Mr. Chairman and Members of the Subcommittee: I am pleased to be here today to discuss work we have done addressing management and program challenges at the Immigration and Naturalization Service (INS). These challenges have been related to INS’ strategic planning process, organizational structure, communications and coordination, financial management, and program implementation. For the most part, our testimony is based on products that we have issued on these matters since 1991. Attached to my statement is a bibliography of this work. INS’ mission involves carrying out two primary functions. One is an enforcement function that involves preventing aliens from entering the United States illegally and removing aliens who succeed in doing so. The other is a service function that involves providing services or benefits to facilitate entry, residence, employment, and naturalization of legal immigrants. To enable INS to better implement and enforce immigration laws, Congress significantly increased its resources during the past several years. For example, between fiscal years 1993 and 1998, the number of onboard staff at INS increased from about 19,000 to nearly 31,000. During the same period, INS’ budget more than doubled from $1.5 billion in fiscal year 1993 to about $3.8 billion in fiscal year 1998. Funding increases have continued in fiscal year 1999 with Congress providing over $3.9 billion. Earlier this year, we reported on management challenges and program risks in the Justice Department. Most of the challenges and risks that we identified were in INS. However, we noted that, in carrying out its responsibilities, INS has to contend with issues of foreign policy (e.g., U.S. readiness to provide asylum to political refugees); domestic policy (e.g., the tension between the need for cheap labor that immigrants have historically met and the protection of employment and working standards for U.S. citizens); and intergovernmental relations (e.g., between the federal government, which sets policy on immigration, and state and local governments, which largely bear its costs and consequences). (3) communications and coordination; and (4) financial management processes. In 1991, we reported that INS lacked a strategic plan and that past priority management processes were not successful. We also stated that past efforts to implement agencywide planning systems lacked sustained top management support, managers were not held accountable for achieving goals and objectives, and priorities were not used in planning for decisionmaking. Three years later, INS developed and issued a strategic plan to better focus its attention on key mission and operational priorities. The plan identified eight major strategic priorities, including such challenges as facilitating compliance with immigration laws, deterring unlawful migration, and reengineering INS work processes. In fiscal year 1995, INS implemented a priorities management process intended to facilitate the achievement of the strategic priorities identified in the plan. Specific annual goals related to strategic priorities were identified for special management attention, including the establishment of objectives, time frames, and performance measures. In fiscal year 1996, to further focus management attention on the most important goals, INS ranked the annual goals according to their priority. By assigning senior INS managers specific responsibility for achieving the annual priority goals, INS intended to establish better organizational and individual accountability. In 1997, we said that these efforts appeared to be consistent with the intent of the Government Performance and Results Act. However, we also concluded that, while INS’ initial steps in developing a strategic plan and management priorities had been positive, our past work at INS had indicated that, to be successful, such initiatives would require sustained management attention and commitment. INS’ 33 district directors and 21 Border Patrol chiefs were supervised by a single senior INS headquarters manager. In 1994, with the appointment of a new Commissioner, INS implemented an organizational structure intended to remedy at least two problems with the 1991 structure. First, the Commissioner thought the agency’s field performance was uneven and poorly coordinated. In particular, the headquarters operations office had an unrealistically large span of control because of its responsibility for overseeing the operations of 33 district offices and 21 Border Patrol sectors. Second, the Commissioner believed that program planning, review, and integration had suffered because the operations office was preoccupied with matters that should have been handled by field managers and therefore could not focus on program planning. To address these and other problems, the reorganization established Executive Associate Commissioner (EAC) positions for (1) policy and planning, (2) programs, (3) management, and (4) field operations. The EAC for Field Operations had overall responsibility for managing INS’ operational field activities through three regional directors, who were delegated budget and personnel authority over INS’ district directors and Border Patrol chiefs in their respective areas. In 1997, we reported that the reorganization had succeeded in shifting some management authority to officials closer to the field activities, and many INS managers that we interviewed perceived the reorganization as a positive step in providing oversight to the field units. However, the implementation of the headquarters reorganization also appeared to have created some uncertainty among INS managers and field staff about the relative roles and responsibilities of some of the EACs. This uncertainty had been amplified by internal questions about possible staffing imbalances among the offices. For example, we found that no analysis had been done to determine the appropriate number of staff needed for the office of programs, given the reassignment of some its new responsibilities to other offices. communications challenge involved uncertainty among INS managers about the roles and responsibilities of headquarters executives, which in turn caused uncertainty about proper channels of communication for obtaining policy guidance or implementing program initiatives. Headquarters’ efforts to resolve concerns about roles, responsibilities, and communication processes were not successful. For example, there was still confusion among field managers regarding roles and responsibilities, and inconsistent versions of guidance on naturalization procedures were distributed to field offices. INS did not intend to issue written guidance on appropriate communication channels and coordination methods between offices until it obtained a decision on how the agency would be restructured. Lack of up-to-date policies and procedures had also contributed to INS’ communications challenges. For example, at the time of our 1991 report, field manuals containing policies and procedures on how to implement immigration laws were out-of-date and had not been updated by the time of our 1997 report. As a result, INS employees were burdened with having to search for information on immigration laws or regulations in multiple sources, which sometimes resulted in their obtaining conflicting information. The lack of current manuals also led some field officers to create policy locally, thus compounding coordination difficulties. However, during the past 2 years, INS has published an administrative manual and established a timetable through January 2001 for issuing five field manuals. management systems. INS has taken action to address some of its financial management problems, including engaging a contractor to reconcile the fund balance differences with Treasury. With respect to INS’ financial management systems, the auditor reported that the systems (1) were not integrated, resulting in significant delays and burdensome reconciliation efforts; (2) had significant internal control weaknesses—including computer control problems—affecting the accuracy and reliability of financial information; and (3) limited, rather than enhanced, effective decisionmaking. In 1991, we reported that INS’ budget development process, which had evolved with weak controls over expenditures and revenues, significantly impeded INS management’s ability to address program weaknesses. In addition, we said that INS did not have fiscal accountability over its resources. Its outdated accounting systems, weak internal controls, and lack of management emphasis on financial management had contributed to this situation. As we reported again in 1993 and more recently in 1997,INS’ financial management systems’ weaknesses made it difficult for the agency to monitor the status of its budget and to make sound budgetary decisions. For example, in March 1995, INS’ budget office projected that the field offices would have about $115 million in surplus funds through the rest of the year. Upon subsequent input from INS’ field offices, it turned out that the field offices would experience a $5 million shortfall for the remainder of the year. Earlier this year, concerned that INS would incur a budget shortfall, the House Appropriations Committee asked that we examine INS’ fiscal condition for fiscal year 1999. Based on discussions with officials from INS, the Justice Department, and the Office of Management and Budget, and based on our analysis of INS budget documents, we concluded that INS was not experiencing an overall budget shortfall for fiscal year 1999.However, we noted that the hiring policy that INS followed in fiscal year 1998, and the reduced revenues from INS’ Examinations Fee revenues, contributed to reduced discretionary funding in fiscal year 1999. Cohen Act of 1996, to ensure that the new system did not automate outmoded, inefficient business processes. Instead of developing and implementing a risk management plan, as we had recommended, INS tasked its contractor with helping to ensure that risks associated with implementation of the new system would be identified and necessary steps taken to mitigate them. According to INS, it had an urgent need to replace its financial management system, which was over 19 years old and did not have the functionality needed for INS to efficiently manage and account for its resources, and INS believed that this was a prudent way to proceed. In addition to the long-standing management challenges that we identified, program implementation issues at INS have been of continuing concern. These issues have been related to INS’ efforts to (1) stem the flow of illegal aliens across the border, (2) identify and remove criminal aliens, (3) process applications for naturalization, (4) enforce immigration laws that pertain to the workplace, and (5) process aliens for expedited removal from the country. In 1993, we testified that INS was confronted with the challenge of preventing millions of aliens from entering the country illegally. Our prior work in this area had shown that INS had difficulty in removing illegal aliens once they entered the country and had limited space to detain aliens it apprehended. We concluded, therefore, that the key to controlling the illegal alien population was to prevent their initial entry.