Summer Work Travel Program: State Department Has Taken Steps to Strengthen Program Requirements, but Additional Actions Could Further Enhance Oversight
Released: 2015-03-13T00:00:00

Letter

Background

The SWT program is a component of State’s Exchange Visitor Program, known as the J-1 Visa Program, which was established to implement the purposes of the Fulbright-Hays Act, including strengthening ties and increasing mutual understanding between the people of the United States and the people of other countries through educational and cultural exchanges. The SWT program—one of the largest U.S. exchange programs—offers young people who might otherwise lack the means to visit the United States a unique opportunity to spend up to 4 months in this country while working to defray program costs. To administer the SWT program, State works in partnership with private sector sponsors, who may contract with overseas and domestic agents to handle various administrative functions. Over time, State has identified concerns about the SWT program, such as abuses of some SWT participants by employers, links between some SWT participants and organized crime, and overshadowing of the program’s cultural exchange component by its work component.

SWT Program Roles

Participants. To qualify for the program, exchange visitors under the SWT program must meet certain criteria, including being full-time college or university students. Participants from most countries are required to be preplaced in a job before entering the United States. While in the United States, SWT participants generally work in low-wage service positions such as amusement park ride operator, cashier, lifeguard, resort worker, restaurant worker, or retail sales assistant. Participants come from all over the world and work throughout the United States year-round, based on the timing of their major academic breaks. For example, State records show that in 2014, approximately 79,000 SWT participants from more than 120 countries worked in all 50 states and the District of Columbia. Figure 1 shows SWT participants’ numbers, countries of origin, and U.S. job locations from January to mid-November 2014.

Sponsors. SWT sponsors are U.S. organizations that bring participants to the United States and facilitate their employment and cultural exchange. To be eligible for designation as a sponsor, an organization must demonstrate to State’s satisfaction its ability to comply, and remain in continual compliance, with all program requirements and to maintain certain financial obligations and responsibilities as an SWT sponsor. State’s records show that as of November 2014, the SWT program had 41 active sponsors. Sponsors are the participants’ primary point of contact and are responsible for addressing issues that affect the health, safety, and welfare of participants while they are in the United States. Other aspects of sponsors’ roles and responsibilities include the following:

Sponsors may recruit prospective SWT participants directly or through overseas agents.

Sponsors are required to enter selected participants’ data in the Student and Exchange Visitor Information System (SEVIS).

Sponsors are responsible for ensuring that participants have employment in the United States and are required to vet potential employers and their job offers by contacting each employer directly and verifying the business owner’s or manager’s contact information and location as well as the company’s line of business.

Before participants arrive in the United States, sponsors are required to provide an orientation to prepare them for life in the United States as well as information about what to do in an emergency.

After participants arrive in the United States, sponsors are required to monitor participants’ health, safety, and welfare and ensure that participants receive exposure to U.S. culture.

Overseas and domestic agents. Sponsors may contract with overseas and domestic agents to carry out certain SWT program functions.

Overseas agents generally assist sponsors with recruiting participants for the SWT program, assessing participants’ qualifications, and identifying U.S. job placements for participants.

Domestic agents assist sponsors with functions such as arranging cultural activities for participants, helping participants find housing, identifying participant job placements, and providing participants with transportation.

Employers. SWT employers are businesses in the United States that hire SWT participants for positions that the sponsors confirm are seasonal or temporary and do not displace U.S. workers. SWT employers have typically included hotels, restaurants, retail stores, ski resorts, and theme parks, among others.

State Department. State’s Bureau of Educational and Cultural Affairs administers the SWT program through the Office of Private Sector Exchange. In addition, State’s Bureau of Consular Affairs adjudicates visas overseas and conducts domestic monitoring visits to SWT participants. State’s Kentucky Consular Center, established to assist in administering certain classes of visas, also provides a secondary check on employers of SWT participants. For more information about individual State offices’ roles and responsibilities related to the SWT program, see appendix II.

SWT Program Funding

As a private sector exchange program, the SWT program is primarily funded through fees paid by SWT sponsors and participants. For example:

Participants pay sponsors or overseas agents program fees for services such as assisting with job preplacement and acquiring airline tickets and insurance. Participants also pay a visa application fee to State.

Sponsors pay State a fee when they apply for designation or redesignation as SWT sponsors. In addition, sponsors that hire domestic agents may pay the agents for their services.

Overseas agents pay sponsors a portion of participants’ program fees.

Figure 3 shows the flow of funds among the primary entities in the SWT program.

Concerns about the SWT Program

Concerns about the SWT program have related primarily to abuses of SWT participants by employers, links between SWT participants and organized crime, and an overshadowing of the program’s cultural exchange component by its work component.

Abuses of SWT participants by employers. In 2010, Consular sections overseas raised concerns about the exploitation of some SWT participants and fraud relating to employment offers in the United States. In 2011, print and broadcast media reported further exploitation and abuses of some SWT participants. For example, SWT participants working full-time for a certain employer were reported to be earning only $160 to $560 per month while paying $395—twice the market rate—for company housing. State also acknowledged an increase in SWT-related complaints regarding, for example, improper or unsafe job placements, fraudulent job offers, post-arrival job cancellations, inappropriate work hours, and problems regarding housing and transportation.

Links between participants and organized crime. Beginning in early 2010, law enforcement agencies identified an emerging relationship between organized criminal activity and some SWT participants, who were at risk of being recruited to organized crime because they were eligible for Social Security numbers. U.S. law enforcement investigations revealed that while some SWT participants may have been misled into criminal activities, other participants willingly and deliberately engaged in activities such as tax fraud, health care fraud, and illicit money transfer schemes. In 2012, State also reported that criminal organizations had involved SWT participants in incidents relating to illegal transfer of cash, the creation of fraudulent businesses, and violations of immigration law.

Overshadowing of cultural exchange component. In 2012, State reported that in recent years, the work component of SWT had often overshadowed the core cultural exchange component of the program necessary for the SWT program to be consistent with the intent stated by the Fulbright-Hays Act. State attributed this imbalance to the attitudes of some sponsors, employers, and participants. For example, State noted that many participants viewed the program primarily as an opportunity to work in different jobs and to earn more money than they would at home.

State Has Taken a Variety of Actions to Strengthen Program Requirements

To better protect the SWT program from misuse and participants from abuse, State amended federal requirements in 2011 and 2012, imposing tighter restrictions on participants and sponsors. State also capped the size of the program to maintain it at a manageable size while State addresses the identified concerns. Additionally, State expanded its internal requirements and guidance for visa adjudication, with a goal of better ensuring participants’ health, safety, and welfare after they arrive in the United States.

State Updated Federal Requirements in 2011 and 2012

State issued interim final rules (IFR) in 2011 and 2012 that amended the federal regulation for the SWT program.

2011 Interim Final Rule. In 2011, State issued an IFR amending the SWT regulation, which went into effect in July 2011. These changes, which expanded on a pilot program that State had announced for the 2011 summer season, were intended to impose tighter controls and restrictions on all SWT participants and sponsors. The 2011 IFR specified the following, among other things.

All applicants from countries that do not participate in the Visa Waiver Program must have prearranged jobs before entering the United States.

Sponsors must vet all potential host employers to confirm that they are ongoing and viable business entities; must fully vet all job offers, including verifying the terms and conditions of such employment; and must not place participants in any prohibited position, such as adult entertainment or domestic help.

Sponsors must fully vet all overseas agents whom they engage to assist in functions such as screening, selecting, and monitoring participants.

Sponsors must contact participants on a monthly basis to monitor their welfare and physical location. 2012 Interim Final Rule. In May 2012, State published its 2012 IFR, which, according to State, was intended to expand on the 2011 changes to further protect the health, safety, and welfare of SWT participants. Most of the regulatory changes announced in the 2012 IFR took effect in May, and the changes remained in effect as of December 2014. The 2012 IFR explained that the 2012 regulatory changes included, among others, increased language requirements for participants, requiring them to have sufficient English not only to perform their jobs, as previously required, but also to protect themselves as they navigate daily life; an expanded list of job placement requirements and prohibitions—for example, placements must be seasonal or temporary, must provide opportunities for participants to interact regularly with U.S. citizens, and must not displace U.S. citizen workers; and requirements that sponsors submit annual participant price lists to provide itemized breakdowns of costs that participants must pay to both overseas agents and sponsors; assist participants in arranging housing and transportation when needed; and vet domestic agents.

State Capped SWT Program to Maintain Manageable Size

In November 2011, given continuing reported problems in the SWT program, State issued a notice in the Federal Register that capped the maximum number of participants and imposed a moratorium on designation of new sponsors. State noted that it intended to strengthen and expand its oversight, consult more closely with key stakeholders, and develop new program regulations, among other things, while the restrictions were in place. According to the 2012 IFR, the restriction on program size would remain until State was confident that the program regulations were sufficient to remedy identified concerns. State officials told us that as of October 2014, State had no current plans for lifting the program cap.

As a result of State’s 2011 restrictions, the number of program participants dropped by about 20 percent from 2011 to 2013. State capped at 2011 levels the participants allotted to each sponsor, effectively restricting the total number of participants to 109,000. State’s moratorium on designating new sponsors resulted in further reductions in the actual number of participants. Figure 4 shows the numbers of SWT program participants and sponsors in 2011 through 2014.

State Expanded Internal Requirements and Guidance for SWT Program

In addition to increasing the federal requirements for the SWT program, in 2012 State updated its Foreign Affairs Manual requirements for visa adjudication to help safeguard SWT participants’ health, safety, and welfare. State’s 2012 revision of the Foreign Affairs Manual sections providing guidance for the SWT program indicate the following:

Consular officers can deny visas to SWT applicants who do not demonstrate sufficient English proficiency to enable them to, for example, interact effectively with law enforcement authorities and medical personnel, read rental agreements, and carry on non-work- related conversations. At all five of the posts we visited, we observed State officials conducting SWT visa interviews in English and verifying that participants had sufficient English proficiency to participate in the program. Consular officers told us that they try to ensure that applicants can be understood in the United States and can communicate with U.S. law enforcement officers about their own health, safety, and welfare.

Consular officers must confirm that applicants understand a pamphlet specifying their legal rights with regard to federal immigration, labor, and employment laws in the United States. At each post that we visited, we observed consular officers asking applicants questions to confirm that they understood these rights.

State Conducts Oversight of Sponsors, Employers, and Participants but Has Limited Information about Program Costs

State has several mechanisms for monitoring and enforcing compliance with SWT regulations intended to prevent abuse of the program and of participants. State reviews sponsors’ compliance with SWT regulations and may sanction sponsors found to be in violation. In addition, sponsors vet potential employers and jobs and State conducts a secondary check of these employers, gathering information that it uses to help ensure participants’ health, safety, and welfare; sponsors also vet their overseas and domestic agents. State oversees participants through field site reviews and through complaints and incident reports. However, State has not ensured that the annual lists of participant fees that it requires sponsors to provide are complete, consistent, and publicly available. As a result, State has limited ability to protect participants from excessive and unexpected costs that could negate their otherwise positive experiences.

State Reviews Sponsors’ Compliance with Program Regulations and Sanctions Violations

State monitors SWT sponsors’ compliance with program regulations through biennial redesignation reviews and through on-site reviews and compliance reviews. If it determines that a sponsor has violated program regulations, State may impose sanctions.

Redesignation reviews. Every 2 years, State reviews each sponsor’s application for redesignation, checking the sponsor’s record of compliance with certain program regulations as well as its ability to meet the financial obligations and responsibilities involved in SWT sponsorship. For example, during the redesignation reviews, State checks sponsors’ annual reports; their financial records, including external audits; their SEVIS records; and any recorded incidents or complaints involving the sponsor. If a redesignation review identifies concerns about a sponsor’s compliance with program regulations, State may recommend sanctions. According to a State official, State conducted 57 redesignation reviews from 2011 through 2014.

On-site reviews. State’s on-site reviews of sponsors involve a comprehensive assessment of the sponsors’ compliance with program regulations. State conducts each review at the sponsor’s place of business, examining the sponsor’s records and holding discussions with the sponsor. To document the reviews, State officials complete a questionnaire covering topics such as verification of participants’ jobs and host employers, participant monitoring, complaints analysis, maintenance of SEVIS, use of partners, internal controls and training, and supervision of staff. State officials told us that State may sanction sponsors when on-site reviews identify noncompliance with SWT regulations and that State also uses on-site review results to develop recommendations to strengthen or make regulatory changes to the program. In 2011 through 2014, State conducted on-site reviews of 18 sponsors that were active during this period.

Compliance reviews. State conducts compliance reviews when it believes that sponsors may have grossly violated SWT regulations. In contrast to on-site reviews, compliance reviews are narrowly focused on specific concerns, such as the sponsor’s administration of job placements or ongoing complaints against a sponsor. State completed 2 SWT compliance reviews in 2011 and 2013, respectively, and as of March 2014 was conducting 6 additional SWT compliance reviews, according to State officials.

State imposes lesser or greater sanctions on sponsors depending on the nature of misconduct. According to a State document, State may impose any or all of four lesser sanctions if it believes a sponsor can be rehabilitated: (1) a letter of reprimand, (2) probation for 1 or 2 years, (3) a corrective action plan, and (4) a reduction of up to 15 percent in the number of participants allotted to the sponsor. If sponsors are involved in more egregious violations of the regulations, State can impose three greater sanctions: (1) suspension for a maximum of 120 days, (2) denial of redesignation, or (3) revocation of designation. As of November 2014, 5 of the on-site reviews and both compliance reviews that State conducted from 2011 through 2014 had resulted in sanctions of the sponsors reviewed. Table 1 provides information about State’s sanctions of seven of these sponsors.

Sponsors Vet Employers, and State Conducts Some Secondary Verification

To ensure that SWT participants work only for suitable employers in legitimate jobs, sponsors are to vet potential employers and jobs before the participants begin to work in preplaced positions. State also verifies most employers through the Kentucky Consular Center (KCC), although this secondary verification is not required by SWT regulations.

State documents show that sponsors vet employers by, among other things, contacting each employer, obtaining a copy of the employer’s business license and employer identification number, verifying that the employer has a worker’s compensation insurance policy or the state’s equivalent, and confirming that the employer has not experienced layoffs in the past 120 days. Sponsors place participants in jobs that are either seasonal (i.e., tied to the time of year by an event or pattern and requiring labor levels above and beyond existing worker levels) or temporary (i.e., to be performed as a one-time occurrence or to meet a peak load need or an intermittent need). In addition, sponsors maintain files documenting employer verification. All of the sponsors we spoke with said that they had conducted the required employer and job vetting, and all 15 of the on-site reviews that we examined included checks to ensure that sponsors were conducting the required vetting.

State uses KCC to conduct a secondary verification of employers to ensure employers’ legitimacy and participants’ safety. KCC verifies employers of participants from non-visa-waiver countries as well as participants from visa waiver countries in preplaced jobs. Complementary to sponsors’ vetting, KCC’s verification focuses on potential concerns such as law enforcement issues; criminal records; and financial problems that could jeopardize participants’ health, safety, or welfare. State officials said that in addition to contacting SWT employers directly, KCC staff use a variety of databases as well as other public sources, such as the Internet and social media, to vet the employers. When KCC’s verification identifies a concern, State may recommend that a sponsor conduct additional monitoring of the participant or move the participant to a different employer or housing location. In 2014, as of September, State had recommended that sponsors move at least 47 participants involving 26 employers.

Sponsors Vet Overseas and Domestic Agents

SWT sponsors vet potential overseas agents that assist them with core programmatic functions such as participant screening, selection, and orientation, according to State documents. Our review of State’s on-site review records found that the sponsors examined, among other things, the agents’ proof of business licensing, disclosure of any previous bankruptcy or pending legal action, and criminal background check reports for owners and officers of the organization. Sponsors also report to State all active overseas agents’ names, addresses, and contact information, which State compiles in a list that it shares with bureaus and with posts to assist them in scheduling visa adjudications. State may remove an overseas agent from the list for reasons including overall problems or derogatory information, such as evidence of fraud in visa applications that the agent helped to prepare. When it removes an overseas agent from the list, State notifies all other sponsors so that they will not work with the agent. As of November 2014, State had removed two overseas agents from the list since 2010, according to State officials. In addition, sponsors ensure that domestic agents’ involved in providing orientation or opportunities for participants to engage in cultural opportunities are qualified to perform these activities and have sufficient liability insurance, if appropriate.

State Oversees Participants’ Welfare through Field Site Reviews and Complaints and Incident Reports

State oversees participants’ welfare through field site reviews, which allow it to learn first-hand about participants’ experiences with the SWT program. State also oversees participants’ welfare through complaints that it receives from participants, the general public, and State officials and through incident reports from sponsors.

Field Site Reviews

State has conducted field site reviews since 2012, in part to strengthen its oversight of SWT participants’ health, safety, and welfare. During field site reviews, teams of State officials visit participant job sites and interview participants and employers about their experience with the SWT program. According to State officials, they typically select sites that are in areas with more than 15,000 SWT participants and that, for example, have historically high rates of complaints or have not been selected previously. The State officials explained that at the end of each season, they communicate the review findings to the participants’ sponsors and may meet with sponsors individually to discuss any problems identified.

In the summer of 2014, field site review teams conducted interviews in 33 states and the District of Columbia. According to a November 2014 report summarizing field site review findings for the 2014 summer season, State interviewed 2,505, or approximately 3 percent, of the more than 79,000 participants that year. Of those participants, about 90 percent indicated that they were satisfied with their program experience and were pleased with their sponsors. According to the report, housing was a primary concern among participants—specifically, lack of sponsor support in finding housing and a shortage of suitable and affordable housing. The report also states that many participants expressed concerns about program expenses and high program fees.

During field site reviews, State also verifies the accuracy of SEVIS data, which State uses to locate participants at their places of employment and their homes, according to State officials. State guidance requires sponsors to keep these data current, in accordance with federal law. If State finds gaps or notices errors in the SEVIS data or identifies trends of concern, State may provide feedback and may issue a letter of concern to the sponsor.

Complaints and Incident Reports

Since 2009, State has provided oversight of SWT participants’ welfare through complaints and incident reports, which State receives through e- mail, the U.S. mail, telephone, and a toll-free hotline. State may also receive complaints from participants or employers during its field site reviews. State established standard operating procedures for addressing complaints and incident reports related to the SWT program and, in March 2014, implemented a new database for tracking them.

Complaints. State’s standard operating procedures define a complaint as any expression of concern about a participant or a sponsor’s actions from any source other than the sponsor. According to State’s procedures, complaints have been received from, among others, former and current participants, employers, overseas and domestic agents, Congress, members of the media, and participant family members. The procedures note that in general, State is to refer complaints to sponsors and resolve the complaints in coordination with the complainant (for complaints) and the sponsor. The procedures list 40 complaint categories for the SWT program, ranging from “accident” to “insufficient funds” to “workplace discrimination.” State’s procedures lay out criteria and steps for referring serious complaints to senior State officials. State may provide information about sponsorship best practices to help the sponsor improve its program. If a complaint about a sponsor identifies serious regulatory concerns and potential violations, State may draft a letter of concern as part of its process for closing out the complaint; State may also sanction the sponsor, depending on the degree of misconduct. Figure 5 shows State’s process for addressing complaints.

Incident reports. Sponsors are required to promptly inform State of any serious problem or controversy that could be expected to bring State or the SWT program into notoriety or disrepute. Sponsors submit this information in incident reports. According to State, most incident reports involve matters such as deaths, accidents, crimes or arrests, medical issues, sexual abuse, or missing persons. State’s process for handling incident reports is similar to its process for handling complaints, and State uses the same procedures to escalate incidents as it uses to escalate complaints. State logs and maintains information about each incident report, using the same database that it uses for registering complaints. According to State’s procedures, State maintains contact with the sponsor regarding the incident until it is resolved. For example, if the incident report involved the death of an SWT participant, State would follow up with the sponsor until the participant’s body was repatriated, or if a participant was hospitalized, until the participant was released from the hospital. If a sponsor fails to submit an incident report about a serious problem or controversy, State notes the failure as a potential regulatory violation and may sanction the sponsor.

State provided data showing that in 2013, State received relatively few complaints and incidents—592 and 143, respectively—given the approximately 86,500 participants in the SWT program that year. Examples of the 2013 complaints range from participant problems with pay or living conditions to lack of response from sponsors. Examples of incidents in 2013 include participants’ arrests for theft, involvement in car and bicycle accidents, and deaths. According to State, approximately 38 percent of 2013 complaints and incident reports resulted from field site reviews, 22 percent were called in by sponsors, 20 percent came into State’s hotline, 14 percent were sent to State’s e-mail in-box, and 7 percent came from unspecified sources.

State’s procedures do not specify response time frames but require that all complaints and incident reports be handled quickly and efficiently. While State does not track the time between receipt of a complaint or incident report and State’s initial response, State officials said that a response is generally initiated within 1 or 2 days. According to State data, in 2013, an average of 46 days elapsed between receipt and closeout of a complaint and an average of 73 days elapsed between receipt and closeout of an incident report. State officials told us that the time between receipt and closeout of a complaint or incident report may include, for example, delays in receiving police and hospital reports.

State Requires Sponsors to Provide Data on Program Fees but Has Not Ensured That the Data Are Complete, Consistent, and Publicly Available

Although State requires SWT sponsors to annually submit participant price lists itemizing fees that participants pay to sponsors and overseas agents, State does not have a mechanism for ensuring that the sponsors provide complete and consistent data. Moreover, despite a 2013 recommendation by State’s Office of Inspector General (OIG) that sponsors be required to publicly disclose all fees that participants pay them and their overseas agents, State has not established a mechanism to ensure that this information is made publicly available. According to the 2012 IFR, recent criticism of the program had included alleged exorbitant fees charged to SWT participants, and State requested the information about participant fees to protect participants, sponsors, and the integrity of the program. Because State has not established mechanisms to ensure, respectively, that sponsors provide complete and consistent lists of participant fees and that this information is made publicly available, State’s ability to protect participants from excessive and unexpected program costs is limited.

The fees that participants pay vary by sponsor, agent, and services provided. According to the State OIG’s 2013 report, sponsors and overseas agents can charge participants whatever fees they deem appropriate and State sets no limits on the fees that can be charged. State officials estimated that participant fees in each country, excluding airfare, range from $1,500 to $5,000 and often include a program fee, job placement fees, and health insurance, in addition to the visa application fee and SEVIS fee, which participants generally pay to State and the Department of Homeland Security, respectively. However, according to the State OIG’s 2013 report, participants do not always have a clear sense of what the fees cover and frequently pay additional, unanticipated expenses such as interview fees and registration fees.

Although State solicited information about sponsors’ and overseas agents’ fees in 2013, the data it received were incomplete and inconsistent, and State did not solicit or obtain this information in 2014. Standards for internal control in the federal government call for managers to ensure that there are adequate means of obtaining relevant, reliable, and timely information from external stakeholders that may have an impact on the agency’s ability to achieve its goals. In January 2013, State sent sponsors an approved template itemizing the fees that they were required to report as well as instructions for completing the template. However, State did not receive responses in 2013 from all sponsors, according to a senior State official. Moreover, our analysis showed that the lists of fees that State received were not complete or consistent. For example, some sponsors listed a flat program fee, others listed a range of fees with no explanation of what the ranges covered, and others provided no information about their fees. Our review of the instructions that State sent sponsors for filling out the fee template showed that the instructions did not specify the information requirements; according to two of the five sponsors we interviewed, the instructions were difficult for them and their overseas agents to follow. In 2014, State did not solicit the required data and sponsors did not provide these data.

In reports published in February 2012 and September 2013, respectively, State’s OIG made recommendations related to the transparency of SWT fees. In its 2012 report, the OIG recommended that State revise its regulations to establish maximum fees that sponsors and their overseas agents can charge. In response, State reported in 2012 that it had begun meeting with sponsors to discuss ways to establish an open and transparent process for capturing fees that they and their overseas agents may charge participants. In its 2013 report, the OIG changed its 2012 recommendation to say that State should revise regulations for SWT and other private sector exchange programs to require that sponsors publicly disclose all fees that they and their overseas agents charge program participants.

State officials told us that, in response to the OIG’s 2013 recommendation, State is considering regulatory changes that would require SWT sponsors to post online the fees that they and their overseas agents charge, to ensure that participants are aware of the costs of participation in the program. State officials noted that the changes being considered, as well as State’s effort to collect fee data, would allow prospective students to review costs among various sponsors, programs, and countries and would also allow State to compare fees across all sponsors and countries and identify anomalies or unusually high fees. However, State officials said in November 2014 that the regulatory changes were still under consideration, with no projected time frame for completion. Moreover, according to State officials, State has not established a mechanism for ensuring that information about sponsors’ and overseas agents’ fees is made publicly available. Standards for internal control in the federal government state that ongoing monitoring should occur in the course of operations. Without a mechanism to ensure that complete and consistent information about participant fees is made publicly available, State has limited ability to protect participants from being charged excessive and unexpected fees that might negate their otherwise positive experiences of the program.

State Has Taken Steps to Strengthen the Program’s Cultural Exchange Aspect but Has Limited Ability to Enforce a 2012 Cultural Requirement

To strengthen the SWT program’s cultural exchange aspect, State has taken steps to emphasize the program’s cultural component relative to its work component, including adding cultural requirements to the program regulation. However, State officials indicated that because the requirement that sponsors provide participants opportunities for cultural activities outside the workplace does not include detailed criteria for sufficient and appropriate opportunities, State has limited ability to assess and enforce compliance. As a result, State lacks assurance that SWT participants’ experiences of U.S. culture further State’s public diplomacy goals. Since 2013, State has taken initial steps to leverage the SWT program’s long-term public diplomacy value by including a small number of SWT alumni in its broader activities involving exchange program alumni.

State Added a Cultural Component to Program Regulation but Has Limited Ability to Assess and Enforce Compliance with the Cultural Activity Requirement

ensure that all participants have opportunities to work alongside U.S.

State reported efforts to elevate the visibility of the cultural exchange aspect of the Summer Work Travel (SWT) program. For example, State officials reported that in the summer of 2014, they travelled around the United States, meeting exchange participants and highlighting their “true American experience,” including cooking demonstrations, holiday celebrations, and community volunteering. In addition, State officials said that State has worked with community support groups around the country that have assisted with various aspects of the SWT program, including providing opportunities for participants to engage in cultural activities. citizens and interact regularly with U.S. citizens to experience U.S. culture during the workday; and ensure that all participants have opportunities to engage in cultural activities or events outside of work, by planning, initiating, and carrying out events or other activities that provide participants exposure to U.S. culture.

Lifeguard Olympics for Summer Work Travel Program Participants Summer Work Travel program (SWT) alumni whom we met with overseas discussed cultural experiences while in the United States, such as going to amusement parks, attending theater performances, and visiting national parks. Additionally, the sponsors we interviewed indicated that they had provided opportunities for participants to engage in cultural activities, such the Lifeguard Olympics. This event involved swimming relays, diving competitions, and other aquatic challenges to win money for local charities. About 150 lifeguards, including Americans and SWT participants from three different sponsors, were gathered at the event in Virginia.

State provided guidance for meeting the cultural component requirement, in the 2012 IFR and a guide that State sent to sponsors in 2013. For example, according to the 2012 IFR, if a participant works at an amusement park, then amusement parks are not an acceptable cultural offering. The 2012 IFR also offers examples of ways that sponsors can meet the requirement, such as activities to acquaint participants with recognized features of U.S. culture and history—for instance, national parks, historic sites, major cities, or scenic areas—or to engage participants with the communities in which they work and live. In addition, the 2013 guide offers resources for sponsors to develop cultural programming that aligns with State’s public diplomacy goal.

State monitors compliance with the SWT cultural component requirement during its redesignation, on-site, compliance, and field site reviews. During redesignation reviews, State reviews sponsors’ annual reports to ensure that sponsors have provided opportunities for participants to engage in cultural exchange activities. During on-site reviews and compliance reviews, State may request copies of the sponsor’s documentation of its required monthly monitoring of participants, including records of participants’ involvement in cultural activities. During field site reviews, State asks participants about their cultural experiences. State’s summer 2014 field site review report notes that roughly 60 percent of the participants interviewed indicated that they had participated in cultural activities planned by their sponsors or employers, whereas in 2013 State reported that nearly 60 percent of participants indicated they would welcome more involvement from sponsors in arranging cultural activities. Since 2011, State has sanctioned two sponsors, in part for failing to provide any cultural programming, according to a State official and documentation that we examined.

However, according to State officials, because the cultural component requirement does not include detailed criteria, State is unable to sanction sponsors for providing insufficient or inappropriate opportunities for cultural activities outside the workplace. State officials said that they can issue a sanction if a sponsor provides no cultural component. In November 2014, State officials indicated that they were considering regulatory changes that would establish grounds for sanctioning sponsors that do not provide sufficient or appropriate cultural programming; however, the officials could not tell us when a decision about these regulatory changes was expected. Without detailed criteria that would allow State to assess the sufficiency or appropriateness of the cultural component, State lacks assurance that SWT participants’ experiences of U.S. culture further State’s public diplomacy goals.

State Has Taken Initial Steps to Leverage the SWT Program’s Long- Term Public Diplomacy Value

State has taken initial steps to leverage the SWT program’s long-term public diplomacy value by reaching out to a limited number of SWT alumni. State engages systematically with alumni of various other cultural exchange programs with the goal of strengthening U.S. relationships with current and emerging leaders, according to State officials. State officials noted that SWT alumni are active in their communities and promote ideals and values, such as entrepreneurship and volunteerism, that they learned about in the United States.

In contrast to its nascent efforts to engage with alumni of the private sector-funded SWT program, State’s engagement with alumni of most U.S.-government-funded cultural exchange programs—for example, the Fulbright, International Visitors, and Academic Exchange programs— began in 2001, according to State officials. Recognizing the potential value of maintaining connections with exchange visitor alumni, in 2005 State began developing an archive of all alumni of U.S.-government- funded exchange programs; previously, State did not maintain connections with former exchange program alumni because it lacked their contact information. State officials explained that State also developed a network that allows exchange program alumni to access networking tools, grants, career development aids, and research tools. Alumni of U.S.- government-funded exchange programs receive an automatically generated e-mail invitation to join this network.

State has recently taken several steps toward including SWT in its alumni network. In January 2013, State hired a special assistant to coordinate outreach to SWT and other private sector–funded exchange program alumni. In 2013, State also began, on a pilot basis, to include a limited number of SWT alumni in State’s archive of exchange visitor alumni. State selected these SWT alumni for inclusion in the archive because of their involvement with sponsor-led leadership conferences or involvement with local grassroots alumni group at posts. In November 2014, as part of a State pilot, sponsors were asked to provide contact information for 5 percent of their 2014 SWT alumni for automatic registration in State’s exchange visitor alumni archive and to give SWT alumni access to material on the alumni affairs website. State officials noted that State will review the initial effort before expanding the pilot.

In addition, State has encouraged SWT alumni to engage with one another and encouraged several posts to engage with SWT alumni. In Macedonia, State connected a grass-roots- organized SWT alumni group—the only formal SWT alumni network as of September 2014—with resources at the embassy and through its alumni affairs network. State officials reported that State was also beginning to support the embassy in Serbia to launch similar alumni groups. State noted that some embassies currently undertake outreach to SWT alumni on an ad hoc basis. For example, the U.S. Ambassador in Kazakhstan held a picnic for SWT alumni at the embassy, partly to promote the EducationUSA program in 2013, and the embassies in Bulgaria, Poland, and Hungary hosted SWT photo contests for alumni in 2013 and 2014. Among the five posts we visited, the post in Sofia, Bulgaria, had engaged in an SWT alumni activity and reported plans to assist in establishing an SWT alumni network. Some SWT sponsors in the United States also maintain alumni networks, although State does not require them to do so. Of the five sponsors we met with, three sponsors reported that they maintain SWT alumni networks.

Conclusions

By allowing large numbers of young, educated people—approximately 79,000 in 2014—to experience life in the United States each year and return home to share their experiences, the SWT program offers the potential to strengthen U.S. relationships abroad and further U.S. public diplomacy. However, if even one participant has a harmful or abusive experience, the potential also exists for notoriety and disrepute to the program, State, and the country. Moreover, unless participants receive sufficient and appropriate exposure to U.S. culture, they will not receive the full intended benefits of the program.

In the past several years, State has strengthened program requirements and expanded its oversight with the intention of better ensuring the health, safety, and welfare of SWT participants. For example, State required sponsors to ensure that all employers are legitimate and all wages paid to participants meet certain criteria and has sanctioned sponsors for violating regulations. In addition, responding to allegations of exorbitant fees charged to program participants, State required sponsors to provide annual lists of fees that participants must pay sponsors and overseas agents. Moreover, noting that participants did not always have a clear sense of what sponsors’ and overseas agents’ fees cover, State’s OIG recommended in 2013 that sponsors be required to publicly disclose all fees that they and their overseas agents charge participants. However, State has not established mechanisms for ensuring that the price lists it receives are consistent and complete and that this information is made publicly available. As a result, State has limited ability to protect participants from excessive or unexpected fees that might negate their otherwise positive experiences of the program.

State has also taken steps to emphasize the SWT program’s cultural component relative to its work component and to strengthen the SWT program’s value for public diplomacy. However, a lack of detailed criteria for the cultural opportunities that sponsors are required to provide limits State’s ability to ensure that participants have sufficient and appropriate opportunities to experience American culture outside the workplace. As a result, State lacks assurance that SWT participants engage in cultural exchanges that will benefit the participants and align with its public diplomacy goals.

Recommendations for Executive Action

To enhance State’s efforts to protect SWT participants from abuse and the SWT program from misuse, we recommend that the Secretary of State direct the Bureau of Education and Cultural Affairs to take the following three actions: establish a mechanism to ensure that sponsors provide complete and consistent lists of fees that participants must pay, establish a mechanism to ensure that information about these participant fees is made publicly available, and establish detailed criteria that will allow State to assess the sufficiency and appropriateness of opportunities for cultural activities outside the workplace that sponsors provide to SWT participants.

Agency Comments and Our Evaluation

State provided written comments about a draft of this report, which are reproduced in appendix III. In addition, State provided technical comments, which we incorporated as appropriate. In response to a suggestion in State’s written comments, we also adjusted the wording of our first recommendation to more clearly convey that State should identify a mechanism to ensure that sponsors’ price lists reflect all fees that participants must pay.

In its written comments, State agreed with our recommendations and indicated that it is considering actions that address them. For example, responding to our first recommendation, State wrote that it is considering developing a template to facilitate program sponsors’ public release of fee and cost information in a consistent format. According to State, this will enable it to check the completeness and consistency of the price lists that sponsors are required to submit, by comparing the lists with the information that sponsors disclose to program participants. Regarding our second and third recommendations, State wrote that it is considering, respectively, additional and more-specific fee and cost transparency requirements and cross-cultural requirements for SWT sponsors. Moreover, State pointed to recent updates to its regulation governing all private sector exchange visitor programs, including the SWT program, that went into effect on January 5, 2015, and that may enhance State’s ability to provide oversight for the SWT program. However, we believe that further actions are needed to address our recommendations related to the fee and cross-cultural components of the SWT program.

As agreed with your office, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to interested congressional committees and the Secretary of State. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-8980 or CourtsM@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Individuals who contributed to this report are listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

This report examines (1) changes to program requirements that the Department of State (State) has made since 2010 to better protect the Summer Work Travel (SWT) program and participants, (2) State’s oversight of SWT sponsors’ compliance with program regulations and of participants’ welfare, and (3) efforts State has made to strengthen the program’s cultural exchange aspect and further its broader public diplomacy goals.

To address these objectives, we reviewed and analyzed rules and regulations and State documents related to the SWT program. We interviewed officials from State’s Bureau of Education and Cultural Affairs (ECA), which is responsible for administering the SWT program, and Bureau of Consular Affairs; the Department of Labor; and the Department of Homeland Security. We also interviewed a nongeneralizable sample of five U.S. sponsors in various locations—American Work Adventures, the Council on International Educational Exchange, Cultural Homestay International, Geovisions, and Intrax—which we selected on the basis of the number of participants they sponsored. We also interviewed representatives of an association representing many SWT sponsors—the Alliance for International Educational and Cultural Exchange—and one nonprofit focused in part on labor rights, the Southern Poverty Law Center. We conducted fieldwork at five posts—Dublin, Ireland; Istanbul, Turkey; Moscow, Russia; Sofia, Bulgaria; and St. Petersburg, Russia— where we met with State officials adjudicating visas for the SWT program. Our findings from these site visits are not generalizable. We selected these locations based on a variety of factors, including the number of SWT participants from each country, the post’s involvement in the 2011 pilot project, and the post’s involvement in the Visa Waiver Program. At posts, we observed the SWT visa adjudication process for the 2014 SWT summer season. We also interviewed a total of 19 overseas agents in Dublin, Istanbul, Sofia, and St. Petersburg who worked with the sponsors we interviewed, including overseas agents in Moscow whom State also interviewed. In addition, we interviewed 12 groups comprising a total of 70 previous participants, whom we selected from participants that the overseas agents recommended. We focused our review on the period between 2010 and 2014, because State took steps during this period to strengthen the SWT program; implement regulatory changes addressing program concerns; strengthen its monitoring and oversight in response to our recommendation in 2005; and strengthen the program’s cultural component.

To understand the steps that State has taken since 2010 to strengthen SWT requirements, we interviewed State officials about the pilot program and ensuing changes to SWT regulations, reviewed State’s 2011 Pilot Program guidelines; 2011 and 2012 interim final rules; and relevant changes in the Federal Register, State’s Foreign Affairs Manual, State cables, and State’s Guidance Directives. We also analyzed State data about the size of the program from 2011 through 2014.

To examine State’s oversight of SWT sponsors and participants, we interviewed program officials from various ECA offices responsible for monitoring and oversight of the SWT program, including the Offices of Private Sector Exchange Administration, Compliance, and Designation. We also interviewed officials of the Bureau of Consular Affairs’ Offices of Passport Services and Visa Services. We reviewed State’s standard operating procedures published between 2011 and 2014 related to implementing, monitoring, and overseeing the program. To understand how State evaluates sponsors, we analyzed documentation for 15 on-site reviews, 2 compliance reviews, and 4 letters imposing sanctions on SWT sponsors that State has completed since 2011. We also reviewed State’s process for conducting secondary employee verification through the Kentucky Consular Center to understand its changing role in the visa adjudication process and State’s process for reprogramming participants. We analyzed State’s documentation of its monitoring of sponsors through the designation process. To evaluate the quality of the fee data that State collects from sponsors and overseas agents, we obtained and reviewed data collected in 2013. We interviewed ECA officials regarding the 2013 data as well as ECA’s reason for not collecting these data in 2014. We determined that the 2013 fee data were not sufficiently reliable for reporting on the fees that overseas agents and sponsors charge participants, as discussed earlier in the report. We reviewed State’s analysis of its field site reviews for the SWT 2013 and 2014 summer and 2013 winter programs, along with the questionnaires that State officials used on the monitoring visits, to determine how State ensures the health, safety, and welfare of SWT participants and to ascertain what participants thought about the program. We did not review the methodology that State used to analyze the interview results, and we present some of State’s reported results for context only. We also observed State officials interviewing a total of 21 SWT participants and four SWT employers during field site visits conducted by ECA’s Private Sector Exchange Office of the Private Sector Exchange Administration in San Francisco, California; New York, New York; and Washington, D.C., as well as field site visits conducted by Consular Affair’s Office of Passport Services in Philadelphia, Pennsylvania. We selected these sites on the basis of the State office conducting the field site visit and the number of SWT participants in each location. Finally, we reviewed State’s process for handling complaints and incident reports and analyzed complaints and incident reports that State received from 2010 to September 2014, to understand the types of concerns reported and State’s manner of responding to them. We determined that the complaints and incident data from 2013 were sufficiently reliable for our purposes by interviewing State officials responsible for compiling and maintaining the data. We asked these officials about procedures for data entry, edit checks and controls, safeguards against inconsistent entries, procedures for following up on identified errors, among other things.

To identify State’s efforts to strengthen the cultural component of the SWT program and further its broader public diplomacy goals, we reviewed the regulatory requirement that sponsors ensure that all participants have opportunities to engage in cultural activities or events outside of work by planning, initiating, and carrying out events or other activities that provide participants’ exposure to U.S. culture. We also reviewed State’s efforts to collect information on the cultural component of the program through its field site review reports and by witnessing field site reviews. To identify the extent to which the SWT program is furthering U.S. public diplomacy goals and leveraging alumni resources within ECA, we reviewed ECA’s Bureau Strategy Document for fiscal years 2015 to 2017. We also interviewed ECA officials responsible for implementing the SWT program, officials in the Office of Alumni Affairs, and the Deputy Assistant Secretary and reviewed State’s efforts to monitor the cultural component of the program.

We conducted our review from November 2013 to February 2015 in accordance with generally accepted U.S. government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: State Department Entities with Responsibilities for the Summer Work Travel Program

The following State Department (State) entities have responsibilities for administering the Summer Work Travel (SWT) program.

State’s Bureau of Educational and Cultural Affairs (ECA) administers the SWT program through the Office of Private Sector Exchange, which expanded from two to four offices and nearly doubled its staff size from 2012 through 2013. Within the Office of Private Sector Exchange are four offices with responsibilities for the Summer Work Travel program: the Offices of Designation, Exchange Coordination and Compliance, Private Sector Exchange Administration, and Policy and Program Support. These offices also oversee the other exchange visitor programs that ECA administers.

The Office of Designation is responsible for designating new sponsors to the SWT program and redesignating current sponsors on a biannual basis. Designated sponsors are given access to the Student and Exchange Visitor Information System (SEVIS) in order to maintain accurate information on participants throughout their stay in the United States. The Office of Designation also conducts outreach to sponsors and helps them stay compliant with regulations through timely advice and ongoing communication.

The Office of Exchange Coordination and Compliance investigates concerns about sponsors, including alleged violations of the SWT regulations. It has the authority to sanction sponsors in a variety of ways and liaises with State’s Bureau of Diplomatic Security and other law enforcement agencies when appropriate. It also conducts on-site reviews of sponsors in all J-1 Visa categories to ensure that the sponsors are complying with regulations.

The Office of Private Sector Exchange Administration, established in 2013, manages issues, crises, and complaints within the SWT program. It maintains a hotline and e-mail in box that participants and the public can use to make contact if issues arise, and, according to State officials, sustains contact with complainants until issues are resolved. Similarly, the office works with sponsors to resolve reported incidents. It also conducts field site reviews interviewing SWT participants at their workplaces to assess SWT participants’ overall program experiences and identify any recurring problems.

The Office of Policy and Program Support, established in 2013, develops SWT regulations. According to State, the office is currently considering regulatory changes to strengthen provisions aimed at enhancing the safety, health, and welfare of exchange visitors and strengthening overall exchange visitor program experiences; establish the Office of Private Sector Exchange’s strategic focus to ensure that its 14 private sector programs are linked to its mission; ensure budgetary responsibility; and guide the private sector’s alumni expansion effort.

State’s Bureau of Consular Affairs consular officers overseas adjudicate visa applications after determining whether applicants are eligible for the SWT program based on factors such as English language proficiency, intent to return to their home countries, and sufficient funds to cover expenses. In addition, the bureau’s domestic passport offices, located throughout the United States, assist ECA in conducting field site reviews.

The Kentucky Consular Center (KCC) verifies, using various databases, the legitimacy of SWT employers for participants from countries that are not part of State’s Visa Waiver Program. Each day, KCC produces a report for ECA that indicates whether it identified any employers that may be of concern to the health, safety, and welfare of participants.

Appendix III: Comments from the Department of State

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgements

In addition to the contact named above, Hynek Kalkus (Assistant Director), Julie Hirshen (Analyst-in-Charge), Sada Aksartova, Carly Gerbig, Etana Finkler, Reid Lowe, Alana Miller, and Anthony Moran made key contributions to this report. Other assistance was provided by Martin de Alteriis and Grace Lui.