State Department: Stronger Action Needed to Improve Oversight and Assess Risks of the Summer Work Travel and Trainee Categories of the Exchange Visitor Program
Published: 2005-10-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Exchange programs, which bring over 280,000 foreign visitors to the United States annually, are widely recognized as an effective way to expose citizens of other countries to the American people and culture. Past GAO and the Department of State (State) Office of Inspector General reviews have reported that some exchange visitors have participated in unauthorized activities and cited problems in the management and oversight of the programs. Strong management oversight is needed to ensure that the programs operate as intended and are not abused. This report examines how State manages the Summer Work Travel and the Trainee programs to ensure that only authorized activities are carried out under the programs and identifies potential risks of the programs and the data available to assess these risks.
section_title: What GAO Found
paragraphs: State has not exerted sufficient management oversight of the Summer Work Travel and the Trainee programs to guard against abuse of the programs and has been slow to address program deficiencies. State attempts to ensure compliance with program regulations through its processes of approving and annually reviewing the organizations that sponsor exchange visitors. These processes, however, are not sufficient to ensure that visitors participate only in authorized activities because the procedures consist primarily of document reviews, and State rarely visits the sponsors or host employers of the exchange visitors to make sure they are following the rules to investigate complaints. Moreover, some sponsors have asserted that the program regulations need updating. Further, State officials believe that the sanctions provided in the regulations are difficult to enforce. State acknowledged that it has been slow to address identified deficiencies and update the regulations, but had indicated that it is beginning to revise the regulations and is establishing a unit to monitor exchange activities. However funding of the unit has not been secured. A number of potential risks are associated with the programs, including that exchange visitors might use it to remain in the United States beyond their authorized time. There is also the potential for the Trainee Program to be misused as an employment program. Further, negative experiences for exchange participants could undermine the purpose of the programs. However, State has little data to measure whether such risks to the program are significant. As a result, State cannot determine if additional management actions are needed to mitigate the risks.

section_title: Letter
paragraphs: Exchange programs are widely recognized as an effective way to expose  citizens of other countries to the American people and culture. According  to former Secretary of State Colin Powell, a good stay in this country is the  best public diplomacy tool the United States has. The Department of State’s  (State) 2004 public diplomacy strategy calls for broader and deeper use of  exchanges—people-to-people contacts—that, according to the strategy,  can change hearts and minds. More than 280,000 foreign nationals travel to  the United States annually using a J-1 visa to participate in the Exchange  Visitor Program. This program encompasses 13 categories of educational  and cultural exchanges designed to enhance understanding between the  people of the United States and those of other countries. Among the largest  exchange programs are the Summer Work Travel Program, which allows  bona fide foreign college and university students to learn about life in the  United States through temporary work and travel, and the Trainee  Program, which, through a structured training program, allows participants  to enhance their skills in their chosen career field. State’s Bureau of  Educational and Cultural Affairs administers the Exchange Visitor Program  through the Office of Exchange Coordination and Designation. Past GAO  and State Office of Inspector General (OIG) reviews cited a few specific  cases where J-1 visa holders participated in unauthorized activities and  cited problems in program management. In particular, the OIG reported  instances where companies were using exchange visitors to fill regular  staff positions and not trainee positions as mandated by the Exchange  Visitor Program regulations.
This report (1) examines how State manages the Summer Work Travel and  the Trainee programs to ensure that only authorized activities are carried  out under the programs and (2) identifies potential risks of the programs  and the data available to State to assess these risks.
To accomplish our objectives, we reviewed previous GAO and OIG reports  and examined current and proposed program regulations, State cables,  sponsoring organizations’ annual reports, agency databases, and other  information pertaining to the Summer Work Travel and Trainee programs.  We also met with representatives of nine sponsoring organizations of the  Summer Work Travel Program that accounted for 75 percent of the  participants in 2004 and representatives of 13 sponsors of the Trainee  Program that accounted for 54 percent of the participants in 2004.  Additionally, we visited three overseas posts––Minsk, Belarus; Warsaw,  Poland; and Dublin, Ireland––where we discussed the programs with U.S.  embassy officials, including consular officers, and the overseas partners of  the U.S. sponsors of the exchanges. We selected these posts because they  are among the top sending countries for the Summer Work Travel Program.  We focused on the Summer Work Travel and the Trainee programs because  they bring in nearly one-half of the Exchange Visitor Program participants.  In addition, the Trainee Program was the subject of a 2000 OIG report. We  conducted our review from November 2004 to August 2005 in accordance  with generally accepted government auditing standards. Appendix I  provides more information on our scope and methodology.
subsections: section_title: Background
paragraphs: The Mutual Educational and Cultural Exchange Act of 1961 authorizes the  J-1 Exchange Visitor Program. The program provides foreign nationals with  opportunities to participate in exchange programs in the United States and  return home to share their experiences, while also encouraging Americans  to participate in educational and cultural programs in other countries.
Foreign nationals who participate in the program enter the United States  with a J-1 visa. The program has grown considerably over the years. Figure  1 shows the number of J-1 visas issued since 1995.
The program is comprised of 13 categories of exchanges, which are  grouped under private sector programs or academic and government  programs. The private sector programs include the Alien Physician, Au  Pair, Camp Counselor, Summer Work Travel, and Trainee categories. The  academic and government programs include the Government Visitor,  International Visitor, Professor and Research Scholar, Short-Term Scholar,  Specialist, Student (Secondary School Student, College/University  Student), and Teacher categories. The Exchange Visitor Program had about  282,000 exchange visitors in the 13 program categories for fiscal year 2004.
State’s Bureau of Educational and Cultural Affairs administers the  Exchange Visitor Program through the Office of Exchange Coordination  and Designation. This office administers the program through the  designation of United States organizations to conduct exchange programs  in the various exchange categories.  There are 1,457 designated exchange  programs. Designated sponsors are responsible for screening and selecting  qualified applicants for program eligibility. The office determines which  organizations will be designated to administer the international exchange  programs on the basis of information provided during the application  process in accordance with regulatory requirements. The office also  develops and administers policy and regulations for the exchange  categories and oversees sponsoring organizations’ compliance.
Sponsors may be for profit or nonprofit organizations; businesses; state,  local, or federal government agencies; and education-related institutions.  Sponsors sometimes contract with overseas organizations—such as  student travel agencies—as local partners to help identify and screen  exchange program applicants. Some sponsors serve as intermediaries  between the exchange visitor and a third party, which engages the  exchange visitor in the program activity for the category in which they are  being sponsored. For example, for trainees, the third parties are the  organizations where the exchange visitors will receive training. Third  parties consist of a variety of organizations, which include—but are not  limited to—hotels, law firms, restaurants, Internet companies, and other  private and public sector businesses and organizations. Sponsors are  responsible for overseeing the operations of their overseas partners,  and  any third parties they work with.
Also chief among the sponsors’ responsibilities is that of managing  information on the exchange participant in DHS’ Student and Exchange  Visitor Information System (SEVIS), which has been in operation since  January 2003. SEVIS, which is maintained and administered by DHS’ U.S.  Immigration and Customs Enforcement, is an Internet-based system that  electronically collects information on all nonimmigrants that enter the  United States with student visas and exchange visitor visas, and their  dependents. Once a participant’s data are entered into SEVIS by the  sponsor, a Form DS-2019 is issued by the system in the applicant’s name.  This identifying information in SEVIS can be reviewed by a consular officer  at the time of the visa interview and during the processing of the exchange  visitor at the port of entry. Upon the arrival of the Exchange Visitor  Program participant, the sponsor is required to document their  participation in their program activity and record information on the  location of the visitor’s employment or training and U.S. residence address.  Figure 2 describes the sponsoring organizations’ roles and responsibilities.
subsections: section_title: Summer Work Travel and Trainee Programs
paragraphs: The Summer Work Travel Program is among the largest of the 13 categories  of exchanges, with about 89,453 participants in 2004. This program is  designed to achieve the educational objectives of international exchange  by involving bona fide foreign college or university students directly in the  daily lives of U.S. citizens through travel and temporary work  opportunities. The Trainee Program, with about 27,475 participants in 2004,  provides foreign nationals the opportunity to enhance their skills in their  chosen career field through participation in a structured training program.  Summer Work Travel sponsors help the participants obtain jobs and  provide pre-arrival information, an orientation to life in the United States,  and contact information in the event of problems. Sponsors of trainees are  also required to provide pre-arrival information to the trainees and are  directly responsible for all aspects of the trainees’ program, including the  selection, orientation, training, supervision, and evaluation. About 52  Summer Work Travel and 170 Trainee sponsors operated programs in 2005.
Thousands of employers participate in the Summer Work Travel and the  Trainee programs. Typical Summer Work Travel employers include  amusement parks, resorts, hotels, and restaurants. The jobs generally  include ride operators, waiters, lifeguards, receptionists, and guides. The  types of organizations that utilize trainees include corporations,  architectural firms, hotels, restaurants, development organizations,  airlines, investment and financial services entities, and manufacturing  companies. The participants are placed in locations wherein they receive  training in engineering, drafting and design, biomedical technology,  agricultural technology, hospitality administration and management,  marketing, agricultural and food products processing, culinary arts and  chef training, financial management, and many other careers.
Throughout the existence of the Summer Work Travel Program, there has  been a geographic shift in which countries provide the most program  participants. In the past, Western Europe had the largest numbers of  participants. However, more recently, the largest numbers of Summer Work  Travel participants have been citizens of Eastern European countries,  including Poland, Bulgaria, Czech Republic, and Romania. Table 1 lists the  10 countries with the largest numbers of Summer Work Travel and Trainee  participants.
section_title: State Has Maintained Limited Oversight of Exchange Programs
paragraphs: State has not exerted sufficient management oversight of the Summer  Work Travel and the Trainee programs to guard against abuse of the  programs. State primarily ensures compliance with program regulations  through a paperwork review, and there is inconsistent monitoring by  sponsors. Moreover, some sponsors believe that the program regulations  need updating, and State officials have expressed concerns about the  enforceability of the sanction/revocation process provided for in the  Exchange Visitor Program regulations. Sponsors have also expressed  concern about their communication with State. State has acknowledged  problems, is establishing a compliance unit to monitor program activities,  and is revising the regulations; however progress has been slow.
subsections: section_title: State’s Monitoring Efforts Are Minimal
paragraphs: State’s monitoring efforts largely consist of reviewing written information  provided by sponsors, with minimal efforts of verifying such information  through program visits. State relies on sponsors to provide written  information, primarily through annual reports, which describe the number  of individuals a sponsor has placed and a brief narrative on program  activities, difficulties encountered, and their resolution. Exchange program  regulations require that sponsors promptly notify State about any serious  problem or controversy that could cause State or the sponsor’s Exchange  Visitor Program notoriety or disrepute. When a sponsor reports a problem,  State officials follow-up by telephone, e-mail, fax or letter, according to  sponsors and State officials. However, State rarely visits sponsors to  observe program activities and verify the information that they provide,  although such visits are a good internal control practice for ensuring that  management’s directives are being carried out. We found that in the past 4  years, State officials made visits to only 8 of its 206 Summer Work Travel  and/or Trainee sponsors.
Additionally, information on problematic incidents provided by the  sponsors and any notes or correspondence on the matter are filed as part of  the material that is examined when the sponsor applies for redesignation,  which is required every 2 years. In their applications for redesignation to  State, all sponsors are required to estimate the number of exchange visitors  their organization would like to place and provide information on their  legal, financial, and managerial resources to manage exchange programs in  compliance with federal regulations. State reviews these applications along  with the annual reports and other documentation collected over the 2-year  period and determines whether it should grant a 2-year designation to a  sponsor and the number of participants the sponsor will be authorized to  include in their exchange program activity. The vast majority of sponsors  who apply for redesignation are approved. State officials said that their  staffing levels and lack of travel funds do not allow for intensive monitoring  of the Exchange Visitor Program sponsors. The Office of Exchange  Coordination and Designation has five Program Designation officers who  serve as the point of contact and are responsible for the day-to-day  administration and management of the 13 exchange programs.
subsections: section_title: Sponsors’ Monitoring of Employers and Third Parties Is Limited
paragraphs: Exchange Visitor Program regulations require sponsors to effectively  administer and monitor their Exchange Visitor Program and ensure  exchange participants engage in activities consistent with the appropriate  exchange category. Nevertheless, recent discoveries by consular officers  overseas suggest that some sponsors do not consistently carry out their  oversight and monitoring responsibilities. For example:
A trainee applicant submitted a training offer that included the name  and organizational information of a legitimate financial services  company, but listed as a contact an individual with a noncompany e-mail  address. When the consular officer checked the contact information, he  learned that the contact person was not affiliated with the financial  services company.  The sponsor admitted to only spot-checking the  viability of third party organizations and training plans.
When a consular officer at another post checked a company’s Web site  to verify the job offer of a foreign student applying for the Summer Work  Travel Program, he discovered that the company was a topless bar.
In another case, consular officers noticed a number of trainee applicants  who said they were going to the United States to work as kitchen help  and wait staff. When State contacted the U.S. sponsor about these  applicants, the sponsor stated that it relied on another organization to  help it select and place the trainees and admitted that it had not  followed up directly with each trainee and employer to ensure that its  standards were being satisfied.
Sponsors are required to take all reasonable steps to ensure that third  parties know and comply with applicable provisions of the Exchange  Visitor Program regulations. However, State does not offer any guidance on  how the sponsors should carry out their monitoring and oversight  responsibilities. Two of the sponsors we met with said that, after they  discovered that trainees whom they had sponsored were not receiving any  training, they established new practices to visit at least 10 percent of their  exchange program participants and all employers and exchange  participants where there were problems.
section_title: Various Concerns Exist About Program Regulations
paragraphs: During our review, several sponsors we met with raised concerns about the  clarity of the program regulations and also complained that varying  interpretations of the regulations make it difficult for them to implement  the program.  Moreover, State officials believed that the sanctions provided  in the regulations are not adequate to control the activities of sponsors who  incorrectly implemented the program. State has been revising the  regulations but has not finalized the changes.
subsections: section_title: Regulations Need Revising
paragraphs: Six of the 13 sponsors that we met with described a range of problems  pertaining to the regulations, particularly regarding the Trainee Program.  Their comments included the following:
The Trainee regulations lack specificity and are open to differing  interpretation by State and the sponsors.
Dealing with State has become more complicated for sponsor  organizations because State has at times changed rules outside of the  formal regulation-setting process.
The Trainee regulations are so cumbersome that it is unclear what  should be included in a training plan.
Training plans vary widely among sponsors, and there is no guidance on  what constitutes a good plan.
The regulations should include a separate category for interns.
A past OIG report also cited problems with the regulations and  recommended in particular that, for the Trainee Program, the training  regulations should more clearly define what is not considered training.
Six of the sponsors we met with and the representative of an association of  sponsors expressed concern with State’s interpretation of certain  provisions of the regulations, while seven sponsors and the association  representative also said that State does not consistently disseminate its  interpretations or guidance on the regulations to the sponsors. For  example, the regulations state that the maximum period of the  participation in the Exchange Visitor Program for a trainee, with the  exception of flight training, shall not exceed 18 months. Some sponsors  said they interpreted this provision to mean that an individual could come  to the United States one or more times as a trainee as long as the combined  duration of the visits did not exceed 18 months. In 2002, however, some  sponsors said they were told that the Trainee Program was restricted to a  one-time training session not to exceed 18 months. This clarification in  regulations has surprised some sponsors, according to one of the sponsors  who was notified about this change through a fax from State. A State  official explained that all Trainee sponsors were sent a message through  SEVIS in October 2003, explaining State’s policy on this matter. According  to the documentation, the message was to be addressed to all sponsors that  conduct Trainee programs and all responsible officers and their alternates.
Moreover, a few sponsors said guidance or interpretations of various  provisions of the regulations have been communicated inconsistently. For  example, representatives of two sponsoring organizations said that State is  no longer requiring that sponsors recruit no more than 10 percent of repeat  Summer Work Travel participants, as specified in the regulations, but State  did not make any formal effort to inform the sponsors of the change. One of  the sponsors said that the organization learned about the change from the  U.S. Embassy in Warsaw. A State official explained that policy changes are  announced in the Federal Register or by written notice to all sponsors.  According to the official, two cables were sent to all overseas posts  clarifying the requirements of the Summer Work Travel Program and the  removal of the 10 percent rule regarding repeat participants. In addition,  copies of these cables were sent, by e-mail, to all Summer Work Travel  sponsors, according to the official.
section_title: State Officials Believe Regulations Lack Enforceable Sanctions
paragraphs: State is also reviewing the sanctions provided in the regulations. State  officials, including the Principal Deputy Assistant Secretary of the Bureau  of Educational and Cultural Affairs, said the current sanction/revocation  process that State may use to limit the activities of sponsors that do not  comply with the regulations—or remove a sponsor from the program  altogether—is difficult to enforce. The sanctions range in severity from a  letter of reprimand to an action to revoke a sponsor’s designation. One  sanction that State uses is to deny the sponsor’s request for certification  forms until the compliance issue has been resolved. For example, State  officials described a recent case in which State’s attempt to revoke a  sponsor’s designation was challenged by the sponsor in district court. In  this case, State received complaints from two trainees who alleged they  were not receiving the training that they had expected and were displeased  with their training assignments and compensation. The sponsor in this case  had placed individuals in positions in the hospitality industry.  State  investigated the sponsor’s operation, interviewed a number of program  participants, and concluded that the sponsor was not placing participants  in management training positions but was operating a work program, in  violation of the regulations. State’s in-house revocation board agreed and  supported the sanction of revocation. However, in remanding the matter to  the board for further proceedings, the district court concluded that State's  investigation had been too limited and had not produced evidence adequate  to support the severe punishment of revocation. After a second hearing, the  board overturned the revocation, thereby enabling the sponsor to resume  its program. State concluded that the sanctions’ provisions needed  streamlining and tightening for more effective and assured application.
State Slow to Revise Regulations 	 State has acknowledged that the regulations need revising; however, more  than 3 years after revisions were suggested by the exchange industry they  are still in draft form. According to the Acting Director of the Office of  Exchange Coordination and Designation revisions are in process. For  example, State is revising the Trainee regulations to create a separate  Intern category to accommodate younger, less experienced applicants,  such as students or recent university graduates seeking to gain practical  work experience. The exchange community generally supports the  creation of a new Intern category and, in November 2001, an association of  organizations that sponsor exchange students submitted its proposals for  revising the regulations to State. The Acting Director of the Office of  Exchange Coordination and Designation said that the sections of the  regulations on interns and trainees are still being reviewed at State and  attributed the delay in completing the regulations to the review process. He  also stated that State’s Office of Legal Advisor was given the responsibility  to develop new sanctions for the program 2 years ago. According to the  Assistant Legal Advisor for Public Diplomacy and Public Affairs, revised  sanctions regulations were drafted and shared with the Bureau of  Educational and Cultural Affairs for review and comment. The Assistant  Legal Advisor stated that recent guidance from the Bureau’s Principal  Deputy Assistant Secretary suggested that further revisions were  warranted to best suit evolving program needs. Once State has completed  its review, the Department of Justice will be consulted prior to publication  of the revised regulations. She stated that while this process could take an  additional 2 to 6 months to complete, the timing should fall well within the  time lines and milestones set forth in a 24-month corrective action plan  proposed by the Bureau in March 2005.
According to GAO guidance on internal controls, managers should ensure  that effective external communications occur with groups that impact its  program, projects, operations, and other activities. According to seven of  the sponsors we met with and the organization representing sponsors,  communication with State is a problem. For example, one sponsor  described State as reactive rather than proactive in its communication  practices. Representatives of four of the sponsoring organizations  complained that program officers were not always responsive to their  inquiries or were difficult to reach. Some sponsors attributed the  difficulties to an insufficient number of State staff.
Some sponsors also complained about a lack of feedback from a study  commissioned by State on SEVIS compliance and other issues, which was  completed in December 2003. The report concluded that in some cases the  sponsors’ staff was not adequately trained, that the sponsors did not  maintain required records, and did not fully provide oversight of their  foreign partners, employers, third-party organizations, or the exchange  participants. The report made a number of recommendations on how State  should further clarify the program regulations and help train the sponsors  on both State regulations and their role in maintaining SEVIS data. We met  with six sponsors that participated in the study, and none had received  feedback from State on the results of the study. One said the Acting  Director of the Office of Exchange Coordination and Designation made  some general comments about the study at a meeting of an industry  association.
Communication between the Office of Exchange Coordination and  Designation and the overseas posts has also been cited as a concern. For  example, one sponsor said there is no mechanism to ensure consistent  interpretation of the regulations by the overseas posts, while another said  the posts are the last to know about program changes. For example, a  sponsor said that even though the office has told them that applicants can  have only one trainee placement, one post was still telling applicants in  2004 that they can participate more than once. Further, a representative of  an exchange industry organization stated that the Office of Exchange  Coordination and Designation knows too little about what is really going on  in the field. This situation may have been the reason ineligible students  from at least one country, Ireland, were allowed to participate in the  Summer Work Travel Program for over 30 years before an apparent  misinterpretation of the regulations was discovered. In 2002, a consular  officer in Dublin asked for clarification on the eligibility of students who  had completed their course work but had not formally graduated,  according to an embassy official. In response, State instructed the posts not  to change their selection procedures for the 2003 season. However,  according to the Acting Director of Office of Exchange Coordination and  Designation, State ultimately confirmed that such students were not  eligible for the program, unless they could demonstrate enrollment in  another degree program, and sent a cable to the posts with its decision in  2004. According to the local program representatives, such students had  constituted up to a third of the participants from Ireland.
section_title: Establishment of a Compliance Unit Not Fully Implemented
paragraphs: State has been slow to implement the OIG’s 2000 recommendation that it  devote the necessary resources to perform more rigorous oversight.  The  Principal Deputy Assistant Secretary of the Bureau of Educational and  Cultural Affairs and the Acting Director of the Office of Exchange  Coordination and Designation acknowledged that State has been slow to  establish a compliance unit. The Acting Director of the Office of Exchange  Coordination and Designation said funding to establish a compliance unit  has been requested for several years without success. The Bureau  requested funding in fiscal years 2002 and 2003 for five additional positions  for the compliance unit, but State did not approve the request for  submission to the Office of Management and Budget (OMB), according to a  State official. The Principal Deputy Assistant Secretary of the Bureau of  Educational and Cultural Affairs stated that the unit was not funded  initially because of a lack of senior managerial support. State has since  supported the request for funding because of congressional interest and the  increased emphasis on strengthening program management, according to  the Principal Deputy Assistant Secretary. Subsequent requests for funding  for the unit for fiscal years 2004 to 2006 were approved by State but not  approved by OMB. However, the officials told us they realized that the  program regulations have been ignored by some exchange program  sponsors, agreed that a compliance unit was needed, and are in the process  of the establishing the unit by diverting existing positions.
According to State officials, the unit as it is currently conceived would  initially consist of one Foreign Service officer and two program analysts  and will report to the Principal Deputy Assistant Secretary. The officials  stated that the compliance unit will rely on structured reviews conducted  by contractors. They said State will utilize the system currently in place at  DHS, which uses contractors for on-site reviews of schools to verify their  eligibility to register foreign students into the SEVIS system. The  contractors will verify the information that the sponsors submit as part of  the redesignation process and may check the names of the responsible and  alternate responsible officers—and possibly board members—through law  enforcement databases, according to the State officials. They said that as  part of the new compliance effort, sponsors for all nonacademic exchanges  will be required to contract for and submit annual audits of their activities.  The compliance unit will develop a management template to guide the  audits. Currently only sponsors of the Au Pair Program are required to  submit such audits.
It is too early to determine whether implementation of the planned  compliance unit will resolve all of the issues identified by GAO and OIG.  For example, using contractors to visit the sponsors will address OIG’s  criticism that State does not visit the sponsors. However, State has not  determined what information the contractors need to review to assess how  well the sponsors monitor employers and third parties. Moreover, State has  not provided a written plan describing in detail how the compliance unit  will operate. Funding also remains an issue. State initially plans to cover  the cost of the new compliance unit by redirecting current appropriations  and obtaining—as agreed upon by OMB—about $450,000 of the SEVIS fees  collected from exchange program sponsors by DHS. Further, State will  again request funding for the compliance unit in the 2007 budget request.
section_title: State Has Not Assessed Potential Risks
paragraphs: GAO internal control standards instruct agencies to identify risks that  could impede the efficient and effective achievement of its objectives and  assess their impact. A number of potential risks are associated with the  Summer Work Travel and the Trainee programs, including the risk of  participants using the programs to remain in the United States beyond their  authorized time. Exchange participants may also use the programs as a  means to fraudulent immigration. There is also the potential for the Trainee  Program being misused as an employment program, although State does  not have data on the extent that such abuse occurs. The exchange  participants could be exploited by employers or other third parties. While  State investigates complaints, it does not know the extent to which  participants have negative experiences because it does not systematically  document and analyze complaints made by program participants and  reports of serious problems reported by the sponsors.
subsections: section_title: Some Exchange Participants Have Used the Programs to Remain in the United States
paragraphs: Although exchange program participants are expected to return to their  country following completion of their program, there is information  indicating that some participants remain beyond the time that they were  authorized to stay. Information on overstays is available from DHS’s arrival  and departure database and the results of returnee validation studies  conducted by overseas posts. For example, we asked DHS to check the  total number of J-1 visa recipients in all exchange categories who had  completed their program since January 2003 against its arrival and  departure database to determine which visa holders had departed the  country. The results showed that about 362,000 exchange participants had  concluded their program during this period. The data showed that about 36  percent of the participants had departed the United States by the end of  their program and about 24 percent were potential overstays. However,  the full extent of overstays is uncertain because DHS could not find  information on an additional 40 percent of the J-1 visa holders because they  may have entered the United States before the current entry system was  operational. DHS’ primary method for estimating overstays is to match the  arrival portion of a form collected by DHS when the visitor enters the  United States to the departure portion of the form generally collected by  the airlines when the visitor departs. One of the weaknesses in this system  is that the departure portion of the form is not always submitted to airline  staff. Further, data entry errors by DHS contractors also make it difficult to  match the forms. The U.S. government is phasing in a more comprehensive  entry-exit system, US-VISIT, to correct the weaknesses in its current  system.
Some overseas posts periodically conduct validation studies to determine if  visa applicants who received J-1 visas at their post have returned to that  country. These studies generally consist of telephone inquiries to the visa  recipient, while some posts have required J-1 visa recipients to report to  the post upon their return. The results vary. For example, one post in the  former Soviet Union conducted a study of its 2004 Summer Work Travel  season that showed that, as of January 20, 2005, 26 percent of the 2004  participants from that country remained in the United States. This post  reported overstay rates of 29 percent for 2003, 25.6 percent for 2002, and 27  percent for 2001. Other posts have reported lower overstay rates. For  example, a post in a Western European country conducted a validation  study of its 2004 Summer Work Travel Program that showed that all of the  visa applicants in the sample who were issued J-1 visas returned home, as  required. The posts can use the results of such studies to guide their  decision making when they adjudicate visas. For example, the post with a  26 percent overstay rate in 2004 developed additional selection factors for  the 2005 Summer Work Travel season to assess the potential for individuals  to return to their country after their programs are completed. However,  these studies are not always statistically valid. Moreover, the Acting  Director of Exchange Coordination and Designation said the post  validation studies are not useful to program officials because the posts do  not follow a standardized methodology.
J-1 visitors who remain in the United States beyond their program do not  necessarily stay for long periods of time, and not all of them remain in the  United States illegally. According to consular officials we talked with at one  post, some participants in the Summer Work Travel Program from their  country who remain in the United States beyond their program date might  typically overstay anywhere from a few days to no more than a few months.  The consular officials said the participants sometimes remain in the United  States longer if they have not earned sufficient money to cover their  expenses. Others change their visa status to another nonimmigrant  category. For example, the 2004 validation study by one post in the former  Soviet Union country showed that 39 percent of those who had remained in  the United States beyond the completion of the program had either  changed their visa status, got married, or were seeking asylum. Changing  status from a J-1 visa to another visa category is permitted under U.S.  immigration laws in certain circumstances, but Bureau of Consular Affairs  and other officials have stated that it is not the intent of the program.
section_title: Potential Exists for Fraudulent Immigration Claims
paragraphs: DHS data show that a growing number of J-1 visa holders had applied for  political asylum between 1995 and 2004, about 6,300 individuals who  entered the United States with J-1 visas applied for asylum. According to  DHS, the numbers of asylum applications from J-1 visa holders from former  Soviet Union countries have more than doubled since 2000. These  countries include Russia, Belarus, Armenia, and Ukraine. The officials are  concerned that some of these claims are fraudulent, as they doubt that J-1  visa holders—who have to be students in good standing in their  countries—are being persecuted. The recent increase in numbers of such  claims and the similarities of the stories—which indicate coaching, are also  indicators of fraud, according to DHS officials. DHS’ Fraud Detection and  National Security Unit and State’s Bureau of Consular Affairs Office of  Consular Fraud Prevention are monitoring this issue. These units would  turn over any suspected fraud to U.S. Immigration and Customs  Enforcement for investigation. According to a DHS official, U.S.  Immigration and Customs Enforcement is conducting asylum fraud  investigations in Los Angeles and Cleveland. Among the targets of those  investigations are individuals who were admitted with J-1 visas, as well as  several other classes of  nonimmigrants.
section_title: Trainee Category Is Vulnerable to Misuse as Employment Program
paragraphs: The potential exists for the Trainee Program to be misused as an  employment program. Regulations strictly prohibit the use of the trainee  category for ordinary employment purposes, stating in particular that  sponsors may not place trainee participants in positions that are filled or  would be filled by full-time or part-time employees. State and the overseas  posts provided some information describing Trainee Program abuses, but  they did not have information on the extent of the problem.
In one example, a sponsor learned that an organization it had contracted  with to help select and place trainees had placed the participants with  employers that had contracts to provide H-2B temporary workers. The  organization had participated in the Trainee Program because the H-2B  visa category was at its limit and it was looking for an alternative way to  receive foreign workers.
In another example, a staffing agency recruited about 650 electrical  engineers, primarily from Slovakia, Bulgaria, and Romania, to come to  the United States as trainees. Ostensibly, the plan was to train the  engineers in the United States because they would be working on  projects in Europe that required knowledge of U.S. standards. However,  the organization served as an electrical contractor, placing the trainees  on U.S. construction projects as electricians. Because it was not  designated to sponsor trainees, the staffing agency approached a few  designated sponsors to issue the DS-2019 forms. State received  complaints from the trainees and the electrician’s union and  investigated this case. To correct the situation, the sponsors and the  union eventually found appropriate placements for some of the  engineers. Others returned to their countries. According to a State  official, the staffing agency went out of business, and the principal party  was indicted on criminal charges.
The Acting Director of the Office of Exchange Coordination and  Designation described agricultural training programs as problematic  because of the potential for fraud. He said the abuses are not hidden and  that there is not even an attempt to represent jobs as training, and that  employers refer to the participants as employees rather than trainees. For  example, a 2004 DHS investigation involved four Chinese nationals brought  to the United States by an individual to participate in an agricultural  program sponsored by a Florida university. The trainees were placed with a  dairy farm that had an agreement with the university. DHS found that only  one trainee had a firm grasp of English, which called into question the  trainees’ eligibility for a J-1 visa as well as whether the trainees were  receiving training or simply employed at the farm. Upon further  investigation DHS found that the individual had brought 17 trainees to the  United States to participate in the university’s training program. The  trainees were placed at four participating dairies. DHS also found that only  one of the dairies reported having a structured training plan. According to  DHS, the university violated regulations concerning sponsoring  organizations for exchange trainees by failing to ensure that the J-1 trainees  were properly compensated and possessed the required language ability to  participate in an English language-based training program. DHS further  stated that the dairies were exploiting the J-1 trainees for cheap labor and  in most cases were not concerned with actually training them beyond what  was necessary to perform their work. The OIG’s 2000 report also described  abuse of the Trainee Program. In two of the cases that the OIG investigated,  U.S. workers complained that they were replaced by trainees.
Despite such misuses, Labor officials stated that it is not likely that the  exchange programs will have any effect on the U.S labor market because of  the small number of J-1 exchange visitors (about 283,000 in fiscal year  2004) relative to the U.S. workforce. However, the U.S. government does  not collect data to assess any potential effect of exchange programs on the  U.S. labor market. Labor officials said that a monthly household survey, the  Current Population Survey, reviews a sample of households to compile  labor statistics on foreign-born workers. However, the numbers of  exchange program participants is so small that even if they were captured  by these surveys there is no way to separate out the effect of their labor  participation from that of the other foreign-born workers. Also, it is  possible that exchange participants would not be captured in the survey  because of their housing arrangements. For instance, if they do not reside  in traditional housing units and live in dormitories or resort-provided  housing, they may not be included in the survey sample.
section_title: Some Exchange Participants Could Be Exploited or Have Otherwise Negative Experiences
paragraphs: The Summer Work Travel and Trainee participants generally have positive  experiences in the United States, according to the sponsors and  participants we met with. Some sponsors and overseas representatives  survey their participants on their experiences. One of the sponsors said its  research showed that about 85 percent of its participants were satisfied  with their placement. All of the Summer Work Travel and Trainee  participants whom we met with described their overall experiences as  positive.
When the participants do complain, the complaints are generally minor,  usually involving disappointments with their placement, housing, or  location. The Office of Exchange Coordination and Designation  investigates all complaints that are brought to its attention, according to  State officials. In addition, the regulations require the sponsors to inform  State of any serious problems or controversy that could be expected to  bring State or the sponsors’ exchange programs into disrepute. However,  we found that although State may follow up on such reports, it does not  systematically document or analyze them. Such an analysis could be used  to identify program weaknesses.  State acknowledged that is does not have  procedures for recording and maintaining all complaints in all categories  and stated such procedures are currently being prepared and will be  incorporated into the Foreign Affairs Manual.
Occasionally, the exchange participants have negative experiences as a  result of exploitation by a third party. A State official described an incident  in which about 45 current Summer Work Travel participants were placed in  substandard housing. Apparently, the housing was leased by an employee  of the sponsoring organization. The sponsor subsequently placed the  students in better housing, and the OIG is investigating the incident at the  Exchange Visitor Program office’s request. State officials described another  situation in which they fear a third party might have exploited the exchange  participants. In this case, Bulgarian Summer Work Travel participants were  approached by an employee of the local program representative while they  were still in Bulgaria and told that the jobs arranged for them in New Jersey  by the U.S. sponsor were no longer viable and that they were instead to  report to jobs in Florida. As a result, when the Bulgarians arrived in the  United States, they refused to continue on to New Jersey with the sponsor’s  representative, who met them at the airport. Instead, they had tickets to  Florida and went there to work for a third-party organization that provided  cleaning services to hotels. State and DHS are currently investigating this  case.
When such situations receive negative media attention, it can further  undermine the purpose of the program. For example, a July 13, 2005, article  in a New Hampshire newspaper reported on the plight of three students  from Romania who arrived in the United States on July 5, 2005, to find that  the jobs they were promised no longer existed. News of these situations  may even reach the foreign media. For example, a June 2004 United Press  International article concerning an incident affecting Russian students  stated the incident was also reported by the Moscow Times. As a result of  such situations at least one foreign government has discussed its concerns  with U.S. embassy officials in their country, according to a Bureau of  Consular Affairs official.
section_title: Conclusions
paragraphs: The Summer Worker Travel and Trainee Exchange Visitor Program  categories are important components of U.S. public diplomacy efforts.  However, State has not exercised sufficient management oversight of the  programs to ensure that they operate as intended and are not abused. State  has taken some action to address identified deficiencies, such as beginning  efforts to revise the regulations; but progress has been slow.  Also, State  has been slow in establishing a compliance unit, which would bolster  oversight efforts, despite recommendations from State’s OIG to do so. GAO  guidance on internal control standards instructs agencies to identify risks  that could impede the efficient and effective achievement of program goals.  Once these risks are identified, they should be analyzed for possible effect.  For example, an analysis of complaints and problems that participants and  sponsors report could uncover program weaknesses, and these results  could be used to guide the efforts of the compliance unit. Assessing such  risks is a necessary step to mitigating the risks. But State has not taken  action to assess the risks associated with the Summer Work Travel and the  Trainee programs, in part because limited data are available.
section_title: Recommendations for Executive Action
paragraphs: This report recommends that the Secretary of State take the following  three actions to enhance the overall management and monitoring of the  Summer Work Travel and the Trainee programs: fully implement a compliance unit to better monitor exchange program  activities and address deficiencies; update and amend the regulations where necessary; and develop strategies to obtain data, such as information on overstays and  program abuses, to assess the risks associated with the program, and  use the results of its assessment to focus its management and  monitoring efforts.
section_title: Agency Comments and Our Evaluation
paragraphs: State provided written comments on a draft of this report. These comments  are reprinted in appendix II. State and DHS also provided technical  comments, which we have incorporated into the report as appropriate.
In its comments, State acknowledged weaknesses in its oversight and  administration of the Exchange Visitor Program and reported that it has  designated program oversight and administration as a weakness under the  Federal Managers Financial Integrity Act. State described a number of  actions it is taking to implement each of our recommendations, including  developing a corrective action plan, establishing a compliance unit,  working to revise program regulations, and working with DHS to gather  data related to the tracking of overstays.
As we agreed with your office, unless you publicly announce the contents  of this report earlier, we plan no further distribution of it until 30 days from  the date of this letter. We will then send copies of this report to interested  congressional committees, and the Secretaries of State, DHS, and Labor.  We will also make copies available to others upon request. In addition, the  report will be available 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: Scope and Methodology
paragraphs: To examine how State manages the Summer Work Travel and the Trainee  programs to ensure that only authorized activities are carried out under the  programs, we reviewed previous GAO and OIG reports, program regulations and  guidance, cables, sponsors’ annual reports, and other information  pertaining to the programs; reviewed program files maintained by the Bureau of Educational and  Cultural Affairs, Office of Exchange Coordination and Designation, for  selected Summer Work Travel and Trainee sponsors to gain an  understanding about the kinds of problems that the sponsors report to  the Department of State (State) and how State has addressed them;  interviewed State officials, including the Bureau of Educational and  Cultural Affairs and the Bureau of Consular Affairs, and the Department  of Homeland Security (DHS) to discuss how the U.S. government  manages the programs;  interviewed Department of Labor (Labor) officials about the impact of  the programs on the U.S. labor market, and the Social Security  Administration on issues related to Social Security cards for exchange  visitors; and met with nine sponsors of the Summer Work Travel Program that  accounted for 75 percent of the participants in 2004 and 13 sponsors of  the Trainee Program that accounted for 54 percent of the participants in  2004, as well as an official of an association of exchange program  sponsors to discuss how sponsors carry out their monitoring and  oversight responsibilities.
We relied on data from DHS’ Student and Exchange Visitor Information  System (SEVIS) to identify sponsors and the number of participants. The  SEVIS database is used by exchange program managers, sponsors, and U.S.  government agencies to keep track of individuals who enter the United  States on exchange visitor and student visas. We reviewed SEVIS data and  discussed its reliability with State and DHS officials and sponsors, based on  the descriptions of the database, procedures for entering and managing the  data, and the internal checks that are part of the system. We believe these  data are sufficiently reliable for our purposes. We relied on data from the  sponsors to identify their overseas representatives, exchange participants,  employers, and host companies.
We met with 28 exchange participants to discuss their views of the  programs. We reviewed data provided by the sponsors to identify exchange  participants who were in their programs during our fieldwork and who  were in nearby locations. We visited exchange participants in Boston,  Massachusetts; Bolton Valley and Smugglers’ Notch, Vermont; and  Washington, D.C. We used the results of our interviews for illustrative  purposes and not to generalize to all participants.
We also visited three overseas posts-–Minsk, Belarus; Warsaw, Poland; and  Dublin, Ireland––where we observed visa interviews of exchange program  applicants, reviewed post validation studies and other exchange program  guidance, and discussed the exchange programs with consular and  embassy officials. We also met with the local representatives of the U.S.  sponsors to discuss how they recruited and screened Summer Work Travel  and Trainee applicants. We selected Belarus because of consular concerns  about overstays and the integrity of the overseas partners. Belarus is also  one of the top sending countries for the Summer Work Travel Program. We  selected Poland because it was the number one sending country for  Summer Work Travel participants and within the top-10 sending posts for  trainees in 2004. We selected Ireland because it is also within the top-10  sending countries for both the Summer Work Travel and the Trainee  programs and because of the decreased participation in the Summer Work  Travel Program after State’s ruling concerning the eligibility of certain  students.  We used the results of our fieldwork for illustrative purposes and  not to generalize to all posts.
To examine the potential risks of the programs we reviewed past GAO and  OIG reports, and examined post validation studies, cables, and other  documents. We followed up on information we obtained in Belarus on  asylum seekers with J-1 visas with (1) the Bureau of Consular Affairs’  Office of Consular Fraud Prevention; (2) DHS’ Citizenship and Immigration  Services, Asylum Division; and (3) DHS’ Fraud Detection National Security  Unit. We also requested data on overstays from the National Security  Investigations Division of DHS’ Office of Investigation, U.S. Immigration  and Customs Enforcement. The overstay data that DHS provided were  primarily obtained from DHS’ arrival and departure information system.  Past GAO reports have discussed the weaknesses in the U.S. government’s  methods of collecting overstay data. However, despite the lack of precision  of both the DHS and post data on overstays, these data are sufficiently  reliable to indicate overstays are a cause for concern.
We conducted our review from November 2004 to August 2005 in  accordance with generally accepted government auditing standards.
section_title: Comments from the Department of State
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgment
paragraphs: In addition to the individual named above, John Brummet, Assistant  Director; Joseph Brown; Joseph Carney; Maria Oliver; and La Verne  Tharpes made key contributions to this report.