Homeland Security: Challenges Facing the Department of Homeland Security in Balancing its Border Security and Trade Facilitation Missions
Published: 2003-06-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Balancing our nation's security and commercial needs is a longstanding issue that is especially important in the aftermath of the September 11, 2001, terrorist attacks that changed the nation's security environment. Addressing this challenge now falls principally to the Department of Homeland Security (DHS) and its Border and Transportation Security directorate. Within this directorate, responsibility has been assigned primarily to the Bureau of Customs and Border Protection (BCBP). BCBP consists of the inspections component of the former U.S. Customs Service; the Border Patrol and Inspections component of the former Immigration and Naturalization Service, and a former component of the U.S. Department of Agriculture, the Animal and Plant Health Inspection Service. Achieving the balance between security and commercial needs is greatly affected by BCBP's commercial and border and immigration control workload. Regarding commercial workload, in fiscal year 2002, the former U.S. Customs Services processed 24.9 million trade import entries valued at over $1.1 trillion and collected $23.8 billion in duties and fees; it also processed about 6 million cargo containers arriving at U.S. sea ports. While the cargo workload has stabilized somewhat as a result of the recent global economic slowdown, it is likely to begin growing again, when an economic recovery is underway at some point in the future, thus exacerbating the challenges BCBP faces. Regarding border and immigration control workload, in fiscal year 2002, inspectors at over 300 ports of entry inspected nearly 450 million travelers while the Border Patrol apprehended nearly 960,000 aliens trying to enter the U.S. illegally between the ports of entry.
section_title: What GAO Found
paragraphs: With respect to cargo, BCBP has attempted to select and inspect the highest-risk incoming cargo, while enabling legitimate cargo to be cleared in a timely manner. These efforts pose a range of challenges, from the availability of threat assessments and actionable intelligence to the capability of nonintrusive inspection technology to detect potentially harmful contraband. BCBP has made some progress in implementing initiatives that are designed to improve the efficiency of its regulation of legitimate commercial activities. But, additional challenges remain, including the need to improve its trade compliance program and to successfully implement its new trade processing information system. BCBP also faces many challenges with respect of preventing illegal entry by individuals into the United States. These challenges impact BCBP's ability to detect and deter illegal entry between ports of entry and to identify those individuals who should not be permitted entry at the ports. BCBP is faced with continuing to implement its southwest border strategy while simultaneously addressing emerging concerns over illegal entry along the northern border, mitigating the negatives affects the strategy may have on communities, and responding to continuing concern over the safety of aliens who cross in remote and desolate areas. At our nation's borders, the challenges include detecting false admissibility documents, unifying and enhancing inspector training, and providing timely intelligence to the field, and successfully implementing the new entry-exit system. In our recent Performance and Accountability series report, we designed implementation and transformation of DHS as high risk based on three factors. First, the implementation and transformation of DHS is an enormous undertaking that will take time to achieve in an effective and efficient manner. Second, components to be merged into DHS, including those forming BCBP, already face a wide array of existing challenges, some of which are described in this statement. Finally, failure to effectively carry out its mission would expose the nation to potentially very serious consequences.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the longstanding challenge of  balancing our nation’s security and commercial needs, an issue that is  especially important in the aftermath of the September 11, 2001, terrorist  attacks that changed the nation’s security environment. Addressing this  challenge now falls principally to the Department of Homeland Security  (DHS) and its Border and Transportation Security directorate. Within this  directorate, the responsibility has been assigned primarily to the Bureau of  Customs and Border Protection (BCBP). BCBP consists of the inspections  component of the former U.S. Customs Service; the Border Patrol and  Inspections components of the former Immigration and Naturalization  Service (INS); and a former component of the U.S. Department of  Agriculture, the Animal and Plant Health Inspection Service (APHIS).
Achieving the balance between security and commercial needs is greatly  affected by BCBP’s commercial and border and immigration control  workload. Regarding commercial workload, in fiscal year 2002, the former  U.S. Customs Service processed 24.9 million trade import entries valued at  over $1.1 trillion and collected $23.8 billion in duties and fees; it also  processed about 6 million cargo containers arriving at U.S. sea ports.  While the cargo workload has stabilized somewhat as a result of the recent  global economic slowdown, it is likely to begin growing again when an  economic recovery is underway at some point in the future, thus  exacerbating the challenges BCBP faces. Regarding border and  immigration control workload, in fiscal year 2002, inspectors at over 300  ports of entry inspected nearly 450 million travelers while the Border  Patrol apprehended nearly 960,000 aliens trying to enter the U.S. illegally  between the ports of entry.
BCBP faces many challenges as it performs its important missions. In my  testimony today, I make the following points:    With respect to cargo, BCBP has attempted to select and inspect the  highest-risk incoming cargo, while enabling legitimate cargo to be cleared  in a timely manner. These efforts pose a range of challenges, from the  availability of threat assessments and actionable intelligence to the  capability of nonintrusive inspection technology to detect potentially  harmful contraband. BCBP has made some progress in implementing  initiatives that are designed to improve the efficiency of its regulation of  legitimate commercial activities. But, additional challenges remain,  including the need to improve its trade compliance program and to  successfully implement its new trade processing information system.
BCBP also faces many challenges with respect to preventing illegal entry  by individuals into the United States. These challenges impact BCBP’s  ability to detect and deter illegal entry between ports of entry and to  identify those individuals who should not be permitted entry at the ports.  BCBP is faced with continuing to implement its southwest border strategy  while simultaneously addressing emerging concerns over illegal entry  along the northern border, mitigating the negatives affects the strategy  may have on communities, and responding to continuing concerns over  the safety of aliens who cross in remote and desolate areas. At our nation’s  borders, the challenges include detecting false admissibility documents,  unifying and enhancing inspector training, providing timely intelligence to  the field, and successfully implementing the new entry-exit system.
In our recent Performance and Accountability series report, we designated  implementation and transformation of DHS as high risk based on three  factors. First, the implementation and transformation of DHS is an  enormous undertaking that will take time to achieve in an effective and  efficient manner. Second, components to be merged into DHS, including  those forming BCBP, already face a wide array of existing challenges,  some of which are described in this statement. Finally, failure to  effectively carry out its mission would expose the nation to potentially  very serious consequences.
My testimony today is intended to provide an overview based primarily on  the results of work that we have completed in recent years, namely, our  Performance and Accountability Series and High-Risk reports related to  DHS, Justice and Treasury; DHS’s international mail and package  inspection processes; DHS’s acquisition and deployment of radiation  detection equipment; the Border Patrol’s southwest border strategy;  DHS’s spending plans for its planned system to monitor the flow of foreign  nationals in and out of the United States; and our investigators’ efforts to  enter the country using fraudulent documents. My testimony also  highlights our ongoing work related to cargo inspections and individual  inspections at land ports of entry.
subsections: section_title: Challenges Related to Cargo Processing
paragraphs: BCBP has undertaken efforts to focus its enforcement on selecting and  inspecting the highest-risk incoming cargo, while enabling legitimate cargo  to be cleared in a timely manner. It has a number of initiatives underway  aimed at improving its ability to identify potentially risky cargo for  inspection. BCBP and Customs before it have longstanding efforts to use  information, personnel, and technology to identify such cargo. These  efforts pose a range of challenges, from the availability of threat  assessments and actionable intelligence to the capability of nonintrusive  inspection technology to detect potentially harmful contraband. From a  trade facilitation perspective, BCBP has made some progress in  implementing initiatives that are designed to improve the efficiency of its  regulation of commercial activities. But additional challenges remain,  including the need to improve its evolving trade compliance program and  acquire a new trade processing system.
subsections: section_title: Major Cargo Security Initiatives
paragraphs: According to the Commissioner of BCBP, the priority mission is to prevent  terrorists and terrorist weapons from entering the United States. This  important mission means improving security at our physical borders and  ports of entry, as well as extending the zone of security beyond our  physical borders. BCBP has a number of initiatives underway aimed at  improving security, including:    Container Security Initiative, which stations BCBP personnel in key  international ports to examine high-risk cargo before it is placed on ships  bound for the United States.
Customs-Trade Partnership Against Terrorism and the Free and Secure  Trade Program, which are designed to increase supply chain security and  expedite the clearance of legitimate trade.
Non-Intrusive Inspection technology, which increases the ability to detect  conventional explosives, nuclear weapons, radioactive components, and  other weapons of mass destruction.
Automated Targeting System, which is used by the National Targeting  Center and field targeting units in the United States and overseas to help  target high-risk cargo and passengers entering the United States.
We have work underway to review most of these initiatives and will make  our results available to the Subcommittee as soon as the work is  completed.
section_title: Selecting Highest-Risk Cargo for Inspection
paragraphs: Separating high-risk cargo from low- or no-risk cargo is extremely  important to BCBP because searching each and every cargo and traveler  that enters the United States would cripple the flow of legitimate trade and  travel and would require a huge resource commitment. Over the years  Customs has recognized that it needed to identify what is high risk—and  to do so as early in the process as possible—and target its limited  resources accordingly. To select, or “target,” and inspect the highest-risk  cargoes and travelers, BCBP relies on the use of threat assessments and  actionable intelligence, the ability of inspectors to quickly discover or  sense an unlawful cargo, and the use of nonintrusive inspection  technology to detect potentially harmful contraband. Each of these poses  challenges to BCBP.
Information is key to identifying high-risk cargo. Such information can  come from manifests for air and sea shipments, from importers, or from  intelligence units within or outside DHS. Accurate information can help  BCBP make reliable risk determinations, particularly when it is used in  DHS computerized models that help assess cargo risk. Obviously, when  information or intelligence is incomplete or unreliable, it can adversely  impact on BCBP’s ability to identify potentially risky cargo for inspection.
We are currently reviewing how BCBP is targeting cargo for further  inspection and how such cargo is inspected at ports. In this regard, we are  reviewing how BCBP developed the model used in targeting, how BCBP is  handling the targets generated by the model at sea ports, and whether and  how BCBP intends to evaluate targeting. Since this work is ongoing, and  involves information that BCBP also considers to be law enforcement  sensitive, we are precluded from discussing specific aspects of this matter  in this unclassified statement. However, in the broadest terms, our work to  date shows that BCBP’s targeting efforts face a range of challenges  relating to threat assessments, actionable intelligence, and nonintrusive  inspection technology.
Having sufficient numbers of well-trained and motivated staff is also key  to identifying high-risk cargo. Inspectors and canine officers are trained to  detect unusual or abnormal behaviors or circumstances that suggest a  potential threat or unlawful activity. Many have developed a “sixth sense”  in that they pick up on latent clues and unconnected information.  Nevertheless, these inspectors are challenged by the tight timeframes and  pressures they work under to move legitimate cargo through the ports.
Our recent work on the inspection of international mail showed that  relying on inspectors alone can increase the risk that contraband enters  the country. The inspection of incoming foreign mail remains largely a  manual process that relies primarily on physical examination. We found  several challenges relating to this process, but BCBP’s determination that  our results were law enforcement sensitive precludes our discussing them  here. However, at the time our work was completed, one courier was  working with the former Customs Service to pilot test an advance manifest  system—a computerized database that receives cargo manifest  information. The database is intended to allow Customs to analyze  incoming package information and make more informed decisions about  what packages to inspect.
In addition to information and staff, technology provides for a more  effective and efficient process. Large-scale x-ray and gamma–ray imaging  systems, portal radiation monitors, and portable and hand-held radiation  detection devices can reduce the need for costly, intensive inspections and  save inspection time and resources.
As important as the use of technology is, there are certain limitations and  challenges that need to be considered. For example, we reviewed  Customs’ acquisition and deployment of radiation detection equipment.  We found that some of the radiation detection equipment being used— radiation pagers—have a limited range and are not designed to detect  weapons-usable nuclear material. Furthermore, experts we contacted did  not view pagers as search instruments but rather as personal safety  devices. We plan to report later this summer on BCBP’s acquisition and  deployment of radiation detection equipment.
section_title: Assuring the Timely Flow of Legitimate Cargo
paragraphs: In trying to achieve the commercial-security balance, BCBP is challenged  to ensure that antiterrorism efforts do not slow the flow of legitimate  international commerce and travel. According to BCBP, it has worked  with importers on concerns such as where their goods originated, the  physical security and integrity of their overseas plants and those of their  foreign suppliers, the background of their personnel, the means by which  they transport goods, and those who they have chosen to transport their  goods into the country. BCBP has reaffirmed to importers the importance  of knowing their customers and has examined the security practices of  their freight forwarders and the routes their shipments travel.
Although BCBP has made some progress in implementing initiatives that  are designed to improve the efficiency of its regulation of commercial  activities, additional challenges remain, particularly in view of the new and  heightened emphasis on terrorism. These challenges include (1)  continuing to improve its evolving trade compliance program and (2)  acquiring a new trade processing system.
subsections: section_title: Implementing the Customs Modernization Act
paragraphs: Although tempered recently by the global economic slowdown, growth in  the volume and value of imports continues to create profound challenges  for BCBP to facilitate and enforce U.S. trade laws and regulations. The  volume of trade is expected to surpass $2 trillion in the year 2006. To  speed the processing of imports and improve compliance with trade laws,  specifically, the Customs Modernization and Informed Compliance Act of  1993 (also known as the “Mod Act”), BCBP’s predecessor, Customs,  developed an “informed compliance strategy.”
In 1999, we recommended that the Customs Service develop and  implement an evaluation of the effectiveness of its informed compliance  strategy. Customs agreed with our recommendation and completed its  Trade Compliance Strategy Study on May 24, 2001. The study indicated  that the strategy improves compliance, but the impact on overall  compliance rates is small. For example, one initiative, the Company  Enforced Compliance Process (CECP), was to address large importers’  noncompliance that had a significant negative impact on the overall  national compliance rates. According to the study, Customs was to punish  noncomplying companies by imposing “confirmed risk” designations,  increasing examinations, removing privileges, and referring for penalties.  However, the confirmed risk status was only used six times, and loss of  privileges and referral for penalties were never used. The study concluded  that CECP was not much of an enforced compliance process, and it was  discontinued.
On the other hand, the study found that the companies’ compliance rates  increased after they participated in the other initiatives such as  compliance assessment and account management initiatives. While it is  not possible to attribute the increase in compliance totally to these  initiatives, the study concluded that these programs had a positive impact.
section_title: Acquiring a New Trade Processing System
paragraphs: Customs’ ongoing effort to acquire a new trade processing system is key to  modernizing how Customs tracks, controls, and processes all commercial  goods imported into and exported out of the United States. This large and  complex system, known as the Automated Commercial Environment  (ACE), is expected to cost about $1.7 billion and is to replace Customs’  antiquated system. Expected benefits from ACE include speeding the flow  of legitimate commerce into and out of the United States, identifying and  targeting high-risk commerce requiring greater scrutiny, and providing a  single interface between the trade community and the federal government  for trade data. In April 2001, Customs awarded a 5-year contract, with  options to extend the contract to not more than 15 years, to a system  integrator responsible for developing and deploying ACE.
Successfully managing a project as large and complex as ACE is a  challenging undertaking. Over the last 4 years, we have reported on ACE  and recommended steps Customs needed to take to minimize project  risks. To its credit, Customs has taken action to implement our  recommendations, as follows:    We recommended Customs incrementally justify the ACE investment.
Customs defined and committed to implement process controls for  justifying and making ACE investment decisions incrementally. After  implementing the first ACE release, Customs plans to verify that actual  costs and benefits meet expectations and plans to continue this  incremental investment approach for the remaining ACE releases.
We recommended Customs ensure ACE alignment with its enterprise  architecture. Customs ensured that its enterprise architecture contained  sufficient detail to build the first ACE release and has aligned the release  with the enterprise architecture. Customs plans to continue to extend its  enterprise architecture as necessary to build subsequent ACE releases.
We recommended Customs have sufficient human capital resources.
Customs developed and plans to implement a human capital management  strategy for the Customs modernization office, which is responsible for  managing the ACE acquisition.
We recommended Customs develop rigorous and analytically verifiable  cost estimating. Customs began developing and plans to implement a cost- estimating program that employs the tenets of effective cost estimating as  defined by the Software Engineering Institute (SEI).
We recommended Customs employ effective software acquisition  processes. Customs continues to make progress and has plans to establish  effective software acquisition process controls, as embodied primarily in  the second level of SEI’s Software Acquisition Capability Maturity Model.
Customs has made progress in implementing some, but not all, of our  recommendations. Moreover, because Customs is in the early stages of  acquiring ACE, many challenging tasks remain before Customs will have  implemented full ACE capability.
section_title: Challenges Related to Immigration Control
paragraphs: To prevent illegal entry of individuals into the United States between the  ports of entry, BCBP has deployed significant resources but estimates  significantly more are needed. Continued implementation of the southwest  border strategy faces a range of challenges, including meeting hiring goals  and obtaining needed approvals to deploy fencing and technology to  implement its strategy while simultaneously addressing emerging  concerns over illegal entry along the northern border, mitigating the  negatives affects the strategy may have on communities that experience an  increase in illegal alien traffic, and responding to continuing concerns over  the safety of aliens who cross in remote and desolate areas. At our nation’s  ports, BCBP faces an array of challenges, including improving inspectors’  ability to verify the identity of travelers and whether they can be admitted  into the country, unifying and enhancing inspector training, and complying  with the congressional mandate to implement a system to track the entry  and exit of all aliens.
subsections: section_title: Deterring Illegal Entry between the Ports of Entry
paragraphs: Deterring illegal entry between the nation’s ports of entry will continue to  be a challenge for BCBP. In previous work, we reported that the Border  Patrol had estimated that significantly more resources would be needed to  fully implement its border control strategy and that various factors had  impeded the Border Patrol’s ability to implement its strategy as originally  planned.
Since 1994, the Border Patrol has been implementing a phased strategy to  increase deterrence to illegal entry beginning, first, with the areas that had  the largest influx of illegal aliens. The strategy postulated that as resources  were applied in one area, the flow of illegal alien traffic would shift to  other locations along the southwest border where resources had yet to be  applied.
In our last report on the southwest border strategy in August 2001, we  reported that the Border Patrol estimated it would need between 11,700  and 14,000 agents, additional support personnel, and hundreds of millions  of dollars in additional technology and infrastructure to fully implement  the Southwest border strategy. We reported that it would take at least 5  more years (until 2006) to reach the minimum number of agents the  Border Patrol believed it needed along the Southwest border if (1) the  administration’s agent hiring goals at that time were maintained and met  and (2) all new agents were deployed to the southwest border. However,  this estimate was made before the September 11, 2001, attacks and the  subsequent concerns regarding the need for additional resources to deter  illegal entry along the northern border.
BCBP continues to face hiring challenges to meet its estimated needs. The  Border Patrol currently has about 9,500 agents deployed along the  southwest border. While nearly a 3-fold increase from the 3,400 agents the  Border Patrol had along the southwest border in 1994, it is still about 2,200  agents short of the minimum number, 11,700, the Border Patrol said it  needed to fully implement the southwest border strategy. Currently, the  Border Patrol has 567 agents deployed along the northern border.
We also reported on various factors that had impeded the Border Patrol’s  ability to implement its strategy, some of which still appear to be  problematic. For example, it had taken the Border Patrol longer to  implement the strategy than originally planned because, among other  things, the Border Patrol experienced difficulties hiring agents and delays  in obtaining approvals needed to deploy technology and build fences.
The Border Patrol also recognized the need to make outreach efforts to  communities because its initial failure to warn some communities about  anticipated increases in illegal alien traffic caught community officials by  surprise and angered some residents due to the negative effects the  increased traffic had on the community. When apprehensions surged in  communities into which the illegal alien traffic was reportedly pushed,  officials and residents in one community reported experiencing loss of  business, destruction of private property, and environmental degradation.  Concerns have been raised over the environmental impact of current plans  to build additional fencing along the border in Arizona. A recent news  article described how some local residents in the border area southwest of  Tucson, Arizona, are patrolling the border to report illegal crossings  raising the concern of law enforcement officials. The Border Patrol has  realized its goal of shifting illegal alien traffic away from urban areas into  more remote areas. However, rather than being deterred from attempting  illegal entry, many aliens have instead risked injury and death by trying to  cross mountains, deserts, and rivers. This prompted the Border Patrol to  implement a Border Safety Initiative consisting of, among other things, a  media campaign to warn aliens about the dangers of crossing illegally, as  well as establishing search-and-rescue units.
We further reported in August 2001 that although alien apprehensions had  shifted along the border as expected, overall apprehensions along the  southwest border had continued to increase to over 1.6 million in fiscal  year 2000—raising questions about the strategy’s effect on overall illegal  entry along the southwest border. However, since then apprehensions  along the southwest border have declined to less than 1 million in fiscal  year 2002.
While there may be many reasons for the decline in apprehensions, in  response to our recommendation, the Border Patrol has developed a plan  designed to evaluate the impacts of its southwest border strategy.  However, the evaluation has yet to be completed.
section_title: Preventing Illegal Entry at Ports of Entry
paragraphs: Our recent work at ports of entry and our ongoing work specifically at  land border ports, indicate that BCBP inspectors continue to face  challenges that those from their predecessor agencies also faced in  balancing the need to identify violators of immigration and other laws  while facilitating the movement of lawful travelers. Today, I will touch on  several issues relating to the inspection of entry documents, inspector  training, intelligence information needs of the field, and BCBP plans for  implementing the U.S. Visitor and Immigrant Status Indication Technology  system, known as the U.S. VISIT system.
subsections: section_title: Determining Traveler Admissibility
paragraphs: At land border ports of entry, inspectors must quickly make decisions  about whether to admit a traveler into the United States or refer travelers  for more intensive inspection if admissibility cannot be readily  determined. Two of the factors that challenge inspectors’ ability to verify  the travelers’ identity and admissibility are that (1) some travelers may  enter the United States without having to present a travel document and  (2) travelers can present a variety of documents to gain entry into the  United States, some of which can be easily counterfeited.
First, some travelers do not need to present proof of citizenship at the  border. U.S. and certain Canadian citizens are exempt from having to  present any document upon entry. Instead, they can make an oral claim of  citizenship, if this satisfies the inspector. According to immigration data,  inspectors at land border ports intercepted nearly 15,000 people in 2002  who falsely claimed to be U.S. citizens in order to gain illegal entry,  suggesting an unknown number of travelers successfully entered the  United States this way.
Second, a variety of documents are accepted at ports, and many can be  counterfeited or used fraudulently with apparent ease. With nearly 200  countries issuing unique passports, official stamps, seals, and visas, the  potential for document fraud is great. A wide variety of documents can be  presented for inspection—including more than 8,000 state and local  offices issue birth certificates, driver’s licenses, and other documents, any  of which could potentially be counterfeit. According to immigration data,  inspectors at land ports intercepted nearly 60,000 fraudulent documents in  fiscal year 2002, including over 10,000 U.S. citizenship-related documents.  Clearly, others have successfully gained access to this country using  counterfeit documents. Earlier this year, we testified on how our  investigators entered the country from Canada, Mexico, and Jamaica  through land, air, and sea ports of entry using fictitious names, and  counterfeit driver’s licenses and birth certificates made using readily  available software. INS and Customs Service inspectors never questioned  the authenticity of the counterfeit documents, and our investigators  encountered no difficulty in entering the country using them.
section_title: Unifying and Enhancing Inspector Training
paragraphs: BCBP will also face an array of challenges in ensuring that its border  inspectors are adequately trained, including ensuring appropriate training  is provided in the detection of fraudulent documents. For example, former  INS and Customs inspectors are still being trained at separate basic  training academies using two different curricula. If border inspectors are  to wear “one face” at the border, a unified curriculum and training  approach will need to be developed and implemented. These training  challenges will continue beyond the academy—BCBP will also need to  ensure that a field training program is established that meets the needs of  the newest as well as experienced inspectors at the ports. For example,  neither the former INS nor Customs agencies had a standard on-the-job  training program for their inspectors working at land border ports. The  prior work I mentioned in which our investigators used counterfeit  documents to enter the United States, as well as our ongoing work at 15  land border ports, suggest that one training challenge for BCBP will be to  ensure that both new and experienced border inspectors are capable of  readily detecting fraudulent documents.
section_title: Meeting Field Intelligence Needs
paragraphs: Our ongoing work at land border ports suggests that the Bureau will also  face challenges regarding the collection, analysis, and use of intelligence  information in the field. The former INS recognized the need for more  intelligence support in the field. In 1997, an INS-contracted study reported  the lack of an intelligence capability at all INS locations, including districts  and ports. More recent studies suggest needs in this area persist.  Although some steps have been taken to bring the intelligence function to  the field level, additional steps remain if the intelligence needs of the field  are to be met. These challenges include, but are not limited, to decisions  related to staffing and training, as well as merging intelligence positions  from the former Customs and INS.
section_title: Implementing the New U.S. VISIT System
paragraphs: One of the most significant challenges facing DHS at ports of entry is the  implementation of the U.S. VISIT system. This significant undertaking is  intended to capture both entry and exit data on travelers. It will also have  many implications for operations at U.S. ports of entry, including  expenditures, staffing, inspection procedures, and infrastructure. We  reviewed INS’s fiscal year 2002 expenditure plan and associated system  acquisition documentation and system plans. We reported that INS’s  preliminary plans showed that it intended to acquire and deploy a system  that will satisfy the general scope of capabilities required under various  laws. However, we found that the initial plan did not provide sufficient  information about INS commitments for the system, such as what specific  system capabilities and benefits will be delivered, by when, and at what  cost. We concluded that this lack of detail is a material limitation in the  first plan that will become even more problematic in the future as the  magnitude and complexity of the system acquisition increases, as will the  importance of creating plans with the appropriate level and scope of  information. Responsibility for implementing U.S. VISIT now resides in  the Border and Transportation Security directorate. We are currently  reviewing the fiscal year 2003 expenditure plan and will ascertain whether  these problems were addressed.
section_title: Challenges Related to Implementing and Transforming DHS
paragraphs: We designated implementation and transformation of the new Department  of Homeland Security as high risk based on three factors. First, the  implementation and transformation of DHS is an enormous undertaking  that will take time to achieve in an effective and efficient manner. Second,  components to be merged into DHS—including those that now form  BCBP—already face a wide array of existing challenges, some of which we  have described in this statement. Finally, failure to effectively carry out its  mission would expose the nation to potentially very serious consequences.
In the aftermath of September 11, invigorating the nation’s homeland  security missions has become one of the federal government’s most  significant challenges. DHS, with an anticipated budget of almost $40  billion and an estimated 170,000 employees, will be the third largest  government agency; not since the creation of the Department of Defense  (DOD) more than 50 years ago has the government sought an integration  and transformation of this magnitude. In DOD’s case, the effective  transformation took many years to achieve, and even today, the  department continues to face enduring management challenges and high- risk areas that are, in part, legacies of its unfinished integration.
Effectively implementing and transforming DHS may be an even more  daunting challenge. DOD was formed almost entirely from agencies whose  principal mission was national defense. DHS will combine 22 agencies  specializing in various disciplines: law enforcement, border security,  biological research, disaster mitigation, and computer security, for  instance. Further, DHS will oversee a number of non-homeland-security  activities, such as the Coast Guard’s marine safety responsibilities and the  Federal Emergency Management Agency’s (FEMA) natural disaster  response functions. Yet, only through the effective integration and  collaboration of these entities will the nation achieve the synergy that can  help provide better security against terrorism. The magnitude of the  responsibilities, combined with the challenge and complexity of the  transformation, underscores the perseverance and dedication that will be  required of all DHS’s leaders, employees, and stakeholders to achieve  success.
Further, it is well recognized that mergers of this magnitude in the public  and private sector carry significant risks, including lost productivity and  inefficiencies. Generally, successful transformations of large  organizations, even those undertaking less strenuous reorganizations and  with less pressure for immediate results, can take from 5 to 7 years to  achieve. Necessary management capacity and oversight mechanisms must  be established. Moreover, critical aspects of DHS’s success will depend on  well-functioning relationships with third parties that will take time to  establish and maintain, including those with state and local governments,  the private sector, and other federal agencies with homeland security  responsibilities, such as the Department of State, the Federal Bureau of  Investigation, the Central Intelligence Agency, DOD, and the Department  of Health and Human Services. Creating and maintaining a structure that  can leverage partners and stakeholders will be necessary to effectively  implement the national homeland security strategy.
The new department is also being formed from components with a wide  array of existing major management challenges and program risks. For  instance, one DHS directorate’s responsibility includes the protection of  critical information systems that we already consider a high risk. In fact,  many of the major components merging into the new department,  including the Transportation Security Administration (TSA), FEMA and  the U.S. Coast Guard, face at least one major problem, such as strategic  human capital risks, critical information technology challenges, or  financial management vulnerabilities; they also confront an array of  challenges and risks to program operations. For example, TSA has had  considerable challenges in meeting deadlines for screening baggage, and  the agency has focused most of its initial security efforts on aviation  security, with less attention to other modes of transportation. The Coast  Guard faces the challenges inherent in a massive fleet modernization.
DHS’s national security mission is of such importance that the failure to  address its management challenges and programs risks could have serious  consequences on our intergovernmental system, our citizens’ health and  safety, and our economy. Overall, our designation of the implementation  and transformation of DHS as a high-risk area stems from the importance  of its mission and the nation’s reliance on the department’s effectiveness  in meeting its challenges for protecting the country against terrorism.
Mr. Chairman, this concludes my prepared statement. I would be pleased  to answer any questions that you or other Members of the Subcommittee  may have.
section_title: Appendix: Contacts and Acknowledgments
paragraphs: For further information regarding this testimony, please contact Richard  M. Stana at (202) 512-8777. Individuals making key contributions to this  testimony included Seto J. Bagdoyan, Michael P. Dino, Darryl W. Dutton,  Barbara Guffy, E. Anne Laffoon, and Lori Weiss.
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