U.S. Customs Service

GAO reviewed unresolved audit issues between the U.S. Customs Service and the U.S. Virgin Islands, focusing on: (1) who should receive preclearance collections; (2) whether the Virgin Islands should receive interest on a U.S. Treasury Customs collection account; (3) the Virgin Islands' right to U.S. duties for items entering the United States before reaching the Virgin Islands; (4) $5 million which the Virgin Islands auditor contended that Customs collected but did not credit to the Virgin Islands' account; and (5) Customs administrative issues regarding user fee funds accounts, support costs, and employee payments.

GAO found that: (1) the United States should receive preclearance duty collections; (2) the Virgin Islands should not receive interest on funds in its U.S. Treasury account; (3) the Virgin Islands was not entitled to U.S. Customs duties collected in the United States for items later shipped to the Virgin Islands; (4) it could not resolve the $5-million discrepancy, because the Virgin Islands and Customs lacked sufficient documentation to support their claims; (5) Customs erroneously charged $93,000 in user fee expenses incurred by Customs officials to the Virgin Islands account, but later refunded the money; (6) Customs will include a description of procedures for estimating and allocating administrative support costs in an upcoming directive on its Virgin Islands operations; and (7) Customs erroneously made payments to two former employees, but later recovered them.