM-018, Aug. 1998).\n 34\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nlimitations of the data, OIG could not select a sample of personnel expenditures for testing.\nTherefore, OIG did not rely on the Global Financial Management System for testing personnel\nexpenditures.\n\n OIG obtained information from CA\xe2\x80\x99s Consular Workload Statistical System (CWSS),\nwhich identifies consular employees, both American direct hire and locally employed staff, by\npost, position, and fiscal year. OIG used this information to select a sample of employees to\ninterview at each post to determine their roles and responsibilities during FY 2010. OIG\nperformed testing of the data during its fieldwork. OIG also obtained information from CA\xe2\x80\x99s\nConsular Affairs Post Allotment System to determine whether CA had approved the use of\nconsular fees for certain expenditures. Issues identified during fieldwork are detailed in the\nAudit Results section, Finding B. Other than the work described, OIG did not audit the data\nfrom these systems.\n\nWork Related to Internal Controls\n\n OIG performed steps to assess the adequacy of internal controls related to the areas\naudited. For example, OIG gained an understanding of and tested the controls over consular fee\nexpenditures at posts and bureaus. OIG discussed exceptions identified during its testing of\nexpenditures with post and bureau officials to better understand the reasons for the exceptions,\nwhich would highlight internal control issues. In addition, OIG gained an understanding of the\nDepartment\xe2\x80\x99s policies and procedures related to consular fee expenditures and of how the\nDepartment oversees these expenditures. Work performed on internal controls during the audit is\ndetailed in the Audit Results section of the report.\n\nDetailed Sampling Methodology and Results at Selected Posts and Bureaus\n\n OIG\xe2\x80\x99s sampling objective was to determine whether the Department spent border\nsecurity-related funds for allowable purposes.\n\n Selection of Posts\n\n For its audit, OIG selected overseas posts in China, Mexico, and India. OIG used a\nnonstatistical sampling method known as \xe2\x80\x9cjudgment sampling.\xe2\x80\x9d Because this method uses\ndiscretionary criteria to effect sample selection, the audit team was able to use information from\nits preliminary work to aid in making informed selections.\n\n The primary consideration in selecting the sites, which are shown in Table 1, was the\ntotal amount of border security funds expended during FY 2010. The three countries selected\nhad the highest amount of border security expenditures during FY 2010. The geographical\ndistribution of the posts was another factor considered; the three countries selected are in\ndifferent regional bureaus. In addition to performing work at the three embassies, OIG, to gain a\ncomplete understanding of the overseas use of border security funds, chose to perform work on\nexpenditures made at two overseas consulates: Guangzhou, China, and Mumbai, India.\n\n 35\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n Table 1. Posts With Highest Amounts of Border Security Program Expenditures\n During FY 2010\n Amount\n Post Expended Regional Bureau\n Mexico $9,768,579 Western Hemisphere Affairs\n India $3,976,091 South and Central Asian Affairs\n China $2,928,221 East Asian and Pacific Affairs\n Brazil $2,451,239 Western Hemisphere Affairs\n Japan $1,936,700 East Asian and Pacific Affairs\n Germany $1,830,028 European and Eurasian Affairs\n The Philippines $1,465,592 East Asian and Pacific Affairs\n Colombia $1,447,141 Western Hemisphere Affairs\n United Kingdom $1,413,286 European and Eurasian Affairs\n Saudi Arabia $1,365,574 Near Eastern Affairs\n Source: OIG analysis of expense databases.\n\n\n Selection of Bureaus\n\n For its audit, OIG selected CA, RM, WHA, Bureau of East Asian and Pacific Affairs,\nBureau of South and Central Asian Affairs, and DS. OIG used the same nonstatistical sampling\nmethod that it used for selecting overseas locations (judgment sampling) to select the bureaus.\n\n One consideration for choosing to perform work at these six bureaus was the amount of\nexpenditures related to the Border Security Program extracted from the FY 2010 expenditures\ndatabase, as shown in Table 2. OIG chose the top two bureaus (CA and RM) in terms of\nexpenditures related to the border security program. These two bureaus accounted for about\n90 percent of the domestic expenditures. Another factor considered was the regional bureaus\nrelated to the posts selected for site visits. Although only one of the regional bureaus (WHA)\nrelated to the posts selected for site visits had domestic expenditures pertaining to the border\nsecurity program, OIG performed limited procedures at the three regional bureaus (WHA,\nBureau of East Asian and Pacific Affairs, and Bureau of South and Central Asian Affairs).\nFinally, although DS had not spent a significant amount of funds related to border security in FY\n2010 (only about 2 percent), OIG included DS in its audit work because DS is a key bureau for\nfraud deterrence.\n\n Although OIG had planned on performing limited procedures at each of these bureaus, it\nperformed testing only at CA and DS. The three regional bureaus had either very little domestic\nexpenditures or no domestic expenditures. The RM expenditures were transfers of funds to the\ncentral payroll account. Payments to personnel were authorized; consequently, OIG determined\nthat no testing would be performed on the transfer of funds in RM.\n\n\n\n\n 36\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n Table 2. FY 2010 Domestic Border Security Program Expenditures by Bureau/Entity\n\n\n Bureau Amount Expended Percent of Total\n Bureau of Consular Affairs $685,145,821 52.34\n Bureau of Resource Management $510,466,000 38.99\n Bureau of Western Hemisphere Affairs $47,491,500 3.36\n Bureau of Administration $24,666,108 1.88\n Bureau of Diplomatic Security $23,373,971 1.79\n Bureau of Human Resources $5,997,299 0.46\n Bureau of Information Resource\n Management $3,906,682 0.30\n Bureau of Near East and South Asian\n Affairs $3,000,000 0.23\n Foreign Service Institute $2,852,595 0.22\n Unknown $2,225,746 0.17\n Total $1,309,125,723 100.00\n Source: OIG analysis of expense databases.\n\n\n Identification of the Border Security Program Expenditure Universes\n\n OIG modified the databases of border security expenditures for FY 2010 to arrive at the\noverall target universe, or population, which is the universe to be covered. Specifically, OIG\nextracted the dollar value and number of expenditures that were related to the Border Security\nProgram categories and sorted the data by post for overseas expenditures and by bureau for\ndomestic expenditures. Personnel and nonpersonnel expenditures were extracted separately, and\nall negative expenditures were excluded.\n\n Nonpersonnel Universes. As shown in Table 3, for nonpersonnel overseas expenditures,\nOIG separately considered expenditures allotted to posts by the regional bureaus and CA and by\nDS.\n\nTable 3. Universes of Nonpersonnel Expenditures for Overseas Posts\n Nonpersonnel Funds Allotted to Nonpersonnel Funds Allotted to\n Posts by Regional Bureaus and CA Posts by DS\n Universe Universe Universe Universe\n Post Total Amount Total Amount\n Beijing, China 867 $567,532 134 $50,171\n Mexico City,\n Mexico 1,366 $799,214 624 $150,259\n New Delhi,\n India 2,205 $1,822,547 474 $136,868\n Total 4,438 $3,189,293 1,232 $337,298\nSource: OIG analysis of expense databases.\n\n\n 37\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n As shown in Table 4, for nonpersonnel domestic expenditures, OIG sorted expenditures\nby the specific type of fund used.\n\nTable 4. Universes of Nonpersonnel Domestic Expenditures by Fund Type for CA and DS\n CA DS\n Nonpersonnel Expenditures Nonpersonnel Expenditures\n Universe Universe Universe Universe\n Fee Type Total Amount Total Amount\n Machine Readable\n Visa (MRV) 18,715 $291,767,717 4,527 $18,860,180\n Western Hemisphere\n Travel Initiative\n (WHTI) Passport\n Surcharge 548 $122,153,240 0 0\n Passport Security\n Surcharge 81 $250,582,746 0 0\n Immigrant Visa (IV)\n Security Surcharge 205 $12,230,735 0 0\n Diversity Immigrant\n Visa (DV) Lottery\n Surcharge Fee 193 $570,968 0 0\n H and L (H&L) Visa\n Fraud Prevention and\n Detection Fee 88 $5,225,687 665 $1,926,213\n Total 19,830 $682,531,093 5,192 $20,786,393\nSource: OIG analysis of expense databases.\n\xc2\xa0\n Personnel Universes. To determine the universe for overseas personnel testing, OIG\nanalyzed the expenditure database for each of the three countries (China, India, and Mexico) in\nwhich work was going to be performed. OIG found that the database did not contain the\ninformation necessary to test the personnel expenditures. Specifically, the database did not\ncontain the information on each expenditure by employee. OIG was not able to obtain detailed\ninformation from the accounting system helpdesk or from Payroll Customer Support at the\nCharleston (SC) Financial Service Center. Helpdesk personnel responded that they were unable\nto assist the audit team, and Payroll Customer Support personnel stated that it would be a\n\xe2\x80\x9cmassive task.\xe2\x80\x9d Because of the lack of assistance as well as time constraints, OIG tested\npersonnel expenditures differently than what it had originally planned.\n\n Specifically, OIG tested personnel expenditures by analyzing the work performed by\nconsular staff and the funding used for the staff salaries and benefits. After reviewing the\nCWSS, the audit team divided consular staff into categories as follows:\n\n \xef\x82\xb7 Position Funded by Border Security Program \xe2\x80\x93 American\n \xef\x82\xb7 Position Funded by Border Security Program \xe2\x80\x93 Foreign Service National\n \xef\x82\xb7 Position Funded by Program \xe2\x80\x93 American\n \xef\x82\xb7 Position Funded by Program \xe2\x80\x93 Foreign Service National\n 38\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n \xef\x82\xb7 Unfilled Positions Funded by Border Security Program \xe2\x80\x93 American\n \xef\x82\xb7 Unfilled Positions Funded by Border Security Program \xe2\x80\x93 Foreign Service National\n\n Information on the number of employees by category by overseas location is in Table 5.\n\nTable 5. Number of Consular Personnel at Overseas Locations\n Number of Number of\n Post Fund Type Employee Type Positions Filled Positions Unfilled\n Border Security American 31 9\n Border Security Foreign Service National 14 0\n Beijing Program Funded Position American 6 Not Applicable\n Program Funded Position Foreign Service National 23 Not Applicable\n Subtotal Beijing 74 9\n Border Security American 37 2\n Border Security Foreign Service National 10 2\n Guangzhou Program Funded Position American 4 Not Applicable\n Program Funded Position Foreign Service National 53 Not Applicable\n Subtotal Guangzhou 104 4\n Border Security American 58 2\n Border Security Foreign Service National 33 7\n Mexico City Program Funded Position American 4 Not Applicable\n Program Funded Positions Foreign Service National 43 Not Applicable\n Subtotal Mexico City 138 9\n Border Security American 31 2\n Border Security Foreign Service National 24 3\n Mumbai Program Funded Position American 0 Not Applicable\n Program Funded Position Foreign Service National 26 Not Applicable\n Subtotal Mumbai 81 5\n Border Security American 23 3\n Border Security Foreign Service National 33 1\n New Delhi Program Funded Position American 5 Not Applicable\n Program Funded Positions Foreign Service National 23 Not Applicable\n Subtotal New Delhi 84 4\nSource: OIG analysis of data in CWSS.\n\n\n Domestically, OIG found that the personnel expenditures for CA and DS\xe2\x80\x93the two\nbureaus where testing was planned\xe2\x80\x93were immaterial. Specifically, for CA, out of 21,253\nexpenditures, totaling $685,145,821, only 1,423 expenditures, totaling $2,614,728, were\npersonnel related, which is only 0.38 percent of the total amount. For DS, out of 5,296\nexpenditures, totaling $20,846,633, only 104 expenditures, totaling $60,240, were personnel\nrelated, which is only 0.29 percent of the amount of the universe. Because of these relatively\n\n 39\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\nsmall totals and the lack of readily available information on the individual employees paid, OIG\ndid not perform testing on domestic personnel expenditures.\n\n Selection of Expenditure Samples and Testing Results\n\n OIG selected samples to test overseas nonpersonnel expenditures funded by allotments\nfrom the regional bureaus and CA separately from DS. OIG also performed testing of the\nfunding for a sample of consular personnel at overseas locations. In addition, OIG separately\ntested domestic nonpersonnel expenditures from CA and DS.\n\n OIG noted that the universe of expenditures included certain negative expenditures and\nexcluded them when developing the universe of expenditures to test. However, OIG wanted to\ngain an understanding of the types of activities that resulted in negative expenditures. Therefore,\nOIG randomly selected 10 negative expenditures at the three overseas posts and at CA to\ndetermine the reasons for these expenditures. OIG found several reasons for the negative\nexpenditures. For example, some of the expenditures were canceled, other expenditures were for\nrefunds from the value added taxes at post or overpayments to employees or vendors, and still\nother negative expenditures were for error corrections.\n\n Overseas Nonpersonnel Samples. OIG tested funds allotted to overseas posts by DS\nseparately from funds allotted to posts by the regional bureaus and CA. The funding from the\nregional bureaus and CA was the most significant funding source for overseas nonpersonnel\nexpenditures related to the Border Security Program. To test these expenditures, OIG employed\njudgment sampling. Specifically, OIG sorted the list of positive expenditures for each post by\ndollar amount from highest to lowest and then chose the largest dollar expenditures until the\ncumulative total reached about 70 percent of the universe amount. Consequently, OIG was able\nto concentrate its testing on the highest dollar expenditures at each post. This procedure yielded\nthe required sample size at each of the posts to attain the 70 percent target. However, OIG found\nsome canceled expenditures, which necessitated substitutions. Consequently, the target\npercentage was not realized. Nevertheless, the total expenditures tested totaled over 60 percent\nof the dollar amount of the universe at each post, and the overall rate at the three posts was about\n66 percent, although only about 10 percent of the total number of expenditures at all of the posts\nwere tested, as shown in Table 6.\n\n For each of the CA-allotted sample items, OIG determined the allowability of the\nexpenditures based on CA\xe2\x80\x99s Post Allotment Funding Matrix. The regional bureaus did not have\nformal guidance on the types of activities that were allowable from regional bureau-allotted\nfunds. Therefore, OIG used the bureau-approved post budgets and advices of allotment to make\na preliminary determination on the allowability of regional bureau-allotted border security funds.\nTo perform its testing, OIG obtained supporting documentation, such as invoices, to determine\nwhether posts had expended funds in accordance with CA\xe2\x80\x99s guidelines or approved financial\ninstructions.\n\n As shown in Table 6, OIG determined that out of 431 expenditures, totaling $2,086,517,\n71 expenditures, totaling $165,738 (or 7.94 percent of amount of expenditures), were not made\n 40\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\nin accordance with CA\xe2\x80\x99s guidance or approved financial instructions and had not been separately\napproved by CA or the regional bureaus.\n\nTable 6. Results of Testing Overseas Nonpersonnel Expenditures From Funds Allotted by\nCA and the Regional Bureaus\n Number of Amount of\n Exceptions Not in Exceptions Not in\n Compliance With Compliance With\n Guidance and Guidance and Not\n Not Allowed by Allowed by CA or\n Universe Universe Number Amount CA or the the Regional\n Post Total Amount Tested Tested Regional Bureau Bureau\n China 867 $567,532 64 $381,461 2 $11,304\n Mexico 1,366 $799,214 224 $510,663 67 $150,219\n India 2,205 $1,822,547 143 $1,194,393 2 $4,215\n Total 4,438 $3,189,293 431 $2,086,517 71 $165,738\n (9.71%) (65.42%) (16.47%) (7.94%)\nSource: Prepared by OIG based on the results of its testing.\n\n DS funds certain overseas expenditures using border security funds. OIG wanted to\nensure it tested some of these expenditures and therefore randomly selected 10 expenditures\nfunded by DS allotments for testing at each overseas location. During the testing of DS-allotted\nfunds overseas, OIG obtained supporting documentation, such as invoices, to determine whether\nposts had spent the funds in accordance with DS-approved post spending plans. The results of\nthe testing at each overseas location for nonpersonnel expenditures funded by DS are in Table 7.\n\n Table 7. Results of Testing Overseas Nonpersonnel Expenditures From Funds Allotted by\n DS\n Universe Universe Number Amount Number of Amount of\n Post Total Amount Tested Tested Exceptions Exceptions\n China 134 $50,171 10 $1,256 0 0\n Mexico 624 $150,259 10 $1,871 2 $343\n India 474 $136,868 10 $2,521 0 0\n Total 1,232 $337,298 30 $5,648 2 $343\n (2.44%) (1.67%) (6.67%) (6.07%)\n Source: Prepared by OIG based on the results of its testing.\n\n OIG sampled 30 DS expenditures, totaling $5,648, for testing and determined that\n28 expenditures, totaling $5,305 (93.93 percent of amount of expenditures), were for allowable\nitems. DS spent border security funds at posts to support its Assistant Regional Security Officer-\nInvestigator program. For example, funds were used for residential utilities, cell phone fees, and\nvehicle maintenance. Of the two remaining expenditures, OIG could not determine whether one\nexpenditure was allowed because the post could not provide sufficient supporting\ndocumentation, and the other expenditure was not in compliance with the guidelines.\nSpecifically, the post paid approximately $260 for residential electricity expenses for an\nindividual in a consular position using DS-allotted funds instead of CA-allotted funds.\n\n 41\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n Overseas Personnel Samples. For overseas personnel testing, OIG planned to sample,\nwhen available, six positions at all five posts for each of the following categories:\n\n \xef\x82\xb7 Position Funded by Border Security Program \xe2\x80\x93 American\n \xef\x82\xb7 Position Funded by Border Security Program \xe2\x80\x93 Foreign Service National\n \xef\x82\xb7 Position Funded by Program \xe2\x80\x93 American\n \xef\x82\xb7 Position Funded by Program \xe2\x80\x93 Foreign Service National\n \xef\x82\xb7 Unfilled Positions Funded by Border Security Program \xe2\x80\x93 American\n \xef\x82\xb7 Unfilled Positions Funded by Border Security Program \xe2\x80\x93 Foreign Service National\n\n Given these parameters, OIG determined, during planning, that it could test a total of\n135 positions. However, OIG noted, during fieldwork, that several of the positions that had been\nfilled in FY 2010 were now unfilled, thereby necessitating substitutions. Additionally, some\nindividuals were not available to be interviewed. The sample sizes at the various posts were also\naffected by disparities between the CWSS data and post documentation, as shown in Table 8.\n\nTable 8. Overseas Unfilled Personnel Sample Sizes and Results\n Number of Number of\n Original Positions Positions\n Total Original Correctly Filled (for at\n Number of Sample of Classified by Least a\n Post Unfilled Positions in FY Positions Positions CWSS as Portion of FY\n 2010 per CWSS Unfilled Unfilled Unfilled 2010)\n Border Security \xe2\x80\x93 American 9 6 4 2\n Beijing Border Security \xe2\x80\x93 Foreign\n Service National 0 0 0 0\n Subtotal 9 6 4 2\n Border Security \xe2\x80\x93 American 2 2 2 0\n Guangzhou Border Security \xe2\x80\x93 Foreign\n Service National 2 2 2 0\n Subtotal 4 4 4 0\n Border Security \xe2\x80\x93 American 2 2 0 2\n Mexico Border Security \xe2\x80\x93 Foreign\n City Service National 7 5 5 0\n Subtotal 9 7 5 2\n Border Security \xe2\x80\x93 American 2 2 2 0\n Mumbai Border Security \xe2\x80\x93 Foreign\n Service National 3 3 0 3\n Subtotal 5 5 2 3\n New Delhi Border Security \xe2\x80\x93 American 3 3 3 0\n Border Security \xe2\x80\x93 Foreign\n Service National 1 1 0 1\n Subtotal 4 4 3 1\n Total 31 26 18 8\nSource: OIG analysis of data provided by CWSS and overseas posts.\n\n\n\n 42\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n Although OIG originally selected the positions to test overseas using the CWSS database,\nOIG found that sometimes the information obtained from the CWSS database differed from\ninformation in the human resource documents at the overseas posts. In those instances, the post\ndata prevailed because the post data were deemed more accurate. Consequently, positions were\nsometimes moved from one of the two unfilled categories to one of the four filled and funded\ncategories. The net result of various necessary adjustments was that OIG tested a total of\n108 positions distributed among the overseas posts, as shown in Table 9.\n\nTable 9. Overseas Filled and Funded Personnel Sample Sizes and Results\n Number\n Number Performing Number\n of Work Other Performing\n Filled and Funded Position Positions Number Than Border Border Security\n Post Category Tested Correct Security Work\n Border Security \xe2\x80\x93 American 4 4 0 N/A\n Border Security \xe2\x80\x93 Foreign Service\n National 5 5 0 N/A\nBeijing\n Program \xe2\x80\x93 American 6 0 N/A 6\n Program \xe2\x80\x93 Foreign Service National 8 0 N/A 8\n Subtotal 23 9 0 14\n Border Security \xe2\x80\x93 American 0 0 0 N/A\n Border Security \xe2\x80\x93 Foreign Service\n National 5 5 0 N/A\nGuangzhou\n Program \xe2\x80\x93 American 5 0 N/A 5\n Program \xe2\x80\x93 Foreign Service National 10 0 N/A 10\n Subtotal 20 5 0 15\n Border Security \xe2\x80\x93 American 4 4 0 N/A\n Border Security \xe2\x80\x93 Foreign Service\nMexico National 6 6 0 N/A\nCity Program \xe2\x80\x93 American 7 2 N/A 5\n Program\xe2\x80\x93 Foreign Service National 6 0 N/A 6\n Subtotal 23 12 0 11\n Border Security \xe2\x80\x93 American 6 6 0 N/A\n Border Security \xe2\x80\x93 Foreign Service\n National 9 9 0 N/A\nMumbai\n Program \xe2\x80\x93 American 0 0 N/A 0\n Program \xe2\x80\x93 Foreign Service National 6 0 N/A 6\n Subtotal 21 15 0 6\n Border Security \xe2\x80\x93 American 8 8 0 N/A\n Border Security \xe2\x80\x93 Foreign Service\n National 4 4 0 N/A\n New Delhi\n Program \xe2\x80\x93 American 2 0 N/A 2\n Program \xe2\x80\x93 Foreign Service National 7 0 N/A 7\n Subtotal 21 12 0 9\n Total 108 53 0 55\nSource: OIG analysis of data provided by CWSS and overseas posts.\n\n\n 43\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n For each of the tested positions, OIG determined the appropriateness of funding used for\nthe work performed. OIG testing disclosed that of 108 individuals, 55 individuals (50.9 percent)\nwere performing work that was not allowable per the funding source. However, none of the\n55 individuals were funded with Border Security Program funds. Rather, all 55 individuals were\nfunded with Diplomatic and Consular Program funds but were performing work related to border\nsecurity.\n\n Domestic CA Nonpersonnel Testing. To test domestic nonpersonnel expenditures from\nCA, OIG selected all expenditures above various thresholds or cutoff amounts for each fee type\nof expenditure, thereby allowing OIG to concentrate audit efforts on the highest dollar\nexpenditures for each fee type. Based on this sampling methodology, OIG planned to test a total\nof 276 expenditures, totaling $547,233,035. However, OIG noted during fieldwork that seven of\nthe expenditures either were canceled or were attributable to error corrections. Nevertheless, the\nvalid expenditures that were actually tested encompassed more than 70 percent of the\nnonpersonnel funds spent domestically by CA, although less than 2 percent of the expenditures\nwere tested. Specifically, of CA\xe2\x80\x99s 19,830 expenditures, totaling $682,531,093, OIG tested\n269 expenditures, totaling $496,598,715, which was 72.76 percent of the entire amount of CA\xe2\x80\x99s\nexpenditures, as shown in Table 10.\n\n For each of these sample items, OIG determined the allowability of the expenditures\nbased on CA\xe2\x80\x99s Consular Fee Authorities guidelines. To perform its testing, OIG obtained\nsupporting documentation, such as invoices, to determine whether CA had expended funds in\naccordance with its guidelines.\n\n As shown in Table 10, OIG determined that out of a sample of 269 expenditures, totaling\n$496,598,715, 187 expenditures, totaling $279,568,710 (56.30 percent of amount of\nexpenditures), were not used strictly in accordance with CA guidelines or OIG could not\ndetermine how the funds were used because of insufficient supporting documentation. Two of\nthe category types, Passport Security Surcharge and WHTI, had the largest rates of error:\n85 percent and 100 percent, respectively.\n\nTable 10. Domestic Nonpersonnel Positive Expenditure Testing for CA\n Fee Universe Universe Number Amount Number of Amount of Cutoff\n Type Total Amount Tested Tested Exceptions Exceptions Amount\n MRV 18,715 $291,767,717 21 $128,246,638 4 $8,693,000 $1,000,000\n WHTI 548 $122,153,240 111 $101,944,581 111 $101,944,581 $100,000\n Passport 81 $250,582,746 80 $250,582,138 68 $168,836,446 $200,000\n IV 205 $12,230,735 19 $10,475,684 0 0 $250,000\n DV 193 $570,968 7 $151,862 4 $94,683 $15,000\n H&L 88 $5,225,687 31 $5,197,812 0 0 $20,000\n Total 19,830 $682,531,093 269 $496,598,715 187 $279,568,710\n (1.36%) (72.76%) (69.52%) (56.30%)\nSource: Prepared by OIG based on the results of its testing.\n\n\n 44\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n Domestic DS Nonpersonnel Testing. To test domestic nonpersonnel expenditures from\nDS, OIG selected all expenditures above a threshold or cutoff amount for each of the two types\nof fee categories used at DS, thereby allowing OIG to concentrate audit efforts on the highest\ndollar expenditures for each type of DS expenditures. This sampling methodology encompassed\nabout 75 percent (74.59 percent) of total nonpersonnel funds spent domestically by DS, although\nless than one percent (0.67 percent) of the expenditures were tested. In fact, this methodology\nprovided testing coverage for more than 75 percent of the dollars spent from MRV fees and more\nthan 50 percent of the dollars spent from H&L fees.\n\n During the testing of domestic DS-allotted funds, OIG obtained supporting\ndocumentation, such as invoices, to determine whether DS had spent the funds in accordance\nwith DS spending plans.\n\n As shown in Table 11, OIG found that out of a sample of 35 expenditures, totaling\n$15,503,861, three expenditures, totaling $3,421,014 (22.07 percent of amount of expenditures),\nwere not in compliance with DS spending plans. DS had erroneously funded some local guard\nservices provided to Department annexes with MRV funds. DS was aware of this error, but\ninstead of correcting the entries in the accounting system, it chose to use other funds to pay for\nexpenditures that could have been funded using border security-related funding. As of June\n2012, DS had reimbursed the Border Security Program about $1.4 million using this method.\nHowever, the remaining amount of approximately $2.1 million had not been reimbursed.\n\nTable 11. Domestic Nonpersonnel Positive Expenditure Testing for DS\n\n\n Fee Universe Universe Number Amount Number of Amount of Cutoff\n Type Total Amount Tested Tested Exceptions Exceptions Amount\n\n MRV 4,527 $18,860,180 29 $14,502,300 3 $3,421,014 $100,000\n H&L 665 $1,926,213 6 $1,001,561 0 0 $50,000\n 35 $15,503,861 3 $3,421,014\n Total 5,192 $20,786,393 (0.67%) (74.59%) (8.57%) (22.07%)\nSource: Prepared by OIG based on the results of its testing.\n\n\n\n\n 45\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n Appendix B\n CA Post Allotment Funding Matrix\n\n\n\n\n CAPoSl ca u b ... l ~ !rCA\n Item AliormerllS\n AnOlmeru lunds r~m"\'n Dr\n lundS remilln lit ~\n Ih ~\n "f1n~ Y"M\n ~n!lOfln~\'I"M\n ~n!l\n\nObject Class 1100/1200\n 1100/1200\xc2\xb7- Salanes and Benefits\n\n\n\n\n slgnlllcWlt lnoud portfolio. and _\n\n\n\n\n 46\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n May be funded Funded on a case\xc2\xb7b\n through CA Post Not funded throug case basis if CA\n Item Allotments CA Post\n Allotments funds remain at the\n (MRV, DVorH& Las\n (MRV,DVorH&L as\n end of the year\n appropr iate )\n appropriate\n Brochures, n\n Brochures nyers,\n rs outreach materials xX\nObject Class 2500 - Other (Contractual) Services\n\n\n\n\nConsular Agents\n salaries & benefits X\n X\n\n\n~\n X\n X\n I\n ,al conGen\n ,at cOnGen (traveland\n (lraVel and per diem) X\n X\n flo\n fto poslfor\n , postror "" tralnlno X\n X\n I\n Fobs for Consular Agenls\n Agents X\n X\n X\n X\n urnilure\n urniture X\n X\n t secumy GUardS X\'\n\n\n (The 11* indicates that CA funds do support this item but through consular fees provided to the appropriate regional or functional\n bureau. Consular ch\n chiefs\n iefs shou\n should\n ld not request\n reque.t these\n the.e funds directly\n d irectly from CA in the MRV,\n MRV, DV,\n DV, or H&L data calls.)\n\n\n\n\n 47\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n Appendix C\n\n United States Department of State\n\n Assistant Secretary oJState\n oJStme\n Jor Consular Affairs\n Jar\n\n Washington,, D.C. 20520\n Washington\n\nUNCLASSIFIED July 24, 2012\n\nMEMORANDUM\n\nTO: OIG - Harold W. G~isel\n\n\nFROM: CA - Janice L. Ja~\n Ja~\nSUBJECT: Revised Draft Report on Audit ojDepartment oJState Use oj\n Consular Fees Collected in Support oJthe Border Security Program\n\n Thank you for the opportunity to respond to the revised draft report on the\nAudit ojDepartment ojState Use oj Consular Fees Collected in Support oj the\nBorder Security Program\n Program.. The Bureau of Consular Affairs has provided\ncomments below to the six recommendations for which CA is the action entity.\n\nRecommendation 1: I: OlG\n OIG recommends that the Bureau oj Consular AJJairs\n Affairs (CA)\nJormalize its authority over the Border Security Program by modifying the\nForeign AJJairs\n Affairs Manual (I (1 FAM 150)\n 250) to recognize CA\'s role as the overall\nprogram management oJfice Jor for the Border Security Program.\n\n CA agrees with this recommendation and believes formalizing CA\'s\nauthority as the overall program management office for the Border Security\nProgram will increase the transparency of the use of consular fees in accordance\nwith Department guidelines and mission priorities. CA is in the process of revising\n1I F AM 250 to outline CA\'s authority and anticipates submitting all proposed\n FAM\nrevisions for the appropriate clearances by mid-August. CA has received initial\nclearance from the Office of the Legal Adviser (LIM, LILFA,\n LILF A, and LlCA) to add the\nfollowing language to the Assistant Secretary\'s responsibilities in 1 F\n FAM\n AM 251.1,\nunder a new subsection:\n\n (f) Oversees the Department\'s use of fee revenue collected fo forr consular\n services (i.e., passport and visa services and provision of consular services)\n and retained by the Department\n Depattment and the allocation of consular fees to other\n Bureaus. Establish\n Establishes\n es and oversees implementation of policies and\n procedures to ensure that consular fees, including consular fees allocated to\n\n UNCLASSIFIED\n\n\n\n\n 48\n\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n\n\n UNCLASSIFIED\n - 2-\n 2-\n other Bureaus, are used for authorized purposes in accordance with\n applicable law and regulation.\n\nRecommendation 2: OIG recommends that the Bureau of Consular Affairs\ndevelop clear roles and responsibilities for all parties involved in the Border\nSecurity Program and codify this information in the Foreign Affairs Manual.\n\n CA agrees with this recorrunendation\n recommendation.. CA plans to formalize the roles and\nresponsibilities for all parties involved in the Border Security Program by\ndeveloping Service Level Agreements (SLAs) with Department Bureaus that\nreceive consular fee funding. These SLAs will defmedefine clear expectations between\nCA and the relevant Bureau. CA anticipates developing and implementing SLAs\nby the start ofFY\n of FY 2013 with the following Department of State Bureaus:\nAdministration (A), Diplomatic Security (OS), the Foreign Service Institute (FSI),\nInformation Resource Management (IRM), (lRM), the Office of the Legal Adviser (L),\nand Overseas Building Operations (OBO). CA will work with the Office of\nDirectives Management (AlGlSIDIR)\n (NGISlDlR) to codity the SLA procedure in the relevant\nsection of the Foreign Affairs Manual.\n\nRecommendation 3: OIG recommends that the Bureau of Consular Affairs\ndevelop processes to prioritize Border Security Program funding requests and\noversee the allocation offunding for prioritized projects of the Border Security\nProgram.\n\n CA agrees with this recommendation and has made several adjustments\nsince FY 2010 (the scope of the OIG audit) as to how the Bureau manages its\nresources. In FY 20 11,\n II , CA revamped the budget formulation process to include a\nrobust analytical review conducted by the Comptroller\'s Office, in order to\npromote greater accountability and transparency. Under the new process\n process,, partner\nbureaus and CA directorates are required to submit detailed budget justifications\nand participate in formal hearings\n hearings,, and CA approves funding requests based on the\nresulting analysis. CA plans to utilize the new Bureau SLAs to further guide and\nformalize the process for prioritizing Border Security Program funding requests\n requests..\n\nRecommendation 4: OIG recommends that the Bureau of Consular Affairs\ndevelop comprehensive performance goals and indicators for the Border Security\nProgram and a process to measure the program\'s accomplishments.\n\n CA agrees with this recorrunendation.\n recommendation. Since FY 20 I 0, CA has pursued a\nmore comprehensive strategic planning process in order to develop an integrated\n UNCLASSIFIED\n\n\n\n\n 49\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n\n\n UNCLASSIFIED\n -3-\nCA-wide plan. The Bureau also has taken an active role in the new strategic\nplanning and performance management processes developed under the\nQuadrennial Diplomacy and Development Review (QDDR) implementation,\nincluding volunteering as a pilot bureau for the new multi - year strategic planning\nrequirements.. CA will continue to work on these initiatives and expand to the\nrequirements\nBorder Security Program\n Program..\n\nRecommendation 6: OIG recommends that the Bureau of Consular Affairs\n Department--wide guidance on the use of border security\ndevelop Department security--related funds\nand disseminate the guidance to all bureaus and posts that receive border\nsecurity funds.\n\n CA agrees with this recommendation. The new SLAs will include guidance\non the development of budget requests for of Border Security Program funds by\npartner bureaus. In addition, CA is in the process of significantly revising the post\nallotment process, including updating the CA Post Allotment Fund ing Matrix to\n Funding\nensure continuity\n continuity,, transparency, and conformity to standard operating procedures.\nTo maintain consistency with systems currently utilized by overseas posts and\nWashington, CA is committed to using Department IT tools such as the Resource\nAllocation and Budget Integration Tool (WebRABlT) and the Consolidated\n (COAST).\nOverseas Accountability Support Toolbox (COAST).\n\nRecommendation 7: OIG recommends that the Bureau of Consular Affairs\ndevelop and implement a comprehensive monitoring process, to include periodic\nreviews of expenditures,for the Border Security Program that will ensure that\nborder security funds are used in accordance with guidelines.\n\n CA agrees with this recommendation and has recently created a bureau-wide\ninternal review program, which focuses on financial management and contract\nadministration oversight within the Bureau. As this review program is expanded,\nCA plans to evaluate whether overseas posts are spending post-allocated Border\nSecurity Program funds in accordance with Department guidelines. In order to\ninitiate a regular monitoring process of the us\n usee of consular funds by partner\nbureaus, CA plans to add a review section to the Bureau Service Level\nAgreements. The agreements will indicate how often the reviews will occur, likely\nquarterly.\n\n In addition to our comments to the above recommendations, we suggest the\nfollowing revisions to the draft OIG report:\n\n\n UNCLASSIFIED\n\n\n\n\n 50\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n\n\n UNCLASSIFIED\n UNCLASSlFfED\n -4-\n -4-\n\xe2\x80\xa2 Page five of the report says the Office of the Comptroller was created\n in 2009 which is when staff began working in the new office. As\n written, the draft presents an inaccurate impression that the office was\n unstaffed for two years. For clarity, we suggest the following edit to\n the last sentence of the first bullet: The Office of the Comptroller is\n responsible for leading "all strategic activ\n activities\n ities related to contracting,\n budgeting, accounting, resource management, and outreach related to\n resources.."\n resources\n\n\xe2\x80\xa2 On page six, under the Regional Bureaus and Posts heading, we\n recommend adding a sentence indicating these were the\n responsibilities in FY 2010.\n\n\xe2\x80\xa2 On page II (last paragraph)\n paragraph),, we recommend clarifYing that CA\n obtains requests for overseas Border Security Program funding from\n posts using the Web\n Web-- based Consular Affairs Post Allotment System.\n\n\xe2\x80\xa2 On pages 16, 21, 22, and 26, the allowable fee usage for the Passport\n Security Surcharge is listed as "secure mail and postage." This\n language was mistakenly written as such on the Consular Affairs\n Revenue Authorities Guidelines. The Passport Security Surcharge\n legislation authorizes the Department to charge surcharges for\n consular services in support of enhanced border security, and the\n surcharge includes such components as facial recognition for book\n and card applications, enhanced fraud prevention programs, and\n enhanced security features on cards\n cards.. Therefore, the language for the\n authorized fee usage shou ld\n should read "secure ma\n mail\n il and to enhance the\n security of passport books and cards."\n\n\n\n\n UNCLASSIFfED\n UNCLASSIFIED\n\n\n\n\n 51\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n Appendix D\n\n\n\n Un itited\n ed State\n Statess De pa rtm\n rtmee nt of St at\n atee\n\n \\\\\n 1\\~15h;\'\n ~IShi"I 1?lOfI.\n RI(/fI. D .C\n .C. 20520\n\n "\xc2\xb7"\xc2\xb7" \xc2\xb705((/ 1(>.).:0\' \xc2\xb7\n\n\n JUN1810U\n JUH18 10U\n\nUNCLA\nUNC LASS\n SS IF IED\n( UNCLASS\n UNCLA SS IFI ED w hen se\n separa\n paratt ed fr\n from\n om attac\n attachm\n hment)\n cnt)\n\nINFORM ATIO N M EMO TO D E IP\'U\nINFORMATION TY INSPE\n UTY C TOR GENERAL\n NS PEC GENERA L\nli\nUA w. GE ISE L\n A ROLD W. ~\n\nFROM : Eriic J. Boswe L Y\n DS - Er\n\nSU BJ EC\n ECT:\n T: Draft Report Responesponse\n se - Audi t of Departm\n epart ment of St ate Use of\n sulla r Fees Collected in Support of the Bor\n Connsu\n Co Borde\n derr Sec\n Secuur itity\n y Prog\n rogrram\n am,,\n AU\n AUD D / FM~12\n F M ~12 -XX\n \xc2\xb7 XX ., M ay 20112\n 2\n\n Attached is th e B ureau\n urea u or Diplomatic\n pl omatic Security\'s responsc\n esponse to\n ecommendati\nRecomme ndat ioon S\n 5 of the subjec\n orthe ubjectt draft repo rt .\n report.\n\n\n\nA ttachment\n uachment::\n As stated.\n\n\n\n\n UNC LASS IFIED\n LA SS IF IED\n\n\n\n\n 52\n\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n\n\n UNCLASSIFIED\n\n Audit of OCp:l rtment of State\n Department Conss ular\n St:lte Use of Con\n Fees Co\n Collected\n llected in Support ufthe Border Securit\n S upport ofthc y Pro\n Secur ity g ram\n Progra m\n (AUD / FM-12-XX , Ma y 2012)\n\n\n(U) Recommendation\n Reco mme ndation 5: OIG recommends that the Bureau of Diplomat Diplomatic\n ic\nSecurity refund the $2 ._11 m illion erroneously charged to the Border Security\nProgra\nPrognlmm fund from the Wor Worldldwide\n wide Sec\n SL"CuriL\n urityy Protection fund.\n\n\n(U) OS spo n .~e (06/01/20\n DS R esponse 12): OS concurs with tlu s recommendation\n (06101 /2012): recommendation.. During\n1m\n,m Office of the In spector Gene ra\n Inspector rall (O IG) aud\n (010) it orlhe Departmen\n audit Departmentt of State \' s use of\n StaLe \'s\nconsular fee\n feess collected in support of the l30rdcr\n Border Security Program, auditors noticed\nthai six In\nLim\\ ter-Con invoices\n Inler-Con invoices were erroneously charged against the Mac hinehi ne\nReadable Visa ( MRV)MRV ) accowlt.\n aCCOlmt. However, after further research by the Bureau of\nDi plomatic Security \' s Chief F inancial Office\nDiplomatic Officerr (DSIEXlCfO\n (DSIEXlCfO)) and Domestic\nOperat ions (DSIDO\nOperations (DSfDO)), it was discovered that a total of 67 FY 2010 invoices\n Invoices were\nerroneously charged against the Worldwide Security Protection ( WS WSP)P) account.\nThis emlr\n error o ccurred when the previous contract ing officer \' s representative\n contracting\ntransposed the award lines [or l\\1RV\n tvrRV and WSP [ro[romm the contract. As a re sult,,\n result\nMRV actually owes WSP $1 ,039 ,027 ( see attached In voice s ummary).\n Invoice ummary).\n\n\n(U) OSlEXlCFO ha hass been in co\n contact\n ntact with the Global Financial Mana gement\n Management\nSystem (GF MS)) about correcting the pa\n (GFMS payy ments and decided , in consultation with\nOS/OO , that a bulk reimbursement wou would\n ld be the best o ption . Th\n Thee reimbursement\nshould occur hb y early Jul y 20 12. DS/J)O hahass also discu ssed methods with the\n discussed\nOffice of Domestic Facilities Protection ( DS/OO/OFP\n DSIOO/DFP)) to mitigate any further\n harged\nerroneously c ha nvoices..\n rged invoices\n\n\n\n\n UNCLASSIFIED\n\n\n\n\n 53\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n Appendix E\n\n\n l init"d StlltC"i; Dt"llIIrtnwllt urSllltc\n\n C/.;e! Fj\'lCln,.j(d ODi(\'r(\'\n\n WlI s IliI18 /(lrI , O.C. 20520\n\n\n JUN 14 2012\nUNC LASSIFI ED\n\nMEMORANDUM\n\nTO: DIG - Harold\n GIG orold W . Geisel\n\nFROM: RMiCFO - !om"\n RMlCFO Milli\n lome, L. Mill t.\n\nSUBJECT: Audit of Department of\n ofSt.1te\n State Use of Consular Feess Collected\n Cons ular Fee Collccted in\n Support of the Border Securit\n Securityy Pro grJ.111 (AUD/ FM-12-XX)\n Program\n\n RM apprec iates the opportunity to co\n appreciates mment on the s ubject Audit Report\n comment\ndated May 2012.\n 2012 . RM appreciates the in incorporation\n corporation of previous co mments, but ha\n comments, hass\nconccms about severa\nconcerns everall rema inin\n iningg assertions regardi\n regardinng RM\'s role; comments\nbelow,\nbelow.\n\nPage\nPal:,C 12,\n 12. First paragraph, third sentence: "Although RMlBI) did not nOl ha\n have prog.rnm\n ve pro gram\nmanagement oUlhority thee Border Securi ty Pr\n nuthority for th ogram., it wa\n Program wass respon\n responsible\n sib le for\n ror\nallotting\nall otting Border Security Pro grum funds\n Program runds based on the funding\n runding reque s ts developed\nby various\n vnrious bureaus. RMIBP. consultation\n RMlBP, in co nsultation with CA, based the funding\n runding dec\n deciis ion s\non the request\n reques ts for\n ror funding and on what had been allotted the pr previou\n eviouss yea r."\n year."\n\nR eSSllonsC\n lons c : RM/BP requests thatlhe that the final report rephrase the misleadin misleading g state ment\nci ted above, which suggests that RMlBP\ncited RM/ BP lacked authority for fo r exec utin g BSP\nallonnent\nallotment s during this thi s period. Border Sec Se<:ururitityy Fund\n undss are a descrip tive budgetary\n descriptive\nterm for certain offsetti ng fee collections that are ordinari ly credited to the\nDiplomati c and nod Consular Program Programss accouni.\n account. RM RMIBP / BP exercised its allotment\nauthori\nauthorityty consistent w ith its respo ns ibilitie bili tiess under I FAM FAM 226. T he report repon \'s\ninterpreta tition\n on of "p rogrr3l11\n "prog alll ma na ge r" responsib\n responsibilitie ilitiess le ads to allan interna\n internall\ncontradiction.\ncontradictio n. The repol1\n report contends that no State Departm Department ent office\n ffi ce had been\nfomuill y des\nfornHlll dcsiig naled\n nated as th thee " program m::uUlger,"\n manager," as os de fined by the Pro gram\n Program\nManage\nManagem menlent lIn sti tute. If the audi\n titutc. auditt is suggesting\n suggesti ng that only suc uchh an offi\n oflice\n ce was\nauthorized to allot fund funds.s, it would follow thaI mat no fee collec tion s sho\n collection uld have been\n s hould\nallotted - irre spective of o f th e Department\'s\n Department \'s stan ding fisca\n standing fi sca l authorities.\n\n\n\n UNCLASS I FI ED\n\n\n\n\n 54\n\n UNCLASSIFIED\n\x0c UNCLASSIFIED\n\n\n\n\n\n J.lliQ,ASSI\n UNCLASSIFI:IED\n IED\n -2-\n\nP UI!,C\n age 13, Fourth paragraph: "There is liule little tran sparency into how funds being\n transparency\nal lotted by RM / BP to OIher\nalloued other bureaus arc being used. Although CA hod had not\n nOI been\ndelegated the authority , it had hud begun to take a Icadership\n leadership role in developing\nbudgets wiwilh other\n th ot her bureaus that receive funding from the Border Security Program\nand in improvin\n improving g transparency. In FY 2010, 2010. RM RM// BP worked with bureaus to\ndevelop bo rder seeu\n bordcr securritity\xc2\xb7related budgett requests. RMIBP would co\n y\xc2\xb7relalcd budge confer\n nfcr with CA\nofficials about the bud\n budget gct requests re cei ved from other burcuus\n received bureaus and ensure that CA\n eque s ts prior 10\nagreed with the requcs to finali\n finalizing\n zing ththee allotments."\n allotments."\n\nRe s p o n se: Request\n cquest the removal of the sen tence "71lere\n sentence n/ere is liltle \'r\n i~\'linle transparency\n ollSpureliCY ininfO\n to\nhow funds being allotted\nhowJunds RMIBP (0 other bureaus\n alloned by RM/BP used.. ..., Thi\n burealls are being used Thiss ma\n mayy\nhave been intended to highlight concems raised by CA re garding\nhavc bureaus \'\n ga rding other bureaus\'\nuse ofMRV\nusc of MRV funds\n fund s., but the wording is s till objcctionable. Suchh an assertion is nOI\n objectionable. Suc not\nsupported\n upportcd by the factfactss presented\n presented,, and is beyond the stale\n tatedd scope\n seope of this repon.\n report. The\nOIG team ad vised RMlBP\nOlG RM/BP that its allotment proce\n process\n ss was \'out of scope\n scope\'\' for this\nreport, and they th\nreport. therefore request further docurnentation\n erefore did not requcst documentation of those\nallo tments.\n llotmenl.<;.\n\n"\nI\'u~ge\n gc 13\n 13,, Fifth paragraph , first se ntence;: " In FY 20\n sentence 11 , CA revamped the budget\n 2011,\nreview process by beginning to hold " hearings,"\n hcarings," in which bureaus and CA onices\n ofliccs\n CA \'s Comptro\nmet with CA\'s ller to justify\n Comptroller justifY the bureaus\' and CA \'s border se\n security\xc2\xb7re latcd\n curity-related\n requests."."\nbudget requests\n\nResponse\nRes po nse : Reques\n equestt clarirying language nOling\n clarifying noting that\n lhat BP\n UP was exp licitly exclude\n explicitly excludedd\nfrom the\n thesse budget hearings by CA, dedesp ite requests to attend\n spite allend by BP and sosome\n me of\nthe participatin\n participatingg bureau s.\n bureaus.\n\nPage\nP:lgC 1414,, Last paragraph:\n paragraph : "Although the D Department was ob taini ng s uffi\n obtllining ffi cient funds\nrrom\nfrom con sular fee collections to cover 1I10st\n consular most current fund ing reque\n funding sts, the\n requests,\nDepartment\nDepartm ent did as k CA to use th e border security\n ask securi ty funds to cover a number of\n onull costs. For in stance, within the next\nadd iti ona ncxt 2 years,\n yt;:ars, CA has been asked to fund\nthe salaries of all consular s taff atal overseas posts using Bord er Security Pr ogram\n Program\nfunds addifioll, CA hus\nfunds.. Inn addition, has funded some limit ed requests from tb\n limited thee Bureau\n Burctlll of\nOve rseas Buildings Ope\nOverseas ration\n Operat ions for renovations to t he consular\n cOllsular sectio\n scctio ns in certa in\n certain\ncountrie\ncountriess that have a high demand for visas. CA is concerned that these request eque stss\nmay expand u ntil it is expected to fund all costs related to consular activities.\nmay activities, even\nindirect costs for which the Department receives app\nindirect approp\n roprri ated fund\n fundss.. Because CA\nis facing\n faci ng increasing demands on its resources and the Department cannot predic predictt\nw hen ththee amount of fund\n fundss from fcc\n ICc collec tions\n collecti ons may decrea\n decreasese because of aa drop in\n\n\n\n\n 55\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n\n\n UNCLASSIFIED\n -3-\n\noverseas demand for visas to travel to the United States, the\n thc Department needs to\nmake long-te\nmnke long-Icnn\n nn plans on how to prior itize border secu\n prioritize security-related\n rity-related needs. The\nbudgetary environment shou\n should opportunity tor\n ld be seen as an opponunity for the Departm ent to\n Department\nperform p lanning to ma\n maximize impactt of every dollar spen\n xim ize the impac t."\n s ~nl."\n\n\nRes po nse: RM / BP recognizes thm that this paragraph is based\n bnsed on inpu inputt from\ninterviews. but notes that it provides a very incomp\ninterviews, incomplete picture\n lete pi cture of how DSP costs,\nrevenue, anandd spen\n spending -rellated. Th\n ding are inter-re Thee "additiona l costs"\n COSts" cited are incurred\non behalf of th e Border SecuSecurity\n rity Program by other Departmental\n Depanmental bureaus and nnd\noflices.\nonices. CA took such cos ostts into account when es establishin\n tabli shi ngg cons\n consular\n ular fee\n fcess rates\n niles for\nFY2012. Acco rd ingl y, the re\n ingly, coupment of such costs from cur\n recoupment rent and future\n current fut ure\ncollections\ncollec tions is consistent wiwith stannding Federal\n th sta Fedcral practice for achiev\n achievinging \'full\n \'flil l cost\nrecovery\' from offsetti ng fee collections. RM\n from offsetting RM// BP recogni\n recognize zess that fee rerevenues\n venues are\n ubject to both annual increases and decreases, as det er\ns ubjcctto mined by wo\n ermined workload,\n rkload, but\nbelieves suc\n suchh variability is taken into consideration whcn when calculating\n calcu lating fcc ratesrales and\nprojecting future\n fu turc spending.\n\nPa ge 18\nPal!c I R,, Second paragraph, beginning with the second sentence "Based\n " Based on the\nnumber of fee -fu nded direct-hire American full-t\n fee-funded ime-equivalent employees llmt\n full-time-equivalent that\nperform co nsul ar work, both overseas and domestically, RM\n nsu lar /BP culcu\n RM/BP calculalated\n ted t he\ntota\n otall cost of payroll (which included salary and most benefi\n benefits)\n ts) using a derived\nmedian average earned rate along with a benefit computatio\n computationn for thc\n the population of\nCA full-time-equivalent\n ful l.t ime-equivalclll employees. Once CA agreed\n agrced to the amount, thethc funds\n unds\nwere\nwcre transferred quarterly from the Border Security Program to the centralized\n centrali7..ed\nAmerican salaries account. Although the money transferred to the sa la ries acco\n laries accountunt\nwas used to fund personnel costs, GIG 010 could not ensure that all of the fund\n fu nds\ntransferred to the\ntranslerred thc central payroll fund were\n werc used for border s ecurity-related\n ecuri ty-related\nposi tions because the money was commingled with other payro l l-relaled\npositions fun ds.""\n l-related funds.\n\nR esp\n es po n se\n se:: R Ml BP disagrees with the reports charactcri7.ation\n characterization of current practice\nas "c o m mingling\n "co mingling," ," and reque sts Ihe\n requests the _ removal of the " commingling" langua\n the languagege\nthroughout.\nthroughout. RM \'s current pnlcticc\n current practice for \' reimbursin g\' fcc collec\n reimbursing\' fee collection tion s into the central\nS<l !aries "ccoum\nsa!arit:s acco ull! is fully\n full y consistent\n consistelll with accepted Federal\n Fedcral practice for lOr offse tttting\n ing\ncoll ecction\ncolle tions,\n s. as outlined in GAO OAO Princ iples of Fedenll\n Fedcral Appropriations Law (3n.l (3ft! cd .\xe2\x80\xa2..\nvo l. I)\n I). Retained\n etained cons\n consuular feefeess are ordinaril\n ordinari ly c redited\n reditcd to lh thee Diplomati\n Diplomaticc and\nCons\nCo ular Prog\n nsular rogram s (D&CP) appropriation,\n appropriation, which\n wh ich funds\n fllnd s the s alary\n lary and benefit\n bene fi t\ncosts for thc large majorit\n majority y Departm\n Dcpanment ent personnel\n pcr.;onnel,. including all co nsular\n cons ular staff\n tafT.. As\n 010 team advised RM that\nthe OIG thaI payroll practices and procedures\n procL-dures were outside the\nscope of o f this report.\n eport , the audit did not rev iew this this matter\n mattcr in suf ficient delail\n sufficient detail to make\n\n\n\n\n 56\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n\n\n UNCI,i\\SSIFlED\n UNCLASSIFIED\n \xc2\xb74\xc2\xb7\n -4-\n\nssuch\n uch an assertion.\n asse.rtion, Had the O IG requested,\n requested , RM/BP would have provided further\n information on the metmethodology used to \'charge\' consular\n hodology lIsed cost~\n consu lar salary cos ts to SSP\noffsetting co\n collect\n llect io\n ions,\n ns, validat\n validating\n ing that all fec collection used to fund cen central\n tral sa\n salaries\n laries\nwere ass ociated w ith border security positions.\n associated posi tions, Once suc suchh collections\n collect ions are c redited\n redi ted\nto ~alary account within D&\nto the central salary D&CP C P,, it ii.~e; reasonable and w itithin\n hin accepted\nFederal practice to consolid\n consolidate\n ate them with regu la r appropriation\n appropriationss for disbursement\nvia payroll.\n pay roll.\n\n\n\n\n 57\n\n UNCLASSIFIED\n\n\x0c UNCLASSIFIED\n\n\n\n\n\nMajor Contributors to This Report\n\nGayle Voshell, Director\nFinancial Management Division\nOffice of Audits\n\nMary P. Siatis, Audit Manager\nFinancial Management Division\nOffice of Audits\n\nKaren Crue, Auditor\nFinancial Management Division\nOffice of Audits\n\nCarol E. Hare, Auditor\nFinancial Management Division\nOffice of Audits\n\nStephanie A. Hwang, Auditor\nFinancial Management Division\nOffice of Audits\n\n\n\n\n 58\n UNCLASSIFIED\n\x0cFRAUD, WASTE, ABUSE, OR MISMANAGEMENT\n of Federal programs\n\n and resources hurts everyone.\n\n\n\n\n Call the Office of Inspector General\n\n HOTLINE\n\n 202/647-3320\n\n or 1-800-409-9926\n\n to report illegal or wasteful activities.\n\n\n\n You may also write to\n\n Office of Inspector General\n\n U.S. Department of State\n\n Post Office Box 9778\n\n Arlington, VA 22219\n\n\n Please visit our Web site at oig.state.gov\n\n\n Cables to the Inspector General\n\n should be slugged \xe2\x80\x9cOIG Channel\xe2\x80\x9d\n\n to ensure confidentiality.\n\n\x0cUNCLASSIFIED\n\n\n\n\n\nUNCLASSIFIED\n\n\x0c'