U.S. Customs Service: Enforcement Oversight Issues
Published: 1999-05-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Pursuant to a congressional request, GAO discussed efforts by the Customs Service to interdict drugs, allocate inspectional personnel, and develop performance measures, including information on Customs' action plan for resolving management problems.
section_title: What GAO Found
paragraphs: GAO noted that: (1) Customs initiated and encouraged its ports to use several programs to identify and separate low-risk shipments from those with apparently higher smuggling risk; (2) GAO identified internal control weaknesses in one or more of the processes used to screen Line Release program applicants for entry into the program; (3) the Three Tier Targeting program was used at the Southwest border ports where officials say they lost confidence in the program's ability to distinguish high- from low-risk shipments; (4) Customs is evaluating the Automated Targeting System for expansion to other land-border cargo ports; (5) Customs has been using traditional law enforcement measures to evaluate the Aviation program; (6) these measures, however, are used to track activity, not measure results or effectiveness; (7) Customs has discontinued the use of the threat index as an indicator of its effectiveness in detecting illegal air traffic, as well as some other performance measures, because Customs determined that they were not good measures of results and effectiveness; (8) Customs, Department of Defense (DOD), Federal Aviation Administration (FAA), and Ancore Corporation recently began planning to field test the pulsed fast neutron analysis (PFNA) inspection system; (9) while Customs, DOD, and FAA officials acknowledge that laboratory testing has proven the technical feasibility of PFNA, they told GAO that the Ancore inspection system would not meet their operational requirements; (10) agency officials said that a PFNA system not only is too expensive, but also is too large for operational use in most ports of entry or other sites; (11) Customs officials were not aware of any formal agencywide efforts prior to 1995 to determine the need for additional cargo or passenger inspectional personnel for its 301 ports; (12) in preparation for its fiscal year 1997 budget request, Customs conducted a formal needs assessment; (13) GAO concluded that the assessments had limitations that could prevent Customs from accurately estimating the need for inspectional personnel and then allocating them to ports; (14) GAO found that Customs' strategic plan contained weaknesses that could affect the reliability of Customs' performance data; (15) Customs' first action plan was issued in February 1999 and has since been updated three times; (16) it is Customs' intention to implement all action items included in the plan by 2000; and (17) use of this kind of management tool can be very helpful in communicating problems and proposed solutions to executives, managers, and the Customs Service workforce.

section_title: Letter
paragraphs: I am pleased to be here today to discuss work we have done addressing efforts by the U.S. Customs Service to interdict drugs, allocate inspectional personnel, and develop performance measures. For the most part, our testimony is based on products we have issued on each of these subjects since 1997. You also asked us to discuss Customs’ action plan for resolving management problems. Our discussion of the action plan is based on (1) interviews with Customs officials from its Office of Planning, Management Inspection Division, and Office of Strategic Trade and (2) our examination of the several versions of the plan.
Created in 1789, the U.S. Customs Service is one of the federal government’s oldest agencies. Customs is responsible for collecting revenue from imports and enforcing customs and other U.S. laws and regulations. Customs collects revenues of about $22 billion annually while processing an estimated 15 million import entries and 450 million people who enter the country. A major goal of Customs is to prevent the smuggling of drugs into the country by creating an effective drug interdiction, intelligence, and investigation capability to disrupt and dismantle smuggling organizations. Customs’ workforce totals almost 20,000 employees at its headquarters, 20 Customs Management Centers, 20 Special Agent-in-Charge offices, and 301 ports of entry around the country.
subsections: section_title: Drug Interdiction
paragraphs: Our work on Customs’ efforts to interdict drugs has focused on four distinct areas: (1) internal controls over Customs’ low-risk cargo entry programs; (2) the missions, resources, and performance measures for Customs’ aviation program; (3) the development of a specific technology for detecting drugs; and (4) Customs drug intelligence capabilities.
subsections: section_title: Low-Risk Cargo Entry Programs
paragraphs: In July 1998, at the request of Senator Dianne Feinstein, we reported on Customs’ drug-enforcement operations along the Southwest border of the United States. Our review focused on low-risk, cargo entry programs in use at three ports—Otay Mesa, California; Laredo, Texas; and Nogales, Arizona. To balance the facilitation of trade through ports with the interdiction of illegal drugs being smuggled into the United States, Customs initiated and encouraged its ports to use several programs to identify and separate low-risk shipments from those with apparently higher smuggling risk. One such program is the Line Release Program, designed to expedite cargo shipments that Customs determined to be repetitive, high volume, and low risk for narcotics smuggling. The Line Release Program was first implemented on the Northern border in 1986 and was expanded to most posts along the Southwest border by 1989. This program requires importers, brokers (companies who process the paperwork required to import merchandise), and manufacturers to apply for the program and to be screened by Customs to ensure that they have no past history of narcotics smuggling and that their prior shipments have been in compliance with trade laws and Customs’ commercial importing regulations. In 1996, Customs implemented the Land Border Carrier Initiative Program, which required that the Line Release shipments across the Southwest border be transported by Customs-approved carriers and driven by Customs-approved drivers. After the Carrier Initiative Program was implemented, the number of Southwest Border Line Release shipments dropped significantly.
At each of the three ports we visited, we identified internal control weaknesses in one or more of the processes used to screen Line Release applicants for entry into the program. These weaknesses included (1) an absence of specific criteria for determining applicant eligibility at two of the three ports, (2) incomplete documentation of the screening and review of applicants at two of the three ports, and (3) lack of documentation of supervisory review for aspects of the applicant approval process. During our review, Customs representatives from northern and southern land- border cargo ports approved draft Line Release volume and compliance eligibility criteria for program applicants and draft recertification standards for program participants.
The Three Tier Targeting Program—a method of targeting high-risk shipments for narcotics inspection—was used at the three Southwest border ports that we visited. According to officials at the three ports, they lost confidence in the program’s ability to distinguish high- from low-risk shipment because of two operational problems. First, there was little information available in any database for researching foreign manufacturers. Second, local officials doubted the reliability of the designations. They cited examples of narcotics seizures from shipments designated as “low-risk” and the lack of a significant number of seizures from shipments designated as “high-risk.” Customs suspended this program until more reliable information is developed for classifying low- risk importations.
One low-risk entry program—the Automated Targeting System—was being pilot tested at Laredo. It was designed to enable port officials to identify and direct inspectional attention to high-risk shipments. That is, the Automated Targeting System was designed to assess shipment entry information for known smuggling indicators and thus enable inspectors to target high-risk shipments more efficiently. Customs is evaluating the Automated Targeting System for expansion to other land-border cargo ports.
section_title: Aviation Program
paragraphs: In September 1998, we reported on Customs’ aviation program missions, resources, and performance measures. Since the establishment of the Customs Aviation Program in 1969, its basic mandate to use air assets to counter the drug smuggling threat has not changed. Originally, the program had two principal missions: border interdiction of drugs being smuggled by plane into the United law enforcement support to other Customs offices as well as other federal, state, and local law enforcement agencies.
In 1993, the administration instituted a new policy to control drugs coming from South and Central America. Because Customs aircraft were to be used to help carry out this policy, foreign counterdrug operations became a third principal mission for the aviation program. Since then, the program has devoted about 25 percent of its resources to the border interdiction mission, 25 percent to foreign counterdrug operations, and 50 percent to other law enforcement support.
Customs Aviation Program funding decreased from about $195 million in fiscal year 1992, to about $135 million in fiscal year 1997—that is, about 31 percent in constant or inflation-adjusted dollars. While available funds decreased, operations and maintenance costs per aircraft flight hour increased. Customs Aviation Program officials said that this increase in costs was one of the reasons they were flying fewer hours each year. From fiscal year 1993 to fiscal year 1997, the total number of flight hours for all missions decreased by over one-third, from about 45,000 hours to about 29,000 hours.
The size of Customs’ fleet dropped in fiscal year 1994, when Customs took 19 surveillance aircraft out of service because of funding reductions. The fleet has remained at about 114 since then. The number of Customs Aviation Program onboard personnel decreased, from a high of 956 in fiscal year 1992 to 745 by the end of fiscal year 1997.
Customs has been using traditional law enforcement measures to evaluate the aviation program (e.g., number of seizures, weight of drugs seized, number of arrests). These measures, however, are used to track activity, not measure results or effectiveness. Until 1997, Customs also used an air threat index as an indicator of its effectiveness in detecting illegal air traffic. However, Customs has discontinued use of this indicator, as well as some other performance measures, because Customs determined that they were not good measures of results and effectiveness. Having recognized that these measures were not providing adequate insights into whether the program was producing desired results, Customs said it is developing new performance measures in order to better measure results. However, its budget submission for fiscal year 2000 contained no new performance measures.
section_title: Pulsed Fast Neutron Analysis Inspection System
paragraphs: The pulsed fast neutron analysis (PFNA) inspection system is designed to directly and automatically detect and measure the presence of specific materials (e.g., cocaine) by exposing their constituent chemical elements to short bursts of subatomic particles called neutrons. Customs and other federal agencies are considering whether to continue to invest in the development and fielding of this technology.
The Chairman and the Ranking Minority Member of the Subcommittee on Treasury and General Government, Senate Committee on Appropriations, asked us to provide information about (1) the status of plans for field testing a PFNA system and (2) federal agency and vendor views on the operational viability of such a system. We issued the report responding to this request on April 13, 1999.
Customs, the Department of Defense (DOD), the Federal Aviation Administration (FAA), and Ancore Corporation—the inspection system inventor—recently began planning to field test PFNA. Because they were in the early stage of planning, they did not expect the actual field test to begin until mid to late 1999 at the earliest. Generally speaking, agency and vendor officials estimated that a field test covering Customs’ and DOD’s requirements will cost at least $5 million and that the cost could reach $8 million if FAA’s requirements are included in the joint test. Customs officials told us that they are working closely with the applicable congressional committees and subcommittees to decide whether Customs can help fund the field test, particularly given the no-federal-cost language of Senate Report 105-251. In general, a complete field test would include (1) preparing a test site and constructing an appropriate facility; (2) making any needed modifications to the only existing PFNA system and its components; (3) disassembling, shipping, and reassembling the system at the test site; and (4) conducting an operational test for about 4 months. According to agency and Ancore officials, the test site candidates are two seaports in California (Long Beach and Oakland) and two land ports in El Paso, Texas.
Federal agency and vendor views on the operational viability of PFNA vary. While Customs, DOD, and FAA officials acknowledge that laboratory testing has proven the technical feasibility of PFNA, they told us that the current Ancore inspection system would not meet their operational requirements. Among their other concerns, Customs, DOD, and FAA officials said that a PFNA system not only is too expensive (about $10 million to acquire per system), but also is too large for operational use in most ports of entry or other sites. Accordingly, these agencies question the value of further testing. Ancore disputes these arguments, believes it can produce an operationally cost-effective system, and is proposing that a PFNA system be tested at a port of entry. The Office of National Drug Control Policy has characterized neutron interrogation as an “emerging” or future technology that has shown promise in laboratory testing and thus warrants field testing to provide a more informed basis for deciding whether PFNA has operational merit.
section_title: Federal Counterdrug Intelligence Coordination Efforts
paragraphs: At the request of the Subcommittee on National Security, International Affairs and Criminal Justice, House Committee on Government Reform and Oversight, in June 1998 we identified the organizations that collect and/or produce counterdrug intelligence, the role of these organizations, the federal funding they receive, and the number of personnel that support this function. We noted that more than 20 federal or federally funded organizations, including Customs, spread across 5 cabinet-level departments and 2 cabinet-level organizations, have a principal role in collecting or producing counterdrug intelligence. Together, these organizations collect domestic and foreign counterdrug intelligence information using human, electronic, photographic, and other technical means.
Unclassified information reported to us by counterdrug intelligence organizations shows that over $295 million was spent for counterdrug intelligence activities during fiscal year 1997 and that more than 1,400 federal personnel were engaged in these activities. The Departments of Justice, the Treasury, and Defense accounted for over 90 percent of the money spent and personnel involved. Customs spent over $14 million in 1997 on counterdrug intelligence, and it is estimated that 63 percent of its 309 intelligence research specialists’ duties involved counterdrug intelligence matters.
Among its many missions, Customs is the lead agency for interdicting drugs being smuggled into the United States and its territories by land, sea, or air. Customs’ primary counterdrug intelligence mission is to support its own drug enforcement elements (i.e., inspectors and investigators) in their interdiction and investigation efforts. Customs is responsible for producing tactical, operational, and strategic intelligence concerning drug-smuggling individuals, organizations, transportation networks, and patterns and trends. In addition to providing these products to its own drug enforcement elements, Customs is to provide this information to other agencies with drug enforcement or intelligence responsibilities. Customs is also responsible for analyzing the intelligence community’s reports and integrating them with its own intelligence. Customs’ in-house collection capability is heavily weighted toward human intelligence, which comes largely from inspectors and investigators who obtain information during their normal interdiction and investigation activities.
section_title: Resource Allocation
paragraphs: In 1998, we reported on selected aspects of the Customs Service’s process for determining its need for inspectional personnel—such as inspectors and canine enforcement officers—for the commercial cargo or land and sea passengers at all of its 301 ports.
Customs officials were not aware of any formal agencywide efforts prior to 1995 to determine the need for additional cargo or passenger inspectional personnel for its 301 ports. However, in preparation for its fiscal year 1997 budget request and a new drug enforcement operation called Hard Line,Customs conducted a formal needs assessment. The needs assessment considered (1) fully staffing all inspectional booths and (2) balancing enforcement efforts with the need to move complying cargo and passengers quickly through the ports. Customs conducted two subsequent assessments for fiscal years 1998 and 1999. These assessments considered the number and location of drug seizures and the perceived threat of drug smuggling, including the use of rail cars to smuggle drugs. However, all these assessments were focused exclusively on the need for additional personnel to implement Hard Line and similar initiatives, limited to land ports along the Southwest border and certain sea and air ports considered to be at risk from drug smuggling, conducted each year using generally different assessment factors, and conducted with varying degrees of involvement by Customs’ headquarters and field units.
We concluded that these limitations could prevent Customs from accurately estimating the need for inspectional personnel and then allocating them to ports. We further concluded that, for Customs to implement the Results Act successfully, it had to determine its needs for inspectional personnel for all of its operations and ensure that available personnel are allocated where they are needed most.
We recommended that Customs establish an inspectional personnel needs assessment and allocation process, and Customs is now in the process of responding to that April 1998 recommendation. Customs has awarded a contract for the development of a resource allocation model, and Customs officials told us that the model was delivered in March 1999 and that they are in the early stages of deciding how to use the model and implement a formal needs assessment system.
section_title: Performance Measures
paragraphs: Under the Results Act, executive agencies are to develop strategic plans in which they, among other things, define their missions, establish results- oriented goals, and identify strategies they plan to use to achieve those goals. In addition, agencies are to submit annual performance plans covering the program activities set out in the agencies’ budgets (a practice which began with plans for fiscal year 1999); these plans are to describe the results the agencies expect to achieve with the requested resources and indicate the progress the agency expects to make during the year in achieving its strategic goals.
The strategic plan developed by the Customs Service addressed the six requirements of the Results Act. Concerning the elements required, the mission statement was results oriented and covered Customs’ principal statutory mission—ensuring that all goods and persons entering and exiting the United States do so in compliance with all U.S. laws and regulations. The plan’s goals and objectives covered Customs’ major functions—processing cargo and passengers entering and cargo leaving the United States. The plan discussed the strategies by which Customs hopes to achieve its goals. The strategic plan discussed, in very general terms, how it related to annual performance plans. The plan discussed some key factors, external to Customs and beyond its control, that could significantly affect achievement of the strategic goals, such as the level of cooperation of other countries in reducing the supply of narcotics. Customs’ strategic plan also contained a listing of program evaluations used to prepare the plan and provided a schedule of evaluations to be conducted in each of the functional areas.
In addition to the required elements, Customs’ plan discussed the management challenges it was facing in carrying out its core functions, including information and technology, finance, and human resources management. However, the plan did not adequately recognize Customs’ need to improve financial management and internal control systems, controls over seized assets, plans to alleviate Year 2000 problems, and plans to improve computer security.
We reported that these weaknesses could affect the reliability of Customs’ performance data.
Further, our initial review of Customs’ fiscal year 2000 performance plan showed that it is substantially unchanged in format from the one presented for 1999. Although the plan is a very useful document for decisionmakers, it still does not recognize Customs’ need to improve its internal control systems, control over seized assets, or plans to improve computer security.
You asked us to comment on the performance measures proposed by Customs, which are to assess whether Customs is achieving its goals. Customs has included 26 performance measures in its fiscal year 2000 performance plan. These measures range from general information on the level of compliance of the trade community with trade laws and Customs’ regulations (which Customs has traditionally used) to very complex measures, such as transportation costs of drug smuggling organizations. Many of these complex measures were still being developed by Customs when the fiscal year 2000 performance plan was issued. In addition, Customs did not include performance targets for 8 of the 26 measures in its fiscal year 2000 plan.
section_title: Action Plan
paragraphs: Computing Crisis: Customs Has Established Effective Year 2000 Program Controls (GAO/AIMD-99-37, Mar. 29, 1999). responsible for ranges from 1 to 37. The first action plan was issued in February 1999 and has since been updated three times.
According to the plan, it is Customs’ intention to implement all action items included in the plan by 2000. Customs’ Director for Planning is to manage and monitor the plan on an ongoing basis. He told us that items are usually added at the behest of the Commissioner. The Management Inspection Division (part of the Office of Internal Affairs) is responsible for verifying and validating the items that have been reported as completed, including determining whether the action taken was effective. The action plan of May 7—the latest version available—shows that 91 of the 203 items had been completed; 110 were ongoing, pending, or scheduled; and 2 had no description of their status.
Overall, use of this kind of management tool can be very helpful in communicating problems and proposed solutions to executives, managers, and the Customs Service workforce, as well as to other groups interested in Customs such as this Committee and us.
Mr. Chairman, this completes my statement. I would be pleased to answer any questions.
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