Customs Revenue
Customs and Border Protection Needs to Improve Workforce Planning and Accountability Gao ID: GAO-07-529 April 12, 2007In forming the Department of Homeland Security (DHS), there was concern that moving the U.S. Customs Service into the new DHS would diminish attention given to collection of customs revenue. In recognition of that concern, Congress required that DHS's Customs Border Protection (CBP) not reduce the staff or resources for customs revenue functions. In March 2003, CBP reported a baseline of 2,263 staff in nine customs revenue positions, and 1,006 staff in associated support positions. The SAFE Port Act required GAO to report on changes related to customs revenue functions since the formation of DHS. This report discusses staff resources, strategic workforce planning, and CBP's public reporting on customs revenue functions. GAO analyzed the number of customs revenue staff, legislatively required staffing levels, and strategic plans and annual performance reports.
Staff resources contributing to customs revenue functions have generally declined since the creation of DHS due, in part, to department priorities and recruiting and retention problems. First, the number of staff in the nine designated customs revenue positions was below the mandated level for much of the time since DHS was formed, but recent efforts increased the number of staff to the mandated levels for most of these positions. Second, the number of support staff associated with customs revenue positions has declined. Lastly, other DHS staff contribute to customs revenue functions, but their contributions have declined. For example, the number of auditors in the Office of the Inspector General reviewing customs issues declined significantly, and they have not performed any customs revenue related performance audits since 2003, as they have primarily focused on security. CBP lacks a strategic workforce plan to guide its performance of customs revenue functions, but has taken some recent steps to improve its human capital management amid challenges. CBP has not determined the critical skills its workforce needs, nor has it developed a strategic workforce plan to inform and guide its future human capital efforts related to customs revenue functions because it has focused on filling open positions. CBP has recently taken some steps to improve its human capital planning such as developing resource allocation models, but gaps in its efforts remain. Additionally, challenges such as a growing workload heighten the importance of such strategic workforce planning. Despite being the second largest revenue generator for the U.S. government, CBP does not publicly report on its performance of customs revenue functions, thus failing to help ensure accountability. CBP's strategic planning documents establish a strategic objective and performance measure related to customs revenue functions. However, CBP does not publicly report on customs revenue functions in its annual plans and performance reports. According to a CBP official, customs revenue measures are not reported in annual performance reports because these functions do not directly address the long-term goal of facilitating trade.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-529, Customs Revenue: Customs and Border Protection Needs to Improve Workforce Planning and Accountability
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
April 2007:
Customs Revenue:
Customs and Border Protection Needs to Improve Workforce Planning and
Accountability:
GAO-07-529:
GAO Highlights:
Highlights of GAO-07-529, a report to congressional committees
Why GAO Did This Study:
In forming the Department of Homeland Security (DHS), there was concern
that moving the U.S. Customs Service into the new DHS would diminish
attention given to collection of customs revenue. In recognition of
that concern, Congress required that DHS‘s Customs Border Protection
(CBP) not reduce the staff or resources for customs revenue functions.
In March 2003, CBP reported a baseline of 2,263 staff in nine customs
revenue positions, and 1,006 staff in associated support positions. The
SAFE Port Act required GAO to report on changes related to customs
revenue functions since the formation of DHS. This report discusses
staff resources, strategic workforce planning, and CBP‘s public
reporting on customs revenue functions. GAO analyzed the number of
customs revenue staff, legislatively required staffing levels, and
strategic plans and annual performance reports.
What GAO Found:
Staff resources contributing to customs revenue functions have
generally declined since the creation of DHS due, in part, to
department priorities and recruiting and retention problems. First, the
number of staff in the nine designated customs revenue positions was
below the mandated level for much of the time since DHS was formed, but
recent efforts increased the number of staff to the mandated levels for
most of these positions. Second, the number of support staff associated
with customs revenue positions has declined. Lastly, other DHS staff
contribute to customs revenue functions, but their contributions have
declined. For example, the number of auditors in the Office of the
Inspector General reviewing customs issues declined significantly, and
they have not performed any customs revenue related performance audits
since 2003, as they have primarily focused on security. CBP lacks a
strategic workforce plan to guide its performance of customs revenue
functions, but has taken some recent steps to improve its human capital
management amid challenges. CBP has not determined the critical skills
its workforce needs, nor has it developed a strategic workforce plan to
inform and guide its future human capital efforts related to customs
revenue functions because it has focused on filling open positions. CBP
has recently taken some steps to improve its human capital planning
such as developing resource allocation models, but gaps in its efforts
remain. Additionally, challenges such as a growing workload heighten
the importance of such strategic workforce planning. Despite being the
second largest revenue generator for the U.S. government, CBP does not
publicly report on its performance of customs revenue functions, thus
failing to help ensure accountability. CBP‘s strategic planning
documents establish a strategic objective and performance measure
related to customs revenue functions. However, CBP does not publicly
report on customs revenue functions in its annual plans and performance
reports. According to a CBP official, customs revenue measures are not
reported in annual performance reports because these functions do not
directly address the long-term goal of facilitating trade.
Figure: Number of Customs Revenue Positions for Which CBP Has Met
Staffing Mandates:
[See PDF for Image]
Source: GAO analysis of CBP data.
[End of figure]
What GAO Recommends:
We recommend that the CBP Commissioner develop a strategic workforce
plan and report on revenue performance measures in agency performance
reports. We also recommend that the DHS Inspector General determine
whether areas of high risk related to customs revenue functions exist.
DHS generally concurred with our recommendations. The Inspector General
concurred with our recommendation.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-529].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Loren Yager at (202) 512-
4347 or YagerL@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Although Improving, CBP Failed to Maintain Mandated Staffing Levels for
Some Customs Revenue Positions:
CBP Lacks a Strategic Workforce Plan, but Some Steps Taken to Improve
Its Human Capital Management as It Faces Key Challenges:
CBP's Public Reporting Does Not Ensure Accountability for Customs
Revenue Functions:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Customs Revenue Positions (March 2003 to December 2006):
Appendix III: Support Staff for Customs Revenue Positions (March 2003
to September 2006):
Appendix IV: Salary and Benefits Directly Attributable to Customs
Revenue Functions:
Appendix V: Comments from the Department of Homeland Security:
Appendix VI: Comments from the Department of Homeland Security's Office
of Inspector General:
Appendix VII: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Customs Revenue Positions, as Defined by the Homeland Security
Act of 2002:
Figures:
Figure 1: Number of Customs Revenue Positions for Which CBP Maintained
the Mandated Staffing Levels:
Figure 2: Change in Number of Staff in Customs Revenue Positions from
March 2003 Baseline, as of December 2006:
Figure 3: Number of Customs Revenue Positions for Which CBP Has
Maintained Mandated Associated Support Staffing Levels:
Figure 4: Change in Number of Associated Support Staff from March 2003
Baseline, by Customs Revenue Position, as of September 2006:
Figure 5: Resources Directly Attributable to Customs Revenue Functions:
Abbreviations:
APHIS: Animal and Plant Health Inspection Service.
CBP: Customs and Border Protection.
CBPO: Customs and Border Protection Officer.
DHS: Department of Homeland Security.
FP&F: Fines, Penalties, and Forfeitures.
FTA: free trade agreement.
FTE: full-time equivalent.
ICE: Immigration and Customs Enforcement.
OIG: Office of the Inspector General.
OMB: Office of Management and Budget.
PART: Program Assessment and Rating Tool.
[End of table]
United States Government Accountability Office:
Washington, DC 20548:
April 12, 2007:
Congressional Committees:
The Department of Homeland Security's (DHS) Bureau of Customs and
Border Protection (CBP) collected nearly $30 billion in revenue in
fiscal year 2006, making it the second largest revenue generator for
the U.S. government. Historically, the U.S. Customs Service was
responsible for collecting revenue in the form of customs duties,
taxes, and fees. However, these responsibilities were transferred to
DHS under the Homeland Security Act of 2002 when the U.S. Customs
Service was merged with parts of the Immigration and Naturalization
Service and the Department of Agriculture's Animal and Plant Health
Inspection Service (APHIS) to form CBP in March 2003. At that time it
employed 2,263 people in customs revenue positions such as Import
Specialists and Entry Specialists, and 1,006 additional associated
support staff. The move of the former U.S. Customs Service into CBP,
whose priority mission is homeland security[Footnote 1], raised concern
that insufficient attention and resources might be dedicated to customs
revenue functions. As a result, the Homeland Security Act of 2002
required DHS to maintain at least the March 2003 level of staff in each
of nine specific customs revenue positions and their associated support
positions.[Footnote 2]
To determine how customs revenue functions have changed since the
formation of DHS, the Security and Accountability for Every (SAFE) Port
Act of 2006 required GAO to review changes in staffing and other
resources for customs revenue functions.[Footnote 3] Specifically, we
examined (1) how staff resources contributing to customs revenue
functions have changed since the creation of DHS, (2) how CBP conducts
strategic workforce planning for customs revenue functions, and (3)
whether CBP's public reporting on customs revenue functions ensures
accountability. In addition, we provide information on the estimated
cost of DHS salary and benefits for staff in customs revenue positions
and associated support staff, because it is the only data DHS could
provide regarding the resources dedicated to customs revenue functions.
We did not assess the effectiveness of CBP's performance of customs
revenue functions.
To meet these objectives, we reviewed documents and data related to
CBP's staffing and performance of customs revenue functions since 2003
and interviewed knowledgeable DHS, CBP, and Immigration and Customs
Enforcement (ICE) officials. We also analyzed CBP data on the number of
staff in customs revenue positions[Footnote 4] and their associated
support staff and compared these numbers to the levels required by the
Homeland Security Act. December 2006 was the most current data
available for customs revenue positions and September 2006 for
associated support positions. We further examined whether the job
responsibilities of staff in customs revenue positions have changed
over time. We also analyzed reports and planning documents from the DHS
Office of Inspector General (OIG). In addition, we identified specific
challenges to performing customs revenue functions and determined
whether CBP's workforce planning efforts successfully address those
challenges. Further, we reviewed U.S. Customs Service, DHS, and CBP
strategic plans, annual plans, and performance reports since 2000 to
identify how CBP plans and reports its performance related to customs
revenue functions. We did not assess the effectiveness of CBP's customs
revenue functions. To determine the resources dedicated to customs
revenue functions, we obtained data from CBP regarding the salaries and
benefits associated with the staff performing customs revenue
functions. We determined that the data presented in this report are
sufficiently reliable for the purpose for which they are presented. We
conducted our work in Washington, D.C., from December 2006 through
March 2007, in accordance with generally accepted government auditing
standards. Appendix I provides additional information about our scope
and methodology. In addition, appendixes II and III provide data on the
number of customs revenue functions staff and associated support
positions. Appendix IV provides information on resources dedicated to
customs revenue functions.
Results in Brief:
Staff resources contributing to customs revenue functions generally
declined since the formation of DHS in March 2003, in part due to
department priorities focused on homeland security and recruiting and
retention problems for some positions. First, the number of staff in
each of the nine designated customs revenue positions was below the
mandated March 2003 baseline level for much of the time, although
recent efforts by CBP increased the number of staff in most of these
positions. Recently, CBP took several steps such as opening job
announcements and closely monitoring its customs revenue staffing
levels to increase the number of customs revenue staff by more than 130
to 2,273. Second, the number of support staff--which includes a variety
of management, technical, and administrative support positions--
associated with the customs revenue positions has declined overall,
with the number of support staff associated with six of eight positions
being below the mandated level in September 2006. For example, the
Import Specialist position lost 94 of its 407 mandated level for
support staff. Lastly, other positions within DHS such as CBP Officers
(CBPOs), ICE Investigators, and OIG Auditors contribute to performing
or improving customs revenue functions, but their contributions have
declined over time. For example, before the formation of DHS, there
were about 65 Treasury OIG Auditors focused on customs issues. Since
the formation of DHS, the DHS OIG has prioritized audits in other areas
such as homeland security and disaster assistance, and the number of
Auditors focusing on customs issues declined to 15 as of February 2007.
Because of other priorities, DHS OIG Auditors have not conducted any
assessments of high-risk areas within customs revenue functions and
have not done any performance audits focused on improving these
functions.
CBP lacks a strategic workforce plan to guide its efforts to perform
customs revenue functions but has taken some recent steps to improve
its human capital management amid external and internal challenges. CBP
has not performed an assessment to determine the critical workforce
skills and competencies that will be needed to achieve current and
future customs revenue functions. For instance, CBP has not yet
determined how many staff and what skills it needs in customs revenue
positions, their associated support staff, and other positions that
contribute to the protection of customs revenue. Such an analysis would
allow CBP to develop a strategy to move from the current workforce to
the future workforce needed to achieve agency objectives related to
performing customs revenue functions. Relatedly, CBP has not developed
a strategic workforce plan to inform and guide its human capital
efforts to perform its current and emerging customs revenue functions.
CBP has recently taken some steps to improve staffing for customs
revenue functions, but gaps exist in these efforts. For example, CBP
has proposed revising the roles and responsibilities for Import
Specialists and is developing congressionally mandated resource
allocation models[Footnote 5] to determine ideal staffing levels for
performing various agency functions. However, CBP has not performed a
similar examination of roles and responsibilities for other positions,
and the resource allocation models being developed will not assess the
deployment of customs revenue staff across the more than 300 individual
ports--an important consideration since about 75 percent of customs
revenue staff work at ports of entry. Additionally, external and
internal challenges heighten the importance of such strategic workforce
planning. First, the workload for some customs revenue positions has
increased. For example, the growing number of free trade agreements
(FTA) has had a pronounced effect on some customs revenue positions,
including attorneys in CBP's Office of Regulations and Rulings who
participate in every phase of the negotiation and implementation of the
FTAs--from participating in negotiating sessions through issuing
binding rulings regarding the proper interpretation of the CBP
regulations implementing the agreement. In addition, some customs
revenue positions have seen an expansion of revenue-related as well as
nonrevenue-related responsibilities. For instance, with the formation
of DHS, the Fines, Penalties, and Forfeitures (FP&F) Specialists from
the former Customs Service became responsible for administering fines
and penalties for violations of immigration and agriculture laws in
addition to their existing responsibilities related to customs law.
Also, staff in some customs revenue positions told us they have been
assigned work that is unrelated to customs revenue functions, such as
administrative work and vehicle maintenance.
Despite being the second largest revenue generator for the U.S.
government, CBP does not publicly report on its performance of customs
revenue functions in its annual plans and performance reports, thus
failing to help ensure accountability. We have previously found that
good management practices dictate linking performance measures to
strategic goals and objectives in an effort to improve performance and
accountability. Good management practices also suggest publicly
reporting this information so that Congress can make informed decisions
and so that taxpayers have a better understanding of what the
government is providing in return for their tax dollars, or in this
case, how well it is collecting customs revenue. CBP's strategic
planning documents recognize the importance of customs revenue
protection by establishing it as a strategic objective and identifying
a revenue-related performance measure. However, we found that CBP does
not use this measure or publicly report on results related to its
customs revenue functions in its annual plans and Performance and
Accountability Reports, the official documents agencies issue to
Congress and the public to report program performance. According to a
CBP official, CBP does not report on customs revenue functions in its
Performance and Accountability Reports because these functions do not
directly address the long-term goal of facilitating trade.
In this report we make three recommendations. We recommend that the CBP
Commissioner develop a strategic workforce plan and work with the
Office of Management and Budget (OMB) to establish and report on
performance measures related to customs revenue functions in its
Performance and Accountability Reports. We also recommend that the DHS
Inspector General should identify areas of high risk related to customs
revenue functions. We provided a copy of this report to DHS. The
department concurred with our recommendation to develop a strategic
workforce plan and partially concurred with our recommendation to
establish and report on specific customs revenue performance measures.
The department agreed to take action to implement these recommendations
by March 31, 2008. The DHS OIG also concurred with our recommendation
and agreed to take action to implement it by September 30, 2007.
Background:
When the U.S. Customs Service was created in 1789 under the Department
of the Treasury, its mission was almost entirely focused on revenue
collection. Over time, the agency was presented with new missions and
challenges, including drug interdiction, immigration enforcement, and
airport passenger processing. But customs revenue functions, such as
assessing and collecting duties, excise taxes, and fees and penalties,
were always central to the Customs Service's mission because they
produced substantial revenue. After the September 11, 2001, terrorist
attacks and after DHS began operations in March 2003, the new
department faced dramatic transformations. In combining the Customs
Service with immigration bureaus, the Homeland Security Act of 2002
required that these function be transferred from the Departments of
Treasury and Justice to DHS. These functions were subsequently split
into two agencies--ICE and CBP. DHS's first priority is to prevent
further terrorist attacks within the United Sates, and it has taken
steps to focus its staff and resources on this priority mission. In
addition, the Homeland Security Act also mandated DHS to carry out the
legacy mission of the Customs Service--fostering legitimate trade and
travel into and out of the United States, which includes assessing and
collecting customs duties, excise taxes, fees, and penalties due on
imported merchandise.
When DHS was formed, it incorporated 22 different legacy organizations,
each with its own distinct culture, practices, and mission.
Transforming into a single agency whose priority mission is homeland
security, while still fulfilling all the missions of its legacy
organizations, including customs revenue functions has been a
challenge. Our previous work has found that DHS has struggled with its
transformation and strategic planning, failing to link its goals to
resource requirements and develop outcome-based measures to assess
performance for several DHS programs.[Footnote 6] To transform into an
effective organization, we have reported that DHS must establish
performance measures to help focus its limited resources.
To preserve a high level of customs revenue collections, Congress
required in Section 412(b) of the Homeland Security Act that CBP, at a
minimum, maintain certain revenue function positions and the level of
staff resources that were present in the U.S. Customs Service when it
became part of DHS in March 2003. The nine specific revenue function
positions Congress required CBP to maintain were Import Specialists,
Entry Specialists, Drawback Specialists, National Import Specialists,
FP&F Specialists, attorneys of the Office of Regulations and Rulings,
Customs Auditors, International Trade Specialists, and Financial
Systems Specialists. The act also mandated that CBP maintain, at a
minimum, the levels of support staff associated with customs revenue
positions. Associated support staff provide a variety of management,
technical, and administrative support functions. Some staff considered
associated support staff includes Liquidators, Seized Property
Custodians, Customs Technicians, as well as, Assistant Port Directors,
Account Managers, and Economists.
Most of these customs revenue positions are located in two offices
within CBP that are primarily responsible for performing the customs
revenue functions: the Office of International Trade[Footnote 7] and
the Office of Field Operations. Table 1 shows the customs revenue
positions and the number of staff specialists and associated support
staff as of March 2003.
Table 1: Customs Revenue Positions, as Defined by the Homeland Security
Act of 2002:
Office of Field Operations.
Position title: Import Specialist;
Position description: Reviews value and classification of imports;
Number of customs revenue positions as of March 2003: 984;
Number of associated support positions as of March 2003: 407.
Position title: Entry Specialist;
Position description: Processes entry documents and collects duties,
taxes, and fees;
Number of customs revenue positions as of March 2003: 409;
Number of associated support positions as of March 2003: 274.
Position title: Drawback Specialist;
Position description: Reviews decisions on claims pertaining to the
refunding of previously collected duties;
Number of customs revenue positions as of March 2003: 37;
Number of associated support positions as of March 2003: 26.
Position title: Fines, Penalties, and Forfeitures Specialist;
Position description: Assesses and collects fines and penalties for
noncompliance;
Number of customs revenue positions as of March 2003: 203;
Number of associated support positions as of March 2003: 203.
Office of International Trade.
Position title: Attorney (Office of Regulations and Rulings);
Position description: Issues decisions and provides technical advice on
customs and navigation laws;
Number of customs revenue positions as of March 2003: 90;
Number of associated support positions as of March 2003: 30.
Position title: Customs (Regulatory) Auditor;
Position description: Conduct external audits of importers to help
ensure compliance with customs laws and regulations;
Number of customs revenue positions as of March 2003: 364;
Number of associated support positions as of March 2003: 29.
Position title: National Import Specialist;
Position description: Serves as national consultants on tariff
classification and related issues;
Number of customs revenue positions as of March 2003: 97;
Number of associated support positions as of March 2003: 20.
Position title: International Trade Specialist;
Position description: Designs, implements, monitors, and evaluates
intervention actions;
Number of customs revenue positions as of March 2003: 74;
Number of associated support positions as of March 2003: 17.
Office of Finance.
Position title: Financial Systems Specialist;
Position description: Develops and implements financial systems;
Number of customs revenue positions as of March 2003: 5;
Number of associated support positions as of March 2003: 0.
Position title: Total;
Position description: [Empty];
Number of customs revenue positions as of March 2003: 2,263;
Number of associated support positions as of March 2003: 1,006.
Source: GAO analysis of CBP data.
[End of table]
Although Improving, CBP Failed to Maintain Mandated Staffing Levels for
Some Customs Revenue Positions:
Staff resources contributing to customs revenue functions have
generally declined since the creation of DHS, in part due to department
priorities focused on homeland security and recruiting and retention
problems for some positions. First, the number of staff in designated
customs revenue positions was below the mandated level for much of the
time since DHS was formed, although recent efforts have increased the
number of staff in most of these positions. Second, the total number of
support staff associated with customs revenue positions declined, with
six of eight positions losing support staff. Lastly, other DHS staff
contribute to performing or improving customs revenue functions, but
some of their contributions have declined over time.
Number of Customs Revenue Staff Was Frequently below the Mandated
Level, but Recent Efforts Increased Staffing for Most Positions:
For much of the time since the creation of DHS, the number of staff in
customs revenue positions was below the mandated level, although recent
efforts by CBP increased the number of staff in most of these
positions. In March 2003, CBP reported a total of 2,263 staff in the
nine customs revenue positions. The total number of customs revenue
staff stayed at or above this baseline until April 2005, when it fell
below the baseline. CBP officials attributed the decline in the number
of staff in customs revenue positions to department priorities focused
on homeland security and recruiting and retention problems in some
positions. For instance, according to CBP officials, they faced
problems recruiting International Trade Specialists and problems
retaining Customs Auditors. As a result, the total number of staff in
customs revenue positions remained below the March 2003 level until
December 2006, when it rose above the baseline to 2,273. In the past
year, CBP increased the total number of staff in customs revenue
positions. Between March and December 2006, CBP hired more than 130 new
staff into customs revenue positions, many of whom were added between
September and December. CBP officials attribute this recent increase
largely to steps taken following a commitment made by the Commissioner
of CBP to Congress to comply with the customs revenue staffing mandate
by the end of 2006. For example, they report that:
* CBP issued open-ended job announcements to continuously fill
positions in which the number of staff had declined.
* CBP attempted to improve its ability to hire high-quality candidates.
For instance, CBP competes with ICE for candidates to fill Customs
(Regulatory) Auditor positions. However, CBP's Auditor position only
goes as high as a GS-12 level, and ICE's position goes as high as a GS-
13. In response, CBP officials told us they are in the process of
revising the position so it advances to a GS-13 level. According to CBP
officials, CBP was also facing problems filling its International Trade
Specialist positions located in Washington, D.C., because of the high
cost of living and the strong competition for quality candidates. As a
result, CBP decided that it will allow more of these positions to be
filled in select Strategic Trade Centers.[Footnote 8]
* CBP is also closely monitoring the results of its efforts to increase
the number of customs revenue staff. Since 2006, on a biweekly basis,
CBP analyzes, by position, the number of customs revenue staff on board
and "in the pipeline."[Footnote 9] CBP officials explained that by
tracking both pieces of information, they can help ensure that they
maintain the appropriate number of staff in each position throughout
the year. For example, CBP estimates that it will lose 130 Import
Specialists during fiscal year 2007, so it manages the number of
candidates in the pipeline to fill these vacancies as quickly as
possible after they occur.
The extent of CBP's compliance with the customs revenue staffing
mandate for the nine specified customs revenue positions has changed
over time. For the first year after the creation of DHS in March 2003,
CBP was able to maintain its mandated staff levels for all nine of the
customs revenue positions. However, since March 2004, as shown in
figure 1, CBP has not been able to maintain the mandated levels for all
nine customs revenue positions.
Figure 1: Number of Customs Revenue Positions for Which CBP Maintained
the Mandated Staffing Levels:
[See PDF for image]
Source: GAO analysis of CBP data.
[End of figure]
As of December 2006, staffing levels are at or above their mandated
levels for six of the nine customs revenue positions, as shown in
figure 2. CBP is below the mandated staff levels for three customs
revenue positions, ranging from 2 to 34 positions below the baseline--
attorneys (2 positions or 2 percent), Custom Auditors (34 positions or
9 percent), and International Trade Specialists (18 positions or 24
percent). CBP officials stated that the decline from mandated levels
occurred for a variety of reasons, including general attrition,
retirements, and transfers within CBP and outside to other DHS units
with better pay or career tracks.
Figure 2: Change in Number of Staff in Customs Revenue Positions from
March 2003 Baseline, as of December 2006:
[See PDF for image]
Source: GAO analysis of CBP data.
Note: Number in parentheses is the mandated baseline staff level for
each position.
[End of figure]
In general, CBP has maintained the mandated staff levels for Entry;
FP&F; and Financial Systems Specialists over time. However, until
recently, the staff levels for Import and National Import Specialists
generally declined from their baselines. For example, the number of
Import Specialists dropped from its baseline of 984 to its lowest level
of 892 in March 2006, reaching 1,000 in December 2006. The number of
National Import Specialists dropped from 97 to 87 in March 2006, but
then reached 113 in December 2006.[Footnote 10] See appendix II for
more information on staff levels for individual customs revenue
positions over time.
Number of Associated Support Staff Has Declined below the Mandated
Levels for Most Positions:
In March 2003, CBP reported a total of 1,006 support staff associated
with eight of the nine customs revenue positions.[Footnote 11] One of
the customs revenue positions--Financial Systems Specialist--did not
have any associated support staff. Associated support staff hold a
variety of positions performing a range of management, technical, and
administrative functions. For example, associated support staff
includes, among others, Liquidators, Seized Property Custodians,
Customs Technicians, as well as Assistant Port Directors, Account
Managers, and Economists. The total number of associated support staff
stayed at or above this baseline through September 2003; it has been
below the baseline since then. CBP officials had not conducted an
assessment to determine the cause for the decline in the number of
associate support staff across positions or the effect of this decline
on the performance of customs revenue functions.
The extent of CBP's compliance with the customs revenue staffing
mandate for the associated support staff for each of the customs
revenue positions has changed over time. From March through September
2003, CBP was able to maintain the mandated level for all the support
positions associated with the customs revenue positions. However, as
shown in figure 3, since March 2004, CBP has at least maintained the
mandated number of associated support staff for as few as one and as
many as three of the eight customs revenue positions.
Figure 3: Number of Customs Revenue Positions for Which CBP Has
Maintained Mandated Associated Support Staffing Levels:
[See PDF for image]
Source: GAO analysis of CBP data.
[End of figure]
As of September 2006, CBP was above the mandated number of staff in two
of eight associated support staff positions as shown in figure 4. For
example, the number of support staff associated with the Customs
(Regulatory) Auditor position exceeded its baseline, gaining a total of
11 staff (or 38 percent) since March 2003, increasing from 29 to 40.
CBP was below the mandated support staff levels associated with 6
customs positions, ranging from 2 (or 10 percent) below for National
Import Specialist support staff to 94 (or 23 percent) below for Import
Specialist support staff. See appendix III for more information on
staff levels for individual associated support staff positions over
time.
Figure 4: Change in Number of Associated Support Staff from March 2003
Baseline, by Customs Revenue Position, as of September 2006:
[See PDF for image]
Source: GAO analysis of CBP data.
Note: Number in parentheses is the mandated baseline staff level for
each position.
[End of figure]
Many DHS Staff Not Specified in Section 412(b) Contribute to Customs
Revenue Functions, but Some of Their Contributions Are Declining:
DHS staff other than those listed in section 412(b) of the Homeland
Security Act also contribute to performing or improving customs revenue
functions; however, their contributions have been declining over time
due to the demands of DHS's priority mission--homeland security. For
example, CBPOs, ICE Investigators, and OIG Auditors make contributions
to help ensure customs revenue functions are carried out effectively
and efficiently. Since the formation of DHS, the contributions of some
of these positions have declined.
Approximately 18,000 CBPOs (formerly Customs Inspectors, Immigration
Officers, or APHIS Inspectors) perform a wide variety of tasks at ports
of entry, including processing people and cargo entering the United
States and screening cargo for security purposes. Some of these tasks
are related to customs revenue functions. For example, CBPOs examine
commercial documents such as bills of lading, packing slips, and
invoices to ensure that imports comply with applicable customs laws and
regulations. Such examinations can help Entry and Import Specialists
ensure that appropriate duties, taxes, and fees are collected. In
addition, CBPOs can identify violations of customs laws and regulations
and help ensure that appropriate fine, penalty, or seizure action is
taken. However, CBP data summarizing staff time charges indicate that
although field staff contributing to trade functions initially grew
from fiscal year 2003 to 2004, the amount of time spent supporting
trade functions has declined about 8 percent since then.[Footnote 12]
CBP data show that 5,464 full-time equivalents (FTE) supported trade
functions in fiscal year 2003 and grew to 6,045 FTEs in fiscal year
2004, but by fiscal year 2006, that number had dropped by 545 FTEs.
About 5,700 ICE Investigators perform a range of border enforcement
efforts, from investigating drug and counterfeit smuggling, to
enforcing U.S. immigration laws, and protecting against the entry of
terrorists and their weapons. ICE Investigators also contribute to
customs revenue functions by conducting investigations to determine
whether customs laws or regulations have been broken. These
investigations can result in identifying and prosecuting criminal
networks that systematically evade customs law by committing acts such
as importing counterfeit merchandise and intentionally undervaluing
merchandise so as to avoid customs duties. According to ICE's Office of
Investigations, which handles such trade enforcement cases, ICE
Investigators undertake such investigations in response to referrals
from CBP staff as well as on their own initiative. Since the formation
of DHS, the amount of attention ICE has focused on trade enforcement
cases has declined. The number of FTEs ICE used to conduct trade
enforcement investigations declined from 226 in fiscal year 2003 to 186
in fiscal year 2006--an 18 percent decline. The proportion of time ICE
investigators spend on trade enforcement cases versus other cases
dropped from 7 percent in fiscal year 2003 to 3 percent in 2006.
Auditors in the DHS OIG can also help improve the effectiveness or
efficiency of agency activities, but they have not focused on customs
revenue functions due to more immediate priorities. OIG Auditors help
improve the effectiveness and efficiency of agency activities by
conducting audits related to DHS programs and operations. They examine,
evaluate, and where necessary, recommend ways for the department to
carry out its responsibilities in the most effective, efficient, and
economical manner possible. According to a DHS OIG official responsible
for audit project management, prior to the formation of DHS, the
Treasury OIG had approximately 180 Auditors, about 65 of which focused
on U.S. Customs Service issues.[Footnote 13] However, when the DHS OIG
was established in 2003, few of the Treasury OIG Auditors with
knowledge and experience related to customs revenue functions moved
from the Treasury OIG to the DHS OIG. Following the formation of DHS,
Congress, DHS, and DHS OIG management prioritized performance audits
focusing on homeland security and, more recently, disaster assistance.
According to a DHS OIG official, its audit priorities are established
annually based on input from subject matter experts and congressional
interest. The OIG has not evaluated whether there are high-risk areas
related to the performance of customs revenue functions, according to
this official, because it has focused its resources on these other
priorities. As part of its compliance with the DHS Financial
Accountability Act, the OIG, through the use of an independent
contractor, has performed audits of DHS's and CBP's financial
statements and information technology systems that affect the
collection of revenue.[Footnote 14] However, because of other
priorities, the DHS OIG has not conducted any specific performance
audits related to customs revenue functions.
As of February 2007, the DHS OIG's Office of Audits had 109 staff on
board to conduct audits of programs throughout DHS.[Footnote 15] Of
these, 15 Auditors (and six managerial and administrative staff) cover
all of CBP. These Auditors are currently working on reviews related to
CBP's Automated Targeting System, export controls, and the Secure
Border Initiative--a DHS program to secure U.S. borders and reduce
illegal immigration. The OIG's fiscal year 2007 Annual Performance Plan
includes one planned review related to customs revenue functions, which
will focus on whether CBP's cargo carrier fine process is an effective
tool for increasing carrier performance and compliance with the law.
Before the formation of DHS, when more resources were dedicated to
auditing customs revenue functions, Treasury OIG Auditors conducted
numerous reviews of the performance of customs revenue functions, some
of which identified areas for significant improvement. For example,
Treasury OIG Auditors reviewed the collection of international mail
entry duties, and the OIG estimated that in fiscal year 2001 between
$150 million and $430 million in customs duties were
uncollected.[Footnote 16] Treasury OIG Auditors also reviewed the
controls in place to ensure drawback[Footnote 17] claims (which
amounted to more than $400 million when the Treasury OIG conducted its
review) were not improperly paid. The OIG found weaknesses in the
processing of drawback claims that could result in overpayments and
made recommendations to fix the problems.[Footnote 18]
CBP Lacks a Strategic Workforce Plan, but Some Steps Taken to Improve
Its Human Capital Management as It Faces Key Challenges:
CBP lacks a strategic workforce plan to guide its efforts to perform
customs revenue functions amid key challenges, but it has taken some
recent steps to improve its human capital management. CBP has not
performed an assessment to determine the critical workforce skills and
competencies that will be needed to achieve current and future customs
revenue functions, a key principle of strategic workforce planning. CBP
also lacks a strategic workforce plan to inform and guide its future
human capital efforts related to customs revenue functions. CBP has
recently made efforts to improve its human capital management such as
developing resource allocation models, but gaps in these efforts
persist. Additionally, external and internal challenges heighten the
importance of such strategic workforce planning. For instance, CBP's
growing workload and changing job responsibilities for customs revenue
positions place additional pressure on CBP's performance of customs
revenue functions.
CBP Has Not Conducted an Assessment of Critical Workforce Skills and
Competencies and Lacks a Strategic Workforce Plan:
We have previously reported that agencies need effective human capital
systems to respond to current and emerging challenges.[Footnote 19]
Specifically, we have found that for DHS to successfully transform into
a more effective organization it must, among other things, improve
management systems, including its human capital system. One tool for
achieving such improvement is a strategic workforce plan. Strategic
workforce planning[Footnote 20] helps an organization align its
staffing with its current and emerging mission and programmatic goals.
This includes developing long-term strategies for acquiring,
developing, and retaining an organization's total workforce. One key
step in strategic workforce planning is performing an assessment to
determine the skills and competencies that are critical to successfully
achieving the agency's current and future mission and goals. This is
especially important in a dynamic environment in which the need for
changing technologies and skills is coupled with constrained budgets.
However, CBP has not engaged in strategic workforce planning to inform
and guide its approach to manage the human capital necessary to perform
customs revenue functions. First, CBP has not conducted a comprehensive
assessment to determine the skills and competencies that are critical
to successfully perform customs revenue functions. While CBP has
examined the roles and responsibilities for Import Specialists, it has
not comprehensively examined the changing workload, roles and
responsibilities for others who perform or support customs revenue
functions to determine the critical skills and competencies that are
needed. For example, CBP has not assessed the workload, roles and
responsibilities for the other customs revenue positions and the
associated support positions to fully understand the skills that are
critical to successfully achieving the current and future goals of its
customs revenue functions. In addition, CBP has not assessed how best
to deploy its workforce across its 300 plus ports of entry to support
customs revenue functions.
CBP has not developed a strategic workforce plan for customs revenue
functions that goes beyond identifying current gaps and needs and
projects future human capital needs based on long-term vision, mission,
and anticipated changes in environmental factors. According to CBP's
Assistant Commissioner for Human Resource Management, CBP's human
capital management efforts have focused on achieving and maintaining
the staffing levels in customs revenue positions required by the
Homeland Security Act of 2002. While the Homeland Security Act of 2002
required CBP to maintain, at a minimum, the number of staff in each of
the nine customs revenue positions, CBP has not determined whether the
number of staff required by the Homeland Security Act is an appropriate
number to ensure that it effectively performs customs revenue functions
in light of changes in the external and internal environment. CBP has
also not developed long-term strategies for acquiring, developing, and
retaining staff needed to achieve agency objectives related to
performing customs revenue functions.
Some Recent Steps Improve CBP's Human Capital Management, but Gaps in
These Efforts Persist:
CBP has taken some recent steps to improve its human capital
management. For instance, according to CBP's Assistant Commissioner for
Human Resource Management, he has engaged his counterpart Assistant
Commissioners in functional units (e.g., Office of International Trade,
Office of Field Operations, etc.) in discussions about their human
capital acquisition needs in light of their varied roles and
responsibilities. CBP has also developed practices to hire qualified
employees for customs revenue positions in a timely manner as described
in the previous section. In addition, CBP's assessment of the roles and
responsibilities for Import Specialists has resulted in a proposed
"Import Specialist Redesign Model" that will, among other things,
revise the position description for Import Specialists and set
standards for the size and composition of Import Specialist teams at
each port of entry.[Footnote 21]
Congressional concern about CBP's ability to link resources to its
mission led Congress to require CBP to develop several resource
allocation models.[Footnote 22] CBP is currently developing these
staffing models mandated by Congress. Since the start of fiscal year
2006, Congress has required CBP to develop two related but distinct
staffing models to determine optimal staffing levels at ports of entry.
Congress directed the creation of one model in the conference report
accompanying the fiscal year 2007 Department of Homeland Security
Appropriations Act.[Footnote 23] The conference report for the act
noted congressional concern with CBP's ability to align its staffing
resources with its mission requirements. It mandated that CBP develop a
resource allocation model for current and future year staffing
requirements that assesses optimal staffing levels at all land, air,
and sea ports of entry. According to CBP officials responsible for
developing the model, it will only focus on staff in the CBPO and
Agricultural Specialist position, not any other positions. While CBPOs
are not one of the customs revenue positions, they do contribute to
customs revenue and other trade functions by screening cargo for trade
violations and performing cargo inspections for trade compliance
purposes.
In addition, the SAFE Port Act[Footnote 24] requires CBP to develop a
resource allocation model for determining the optimal staffing levels
required to carryout CBP's commercial operations, including commercial
inspection and release of cargo and customs revenue functions.
According to CBP staff responsible for developing the model, it will
build on a previous resource allocation model and will suggest the
ideal staffing level for the customs revenue positions as well as some
other trade-related positions such as CBPOs, Agricultural Specialists,
and National Account Managers.[Footnote 25]
While CBP's multiple efforts to develop resource allocation models
could serve as an important component of a strategic workforce plan,
additional planning steps are needed. The models will not include an
assessment of what critical skills and competencies are needed to
perform current and projected customs revenue functions. As a result,
the models will identify the ideal number of staff for performing
various functions, but will not provide insight into what skills and
competencies those staff should have or reconsider their position
descriptions. In addition, the models (even when taken in combination)
will not assess the number and combination of customs revenue staff
that are necessary at each port. Although the model required by the
conference report on the fiscal year 2007 DHS Appropriations Act will
be port specific, it will focus on CBPOs and Agricultural Specialists.
In addition, the model required by the SAFE Port Act will only address
the deployment of staff at a very high level. According to CBP
officials responsible for developing the model, it will indicate the
ideal number of staff along the northern border vs. the southern
border, but will not be port specific. The model required by the SAFE
Port Act will not address the number or composition of associated
support positions needed to perform customs revenue functions.
Key Challenges Heighten the Importance of Strategic Workforce Planning
for Customs Revenue Functions:
CBP faces external and internal challenges that heighten the importance
of strategic workforce planning for customs revenue functions. First,
CBP's workload has increased. This workload increase is attributable to
a variety of factors, including increasing trade, growth in the number
of free trade agreements, and the increasing number and significance of
antidumping orders. At the same time, job responsibilities for some
customs revenue positions have grown. Some customs revenue positions
have seen an expansion of their trade-related responsibilities, and
others have seen the addition of responsibilities unrelated to trade.
External Challenges Increase CBP's Customs Revenue Workload:
CBP's workload has grown since the creation of DHS, which has resulted
in significant challenges to its performance of customs revenue
functions. Part of the workload increase is attributable to an overall
increase in trade and the number of entities importing merchandise into
the United States. Since fiscal year 2002, the volume of imported goods
has increased approximately 33 percent. In addition, the number of
importing entities has grown approximately 18 percent since fiscal year
2002, which increases the challenge for CBP's Import Specialists,
Customs (Regulatory) Auditors, and others who must identify importers'
noncompliance with customs laws and regulations. According to CBP
officials, there has also been a significant growth in noncompliant
trade, such as counterfeit merchandise, dumped or subsidized exports,
and quota circumvention. The growth in such noncompliant trade creates
pressures for CBP to do more to identify, prevent, and respond in order
to protect the American economy and consumers.
According to CBP officials, the growth in FTAs to which the United
States is a party also increases its workload. Since January 2001, the
United States has increased the number of FTAs from two to nine. While
FTAs affect customs revenue functions in a variety of ways, some
customs revenue positions are affected more than others. For example,
attorneys in the Office of Regulations and Rulings are involved in
every phase of the development and implementation of an FTA. According
to CBP officials, the attorneys (1) travel with the U.S. negotiating
team to negotiate the details of agreements, (2) help draft
implementing legislation once the agreement is completed, (3) draft CBP
regulations to implement the legislation once it becomes law, and (4)
issue binding rulings in response to importer requests to determine the
applicable duty for a particular import.
Further, according to CBP officials, the workload associated with
administering antidumping orders[Footnote 26] issued by the Department
of Commerce has increased, especially for Import Specialists. As of
February 2007, CBP was responsible for implementing more than 240
antidumping orders, some of which affect hundreds of millions of
dollars in trade annually. Further, some very significant orders,
including two of the four largest antidumping orders in terms of import
value came into effect since the creation of DHS.[Footnote 27]
According to CBP officials, collecting antidumping duties involves
significantly more work than collecting normal duties because the
amount of antidumping duties that importers owed are often revised (up
to 18 months after the products have entered the country) as a result
of additional reviews conducted by the Department of Commerce. In cases
where Commerce determines that additional duties are owed, CBP must
identify the affected importers, issue supplemental duty bills, and
take steps to collect the supplemental duties. This can be particularly
challenging, as illustrated by the fact that CBP has been unable to
collect more than $500 million in antidumping duties over the past 5
years.[Footnote 28] In addition, CBP monitors trade patterns to
identify, and then works with ICE to investigate, instances of
suspected circumvention of antidumping orders by means such as
mislabeling the country of origin.
Expanded Job Responsibilities for Some Customs Revenue Positions Create
Internal Challenges:
The job responsibilities of some staff in customs revenue positions
have expanded since the creation of DHS, either in the form of
additional duties outside the scope of customs revenue functions or
taking on additional revenue-related duties. According to CBP
officials, some customs revenue positions have seen an expansion of job
responsibilities as a result of merging staff from the legacy U.S.
Customs Service, the Immigration and Naturalization Service, Border
Patrol, and APHIS and assuming the authority and responsibility for
carrying out each of these agencies' functions. This significantly
added to the workload of some customs revenue positions such as FP&F
Specialists. Prior to the formation of CBP, FP&F Specialists in the
U.S. Customs Service were responsible for processing fines, penalties,
and forfeitures related to violations of customs law. When CBP was
formed, only FP&F Specialists from the former Customs Service joined
CBP, and they became responsible for administering and collecting
fines, penalties, and forfeitures for violations of immigration and
agriculture laws. According to CBP officials, this exacerbated an
already existing shortage of resources for legacy Customs FP&F
operations. In addition to the expansion in the types of FP&F actions
for which the FP&F Specialists were responsible, the number of actions
FP&F Specialists had to process increased dramatically. For example,
during the second half of fiscal year 2003, CBP's 203 FP&F Specialists
processed about 48,000 FP&F actions. By the second half of fiscal year
2004, CBP's now 207 FP&F Specialists had to process nearly 70,000
actions. This translates to a 2 percent increase in staff and a 46
percent increase in workload in one year. Since then, the number of
FP&F Specialists had increased to 218 by December 2006 and the workload
had declined to about 60,000 actions in the second half of fiscal year
2006. According to a CBP official, because of this growth in workload,
it takes CBP longer to adjudicate FP&F cases.
Import Specialists (which account for about 40 percent of the staff
assigned to customs revenue positions) have also seen their job
responsibilities expand. These increased responsibilities are a mix of
customs revenue functions, trade functions broadly (but not necessarily
customs revenue functions), and nontrade functions. According to CBP's
Office of Human Resource Management, since the creation of CBP, Import
Specialists have assumed increased responsibilities in a variety of
areas. These include responsibilities associated with managing large
importer accounts, new free trade agreements, origin determinations,
and counterterrorism. Further, some Import Specialists reported to us
through their representative at the National Treasury Employees Union
that they have been detailed to other units and are performing duties
outside their area of responsibility and not contributing to customs
revenue functions. For example, some reported that, due to shortages in
the number of CBPOs at some ports, Import Specialists have been
performing some of the duties assigned to CBPOs such as physically
examining cargo for trade violations.
Other Import Specialists in several locations reported to us through
their representative at the National Treasury Employee's Union that
they have been doing work unrelated to customs revenue functions or
trade. For instance, they report that:
* One port has not had a Secretary/Receptionist position for 5 years.
As a result, that function was given to Import Specialists on a
rotational basis.
* New Import Specialists at one port are assigned to do tasks such as
inventory, vehicle maintenance, mail processing, and moving and setting
up office furniture in a new facility.
* At one port, Import Specialists are performing rotations as long as 3
months to respond to Freedom of Information Act requests.
CBP's Public Reporting Does Not Ensure Accountability for Customs
Revenue Functions:
CBP--the second largest revenue generator for the U.S. government--does
not publicly report on its performance of customs revenue functions in
its annual performance plans and reports. Good management practices
dictate linking performance to strategic goals and objectives and
publicly reporting this information so that Congress has better
information about program and agency performance, and taxpayers can
better understand what the government is providing in return for their
tax dollars, thus helping to ensure accountability. CBP's strategic
planning documents recognize the importance of customs revenue
protection by establishing a related strategic objective and
identifying a revenue-related performance measure. However, CBP does
not publicly report its progress toward meeting this strategic
objective in its annual Performance and Accountability Reports or
annual Performance Plans, the official documents agencies issue to
Congress and the public to report program plans and performance.
According to a CBP official, CBP does not report on customs revenue
functions in its Performance and Accountability Reports because these
functions do not directly address the long-term goal of facilitating
trade.
Reporting Performance Relative to Goals, Objectives, and Measures Can
Help Ensure Accountability:
Leading organizations strive to align their activities and resources to
achieve mission-related goals and also seek to establish clear
hierarchies of performance goals and measures.[Footnote 29] Under these
hierarchies, the organizations try to link the goals and performance
measures for each organizational level to successive levels and
ultimately to the organization's strategic goals.[Footnote 30] They
have recognized that without clear, hierarchically linked performance
measures, managers and staff throughout the organization will lack
straightforward roadmaps showing how their daily activities can
contribute to attaining organizationwide strategic goals and mission.
These leading organizations developed performance measures that are (1)
tied to program goals and demonstrated the degree to which the desired
results were achieved, and (2) are responsibility linked to establish
accountability for results. We found that leading organizations did not
stop after strategic planning and performance measurement. These
organizations helped ensure accountability by publicly reporting this
information so that Congress can make informed decisions and so that
taxpayers have a better understanding of what the government is
providing in return for their tax dollars.
CBP Does Not Publicly Report Results that Link Revenue Performance with
Strategic Goals and Objectives:
CBP has a strategic goal and objective that capture customs revenue
functions, but CBP does not publicly report on related performance
measures, which would enable Congress and the public to assess its
progress in protecting revenue collections and ensure accountability.
CBP's first strategic plan--covering 2005 to 2010--identifies the
importance of revenue collection, as it includes a strategic goal of
"facilitating the more efficient movement of legitimate cargo and
people" with a corresponding strategic objective of "ensuring revenue
protection" and a performance measure of "reduction in lost revenue:
trade."[Footnote 31] CBP's fiscal year 2005 Performance and
Accountability Report described a related baseline performance measure
to track "reduction in lost revenue," but CBP did not include either a
performance target or baseline data for this measure. CBP officials
told us that the program under which customs revenue functions falls--
Border Security Inspections and Trade Facilitation--went through OMB's
Program Assessment and Rating Tool (PART)[Footnote 32] review and as a
result, CBP's "reduction in lost revenue" measure was not accepted. CBP
subsequently did not report it in the fiscal year 2006 annual
performance report. Further, our review of DHS annual Performance Plans
(contained in Performance Budget Overviews) for fiscal years 2005
through 2008 showed that they do not include performance measures
related to customs revenue functions. According to CBP officials, CBP
does not plan to report customs revenue results relative to performance
measures in its future Performance and Accountability Reports because
these functions are not directly tied to the program's long-term goal
of facilitating trade and travel.
Prior to its first strategic plan, CBP developed strategic goals that
were reported in its fiscal year 2003 and 2004 annual performance
reports. Under its strategic goal of "balancing legitimate trade and
travel with security," CBP included the function of collecting duties,
taxes, and fees. However, CBP did not publicly report on related
performance measures in either its fiscal year 2003 or 2004 annual
performance reports.[Footnote 33]
Although CBP has not reported the results of its performance of customs
revenue functions in its Performance and Accountability Reports, other
agencies that collect less revenue than CBP have successfully developed
and publicly reported measures and their results for revenue collection
functions. For example, OMB rated as "effective," the Department of
Treasury's Alcohol and Tobacco Tax and Trade Bureau "Collect the
Revenue" program, which reports (1) the amount of resources expended as
a percentage of the revenue collected and (2) the percent of voluntary
compliance in filing tax payments timely and accurately.
While CBP has not established a successful hierarchy of performance
measures for customs revenue functions, it has internal planning
documents and statistical data that track its effectiveness in
performing some customs revenue functions. For instance, CBP has
designated customs revenue as one of seven Priority Trade Issues and
has developed an internal "official use only" strategy that includes
performance measures, and targets for some revenue functions such as
the percentage of repeat violators with material revenue loss and the
loss of revenue due to surety default. CBP also prepares other
"official use only" documents for internal purposes to provide managers
an update on the progress of certain revenue performance measures. In
addition, various components within CBP's Office of International Trade
track some data on CBP's performance of customs revenue functions. For
example, the Office of International Trade measures the revenue gap--an
estimate of the amount of revenue uncollected due to importer
noncompliance.[Footnote 34] The Office of International Trade also
assesses how well certain customs revenue positions are performing job
functions. For instance, it assesses Customs Auditors' performance by
evaluating how quickly an audit is completed. Further, OT also tracks
whether their attorneys and National Import Specialists issue rulings
in a timely manner in response to requests from importers regarding
proper tariff classification for shipped items.
Conclusions:
The creation of DHS involved the movement of a wide range of functions
from various agencies into the new department. At the time, Congress
expressed its concern that some of these functions, customs revenue
functions in particular, may not continue to receive attention and
resources in the new environment. Customs revenue, as the second
largest revenue generator for the U.S. government, is a highly
significant source of government funding.
The findings in this report suggest that Congress' concerns about the
potential affect of moving customs revenue functions into CBP, whose
priority mission is homeland security, were warranted. We found that
this shift in mission contributed to reduced focus and resources
devoted to customs revenue functions. Specifically, the number of staff
in most customs revenue positions declined since the creation of DHS,
despite a legislative mandate that they should not. In addition, the
number of Auditors in the OIG dedicated to customs issues has declined
as OIG resources have been focused in other areas. As a result there
have been no OIG performance audits related to customs revenue
functions.
An important CBP weakness is that it fails to publicly report results
of its customs revenue functions. The current lack of reporting related
to customs revenue functions makes it difficult for Congress and the
American public to determine how well CBP is performing its customs
revenue responsibilities. In light of the significant amount of revenue
CBP collects annually (nearly $30 billion in fiscal year 2006), and has
not collected (approximately $150 million alone in antidumping duties
in 2006), establishing specific performance targets related to customs
revenue functions and tracking and reporting on CBP's progress in
meeting those targets could help improve CBP's performance and assist
Congress in exercising its oversight responsibilities.
CBP's recent efforts have helped it move closer to compliance with
staffing level mandates for customs revenue positions, but even meeting
the staffing levels does not achieve the more fundamental goal of
maintaining customs revenue functions. Given that more than 4 years
have passed since the Homeland Security Act, it is essential for
Congress and agency management to know whether the staffing levels
required in the act are sufficient to ensure effective performance of
customs revenue functions. The resource allocation models CBP is
developing in response to congressional mandates are a step in the
right direction to help it determine the ideal number of staff for
performing customs revenue functions. The growing workload, caused by
factors such as the increasing volume of trade and the increasing
number of trade agreements affect the amount and nature of human
capital required to effectively perform customs revenue functions. In
addition, changes in the internal environment, such as shifting job
responsibilities for customs revenue positions, also influence the
appropriate level of resources. A strategic approach to workforce
planning that takes into account these kinds of environmental factors
and is linked to revenue-related performance goals will help move the
focus beyond compliance with specific targets and toward a more
informed discussion of the agency's resource needs to achieve current
and future customs revenue functions.
Recommendations for Executive Action:
We recommend that, the CBP Commissioner develop a strategic workforce
plan that aligns its human capital efforts with its objectives related
to performing customs revenue functions. Such a strategic workforce
plan should address five principles: (1) involve top management,
employees, and other stakeholders, (2) determine critical skills and
competencies needed to achieve current and future programmatic goals,
(3) develop strategies tailored to address gaps in the number,
deployment, and alignment of human capital approaches, (4) build the
capability needed to address administrative, educational, and other
requirements for supporting workforce planning strategies, and (5)
monitor and evaluate the agency's progress toward human capital goals
and the contribution of human capital results to achieving programmatic
results.
In order to employ good management practices and link customs revenue
performance measures with agency strategic goals and objectives, the
CBP Commissioner should work with OMB to establish specific customs
revenue performance measures and targets as well as evaluate, track,
and report performance measures in annual agency Performance and
Accountability Reports for congressional and public oversight of
customs revenue functions.
In order to improve oversight over the performance of customs revenue
functions, the Inspector General of the Department of Homeland
Security, while developing its annual performance plan, should identify
whether areas of high risk related to customs revenue functions exist
and consider initiating performance audits to explore and mitigate
those risks.
Agency Comments and Our Evaluation:
We provided a copy of this report to DHS. It concurred with our
recommendation to develop a strategic workforce plan. DHS partially
concurred with our recommendation to establish and report on specific
customs revenue performance measures. The department agreed to take
action to implement these recommendations by March 31, 2008. DHS's
official comments are contained in appendix V. The DHS OIG also
reviewed a draft of this report and concurred with our recommendation
and agreed to take action to implement it by September 30, 2007. The
DHS OIG also provided additional information regarding its audits of
CBP's financial and information technology systems, which we
incorporated as appropriate. The DHS OIG's official comments are
contained in appendix VI.
We will send copies of this report to the appropriate congressional
committees as well as the CBP Commissioner and the Secretary of
Homeland Security. We will make copies available to others upon
request. In addition, the report will be available at no charge on the
GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please
contact me at (202) 512-4347 or YagerL@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made major contributions to
this report are listed in appendix VII.
Signed by:
Loren Yager:
Director, International Affairs and Trade:
List of Congressional Committees:
The Honorable Daniel K. Inouye:
Chairman:
The Honorable Ted Stevens:
Vice Chairman:
Committee on Commerce, Science, and Transportation:
United States Senate:
The Honorable Max Baucus:
Chairman:
The Honorable Charles Grassley:
Ranking Member:
Committee on Finance:
United States Senate:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Robert C. Byrd:
Chairman:
The Honorable Thad Cochran:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
United States Senate:
The Honorable Bennie G. Thompson:
Chairman:
The Honorable Peter T. King:
Ranking Member:
Committee on Homeland Security:
House of Representatives:
The Honorable James L. Oberstar:
Chairman:
The Honorable John L. Mica:
Ranking Member:
Committee on Transportation and Infrastructure:
House of Representatives:
The Honorable Charles B. Rangel:
Chairman:
The Honorable Jim McCrery:
Ranking Member:
Committee on Ways and Means:
House of Representatives:
The Honorable David E. Price:
Chairman:
The Honorable Harold Rogers:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The SAFE Port Act[Footnote 35] required GAO to review changes in
customs revenue functions since the formation of the Department of
Homeland Security (DHS). Specifically, this report addresses (1) how
staff resources contributing to customs revenue functions have changed
since the creation of DHS, (2) how Customs and Border Protection (CBP)
conducts strategic workforce planning for customs revenue functions,
and (3) whether CBP's public reporting on customs revenue functions
ensures accountability. In addition, this report presents data on
resources dedicated to customs revenue functions in appendix IV. We did
not assess the effectiveness of CBP's customs revenue functions.
To obtain information on these issues, we interviewed a variety of DHS
officials. This included officials from CBP's Offices of Field
Operations, Finance, Human Resource Management, International Trade,
and Policy and Planning. We also interviewed officials from Immigration
and Customs Enforcement's (ICE) Office of Investigations. In addition,
we reviewed information gathered during our prior and ongoing
engagements related to CBP's trade activities, performance measurement,
and strategic workforce planning.
To determine how staff resources contributing to customs revenue
functions have changed since the creation of DHS, we analyzed CBP data
on the number of staff in each of the customs revenue positions since
March 2003 and compared these data with the requirements in the
Homeland Security Act of 2002. We collected data on staff levels from
March 2003 to the most current data available, which was December 2006
for customs revenue positions and September 2006 for associated support
positions. CBP data on staff levels were reported for September and
March for each fiscal year, with the exception of fiscal year 2005 when
CBP reported data for April 2005. To assess the reliability of these
data, we reviewed related documentation, interviewed knowledgeable
officials, and performed manual testing of the data. Based on that
analysis, we determined that these data were sufficiently reliable for
the purpose of determining whether CBP complied with the staffing
requirements in the Homeland Security Act of 2002. We also interviewed
CBP officials regarding the contributions of customs revenue staff to
the performance of customs revenue functions. Further, we analyzed data
from CBP's Customs Overtime and Scheduling System to determine the
overall trend in the number of full-time equivalents dedicated to trade
functions. In addition, we interviewed ICE officials and obtained data
on ICE's contributions to customs revenue functions. Finally, we
interviewed officials from the DHS Office of Inspector General (OIG)
and reviewed relevant OIG performance audit reports and annual
performance plans. We did not assess what effect any change in staff
resources had on the effectiveness of CBP's performance of customs
revenue functions.
To determine how CBP conducts strategic workforce planning for customs
revenue functions, we interviewed CBP officials regarding (1) changes
in customs revenue workload, (2) changes in the roles and
responsibilities of customs revenue staff, (3) efforts to increase the
number of staff in customs revenue positions, (4) human capital
planning, and (5) efforts to develop resource allocation models. We
also analyzed documents and statistics related to customs revenue
workload, changes in the roles and responsibilities of customs revenue
staff, and human capital planning. In addition, we interviewed a
representative of the National Treasury Employee's Union to obtain the
union and its members' views on changes in the roles and
responsibilities of customs revenue staff. Finally, we analyzed our
prior work regarding the components of effective human capital
planning.
To determine whether CBP's public reporting on customs revenue
functions ensures accountability, we interviewed and corresponded with
officials in CBP's Offices of International Trade, Field Operations,
and Policy and Planning as well as officials in DHS's Offices of Human
Resource Management, Finance, and Program Analysis and Evaluation. In
addition, we reviewed department and agency documents such as the DHS
Performance Budget Overviews for fiscal years 2005 to 2008 and CBP's
Strategic Plan for 2005 to 2010. We also analyzed Priority Trade Issue
documents and performed a systematic analysis of fiscal years 2003 to
2006 CBP Performance and Accountability Reports. To assess what
performance data are recorded outside of the Performance and
Accountability Reports, we additionally reviewed performance measures
captured in the Future Year Homeland Security Program system. To assess
how revenue performance reporting practices have changed since the
formation of DHS, we reviewed the U.S. Customs Service's 2000 to 2005
Strategic Plan as well as its fiscal years 2000 to 2002 annual
performance reports. We did not assess CBP's performance of customs
revenue functions.
To determine the resources dedicated to customs revenue functions, we
obtained data from CBP that estimates the salary and benefits directly
attributable to staff performing customs revenue functions. These data
are an estimate of funds expended for salaries and benefits for staff
in the nine customs revenue positions and the associated support
positions. This estimate does not include indirect costs such as
overtime, travel, and overhead. According to CBP officials, these were
the only data they had available to consistently measure resources
dedicated to customs revenue functions since the formation of DHS.
We conducted our work in Washington, D.C., from December 2006, through
March 2007, in accordance with generally accepted government auditing
standards.
[End of section]
Appendix II: Customs Revenue Positions (March 2003 to December 2006):
Office of Field Operations.
Customs revenue positions: Import Specialist;
March 2003 Baseline: 984;
September 2003: 1,022;
March 2004: 962;
September 2004: 957;
April 2005: 931;
September 2005: 918;
March 2006: 892;
September 2006: 907;
December 2006: 1,000.
Customs revenue positions: Entry Specialist;
March 2003 Baseline: 409;
September 2003: 418;
March 2004: 458;
September 2004: 452;
April 2005: 407;
September 2005: 404;
March 2006: 408;
September 2006: 432;
December 2006: 431.
Customs revenue positions: Drawback Specialist;
March 2003 Baseline: 37;
September 2003: 37;
March 2004: 38;
September 2004: 37;
April 2005: 31;
September 2005: 31;
March 2006: 31;
September 2006: 28;
December 2006: 37.
Customs revenue positions: Fines, Penalties, and Forfeitures
Specialist;
March 2003 Baseline: 203;
September 2003: 211;
March 2004: 207;
September 2004: 214;
April 2005: 214;
September 2005: 212;
March 2006: 218;
September 2006: 225;
December 2006: 218.
Office of International Trade.
Customs revenue positions: Attorney (Office of Regulations and
Rulings);
March 2003 Baseline: 90;
September 2003: 90;
March 2004: 84;
September 2004: 85;
April 2005: 84;
September 2005: 83;
March 2006: 85;
September 2006: 92;
December 2006: 88.
Customs revenue positions: Customs (Regulatory) Auditor;
March 2003 Baseline: 364;
September 2003: 369;
March 2004: 369;
September 2004: 364;
April 2005: 364;
September 2005: 364;
March 2006: 351;
September 2006: 350;
December 2006: 330.
Customs revenue positions: National Import Specialist;
March 2003 Baseline: 97;
September 2003: 97;
March 2004: 91;
September 2004: 89;
April 2005: 91;
September 2005: 90;
March 2006: 87;
September 2006: 88;
December 2006: 113.
Customs revenue positions: International Trade Specialist;
March 2003 Baseline: 74;
September 2003: 84;
March 2004: 68;
September 2004: 74;
April 2005: 74;
September 2005: 74;
March 2006: 62;
September 2006: 59;
December 2006: 56.
Office of Finance.
Customs revenue positions: Financial Systems Specialist;
March 2003 Baseline: 5;
September 2003: 5;
March 2004: 5;
September 2004: 5;
April 2005: 5;
September 2005: 5;
March 2006: 5;
September 2006: 5;
December 2006: 5.
Total;
March 2003 Baseline: 2,263;
September 2003: 2,333;
March 2004: 2,282;
September 2004: 2,277;
April 2005: 2,201;
September 2005: 2,181;
March 2006: 2,139;
September 2006: 2,186;
December 2006: 2,273.
Source: GAO analysis of CBP data.
[End of table]
[End of section]
Appendix III: Support Staff for Customs Revenue Positions (March 2003
to September 2006):
Office of Field Operations.
Customs revenue positions: Import Specialist;
March 2003 Baseline: 407;
September 2003: 426;
March 2004: 394;
September 2004: 339;
April 2005: 351;
September 2005: 316;
March 2006: 331;
September 2006: 313.
Customs revenue positions: Entry Specialist;
March 2003 Baseline: 274;
September 2003: 281;
March 2004: 271;
September 2004: 258;
April 2005: 293;
September 2005: 266;
March 2006: 260;
September 2006: 269.
Customs revenue positions: Drawback Specialist;
March 2003 Baseline: 26;
September 2003: 27;
March 2004: 6;
September 2004: 7;
April 2005: 8;
September 2005: 7;
March 2006: 8;
September 2006: 7.
Customs revenue positions: Fines, Penalties, and Forfeitures
Specialist;
March 2003 Baseline: 203;
September 2003: 214;
March 2004: 209;
September 2004: 199;
April 2005: 198;
September 2005: 186;
March 2006: 195;
September 2006: 175.
Office of International Trade.
Customs revenue positions: Attorney (Office of Regulations and
Rulings);
March 2003 Baseline: 30;
September 2003: 33;
March 2004: 26;
September 2004: 24;
April 2005: 23;
September 2005: 24;
March 2006: 22;
September 2006: 32.
Customs revenue positions: Customs (Regulatory) Auditor;
March 2003 Baseline: 29;
September 2003: 33;
March 2004: 34;
September 2004: 47;
April 2005: 47;
September 2005: 47;
March 2006: 41;
September 2006: 40.
Customs revenue positions: National Import Specialist;
March 2003 Baseline: 20;
September 2003: 20;
March 2004: 18;
September 2004: 18;
April 2005: 19;
September 2005: 19;
March 2006: 19;
September 2006: 18.
Customs revenue positions: International Trade Specialist;
March 2003 Baseline: 17;
September 2003: 21;
March 2004: 17;
September 2004: 17;
April 2005: 17;
September 2005: 17;
March 2006: 11;
September 2006: 12.
Total;
March 2003 Baseline: 1,006;
September 2003: 1,055;
March 2004: 975;
September 2004: 909;
April 2005: 956;
September 2005: 882;
March 2006: 887;
September 2006: 866.
Source: GAO analysis of CBP data.
[End of table]
[End of section]
Appendix IV: Salary and Benefits Directly Attributable to Customs
Revenue Functions:
DHS dedicates resources to performing customs revenue functions. Figure
5 represents the cost of salary and benefits for all customs revenue
positions and their associated support staff. The data do not include
indirect costs such as overtime, travel and overhead. As shown in
figure 5, the amount of budget resources directly attributable to
performing customs revenue functions has generally increased since the
formation of DHS.
Figure 5: Resources Directly Attributable to Customs Revenue Functions:
[See PDF for image]
Source: GAO analysis of CBP data.
[End of figure]
[End of section]
Appendix V: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
March 27, 2007:
Mr. Loren Yager:
Director, International Affairs and Trade:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Yager:
Thank you for the opportunity to review and comment on the Government
Accountability Office's (GAO's) report titled "Customs Revenue: Customs
and Border Protection Needs to Improve Workforce Planning and
Accountability" (GAO-07-529).
Revenue collection has been a longstanding responsibility for U.S.
Customs and Border Protection (CBP) and remains an important mission
for the Department of Homeland Security (DHS). In the report, GAO notes
that the number of staff in most customs revenue positions declined
since the creation of the department. However, CBP has made a concerted
effort to bring the revenue-devoted resources into compliance with the
Homeland Security Act. As of December 31, 2006, CBP had sufficient
personnel in the "pipeline" to meet the required threshold for all
positions.
The report makes two recommendations to the Commissioner of CBP. We
outline a corrective action plan and also provide technical comments.
The report also contains one recommendation directed to the Inspector
General of DHS:
In order to improve oversight over the performance of customs revenue
functions, the Inspector General of the Department of Homeland
Security, while developing its annual performance plan, should identify
whether areas of high risk related to customs revenue functions exist
and consider initiating audits to explore and mitigate those risks.
With regard to the classification of the draft report, CBP has not
identified information within the report requiring restricted public
access based on a designation of "For Official Use Only."
The following is our response to the recommendations.
Recommendation 1: GAO recommends that the Commissioner of CBP develop a
strategic workforce plan that aligns its human capital efforts with its
objectives related to performing customs revenue functions.
Response: CBP concurs with the recommendation. CBP plans to develop a
strategic workforce plan that identifies any gaps in human capital for
the revenue positions and provides a comprehensive plan for recruiting,
retaining, and training employees. The strategic plan will also assess
the critical skills and competencies needed to achieve CBP programmatic
goals. In addition, CBP is developing a Resource Model for the revenue
functions that will assist management in determining the optimal level
of staff to meet the performance outcomes and goals for the agency's
trade mission.
Completion Date: March 31, 2008:
Recommendation 2: CBP concurs in part with the recommendation. GAO
recommends that the Commissioner of CBP establish specific customs
revenue performance measures and targets as well as evaluate, track,
and report performance measures in annual agency Performance and
Accountability Reports for congressional and public oversight of
customs revenue functions.
Response: CBP currently tracks and monitors revenue-related performance
measures. At the beginning of each fiscal year, CBP works with the
Office of Management and Budget (OMB) to determine the set of agency
level performance measures for inclusion in the year's Performance and
Accountability Report. The set of measures for FY 2007 have already
been determined. CBP will consider the proposal to include revenue
related performance measures in the FY 2008 CBP PAR.
Completion Date: March 31, 2008:
We thank you for the opportunity to review the draft report and provide
comments.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix VI: Comments from the Department of Homeland Security's Office
of Inspector General:
Office of Inspector General:
U.S. Department of Homeland Security:
Washington, DC 20528:
March 30, 2007:
Mr. Loren Yager:
Director, International Affairs and Trade:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Yager:
Thank you for the opportunity to review and comment on the Government
Accountability Office's (GAO's) report titled "Customs Revenue: Customs
and Border Protection Needs to Improve Workforce Planning and
Accountability" (GAO-07-529).
As GAO noted in the report, the Office of Inspector General is a unique
resource to the department that can contribute to improving U.S.
Customs and Border Protection's (CBP's) operations including its
revenue related functions. GAO also noted that the Department of
Homeland Security (DHS) Inspector General has not had the same
resources as the Treasury Inspector General to apply to CBP issues, and
that legislatively mandated work and other high priority national
security issues have dictated to a large extent the priorities for
using the resources we have. For example, the establishment of the
Deputy Inspector General for Disaster Assistance Oversight, was a
result of the nation's and congress' priorities for addressing
catastrophes represented by Hurricanes Katrina and Rita, and other
disasters. This requirement placed a huge strain on our ability to
provide coverage to the rest of the issues associated with the whole
department, let alone CBP.
GAO also acknowledged that oversight of CBP's revenue related activity
is not just confined to program or operational reviews, but that the IG
also covers this area through its financial statement work and
specialized reviews conducted by its Information Technology (IT) Audit
Group. The Office of the Inspector General (OIG) audits the CBP revenue
functions through the CBP financial statement audit. Specifically, the
custodial revenue functions at CBP relate primarily to the collection
of Customs duties, taxes and fees. The financial statement audit
process tests controls over the entry (the collection of these duties
taxes and fees) and refund and drawback (refunds of collections)
applications. Controls are also tested related to Regulatory Audit,
Compliance Measurement (Revenue Tax Gap), National Analysis Specialist
Division (NASD), and the Strategic Trade Center, as these programs have
controls that directly impact the effectiveness of the custodial
collection and refund processes.
In addition, as part of the DHS financial statement audit, the OIG has
assessed IT controls of CBP's financial systems every year since 2003.
In addition, to complement these general IT controls review, the OIG
also performed technical security testing for key network and system
devices, as well as testing over key financial application controls.
During the course of this work, the OIG has provided CBP dozens of
findings and recommendations, written summaries of any deficiencies
found, and how to fix them. As part of the FY 2005 financial statement
audit, the OIG issued a stand-alone report on IT controls issues at
CBP: Information Technology Management Letter for the FY 2005 Customs
and Border Protection Balance Sheet Audit (OIG-06-41, June 2006). The
OIG plans to continue issuing such stand-alone reports on an annual
basis.
Last year, during our annual planning process, we addressed the fact
that we needed to conduct program reviews in the revenue related
functions at CBP, and initiated planning efforts to that effect. As a
result, we incorporated a revenue related job into our fiscal year 2007
Annual Performance Plan, as noted by GAO in the report.
In GAO's report, which focused primarily on CBP's use of staff and
resources in support of their revenue mission, they made one
recommendation to the DHS Inspector General. The recommendation and our
response to it follow.
Recommendation 1: In order to improve oversight over the performance of
customs revenue functions, the Inspector General of the Department of
Homeland Security, while developing its annual performance plan, should
identify whether areas of high risk related to customs revenue
functions exist and consider initiating audits to explore and mitigate
those risks.
Response: Concur. The Inspector General recognizes the importance of
identifying high risk areas related to customs revenue functions as a
part of our process for planning work related to CBP. In planning work,
we routinely consider the risks associated with the function or process
and in prioritizing where we will devote our resources each year. As
our agency matures and more program audit staff is added, we intend to
continue to expand our coverage while planning and performing more
audits in the revenue related areas. The OIG has an aggressive
recruiting and hiring effort underway in order to fill the many
vacancies we have. As our numbers increase and become more experienced
each year, we intend to review more of the important revenue functions
of CBP.
Completion Date: September 30, 2007:
Should you have any questions please call me, or your staff may contact
James Taylor, Deputy Inspector General, at (202)254-4100.
Sincerely,
Signed by:
Richard L. Skinner:
Inspector General:
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Loren Yager (202) 512-4347:
Staff Acknowledgments:
In addition to the individual named above, Christine Broderick, Jason
Bair, Deborah Owolabi, Karen Deans, Michael White, and Jackie Nowicki
made key contributions to this report. Laura Miller Craig, Casey
Keplinger, Grace Lui, and Martin de Alteriis also provided assistance.
FOOTNOTES
[1] CBP's 2005 to 2010 Strategic Plan states that CBP's priority
mission is homeland security. While carrying out its priority mission,
CBP must also work to facilitate the movement of legitimate trade and
people.
[2] Pub. L. No. 107-296, § 412, 116 Stat. 2135, 2179. The nine
designated customs revenue positions are Import Specialists, Entry
Specialists, Drawback Specialists, National Import Specialists, Fines
and Penalties Specialists, attorneys of the Office of Regulations and
Rulings, Customs (Regulatory) Auditors, International Trade
Specialists, and Financial Systems Specialists.
[3] Pub. L. No. 109-347, § 401, 120 Stat. 1884, 1922 (2006).
[4] For the purposes of this report, we refer to the nine positions
specified in section 412(b) of the Homeland Security Act of 2002 as
customs revenue positions.
[5] Pub. L. No. 109-347, § 403, 120 Stat. at 1926.
[6] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[7] The Office of International Trade was established by CBP and
codified by the SAFE Port Act in October 2006. The new office
consolidated CBP's trade policy and program development functions
associated with customs revenue functions. It combined staff from the
Office of Strategic Trade and the Office of Regulations and Rulings,
and some staff from the Office of Field Operations. According to CBP
officials, the new Office of International Trade will help strengthen
CBP's ability to carry out its key trade mission of facilitating the
flow of legitimate trade across the border while protecting the
American economy from unfair trade practices and illicit commercial
enterprises.
[8] CBP has five Strategic Trade Centers located around the country
that address the agency's Priority Trade Issues. Three Strategic Trade
Centers support specific types of customs revenue collection:
antidumping revenue (South Florida); textile enforcement and revenue
(New York), and other revenue sources (Chicago).
[9] The number of staff "in the pipeline" includes job candidates at
various stages of the hiring process. For instance, it includes people
whose applications have been received, qualified applicants, candidates
undergoing background investigations, and candidates to whom offers
have been made.
[10] Although not on board as of December 2006, according to CBP
officials, they have candidates in various stages of the hiring process
for 2 attorney, 35 Customs (Regulatory) Auditors and 20 International
Trade Specialist positions.
[11] The Homeland Security Act of 2002 did not explicitly define
"associated support staff."
[12] CBP's data on trade functions include, but cannot separate out,
time spent on customs revenue functions. CBP officials reported that
trade functions consisted primarily of customs revenue functions, but
also included duties such as agriculture inspections. These data
include time charges for all staff in noncustoms revenue positions
CBP's Office of Field Operations, but according to CBP, it consists
mostly of CBPOs but also includes other positions such as Agricultural
Specialists. We used these data because CBP did not believe its CBPO
specific data for 2003 and 2004 was sufficiently reliable.
[13] A portion of these Auditors were almost always dedicated to
revenue functions related work. In addition to customs issues, Treasury
OIG Auditors conducted audits of the Office of Foreign Assets Control,
the Secret Service, and other Treasury offices and programs.
[14] As a part of the DHS financial statement audit, the OIG has
assessed information technology controls of CBP's financial systems
annually since 2003 and has performed stand-alone financial statement
audits for CBP. As part of the fiscal year 2005 financial statement
audit, OIG issued a stand-alone report on IT controls issues at CBP:
Information Technology Management Letter for the FY 2005 Customs and
Border Protection Balance Sheet Audit, OIG-06-41 (Washington, D.C.:
June 2006). During the financial statement audit process, the
independent auditors tests controls over the entry, refund, and
drawback applications and other programs that have controls that
directly impact the effectiveness of the custodial collection and
refund processes.
[15] The Office of Audit was authorized to have 166 positions. This
includes OIG auditors as well as other positions such as executives and
administrative support staff.
[16] Office of the Inspector General, U.S. Department of the Treasury,
Revenue Protection: Customs Is Not Collecting All Revenue Due From
International Mail, OIG-02-020 (Washington, D.C.: Dec. 13, 2001).
[17] Drawback is the refund, reduction or waiver in whole or in part of
customs duties assessed or collected upon importation of an article or
materials that are subsequently exported.
[18] Office of the Inspector General, U.S. Department of the Treasury,
Revenue Collection: Enhanced Controls Could Prevent Improper Payment of
Customs Drawback Claims, OIG-03-026 (Washington, D.C.: Dec. 2, 2002).
[19] GAO, High-Risk Series: An Update, GAO-07-310 (Washington, D.C.:
January 2007).
[20] As we reported in Human Capital: Key Principles for Effective
Strategic Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11,
2003), the five principles of effective strategic workforce planning
are (1) involve top management, employees, and other stakeholders; (2)
determine critical skills and competencies needed to achieve current
and future programmatic goals; (3) develop strategies tailored to
address gaps in the number, deployment, and alignment of human capital
approaches; (4) build the capability needed to address administrative,
educational, and other requirements for supporting workforce planning
strategies; and (5) monitor and evaluate the agency's progress toward
human capital goals and the contribution of human capital results to
achieving programmatic results.
[21] CBP believes that revising the roles and responsibilities of
Import Specialists and redesigning the existing Import Specialist
workforce will improve accountability, address priority trade issues,
and improve CBP's trade mission. Union representatives and some Import
Specialists have expressed concerns about the Import Specialist
Redesign Model's effects on the performance of trade functions.
[22] Pub. L. No. 109-347, § 403, 120 Stat. at 1926.
[23] H.R. Conf. Rep. No. 109-699, at 126 (2006).
[24] Pub. L. No. 109-347, § 403, 120 Stat. at 1926.
[25] In 2000, the U.S. Customs Service developed a model that
identified optimal staffing levels through fiscal year 2002. The model
projected the required number of positions needed to fulfill the
agency's mission, which included responding to three major challenges
(1) workload growth, (2) increased border presence, and (3) increased
need for enforcement. The model specifically addressed three customs
revenue positions and recommended significant increases in the number
of staff in each position to handle increased workload. The model
recommended that the number of Import Specialists increase to 1,489,
Entry Specialists increase to 565, and Customs Auditors increase to
677. CBP does not use this resource allocation model.
[26] Antidumping orders are intended to counter the negative effects of
unfair imports. Specifically, antidumping orders impose additional
duties on products sold at less than fair value that injure U.S.
industry. The Department of Commerce and the International Trade
Commission review antidumping orders every 5 years to determine whether
revocation of the order would be likely to lead to continuation or
recurrence of dumping or subsidies and of material injury within a
reasonably foreseeable time. If both agencies make affirmative
determinations, the order is continued for another 5 years; if not, the
order is revoked.
[27] These antidumping orders cover frozen or canned warmwater shrimp
or prawns from Thailand and wooden bedroom furniture from China. Each
of these antidumping orders covered about $1 billion in imports.
[28] For information regarding CBP efforts to reduce the amount of
uncollected antidumping duties, see GAO, International Trade: Customs'
Revised Bonding Policy Reduces Risk of Uncollected Duties, but Concerns
about Uneven Implementation and Effects Remain, GAO-07-50 (Washington,
D.C.: Oct. 18, 2006).
[29] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, GAO/GGD-96-118, (Washington, D.C.: June
1996).
[30] These hierarchies are typically embodied in agency strategic
plans, annual plans (referred to by CBP as performance budget
overviews), and Performance and Accountability Reports.
[31] The last strategic plan the U.S. Customs Service issued was issued
for fiscal years 2000 through 2005. However, a new strategic plan was
not immediately published when customs revenue functions were moved
from the Department of Treasury to DHS in 2003. The first strategic
plan that CBP issued covers fiscal years 2005 through 2010.
[32] According to OMB, the PART was developed to assess and improve
program performance so that the federal government can achieve better
results. A PART review helps OMB identify a program's strengths and
weaknesses and is intended to inform funding and management decisions
aimed at making the program more effective. The PART examines program
purpose and design; performance measurement, evaluations, and strategic
planning; program management; and program results.
[33] Under the strategic goal of modernizing and managing, CBP did
report on the "percentage of collections received via electronic means"
in its annual performance report for fiscal years 2003 and 2004.
[34] The revenue gap is a calculation derived from data obtained from
the Compliance Measurement program, which measures how frequently
importers are complying with applicable U.S. laws and regulations when
importing products into the United States. Based on that information,
CBP estimates the amount of overpayments and underpayments of customs
duties resulting from noncompliance. These amounts are then netted to
calculate a total estimated revenue gap. CBP calculated the preliminary
fiscal year 2006 revenue gap to be $314 million. The projected over-
collection and under-collection amounts due to noncompliance were $128
million and $442 million in fiscal year 2006, respectively.
[35] Pub. L. No. 109-347, § 105, 120 Stat. at 1891.
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