Federal User Fees: Key Aspects of International Air Passenger Inspection Fees Should Be Addressed Regardless of Whether Fees Are Consolidated
Published: 2007-09-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: International air passengers arriving in the United States are subject to an inspection to ensure they possess legal entry and immigration documents and do not bring in contraband, such as illegal drugs, counterfeit goods, or harmful pests and prohibited agriculture products. With the creation of the Department of Homeland Security (DHS) in 2003, the customs, immigration, and agriculture inspections activities were integrated into one program led by DHS's office of Customs and Border Protection (CBP). However, the three fees--whose collections totaled about $1 billion in fiscal year 2006--linked to these inspections remain statutorily distinct and are coadministered by CBP, Immigration and Customs Enforcement (ICE), both within DHS, and the Department of Agriculture's Animal Plant Health Inspection Service (APHIS). GAO was asked to examine how the fees are set, collected, and distributed, and the benefits and challenges of this process to agencies and stakeholders, including implications of consolidating these fees under the authority of DHS.
section_title: What GAO Found
paragraphs: The process of setting, collecting, and distributing separate, dissimilar fees creates challenges for agencies and stakeholders. Although air passenger inspections were integrated within CBP, the fees supporting these inspections were created and are still governed by separate, dissimilar authorizing legislation. Two fee amounts are set in statute and one is set by regulation; all are collected by the airlines, deposited into three separate accounts and distributed among the agencies. As a result, the fees are administered and overseen by a complicated network of executive branch agencies and congressional committees, creating a series of challenges. For example, neither CBP nor ICE know whether the fees collected are recovering the full cost of the immigration inspection activities or whether the fees are properly divided between them, because ICE does not have finalized cost calculations for its inspection-related activities. In addition, certain passengers are exempt from some fees but not others, making it difficult for agencies to administer the fees. Further, although airports and airlines play an important role in facilitating inspections and the process of collecting and remitting the fees, opportunities for two-way communication are fragmented and limited, reducing stakeholder buy-in and acceptance of the fees and contributing to confusion about how the three fees work and what activities they may fund. Other challenges are due to the statutory structure of the individual passenger inspection fees. For example, the customs inspection fees are available for limited purposes: not all reimbursable activities may be associated with inspections, and not all inspection activities are reimbursable. However, CBP officials said even if the customs fees were spent on inspection-related activities, they still would only recover about 72 percent of costs in fiscal year 2006. Therefore, customs inspection-related activities are mainly funded by appropriations from general revenues. Further, without auditing each airline, CBP cannot independently verify the amount owed by airlines, partly because airlines are required to remit the fees based on ticket sales rather than passengers transported. CBP said it is developing a legislative proposal that would address these and other challenges by requiring airlines to remit based on passengers transported, but airline industry stakeholders said this change would complicate their collection process and create substantial transition costs. Although a number of options for addressing these fees have been raised, regardless of whether these fees are consolidated in whole, in part, or not at all, certain problems specific to the individual fees can and should be resolved first, and in a manner consistent with principles of effective user fee design, on which GAO has previously reported. Moreover, although partly or fully consolidating the fees under DHS's authority could provide opportunities to address some of the many challenges identified in this report, consolidation in-and-of-itself will not solve all of the problems we have identified.

section_title: Letter
paragraphs: International air passengers arriving in the United States are subject to an  inspection to ensure they possess legal entry and immigration documents  and do not bring in contraband, such as illegal drugs, counterfeit goods, or  harmful pests and prohibited agriculture products. With the creation of  the Department of Homeland Security (DHS) in 2003, the customs,  immigration, and agriculture quarantine inspection activities were  integrated into a unified inspection program—often referred to as  Securing America’s Borders at Ports of Entry (SABPOE)—led by DHS’s  U.S. Customs and Border Protection (CBP). However, the three fees  charged for these inspections—for which collections totaled about $1  billion in fiscal year 2006—remain statutorily distinct and are  coadministered by CBP, U.S. Immigration and Customs Enforcement  (ICE), both within DHS, and the Department of Agriculture’s Animal and  Plant Health Inspection Service (APHIS), referred to in this report as  agencies.
Although CBP now conducts primary and secondary passenger  inspections, ICE and APHIS each still conduct inspection-related  activities. APHIS retained responsibility for 17 plant inspection stations,  smuggling interdiction and trade compliance, pest and disease  identification and notification, and risk analysis, in addition to agriculture  inspection policy and training. ICE is responsible for the investigation,  detention, and removal activities for inadmissible aliens.
You asked us to review how the three user fees charged for the inspection  of arriving international airline passengers are set, collected, and  distributed and the benefits and challenges of this process for agencies  and stakeholders, including examining the implications of consolidating  these fees under DHS’s authority.
To meet these objectives, we reviewed the passenger inspection user fee  legislation, regulations, guidance, agency documents, prior GAO reports,  and literature on principles of effective user fee design and  implementation characteristics. We observed the inspections process and  interviewed CBP officials responsible for port management and airport  and airline officials involved with international passenger processing for  the three passenger inspection fees. We did not assess the effectiveness of  these inspections. We reviewed audit and cost data related to air  passenger inspection activities. We also interviewed APHIS, CBP, and ICE  officials responsible for managing the user fees and auditing the user fee  collections at DHS and the Department of Agriculture. We asked questions  about CBP’s and APHIS’s internal controls for the data we used and  determined that the data are sufficiently reliable for the purposes of this  report. However, it was beyond the scope of this report to evaluate the  reliability of the cost data for purposes beyond this report.
For more information on our scope and methodology, see appendix I. We  performed our work from October 2006 through August 2007 in  Washington, D.C.; San Francisco, California; Miami, Florida; Boston,  Massachusetts; Newark, New Jersey; New York, New York; Dallas and  Houston, Texas; and Seattle, Washington in accordance with generally  accepted government auditing standards.
We reviewed the passenger inspection fees taking into consideration  principles of effective user fee design. These principles, on which we have  previously reported, can inform efforts to design or redesign user fees by  helping to clarify the trade-offs associated with various fee design  elements. These principles include:  Equity: An equitable user fee is one in which the consumers pay for  the cost of the services received, or the burden imposed on the  program.  Efficiency: An efficient user fee is set at a rate that is in proportion to  the cost that the user imposes on the program.   Revenue Adequacy: The revenue adequacy of a fee is determined by  its ability to cover the costs of the program over time.   Administrative Burden: The burden or cost of administering the user  fee should not exceed the funds generated by the user fee, including  any transitional costs associated with changes to the existing system.
We are currently studying these user fee design issues in more depth and  expect to issue a report in the coming months.
subsections: section_title: Background
paragraphs: Millions of individuals arrive in the United States every year and undergo  an inspection to ensure they are entering the country lawfully and not  transporting any illegal goods or harmful pests and prohibited agricultural  products.
Prior to the creation of DHS in 2003, passengers were required to undergo  separate customs, immigration, and agriculture quarantine inspections  (AQI), which were performed by the United States Customs Service, the  United States Immigration and Naturalization Service (INS), and APHIS.  Under the Homeland Security Act of 2002, however, these passenger  inspection functions were transferred to DHS. As part of this realignment,  CBP was charged with leading the customs, immigration, and agriculture  quarantine inspection functions, and all immigration and agriculture  quarantine inspectors were transferred to CBP. The newly created CBP  officers were cross-trained on customs, immigration, and agricultural  quarantine inspections in what is now referred to as “SABPOE.” As a  result, all international passengers are now subject to a single primary  inspection—looking for customs, immigration, and agriculture quarantine  violations—conducted by a CBP officer. If, as a result of the primary  inspection, a passenger requires further scrutiny, that passenger is  referred to another CBP officer who conducts a more in-depth secondary  inspection. Secondary inspection can involve additional interviews,  document reviews, database queries, communication with other law  enforcement agencies, observational techniques, and heightened physical  inspections. Although CBP absorbed and leads the inspection program for  customs, immigration, and agriculture quarantine, other immigration and  agriculture responsibilities were not merged into CBP. (See text box for  more information on CBP, ICE, and APHIS and their missions.)
CBP, ICE, and APHIS  The Homeland Security Act established DHS by merging 22 disparate agencies and  organizations with multiple missions, values, and cultures. As part of this transition, both  CBP and ICE were newly created from parts of legacy agencies.
CBP was assigned the border inspection functions of the former Immigration and  Naturalization Service (INS) and former U.S. Customs Service and the Department of  Agriculture’s APHIS program. The new agency’s mission is the following:  interdicting illegal drugs and other contraband;    apprehending individuals who are attempting to enter the United States illegally;   inspecting inbound and outbound people, vehicles, and cargo;    enforcing all laws of the United States at the border;     protecting U.S. agricultural and economic interests from harmful pests and diseases;    regulating and facilitating international trade;     collecting import duties; and    enforcing U.S. trade laws.
ICE was created by combining the law enforcement arms of the former INS and the former  U.S. Customs Service. Its mission is the following:  to enforce immigration and customs laws, and   to protect the United States against terrorist attacks by targeting illegal immigrants— including the people, money, and materials that support terrorism and other criminal  activities.
The APHIS Program remains part of the Department of Agriculture, though the agriculture  quarantine inspection functions have now been transferred to CBP. The program’s  mission is to    protect and promote U.S. agricultural health, and    administer certain domestic and wild animal management programs.
Although the inspections were unified in 2002, the Homeland Security Act  did not consolidate the corresponding air passenger inspection fees. Thus  the previous separate processes for setting, collecting, and distributing the  fees remain in place. So, whereas most passengers likely notice only that  they pay “fees” when they purchase a ticket, they actually pay—among  other charges—three separate inspection user fees: one for the legacy  customs inspection, one for the legacy immigration inspection, and one for  the legacy agriculture quarantine inspection.
What Is a User Fee?
A user fee is a fee assessed to consumers of goods or services provided by the federal  government. User fees generally apply to federal programs or activities that provide  special benefits to identifiable recipients above and beyond what is normally available to  the public. User fees are normally related to the cost of the goods or services provided. An  example of a user fee is a fee for entering a national park. In the narrow budgetary sense,  a toll for the use of a highway is considered a user fee because it is related to the specific  use of a particular section of highway. Alternatively, highway excise taxes on gasoline are  considered a form of user charge in the economic sense, but since the tax must be paid  regardless of how the gasoline is used and since it is not directly linked with the provision  of the specific service, it is considered a tax.
subsections: section_title: The Customs Air Passenger Inspection Fee
paragraphs: The customs air passenger inspection is designed to prevent passengers  from bringing illegal goods—such as narcotics—into the United States.  Passengers pay a customs air passenger inspection fee, currently set in  statute at $5.50 per passenger, when they purchase their tickets. The fees  are remitted to the government quarterly, after which they reimburse CBP  appropriations for a specific set of reimbursable expenses. The air  passenger inspection fee is only one of several types of customs inspection  fees also known as COBRA fees—named for its authorizing legislation, the  Consolidated Omnibus Reconciliation Act of 1985. For example,  commercial vessel passengers also pay a customs inspection fee.
section_title: The Immigration Air Passenger Inspection Fee
paragraphs: The immigration air passenger inspection is designed to prevent  passengers from entering the United States without legal entry and  immigration documents. Passengers pay an inspection fee (set in statute at  $7 per passenger) when they purchase their tickets. The fees are remitted  to the government quarterly, except for the last quarter of the year, when  the immigration fees collected to-date are remitted 10 days before the end  of the fiscal year, with the remaining fees collected in the fourth quarter  remitted along with the first quarter payment of the next fiscal year. The  fees are then divided between CBP and ICE according to the costs of the  immigration inspection activities for which each agency is responsible.
The immigration air passenger fee is one of two immigration inspection  fees, the other being the international passenger commercial vessel fee.
section_title: The Agriculture Air Passenger Inspection Fee
paragraphs: The agriculture air passenger inspection is in place to seize prohibited  materials and intercept foreign agricultural pests. Passengers pay an  inspection fee, set by the agency in regulation at $5.00 per passenger,  when they purchase their tickets. The fees are remitted to the government  quarterly and are made available to APHIS. The fees are then divided  between APHIS and CBP based on the proportion of costs associated with  each agency’s agriculture quarantine inspection activities. The air  passenger inspection fee is only one of several types of APHIS inspection  fees, known as AQI fees. For example, commercial aircraft and vessels  also pay AQI fees.
By statute, the authority to collect the three passenger inspection user fees  varies from a legislative grant of broad agency discretion to set and collect  a full-cost recovery fee, to more restrictive authority to collect a sum- certain amount available for a limited number of purposes. For example,  the agriculture inspection statute grants the Secretary of Agriculture broad  discretion to prescribe and collect fees sufficient to cover the cost of  providing agricultural quarantine and inspection services. APHIS adjusts  fees under this authority through the federal regulatory process by public  notice and comment on proposed rates and implementing regulations in  the federal register. In contrast, the customs passenger inspection fee  statute is the most restrictive of these three fee statutes. It limits both the  fee that may be charged and the set of activities for which collections may  reimburse appropriations. Somewhere between these two margins is the  immigration fee statute. It is available to refund any appropriation for  expenses incurred in providing immigration inspection and preinspection  services, but it limits the fee that may be charged. While both the  immigration and customs statutes contain language that fees equal or be  reasonably related to the cost of services, the two statutes actually  prescribe an exact amount in law to be charged for their respective  inspection services. That is, the immigration and customs user fees  actually limit cost recovery to a sum certain.
During our audit work, CBP informed us that they are developing a broad  legislative proposal that would, among other things, partially consolidate  the three passenger inspection user fees and make other changes to  address certain administrative challenges. As of August 2007, the  legislative proposal had been reviewed by CBP chief counsel but officials  were still working on estimates of the cost of ICE’s inspection activities.  We have not received, reviewed, or evaluated this proposal, although we  have been briefed on elements of it. Because CBP has widely circulated  elements of the proposal among key stakeholders, we refer to relevant  elements of this proposal throughout this report. Any proposal to  consolidate these fees, however, will be considered in an environment of  considerable flux and controversy. For example, there are proposals  before lawmakers to transfer the agriculture quarantine inspection  function back out of DHS and under the Department of Agriculture’s  authority.
section_title: Separate, Dissimilar Fees Create Administrative, Operational, and Oversight Challenges
paragraphs: The complex process for setting, collecting, and distributing the passenger  inspection fees is different for each fee, creating administrative,  operational, and oversight challenges for agencies and stakeholders, and  oversight challenges for Congress. The fees are still governed by separate,  dissimilar authorizing legislation and are administered by multiple  executive branch agencies and overseen by multiple congressional  committees. Agencies involved face difficulties reimbursing the collections  among their various appropriations because there is disagreement on how  to divide the receipts among them and because the process of transferring  the funds from one agency to another complicates agency budget  execution. Finally, airports and airlines play an important role in both  facilitating inspections and in fee collection and remittance, but they have  limited substantive interaction with the three agencies. This contributes to  misunderstandings, skepticism, and confusion about how the fees work  and what activities they may fund.
subsections: section_title: A Complicated Network of Decision Makers Administer and Oversee These Fees
paragraphs: Although the passenger inspections themselves have largely been  consolidated, administrative authority remains divided. The Treasury  Department, from which the legacy U.S. Customs Service was transferred,  retained administrative authority over the customs fee, although most of  these duties have been delegated to DHS. The Department of  Agriculture’s APHIS retained administrative authority over the agriculture  inspection fee, although a majority of the fee collections is transferred to  CBP to cover the cost of agriculture quarantine inspections. The  administrative authority for the immigration passenger inspection fee was  transferred to CBP, but CBP and ICE divide the immigration fee  collections.
Table 1 shows the differences in authorizing statute, rate, congressional  committees of jurisdiction, and administrative authority.
Although the agencies are required to report to Congress on their  respective fees, Congress lacks a comprehensive picture of all three fees  because the agencies report separately. Both the Office of Management  and Budget (OMB) Circular A-25 and the Chief Financial Officers Act of  1990 (CFO Act) require an agency to review its user fees biennially and  make recommendations on topics such as revising the fees to reflect costs  incurred. We have previously reported that agencies with shared  responsibilities for common outcomes or related functions should  reinforce agency accountability for collaborative efforts through common  agency planning and reporting. However, when CBP issued its user fee  review it only reported on the customs fee, the portion of the agriculture  fee it received, and the immigration fee. Further, the information provided  about the immigration fee did not include any input from ICE, which did  not have cost information about its portion of the immigration fee at that  time. APHIS’s review included the entire agriculture fee. As a result, the  eight congressional committees that oversee the inspection fees do not  have a complete picture as to whether the fees work in concert or conflict  with each other.
section_title: Agencies Disagree on How to Divide and Distribute the Fees
paragraphs: Although the immigration fee may be used for any immigration inspection  activity, ICE officials said that they do not receive sufficient immigration  fee collections to cover their reimbursable activities. Principles of  effective user fee design suggest that user fees should be set at a rate to  cover allowable costs as a way of ensuring the fee is as efficient as  possible. Instead, however, ICE officials said they rely on appropriated  funds to cover the gap between fee collections and costs. By law, ICE uses  appropriated money for fee-reimbursable expenses and then refunds the  appropriations when user fees are received. They are also permitted to use  appropriations if fees are insufficient to cover inspection costs. ICE  officials said that although they have not finalized their activity cost  analysis, the preliminary data shows that ICE’s current portion of the fee  collections is not sufficient to fully refund the appropriations used and  demonstrates that ICE should receive a greater proportion of the  immigration user fee funds. CBP officials do not agree with the  preliminary assessment. CBP officials told us that the immigration fee  collections CBP receives are sufficient to cover the cost of CBP’s  immigration-related reimbursable activities. In fact, CBP’s data show that  its portion of the immigration fee collections were 1 percent more than  CBP’s immigration inspection costs for fiscal year 2006. Until ICE  completes its cost analysis, it will not be known whether the immigration  fee is set at a rate that covers the total cost of both CBP and ICE’s  immigration activities.
CBP and APHIS disagree on how future collections should be estimated  and how the fees are subsequently distributed. CBP and APHIS use  different rates of passenger volume increases to calculate the costs of  covered activities. APHIS—the agency responsible for setting the  agriculture fee—estimates future international air passenger volumes by  extrapolating historical growth, whereas CBP primarily uses Federal  Aviation Administration’s (FAA) passenger volume forecast and collection  trends. In the December 2004 interim rule for the January 2005 fee  adjustment, for example, APHIS forecast passenger volume to increase by  1.18 percent per year for fiscal years 2005 through 2010, which was the  average volume increase for fiscal years 1999 through 2003. In contrast,  CBP projected a 4.7 to 4.8 percent annual growth. The resulting higher  passenger volume estimate leads to higher total collections estimates by  CBP than the one APHIS uses. CBP officials said that in 2004, 2005, and  2006 actual collections were higher than APHIS’s forecast by $17 million,  $11 million, and $12 million, respectively. CBP officials said 2007  collections to-date are also $13 million higher than forecasted, and APHIS  officials told us they would make additional transfers to CBP to distribute  the extra collections. CBP officials said that if the agriculture fee estimates  tracked actual collections better, CBP would receive more money earlier  in the year rather than toward the end of the fiscal year, which would  allow CBP to better plan for its use. However, APHIS officials said the  more conservative forecasting approach was appropriate since they do not  receive appropriations for these activities and must be able to provide the  services even if fee collections should decline. Table 2 shows the  bimonthly transfers for November 2005 through August 2006, and the  additional year-end transfer of additional fees.
Agencies divide and distribute the fees as specified in memoranda. CBP  and APHIS, and CBP and ICE signed a memorandum of agreement   (MOA) / memorandum of understanding (MOU) establishing a process for  fee distribution. The Homeland Security Act of 2002 requires an agreement  between the Secretaries governing the transfer of agriculture user fee  funds from the Department of Agriculture to DHS for DHS’s agriculture  quarantine inspection activities. The most recent MOA, dated 2007,  documents the fee distribution: 60.64 percent of total agriculture  passenger inspection fees were allotted to CBP and 39.36 percent to  APHIS. Per the MOA, APHIS transfers CBP’s portion via a bimonthly  transfer. Although we reported in May 2006 that APHIS did not always  make regular transfers to CBP, we found that these issues have generally  been resolved. The CBP/ICE memo allotted 82.63 percent of total  immigration fee collections to CBP and 17.37 percent to ICE, and required  CBP to submit monthly warrants to the Treasury to initiate the distribution  of the immigration fees between ICE and CBP.
However, the extent, quality, and results of agency coordination differ.  The CBP/APHIS MOA requires the agencies to periodically exchange cost  information. Specifically, CBP is required to submit to APHIS at the end of  each quarter an accounting of the costs of its agriculture quarantine  inspection activities. APHIS is also required to submit to CBP a quarterly  and annual report on both agriculture user fee collections by activity and  associated costs of the agriculture quarantine inspection fees. Officials  told us that these requirements are important to help them address issues  such as changing workloads and costs, and the MOA has been updated  accordingly. CBP and APHIS’s experience is consistent with our past work  on agency coordination, which states that optimal coordination requires  agencies to establish compatible policies and procedures and  communicate frequently. Such communication is critical, as evidenced by  our recent report on APHIS and CBP management coordination issues,  which found that the agencies’ coordination problems sometimes result in  operational weaknesses that increase the vulnerability of United States  agriculture to foreign pests and disease. In contrast, the CBP/ICE MOU is  much less specific and lacks important elements present in the  CBP/APHIS MOA. For example, the CBP/ICE MOU only states that, “ICE  and CBP agree to provide each other reports on the total amounts of  immigration user fees received to ensure that such receipts are equitably  split.” ICE officials said the MOU was primarily intended to set up the  initial transfer of immigration fee collections from the newly formed ICE  to CBP and was not designed to address how CBP and ICE would  regularly coordinate on the immigration fee.
Even if agencies generate complete cost data and agree on how to divide  collections between them, the precise activities associated with  inspections—and the costs of those activities—can change over time.  Legislation, regulations, or agency agreements governing a fee should  ideally contain a mechanism for adjusting user fee rates that is flexible and  timely enough to allow for periodic review and, as appropriate,  adjustment. The CBP/APHIS MOA requires both agencies to appoint Chief  Budget Liaisons who must hold “quarterly and annual face-to-face  meetings where both parties would share and analyze their respective  program costs … ” so that the proportions can be reviewed and adjusted  as appropriate. Through this coordination, CBP received an additional 1.31  percent in agricultural passenger inspection fees, pursuant to approval by  both agencies, after actual fee collections exceeded projections. ICE  officials told us that, at the time of the transition to DHS, ICE requested  that the MOU be renegotiated every 2 years; however, the CBP/ICE MOU  does not include any provision to renegotiate, and CBP and ICE officials  have not regularly met to discuss potential adjustments to each agency’s  portion of the fee.
section_title: Distributing Fees among Agencies Has Implications for Agency Budget Execution
paragraphs: Airlines remit collections of the customs and immigration user fees to CBP  and the agriculture fees to APHIS. The three fees are remitted to the  government quarterly, except for the last quarter, when the immigration  fees collected to-date are remitted 10 days before the end of the fiscal  year, with the remaining fees collected in the fourth quarter remitted along  with the first quarter payment of the next fiscal year. By law, each of the  three passenger inspection fees is deposited into a separate account.  Therefore CBP must transfer ICE’s portion of the immigration fees to  reimburse ICE’s appropriations, and APHIS must transfer CBP’s portion of  the agriculture passenger inspection fee to reimburse CBP’s  appropriations. CBP officials told us that CBP has more flexibility in  spending customs fees than immigration and agriculture fees, partly  because of the fees’ budgetary treatment and partly because of the  interagency transfer process for the APHIS fee. The customs fee is  subject to an automatic warrant process, wherein within 5 business days  Treasury confirms the total amount remitted and then the fees are directly  reimbursed to CBP appropriations to spend from right away. In contrast,  CBP’s immigration and agriculture activities are funded on a reimbursable  basis by CBP’s portion of the respective fees. Therefore, CBP initially uses  appropriations to cover the cost of the agriculture quarantine and  immigration inspections and then reimburses the appropriations accounts  from the immigration and agriculture user fee accounts. To ensure that  they reimburse from the correct fee account, CBP officers track time spent  on customs, agriculture quarantine, and immigration activities,  respectively.
CBP officials said that the quarterly remittance schedule—which is  exacerbated by the fourth quarter remittance schedule for the immigration  fee—contributes to a several-month delay between use of the appropriated  funds and receipt of the reimbursement from the immigration and  agriculture user fee accounts, which has delayed CBP’s ability to spend  funds on critical mission areas such as hiring personnel, purchasing  equipment, or travel. For example, CBP officials told us of instances where  they had to delay entering into a contract because of cash-flow issues  resulting from the delay in fee reimbursement. They also said transferring  funds between budget accounts creates administrative rework. To address  these challenges, CBP told us it is requesting in its draft legislative  proposal direct reimbursement authority for the immigration and  agriculture quarantine activities it conducts.
section_title: Inconsistent Passenger Exemptions among the Fees and Record-Keeping Requirements for Airlines Complicate Remittance and Verification
paragraphs: Inconsistencies in passenger exemptions and definitions across the three  fees make administering the fees difficult. Each statute specifies the same  standard passenger exemptions for each fee, but there are additional  exemptions for the customs fee. Passengers from Canada, Mexico, and  U.S. territories and adjacent islands are exempt from the customs fee but  not from the immigration or agriculture fees. (See table 3). For instance,  a passenger arriving from the Bahamas must pay the immigration and  agriculture fee, but not the customs fee. Aspects of a fee, such as country  of origin exemptions, may promote certain policy goals. However,  complex fee structures—like the variations in passenger exemptions—can  increase administrative costs and potential for error and complicate the  audit process since CBP must reconcile the remittance for a single  passenger with different exemptions rules. It is important to understand  the likely administrative and operational consequences of a fee’s design in  order to address and mitigate challenges.
CBP officials said its draft legislative proposal recommends eliminating  the customs-specific country of origin exemptions. The airline industry  officials we spoke with generally support this change and said the  administrative transition costs would be minimal, since calculations are  automated and could be easily adjusted to accommodate this type of  change.
In response to Treasury Inspector General recommendations, the audit  function was consolidated before the inspection functions themselves  were consolidated, creating efficiencies and simplifying the process for  government and industry alike by having only one agency audit all three  fees concurrently. However, the improvement was limited because the  regulations for each of the fees still specify different airline record-keeping  requirements for audit purposes. Airlines must retain customs  documentation for 5 years and immigration documentation for 2 years.  There is no time period specified for airline documentation for the  agriculture fees. Both CBP and airline officials said inconsistent record- keeping requirements impose an unnecessary administrative burden on  both parties. Airline officials told us that the custom fee’s 5-year document  retention requirement is especially burdensome.
section_title: Air Travel Stakeholders Play an Important Role in the Process, but Mechanisms for Ensuring Substantive Stakeholder Communication and Information Exchange Are Fragmented and Reportedly Insufficient
paragraphs: The administering agencies use separate, different processes for  communicating with stakeholders, including soliciting stakeholder  feedback on proposed adjustments to the fees, an area of great interest to  stakeholders. However, stakeholders report that these disjointed  mechanisms for two-way communication are insufficient. CBP uses the  Airport and Seaport Inspections User Fee Advisory Committee (Advisory  Committee) to solicit stakeholder perspectives, but limits the breadth of  the Advisory Committee by discussing only the customs fee and CBP’s  portion of the immigration and agriculture fees. ICE is not included in  planning these Advisory Committee meetings even though the legacy  Department of Justice immigration fee advisory committee was combined  with the customs advisory committee when immigration functions were  transferred to DHS. ICE officials said they were not aware that a meeting  had been scheduled and were not consulted on the agenda, even though  their user fee statute specifies that they meet regularly with stakeholders.  ICE officials attended the June 2007 Advisory Committee meeting but did  not participate in the presentations and had not been involved in the  planning or agenda-setting for the meeting. APHIS is also not included in  planning Advisory Committee meetings. APHIS officials said issues  pertaining to the agricultural inspection fee are handled by CBP’s liaison  to APHIS, but no one from this office attended the June 2007 meeting. CBP  officials said CBP met the notification requirements of the Federal  Advisory Committee Act by publishing notice of the meeting date and the  agenda in the Federal Register.
APHIS provides information about inspection costs and receives  stakeholder input on proposed changes to the agriculture fee through  public notice and comment under the federal rule-making process. APHIS  officials also told us that they meet informally with stakeholders when  issues arise, particularly in the field, and that this informal consultation is  sufficient for their purposes, but our audit work indicates otherwise. For  the past two adjustments, however APHIS has adjusted the fees through  interim final rules, an option within the regulatory process that allows an  agency, for “good cause” to make a rule change effective before receiving  public comment. That is, the increase took effect before stakeholders had  an opportunity to comment. For example, on December 9, 2004, APHIS  published an interim final rule in the Federal Register proposing to  increase the agriculture passenger inspection fee from $3.10 in 2004 to  $4.95 in 2005 and to $5.00 per passenger for 2006 to 2010. The change was  effective January 1, 2005, although comments received by February 7,  2005, would be considered before the final rule was issued. In another  instance, APHIS eliminated the fee exemption for passengers originating in  Canada by means of an interim final rule published in the Federal Register  in August 2006, which stated that it was effective November 24, 2006, and  comments received by November 24, 2006, would be considered.
APHIS’s use of the “good cause” exemptions to issue interim final rules  limits stakeholder input. Stakeholders said they do not feel their  comments are taken into account since the Department of Agriculture  adjusts the fee before even soliciting feedback and the final rule matches  the interim one regardless of stakeholder feedback. Furthermore, we have  previously reported that nonfederal stakeholders believe relying solely on  notice and comment through the Federal Register is insufficient for  obtaining stakeholder input. When agencies do not effectively  communicate their analysis and results, they miss the opportunity to  obtain meaningful comments that could affect the outcome of their  regulatory changes. Without showing the underlying analysis, the agencies’  conclusions may lack credibility.
ICE and APHIS officials told us that air travel stakeholders have little  information on their respective activities and fees and generally do not  understand how these fees work or what they are intended to fund. As we  will discuss in the next section, CBP stakeholders also do not have a clear  understanding of how the customs fee works and what activities it may  fund. For example, officials said the agriculture quarantine inspection  function has become less transparent to air passengers and stakeholders  since CBP officers all wear the same uniform and conduct the primary  customs, immigration, and agriculture quarantine inspections—and not all  passengers are identified for an agriculture-related secondary inspection.  Similarly, many of the inspection activities retained by APHIS and ICE are  not visible to most passengers or stakeholders during the actual inspection  process.
Stakeholders said the Advisory Committee meetings had declined in value  since INS ran them because cost and full time equivalent (FTE)  information is no longer provided. CBP officials said that in the post- September 11 environment, airport inspector staffing information is “law- enforcement sensitive” and therefore not shared with airports and airlines.  Airport, airline, and industry officials said they have requested information  about passenger inspection activities or the cost of these activities. As a  result, they feel they lack data necessary to know whether the passenger  inspection fees are set fairly or accurately, or are being spent on the  appropriate activities.
section_title: Specific Aspects of the Individual Passenger Inspection Fees Should Be Addressed Prior to or in Concert with Any Consolidation Effort
paragraphs: Some difficulties with these fees arise not because the fees are separate  but because of factors that are specific to the individual passenger  inspection fees. First of all, by statute, the customs fees are available for  limited purposes. Not all of these purposes are associated with conducting  inspections, and not all inspection activities are reimbursable. Even if all  the costs were reimburseable, according to CBP, the fees collected still  would not cover the full inspection costs. This misalignment, coupled with  the problems in stakeholder communication described in the previous  section, have created confusion and misunderstandings, and in some cases  the misimpression among stakeholders that CBP in particular is using the  air passenger fee collections inappropriately. Furthermore, the collection  process itself is complex and presents challenges for CBP and the airlines.  Finally, the tools provided to the agencies to ensure the airlines’  compliance are not applied consistently and, contrary to strategies  associated with effective incentives and penalties, do not provide  progressively stronger disincentives for noncompliance (i.e., a graduated  penalty system).
subsections: section_title: There Is a Disconnect between What Customs User Fees Can Pay for and Activities Involved in Customs Inspections
paragraphs: The activities that can be funded by passenger inspection collections vary  among the fees and are specified in statute. Principles of effective user fee  design suggest that fees should be aligned with the costs of the activities  for which the fee is collected. The agriculture and immigration statutes  generally permit the Secretaries of Agriculture and Homeland Security to  cover costs associated with agricultural and immigration inspection  activities. In contrast, the customs user fee collections are available for  limited purposes. Under the customs authorizing statute, passenger  inspection fee collections are only available to reimburse appropriations  for a limited, prioritized set of activities, including general deficit  reduction, overtime and premium pay, retirement and disability  contributions, preclearance services, and foreign language proficiency  awards. Customs inspection-related activities that occur while a CBP  officer is earning overtime, premium pay, or during preclearance can be  funded by the user fees, but the customs fee is not authorized to fund  customs-inspection activities that occur beyond these times. Moreover,  the customs air passenger fee can be used for overtime and premium pay  as well as retirement and disability contributions for CBP officers for time  spent conducting inspections regardless of whether the CBP officers are  inspecting passengers at air, sea, or land ports of entry. Therefore, under  current law not all activities that may be funded from the customs fee (see  table 4) are necessarily associated with conducting air passenger  inspections (see table 5), and not all inspection activities are reimbursable,  that is, can be covered by funds from the user fee account.
50 full-time equivalent inspectional positions to provide preclearance services.
section_title: Airlines Collect Fees When Tickets Are Sold Rather Than When Passengers Travel, Which Makes It Difficult for Agencies to Verify Collection and Payment
paragraphs: Despite a unified collection process for the three fees, CBP faces  challenges in verifying individual passenger payment and accurately  determining each airline’s liability. By law, the ticket seller (i.e., the airline  or ticket agent) must collect the applicable passenger inspection fees from  the passenger at the time the ticket is sold. Tickets can be sold up to a  year in advance, and CBP has no independent documentation on which to  calculate liability. Therefore, CBP cannot match the fees paid to individual  passengers. The only way CBP can independently confirm that  passengers traveling to the United States have paid the requisite inspection  fees is through postremittance audits. To remedy this, CBP would like to  move to a system wherein airlines remit fees based on the passengers  transported into the United States. CBP could then track the remittances  to the number of passengers per flight by comparing them to the airplane  manifest data and “onboard” counts that airlines already provide to CBP.  According to CBP officials, if the fees were remitted based on passengers  transported, there would be little need for auditing carrier remittance  since CBP would be able to automatically calculate and verify airline  liability.
Airline and Air Transport Association (ATA) officials with whom we spoke  said that changing from a ticket-based collection system to a passenger- transported collection system poses challenges to airlines. First, the airline  that transports the passenger is not always the airline that sold the ticket.  This means that in a manifest-based system the airline responsible for  remitting a fee might not be the airline that collected it from the passenger.  Nearly all United States airlines use the “interlining” system, in which one  airline can contract with another to provide transportation for one or more  segments of a passenger’s journey. Under the current ticket-based  collection system, on an interlined ticket the airline that sells the ticket  remits the fee, regardless of which airline transports the passenger into the  United States. For example, a passenger who purchases a Madrid-Paris- New York ticket from ABC airline pays the fee to ABC airline even if he  flies ABC from Madrid to Paris and XYZ from Paris to New York. Airline  ABC is liable for the fee and remits it to the U.S. government. However,  under CBP’s original proposed passenger-transported system, the liability  for remitting the fee would fall on airline XYZ—the airline that brought the  passenger into the country—even though ABC airline sold the ticket and  collected the fee. As a result, airline XYZ—the airline that transported the  passenger into the United States—would have to ensure not only that ABC  paid airline XYZ for the ticket but also that it collected and transferred the  correct fees.
According to CBP officials many foreign-owned airlines already remit the  fees based on passengers transported, though these payments are in  violation of the statute, and the International Air Transport Association  (IATA) reports that the manifest-based remittance system is common in  other countries that collect similar fees. Nevertheless, airlines and ATA  officials said that transition costs would be significant—though limited to  the first year—because airlines begin selling tickets for a flight 1 year in  advance, and as a result they would have to maintain two separate  remittance systems—ticket-based and passenger-transported-based—for a  full year. Airlines question the need for such a change. Officials from two  major airlines noted that CBP’s audits put their remittance error rate at  less than 1 percent. CBP officials concur that for the six to seven major  domestic airlines the remittance error rate is extremely low, but as we will  discuss, error and timely remittance rates for small and medium-sized  airlines are more problematic. A shift to a passenger-transported system  would, they argue, increase the ability of CBP’s finance office to determine  the compliance of smaller airlines and potentially reduce CBP’s audit  costs.
In addition, the airlines also see fee collection as a cost they incur over  and above the cost of the audits. To help offset collection costs, airlines  are permitted to keep the “interest float”—that is, the interest income that  accrues between the quarterly remittances. Airline representatives view  this as minimal for two reasons. First, in the recent era of low interest  rates, the interest float is small; airline officials told us that it covered as  little as 38 percent of collection costs. This would decline even further if  CBP moves to monthly remittance as it suggests it will in its legislative  proposal. Second, airline and airline industry officials said credit card  transaction fees averaging 2.15 percent on the total transaction—including  taxes and fees as well as the ticket price—further reduce the benefit.  Another user fee collected by airlines on behalf of the government—the  passenger facility charges (PFC)—has a provision that is designed to  compensate for the actual cost of collections, in addition to the interest  float. The airlines told us they would prefer this type of direct  compensation for their collection role, similar to the PFC.
section_title: Compliance Tools Do Not Provide a Graduated Penalty System to Encourage Airline Remittance
paragraphs: The tools used to ensure airline compliance do not provide optimal  incentives for airlines to make accurate and timely payments. We have  previously reported that rewards and penalties should correspond to  performance. Although each fee contains enforcement mechanisms  meant to encourage airlines to remit the correct fee amount on time— namely the carrier bond associated with the customs fee, the denial of  landing rights for the customs and immigration fees, and the penalties and  interest associated with the agriculture and immigration fees—none are  designed in this manner. For the customs fee, CBP is authorized to require  airlines to maintain a carrier bond, which is used both to enforce payment  of inspection fees and to encourage airlines to comply with inspection- related requirements, such as submitting complete Advance Passenger  Information System (APIS) data prior to takeoff. In addition, airlines that  do not remit the customs fee timely—or not at all—are charged liquidated  damages for breach of bond conditions that are equal to twice the fee  amount owed for each violation, whether it is the first violation or a repeat  violation. CBP officials said they have issued liquidated damages against  20–25 airlines on average per quarter since 2003 for late payment or  nonpayment.
For the immigration and agriculture fees, the agencies may require airlines  to pay interest and penalties because of late payment or nonpayment. CBP  officials said the interest and penalty rates charged for late payments are  set by the Treasury Department and do not provide for increasing interest  or penalty rates, or both, for repeated instances of late or nonpayment.  Thus an airline that repeatedly pays late—or not at all—is charged the  same interest and penalty amount each time, which may just offset the  interest the airline earned by not remitting user fee collections in the first  place. Therefore, CBP officials said the penalty is not high enough to  discourage violations.
CBP is also authorized to deny landing rights if the airline does not remit  customs and immigration fees. However, this tool suffers from the very  opposite design flaw: it is perceived to be too severe to invoke. CBP  officials said that denying landing rights is such a severe penalty that its  very existence—infrequent application notwithstanding—is effective  enough to discourage late payment or nonpayment of passenger  inspection fees by the airlines. However, even in cases of carrier  nonremittance or chronic late remittance, CBP officials said CBP has  threatened to use this authority to deny landing rights on four occasions— twice against the same airline—in nearly 20 years. Three of these instances  occurred in 2007. We have previously reported that penalties may lose  their effectiveness and credibility over time if they are not executed  consistently.
section_title: CBP Does Not Employ a Systematic Process for Selecting Airlines for Audit
paragraphs: Officials said there is no standard set of criteria used to guide the selection  of airlines for audit. The audit function for all three inspection fees is  consolidated within CBP’s Office of Regulatory Audit, and all audits cover  all three fees. Approximately 385 airlines remit immigration and  agriculture fees, and 290 airlines remit the customs fee. CBP audits about  50 carriers annually to test for compliance. CBP’s Office of Finance  recommends airlines for audit based on a number of factors, including  whether a carrier’s remittance dropped substantially from one quarter to  the next, news articles about changes in flights or airline financial issues,  and prior audit findings. Experience and judgment also come into play.  Officials are responsible for processing the same airlines’ payments every  quarter and become “experts” on those airlines and the normal trends in  their remittances. Although this flexibility and individualized  understanding of the airlines is important, we have previously reported  that developing internal controls is key to minimizing the risks that may  prevent an agency from meeting its objective. Documenting selection  criteria could also protect the agency when experienced officials leave the  agency. CBP officials told us that although the larger airlines generally  present a much lower risk of noncompliance or incomplete remittance,  they are audited every couple of years because the record-keeping  requirements are so burdensome. In addition, if CBP audited a large airline  only once every 5 years, the audit would be very resource-intensive.  Nevertheless, the fact that there is significantly more volatility in  compliance by small and mid-sized airlines and those offering seasonal  flights means they require more audit attention. For context, in a 5-year  sample of 16 airlines, the 11 airlines with the smallest passenger volume  rate remitted the passenger inspection fees late 35 times. These 11 airlines  represented 14.6 percent of total international passenger volume—slightly  larger than that of the single largest airline in the sample.
section_title: Certain Elements Have the Potential to Undermine Any Effort to Consolidate the Fees
paragraphs: As we have discussed, the challenges related to the passenger inspection  user fees result both from inconsistencies among the fees—making them  difficult to administer—and from specific design elements within the  individual fees. For example, agencies face difficulties distributing the fee  collections, both because they disagree on how to allocate the receipts  among them, and because the process of transferring the funds from one  agency or appropriation to another complicates agency budget execution.  Moreover, the statutory structure does not permit the administering  agencies to easily verify collection and payment, and the customs fee does  not permit reimbursement for many activities directly associated with air  passenger inspections. These issues should be considered regardless of  whether the fees are consolidated.
As discussed earlier, we have previously reported on a number of  principles that could inform efforts such as these to redesign or  consolidate these fees. Understanding the trade-offs inherent in various  fee design elements and the likely consequences of various design choices  with respect to efficiency, equity, revenue adequacy and administrative  burden can help policy makers carefully weigh the likely effects of various  policy decisions and move discussion and debate to a more informed  plane.
section_title: Conclusions
paragraphs: Although the need to address some of the user fee challenges presented in  this report may appear obvious, how to accomplish this is less clear. Any  changes made to one fee should be designed to complement rather than  conflict with the other two fees. Moreover, although whether and how to  consolidate the international passenger inspection fees is ultimately a  policy decision Congress must make, it is important to note that  consolidating the passenger inspection fees absent other changes will not  eliminate some of the administrative and operational challenges agencies  and stakeholders currently encounter. In some cases the origins of these  challenges lie in the statutory structure of the fees themselves, and not  their lack of consolidation.
Any consolidation effort that neglects to consider these issues is unlikely  to have the desired effect:    Unless agencies present a comprehensive picture of the three fees,  including the full scope of inspection activities and their costs, Congress  will lack a complete picture of whether the fees work in concert or  conflict with each other, which could hamper oversight. Furthermore,  agencies will be less able to develop and maintain the partnerships  necessary to collect and distribute the fees as efficiently and effectively as  possible.
The lack of complete cost data and regular, formal opportunities to share  such information can prevent the agencies from addressing existing issues,  including differences in forecasting assumptions and lack of agreement on  activity costs, standardized audit selection criteria, and the design and  implementation of a graduated penalty system to encourage and enforce  airline compliance.
More broadly, if agencies cannot determine whether these fees are  recovering costs, Congress cannot be sure that resources are allocated to  the activities it most values.
Likewise, without substantive, transparent coordination between agencies  and stakeholders, agencies will not be able to effectively address  administrative burdens such as disparate airline record-keeping  requirements among the fees.
The principles of effective user fee design discussed earlier in this report  can both offer a framework for considering the implications of various  statutory structures and help clarify and illuminate the trade-offs  associated with various policy choices available to Congress associated  with amending the individual statutes related to passenger inspection fees  or consolidating all or part of them into a single passenger inspection fee.  Such a framework could also provide the basis for future reviews of  federal user fees as Congress works to ensure that user fee financing  mechanisms remain relevant and up-to-date.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretaries of Agriculture and Homeland Security  take the following seven actions:    direct CBP, ICE, and APHIS to make information on the estimated cost of  inspections as well as the basis for these cost estimates readily available to  affected parties to improve the transparency and credibility—and hence  the acceptance by stakeholders and payers—of the processes for setting,  collecting, and distributing the fees;    direct CBP, ICE, and APHIS to collaborate on agendas, presentations, and  discussions with stakeholders for the CBP Airport and Seaport Inspections  User Fee Advisory Committee (Advisory Committee) meetings in order to  improve the usefulness of these meetings for both agencies and fee  stakeholders;    consolidate reporting of the passenger inspection fees, to include the  activities and proportion of fees for which CBP, ICE, and APHIS are each  responsible to provide a comprehensive picture of the user fees  supporting the passenger inspection process;    develop a legislative proposal in consultation with Congress on a  consolidated, graduated penalty system that reflects airline payment  history and includes specific administrative procedures regarding when  penalties should be invoked in order to improve the effectiveness of the  tools for enforcing payment of passenger inspection fees;    develop a legislative proposal in consultation with Congress on a single,  common set of airline record-keeping requirements for all three passenger  inspection fees that reflects the consolidated audit function for these fees  and reduces the administrative burden on airlines;    develop a legislative proposal in consultation with Congress to eliminate  key differences among the fourth quarter remittance requirement for the  immigration fee; and    develop and implement common assumptions used to forecast the  collections of agriculture quarantine inspection activities in order to more  closely tie the fee rate to CBP’s and APHIS’s agriculture fee distribution to  actual collections.
Further, we make the following three recommendations to the Secretary  of Homeland Security:    develop and implement formal written guidance on factors to be  considered in selecting airlines for audit, including factors intended to  reflect the risk of non- or incomplete payment;    complete development of and report on ICE’s activity costs to ensure the  immigration fee is divided between ICE and CBP according to their  respective proportion of immigration inspection activity costs. Further, if  the study shows that immigration activity costs exceed collections,  develop a legislative proposal in consultation with Congress to adjust the  immigration fee to recover costs as closely as possible, per statute; and    direct CBP and ICE to develop and implement a fee-sharing memorandum  of understanding (MOU) to include time frames for when funds would be  transferred and to provide for periodic review and update.
section_title: Matter for Congressional Consideration
paragraphs: harmonizing the passenger exemption and statutory definitions across the    eliminating the differences among the three fees in the authority to set fee    whether it wishes the customs fee to be a full cost recovery fee, and  reviewing the activities that may be reimbursed by the customs fee  collections.
section_title: Agency Comments & Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of the Departments of  Homeland Security (DHS) and Agriculture for review and received  comments from both agencies that are reprinted in appendixes II and III.  In addition, DHS provided technical corrections, which were incorporated  as appropriate. DHS and USDA concurred with our recommendations, and  provided additional comments for our consideration.  We also provided  portions of the report for non-federal stakeholder review and made  technical corrections where appropriate.
While DHS concurred with our recommendations to work with Congress  to (1) develop a graduated penalty system, (2) develop a common set of  airline record-keeping requirements, (3) eliminate the differences in the  fourth quarter remittance requirements for airlines, and, if needed, (4)  increase the immigration passenger inspection fee, by developing  legislative proposals to address these issues, DHS officials said  implementing these individually could take several years and only address  the challenges in the air passenger environment.  In recommending these  separately we did not intend to imply that they should be addressed  separately and recognize that the agencies could address these issues in a  single legislative proposal. Further, since this engagement only reviewed  air passenger inspection fees we limited our recommendations to those  fees.
We are sending copies of this report to the Secretaries of Homeland  Security and Agriculture and interested congressional committees. We will  also make copies available to others on request. In addition, this report  will be 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) 512-9142 or irvings@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 making major contributions to this report are  listed in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: The objectives of this report were to identify how the three separate  passenger inspection user fees are set, collected, and distributed and the  benefits and challenges of this process for agencies and stakeholders, and  implications of consolidating these fees under the Department of  Homeland Security (DHS).
To meet these objectives, we reviewed the passenger inspection user fee  legislation and guidance, agency documents, and literature on user fee  design and implementation characteristics, and interviewed officials  responsible for managing user fees at the Customs and Border Protection  (CBP) offices in Washington, D.C., and from the New York/New Jersey,  Miami and Seattle Regional Offices, Immigration and Customs  Enforcement (ICE), and Animal and Plant Health Inspection Service  (APHIS). We observed the inspections process and interviewed CBP  officials responsible for port management and certain airport and airline  officials involved with international passenger processing or the three  passenger inspection fees. We did not assess the effectiveness of these  inspections. We reviewed audit and cost data related to air passenger  inspection activities. We also asked questions about CBP’s and APHIS’s  internal controls for the data we used and determined that the data are  sufficiently reliable for the purposes of this report. However, it was  beyond the scope of this report to evaluate the reliability of the cost data  for purposes beyond this report.
We also interviewed APHIS, CBP, and ICE officials responsible for  managing the user fees and auditing the user fee collections at DHS and  the Department of Agriculture.
We also met with officials from Continental Airlines, American Airlines,  Air Transport Association, International Air Transport Association,  Airports Council International-North America, Miami-Dade County  International Airport, New York/New Jersey Port Authority, Bush  Houston-Intercontinental International Airport, Dallas-Fort Worth  International Airport, San Francisco International Airport, and Seattle- Tacoma International Airport. We also met with and reviewed documents  from the travel industry organization, the Discover America Partnership.
To select the airlines and airports to meet with, we reviewed Bureau of  Transportation Statistics data on the volume of international air  passengers and number of international flights and consulted with officials  from government and industry associations. To select industry  stakeholders to meet with, we consulted government agency officials and  reviewed CBP’s Airport and Seaport User Fee Advisory Committee  membership.
We performed our work from October 2006 through August 2007 in  accordance with generally accepted government auditing standards.
section_title: Appendix II: Comments from the Department of Homeland Security
section_title: Appendix III: Comments from the Department of Agriculture
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: Jacqueline M. Nowicki (Assistant Director) and Chelsa Gurkin managed  this assignment. Robin Freshwater and Amy Rosewarne made key  contributions to all aspects of the report. Susan Etzel, Terrance N. Horner  Jr., Jessica Nierenberg, Kathleen Padulchick, and Jack Warner also  provided assistance. In addition, Carlos Diz and Pedro Briones provided  legal support and Donna Miller developed the report’s graphics.