United States General Accounting Office GAO Testimony Before the Subcommittee on Infrastructure and Border Security, Select Committee on Homeland Security, House of Representatives For Release on Delivery Expected at 3:00 p.m. EDT Monday, June 16, 2003 HOMELAND SECURITY Challenges Facing the Department of Homeland Security in Balancing its Border Security and Trade Facilitation Missions Statement of Richard M. Stana, Director Homeland Security and Justice Issues GAO-03-902T Mr. Chairman and Members of the Subcommittee: I am pleased to be here today to discuss the longstanding challenge of balancing our nation’s security and commercial needs, an issue that is especially important in the aftermath of the September 11, 2001, terrorist attacks that changed the nation’s security environment. Addressing this challenge now falls principally to the Department of Homeland Security (DHS) and its Border and Transportation Security directorate. Within this directorate, the responsibility has been assigned primarily to the Bureau of Customs and Border Protection (BCBP). BCBP consists of the inspections component of the former U.S. Customs Service; the Border Patrol and Inspections components of the former Immigration and Naturalization Service (INS); and a former component of the U.S. Department of Agriculture, the Animal and Plant Health Inspection Service (APHIS).1 Achieving the balance between security and commercial needs is greatly affected by BCBP’s commercial and border and immigration control workload. Regarding commercial workload, in fiscal year 2002, the former U.S. Customs Service processed 24.9 million trade import entries valued at over $1.1 trillion and collected $23.8 billion in duties and fees; it also processed about 6 million cargo containers arriving at U.S. sea ports. While the cargo workload has stabilized somewhat as a result of the recent global economic slowdown, it is likely to begin growing again when an economic recovery is underway at some point in the future, thus exacerbating the challenges BCBP faces. Regarding border and immigration control workload, in fiscal year 2002, inspectors at over 300 ports of entry inspected nearly 450 million travelers while the Border Patrol apprehended nearly 960,000 aliens trying to enter the U.S. illegally between the ports of entry. BCBP faces many challenges as it performs its important missions. In my testimony today, I make the following points: • With respect to cargo, BCBP has attempted to select and inspect the highest-risk incoming cargo, while enabling legitimate cargo to be cleared in a timely manner. These efforts pose a range of challenges, from the availability of threat assessments and actionable intelligence to the capability of nonintrusive inspection technology to detect potentially 1 Following the creation of DHS and its absorption of Customs, the Secretary of the Treasury retained authority over Customs’ revenue functions. Page 1 GAO-03-902T harmful contraband. BCBP has made some progress in implementing initiatives that are designed to improve the efficiency of its regulation of legitimate commercial activities. But, additional challenges remain, including the need to improve its trade compliance program and to successfully implement its new trade processing information system. • BCBP also faces many challenges with respect to preventing illegal entry by individuals into the United States. These challenges impact BCBP’s ability to detect and deter illegal entry between ports of entry and to identify those individuals who should not be permitted entry at the ports. BCBP is faced with continuing to implement its southwest border strategy while simultaneously addressing emerging concerns over illegal entry along the northern border, mitigating the negatives affects the strategy may have on communities, and responding to continuing concerns over the safety of aliens who cross in remote and desolate areas. At our nation’s borders, the challenges include detecting false admissibility documents, unifying and enhancing inspector training, providing timely intelligence to the field, and successfully implementing the new entry-exit system. • In our recent Performance and Accountability series report, we designated implementation and transformation of DHS as high risk based on three factors. First, the implementation and transformation of DHS is an enormous undertaking that will take time to achieve in an effective and efficient manner. Second, components to be merged into DHS, including those forming BCBP, already face a wide array of existing challenges, some of which are described in this statement. Finally, failure to effectively carry out its mission would expose the nation to potentially very serious consequences. My testimony today is intended to provide an overview based primarily on the results of work that we have completed in recent years, namely, our Performance and Accountability Series and High-Risk reports related to DHS, Justice and Treasury;2 DHS’s international mail and package inspection processes;3 DHS’s acquisition and deployment of radiation 2 U.S. General Accounting Office, Major Management Challenges and Program Risks: A Governmentwide Perspective, GAO-03-95 (Washington, D.C.: Jan. 2003); Major Management Challenges and Program Risks Department of Homeland Security, GAO-03-102 (Washington, D.C., Jan. 2003); Major Management Challenges and Program Risks: Department of the Treasury, GAO-03-109 (Washington, D.C.: Jan. 2003); and High- Risk Series: An Update, GAO-03-119 (Washington, D.C.: Jan. 2003). 3 U.S. General Accounting Office, U.S. Customs Service: International Mail and Package Inspection Processes at Selected Locations, GAO-02-967 (Washington, D.C.: Aug. 2002). Page 2 GAO-03-902T detection equipment;4 the Border Patrol’s southwest border strategy;5 DHS’s spending plans for its planned system to monitor the flow of foreign nationals in and out of the United States;6 and our investigators’ efforts to enter the country using fraudulent documents.7 My testimony also highlights our ongoing work related to cargo inspections and individual inspections at land ports of entry.8 BCBP has undertaken efforts to focus its enforcement on selecting and Challenges Related to inspecting the highest-risk incoming cargo, while enabling legitimate cargo Cargo Processing to be cleared in a timely manner. It has a number of initiatives underway aimed at improving its ability to identify potentially risky cargo for inspection. BCBP and Customs before it have longstanding efforts to use information, personnel, and technology to identify such cargo. These efforts pose a range of challenges, from the availability of threat assessments and actionable intelligence to the capability of nonintrusive inspection technology to detect potentially harmful contraband. From a trade facilitation perspective, BCBP has made some progress in implementing initiatives that are designed to improve the efficiency of its regulation of commercial activities. But additional challenges remain, including the need to improve its evolving trade compliance program and acquire a new trade processing system. 4 U.S. General Accounting Office, Customs Service: Acquisition and Deployment of Radiation Detection Equipment, GAO-03-235T (Washington, D.C.: Oct. 2002). 5 U.S. General Accounting Office, INS’ Southwest Border Strategy: Resource and Impact Issues Remain After Seven Years, GAO-01-842 (Washington, D.C.: Aug. 2001). 6 U.S. General Accounting Office, Information Technology: Homeland Security Needs to Improve Entry Exit System Expenditure Planning, GAO-03-563 (Washington, D.C.: June 2003). 7 U.S. General Accounting Office, Weaknesses in Screening Entrants into the United States, GAO-03-438T (Washington, D.C.: Jan. 30, 2003) and Counterfeit Documents Used to Enter the United States from Certain Western Hemisphere Countries Not Detected, GAO-03-713T (Washington, D.C.: May 13, 2003). 8 The cargo inspection work was requested by the House Committee on Energy and Commerce. The individual inspections at land ports of entry work is being done pursuant to a mandate in the Illegal Immigration Reform and Immigrant Responsibility Act of 1996. Since this work is ongoing and involves information that BCBP considers to be law enforcement sensitive, we are precluded from further discussing it in this unclassified statement. Page 3 GAO-03-902T Major Cargo Security According to the Commissioner of BCBP, the priority mission is to prevent Initiatives terrorists and terrorist weapons from entering the United States. This important mission means improving security at our physical borders and ports of entry, as well as extending the zone of security beyond our physical borders. BCBP has a number of initiatives underway aimed at improving security, including: • Container Security Initiative, which stations BCBP personnel in key international ports to examine high-risk cargo before it is placed on ships bound for the United States. • Customs-Trade Partnership Against Terrorism and the Free and Secure Trade Program, which are designed to increase supply chain security and expedite the clearance of legitimate trade. • Non-Intrusive Inspection technology, which increases the ability to detect conventional explosives, nuclear weapons, radioactive components, and other weapons of mass destruction. • Automated Targeting System, which is used by the National Targeting Center and field targeting units in the United States and overseas to help target high-risk cargo and passengers entering the United States. We have work underway to review most of these initiatives and will make our results available to the Subcommittee as soon as the work is completed. Selecting Highest-Risk Separating high-risk cargo from low- or no-risk cargo is extremely Cargo for Inspection important to BCBP because searching each and every cargo and traveler that enters the United States would cripple the flow of legitimate trade and travel and would require a huge resource commitment. Over the years Customs has recognized that it needed to identify what is high risk—and to do so as early in the process as possible—and target its limited resources accordingly. To select, or “target,” and inspect the highest-risk cargoes and travelers, BCBP relies on the use of threat assessments and actionable intelligence, the ability of inspectors to quickly discover or sense an unlawful cargo, and the use of nonintrusive inspection technology to detect potentially harmful contraband. Each of these poses challenges to BCBP. Information is key to identifying high-risk cargo. Such information can come from manifests for air and sea shipments, from importers, or from intelligence units within or outside DHS. Accurate information can help BCBP make reliable risk determinations, particularly when it is used in DHS computerized models that help assess cargo risk. Obviously, when Page 4 GAO-03-902T information or intelligence is incomplete or unreliable, it can adversely impact on BCBP’s ability to identify potentially risky cargo for inspection. We are currently reviewing how BCBP is targeting cargo for further inspection and how such cargo is inspected at ports. In this regard, we are reviewing how BCBP developed the model used in targeting, how BCBP is handling the targets generated by the model at sea ports, and whether and how BCBP intends to evaluate targeting. Since this work is ongoing, and involves information that BCBP also considers to be law enforcement sensitive, we are precluded from discussing specific aspects of this matter in this unclassified statement. However, in the broadest terms, our work to date shows that BCBP’s targeting efforts face a range of challenges relating to threat assessments, actionable intelligence, and nonintrusive inspection technology. Having sufficient numbers of well-trained and motivated staff is also key to identifying high-risk cargo. Inspectors and canine officers are trained to detect unusual or abnormal behaviors or circumstances that suggest a potential threat or unlawful activity. Many have developed a “sixth sense” in that they pick up on latent clues and unconnected information. Nevertheless, these inspectors are challenged by the tight timeframes and pressures they work under to move legitimate cargo through the ports. Our recent work on the inspection of international mail showed that relying on inspectors alone can increase the risk that contraband enters the country. The inspection of incoming foreign mail remains largely a manual process that relies primarily on physical examination. We found several challenges relating to this process, but BCBP’s determination that our results were law enforcement sensitive precludes our discussing them here. However, at the time our work was completed, one courier was working with the former Customs Service to pilot test an advance manifest system—a computerized database that receives cargo manifest information. The database is intended to allow Customs to analyze incoming package information and make more informed decisions about what packages to inspect. In addition to information and staff, technology provides for a more effective and efficient process. Large-scale x-ray and gamma–ray imaging systems, portal radiation monitors, and portable and hand-held radiation detection devices can reduce the need for costly, intensive inspections and save inspection time and resources. Page 5 GAO-03-902T As important as the use of technology is, there are certain limitations and challenges that need to be considered. For example, we reviewed Customs’ acquisition and deployment of radiation detection equipment. We found that some of the radiation detection equipment being used— radiation pagers—have a limited range and are not designed to detect weapons-usable nuclear material. Furthermore, experts we contacted did not view pagers as search instruments but rather as personal safety devices. We plan to report later this summer on BCBP’s acquisition and deployment of radiation detection equipment. Assuring the Timely Flow In trying to achieve the commercial-security balance, BCBP is challenged of Legitimate Cargo to ensure that antiterrorism efforts do not slow the flow of legitimate international commerce and travel. According to BCBP, it has worked with importers on concerns such as where their goods originated, the physical security and integrity of their overseas plants and those of their foreign suppliers, the background of their personnel, the means by which they transport goods, and those who they have chosen to transport their goods into the country. BCBP has reaffirmed to importers the importance of knowing their customers and has examined the security practices of their freight forwarders and the routes their shipments travel. Although BCBP has made some progress in implementing initiatives that are designed to improve the efficiency of its regulation of commercial activities, additional challenges remain, particularly in view of the new and heightened emphasis on terrorism. These challenges include (1) continuing to improve its evolving trade compliance program and (2) acquiring a new trade processing system. Implementing the Customs Although tempered recently by the global economic slowdown, growth in Modernization Act the volume and value of imports continues to create profound challenges for BCBP to facilitate and enforce U.S. trade laws and regulations. The volume of trade is expected to surpass $2 trillion in the year 2006. To speed the processing of imports and improve compliance with trade laws, specifically, the Customs Modernization and Informed Compliance Act of Page 6 GAO-03-902T 1993 (also known as the “Mod Act”),9 BCBP’s predecessor, Customs, developed an “informed compliance strategy.” In 1999, we recommended that the Customs Service develop and implement an evaluation of the effectiveness of its informed compliance strategy. Customs agreed with our recommendation and completed its Trade Compliance Strategy Study on May 24, 2001. The study indicated that the strategy improves compliance, but the impact on overall compliance rates is small. For example, one initiative, the Company Enforced Compliance Process (CECP), was to address large importers’ noncompliance that had a significant negative impact on the overall national compliance rates. According to the study, Customs was to punish noncomplying companies by imposing “confirmed risk” designations, increasing examinations, removing privileges, and referring for penalties. However, the confirmed risk status was only used six times, and loss of privileges and referral for penalties were never used. The study concluded that CECP was not much of an enforced compliance process, and it was discontinued. On the other hand, the study found that the companies’ compliance rates increased after they participated in the other initiatives such as compliance assessment and account management initiatives. While it is not possible to attribute the increase in compliance totally to these initiatives, the study concluded that these programs had a positive impact. Acquiring a New Trade Customs’ ongoing effort to acquire a new trade processing system is key to Processing System modernizing how Customs tracks, controls, and processes all commercial goods imported into and exported out of the United States. This large and complex system, known as the Automated Commercial Environment (ACE), is expected to cost about $1.7 billion and is to replace Customs’ antiquated system. Expected benefits from ACE include speeding the flow of legitimate commerce into and out of the United States, identifying and targeting high-risk commerce requiring greater scrutiny, and providing a single interface between the trade community and the federal government for trade data. In April 2001, Customs awarded a 5-year contract, with 9 P.L. 103-183, title VI. The Mod Act fundamentally altered the relationship between importers and, at the time, Customs by giving the importer the legal responsibility for declaring the value, classification, and rate of duty applicable to merchandise being imported into the United States. Customs, however, is responsible for determining the final classification and value of the merchandise. The Mod Act also gave Customs and importers a shared responsibility for ensuring compliance with trade laws. Page 7 GAO-03-902T options to extend the contract to not more than 15 years, to a system integrator responsible for developing and deploying ACE. Successfully managing a project as large and complex as ACE is a challenging undertaking. Over the last 4 years, we have reported on ACE and recommended steps Customs needed to take to minimize project risks. To its credit, Customs has taken action to implement our recommendations, as follows: • We recommended Customs incrementally justify the ACE investment. Customs defined and committed to implement process controls for justifying and making ACE investment decisions incrementally. After implementing the first ACE release, Customs plans to verify that actual costs and benefits meet expectations and plans to continue this incremental investment approach for the remaining ACE releases. • We recommended Customs ensure ACE alignment with its enterprise architecture. Customs ensured that its enterprise architecture contained sufficient detail to build the first ACE release and has aligned the release with the enterprise architecture. Customs plans to continue to extend its enterprise architecture as necessary to build subsequent ACE releases. • We recommended Customs have sufficient human capital resources. Customs developed and plans to implement a human capital management strategy for the Customs modernization office, which is responsible for managing the ACE acquisition. • We recommended Customs develop rigorous and analytically verifiable cost estimating. Customs began developing and plans to implement a cost- estimating program that employs the tenets of effective cost estimating as defined by the Software Engineering Institute (SEI). • We recommended Customs employ effective software acquisition processes. Customs continues to make progress and has plans to establish effective software acquisition process controls, as embodied primarily in the second level of SEI’s Software Acquisition Capability Maturity Model.10 Customs has made progress in implementing some, but not all, of our recommendations. Moreover, because Customs is in the early stages of acquiring ACE, many challenging tasks remain before Customs will have implemented full ACE capability. 10 Capability Maturity ModelSM is a service mark of Carnegie Mellon University, and CMM is registered in the U.S. Patent and Trademark Office. The SA-CMM identifies key process areas that are necessary to effectively manage software-intensive system acquisitions. Achieving the second level of the SA-CMM’s five-level scale means that an organization has the software acquisition rigor and discipline to repeat project successes. Page 8 GAO-03-902T To prevent illegal entry of individuals into the United States between the Challenges Related to ports of entry, BCBP has deployed significant resources but estimates Immigration Control significantly more are needed. Continued implementation of the southwest border strategy faces a range of challenges, including meeting hiring goals and obtaining needed approvals to deploy fencing and technology to implement its strategy while simultaneously addressing emerging concerns over illegal entry along the northern border, mitigating the negatives affects the strategy may have on communities that experience an increase in illegal alien traffic, and responding to continuing concerns over the safety of aliens who cross in remote and desolate areas. At our nation’s ports, BCBP faces an array of challenges, including improving inspectors’ ability to verify the identity of travelers and whether they can be admitted into the country, unifying and enhancing inspector training, and complying with the congressional mandate to implement a system to track the entry and exit of all aliens. Deterring Illegal Entry Deterring illegal entry between the nation’s ports of entry will continue to between the Ports of Entry be a challenge for BCBP. In previous work, we reported that the Border Patrol had estimated that significantly more resources would be needed to fully implement its border control strategy and that various factors had impeded the Border Patrol’s ability to implement its strategy as originally planned. Since 1994, the Border Patrol has been implementing a phased strategy to increase deterrence to illegal entry beginning, first, with the areas that had the largest influx of illegal aliens. The strategy postulated that as resources were applied in one area, the flow of illegal alien traffic would shift to other locations along the southwest border where resources had yet to be applied. In our last report on the southwest border strategy in August 2001, we reported that the Border Patrol estimated it would need between 11,700 and 14,000 agents, additional support personnel, and hundreds of millions of dollars in additional technology and infrastructure to fully implement the Southwest border strategy.11 We reported that it would take at least 5 more years (until 2006) to reach the minimum number of agents the Border Patrol believed it needed along the Southwest border if (1) the 11 See U.S. General Accounting Office, INS’ Southwest Border Strategy: Resource and Impact Issues Remain After Seven Years, GAO-01-842 (Washington, D.C.: Aug. 2001). Page 9 GAO-03-902T administration’s agent hiring goals at that time were maintained and met and (2) all new agents were deployed to the southwest border. However, this estimate was made before the September 11, 2001, attacks and the subsequent concerns regarding the need for additional resources to deter illegal entry along the northern border. BCBP continues to face hiring challenges to meet its estimated needs. The Border Patrol currently has about 9,500 agents deployed along the southwest border. While nearly a 3-fold increase from the 3,400 agents the Border Patrol had along the southwest border in 1994, it is still about 2,200 agents short of the minimum number, 11,700, the Border Patrol said it needed to fully implement the southwest border strategy. Currently, the Border Patrol has 567 agents deployed along the northern border. We also reported on various factors that had impeded the Border Patrol’s ability to implement its strategy, some of which still appear to be problematic. For example, it had taken the Border Patrol longer to implement the strategy than originally planned because, among other things, the Border Patrol experienced difficulties hiring agents and delays in obtaining approvals needed to deploy technology and build fences. The Border Patrol also recognized the need to make outreach efforts to communities because its initial failure to warn some communities about anticipated increases in illegal alien traffic caught community officials by surprise and angered some residents due to the negative effects the increased traffic had on the community. When apprehensions surged in communities into which the illegal alien traffic was reportedly pushed, officials and residents in one community reported experiencing loss of business, destruction of private property, and environmental degradation. Concerns have been raised over the environmental impact of current plans to build additional fencing along the border in Arizona. A recent news article described how some local residents in the border area southwest of Tucson, Arizona, are patrolling the border to report illegal crossings raising the concern of law enforcement officials. The Border Patrol has realized its goal of shifting illegal alien traffic away from urban areas into more remote areas. However, rather than being deterred from attempting illegal entry, many aliens have instead risked injury and death by trying to cross mountains, deserts, and rivers. This prompted the Border Patrol to implement a Border Safety Initiative consisting of, among other things, a media campaign to warn aliens about the dangers of crossing illegally, as well as establishing search-and-rescue units. Page 10 GAO-03-902T We further reported in August 2001 that although alien apprehensions had shifted along the border as expected, overall apprehensions along the southwest border had continued to increase to over 1.6 million in fiscal year 2000—raising questions about the strategy’s effect on overall illegal entry along the southwest border. However, since then apprehensions along the southwest border have declined to less than 1 million in fiscal year 2002. While there may be many reasons for the decline in apprehensions, in response to our recommendation, the Border Patrol has developed a plan designed to evaluate the impacts of its southwest border strategy. However, the evaluation has yet to be completed. Preventing Illegal Entry at Our recent work at ports of entry and our ongoing work specifically at Ports of Entry land border ports, indicate that BCBP inspectors continue to face challenges that those from their predecessor agencies also faced in balancing the need to identify violators of immigration and other laws while facilitating the movement of lawful travelers. Today, I will touch on several issues relating to the inspection of entry documents, inspector training, intelligence information needs of the field, and BCBP plans for implementing the U.S. Visitor and Immigrant Status Indication Technology system, known as the U.S. VISIT system. Determining Traveler At land border ports of entry, inspectors must quickly make decisions Admissibility about whether to admit a traveler into the United States or refer travelers for more intensive inspection if admissibility cannot be readily determined. Two of the factors that challenge inspectors’ ability to verify the travelers’ identity and admissibility are that (1) some travelers may enter the United States without having to present a travel document and (2) travelers can present a variety of documents to gain entry into the United States, some of which can be easily counterfeited. First, some travelers do not need to present proof of citizenship at the border. U.S. and certain Canadian citizens are exempt from having to present any document upon entry. Instead, they can make an oral claim of citizenship, if this satisfies the inspector. According to immigration data, inspectors at land border ports intercepted nearly 15,000 people in 2002 who falsely claimed to be U.S. citizens in order to gain illegal entry, suggesting an unknown number of travelers successfully entered the United States this way. Page 11 GAO-03-902T Second, a variety of documents are accepted at ports, and many can be counterfeited or used fraudulently with apparent ease. With nearly 200 countries issuing unique passports, official stamps, seals, and visas, the potential for document fraud is great. A wide variety of documents can be presented for inspection—including more than 8,000 state and local offices issue birth certificates, driver’s licenses, and other documents, any of which could potentially be counterfeit. According to immigration data, inspectors at land ports intercepted nearly 60,000 fraudulent documents in fiscal year 2002, including over 10,000 U.S. citizenship-related documents. Clearly, others have successfully gained access to this country using counterfeit documents. Earlier this year, we testified on how our investigators entered the country from Canada, Mexico, and Jamaica through land, air, and sea ports of entry using fictitious names, and counterfeit driver’s licenses and birth certificates made using readily available software.12 INS and Customs Service inspectors never questioned the authenticity of the counterfeit documents, and our investigators encountered no difficulty in entering the country using them. Unifying and Enhancing BCBP will also face an array of challenges in ensuring that its border Inspector Training inspectors are adequately trained, including ensuring appropriate training is provided in the detection of fraudulent documents. For example, former INS and Customs inspectors are still being trained at separate basic training academies using two different curricula. If border inspectors are to wear “one face” at the border, a unified curriculum and training approach will need to be developed and implemented. These training challenges will continue beyond the academy—BCBP will also need to ensure that a field training program is established that meets the needs of the newest as well as experienced inspectors at the ports. For example, neither the former INS nor Customs agencies had a standard on-the-job training program for their inspectors working at land border ports. The prior work I mentioned in which our investigators used counterfeit documents to enter the United States, as well as our ongoing work at 15 land border ports, suggest that one training challenge for BCBP will be to ensure that both new and experienced border inspectors are capable of readily detecting fraudulent documents. 12 U.S. General Accounting Office, Weaknesses in Screening Entrants into the United States, GAO-03-438T (Washington D.C.: Jan. 30, 2003) and Counterfeit Documents Used to Enter the United States from Certain Western Hemisphere Countries Not Detected, GAO-03-713T (Washington D.C.: May 13, 2003). Page 12 GAO-03-902T Meeting Field Intelligence Our ongoing work at land border ports suggests that the Bureau will also Needs face challenges regarding the collection, analysis, and use of intelligence information in the field. The former INS recognized the need for more intelligence support in the field. In 1997, an INS-contracted study reported the lack of an intelligence capability at all INS locations, including districts and ports.13 More recent studies suggest needs in this area persist. Although some steps have been taken to bring the intelligence function to the field level, additional steps remain if the intelligence needs of the field are to be met. These challenges include, but are not limited, to decisions related to staffing and training, as well as merging intelligence positions from the former Customs and INS. Implementing the New U.S. One of the most significant challenges facing DHS at ports of entry is the VISIT System implementation of the U.S. VISIT system. This significant undertaking is intended to capture both entry and exit data on travelers. It will also have many implications for operations at U.S. ports of entry, including expenditures, staffing, inspection procedures, and infrastructure. We reviewed INS’s fiscal year 2002 expenditure plan and associated system acquisition documentation and system plans. We reported that INS’s preliminary plans showed that it intended to acquire and deploy a system that will satisfy the general scope of capabilities required under various laws. However, we found that the initial plan did not provide sufficient information about INS commitments for the system, such as what specific system capabilities and benefits will be delivered, by when, and at what cost. We concluded that this lack of detail is a material limitation in the first plan that will become even more problematic in the future as the magnitude and complexity of the system acquisition increases, as will the importance of creating plans with the appropriate level and scope of information.14 Responsibility for implementing U.S. VISIT now resides in the Border and Transportation Security directorate. We are currently reviewing the fiscal year 2003 expenditure plan and will ascertain whether these problems were addressed. 13 INS Intelligence Program Strategic Plan, September 30, 1997 (submitted by LB&M Associates, Inc.). 14 U.S. General Accounting Office, Information Technology: Homeland Security Needs to Improve Entry Exit system Expenditure Planning, GAO-03-563 (Washington D.C.: Jun. 2003). Page 13 GAO-03-902T We designated implementation and transformation of the new Department Challenges Related to of Homeland Security as high risk based on three factors. First, the Implementing and implementation and transformation of DHS is an enormous undertaking that will take time to achieve in an effective and efficient manner. Second, Transforming DHS components to be merged into DHS—including those that now form BCBP—already face a wide array of existing challenges, some of which we have described in this statement. Finally, failure to effectively carry out its mission would expose the nation to potentially very serious consequences. In the aftermath of September 11, invigorating the nation’s homeland security missions has become one of the federal government’s most significant challenges. DHS, with an anticipated budget of almost $40 billion and an estimated 170,000 employees, will be the third largest government agency; not since the creation of the Department of Defense (DOD) more than 50 years ago has the government sought an integration and transformation of this magnitude. In DOD’s case, the effective transformation took many years to achieve, and even today, the department continues to face enduring management challenges and high- risk areas that are, in part, legacies of its unfinished integration. Effectively implementing and transforming DHS may be an even more daunting challenge. DOD was formed almost entirely from agencies whose principal mission was national defense. DHS will combine 22 agencies specializing in various disciplines: law enforcement, border security, biological research, disaster mitigation, and computer security, for instance. Further, DHS will oversee a number of non-homeland-security activities, such as the Coast Guard’s marine safety responsibilities and the Federal Emergency Management Agency’s (FEMA) natural disaster response functions. Yet, only through the effective integration and collaboration of these entities will the nation achieve the synergy that can help provide better security against terrorism. The magnitude of the responsibilities, combined with the challenge and complexity of the transformation, underscores the perseverance and dedication that will be required of all DHS’s leaders, employees, and stakeholders to achieve success. Further, it is well recognized that mergers of this magnitude in the public and private sector carry significant risks, including lost productivity and inefficiencies. Generally, successful transformations of large organizations, even those undertaking less strenuous reorganizations and with less pressure for immediate results, can take from 5 to 7 years to achieve. Necessary management capacity and oversight mechanisms must be established. Moreover, critical aspects of DHS’s success will depend on Page 14 GAO-03-902T well-functioning relationships with third parties that will take time to establish and maintain, including those with state and local governments, the private sector, and other federal agencies with homeland security responsibilities, such as the Department of State, the Federal Bureau of Investigation, the Central Intelligence Agency, DOD, and the Department of Health and Human Services. Creating and maintaining a structure that can leverage partners and stakeholders will be necessary to effectively implement the national homeland security strategy. The new department is also being formed from components with a wide array of existing major management challenges and program risks. For instance, one DHS directorate’s responsibility includes the protection of critical information systems that we already consider a high risk. In fact, many of the major components merging into the new department, including the Transportation Security Administration (TSA), FEMA and the U.S. Coast Guard, face at least one major problem, such as strategic human capital risks, critical information technology challenges, or financial management vulnerabilities; they also confront an array of challenges and risks to program operations. For example, TSA has had considerable challenges in meeting deadlines for screening baggage, and the agency has focused most of its initial security efforts on aviation security, with less attention to other modes of transportation. The Coast Guard faces the challenges inherent in a massive fleet modernization. DHS’s national security mission is of such importance that the failure to address its management challenges and programs risks could have serious consequences on our intergovernmental system, our citizens’ health and safety, and our economy. Overall, our designation of the implementation and transformation of DHS as a high-risk area stems from the importance of its mission and the nation’s reliance on the department’s effectiveness in meeting its challenges for protecting the country against terrorism. Mr. Chairman, this concludes my prepared statement. I would be pleased to answer any questions that you or other Members of the Subcommittee may have. Page 15 GAO-03-902T Appendix: Contacts and Acknowledgments For further information regarding this testimony, please contact Richard M. Stana at (202) 512-8777. Individuals making key contributions to this testimony included Seto J. Bagdoyan, Michael P. Dino, Darryl W. Dutton, Barbara Guffy, E. Anne Laffoon, and Lori Weiss. (440222) Page 16 GAO-03-902T This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. 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Homeland Security: Challenges Facing the Department of Homeland Security in Balancing its Border Security and Trade Facilitation Missions
Published by the Government Accountability Office on 2003-06-16.
Below is a raw (and likely hideous) rendition of the original report. (PDF)