oversight

Major Management Challenges and Program Risks: Department of Justice

Published by the Government Accountability Office on 2003-01-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

               United States General Accounting Office

GAO            Performance and Accountability Series




January 2003
               Major Management
               Challenges and
               Program Risks
               Department of Justice




GAO-03-105
               a
A Glance at the Agency Covered in This Report
The Department of Justice’s mission includes
●    enforcing the law and defending U.S. interests according to the law,
●    providing federal leadership in preventing and controlling crime,
●    seeking just punishment for those guilty of unlawful behavior,
●    ensuring fair and impartial administration of justice for all Americans, and
●    administering and enforcing the nation’s immigration laws fairly and effectively.1


The Department of Justice’s Budgetary and Staff Resources


Budgetary Resources a, b                                              Staff Resources b
Dollars in billions                                                   FTEs in thousands

    40                                                                140                                             136
                                                  35                                                      124
                                                                                       121      123
                                       31                                    117
    30              29        29                                      105
          28


    20                                                                 70


    10                                                                 35


     0                                                                  0
         1998     1999      2000      2001        2002                      1998      1999      2000     2001         2002
         Fiscal year                                                        Fiscal year
Source: Budget of the United States Government.

a Budgetary resources include new budget authority (BA) and unobligated balances of previous BA.

b Budget and staff resources are actuals for FY 1998-2001. FY 2002 are estimates from the FY 2003 budget, which
    are the latest publicly available figures on a consistent basis as of January 2003. Actuals for FY 2002 will be
    contained in the President’s FY 2004 budget to be released in February 2003.




This Series
This report is part of a special GAO series, first issued in 1999 and updated in
2001, entitled the Performance and Accountability Series: Major Management
Challenges and Program Risks. The 2003 Performance and Accountability Series
contains separate reports covering each cabinet department, most major
independent agencies, and the U.S. Postal Service. The series also includes a
governmentwide perspective on transforming the way the government does
business in order to meet 21st century challenges and address long-term fiscal
needs. The companion 2003 High-Risk Series: An Update identifies areas at high risk
due to either their greater vulnerabilities to waste, fraud, abuse, and
mismanagement or major challenges associated with their economy, efficiency, or
effectiveness. A list of all of the reports in this series is included at the end of
this report.
1
    These immigration functions are transferring to the new Department of Homeland Security.
                                                    January 2003


                                                    PERFORMANCE AND ACCOUNTABILITY SERIES

                                                    Department of Justice
Highlights of GAO-03-105, a report to
Congress included as part of GAO’s
Performance and Accountability Series




In its 2001 performance and                         The terrorist attacks of September 11, 2001, changed the nation forever and
accountability report on the                        drew the country’s attention to the mission of the Department of Justice
Department of Justice, GAO                          (Justice). In fulfilling its mission, Justice and its components confront
identified five major management                    several performance and accountability challenges in 2003. Congress
challenges. Justice has since made                  recently passed legislation calling for the new Department of Homeland
progress on (1) developing
measurable performance targets in
                                                    Security to absorb certain functions currently performed by Justice—such as
reducing illegal drugs and (2)                      some information analysis and infrastructure protection capabilities and
improving management of its asset                   immigration enforcement and services. Regardless of which agency has
forfeiture program. However, three                  responsibility for such functions, management challenges will persist.
challenges remain and a fourth—
managing the FBI’s                                  •   Transform the Federal Bureau of Investigation (FBI): After September
transformation—was added. GAO                           11, 2001, the FBI began transforming its culture to be more proactive and
prepared this report to bring these                     preventive in responding to terrorism. The FBI faces several challenges
major challenges to the attention of                    in reorganizing, including realigning staff to address terrorism, building
the Congress and Justice. This is                       analytic capabilities, improving information sharing and information
part of a special series of reports
                                                        technology, recruiting employees with specialized skills, and managing
on governmentwide and agency-
specific issues.                                        the ripple effect of reorganization on the law enforcement community.
                                                        Although the Department of Homeland Security will absorb some of the
                                                        FBI’s information analysis and infrastructure protection capabilities, the
                                                        FBI still faces challenges that will require considerable attention.
GAO believes Justice should
                                                    •   Enforce Immigration Laws and Provide Immigration Services: In
•    manage the FBI’s                                   carrying out its enforcement and service functions, the Immigration and
     transformation,                                    Naturalization Service (INS) faces many challenges, including unfocused
                                                        or ineffective efforts at combating benefit fraud, unauthorized
•    improve enforcement of                             employment, and alien smuggling; and problems with workload and
     immigration laws and the                           information technology management. Although the INS will be
     provision of immigration                           transferred to the new Department of Homeland Security, these
     services,                                          organizational, management, and programmatic challenges will remain.
•    better manage programs that
     support state and local crime                  •   Support State and Local Efforts to Reduce Crime: While the Office of
     reduction efforts, and                             Justice Programs has taken steps to achieve more effective grant
                                                        management procedures and systems, it has not resolved long-standing
•    achieve financial                                  problems with monitoring grant programs, including data collection and
     accountability for fiscal year                     sufficiently rigorous impact evaluation studies.
     2002 and beyond.
                                                    •   Achieve Financial Accountability: Although Justice achieved an
                                                        unqualified audit opinion on its fiscal year 2001 financial statements,
                                                        material weaknesses remain in general and application controls over
                                                        financial management systems, recording financial transactions, and
                                                        preparing financial statements.
www.gao.gov/cgi-bin/getrpt?GAO-03-105.

To view the full report, click on the link above.
For more information, contact Norman J.
Rabkin at 202-512-9110 or rabkinn@gao.gov.
Contents



Transmittal Letter                                                                                                 1


Major Performance                                                                                                  2

and Accountability
Challenges

GAO Contacts                                                                                                      39


Related GAO Products                                                                                              41


Performance and                                                                                                   45
Accountability and
High-Risk Series




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                       Page i                                                      GAO-03-105 Justice Challenges
A
United States General Accounting Office
Washington, D.C. 20548
                                                                                           Comptroller General
                                                                                           of the United States




           January 2003                                                                                            T
                                                                                                                   ransmL
                                                                                                                        ta
                                                                                                                         ileter




           The President of the Senate
           The Speaker of the House of Representatives

           This report addresses the major management challenges and program risks facing the U.S.
           Department of Justice (Justice) as it works to carry out its multiple and highly diverse missions. The
           report discusses the actions that Justice has taken and that are under way to address the challenges
           GAO identified in its Performance and Accountability Series 2 years ago, and major events that have
           occurred that significantly influence the environment in which the department carries out its mission.
           Also, GAO summarizes the challenges that remain, new ones that have emerged, and further actions
           that GAO believes are needed.

           This analysis should help the new Congress and the administration carry out their responsibilities and
           improve government for the benefit of the American people. For additional information about this
           report, please contact Norman J. Rabkin, Managing Director, at (202) 512-9110 or at rabkinn@gao.gov.




           David M. Walker
           Comptroller General
           of the United States




                                     Page 1                                            GAO-03-105 Justice Challenges
Major Performance and Accountability
Challenges

              The terrorist attacks of September 11, 2001, changed the nation forever and
              drew the country’s attention to the mission of the Department of Justice
              (Justice). According to its mission statement, Justice enforces the law and
              defends U.S. interests according to the law, leads the federal effort to
              prevent and control crime, seeks punishment for the guilty, and ensures fair
              and impartial administration of justice for all Americans. With budgetary
              resources for fiscal year 2002 at an estimated $35 billion and staff resources
              at 136,000, Justice’s responsibilities are divided among a number of
              components, including the Federal Bureau of Investigation (FBI),
              Immigration and Naturalization Service (INS), Office of Justice Programs
              (OJP), Drug Enforcement Administration (DEA), and U.S. Marshals Service
              (USMS). In helping Justice meet its overall mission, these components
              confront several major performance and accountability challenges.

              In our last report of January 2001, we identified five major performance
              and accountability challenges for Justice and its components. These
              included (1) improving the enforcement of immigration laws and the
              provision of immigration and naturalization services, (2) better managing
              programs designed to support state and local efforts to reduce crime,
              (3) developing measurable performance targets to help the DEA determine
              its progress in reducing the availability of illegal drugs, (4) achieving
              excellence in financial management, and (5) improving the management
              and accountability of Justice’s asset forfeiture program. We noted the
              specific steps Justice had taken to address the challenges, while pointing
              out areas in which Justice had not made enough progress.




              Page 2                                              GAO-03-105 Justice Challenges
Major Performance and Accountability
Challenges




Since Justice has made significant progress and commitment in addressing
two of the five challenges addressed in our last report, we have removed
these from consideration in this report. For the challenge of developing
measurable performance targets in reducing illegal drugs, the DEA has
developed management plans to help measure program effectiveness and
provide organizational accountability for priority performance targets;
established performance targets for disrupting and dismantling
international and domestic drug trafficking organizations; and developed
an automated system to capture, verify, and validate data on all priority
projects. In June 2002, the Justice Office of the Inspector General initiated
a review to determine whether the DEA has developed strategic goals and
objectives; established performance measures to evaluate achievement of
its goals and objectives; and established a data collection, analysis, and
reporting system for its performance measures. The other challenge we
dropped from this report is improving management of Justice’s asset
forfeiture program. We believe Justice has made good faith efforts to
respond to our concern that it reduce its program’s administrative costs by
taking advantage of opportunities for cooperation and for sharing agency
and contractor resources with the Department of the Treasury’s asset
forfeiture program.1

Three challenges, however, continue to confront Justice—enforcing
immigration laws while providing immigration services, managing
programs that support state and local efforts to reduce crime, and
achieving excellence in financial management. Furthermore, given the
increased emphasis on homeland security, we have added one new
challenge to Justice’s list—managing the transformation of the FBI.
Addressing these four challenges will require sustained managerial
attention and commitment, as well as oversight and evaluations from
independent organizations.

In November 2002, Congress passed legislation establishing a new
Department of Homeland Security, which would absorb certain functions
currently performed by Justice.2 For example, part of the FBI’s National
Infrastructure Protection Center and all of the INS will be transferred to the
new department. Regardless of which agency has responsibility for such

1
  We also removed the 2001 high-risk designation of Justice and Treasury’s asset forfeiture
programs from our 2003 High-Risk Series: An Update, GAO-03-119 .
2
  The Homeland Security Act of 2002 (P.L. 107-296), which established the Department of
Homeland Security, was signed by the President on November 25, 2002.




Page 3                                                       GAO-03-105 Justice Challenges
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                   Challenges




                   functions, these organizational, management, and programmatic
                   challenges will remain.




                        Performance and
                        Accountability Challenges
                            Manage the FBI's transformation

                            Improve enforcement of immigration laws and provision of immigration services

                            Better manage programs that support state and local crime reduction efforts

                            Achieve financial accountability for fiscal year 2002 and beyond




Manage the FBI’s   In December 2001 and May 2002, the Director of the FBI unveiled the first
                   two phases of a plan to reorganize the Bureau. The first phase is designed
Transformation     to strengthen the FBI’s management structure, enhance accountability,
                   reduce executive span of control, and establish two new divisions for
                   Records Management and Security. The second phase is designed to build
                   an FBI with a national terrorism response capability that is larger and more
                   mobile, agile, and flexible by shifting some resources from long-standing
                   areas of focus, such as drugs, to counterterrorism and intelligence; building
                   analytic capacity; and recruiting to address selected skill gaps. In light of
                   the events of September 11, 2001, this shift is clearly not unexpected and is,
                   in fact, consistent with the FBI’s 1998 Strategic Plan as well as the current
                   Department of Justice Strategic Plan. This shift is intended to move the
                   FBI to be more proactive and preventive in fighting terrorism rather than
                   reactive and investigative.




                   Page 4                                                        GAO-03-105 Justice Challenges
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                           We discussed the FBI’s proposed reorganization and realignment efforts
                           and the challenges yet to be faced in a June 2002 testimony.3 Our
                           fundamental message was that any changes at the FBI must be part of, and
                           consistent with, broader governmentwide transformations that are taking
                           place. This is especially true as the establishment of a Department of
                           Homeland Security is put into place. Some steps are critical and time
                           sensitive. As a result, the FBI needs to develop a comprehensive
                           transformation plan with key milestones and assessment points to guide its
                           overall transformation efforts.

                           To effectively meet the challenges of the post-September 11 environment,
                           the FBI should consider employing the major elements of successful
                           transformation efforts used by leading organizations here and abroad.
                           These begin with gaining the commitment of the agency head and all in
                           senior level leadership. It requires a redefinition and communication of
                           priorities and values; a performance management system that will
                           reinforce agency priorities; and a fundamental reassessment of the
                           organizational layers, levels, units, and locations. Any realignment must
                           support the agency’s strategic plan and desired transformation.
                           Organizations that have successfully undertaken transformation efforts
                           also typically use best practices for strategic planning; strategic human
                           capital management; senior leadership and accountability; realignment of
                           activities, processes, and resources; and internal and external
                           collaboration among others.4



Realign Staff to Address   The reorganization plan redirects about 5 percent of FBI’s fiscal year 2002
Terrorism                  agent workforce from drug, white-collar, and violent crime investigations
                           “to ensure that all available energies and resources are focused on the


                           3
                             U.S. General Accounting Office, FBI Reorganization: Initial Steps Encouraging but
                           Broad Transformation Needed, GAO-02-865T (Washington, D.C.: June 21, 2002).
                           4
                             For GAO reports discussing the elements of successful transformation in more detail, see
                           Management Reform: Elements of Successful Improvement Initiatives, GAO/T-GGD-00-26
                           (Washington, D.C.: Oct. 15, 1999); Executive Guide: Effectively Implementing the
                           Government Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1,
                           1996); Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate Congressional
                           Review, GAO/GGD-10.1.16 (Version 1) (Washington, D.C.: May 1, 1997); Agencies’ Annual
                           Performance Plans Under the Results Act: An Assessment Guide to Facilitate
                           Congressional Decisionmaking, GAO/GGD/AIMD-10.1.18 (Washington, D.C.: Feb. 1, 1998);
                           and A Model of Strategic Human Capital Management, GAO-02-373SP (Washington, D.C.:
                           Mar. 15, 2002).




                           Page 5                                                      GAO-03-105 Justice Challenges
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                      highest priority threat to the nation, i.e. terrorism.” Careful monitoring will
                      be needed to ensure that the agents working in counterterrorism can be
                      appropriately used and to what extent additional resources will be needed.

                      Specifically, the FBI intends to shift a total of 518 agents from drug (400),
                      white-collar crime (59), and violent crime (59) investigations to work on
                      counterterrorism, security improvements, and training. This shift
                      represents about 30 percent of the staff currently assigned to drug
                      enforcement moving to counterterrorism, while for white-collar and violent
                      crime the shift is not as substantial, representing about 2.5 percent and
                      3 percent of their staff years, respectively. Counterterrorism resources go
                      from about 15 percent of total agent resources to just under 20 percent.
                      The plan also calls for building up the FBI headquarters’ Counterterrorism
                      Division through the transfer of 150 counterterrorism agents from field
                      locations to Washington, D.C. These 150 positions would then be backfilled
                      in the field through recruitment of new agents.

                      Other staff realignment issues include (1) reconsideration of the 56 office
                      structure in the field; (2) whether more de-layering of management is
                      needed to optimize the functioning of the organization; and (3) significant
                      succession planning issues—about 25 percent of the special agent
                      workforce is eligible for retirement through 2005 and 80 percent of the
                      Senior Executive Corps was eligible to retire in 2001.



Build Analytic and    The FBI’s 1998 strategic plan identified shortcomings in its analytical
Information-Sharing   capabilities. For example, many analysts lacked academic or other
                      experience in the subject matter for which they were responsible and most
Capabilities
                      had little or no training in intelligence analysis. To build the capacity to
                      prevent future terrorist attacks, the FBI plans to expand its Office of
                      Intelligence, which was created in December 2001. The Office will focus on
                      improving the FBI’s capacity to gather, analyze, and share critical national
                      security information. In addition, the FBI plans to support the new Office
                      by training analysts on the latest tools and techniques for both strategic and
                      tactical analysis.

                      The FBI Director also indicated that he has taken and will take additional
                      steps to enhance communication with the Central Intelligence Agency
                      (CIA) and other outside organizations. Although there are certain legal
                      restrictions in sharing information in a law enforcement setting, the
                      recently passed USA PATRIOT Act, Public Law 107-56, contains a number
                      of provisions that authorize information sharing and coordination of efforts



                      Page 6                                              GAO-03-105 Justice Challenges
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                              relating to foreign intelligence investigations. For example, section 905 of
                              the PATRIOT Act requires the Attorney General to disclose to the CIA
                              Director foreign intelligence information acquired by Justice in the course
                              of a criminal investigation, subject to certain exceptions. Internally, the
                              plan includes new provisions that provide more authority to FBI field
                              offices to initiate and continue investigations.



Comprehensive Written         The National Infrastructure Protection Center (NIPC) at the FBI is the
Policy Needed for National    “national focal point” for providing comprehensive analyses on threats,
                              vulnerabilities and attacks; issuing timely warnings on threats and attacks;
Infrastructure Protection
                              and coordinating the federal government’s response to computer-based
Center                        incidents. In April 20015 we reported that the development of NIPC’s
                              analysis and warning capabilities were limited by multiple factors,
                              including the lack of a comprehensive governmentwide or national
                              framework for promptly obtaining and analyzing information on imminent
                              attacks, a shortage of skilled staff, the need to ensure that NIPC does not
                              raise undue alarm for insignificant incidents, and the need to ensure that
                              sensitive information is protected. We recommended that NIPC develop a
                              comprehensive written policy for establishing analysis and warning
                              capabilities. Although the Director of NIPC generally agreed with our
                              findings, we are not aware of any actions taken to address this
                              recommendation. In addition, the 2002 Homeland Security Act transfers the
                              NIPC (except for its Computer Investigations and Operations Section) out
                              of the FBI and into the Department of Homeland Security.



Recruitment May Be More       The FBI’s planned recruitment of additional agents, analysts, translators,
Difficult Due to Increased    and others with certain specialized skills and backgrounds may become
                              more difficult because other law enforcement and commercial entities may
Competition for Specialized
                              be competing for the same qualified candidates (particularly those with
Skills                        specialized technology, language, and science skills). In total, the FBI is
                              expected to hire 900 agents this year—about 500 to replace agents who are
                              projected to be leaving the agency and 400 to fill newly created positions.




                              5
                                U.S. General Accounting Office, Critical Infrastructure Protection: Significant
                              Challenges in Developing National Capabilities, GAO-01-323 (Washington, D.C.: Apr. 25,
                              2001).




                              Page 7                                                    GAO-03-105 Justice Challenges
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                             Hiring new agents with foreign language proficiency, especially those with
                             skills in Middle Eastern and Asian languages, is essential but could be
                             difficult given competing market demands for their skills. In January 2002
                             we reported on the FBI’s need for additional translators and interpreters.6
                             Of a total of about 11,400 FBI special agents, just under 1,800 have some
                             foreign language proficiency, with fewer than 800 (about 7 percent) having
                             language skills sufficient to easily interact with native speakers. Obtaining
                             security clearances and basic training will add additional time to the
                             process of enhancing the FBI’s strength in language proficiency. While the
                             FBI has shared linguistic resources with other agencies, more
                             opportunities for pooling these scarce resources should be considered.



Improve Communications       Long-standing communication problems for the FBI, such as antiquated
and Information Technology   computer hardware and software and the lack of a fully functional E-mail
                             system, hamper the FBI’s ability to share time sensitive information
                             internally and with other intelligence and law enforcement agencies.
                             Sharing investigative information encompasses legal requirements related
                             to law enforcement sensitive and classified information and its protection
                             through methods such as encryption.7 There are also cultural barriers
                             related to a tradition of agents holding investigative information close so as
                             not to jeopardize evidence in a case. The need for more functional
                             communication will be essential for successful partnering with other law
                             enforcement agencies and the intelligence community. We do not believe
                             the FBI will be able to successfully change its mission and effectively
                             transform itself without significantly upgrading its communications and
                             information technology (IT) capabilities.

                             In February 2002 we reported that the FBI needed to fully establish the
                             management foundation that is necessary to begin successfully developing,
                             implementing, and maintaining an enterprise architecture.8 Enterprise
                             architecture is a comprehensive and systematically derived description of

                             6
                               U.S. General Accounting Office, Foreign Languages: Human Capital Approach Needed to
                             Correct Staffing and Proficiency Shortfalls, GAO-02-375 (Washington, D.C.: Jan. 31, 2002).
                             7
                               U.S. General Accounting Office, Information Security: Advances and Remaining
                             Challenges to Adoption of Public Key Infrastructure Technology, GAO-01-277 (Washington,
                             D.C.: Feb. 26, 2001).
                             8
                               U.S. General Accounting Office, Information Technology: Enterprise Architecture Use
                             Across the Federal Government Can Be Improved, GAO-02-6 (Washington, D.C.: Feb. 19,
                             2002).




                             Page 8                                                     GAO-03-105 Justice Challenges
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                           an organization’s operations, both in logical and technical terms, that has
                           been shown to be essential to successfully building major IT systems.
                           While the FBI implemented most of the core elements associated with
                           establishing the management foundation, it had not yet established a
                           steering committee or group that has responsibility for directing and
                           overseeing the development of the architecture. The FBI needs to fully
                           implement the practices associated with effective enterprise architecture
                           management, including having a written and approved policy for
                           developing and maintaining the enterprise architecture and requiring that
                           IT investments comply with the architecture. We have ongoing work
                           evaluating the FBI’s management of IT.

                           The Justice Office of the Inspector General (OIG) shares similar concerns
                           about the FBI’s management of its IT investments. In a December 2002
                           report,9 the OIG reiterated the findings of our February 2002 report and
                           added that the FBI does not have effective IT investment management
                           processes, including lacking the architectural context for making internal
                           IT investment decisions. In addition, the FBI Director has designated IT as
                           one of the agency’s 10 priorities.



Develop Internal Control   Although the FBI wishes to become a more proactive agency, it also needs
System to Protect Civil    to be cognizant of individuals’ civil liberties. Guidelines created in the
                           1970s to stem abuses of civil liberties resulting from the FBI’s domestic
Liberties
                           intelligence activities have recently been revised to permit agents to be
                           more proactive. For example, permitting FBI presence at public gatherings,
                           which generally had been inhibited by the prior guidelines. No information
                           obtained from such visits can be retained unless it relates to potential
                           criminal or terrorist activity. To better ensure that these new investigative
                           tools do not infringe on civil liberties, appropriate internal controls, such as
                           training and supervisory review, must be developed, implemented, and
                           monitored.




                           9
                             U.S. Department of Justice, Office of the Inspector General, Federal Bureau of
                           Investigation’s Management of Information Technology Investments, Audit Report
                           No. 03-09 (Washington, D.C.: December 2002).




                           Page 9                                                   GAO-03-105 Justice Challenges
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Manage Reorganization’s   These FBI reorganization changes may have a ripple effect on the nature
Ripple Effect on Law      and volume of work of other Justice Department units and their resource
                          needs, including DEA, the Office of Intelligence Policy and Review, the U.S.
Enforcement Community     Attorneys Offices, and the Criminal Division’s Terrorism and Violent Crime
                          Section. For example, if the volume of FBI counterterrorism investigations
                          increases substantially, one could expect an increased volume of Foreign
                          Intelligence Surveillance Act requests to the Office of Intelligence Policy
                          and Review.10 Moreover, should those requests be approved and
                          subsequent surveillance or searches indicate criminal activity, U.S.
                          Attorneys Offices and the Terrorism and Violent Crime Section could be
                          brought in to apply their resources to the resulting investigations. In
                          addition, one could expect more legal challenges to the admissibility of the
                          evidence obtained and to the constitutionality of the surveillance or
                          search.11 State and local law enforcement are also likely to be affected by a
                          change in FBI focus. Although the major gap that state and local law
                          enforcement may have to help fill because of this realignment is in the drug
                          area, state and local law enforcement may have to take on greater
                          responsibility in other areas of enforcement as well, if additional FBI
                          resources are needed for counterterrorism.



Improve Enforcement       The U.S. government, primarily the INS12 with aid from other federal
                          agencies such as the State Department, is faced with the formidable task of
of Immigration Laws       enforcing the nation’s immigration laws and providing immigration services
and Provision of          to eligible legal aliens. Immigration enforcement is a complex,
                          multifaceted function that includes, among other things, patrolling 8,000
Immigration Services      miles of international boundaries to prevent illegal entry into the U.S.;


                          10
                            The Foreign Intelligence Surveillance Act of 1978 (P.L. 95-511), as amended, among other
                          things, established legal standards and a process for seeking electronic surveillance and
                          physical search authority in national security investigations seeking to obtain foreign
                          intelligence and counterintelligence information within the United States.
                          11
                            U.S. General Accounting Office, FBI Intelligence Investigations: Coordination Within
                          Justice on Counterintelligence Criminal Matters is Limited, GAO-01-780 (Washington,
                          D.C.: July 16, 2001).
                          12
                            P.L. 107-296 directed the abolishment of INS after its functions are transferred to the new
                          Department of Homeland Security. INS’s Border Patrol, detention, removal, intelligence,
                          investigations, and inspections programs will transfer to the new Bureau of Border Security,
                          and its adjudication functions of immigrant visa petitions, naturalization petitions, asylum
                          and refugee applications, and of its service centers will transfer to the new Bureau of
                          Citizenship and Immigration Services.




                          Page 10                                                      GAO-03-105 Justice Challenges
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inspecting over 500 million travelers each year to determine their
admissibility; apprehending, detaining, and removing criminal and illegal
aliens; disrupting and dismantling organized smuggling and trafficking; and
investigating and prosecuting those who engage in benefit fraud, document
abuse, and the willful hiring of undocumented workers. Immigration
services include providing benefits, such as employment authorization and
naturalization, to those who legally enter and reside in the United States. In
this capacity, INS is expected to process millions of applications each year,
make the right adjudicative decision in approving or denying the
applications, and render decisions in a timely manner. INS’s
responsibilities in carrying out its enforcement and service functions are
daunting and its past challenges are many.

Congress has continued to express concern about INS’s ability to carry out
its enforcement and service functions, and over the last several years has
significantly increased INS’s budget and staffing to help it deal with its
considerable workload. INS’s fiscal year 2003 budget request calls for a
total of $6.3 billion in budget authority for enforcement, services and
support activities, three times its fiscal year 1995 budget, and 37,100 in
authorized positions, about 77 percent more than in fiscal year 1995. (See
fig. 1.) Since the September 11 attacks on the United States, concerns about
shortcomings in this country’s immigration enforcement system have been
highlighted. INS received $549 million in emergency counterterrorism
funding following September 11, augmenting the $3.3 billion that had
already been allocated to enforcement activities.




Page 11                                             GAO-03-105 Justice Challenges
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Figure 1: INS Budget Authority (immigration enforcement, services, and support
activities), Fiscal Years 1994-2003
7 Billions
                                                                              6.3

6
                                                                     5.6

                                                             4.9
5
                                                     4.3

4                                      3.7    3.8

                                3.1
3
                         2.6
                  2.1
2
      1.6


1


0
     1994         1995   1996   1997   1998   1999   2000   2001     2002    2003
    Fiscal year
Source: INS.



INS still has many challenges before it can achieve the intended results of
both effective enforcement and service delivery. Those challenges relate to
how the government’s immigration function should be managed; that is,
how to manage efforts to implement programs to control the border and
reduce alien smuggling, reduce immigration benefit fraud, reduce
unauthorized alien employment, remove criminal aliens, manage the
immigration benefit application workload, and risks posed by the State
Department’s visa operations. In addition, INS is faced with significant IT
challenges as it moves forward to implement legislation and other
initiatives passed since the September 11 attacks. Although INS’s functions
will be transferred to the new Department of Homeland Security, many of
the management and programmatic challenges that we and others have
identified will continue if these challenges are not addressed by the new
department.




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INS Estimates That              The INS Border Patrol is responsible for preventing and deterring aliens
Significantly More INS          from illegally entering the United States between ports of entry. We
                                reported in August 2001 that the Border Patrol was in the seventh year of
Resources and Time Needed       implementing a border control strategy.13 At that time it was in the second
to Fully Implement Border       phase of a four-phase strategy that called for allocating additional Border
Control Strategy, Yet Overall   Patrol resources along the southwest border. The Justice OIG reported in
Effectiveness Still Unknown     2002 that INS developed a northern border strategy in 2000, but
                                implementation was initially delayed because of changes in administration
                                and in INS leadership, and the events of September 11, 2001.14 While INS
                                has taken steps since our January 2001 management challenges report to
                                begin evaluating its southwest border strategy, it remains to be seen how
                                reliable and meaningful the results of the assessment will be.

                                Before September 11, INS had generally allocated its agents in accordance
                                with the strategy; that is, deploying agents and other resources first to the
                                areas with the highest levels of illegal activity. In response to the
                                September 11 terrorist attacks, INS accelerated deployment of personnel
                                and resources to the northern border and plans to continue doing so in
                                fiscal year 2003. In fiscal year 2002, 245 Border Patrol agents were
                                allocated to the northern border, a tenfold increase compared to the 24
                                allocated in fiscal year 2001. The southwest border had nearly 9,200 Border
                                Patrol agents as of August 2002. (See fig. 2.) We reported in August 2001
                                that INS’s preliminary estimates indicated that gaining control of the
                                southwest border could take at least 5 more years and between 11,700 and
                                14,000 Border Patrol agents, additional support personnel, and hundreds of
                                millions of dollars in technology and infrastructure. It is unclear what
                                impact redirecting resources to the northern border will have on gaining
                                control of the southwest border.




                                13
                                  U.S. General Accounting Office, INS’ Southwest Border Strategy: Resource and Impact
                                Issues Remain After Seven Years, GAO-01-842 (Washington, D.C.: Aug. 2, 2001).
                                14
                                  U.S. Department of Justice, Office of the Inspector General, Follow-up Report on Border
                                Patrol’s Efforts to Improve Northern Border Security (Redacted Version), Report No. I-
                                2002-004 (Washington, D.C.: February 2002)




                                Page 13                                                    GAO-03-105 Justice Challenges
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Figure 2: Onboard U.S. Border Patrol Agents on the Southwest Border, Fiscal Years
1993 to August 2002
10,000
                                                                                  9124    9188
 9,000                                                                    8475

 8,000                                                            7645
                                                         7292
 7,000
                                               6261
 6,000
                                      5281
 5,000
                               4337
 4,000                  3670
           3389
 3,000

 2,000

 1,000

      0
           1993         1994   1995   1996     1997      1998     1999    2000    2001     2002
          Fiscal year
Source: INS.

Note: The number of agents for fiscal year 2002 is as of August 2002.


In addition to taking longer to control the southwest border than INS
originally thought, questions about the overall effectiveness of the
southwest border strategy remain. We reported in August 2001 that the
primary discernable effect of the southwest border strategy appeared to be
a shifting of illegal alien traffic, and at that time there was no clear
indication that overall illegal entry had declined along the southwest
border.15 However, after a relatively steady increase in yearly
apprehensions between fiscal years 1993 and 2000, apprehensions declined
43 percent from 1.64 million in 2000 to 0.93 million in 2002. Although INS
maintained data on apprehended aliens in its automated fingerprint system,
it had not analyzed the data to determine how many aliens had been
arrested, how many times they had been arrested, where they had been
arrested, and how the numbers changed over time in response to border
enforcement efforts. Such information would provide a better
understanding of the relationship between INS’s strategy and overall illegal

15
  A July 2002 research report by the Public Policy Institute of California, which we did not
independently assess, went even further by concluding that increased enforcement along
the U.S.-Mexican border has failed to reduce unauthorized immigration.




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entry along the southwest border. In response to our recommendation that
it use the data in its automated fingerprint system to help measure the
results of border control efforts and refine its border enforcement strategy,
INS established a working group to examine how the data could be used in
such a manner.

In February 2002, INS issued a plan for evaluating its southwest border
strategy. The plan listed numerous indicators INS will use to evaluate the
overall effects of the strategy. For example, the plan indicated that INS
would measure changes over time in the number of apprehensions of illegal
aliens between the ports of entry, locations of apprehensions, alien
smuggling patterns, fees charged by smugglers, and the number of
fraudulent entry attempts at the ports of entry. (See fig. 3.) It is too early to
tell how INS will conduct its evaluation or the extent to which the study
will yield reliable and meaningful results. INS’s plan did not specify the
time frame for completing the evaluation.



Figure 3: U.S. Border Patrol Apprehensions on the Southwest Border, Fiscal Years
1993-2002
1.8 Millions


                                                               1.64
1.6
                                                       1.54
                                  1.51          1.52


1.4                                      1.37

                           1.27
                                                                       1.24
        1.21
1.2



                    0.99
1.0
                                                                                0.93



0.8
       1993         1994   1995   1996   1997   1998   1999    2000    2001    2002
      Fiscal year
Source: INS.




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Fragmented and Unfocused    In January 2002,16 we noted that fraud to obtain immigration benefits was a
INS Efforts to Combat       significant problem that threatened the integrity of the legal immigration
                            system because it results in INS granting valuable benefits to ineligible
Immigration Benefit Fraud   aliens. Fraud involves attempts by aliens to obtain benefits—such as
                            naturalization, work authorization, and adjustment of status—through
                            illegal means (e.g. using fraudulent documents). INS officials told us that
                            they believed the problem was “pervasive and serious” and that some aliens
                            were using the benefit application process to carry out illegal activities,
                            such as crimes of violence, narcotics trafficking, and terrorism. While the
                            extent of immigration benefit fraud is unknown, INS investigations have
                            uncovered various schemes involving the filing of thousands of fraudulent
                            applications.

                            Although immigration benefit fraud has grown more serious, institutionally,
                            INS has not positioned itself to combat this significant problem. As we
                            reported in January 2002, several difficulties have hampered INS’s
                            immigration benefit fraud investigations. Immigration benefit fraud has
                            been a comparatively low priority within INS and resources devoted to it
                            have been limited. For example, four INS service centers receive several
                            million applications for immigration benefits yearly, yet in 2000, INS had
                            only 40 positions dedicated to fraud detection and analysis. As we
                            reported, INS lacked a comprehensive plan on how its different
                            investigative components are to coordinate their immigration benefit fraud
                            investigations and how INS had not established guidance to ensure the
                            highest priority cases are investigated. In addition, INS lacked an
                            agencywide case tracking and management capability to maintain
                            important data on targets of fraud investigations. Finally, INS staff who
                            adjudicate applications for immigration benefits did not have access to the
                            data they needed to ensure that only eligible aliens obtain immigration
                            benefits.

                            INS agreed with our January 2002 report that it should more effectively
                            detect fraudulent applications and process applications in a more timely
                            manner, and has begun to implement some of our recommendations. For
                            example, in response to our recommendation that it better integrate its
                            many units involved in benefit fraud enforcement, INS developed a
                            strategic plan for combating immigration fraud describing, among other


                            16
                             U.S. General Accounting Office, Immigration Benefit Fraud: Focused Approach Is
                            Needed to Address Problems, GAO-02-66 (Washington, D.C.: Jan. 31, 2002).




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                          things, how its different investigative components were to coordinate their
                          immigration benefit fraud investigations. In response to our
                          recommendation that it develop a method to track and manage benefit
                          fraud investigations, in April 2002, INS mandated that all investigative
                          components begin using the automated agencywide Criminal Investigative
                          Reporting System to track and manage all criminal investigations. Also
                          following the September 11 attacks, the Attorney General mandated certain
                          changes in processing immigration benefit applications. For example, he
                          required that all applications be checked against a federal law enforcement
                          database. Our ongoing work will evaluate changes made to the
                          immigration benefit application process since the September 11 attacks.



Efforts to Reduce         Many immigration experts believe that as long as opportunities for
Unauthorized Employment   employment exist, the incentive to enter the United States illegally or
                          overstay visas will persist and that efforts at the U.S. borders to prevent
Face Impediments
                          illegal entry will be undermined. The Census Bureau estimated that there
                          were about 8 million illegal aliens in the United States in 2000.17 We
                          testified in June 200218 that hundreds of thousands of aliens unauthorized
                          to work in the United States have used fraudulent documents to
                          circumvent the process designed to prevent employers from hiring them.
                          Employers who hire unauthorized workers face little chance of being
                          investigated by INS, in part because resources for work site enforcement
                          have been relatively small. In 1998, INS devoted slightly over 300 work
                          years to work site enforcement, which declined to about 124 work years in
                          fiscal year 2002. How much INS can accomplish with its limited work site
                          enforcement resources is questionable. Although there has been a slight
                          increase in the number of work years devoted to work site enforcement
                          since September 11 (specifically, 124 work years in fiscal year 2002
                          compared to 109 work years for fiscal year 2001), the resources allocated
                          to work site enforcement continue to be limited. Therefore, we concluded
                          that INS needed to ensure that it is making the best use of its limited
                          enforcement resources.




                          17
                           U.S. Census Bureau, ESCAP II: Demographic Analysis Results, Executive Steering
                          Committee for A.C.E. Policy II, Report No. 1 (Washington, D.C.: Oct. 13, 2001).
                          18
                            U.S. General Accounting Office, Immigration Enforcement: Challenges to Implementing
                          the INS Interior Enforcement Strategy, GAO-02-861T (Washington, D.C.: June 19, 2002).




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Another impediment we testified about in June 2002 pertained to difficulty
INS had coordinating work site enforcement with the Department of Labor.
While INS implemented our 1999 recommendations19 to seek assistance
from state labor agencies in disseminating information to employers about
its pilot programs for verifying employees’ eligibility to work, coordinating
these efforts with Labor was difficult because the two agencies have
different enforcement missions. Labor stated that if employees thought
that Labor investigators were trying to determine their immigration status,
the employees’ willingness to report workplace violations to Labor could
be jeopardized.

As a result of the September 11 attacks, INS has changed its priorities
regarding the types of employers that it will investigate. Prior to September
11, INS focused its work site investigations on employers in industries that
traditionally relied on unauthorized workers, such as restaurants, hotels,
and construction. INS now plans to turn its attention to employers in
industries critical to the nation’s infrastructure, such as airports and
municipal water supplies. For example, after September 11, INS launched
Operation Tarmac to focus on companies employing individuals who have
direct access to commercial aircraft or who provide airport security.
According to a June 2002 INS testimony, Operation Tarmac had resulted in
over 500 arrests of unauthorized aliens and over 260 criminal charges. INS
also initiated a similar operation focusing on nuclear power facilities.20 As a
result, INS plans to limit the number of investigations of “traditional”
employers of unauthorized aliens. How this shift in focus will affect
unauthorized employment by these traditional employers is unknown.
Conceivably, it could reduce unauthorized employment in the more
sensitive national security areas, leaving the general problem unsolved.




19
 U.S. General Accounting Office, Illegal Aliens: Significant Obstacles to Reducing
Unauthorized Alien Employment Exist, GAO/GGD-99-33 (Washington, D.C.: April 1999).
20
  Statement of Joseph R. Greene, Assistant Commissioner for Investigations, before the
House Subcommittee on Immigration and Claims, regarding the INS Interior Enforcement
Strategy, June 19, 2002.




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Improvements Needed in     We reported in 199721 and again in 199922 that INS efforts to identify and
Identifying and Removing   remove imprisoned aliens needed improvement. INS had failed to identify
                           all deportable criminal aliens, including aggravated felons. As a result, INS
Criminal Aliens            did not fully comply with the legal requirements that it (1) place criminal
                           aliens who had committed aggravated felonies in removal proceedings
                           while they are incarcerated or (2) take those aggravated felons into custody
                           upon their release from prison. Therefore, many aggravated felons were
                           released from prison without being taken into INS custody and
                           subsequently rearrested for such crimes as assault, robbery, and drug
                           offenses. We made a number of recommendations for improving INS’s
                           criminal alien removal program, some of which INS has implemented. For
                           example, INS implemented our recommendation to develop a workload
                           analysis model and to use it to support funding and staffing requests. INS
                           also implemented a nationwide data system to record information on
                           foreign-born inmates reported to INS by the Bureau of Prisons, but it did
                           not extend the system to state departments of corrections. In a September
                           2002 report, the Justice OIG found a number of the same problems that we
                           identified in our reports and concluded that INS has not effectively
                           managed its national program to identify and remove criminal aliens.23

                           In June 2001,24 the OIG reported that INS was placing the traveling public at
                           potential risk because it was not consistently following its policy of
                           providing INS escorts for violent aliens being removed from the United
                           States via commercial airlines. As a result, some potentially violent aliens
                           were removed without escorts on commercial airlines. In addition, INS’s
                           escort policy failed to require escorts for some aliens who may pose a
                           danger to the public. The Inspector General made a number of
                           recommendations to INS for improving its escort procedures through


                           21
                             U.S. General Accounting Office, Criminal Aliens: INS’ Efforts to Identify and Remove
                           Imprisoned Aliens Need to be Improved, GAO/T-GGD-97-154 (Washington, D.C.: July 15,
                           1997).
                           22
                             U.S. General Accounting Office, Criminal Aliens: INS’ Efforts to Identify and Remove
                           Imprisoned Aliens Continue to Need Improvement, GAO/T-GGD-99-47 (Washington, D.C.:
                           Feb. 25, 1999).
                           23
                             U.S. Department of Justice, Office of the Inspector General, Immigration and
                           Naturalization Service Institutional Removal Program, Audit Report No. 02-41
                           (Washington, D.C.: September 2002).
                           24
                             U.S. Department of Justice, Office of the Inspector General, The INS Escort of Criminal
                           Aliens, Report No. I-2001-005 (Washington, D.C.: June 2001).




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                        actions such as training staff in the use of INS’s escort standard,
                        monitoring, verifying adherence to escort standard, and clarifying its
                        responsibilities.



Shortcomings in Alien   We, along with the Justice OIG,25 have issued reports identifying
Antismuggling Efforts   weaknesses in INS’s antismuggling efforts. We reported in May 200026 and
                        in our last management challenges report, that alien smuggling was a
                        significant and growing enforcement problem. Although INS had developed
                        an antismuggling strategy with both domestic and international
                        components, we found that INS’s ability to implement and evaluate the
                        domestic component of its strategy was impeded by several factors. First,
                        INS’s antismuggling program lacked program coordination, which resulted
                        in multiple antismuggling units overlapping in their jurisdictions, made
                        inconsistent decisions about which cases to open, and functioned
                        autonomously and without a single chain of command. Second, INS lacked
                        an agencywide automated case tracking and management system that
                        prevented antismuggling program managers from being able to monitor
                        their ongoing investigations, determining if other antismuggling units were
                        investigating the same target, or knowing if previous investigations had
                        been conducted on a particular target. Third, INS had limited performance
                        measures to assess the strategy’s effectiveness to deter and disrupt alien
                        smuggling.

                        We concluded that without improvements in its investigations and
                        intelligence programs, INS’s antismuggling efforts would continue to be
                        hampered and INS would find it difficult, if not impossible, to meet the
                        challenges posed by increasingly sophisticated major smuggling
                        organizations. Since our January 2001 management challenges report, INS
                        implemented our recommendation that it set up a case tracking and
                        management system to facilitate sharing of case information and prevent
                        duplication of effort. As noted earlier in this report, in April 2002, INS
                        mandated that all investigative components begin using the automated
                        agencywide Criminal Investigative Reporting System to track and manage
                        all criminal investigations. INS also implemented our recommendation to

                        25
                         U.S. Department of Justice, Office of the Inspector General, Survey of INS’s Anti-
                        Smuggling Units, Report No. I-2001-03 (Washington, D.C.: March 2001).
                        26
                          U.S. General Accounting Office, Alien Smuggling: Management and Operational
                        Improvements Needed to Address Growing Problem, GAO/GGD-00-103 (Washington, D.C.:
                        May 1, 2000).




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                          prepare intelligence reports in database format so the information can be
                          systematically analyzed. INS (1) has partially implemented our
                          recommendation that it establish criteria for opening antismuggling cases
                          to help ensure that resources are focused on the highest priority cases, and
                          (2) agreed to implement our recommendation that it establish performance
                          measures to gauge the effects of its efforts. INS also agreed to implement
                          the Inspector General’s recommendations that it examine coordination,
                          program structure, and communication issues to make improvements in its
                          antismuggling program.



Problems Managing INS’s   Despite years of increasing budgets and staff, INS has continued to
Application Workload      experience significant problems managing its workload of processing
                          applications for such services and benefits as naturalization, immigrant
                          status adjustment, employment authorization, and granting asylum. Even
                          though aliens pay fees to INS for processing their applications, and even
                          though INS’s budget for processing immigration benefit applications
                          increased sevenfold from fiscal year 1994 to 2002, aliens have faced long
                          waits for decisions on their cases and have had difficulty obtaining
                          accurate information on how long they can expect to wait. As of October
                          2002, INS had a backlog of 5.2 million applications, an almost fivefold
                          increase since October 1994.

                          We reported in May 200127 that better automation capability and a more
                          streamlined application process would enable INS to provide improved
                          levels of service. Automation improvements would provide INS with the
                          necessary information to determine whether (1) all the applications
                          received are processed, (2) applications are worked on in the order in
                          which they are received, (3) prompt and correct responses are provided to
                          applicants inquiring about the status of their cases, and (4) aliens have
                          been waiting very long to have their applications processed. Although INS
                          believed that additional staff would reduce its application backlog
                          problem, it was not in a position to determine the extent to which staff
                          shortages played a part in this problem. INS did not know how to deploy
                          its staff to process applications in a timely fashion because it lacked a
                          systematically developed staff resource allocation model. We made a
                          number of recommendations that would help INS improve the application
                          process and its management of it. INS concurred with our

                          27
                            U.S. General Accounting Office, Immigration Benefits: Several Factors Impede
                          Timeliness of Application Processing, GAO-01-488 (Washington, D.C.: May 4, 2001).




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                             recommendations and has begun to implement some of them. For
                             example, in response to our recommendation that INS develop guidance
                             and training on how to screen adjustment of status applications in order to
                             reduce errors in granting work authorization, INS developed standard
                             operating procedures. INS said it has implemented the procedures and
                             also instituted quality assurance reviews of the adjudication process.

                             The Justice’s Inspector General said that since the September 11 terrorist
                             attacks, INS has made efforts to decrease the times needed to process
                             applications for changing immigration status and extending stays.28
                             However, although INS made processing these applications a priority
                             shortly after September 11, its processing times slowed because it had to
                             meet a new requirement to run the applications through the Interagency
                             Border Inspection System (IBIS) database before rendering a decision. In
                             addition, in 2002, the President announced a 5-year, $500 million initiative
                             to eliminate the backlogs of applications for immigration benefits and
                             maintain a 6-month processing time standard for all applications by the end
                             of fiscal year 2003.



Problems Coordinating with   Given the events of September 11, 2001, there is public concern that
State Department on Using    terrorists or other criminals may be exploiting the visa granting process to
                             gain entry into the United States. Generally, citizens of foreign countries
the Visa Process to Screen   must apply for and obtain a nonimmigrant visa travel document at U.S.
for Potential Terrorists     embassies or consulates abroad before arriving at U.S. ports of entry for
                             business, tourism, and other reasons.29 State Department consular officers
                             issued 7.6 million visas in fiscal year 2001. All 19 of the September 11, 2001,
                             terrorist hijackers were issued nonimmigrant visas. The granting of visas is
                             a State Department responsibility. However, Justice entities, most
                             importantly the FBI, are responsible for assisting the State Department by
                             doing name checks of selected visa applicants to determine if they are


                             28
                               U.S. Department of Justice, Office of the Inspector General, The Immigration and
                             Naturalization Service’s Contacts with Two September 11 Terrorists: A Review of the
                             INS’s Admission of Mohamed Atta and Marwan Alshehhi, its Processing of their Change
                             of Status Applications, and its Efforts to Track Foreign Students in the United States
                             (Washington, D.C.: May 20, 2002).
                             29
                               The United States also grants visas to people who intend to immigrate to the United
                             States. In this report section, we use the term “visa” to refer to nonimmigrant visas only.
                             Citizens of 28 countries that participate in the visa waiver program, Canada, and certain
                             other locations are not required to obtain visas for business or pleasure stays of short
                             duration.




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potential terrorists and, therefore, should be denied a visa on terrorism
grounds under section 212(a)(3)(B) of the Immigration and Nationality Act
(INA).

In the months following the terrorist attacks, the State Department
instituted two new name check procedures for selected categories of
applicants. Until recently, the FBI had not implemented these two name
checks in a thorough or timely manner. As a result of the initial delays, the
Foreign Terrorist Tracking Task Force30 began conducting one of the two
name checks for the FBI in late April 2002. Of the estimated 38,000 special
name checks processed by August 1, 2002, the task force had identified
about 280 visa applicants who should be denied a visa under the INA’s
terrorism provision. The task force either believed these applicants are
suspected terrorists, or, in the majority of the cases, needed additional
information to determine the applicant’s true identity. As a result of delays
in the FBI’s name check processing, State received the refusal
recommendation for about 200 of these applicants after overseas posts had
already issued them visas. The State Department revoked the visas in these
cases as a prudent measure and notified the INS. In mid-September 2002,
the executive branch changed the name check procedures in an attempt to
reduce the review time for applicants subject to the name checks. In
October 200231 we recommended that the Assistant to the President for
Homeland Security coordinate with the appropriate agencies to
(1) reassess interagency headquarters security checks to verify that all are
necessary and ensure their timely coordination among U.S. agencies;
(2) consider reassessing, on an interagency basis, visas issued before the
implementation of the new security checks for selected categories of
applicants who may pose security risks; and (3) ensure that law
enforcement and intelligence agencies are promptly providing information
to the State Department on persons who may pose a security risk and who,
therefore, should not receive a visa.



30
 The President established the Foreign Terrorist Tracking Task Force, an interagency group
under the auspices of the Department of Justice, on October 30, 2001. The task force was to
ensure that, to the maximum extent permitted by law, federal agencies coordinate programs
to (1) deny U.S. entry of aliens who are associated with, suspected of being engaged in, or
supporting terrorist activity and (2) locate, detain, prosecute, or deport any such aliens
already present in the United States. The task force does not have legal authority to
adjudicate visa applications or applications for immigration benefits.
31
 U.S. General Accounting Office, Border Security: Visa Process Should Be Strengthened as
an Antiterrorism Tool, GAO-03-132NI (Washington, D.C.: Oct. 21, 2002).




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                        Also, Justice and State have different views on how to apply the INA’s
                        terrorism provision, section 212(a)(3)(B), to visa applicants whose names
                        have resulted in a possible match against FBI or Foreign Terrorist Tracking
                        Task Force databases.32 According to the State Department, it requires
                        specific evidence to prove an applicant ineligible under this provision.
                        State says that consular officers must know the specific actions or
                        associations that may render an applicant ineligible to legally deny a visa.
                        Justice, however, believes that a consular officer need not have specific
                        evidence that the applicant participated in terrorist activities or
                        associations to justify a visa denial. In addition, Justice believes that it will
                        often be impossible to know for sure whether a visa applicant is indeed the
                        same person contained in the relevant databases, even after all the
                        applicant’s information is shared between the two departments. In that
                        situation, State thinks it is appropriate to proceed cautiously and deny a
                        visa on the theory that the name check match does provide the consular
                        officer a “reasonable ground to believe” that the applicant presents a threat
                        to national security and is, therefore, ineligible for admission. We
                        recommended that the Assistant to the President for Homeland Security
                        coordinate with the appropriate agencies to establish a governmentwide
                        policy on the level of evidence needed to deny a visa on terrorism grounds.

                        The Homeland Security Act of 2002 transferred visa policy-making
                        authority to the new Department of Homeland Security, while retaining
                        administration of visas within the Department of State.



INS’s Information       Each year INS has invested hundreds of millions of dollars on IT systems
Technology Management   and activities to carry out its core missions of (1) preventing aliens from
                        entering the United States illegally and removing aliens who succeed in
Weaknesses              doing so and (2) providing services or benefits to facilitate entry, residence,
                        employment, and naturalization of legal immigrants. However, the
                        September 11th terrorist attacks and INS’s critical role in preventing future
                        attacks have increased INS’s need for effectively leveraging technology to
                        achieve mission goals. To illustrate, INS reportedly obligated about
                        $297 million on IT activities in fiscal year 2001, and about $459 million in
                        fiscal year 2002, a 50 percent increase.




                        32
                          As of August 1, 2002, this dispute applied to 567 visa applicants whose names matched
                        information in Foreign Terrorist Tracking Task Force databases.




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Despite the importance and prevalence of IT systems in accomplishing its
core missions, INS has not yet established and implemented effective
controls for managing its IT resources. Over the last decade, Justice’s OIG
has reported that INS was not following established IT project management
procedures. Most recently, the OIG reported in August 200133 that despite
having spent $31.2 million on its Automated I-94 system,34 INS did not know
whether the system was meeting its intended performance goals. The root
cause of the INS system problems has been an absence of effective
enterprise architecture management and IT investment management. In
August and December 2000, we reported on INS’s management weaknesses
in both of these areas and concluded that INS was not in a position to know
whether its ongoing and planned IT investments are the right things to do
or that they are being done the right way.35 That is, INS does not know
whether these investments will produce value commensurate with costs
and risk, whether they are aligned with an agencywide blueprint
(enterprise architecture) defining how the agency plans to function in the
future (operationally and technologically), or whether each investment is
meeting its cost, schedule, and performance commitments.

To address these weaknesses, we made a series of recommendations in
August and December 2000. In response to the recommendations, INS has
developed an enterprise architecture, including a current and target
architecture, and a transition plan. Similarly, INS has taken steps to
implement rigorous and disciplined investment management controls. In
particular, it has (1) developed policies and procedures for implementing
its investment management process and (2) established selection criteria
for assessing the relative merits of each IT investment that address cost,
schedule, benefits, and risk. While these are positive steps, much remains
to be done before INS can fully implement effective investment
management controls and be in a position to make informed IT investment
decisions.



33
 U.S. Department of Justice, Office of the Inspector General, The Immigration and
Naturalization Service’s Automated I-94 System, Report No. 01-18 (Aug. 6, 2001).
34
  The Automated I-94 system electronically captured arrival and departure data for
nonimmigrants at four airports. The system was retired in February 2002.
35
   U.S. General Accounting Office, Information Technology: INS Needs to Better Manage the
Development of Its Enterprise Architecture, GAO/AIMD-00-212 (Washington, D.C.: Aug. 1,
2000) and Information Technology: INS Needs to Strengthen Its Investment Management
Capability, GAO-01-146 (Washington, D.C.: Dec. 29, 2000).




Page 25                                                     GAO-03-105 Justice Challenges
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                       Adding to these problems is the urgency for INS to strengthen its border
                       security operations, which means that INS needs to expeditiously involve
                       new system capabilities while it addresses its IT management
                       shortcomings. In October 2001,36 we testified that the recent terrorist
                       attacks and the demands that they have placed on INS’s border security
                       mission will require INS to effectively leverage technology as part of its
                       response to these demands. Accordingly, we stated that INS will have to
                       actively compensate for missing management controls by ensuring that the
                       requisite human capital skills and expertise are brought to bear on IT
                       projects supporting its border security mission; and in the long term, INS
                       will need to establish controls for implementing and maintaining its
                       enterprise architecture and follow through on its ongoing efforts to
                       establish and implement effective investment management process
                       controls.



Better Manage          Justice provides support to state and local efforts to prevent and control
                       crime, administer justice, and assist crime victims. As part of its role,
Programs Designed to   Justice awards grants to organizations, including state and local
Support State and      governments, through the OJP. Programs overseen by OJP include those
                       administered by the Violence Against Women Office (VAWO),37 the Office of
Local Efforts to       Juvenile Justice and Delinquency Prevention (OJJDP), the Executive Office
Reduce Crime           for Weed and Seed (EOWS), the Office of Police Corps (OPC), and the
                       Bureau of Justice Assistance (BJA), which includes the Drug Courts
                       Program Office (DCPO). Our work over the past 5 years on a number of
                       programs administered by these offices has (1) shown long-standing
                       problems with OJP grant monitoring and (2) raised questions about the
                       methodological rigor of some of OJP’s impact evaluation studies.
                       Monitoring and evaluations are needed to identify whether programs are
                       operating as intended, reaching those who should be served, and ultimately
                       making a difference in the fight against crime and delinquency.




                       36
                         U.S. General Accounting Office, Securing America’s Borders: INS Faces Information
                       Technology Planning and Implementation Challenges, GAO-02-148T (Washington, D.C.:
                       Oct. 11, 2001).
                       37
                         VAWO was renamed the Office on Violence Against Women (OVW) in July 2002 as part of
                       an OJP reorganization.




                       Page 26                                                  GAO-03-105 Justice Challenges
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Problems with OJP Grant   In March 200238 we testified that our work at OJP since 1996 has shown
Monitoring                continuing grant monitoring problems among some bureaus and offices.39
                          We found that files for certain discretionary grants often lacked the
                          documentation necessary to ensure that required monitoring activities
                          occurred. Neither OJP nor our office could determine the level of grant
                          monitoring performed by grant managers required by OJP and the
                          comptroller general’s internal control standards, which call for
                          documentation of all transactions and significant events to ensure that
                          management directives are carried out.40 As a result, we recommended that
                          OJP (1) study and propose ways to systematically test or review grant files
                          to ensure consistent documentation across OJP and (2) explore ways to
                          electronically compile and maintain documentation of monitoring activities
                          to facilitate more consistent documentation, more accessible management
                          oversight, and sound performance measurement.




                          38
                           U.S. General Accounting Office, Office of Justice Programs: Problems with Grant
                          Monitoring and Concerns about Evaluation Studies, GAO-02-507T (Washington, D.C.:
                          Mar. 7, 2002).
                          39
                            U.S. General Accounting Office, Justice Discretionary Grants: Byrne Program and
                          Violence Against Women Office Grant Monitoring Should Be Better Documented,
                          GAO-02-25 (Washington, D.C.: Nov. 28, 2001); Juvenile Justice: OJJDP Reporting
                          Requirements for Discretionary and Formula Grantees and Concerns About Evaluation
                          Studies, GAO-02-23 (Washington, D.C.: Oct. 30, 2001); Juvenile Justice: Better
                          Documentation of Discretionary Grant Monitoring is Needed, GAO-02-65 (Washington,
                          D.C.: Oct. 10, 2001); and Juvenile Justice: Selected Issues Relating to OJJDP’s
                          Reauthorization, GAO/T-GGD-96-103 (Washington, D.C.: May 8, 1996).
                          40
                            U.S. General Accounting Office, Internal Control: Standards for Internal Control in the
                          Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1999).




                          Page 27                                                    GAO-03-105 Justice Challenges
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                               Others, including OJP and Justice’s OIG, have identified problems with
                               grant monitoring. In 1996, an OJP-wide working group found that grant
                               monitoring was not standardized in OJP and that a tracking system was
                               needed to facilitate control of the monitoring process. In 2000, an
                               independent contractor found that OJP lacked consistent procedures and
                               practices for performing grant management functions across the agency. 41
                               The contractor recommended that, among other things, OJP develop an
                               agencywide, coordinated, and integrated monitoring strategy; standardize
                               procedures for conducting site visits and other monitoring activities; and
                               mandate the timeliness and filing of monitoring reports. Finally, the OIG
                               reported on OJP-wide monitoring problems, having identified grant
                               management as 1 of the 10 major management challenges facing Justice in
                               2000 and 2001.42 Among other things, the OIG stated that Justice’s
                               multibillion dollar grant programs are a high risk for fraud, given the
                               amount of money involved and the tens of thousands of grantees.
                               Additionally, past OIG reviews determined that many grantees did not
                               submit the required progress and financial reports and that program
                               officials’ on-site reviews did not consistently address all grant conditions.



Too Early to Gauge             It is too early to tell how effective OJP’s efforts to resolve grant monitoring
Effectiveness of OJP Efforts   problems will be. In its Fiscal Year 2000 Performance Report and Fiscal
                               Year 2002 Performance Plan, OJP established a goal to achieve effective
to Resolve Grant Monitoring    grant management—in part by progressing toward fully implementing a
Problems                       new grant management system. This new system is intended to help set
                               priorities for program monitoring and facilitate timely program and
                               financial reports from grantees. At the time of our review in 2001, the new
                               system covered grants for some organizations up to the award stage.43
                               When fully operational, it is envisioned to produce reports in response to
                               informational requests, provide information pertaining to grantees and all
                               resources provided by OJP, and maintain information from the opening to


                               41
                                 Dougherty and Associates, Final Report of Finding & Recommendations for
                               Improvement of the Grant Management Process (Alexandria, Va., 2000).
                               42
                                 U.S. Department of Justice, Office of the Inspector General, Top Management Challenges
                               in the Department of Justice – 2000, usdoj.gov/oig/challenges/2000.htm (Washington, D.C.:
                               Dec. 1, 2000) and 2001, usdoj.gov/oig/challenges/2001.htm (Washington, D.C.: Dec. 31,
                               2001).
                               43
                                  Since then, OJP created a chief information officer position charged with overseeing an
                               agencywide grant management system.




                               Page 28                                                      GAO-03-105 Justice Challenges
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the closing of a grant award. However, it was still unclear whether the new
system will include the full range and scope of monitoring activities.

We also reported that OJP had been working on other key efforts, such as
new OJP-wide guidance for grant administration, including grant
monitoring. In January 2001, OJP released its Grant Management Policies
and Procedures Manual to update and codify OJP’s policies and procedures
regarding its business practices.44 At the time of our review, OJP had
trained over 300 grant managers and had plans to train supervisors about
the new guidance. However, there were no plans to test or systematically
monitor compliance with the new guidelines to ensure that grant managers
were fulfilling their responsibilities.

OJP’s bureaus and program offices have taken steps to respond to our
reports. For example, with respect to our 1999 Weed and Seed report,45
EOWS said it recognized the need to improve program monitoring and
documentation of all monitoring visits. In a July 2000 letter, EOWS officials
reported it had taken steps to improve program monitoring, including
documentation of site monitoring visits. Also, VAWO has developed an
internal monitoring manual that is intended to enhance accountability in
performing oversight and help improve monitoring quality, consistency,
and uniformity. OPC, another OJP program highlighted in the 2001 issue of
this report, continues to make progress in obligating funds and establishing
interagency agreements. By the end of September 2002 OPC plans to award
a total of $53 million to 27 participating states, 22 of which are actively
recruiting and training. Although OPC’s service agreements with 1,402
police corps candidates46 is fewer than the 2,128 slots authorized, it does
reflect moderate program expansion.




44
 This document superseded OJP Handbook: Policies and Procedures for the
Administration of OJP Grants (Washington, D.C., 1992).
45
  U.S. General Accounting Office, Federal Grants: More Can Be Done to Improve Weed and
Seed Program Management, GAO/GGD-99-110 (Washington, D.C.: July 16, 1999).
46
     This number is current as of July 5, 2002.




Page 29                                                  GAO-03-105 Justice Challenges
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Concerns about              We have also issued reports questioning the methodological rigor of OJP
Methodological Rigor of     grant program impact evaluation studies. For example, as we reported in
                            March 2002,47 three impact evaluations examining VAWO programs had
Impact Evaluation Studies   methodological problems that question whether the evaluations will
                            produce definitive results. These evaluations are particularly arduous
                            because of variations in program implementation. In addition, VAWO sites
                            participating in the impact evaluations did not appear to represent their
                            programs, thereby limiting the evaluators’ ability to generalize the results.
                            Further, the lack of nonprogram participant comparison groups hindered
                            isolating external factors from the program’s impact alone. Finally, data
                            collection and analytical problems (e.g. related to statistical tests,
                            assessment of change) compromised the evaluators’ ability to draw
                            appropriate conclusions from the results. We recommended, among other
                            things, that OJP assess its evaluation process and develop approaches to
                            mitigate potential methodological design and implementation problems.
                            The assistant attorney general agreed with the substance of our
                            recommendations and has begun or plans to take steps to address them.

                            Our October 2001 review48 of 10 OJJDP impact evaluations undertaken
                            since 1995 also raised some concerns about whether many of the
                            evaluations would produce definitive results. Two of the evaluations that
                            were in their later stages and three of those that were in their formative
                            stages at the time of our review lacked specific plans for comparison
                            groups. Furthermore, three of the five evaluations that were well into
                            implementation at the time of our review had developed data collection
                            problems. We recommended that OJJDP assess the five impact evaluations
                            that were in their formative stages to address potential problems and
                            intervene if necessary to help ensure definitive results. In commenting on a
                            draft of our report, the assistant attorney general said that OJP would use
                            our report to improve the quality of its evaluations and design programs to
                            achieve greater impact. Two months after our report’s issuance, OJP told us
                            that OJJDP had decided to discontinue the one evaluation that was to use a
                            comparison group because it was unable to identify a comparison site. In
                            addition, OJJDP was considering scaling back and refocusing the scope of

                            47
                             U.S. General Accounting Office, Justice Impact Evaluations: One Byrne Evaluation Was
                            Rigorous; All Reviewed Violence Against Women Office Evaluations Were Problematic,
                            GAO-02-309 (Washington, D.C.: Mar. 7, 2002).
                            48
                              U.S. General Accounting Office, Juvenile Justice: OJJDP Reporting Requirements for
                            Discretionary and Formula Grantees and Concerns About Evaluation Studies, GAO-02-23
                            (Washington, D.C.: Oct. 30, 2001).




                            Page 30                                                 GAO-03-105 Justice Challenges
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                             another evaluation because the program being studied did not lend itself to
                             an impact evaluation with comparison groups.



Better Data Collection and   Despite the increasing number of drug court programs49 required to collect
Evaluation Efforts Needed    and maintain performance and outcome data, and despite our
                             recommendations in 199750 to improve evaluation efforts, Justice’s DCPO
to Measure Impact of         continues to lack vital information on the impact of its programs. Although
Federally Funded Drug        certain DCPO programs must collect and provide performance
Court Programs               measurement and outcome data, Justice has not effectively managed this
                             effort because of (1) its inability to readily identify the universe of DCPO-
                             funded drug court programs, including those subject to DCPO’s data
                             collection reporting requirements; (2) its inability to accurately determine
                             the number of drug court programs responding to DCPO’s semiannual data
                             collection survey; (3) inefficiencies in the administration of DCPO’s
                             semiannual data collection effort; (4) the elimination of post-program
                             impact questions from DCPO’s data collection survey effort; and
                             (5) insufficient use of the Drug Court Clearinghouse. Also, because of
                             various administrative and research factors that have hampered Justice's
                             ability to complete the two-phase National Institute of Justice-sponsored
                             national impact evaluation study, Justice cannot provide Congress and drug
                             court program stakeholders with reliable information on program
                             performance and impact.

                             To improve data collection on the performance and impact of federally
                             funded drug court programs, we recommended in April 200251 that the
                             Attorney General (1) develop and implement a management information
                             system to track and identify the universe of DCPO-funded drug court
                             programs; (2) take steps to ensure and sustain an adequate grantee
                             response rate to DCPO’s data collection efforts; (3) take corrective actions
                             toward grantees who do not comply; (4) reinstate the collection of post-
                             program data, selectively spot checking grantee responses to ensure

                             49
                               The main purpose of a drug court program is to use the court’s authority to reduce crime
                             by changing the defendants’ substance abuse behavior. In exchange for the possibility of
                             dismissed charges or reduced sentences, defendants are diverted to drug court programs.
                             50
                              U.S. General Accounting Office, Drug Courts: Overview of Growth, Characteristics, and
                             Results, GAO/GGD-97-106 (Washington, D.C.: July 31, 1997).
                             51
                               U.S. General Accounting Office, Drug Courts: Better DOJ Data Collection and
                             Evaluation Efforts Needed to Measure Impact of Drug Court Programs, GAO-02-
                             434 (Washington, D.C.: Apr. 18, 2002).




                             Page 31                                                     GAO-03-105 Justice Challenges
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accurate reporting; (5) analyze performance and outcome data collected
from grantees and report annually on the results; and (6) consolidate the
multiple drug court program-related data collection efforts to ensure the
primary focus is on DCPO-funded drug court programs. We also
recommended that the Attorney General accelerate the funding and
implementation of a methodologically sound national impact evaluation,
consider ways to reduce the time needed to provide information on overall
program impact, and implement appropriate oversight of this evaluation
effort.

In response to our recommendations, Justice plans to (1) develop an
management information system that would track the universe of DCPO-
funded drug court programs and (2) revamp DCPO’s data collection efforts
in conjunction with the National Institute on Drug Abuse. Both are
expected to be completed in 2003. However, we believe that it is unclear
whether Justice’s plans will address all of the insufficiencies we have cited
or how well Justice will monitor grantee compliance with data collection,
reporting, and evaluation requirements. Until Justice fully implements our
recommendations, Congress, the public, and other stakeholders will
continue to lack sufficient information to measure long-term program
benefits and to assess how these programs affect criminal behavior of
substance abuse offenders and whether these programs are an effective
use of federal funds.




Page 32                                            GAO-03-105 Justice Challenges
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Achieve Financial      Justice achieved an unqualified audit opinion on its fiscal year 2001
                       departmentwide financial statements,52 which was one of the Attorney
Accountability for     General’s foremost priorities. Justice improved from receiving a mixed
Fiscal Year 2002 and   audit opinion on its fiscal year 2000 departmentwide financial statements53
                       to receiving an unqualified audit opinion in 2001.54 One of key
Beyond                 improvements made since we last reported is the financial statement audit
                       results of the INS. INS was the only component of Justice that did not
                       receive an overall unqualified audit opinion in fiscal year 2000. For the
                       fiscal year 2001 financial statements, INS received its first overall
                       unqualified audit opinion after gathering appropriate accounting records
                       and documents to support its deferred revenue and vendor payable
                       accounts. However, the auditors continued to report material internal
                       control weaknesses at the INS and several other components. While
                       obtaining an unqualified audit opinion on the fiscal year 2001 financial
                       statements for Justice as a whole and for each of its components was an
                       important milestone, it is not an end in and of itself. The end goal is to
                       achieve financial accountability by having systems and controls in place
                       that provide accurate, timely, and useful financial information to manage
                       Justice and its components on a day-to-day basis.

                       Justice has 10 components for financial reporting purposes: (1) Assets
                       Forfeiture Fund and Seized Asset Deposit Fund (AFF); (2) Working Capital
                       Fund (WCF); (3) Offices, Boards, and Divisions (OBD); (4) USMS; (5) OJP;
                       (6) DEA; (7) FBI; (8) INS; (9) Federal Bureau of Prisons (BOP); and
                       (10) Federal Prison Industries, Incorporated (FPI). Five of these 10
                       components continue to have significant systems and material internal
                       control weaknesses that preclude them from achieving the goal of financial
                       accountability. The weaknesses identified can be categorized into three


                       52
                         The information used for this section is largely drawn from the U.S. Department of
                       Justice, Office of the Inspector General, U.S. Department of Justice Annual Financial
                       Statement Fiscal Year 2001, Audit Report No. 02-06 (Washington, D.C.: February 2002), and
                       U.S. Department of Justice Annual Financial Statement Fiscal Year 2000, Audit Report
                       No. 01-07 (Washington, D.C.: February 2001)
                       53
                        INS and Justice received an unqualified opinion on the Balance Sheet and Statement of
                       Custodial Activity and a qualified opinion on the Statements of Net Cost, Changes in Net
                       Position, and Budgetary Resources and Financing for fiscal year 2000.
                       54
                         In our prior report on management challenges at Justice issued in January 2001, we
                       reported that Justice had improved from receiving a disclaimer of opinion on its fiscal year
                       1998 departmentwide financial statements to receiving a qualified opinion on its fiscal year
                       1999 departmentwide financial statements.




                       Page 33                                                      GAO-03-105 Justice Challenges
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                          major areas: (1) ineffective general and application controls over financial
                          management systems of various components, (2) lack of adherence to
                          established policies and procedures for recording financial transactions in
                          accordance with generally accepted accounting principles, and
                          (3) ineffective financial statement preparation processes. Furthermore, the
                          auditors for the same five components reported that they found internal
                          control weaknesses that were significant departures from the systems
                          requirements of the Federal Financial Management Improvement Act of
                          1996 (FFMIA). Until these material weaknesses are addressed, Justice,
                          regardless of the type of audit opinion received, will continue to be at risk
                          for errors, fraud, or noncompliance that may not be promptly detected.

                          The auditors reported a total of 13 material weaknesses55 for the Justice
                          components for fiscal year 2001, compared to 15 and 14 material
                          weaknesses reported for fiscal years 2000 and 1999, respectively.56 While
                          the 2001 results represent some improvement over prior years, the large
                          number of remaining material weaknesses continues to indicate a lack of
                          financial accountability in most Justice components. As previously noted,
                          these material weaknesses are categorized into three main areas, which
                          will be discussed in more detail in the next section.



Material Weaknesses in    The auditors for 4 out of the 10 components reported weaknesses in
General and Application   general and application controls over financial management information
                          systems. Specific concerns were found in the areas of entity-wide security,
Controls over Component
                          access controls, application software development and change controls,
Financial Management      service continuity, segregation of duties, and system software. For
Systems                   example, the component auditors reported that:




                          55
                            A material weakness is a condition in which the design or operation of one or more of the
                          internal control components does not reduce, to a relatively low level, the risk that errors or
                          irregularities, in amounts that would be material to the financial statements, may occur and
                          not be detected promptly by employees in the normal course of performing their duties.
                          56
                             The auditors reported a total of 12 reportable conditions for the Justice components for
                          fiscal year 2001, compared to 23 and 28 reportable conditions reported for fiscal years 2000
                          and 1999, respectively. Reportable conditions are matters coming to the attention of the
                          auditors that, in their judgment, should be communicated to management because they
                          represent deficiencies in the design or operation of internal control, which could adversely
                          affect the organization’s ability to meet the objectives of reliable financial reporting and
                          compliance with applicable laws and regulations.




                          Page 34                                                        GAO-03-105 Justice Challenges
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                             • Several of the DEA’s data processing systems (1) have an expired
                               certification/accreditation, (2) cannot track personnel who are granted
                               access to the system or whose access should be terminated, (3) do not
                               have documented procedures for handling software changes, and (4)
                               cannot trace data entries to source documents.

                             • Security plans have not been completed for two financial management
                               applications at the USMS, and contingency plans were either outdated
                               or incomplete.

                             • Although the financial management system of record at the INS has
                               been in development for almost 5 years, the implementation is not
                               complete, requiring the majority of INS’s transactions to be entered into
                               its legacy system, which has many inherent control weaknesses.
                               Auditors reported that collectively, the DEA process presents significant
                               risks to the continued operation of INS’s financial management system
                               as a whole.

                             The material weaknesses identified over program and application controls
                             increase the risk that programs and data processed on these components’
                             systems are not adequately protected from unauthorized access or service
                             disruption. These weaknesses could compromise Justice’s ability to ensure
                             security over sensitive programmatic or financial data, reliability of its
                             financial reporting, and compliance with applicable laws and regulations.
                             Furthermore, without adequate controls over financial management
                             systems, the components could experience a loss or manipulation of data
                             as well as potential financial losses from expensive efforts to recover such
                             system or data losses.



Material Weaknesses in       The auditors reported that 4 of 10 components did not always follow
Recording Financial          policies or procedures in place to ensure that financial transactions were
                             recorded in accordance with generally accepted accounting principles.
Transactions in Accordance
                             Specifically, various component entities did not record financial
with Generally Accepted      transactions in accordance with certain Statements of Federal Financial
Accounting Principles        Accounting Standards (SFFAS), which include the following:

                             • SFFAS No. 1, Accounting for Selected Assets and Liabilities—FBI
                               auditors reported that inefficient vendor invoice approval and payment
                               processes contributed to the initial under-reporting of liabilities and
                               increased FBI payments for interest and penalties under the Prompt Pay
                               Act. Auditors also reported that the DEA continues to have significant



                             Page 35                                           GAO-03-105 Justice Challenges
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                         Challenges




                            unreconciled differences between the collections and disbursements
                            recorded in its accounting records and those recorded by the U.S.
                            Treasury.

                         • SFFAS No. 3, Accounting for Inventory and Related Property—FPI
                           auditors reported that financial accounting system deficiencies continue
                           to exist in the capture, processing, reporting, and use of inventory data.
                           These deficiencies affect the ability of the FPI to reasonably estimate
                           overhead rates and consistently value finished goods inventories.

                         • SFFAS No. 5, Accounting for Liabilities of the Federal Government—
                           Auditors of the DEA, INS, and FBI reported that components’ processes
                           to estimate accounts payable were not adequate or were not completed
                           in a timely manner. Specifically, some methods used were not well
                           supported, used noncurrent information, and did not properly record
                           some obligations.

                         • SFFAS No. 7, Accounting for Revenue and Other Financing Sources—
                           Auditors of the INS and FPI reported that improvements are needed in
                           the components’ accounting for earned and deferred revenues. In some
                           instances, the components could not provide regular and timely support
                           for general ledger entries, consistently or adequately perform collection
                           efforts, or invoice customers in a timely manner.

                         The specific reporting deficiencies described raised concerns over the
                         components’ abilities to make reasonable estimates, ensure the security of
                         assets, value and support recorded transactions appropriately, and reduce
                         unnecessary manual processing at year-end. Despite these concerns over
                         ongoing compliance with the SFFAS, an unqualified opinion over the
                         Justice’s financial statements was obtained due to significant manual
                         correction efforts at year-end, which compensated for the lack of
                         integrated systems sufficient to support accounting operations. However,
                         the failure to address these reporting deficiencies may not only affect
                         future audit opinions, but may also result in the failure to provide Justice
                         management with meaningful information throughout the year that is
                         essential in making timely operational decisions.



Material Weaknesses in   The auditors for 2 of the 10 components reported material weaknesses in
Financial Statement      the financial statement preparation process. In response to prior auditor
                         recommendations, the Justice Management Division issued a number of
Preparation Processes    departmentwide policies and held periodic meetings with the Justice’s



                         Page 36                                           GAO-03-105 Justice Challenges
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Challenges




components to discuss accounting and financial reporting requirements. A
key product of these efforts was the issuance of Justice’s Financial
Statement Requirements and Preparation Guide. This guide helped
provide a solid foundation for improved financial reporting in 2001,
however, the auditors continued to identify material weaknesses in the
financial statement preparation process. For example, component auditors
reported that:

• Draft financial statements and Managements’ Discussion and Analysis
  (MD&A) submitted for audit by several components were not properly
  prepared in accordance with existing Justice reporting requirements
  and were not adequately reviewed by management. The drafts were
  found to contain clerical errors, incomplete disclosures, and
  inconsistencies in the financial statements and note disclosures.

• Accrual-based financial transaction processing at DEA was not
  performed on an ongoing basis, resulting in substantial year-end efforts
  to obtain and analyze financial data necessary for financial statement
  preparation.

• The FBI’s financial management department lacked the staff to perform
  the many tasks needed to produce annual financial statements and,
  therefore, could not fully comply with Justice’s financial reporting
  requirements.

• Requirements to accumulate and report interagency elimination entries
  to Justice were not consistently followed and resulted in the failure to
  meet internal timelines, data not being provided in required formats, and
  having financial activity among the components to go unconfirmed.

• The reconciliation of intragovernmental transactions with other federal
  agencies was not fully completed and increased the risk of inaccurate
  data being reported.

Proper financial management and reporting must be performed throughout
the year and must be complete in order to eliminate extensive manual
financial statement preparation efforts at the end of the fiscal year. These
year-end efforts are more susceptible to error and increase the risk of
misstatement in the Justice’s and components’ financial statements. The
reduction of these manual efforts is especially important given the new
financial reporting requirements of the Office of Management and Budget
(OMB) for interim financial statements and the acceleration of 2002 year-



Page 37                                           GAO-03-105 Justice Challenges
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end financial statement deadlines by approximately 1 month. Without
improvements or fundamental changes to how Justice and its components
manage their financial activities, there is a serious risk that the preparation
and audit of Justice’s fiscal year 2002 financial statements will not comply
with required deadlines. This could result in a modification to the auditors’
reports on Justice’s and its component’s financial statements, internal
controls, and compliance with laws and regulations.




Page 38                                             GAO-03-105 Justice Challenges
GAO Contacts




               Subjects covered in this report                 Contact person
               Manage the FBI’s Transformation                 Laurie K. Ekstrand, Director
                                                               (202) 512-8777
               Realign staff                                   ekstrandl@gao.gov

               Build analytic capability

               Need for comprehensive policy for National
               Infrastructure Protection Center

               Recruitment may be more difficult due to
               increased competition for specialized skills

               Improve communications and information
               technology

               Develop an internal control system to protect
               civil liberties

               Manage the ripple effect on the law
               enforcement community

               Better Manage Programs Designed to
               Support State and Local Efforts to Reduce
               Crime

               Problems with OJP grant monitoring

               Too early to gauge effectiveness of OJP
               efforts to resolve grant monitoring problems

               Concerns about methodological rigor of
               impact evaluation studies

               Better DOJ data collection and evaluation
               needed to measure impact of federally funded
               drug court programs




               Page 39                                                     GAO-03-105 Justice Challenges
GAO Contacts




(Continued From Previous Page)
Subjects covered in this report               Contact person
INS estimated that significantly more INS    Richard M. Stana, Director
resources and time needed to fully implement (202) 512-8777
border control strategy, yet overall         stanar@gao.gov
effectiveness still unknown

Efforts to combat immigration benefit fraud
fragmented and unfocused

Efforts to reduce unauthorized employment
face impediments

Improvements needed in identifying and
removing criminal aliens

Shortcomings in alien antismuggling efforts

Problems managing application workload
Problems coordinating with State Department Jess T. Ford, Director
on using the visa process to screen for     International Affairs and Trade
potential terrorists                        (202) 512-4128
                                            fordj@gao.gov
INS’s information technology management       Randolph C. Hite, Director
weaknesses                                    Information Technology Architecture and
                                              Systems Issues
                                              (202) 512-6204
                                              hiter@gao.gov
Weaknesses in general and application         Linda M. Calbom, Director
controls over component financial             Financial Management and Assurance.
management systems                            (202) 512-8341
                                              calboml@gao.gov
Weaknesses in recording financial
transactions in accordance with generally
accepted accounting principles

Weaknesses in financial statement
preparation




Page 40                                                   GAO-03-105 Justice Challenges
Related GAO Products



Manage FBI’s                 FBI Reorganization: Initial Steps Encouraging but Broad
Transformation               Transformation Needed. GAO-02-865T. Washington, D.C.: June 21, 2002.

                             A Model of Strategic Human Capital Management. GAO-02-373SP.
                             Washington, D.C.: March 15, 2002.

                             Information Technology: Enterprise Architecture Use Across the Federal
                             Government Can Be Improved. GAO-02-6. Washington, D.C.: February 19,
                             2002.

                             Foreign Languages: Human Capital Approach Needed to Correct Staffing
                             and Proficiency Shortfalls. GAO-02-375. Washington, D.C.: January 31,
                             2002.

                             Critical Infrastructure Protection: Significant Challenges in Developing
                             National Capabilities. GAO-01-323. Washington, D.C.: April 25, 2001.

                             Information Security: Advances and Remaining Challenges to Adoption
                             of Public Key Infrastructure Technology. GAO-01-277. Washington, D.C.:
                             February 26, 2001.

                             Management Reform: Elements of Successful Improvement Initiatives.
                             GAO/T-GGD-00-26. Washington, D.C.: October 15, 1999.

                             Agencies’ Annual Performance Plans Under the Results Act: An
                             Assessment Guide to Facilitate Congressional Decisionmaking.
                             GAO/GGD/AIMD-10.1.18. Washington, D.C.: February 1, 1998.

                             Agencies’ Strategic Plans Under GPRA: Key Questions to Facilitate
                             Congressional Review. GAO/GGD-10.1.16. Washington, D.C.: May 1, 1997.

                             Executive Guide: Effectively Implementing the Government Performance
                             and Results Act. GAO/GGD-96-118. Washington, D.C.: June 1, 1996.



Improve the Enforcement of   Border Security: Visa Process Should Be Strengthened as an
Immigration Laws and         Antiterrorism Tool. GAO-03-132NI. Washington, D.C.: October 21, 2002
Provision of Immigration
                             Immigration Enforcement: Challenges to Implementing the INS Interior
Services                     Enforcement Strategy. GAO-02-861T. Washington, D.C.: June 19, 2002.




                             Page 41                                         GAO-03-105 Justice Challenges
Related GAO Products




Immigration Benefit Fraud: Focused Approach Is Needed to Address
Problems. GAO-02-66. Washington, D.C.: January 31, 2002.

Immigration and Naturalization Service: Overview of Recurring
Management Challenges. GAO-02-168T. Washington, D.C.: October 17,
2001.

Securing America’s Borders: INS Faces Information Technology
Planning and Implementation Challenges. GAO-02-148T. Washington,
D.C.: October 11, 2001.

INS’ Southwest Border Strategy: Resource and Impact Issues Remain
After Seven Years. GAO-01-842. Washington, D.C.: August 2, 2001.

Immigration Benefits: Several Factors Impede Timeliness of Application
Processing. GAO-01-488. Washington, D.C.: May 4, 2001.

Alien Smuggling: Management and Operational Improvements Needed to
Address Growing Problem. GAO/GGD-00-103. Washington, D.C.: May 1,
2000.

Information Technology: INS Needs to Strengthen Its Investment
Management Capability. GAO-01-146. Washington, D.C.: December 29,
2000.

Information Technology: INS Needs to Better Manage the Development of
Its Enterprise Architecture. GAO/AIMD-00-212. Washington, D.C.:
August 1, 2000.

Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien
Employment Exist. GAO/GGD-99-33. Washington, D.C.: April 2, 1999.

Criminal Aliens: INS’ Efforts to Identify and Remove Imprisoned Aliens
Continue to Need Improvement. GAO/T-GGD-99-47. Washington, D.C.:
February 25, 1999.

INS Management: Follow-up on Selected Problems. GAO/GGD-97-132.
Washington, D.C.: July 22, 1997.

Criminal Aliens: INS’ Efforts to Identify and Remove Imprisoned Aliens
Need to be Improved. GAO/T-GGD-97-154. Washington, D.C.: July 15, 1997.




Page 42                                         GAO-03-105 Justice Challenges
                              Related GAO Products




Better Manage Programs        Drug Courts: Better DOJ Data Collection and Evaluation Efforts Needed
Designed to Support State     to Measure Impact of Drug Court Programs. GAO-02-434. Washington,
                              D.C.: April 18, 2002.
and Local Efforts to Reduce
Crime                         Violence Against Women: Problems with Grant Monitoring and Concerns
                              about Evaluation Studies. GAO-02-641T. Washington, D.C.: April 16, 2002.

                              Office of Justice Programs: Problems with Grant Monitoring and
                              Concerns about Evaluation Studies. GAO-02-507T. Washington, D.C.:
                              March 7, 2002.

                              Justice Impact Evaluations: One Byrne Evaluation Was Rigorous; All
                              Reviewed Violence Against Women Office Evaluations Were Problematic.
                              GAO-02-309. Washington, D.C.: March 7, 2002.

                              Justice Discretionary Grants: Byrne Program and Violence Against
                              Women Office Grant Monitoring Should Be Better Documented.
                              GAO-02-25. Washington, D.C.: November 28, 2001.

                              Juvenile Justice: OJJDP Reporting Requirements for Discretionary and
                              Formula Grantees and Concerns About Evaluation Studies. GAO-02-23.
                              Washington, D.C.: October 30, 2001.

                              Juvenile Justice: Better Documentation of Discretionary Grant
                              Monitoring is Needed. GAO-02-65. Washington, D.C.: October 10, 2001.

                              Internal Control: Standards for Internal Control in the Federal
                              Government. GAO/AIMD-00-21.3.1. Washington, D.C.: November 1999.

                              Federal Grants: More Can Be Done to Improve Weed and Seed Program
                              Management. GAO/GGD-99-110. Washington, D.C.: July 16, 1999.

                              Drug Courts: Overview of Growth, Characteristics, and Results.
                              GAO/GGD-97-106. Washington, D.C.: July 31, 1997.

                              Juvenile Justice: Selected Issues Relating to OJJDP’s Reauthorization.
                              GAO/T-GGD-96-103. Washington, D.C.: May 8, 1996.




                              Page 43                                         GAO-03-105 Justice Challenges
                            Related GAO Products




Achieve Financial           Critical Infrastructure Protection: Significant Challenges Need to Be
Accountability for Fiscal   Addressed. GAO-02-961T. Washington, D.C.: July 24, 2002.
Year 2002 and Beyond        Information Security: Additional Actions Needed to Fully Implement
                            Reform Legislation. GAO-02-470T. Washington, D.C.: March 6, 2002.

                            Computer Security: Improvements Needed to Reduce Risk to Critical
                            Federal Operations and Assets. GAO-02-231T. Washington, D.C.:
                            November 9, 2001.




                            Page 44                                         GAO-03-105 Justice Challenges
Performance and Accountability and High-
Risk Series

              Major Management Challenges and Program Risks: A Governmentwide
              Perspective. GAO-03-95.

              Major Management Challenges and Program Risks: Department of
              Agriculture. GAO-03-96.

              Major Management Challenges and Program Risks: Department of
              Commerce. GAO-03-97.

              Major Management Challenges and Program Risks: Department of
              Defense. GAO-03-98.

              Major Management Challenges and Program Risks: Department of
              Education. GAO-03-99.

              Major Management Challenges and Program Risks: Department of
              Energy. GAO-03-100.

              Major Management Challenges and Program Risks: Department of
              Health and Human Services. GAO-03-101.

              Major Management Challenges and Program Risks: Department of
              Homeland Security. GAO-03-102.

              Major Management Challenges and Program Risks: Department of
              Housing and Urban Development. GAO-03-103.

              Major Management Challenges and Program Risks: Department of the
              Interior. GAO-03-104.

              Major Management Challenges and Program Risks: Department of
              Justice. GAO-03-105.

              Major Management Challenges and Program Risks: Department of
              Labor. GAO-03-106.

              Major Management Challenges and Program Risks: Department of State.
              GAO-03-107.

              Major Management Challenges and Program Risks: Department of
              Transportation. GAO-03-108.




              Page 45                                        GAO-??-?? Document Name
Performance and Accountability and High-
Risk Series




Major Management Challenges and Program Risks: Department of the
Treasury. GAO-03-109.

Major Management Challenges and Program Risks: Department of
Veterans Affairs. GAO-03-110.

Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-03-111.

Major Management Challenges and Program Risks: Environmental
Protection Agency. GAO-03-112.

Major Management Challenges and Program Risks: Federal Emergency
Management Agency. GAO-03-113.

Major Management Challenges and Program Risks: National
Aeronautics and Space Administration. GAO-03-114.

Major Management Challenges and Program Risks: Office of Personnel
Management. GAO-03-115.

Major Management Challenges and Program Risks: Small Business
Administration. GAO-03-116.

Major Management Challenges and Program Risks: Social Security
Administration. GAO-03-117.

Major Management Challenges and Program Risks: U.S. Postal Service.
GAO-03-118.

High-Risk Series: An Update. GAO-03-119.

High-Risk Series: Strategic Human Capital Management. GAO-03-120.

High-Risk Series: Protecting Information Systems Supporting the
Federal Government and the Nation’s Critical Infrastructures. GAO-03-
121.

High-Risk Series: Federal Real Property. GAO-03-122.




Page 46                                          GAO-??-?? Document Name
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