State Department: Comprehensive Strategy Needed to Improve Passport Operations
Published: 2008-07-25T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 2007, following the implementation of new document requirements for travelers entering the United States from within the Western Hemisphere, the Department of State (State) received a record number of passport applications. In June 2009 further document requirements are scheduled to go into effect and will likely lead to another surge in passport demand. GAO examined (1) the extent to which State was prepared for the surge in passport demand and how its readiness affected passport operations, (2) State's actions to increase passport production capacity in response to the surge, and (3) State's readiness for near-term surges in demand and its strategy to improve passport operations. GAO interviewed officials from State and the Departments of the Treasury and Homeland Security, conducted site visits, and reviewed data on passport processing times and reports on passport operations.
section_title: What GAO Found
paragraphs: State was unprepared for the record number of passport applications it received in 2007, leading to significant delays in passport processing. State underestimated the increase in demand and consequently was not able to provide enough notice to the financial agent it uses for passport application payment processing for the agent to prepare for the increased workload, further adding to delays. As a result, reported wait times reached 10 to 12 weeks in the summer of 2007--more than double the normal wait--with hundreds of thousands of passports taking significantly longer. State had difficulty tracking individual applications and failed to effectively measure or communicate to applicants the total expected wait times, prompting many to re-apply and further straining State's processing capacity. State took a number of emergency measures and accelerated other planned efforts to increase its passport production capacity in 2007. For example, to help adjudicate passports, State established four adjudication task forces and deployed passport specialists to U.S. passport agencies severely affected by the surge. In addition, State accelerated hiring and expansion efforts. As a result of these efforts and the normal seasonal decline in passport applications, wait times returned to normal by October 2007. According to State estimates, these emergency measures cost $42.8 million. Although State has taken steps to improve its ability to respond to near-term surges in passport demand, it lacks a comprehensive strategy to improve long-term passport operations. State previously identified several deficiencies limiting the efficiency and effectiveness of passport operations, such as reliance on a paper-based work flow and ineffective communications, and these deficiencies were exposed by State's response to the surge. While State also identified a framework to guide its modernization efforts, it does not have a comprehensive plan to prioritize and synchronize improvements to its passport operations. A comprehensive strategy for making these improvements--for example, using a business enterprise approach--would better equip State to handle a significantly higher workload in the future.

section_title: Letter
paragraphs: In early 2007, the Department of State (State) received a record number of  passport applications, resulting in lengthy delays in passport issuances,  which inconvenienced thousands of Americans. State officials have said  that this surge in passport demand was largely a result of the January 23,  2007, implementation of the first phase of the Western Hemisphere Travel  Initiative (WHTI), which established new document requirements for  travelers entering the United States by air. Although State initially  budgeted about $185 million to issue an estimated 15 million passports in  fiscal year 2007, it received roughly 18.6 million passport applications  during this period.
The second phase of WHTI implementation—which establishes new  document requirements for travelers entering the United States by land or  sea and is scheduled to go into effect in June 2009—will likely lead to  another surge in passport demand. In addition, State began issuing a  passport card, which is intended to be a lower-cost alternative to the  passport book, in July 2008. The availability of the passport card may also  lead to greater passport demand in the near future, as the card is expected  to serve as a convenient form of identification for citizens living in border  communities who travel frequently between the United States and Canada  or Mexico.
You have expressed interest in State’s efforts to determine its workload  and plan for another large surge in demand. We reviewed (1) the extent to  which State was prepared for the surge in passport demand in 2007 and  how State’s readiness affected passport operations, (2) how State  increased its passport production capacity in response to the 2007 surge,  and (3) State’s readiness for near-term surges in demand and whether  State has a comprehensive strategy in place to improve long-term passport  operations.
To accomplish our objectives, we reviewed passport issuance, staffing,  and processing time data through May 2008. In addition, we reviewed State  reports on passport demand estimates, lessons learned from the 2007  surge in passport demand, and the future of passport operations. We also  analyzed surveys used by State to estimate passport demand in 2007 and  2008. We observed passport operations and interviewed U.S. government  officials at six U.S. passport agencies—Hot Springs, Arkansas; Charleston,  South Carolina; Houston; New Orleans; New York; and Washington. We  selected these locations based on the size of their workload and  geographic diversity. We also interviewed officials from State’s Bureau of  Consular Affairs (CA), the Department of Homeland Security (DHS), the  Department of the Treasury’s Financial Management Service (FMS), and  State contractors involved in the passport operations.
We conducted this performance audit from August 2007 through July 2008  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. Appendix I contains a more  detailed description of our scope and methodology.
subsections: section_title: Background
paragraphs: A passport is an official government document that certifies an individual’s  identity and citizenship and permits a citizen to travel abroad. According  to State, many people who have no overseas travel plans have applied for  a passport because it is viewed as the premier citizenship and identity  document, which allows the bearer to board an airplane, prove citizenship  for employment purposes, apply for federal benefits, and fulfill other  needs not related to international travel. Under U.S. law, the Secretary of  State has the authority to issue passports, which may be valid for up to 10  years. Only U.S. nationals may obtain a U.S. passport, and evidence of  nationality is required with every passport application.
subsections: section_title: State Passport Operations
paragraphs: The Deputy Assistant Secretary for Passport Services oversees the  Passport Services Office, within State’s Bureau of Consular Affairs.  Passport Services, the largest component of Consular Affairs, consists of  five headquarters offices: Field Operations, Technical Operations,  Passport Integrity and Internal Controls Program, Planning and Program  Support, and Legal Affairs and Law Enforcement Liaison. In addition to  these headquarters offices, State operates 17 passport issuing agencies in  Aurora, Colorado; Boston; Charleston, South Carolina; Chicago; Honolulu;  Houston; Los Angeles; Miami; New Orleans; New York; Norwalk,  Connecticut; Philadelphia; Portsmouth, New Hampshire; San Francisco;  Seattle; and two offices in Washington, D.C.—a regional passport agency  and a special issuance agency that handles official U.S. government and  diplomatic passports. State also opened new passport production  facilities for the personalization of passport books in Hot Springs,  Arkansas, in March 2007 and in Tucson, Arizona, in May 2008.
As of May 2008, State employed more than 3,300 government and contract  staff to receive, process, and adjudicate passport applications and print  and mail out passport books. This number of staff has risen dramatically in  recent years to handle the increased number of passport applications.  Between October 2006 and May 2008, the number of passport specialists— staff responsible for approving and issuing most U.S. passports—more  than doubled, to 1,353. In addition, State’s passport agencies employ  roughly 1,500 staff as contractors, who perform nonadjudicative support  functions such as data entry, printing, and mailing out passports.  Separately, as of May 2008, State also employed about 600 full- and part- time staff at the National Passport Information Center (NPIC), which  handles customer service inquiries from the public.
section_title: Passport Application Process
paragraphs: Figure 1 summarizes the passport application process, from the  submission of an application at an acceptance facility or by mail, through  payment processing and basic data entry at lockbox facilities operated by  the financial agent, to adjudication and printing at passport agencies  around the country.
State is authorized to designate acceptance facilities—in addition to its  own passport agencies—to provide passport execution services to the  American public. The majority of passport applications are submitted by  mail or in person at passport application acceptance facilities nationwide.  Passport acceptance facilities are located at certain U.S. post offices,  courthouses, and other institutions and do not employ State personnel.  The passport acceptance agents at these facilities are responsible for,  among other things, verifying whether an applicant’s identification  document (such as a driver’s license) actually matches that applicant.  These agents collect the application package, which includes the passport  application, supporting documents, and payment, and send it to State’s  centralized lockbox facility.
According to State, the number of active acceptance facilities changes  frequently as new facilities are added and others are dropped. In recent  years, State has expanded its network of acceptance facilities to  accommodate increasing passport demand. As of June 2008, there were  over 9,400 such facilities nationwide, an increase from fewer than 7,000  facilities in March 2005.
subsections: section_title: Lockbox
paragraphs: Passport acceptance agents send application packages to a lockbox  facility operated by a Treasury financial agent. The lockbox is responsible  for opening and sorting passport application packages, verifying the  completeness of the packages, processing payments, and batching the  applications. In addition, lockbox staff scan the first page of the passport  application, along with the payment check or money order, and apply a  processing date to the application. Once data on the application are  captured by software using character recognition and confirmed manually  by data entry staff, the information is transferred to a server, which  passport agencies can access to download into their passport issuance  system. The physical passport application, along with supporting  documents such as a birth certificate, is also sent via courier to a passport  agency. The lockbox generally performs all application processing  functions within 24 hours of receipt of the application from an acceptance  facility.
section_title: Adjudication, Personalization, and Delivery
paragraphs: Once a passport application has been received by one of the passport  agencies, it is examined by a passport specialist who determines, through  a process called adjudication, whether the applicant should be issued a  passport. Adjudication requires the specialist to scrutinize identification  and citizenship documents presented by applicants to verify their identity  and U.S. citizenship. It also includes the examination of an application to  detect potential indicators of passport fraud and the comparison of the  applicant’s information against databases that help identify individuals  who may not qualify for a U.S. passport. When passport applications are  submitted by mail or through acceptance facilities, specialists adjudicate  the applications at their desks. A relatively small number of passport  applications are submitted directly by applicants to one of the passport  agencies. Applicants are required to demonstrate imminent travel plans to  set an appointment for such services at one of the issuing agency’s public  counters. “Counter” adjudication allows specialists to question applicants  directly or request further information on matters related to the  application, while “desk” adjudication requires contacting the applicants  by telephone or mail in such cases. Once an applicant has been  determined eligible for a passport by a passport specialist, the passport is  personalized with the applicant’s information at the passport agency or  one of the centralized printing facilities and then delivered to the  applicant.
section_title: Customer Service
paragraphs: The National Passport Information Center, located in Dover, New  Hampshire, and Lansing, Michigan, is State’s centralized customer service  center. NPIC is a contractor-operated center that provides information and  responds to public inquiries on matters related to passport services.  Linked electronically to all passport agencies, NPIC provides an  automated telephone appointment service that customers can access  nationwide 24 hours a day and an online service for customers to check  the status of their applications. A separate telephone number and e-mail  address are dedicated for congressional staff inquiries.
section_title: Historical Passport Trends
paragraphs: State has experienced a tremendous increase in the number of passports it  processes in recent years. Between 2004 and 2007, the number of  passports issued more than doubled to nearly 18.5 million passports (see  fig. 2). This rate of increase far surpasses historical trends—a 2005 study  on passport operations noted that the number of passports issued in the 30  years between 1974 and 2004 increased just 72 percent. Demand for  passports is seasonal in nature, with applications usually peaking between  January and April, as the public prepares for spring and summer vacations,  and then falling off from September through December (see fig. 3). In  estimating future demand for passports, State factors in this seasonality.
According to State data, about 28 percent of the U.S. population has a  passport, with 85.5 million U.S. passports in circulation as of February  2008. Of these, more than 24 million will expire in the next 5 years. State  noted that the number of people applying for passport renewal varies  depending on the laws and regulations in effect, the economy, and other  factors. In addition, people may apply for a passport renewal before their  book expires or up to 5 years after it expires.
In response to this rapid increase in demand for passports, State’s  requested budget for passport activities has increased tenfold since 2002  (see fig. 4). This request is part of State’s Border Security Program, which  includes funding for passport operations, systems, and facilities. The  Border Security Program is funded through a combination of Machine  Readable Visa fees, the Western Hemisphere Travel surcharge, Enhanced  Border Security Program fees, and Fraud Prevention fees, as well as  through appropriated funds. The majority of this funding comes from the  Machine Readable Visa fees, which amounted to nearly $800 million of the  Border Security Program budget in fiscal year 2007. State also collects fees  for expedited passports and the Passport Security surcharge.
section_title: New Regulations for Travel Documents Contribute to Increase in Passport Demand
paragraphs: The increased demand for passports is primarily the result of WHTI, DHS’s  and State’s effort to specify acceptable documents and implement  document requirements at 326 air, land, and sea ports of entry. When fully  implemented, WHTI will require all citizens of the United States and  nonimmigrant citizens of Canada, Mexico, and Bermuda to have a  passport or other accepted travel document that establishes the bearer’s  identity and citizenship to enter or re-enter the United States at all ports of  entry when traveling from within the Western Hemisphere. Prior to this  legislation, U.S. citizens did not need a passport to enter the United States  if they were traveling from within the Western Hemisphere, except from  Cuba.
DHS is implementing WHTI in two phases: first, for air ports of entry, and  second, for land and sea ports of entry (see fig. 5). On January 23, 2007,  DHS implemented WHTI document requirements at air ports of entry. On  January 31, 2008, DHS began implementing the second phase of WHTI at  land and sea ports of entry by ending the routine practice of accepting  credible oral declarations as proof of citizenship at such ports. DHS is  required by law to implement WHTI document requirements at the land  and sea ports of entry on the later of two dates: June 1, 2009, or 3 months  after DHS and State certify that certain implementation requirements have  been met.
During the 2007 surge in passport demand, due to the passport application  backlog, certain WHTI requirements were suspended. Specifically, on June  8, 2007, State and DHS announced that U.S. citizens traveling to Canada,  Mexico, the Caribbean, and Bermuda who have applied for but not yet  received passports could temporarily enter and depart from the United  States by air with a government-issued photo identification and  Department of State official proof of application for a passport through  September 30, 2007.
subsections: section_title: Passport Card
paragraphs: In October 2006, to meet the documentation requirements of WHTI and to  facilitate the frequent travel of persons living in border communities, State  announced plans to produce a passport card as an alternative travel  document for re-entry into the United States by U.S. citizens at land and  sea ports of entry. The passport card is being developed as a lower-cost  means of establishing identity and nationality for American citizens and  will be about the size of a credit card. Individuals may apply for either a  traditional passport book or a passport card, or both. Applications for the  passport card will undergo the same scrutiny and security checks as  applications for the traditional passport book, and the card will  incorporate security features similar to those found in the passport book.  State began accepting applications for the passport card in February 2008  and began producing the card in July 2008. State and other officials have  suggested that the availability of the passport card may generate additional  demand, as individuals may apply for a card for identification for  nontravel purposes, such as voting.
section_title: State Was Unprepared for 2007 Surge in Passport Demand, Leading to Lengthy Wait Times for Applicants
paragraphs: State was unprepared for the record number of passport applications it  received in 2007 because it underestimated overall demand for passports  and did not anticipate the timing of this demand. Consequently, State  struggled to process this record number of passports, and wait times rose  to record levels. State’s efforts to respond to the demand for passports  were complicated by communications challenges, which led to large  numbers of applicants being unable to determine the status of their  applications.
subsections: section_title: State Was Unprepared for Record Number of Passport Applications in 2007
paragraphs: State’s initial estimate for passport demand in fiscal year 2007, 15 million  applications, was significantly below its actual receipt of about 18.6  million passport applications, a record high. Because of its inability to  accurately determine the increase in applications, State was unable to  provide revisions in its estimates to the lockbox financial agent in enough  time for the lockbox to prepare for the increased workload, leading to  significant backlogs of passport applications.
subsections: section_title: State Underestimated Demand for Passports
paragraphs: State was largely unprepared for the unprecedented number of passport  applications in 2007 because it did not accurately estimate the magnitude  or the timing of passport demand. In January 2005, State estimated that it  would receive 15 million passport applications in fiscal year 2007—about  44 percent more than it received in fiscal year 2005. However, actual  receipts totaled about 18.6 million applications in fiscal year 2007, about  23 percent more than State had originally estimated. According to State  officials, planning efforts to respond to increased demand are predicated  on demand estimates, highlighting the need for accurate estimates.
Limitations in the survey methodology used by State’s contractor  responsible for collecting survey data on passport demand contributed to  State’s underestimate. State based its estimate partly on a survey of an  unrepresentative sample of land border crossers. This survey initially  estimated an increase over the baseline demand for passports of more  than 4 million applications in fiscal year 2007 due to implementation of the  first phase of WHTI. However, our analysis of the survey methodology  found several limitations. First, the survey was conducted in July 2005,  over a year before the beginning of fiscal year 2007 and roughly 2 years  before the peak of the surge in demand. According to contractor officials,  many respondents have a limited ability to estimate their likely travel  plans that far in advance. Moreover, State officials noted that travel  document requirements were changed several times by Congress and by  regulation between 2005 and 2007, likely affecting passport demand.  Second, the 2005 survey did not estimate total passport demand because it  did not collect new data on air and sea travelers. Third, the survey was  unable to provide estimates on when the increased demand would occur.  To refine its estimate, State adjusted the figures provided by the survey by  using monthly application trends from previous years. According to these  trends, State expected to receive 4.7 million passport applications in the  first 3 months of 2007. However, demand for passports in 2007 did not  follow previous seasonal trends, and State ultimately received about 5.5  million applications during those first 3 months. According to the then- Assistant Secretary for Consular Affairs, this unprecedented level of  demand in a compressed period contributed to State’s inability to respond  to demand.
State’s efforts to estimate demand for passports were also complicated by  several external factors, including preparations for the introduction of the  passport card for land border crossers and changes in implementation  timelines for WHTI. For example, in its fiscal year 2007 budget request and  Bureau Performance Plan for Consular Affairs, submitted to the Office of  Management and Budget in January 2005, State anticipated the receipt of  15 million passport applications in 2007 and requested $185 million for  passport operations, facilities, and systems to meet this demand. However,  due to these changing circumstances, State revised the 2007 estimates in  subsequent planning and budget documents, estimating 16.2 million  receipts in April 2006 and 17.7 million receipts in March 2007.
section_title: State Did Not Communicate Effectively with the Lockbox Facility
paragraphs: State’s fluctuating demand estimates also complicated efforts to prepare  for the surge in demand at the lockbox operated by the financial agent,  which provides passport application data entry and payment processing  services. According to lockbox agent documents, between May 2006 and  February 2007, State provided lockbox officials with at least five sets of  estimates of passport applications for fiscal year 2007. Although the  lockbox agent began preparing for an increased workload in the end of  2006, lockbox officials told us that they had difficulty adjusting to these  changing estimates, because it takes roughly 60 to 90 days to prepare for  increased demand, such as by hiring additional staff and ordering  additional scanners. Further, these officials told us they did not expect the  volume of applications they eventually did receive. According to State  officials, the lockbox agent planned to process 325,000 applications per  week, but actual workload peaked at 500,000 applications per week, an  increase of over 50 percent. As a result, large numbers of passport  applications accumulated at the lockbox facility, and applications took far  longer to be processed than the typical 24 hours. In April 2007, according  to lockbox data, many applications took as long as 3 weeks to process  before being sent to passport agencies for adjudication. The primary  issues contributing to this backlog, according to lockbox officials, were  incorrect demand estimates from State and insufficient lead time.
section_title: State Struggled to Process a Record Number of Passport Applications in 2007
paragraphs: State issued a record number of passports in fiscal year 2007, but  deficiencies in its efforts to prepare for this increased demand contributed  to lengthy backlogs and wait times for passport applicants. Reported wait  times for routine passport applications peaked at 10 to 12 weeks in the  summer of 2007—with hundreds of thousands of applications taking  significantly longer—compared to 4 weeks in 2006.
subsections: section_title: State Issued a Record Number of Passports in 2007
paragraphs: According to State data, the department issued a record number of  passports in fiscal year 2007—about 18.5 million passports, over 50  percent more than the 12.1 million passports it issued in fiscal year 2006.  State officials characterized the increase in passport demand as  exponential over the past few years and attributed it mostly to the  increased number of applications from Americans complying with the  WHTI requirements. As noted earlier, the number of passports issued  doubled between 2004 and 2007.
In January 2007, State began to notice a sharp increase in passport  applications. Department officials initially believed this increase was  temporary because of their efforts, initiated in December 2006, to publicize  new travel document requirements related to the WHTI; however, State  reported that the number of applications it received increased from about  1.5 million per month in January and February 2007 to about 1.8 million or  more in each of the following 3 months. Additionally, as noted in a 2007  study, passport applications in 2007 did not conform to historical trends,  contributing to State’s lack of preparedness.
section_title: Wait Times Reached Record Highs in 2007 due to Unprecedented Demand
paragraphs: As a result of the increased number of passport applications in the first  half of 2007, reported wait times more than doubled, causing applicants to  wait 10 to 12 weeks for their passports on average, though many  applicants waited significantly longer. According to State data, the average  time to process a passport—from the time one of State’s passport agencies  receives the application until the time it mails the passport to the  applicant—was about 3½ weeks in January 2007, better than the goal of 5  weeks that State had during that period. However, by the summer of 2007,  processing times had risen to about 8½ weeks, which, according to State  officials, led to wait times of between 10 and 12 weeks. Further, data  provided by State show that 373,000 applications—or about 12 percent of  all routine applications—took over 12 weeks to process during the peak of  the surge in July and August 2007. By contrast, average processing times  peaked at just over 4 weeks in 2006 and just over 3 weeks in 2005 (see fig.  6). Furthermore, expedited passport applications, which State guaranteed  would be processed within 3 business days of receipt, took an average of  over 6 days to process in July 2007, leading to reported wait times of 2 to 3  weeks for expedited applications.
In addition, there were wide variations in routine application processing  times between the different passport agencies during the surge. According  to State’s data, average processing times for individual passport agencies  ranged between 13 and 58 days during the peak of the surge in July 2007.
section_title: Communications Issues Contributed to Customer Frustration
paragraphs: State does not have consistent service standards or goals for timeliness of  passport processing. During the 2007 surge, many applicants found it  difficult to get timely, accurate information from State regarding wait  times for passports; as a result, State experienced a record number of  customer service inquiries from the public and Congress during the surge,  drawing resources away from adjudicating passports and increasing wait  times. In addition, State does not systematically measure applicants’ wait  times—measuring instead processing time, which does not include the  applicant’s total wait time—further contributing to the confusion and  frustration of many applicants.
subsections: section_title: State Does Not Have a Consistent Customer Service Standard for Passport Processing Times
paragraphs: State does not provide passport applicants with a committed date of  issuance for passports; rather, it publishes current processing times on the  department Web site. Over the past year, State has changed the  information provided on its Web site from estimated wait time to expected  processing time. Because these processing times fluctuate as passport  demand changes, applicants do not know for certain when they will  receive their passports. For example, at the beginning of the surge,  reported wait times were 6 to 8 weeks. By the summer of 2007, however,  reported wait times had risen to 10 to 12 weeks before falling to 6 to 8  weeks in September and 4 to 6 weeks in October 2007. According to  passport agency staff, however, the times on State’s Web site were not  updated frequently enough during the surge, which led to inaccurate  information being provided to the public.
Further, State has not had consistent internal performance goals for  passport timeliness (see table 1). While State generally met its goals for  passport processing times—which decreased from 25 to 19 days—between  2002 and 2005, the department changed its timeliness goal in 2007 from  processing 90 percent of routine applications within 19 days to  maintaining an average processing time of 35 days for routine applications.  According to State officials, the department relaxed its goals for 2007 and  future years due to the large increase in workload and the expectation of  future surges in passport demand. However, even with the unprecedented  demand for passports in 2007 and State’s lack of preparedness, the  department managed to maintain a reported average processing time of 25  days over the course of the year, raising questions about whether State’s  35-day goal is too conservative.
section_title: Inaccurate Information on Processing Times Contributed to the Strain on Passport Operations
paragraphs: During the 2007 surge in passport demand, applicants found it difficult to  get information about the status of their applications, leading many to  contact several entities for information or to reapply for their passports.  Many of the applicants who did not receive their passports within their  expected time frame called NPIC—State’s customer service center— overwhelming the center’s capacity and making it difficult for applicants  to get through to a customer service representative. Other applicants  contacted passport agencies or acceptance facilities directly. However,  passport agency staff told us that there was little or no contact between  their customer service representatives and the acceptance facilities,  leading to applicants receiving inconsistent or inaccurate information  regarding wait times. Passport agency staff said that officials in  Washington provided processing time estimates to postal facilities that  were far below actual processing times.
In addition to contacting State and State’s partners, thousands of  applicants contacted their Members of Congress for assistance in getting  their passports on time, according to State data. One Senator noted that he  increased the number of staff in his office responding to passport inquiries  from one to seven during the height of the surge in passport demand.  According to State officials, many applicants made inquiries about the  status of their passports through multiple channels—through NPIC,  passport agencies, State headquarters, or congressional offices—leading  to several cases in which multiple staff at State were tasked with searching  for the same application. This duplication of effort drew resources away  from passport adjudication and further contributed to delays in  processing.
According to State officials, many applicants who were unable to receive  timely, accurate information on the status of their passport applications  appeared in person at passport agencies to resubmit their applications— some having driven hundreds of miles and others having taken flights to  the nearest passport agency. For example, according to officials at the  New York passport agency, whose workload consists primarily of counter  applications, the number of in-person applicants nearly doubled at the  height of the surge. These officials told us they generally issue 450 to 550  passports on any given day, but during the surge they experienced an extra  400 to 600 daily applicants without appointments, most of whom were  resubmitting their applications. Officials at another passport agency added  that customers appearing in person at the passport agency stated that they  would have made alternative arrangements had they known how long the  wait time was going to be. This high number of resubmissions further  slowed State’s efforts to reduce passport backlogs during the surge.
The inundation of in-person applicants led to long lines and large crowds  at many passport agencies during the summer of 2007. For example,  officials in New York said that customers waited in line outside the  building for up to 6 hours before appearing at an appointment window— and then waited even longer to see a passport specialist. According to  these officials, this line snaked around the building, and the agency had to  work with local law enforcement to control the crowds. Officials in  Houston also said that crowd control during the surge was a significant  challenge for their agency due to the large numbers of applicants  appearing without appointments.
section_title: State’s Estimated Processing Times Do Not Measure Applicant’s Total Expected Wait Time
paragraphs: The passport processing times that State publishes on its Web site do not  measure the total length of time between the applicant’s submission of an  application and receipt of a passport. According to State officials,  processing times are calculated based on passport aging statistics—that is,  roughly the period beginning when the passport agency receives a  passport application from the lockbox facility and ending when the  passport is mailed to the applicant. Consequently, State’s measure of  processing times does not include the time it takes an application to be  sent from an acceptance facility to the lockbox, be processed at the  lockbox, or be transferred from the lockbox to a passport agency. While  this time may be as short as 1 to 2 days during nonpeak periods, during the  surge, when hundreds of thousands of passport applications were held at  the lockbox facility for as long as 3 weeks, this time was significantly  longer. Passport agency officials told us that during the surge, applicants  were confused about the times published on State’s Web site, as they were  not aware that State did not start measuring processing times until a  passport agency received the application from the lockbox facility.  Finally, customers wishing to track the status of their applications are  unable to do so until 5 to 7 days after they have submitted their passport  application, because applications do not appear in State’s tracking system  until the department receives them from the lockbox facility.
section_title: State Took Emergency Measures and Accelerated Some Planned Efforts to Increase Passport Production Capacity
paragraphs: State increased the capacity of its staffing, facilities, customer service, and  lockbox functions during the surge. Passport agencies also developed  their own efforts to increase the efficiency and effectiveness of passport  operations. State’s actions, combined with seasonal declines in passport  applications, decreased wait times to normal levels by October 2007. State  estimated the cost of the emergency measures to respond to the surge to  be more than $40 million.
subsections: section_title: State Increased the Capacity of its Staffing, Facilities, Customer Service, and Lockbox Functions
paragraphs: In reaction to the 2007 surge in passport demand, State took a variety of  actions related to staffing to increase its production capacity. State  instituted mandatory overtime for all government and contract staff and  suspended all noncritical training and travel for passport staff during the  surge. State hired additional contract staff for its passport agencies to  perform nonadjudication functions. State also issued a directive that  contractor staff be used as acceptance agents to free up passport  specialist staff to adjudicate passport applications, and called upon  department employees—including Foreign Service officers, Presidential  Management Fellows, retirees, and others—to supplement the  department’s corps of passport specialists by adjudicating passports in  Washington and at passport agencies around the United States. State also  obtained an exemption from the Office of Personnel Management to the  hiring cap for civil service annuitants, so that it could rehire experienced  and well-trained retired adjudicators while it continued to recruit and train  new passport specialists. In addition, the department dispatched teams of  passport specialists to high-volume passport agencies to assist with walk- in applicants and process pending passport applications. These teams also  provided customer support, including locating and expediting applications  of customers with urgent travel needs. Finally, consular officers at nine  overseas posts also remotely adjudicated passports, using electronic files.
In addition, State took steps to increase the capacity of its facilities to  handle the increased workload. State expanded the hours of operations at  all of its passport agencies by remaining open in the evenings and on  weekends. Several agencies also added a second shift, and State’s two  passport processing centers operated 24 hours a day, in three shifts. Public  counters at passport agencies were also opened on Saturdays for  emergency appointments, which were scheduled through State’s  centralized customer service call center. In addition to increasing work  hours, State realigned workspace to make more room for adjudication  purposes. For example, passport agencies used training and conference  rooms to accommodate additional passport specialists. One passport  agency borrowed space from another government agency housed in the  same building to prescreen applicants. Some passport agencies that had  more than one shift instituted desk sharing among staff. In some instances,  because of the lack of workstations, adjudication staff also manually  adjudicated applications with a pen and paper and entered the  application’s approval into State’s information system at a later time. In  addition, one passport agency renovated its facility by expanding the fraud  office to add desks for more staff.
To further increase the capacity of its customer service function, State  extended NPIC’s operating hours and, according to State officials,  increased the number of its customer service representatives from 172 full- time and 48 part-time staff in January 2007 to 799 full-time and 94 part-time  staff in September 2007. In response to heavy call volume at NPIC during  the surge, State installed 18 additional high-capacity lines, each of which  carries 24 separate telephone lines, for a total of 432 new lines—25  percent of which were dedicated to congressional inquiries, according to  State officials. State also established an e-mail address for congressional  inquiries. To supplement NPIC, State also established a temporary phone  task force in Washington composed of department employees  volunteering to provide information and respond to urgent requests,  augmented an existing consular center with about 100 operators working  two shifts, and temporarily expanded its presence at a federal information  center with 165 operators available to assist callers 7 days a week.
State also took emergency measures in coordination with Treasury to  bolster the lockbox function in reaction to the surge. First, Treasury  coordinated with State to amend the terms of its memorandum of  understanding with its financial agent responsible for passport application  data entry and payment processing, to increase the agent’s lockbox  capacity. Specifically, under the revised memorandum, the financial agent  committed to processing up to 3 million applications per month at the  lockbox. According to Treasury officials, to increase its processing  capacity, the financial agent increased the number of its staff at the  lockbox facility from 833 in January 2007 to 994 in September 2007;  offered a pay incentive to increase the number of its employees working  overtime; and opened an additional lockbox facility—operating 24 hours  a day, 7 days a week in three shifts. In addition, the financial agent  implemented some process improvements at the lockbox during the surge,  including automating data entry, presorting mail by travel date, and  implementing a new batching process to increase the number of  applications processed. The financial agent also increased the number of  scanners, the capacity of its application server and data storage, and the  bandwidth of its network to accommodate the heavy volume of passport  applications. In addition to the measures described above, Treasury and  State held weekly conference calls with the financial agent to discuss  concerns and determine various courses of action to clear the passport  application backlog. Treasury and State officials also visited lockbox  facilities to review operations and received daily status reports from the  financial agent indicating the processing volumes and holdover inventory.
In addition to the emergency steps that State took, it also accelerated  some planned efforts such as hiring more permanent staff and opening a  new passport book printing facility. While State’s hiring of additional  permanent staff was already in CA’s long-term planning efforts to handle  an increase in passport demand, the time frame to do so was moved up to  respond to the passport demand surge, according to State officials.  Consequently, State hired an additional 273 staff in the last quarter of  fiscal year 2007; however, according to State officials, not all of these staff  were on board at the end of the fiscal year because of delays in processing  security clearances for new hires. Additionally, State opened a new  passport book printing center in March 2007, ahead of its schedule to open  in June 2007, to centralize its book printing function and free up space at  passport agencies for adjudication.
section_title: Passport Agencies Took Actions to Improve Their Operations in Reaction to the Surge
paragraphs: Passport agencies took various actions to meet their specific needs in  reaction to the surge. During our site visits, State officials told us that their  passport agencies had undertaken such actions as    developing a software program to better track suspense cases;    creating a batch tracking system whereby each shelf was numbered and  all batches boxed on this shelf were marked with the same number;    developing a “locator card” for customers, which was color-coded to  indicate different situations—such as customers submitting new  applications, inquiring about pending applications, and resubmitting  applications—to enable the agency to locate the application file before the  customer came into the agency;    providing customers with a ticket that provided expedited service if they  had to return on another day; and    using students for nonadjudication tasks for the summer.
In addition, according to State officials, some passport agencies used  security guards to prescreen applicants at the entrance to control crowds  and improve the efficiency of operations. Finally, other agencies organized  teams to handle inquiries from congressional staff and State headquarters  staff. In an effort to document and disseminate such initiatives, State  compiled a best practices document for passport operations during the  surge. These best practices were submitted by passport agencies on a  variety of issues, including work flow improvements, counter  management, and communication, among others.
To provide a forum for feedback for passport agencies and improve  passport operations, State also conducted a lessons learned exercise  following the surge. State gathered information from passport staff at all  levels and compiled a lessons learned document, which was made  available on CA’s internal Web site. According to this review, the primary  lesson learned from the surge was that the United States passport is  increasingly viewed by the American public not only as a travel document,  but as an identity document. Accordingly, the lessons learned document  outlined lessons learned in five main categories—process,  communications, technology, human resources, and contracts—to help  meet future demand for passports. However, State officials told us that  this document was a draft and State has not formally embraced it.
section_title: State’s Actions and Seasonal Decline in Applications Helped Reduce Processing Times by October 2007
paragraphs: The extraordinary measures that State implemented to respond to the  surge in passport demand, combined with the normal seasonal decline in  passport applications between September and January, helped State  reduce wait times by October 2007. According to data provided by State,  the department returned to normal passport processing times of 4 to 6  weeks by October 2007. These data show that State has maintained these  processing times through July 2008, according to State’s Web site.
section_title: Emergency Response to Passport Surge Cost State over $40 Million
paragraphs: State estimated the cost of its emergency measures to respond to the 2007  surge in passport demand to be $42.8 million. This amount included $28.5  million for contract-related costs, $7.5 million for overtime pay for staff  from CA and other bureaus within State, and $3.1 million spent on travel to  passport agencies for temporary duty staff. In addition, State spent $3.2  million on costs associated with buying equipment and furniture. State  also spent an additional $466,000 on costs related to telephone services for  its call centers, for rentals, and for Office of Personnel Management  position announcements for hiring additional passport staff during the  surge. These estimates do not include the costs of other measures such as  hiring additional staff, which State had already planned but accelerated in  order to respond to the 2007 surge.
To cover costs incurred due to the surge, State notified Congress in June  2007 of its plans to devote an additional $36.9 million to the Border  Security Program. According to State officials, this amount included $27.8  million for passport operations, such as $15 million for a passport  processing center, additional costs for Foreign Service Institute training  for new passport specialists, and salaries for 400 new staff to be hired in  fiscal year 2007. In September 2007, State notified Congress of its intent to  obligate an additional $96.6 million for its Border Security Program,  including $54 million for additional passport books, according to State  officials. In December 2007, State sent a revised spending plan for fiscal  year 2008 to Congress to increase its resources to enable it to handle  processing of 23 million passports. This plan included an additional 700  personnel to meet anticipated passport demand and a new passport  adjudication center. The plan also provided for three passport gateway  agencies to be established in fiscal year 2008.
section_title: Despite Improvements in Its Ability to Handle Near-Term Increases in Demand, State Lacks a Comprehensive Long- Term Strategy to Improve Passport Operations
paragraphs: State has enhanced its capacity for responding to surges in passport  demand in the near term, such as by improving its efforts to estimate  passport demand. However, State lacks a comprehensive, long-term  strategy for improving passport operations. State commissioned a review  of its passport operations, completed in 2005, that identified several  deficiencies and proposed a number of potential measures to guide  modernization efforts; however, State does not have a plan to prioritize  and synchronize these efforts. We have reported that an enterprise  approach could help agencies develop more efficient processes, and this  type of approach could help State improve passport operations and better  prepare for future changes in passport demand.
subsections: section_title: State Has Improved its Ability to Respond to Near- Term Increases in Passport Demand
paragraphs: State has taken several steps to increase its passport production capacity  and improve its ability to respond to near-term increases in passport  demand. As we have noted, State hired more staff and improved individual  components of passport operations, such as centralizing the printing of  passport books and upgrading information technology, during and  following the 2007 surge in passport demand. Additionally, State  developed two shorter-term plans to address a future increase in demand,  including an adjudicative capacity plan, which establishes a set of triggers  for determining when to add capacity. According to State officials, the  department has completed some preparations for future surges in demand,  such as opening a second book printing facility in May 2008 and creating a  reserve adjudication force. State also expects to open new passport  agencies in Dallas and Detroit by the end of 2008 and in Minneapolis by  March 2009, according to these officials. However, it faces challenges in  completing others. For example, State hired only 84 out of a planned 400  additional staff called for in the first quarter of fiscal year 2008. Similarly,  according to officials, State has not yet established an additional mega  processing center and is behind schedule in renovating and expanding  some of its existing facilities. According to these officials, these plans  were developed to expand State’s capacity to issue passports.
State has also taken several steps to improve future estimates of passport  demand since it underestimated demand in fiscal year 2007. In particular,  State’s contractor designed a new passport demand survey to overcome  limitations in its 2005 survey, which was not representative of all border  crossers and did not include air and sea travelers. The contractor’s 2007  estimate of total demand for passports in 2008 was derived from (1) a land  border crosser survey to collect data on the impact of WHTI on passport  demand in 2008, and (2) a nationally representative panel survey of  41,000 U.S. citizens, which included data on overall passport demand,  including for sea and air travel and for nontravel identification purposes.  State then applied average monthly application rates from previous years  to the contractor’s data to estimate the number of passport applications  for each month and to identify peak demand. We found these  methodologies sound in terms of survey design, sample selection, contact  procedures, follow-up, and analysis of nonrespondents.
However, estimating passport demand faces several limitations. State and  contractor officials outlined some of these limitations, which include the  following.
It can be difficult for respondents to anticipate travel many months—or  years—into the future. For example, the most recent surveys were  conducted in May and September of 2007 and were used to estimate travel  throughout 2008.
Survey respondents tend to overstate their prospective travel and thus  their likelihood of applying for a passport. While the contractor adjusted  for this phenomenon in its 2007 survey, it did so based on assumptions  rather than data.
Some survey respondents did not understand certain regulations and  options for passports and border crossings, such as WHTI requirements,  suggesting that some of these individuals are unaware of the future need  to apply for passports for travel to Canada or Mexico.
Changes in personal or professional circumstances, or in the economy,  can lead to changes in individuals’ international travel plans.
Changes in regulations can affect passport demand. For example, New  York State signed a memorandum of understanding with DHS to issue  enhanced driver’s licenses that could be used for land border crossings  and could reduce the demand for passports or passport cards obtained  solely to meet WHTI requirements.
section_title: State Lacks a Comprehensive Strategy to Improve Long-Term Passport Operations
paragraphs: A 2005 study of passport operations commissioned by State identified  several limitations in State’s passport operation, many of which were  exposed during the department’s response to the 2007 surge in demand.  This study and other plans, as described above, have also proposed  numerous improvements to passport operations—many of which were  generated by State officials themselves—and the department has begun to  implement some of them. However, State does not have a long-term  strategy to prioritize and synchronize these improvements to its operation.  As we have reported previously, using a business enterprise approach that  examines a business operation in its entirety and develops a plan to  transition from the current state to a well-defined, long-term goal could  help State improve its passport operations in the long term.
subsections: section_title: Review of Passport Operations Identified Several Deficiencies and Proposed Modernization Efforts
paragraphs: In 2004, State contracted with an independent consulting firm to study its  passport operations, which had not been formally examined for over 25  years. The study, issued in 2005, outlined the current state of passport  operations and identified several issues that limited the efficiency and  effectiveness of passport operations. Several of these limitations were  exposed by State’s response to the 2007 surge in passport demand, and  many of them remain unresolved. For example, the study found that  State’s practice of manually routing the original paper passport application  through the issuance process—including mailing, storage, management,  and retrieval of physical batch boxes containing paper applications— slowed the process, extended processing time, and made upgrade requests  difficult to handle. Due to the overwhelming number of applications  during the surge, a few passport agencies told us that there was no extra  space available at their facilities; according to agency officials, this  situation led to duplicative efforts. In addition, the study found that limited  information was available to management and that reporting tools, such as  Consular Affairs’ Management Information System, could not produce  customized reports. Further, the study found that this system could not  provide information on the performance of its business partners, such as  acceptance facilities or the lockbox, resulting in data being available only  for applications that had been received at a passport agency. As a result,  during the surge, State was not immediately aware of the growing  workload at the lockbox. The study also found limitations in State’s  communications, including challenges to communicating among passport  agencies, providing feedback to headquarters in Washington, and  conducting public outreach. For example, during the surge, State did not  effectively disseminate management decisions and communicate changes  in internal processes and resources available to field staff, according to  State’s lessons learned document.
In addition to identifying limitations, the study proposed a guide for State’s  modernization efforts, including a framework to put in place for passport  services by the year 2020. As part of this guide, the study identified key  factors that affected State’s methods for conducting business and the  performance of passport operations. For example, the study identified  increased demand as one such factor, due to normal trends in passport  demand, the impact of WHTI implementation, and the passport’s  increasing role as an identification document for everyday transactions.  To address these issues, the study suggests that State will have to take  steps such as redistributing workload through centralization to meet  increasing volumes—State has begun to implement this suggestion by  establishing passport printing facilities in Arkansas and Arizona.  Additionally, the study notes that passport adjudication practices will  become an even more important part of combating terrorism and other  security concerns in the future, which will require State to utilize  technology and external data to improve its risk assessment and fraud  detection methods. Finally, the study also suggests that State will face  changing customer expectations in the future, requiring more frequent and  effective communications and, possibly, changes to service standards. As  we previously noted, this issue continues to be a challenge for State.
Although the study proposed several initiatives to improve passport  operations, State officials told us that the department has not developed a  formal plan to implement the initiatives, nor does it have a strategic plan  outlining how it intends to improve its entire passport operations. State  officials told us that because the department has been largely focused on  carrying out its day-to-day operations—especially as it responded to the  2007 surge in passport demand—it has not had time to document its  strategic plan. While State has taken a few steps to implement some of the  proposed initiatives of the study—such as developing and implementing  the e-Passport, opening two passport adjudication centers, and issuing  passports remotely—State does not have a systematic strategy to prioritize  and synchronize these potential improvements to its passport operations.  Some of these proposed initiatives that State has not implemented could  be useful to State’s current operations, including the following:  leveraging electronic work flow management—enabling State to develop  flexible, streamlined work streams that improve its ability to monitor and  manage passport operations while reducing manual processes for the  physical movement and storage of paper applications and supporting  documentation—to ensure a more efficient work flow that supports the  issuance of increasing numbers of passports every year;    providing management visibility over the end-to-end passport issuance  process extending across State and partner organizations, to effectively  manage the process and enforce performance standards;    applying validations and identity checks automatically upon receipt or  modification of an application by consistently applying a comprehensive  set of business rules, to strengthen an adjudication process that supports  the integrity of the passport as a primary identity document;    offering an online point of service with expanded functionality as a means  for self-service by the public to facilitate a simplified, flexible, and well- communicated application process to enhance service to the passport  customer; and    conducting a comprehensive workforce analysis to define a sustainable  workforce structure and plans through 2020 and enhancing  communications within State and its business partners to improve  efficiency and promote knowledge sharing.
The recent increases in passport demand have made the need for a plan to  prioritize the study’s proposed initiatives that State intends to implement  more urgent. While the study assumed that State would issue a minimum  of 25 million passports by 2020, this time frame has already become  outdated, as actual issuances were 18.6 million in fiscal year 2007 and, in  July 2007, were estimated by State to reach 30 million as early as 2010.
section_title: An Enterprise Approach Could Help State Improve Passport Operations
paragraphs: We have reported that using an enterprise approach to examine and improve  the entirety of a business process can help agencies develop more efficient  processes. An enterprise approach defines day-to-day operations in order to  meet agency needs and processes that result in streamlined operations, rather  than simply automating old ways of doing business, and effectively  implements the disciplined processes necessary to manage the project. A  key element of this approach is the concept of operations, which assesses the  agency’s current state, describes its envisioned end state, and provides a  transition plan to guide the agency from one state to the other. An effective  concept of operations would also describe, at a high level, how all of the  various elements of an organization’s business systems relate to each other  and how information flows among these systems. Further, a concept of  operations would serve as a useful tool to explain how all the entities  involved in a business system can operate cohesively, rather than in a  stovepiped manner—in the case of passport issuance, this tool would include  acceptance agents, the lockbox facility, and the various components of  passport operations within State. Finally, it would provide a road map that  can be used to (1) measure progress and (2) focus future efforts.
Using an enterprise approach could provide State with management visibility  over the passport issuance process extending across its entire passport  operations, thereby improving these operations in the long term. While State  has made several improvements to its passport operations, it has yet to  develop and implement a comprehensive strategy for passport operations.  The 2005 study, which included a proposed concept of operations, recognized  the need for a comprehensive approach and was designed to analyze the  entire passport issuance process—including the applicant, passport agency,  acceptance facility, lockbox facility, passport processing center, and passport  book printing center. However, according to State officials, State has not  adopted the framework for improving passport operations proposed by this  study, nor has it developed an alternative strategy for prioritizing and  synchronizing its varied efforts to improve these operations.
section_title: Conclusion
paragraphs: The 2007 surge in passport demand exposed serious deficiencies in State’s  passport issuance process. Passport wait times reached record highs, leading  to inconvenience and frustration for many thousands of Americans. Once it  recognized the magnitude of the problem it was facing, State took  extraordinary measures to reduce wait times to normal levels by October  2007. However, these actions were not part of a long-term, comprehensive  strategy to improve passport operations. State estimates that demand for  passports will continue to grow significantly, making such a strategy an  urgent priority. Indeed, a study State commissioned to identify potential  improvements to its passport operations was premised upon demand  estimates for 2020 that are likely to be surpassed as early as this year. State  needs to rethink its entire end-to-end passport issuance process, including  each of the entities involved in issuing a passport, and develop a formal  strategy for prioritizing and implementing improvements to this process.  Doing so would improve State’s ability to respond to customer inquiries and  provide accurate information regarding expected wait times by increasing its  visibility over a passport application from acceptance to issuance. It would  also encourage greater accountability by providing transparency of State’s  passport operations to the American public.
section_title: Recommendations for Executive Action
paragraphs: In order to improve the effectiveness and efficiency of passport  operations, we recommend that the Secretary of State take the following  two actions:    Develop a comprehensive, long-term strategy for passport operations  using a business enterprise approach to prioritize and synchronize the  department’s planned improvements. Specifically, State should fully  implement a concept of operations document that describes its desired  end state for passport operations and addresses how it intends to  transition from the current state to this end state.
Begin tracking individual passport applications from the time the  customer submits an application at an acceptance facility, in order to  maintain better visibility over the passport process and provide better  customer service to passport applicants.
section_title: Agency Comments and Our Evaluation
paragraphs: State provided written comments on a draft of our report, which we  have reprinted in appendix II. State concurred with our  recommendations; however, it expressed disappointment with our  finding that the department lacks a comprehensive strategy to improve  its passport operations. Although the department has developed short- term and contingency plans for increasing passport production capacity  and responding to future surges in demand, we do not believe these  efforts constitute a comprehensive strategic plan. However, we believe  the establishment and staffing of the Passport Services Directorate’s  Strategic Planning Division is a step in the right direction, and we  encourage this office to focus on the modernization efforts discussed in  this report. State also disputed our characterization of the 2005 study it  commissioned to review existing processes and propose  recommendations for improving these processes. We did not intend to  suggest that the department fully adopt all of the recommendations in  that study and have clarified that point in our findings. State and  Treasury also provided technical comments and updated information,  which we have included throughout this report as appropriate.
We are sending copies of this report to the Secretaries of State and the  Treasury and will make copies available to others upon request. We will  also make copies available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-4128 or fordj@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: In this report, we review (1) the extent to which the Department of State  (State) was prepared for the surge in passport demand in 2007 and how  State’s readiness affected passport operations, (2) how State increased its  passport production capacity in response to the 2007 surge, and (3) State’s  readiness for near-term surges in demand and whether State has a  comprehensive strategy in place to improve long-term passport  operations.
To determine the extent to which State was prepared for the surge in  passport demand in 2007, how State’s readiness affected passport  operations, and how State increased its passport production in response to  the surge, we observed passport operations and interviewed U.S.  government officials at six passport agencies—Hot Springs, Arkansas;  Charleston, South Carolina; Houston; New Orleans; New York; and  Washington. We selected these sites based on their workload volume and  geographic locations. We visited State’s lockbox facility in New Castle,  Delaware, and interviewed officials from the financial agent responsible  for providing lockbox functions. We reviewed State’s passport demand  estimates for fiscal year 2007 and analyzed the survey methodology  supporting these estimates. We also collected and analyzed data on  passport receipts and issuances, and staffing. In addition, we interviewed  officials from State’s Bureau of Consular Affairs, the Department of  Homeland Security, the Department of the Treasury’s Financial  Management Service, and State contractors responsible for collecting  survey data on passport demand.
To determine State’s passport processing times during the 2007 surge in  demand, we interviewed cognizant officials, analyzed data provided by  State, and reviewed public statements by State officials and information  on State’s Web site. We determined that these data were sufficiently  reliable to illustrate the sharp rise in processing times that occurred in the  summer of 2007, and place that rise in the context of yearly and monthly  trends from 2005 to 2007. However, we found that the rise in application  processing time in the summer of 2007 was likely understated to some  degree. This understatement likely occurred because the turnaround time  for entering applications into State’s data system increased greatly at some  points during 2007, due to the abnormally large volume of applications.
To determine the reliability of data on passport issuances from 1997  through 2007, we interviewed cognizant officials and analyzed data  provided by State. We determined that the data were sufficiently reliable  to illustrate a relatively stable level of demand for passports between 1997  and 2003, followed by a significant increase in passport issuances since  2003.
To determine whether State is prepared to more accurately estimate future  passport demand and has a comprehensive strategy in place to address  such demand, we assessed State’s passport demand study for fiscal year  2008 and beyond, a draft report on lessons learned from the 2007 surge in  passport demand, and State’s long-term road map for the future of  passport operations. We also reviewed prior GAO reports on enterprise  architecture and business systems management. In addition, we  interviewed Bureau of Consular Affairs officials in Washington and at the  regional passport agencies.
We conducted this performance audit from August 2007 through July 2008  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Comments from the Department of State
subsections: section_title: GAO Comments
paragraphs: 1. State said that the 2005 study it commissioned to review existing  passport processes and propose recommendations for improving these  processes did not identify or mention deficiencies. We disagree. The  version of the study provided to us notes that it includes an “assessment of  the deficiencies of the current state” (p. 3) and identifies issues that “limit  the efficiency and effectiveness of passport operations” (p. 4). These  deficiencies included the reliance on a manual, paper-based work flow,  ineffective communications, and inflexible passport systems.  2. We did not intend to suggest that the department should have adopted  all of the 2005 study’s recommendations and have made slight  modifications to our finding to clarify this point. Our intent was to note  that the department has developed a variety of recommendations to  improve its passport operations—many of which were developed by staff  in Consular Affairs—but still needs a comprehensive strategy to prioritize  and synchronize the improvements it intends to undertake.  3. While our report recognizes that State has developed several plans  designed to increase passport production capacity, improving the  department’s ability to respond to near-term increases in demand, these  plans are not the same as a comprehensive strategy for improving passport  operations. Our recommendation addresses State’s need for such a  strategy to guide its modernization efforts, by using a business enterprise  approach, and not just to increase capacity.  4. State notes that it has improved its efforts to track the 72 percent of  passport applications it receives from U.S. Postal Service acceptance  facilities for accountability purposes. From a customer service standpoint,  we believe that the department should track all applications from the time  of execution in order to give the customer an accurate estimate of when to  expect his or her passport. Doing so would help eliminate customer  confusion, which contributed to the strain on State’s customer service  operation experienced during the 2007 surge.
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the person named above, Michael Courts (Assistant  Director), Robert Ball, Melissa Pickworth, and Neetha Rao made key  contributions to this report. Technical assistance was provided by Carl  Barden, Joe Carney, Martin de Alteriis, Chris Martin, and Mary Moutsos.