oversight

Student and Exchange Visitor Program: DHS Needs to Assess Risks and Strengthen Oversight Functions

Published by the Government Accountability Office on 2012-06-18.

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

             United States Government Accountability Office

GAO          Report to Congressional Requesters




June 2012
             STUDENT AND
             EXCHANGE VISITOR
             PROGRAM
             DHS Needs to Assess
             Risks and Strengthen
             Oversight Functions




GAO-12-572
                                            June 2012

                                            STUDENT AND EXCHANGE VISITOR PROGRAM
                                            DHS Needs to Assess Risks and Strengthen
                                            Oversight Functions
Highlights of GAO-12-572, a report to
congressional requesters




Why GAO Did This Study                      What GAO Found
As of January 2012, more than               U.S. Immigration and Customs Enforcement (ICE) has not developed a process
850,000 active foreign students were in     to identify and analyze program risks since assuming responsibility for the
the United States enrolled at over          Student and Exchange Visitor Program (SEVP) in 2003, in accordance with
10,000 U.S. schools. ICE, within DHS,       internal controls standards and risk management guidance. Within ICE, officials
is responsible for managing SEVP and        from SEVP and the Counterterrorism and Criminal Exploitation Unit (CTCEU),
certifying schools to accept foreign        which tracks, coordinates, and oversees school fraud investigations, have
students. GAO was asked to review           expressed concerns about the fraud risks posed by schools that do not comply
ICE’s fraud prevention and detection        with requirements. Investigators said that identifying and assessing risk factors,
procedures for SEVP. This report
                                            such as the type of school, are critical to addressing potential vulnerabilities
examines the extent to which ICE has
                                            posed across the more than 10,000 SEVP-certified schools. However, SEVP
(1) identified and assessed risks in
SEVP and (2) developed and
                                            does not have processes to (1) evaluate prior and suspected cases of school
implemented policies and procedures         noncompliance and fraud and (2) obtain and assess information from CTCEU
to prevent and detect fraud during the      and ICE field offices on school investigations and outreach events. For example,
initial school certification process and    ICE reported that it has withdrawn at least 88 schools since 2003 for non-
once schools begin accepting foreign        compliance; however, ICE has not evaluated schools’ withdrawals to determine
students. GAO analyzed documents,           potential trends from their noncompliant actions because case information is not
such as ICE’s SEVP procedures, and          well-organized, according to SEVP officials. Without a process to analyze risks, it
tested recordkeeping controls by            will be difficult for ICE to provide reasonable assurance that it is addressing high-
selecting a random sample of 50             risk vulnerabilities and minimizing noncompliance.
SEVP-certified schools and reviewing
case files. GAO interviewed officials       ICE has not consistently implemented existing controls, in accordance with
from SEVP, CTCEU, and 8 of 26 ICE           internal control standards and fraud prevention practices, to verify schools’
field offices, selected based on a mix      legitimacy and eligibility during initial SEVP certification and once schools begin
of factors, including school fraud          accepting foreign students. Specifically, ICE officials do not consistently verify
investigations and referrals from           certain evidence initially submitted by schools in lieu of accreditation. In addition,
CTCEU. While the results of the case        ICE does not maintain records to document SEVP-certified schools’ ongoing
file reviews and interviews cannot be       compliance. GAO found that 30 of a randomly-selected sample of 48 SEVP-
generalized, they provided insights
                                            certified school case files lacked at least one piece of required evidence, such as
about SEVP.
                                            proof of school officials’ citizenship or permanent residency. ICE was unable to
                                            produce 2 of the 50 case files. ICE officials noted that some files were missing
What GAO Recommends                         because they were lost or destroyed when the Department of Homeland Security
GAO recommends that ICE, among              (DHS) took over the program from the former Immigration and Naturalization
other things, identify and assess           Service; moreover, ICE officials cannot quantify how many files are missing.
program risks; consistently implement       Without verification of evidence and complete case files, ICE cannot provide
procedures for ensuring schools’            reasonable assurance that schools were initially and continue to be eligible for
eligibility; address missing school case    certification. Further, ICE policies require that SEVP-certified flight schools
files; and establish target time frames     offering flight training have specific Federal Aviation Administration (FAA)
for notifying flight schools that lack      certifications; however, GAO found that approximately 167 of 434 (or 38 percent)
required FAA certification that they        SEVP-certified flight schools do not have the required certifications as of
must re-obtain FAA certification. DHS       December 2011. The Border Security Act required recertification for all SEVP-
concurred with the recommendations.         certified schools by May 2004 and every 2 years thereafter to monitor schools’
                                            continued program eligibility. SEVP officials stated that they rely on recertification
                                            to verify schools’ eligibility; however, SEVP began the first recertification cycle in
                                            May 2010 and, as of March 2012, has recertified 1,870 (or 19 percent) of certified
                                            schools. Implementing procedures to monitor state licensing and accreditation
View GAO-12-572. For more information,
contact Rebecca Gambler at (202) 512-6912
                                            status for all types of schools and addressing flight schools that lack required
or gamblerr@gao.gov.                        FAA certification could better position ICE to reduce the risk of fraud and
                                            noncompliance.
                                                                                      United States Government Accountability Office
Contents


Letter                                                                                       1
               Background                                                                    5
               Identifying and Assessing Risks to SEVP Could Strengthen ICE’s
                 Management of the Program                                                 10
               Weaknesses in ICE’s Monitoring and Oversight of SEVP-Certified
                 Schools Contribute to Security and Fraud Vulnerabilities                  21
               Conclusions                                                                 37
               Recommendations for Executive Action                                        38
               Agency Comments and Our Evaluation                                          38

Appendix I     Scope and Methodology                                                       41



Appendix II    Comments from the Department of Homeland Security                           46



Appendix III   GAO Contact and Staff Acknowledgments                                       49



Table
               Table 1: ICE’s Budget Authority, Obligations, and Fee Collections
                        for SEVP, Fiscal Years 2006 through 2012                           19


Figures
               Figure 1: Total Academic (F) and Vocational (M) Visas Issued by
                        the Department of State, Fiscal Years 2005 through 2011             6
               Figure 2: Key Steps in SEVP’s Initial and Recertification Processes          9
               Figure 3: ICE’s Recertification Milestones                                  26




               Page i                           GAO-12-572 Student and Exchange Visitor Program
Abbreviations

CTCEU                      Counterterrorism and Criminal Exploitation Unit
DHS                        Department of Homeland Security
FAA                        Federal Aviation Administration
ICE                        U.S. Immigration and Customs Enforcement
INS                        Immigration and Naturalization Service
SEVIS                      Student and Exchange Visitor Information System
SEVP                       Student and Exchange Visitor Program
TECS                       Treasury Enforcement Communication System
USCIS                      U.S. Citizenship and Immigration Services




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Page ii                                 GAO-12-572 Student and Exchange Visitor Program
United States Government Accountability Office
Washington, DC 20548




                                   June 18, 2012

                                   Congressional Requesters

                                   As of January 2012, more than 850,000 active foreign students in the
                                   United States were enrolled at over 10,000 schools. 1 We have previously
                                   reported that terrorist attacks in the United States have pointed to the
                                   need for close monitoring and oversight of foreign students. 2 For
                                   example, one of the September 11, 2001, terrorists entered the country
                                   on a student visa, and subsequently attended flight schools. Two of the
                                   September 11, 2001, terrorists received visas for temporary visits to the
                                   United States for business or pleasure, and, after entering the country,
                                   illegally attended flight schools. 3 In addition, as we reported in April 2011,
                                   schools have sometimes attempted to exploit the immigration system by
                                   knowingly reporting that foreign students were fulfilling their visa
                                   requirements, such as maintaining a full course load, when they were not
                                   attending school or attending intermittently. 4

                                   U.S. Immigration and Customs Enforcement (ICE), within the Department
                                   of Homeland Security (DHS), is responsible for managing the Student
                                   and Exchange Visitor Program (SEVP), which was created in conjunction
                                   with DHS’s formation on March 1, 2003. 5 Under this program, ICE is
                                   responsible for ensuring that foreign students studying in the United


                                   1
                                    The Department of Homeland Security reports that the five countries with the highest
                                   number of active foreign students are China, South Korea, India, Saudi Arabia, and
                                   Canada. These countries account for more than 50 percent of the total number of active
                                   foreign students in the country. Of active foreign students, 70 percent are enrolled in
                                   bachelor’s, master’s, or doctoral post-secondary programs.
                                   2
                                    GAO, Overstay Enforcement: Additional Mechanisms for Collecting, Assessing, and
                                   Sharing Data Could Strengthen DHS’s Efforts but Would Have Costs, GAO-11-411
                                   (Washington, D.C.: Apr. 15, 2011).
                                   3
                                    Temporary visitors to the United States generally are referred to as “nonimmigrants.” The
                                   United States also issues visas to people who intend to immigrate to the United States. In
                                   this report, we use the term “visa” to refer to nonimmigrant visas only. For a listing and
                                   descriptions of nonimmigrant categories, see 8 U.S.C. § 1101(a)(15); see also 8 C.F.R. §
                                   214.1(a)(1)-(2).
                                   4
                                    GAO-11-411.
                                   5
                                    The former Immigration and Naturalization Service was previously responsible for
                                   monitoring foreign students in the United States and the schools that accept them.




                                   Page 1                                  GAO-12-572 Student and Exchange Visitor Program
States comply with the terms of their admission into the country.
Specifically, ICE certifies schools as authorized to accept foreign students
in academic and vocational programs. In addition, ICE manages the
Student and Exchange Visitor Information System (SEVIS), which assists
the agency in tracking and monitoring certified schools, as well as
students—while they are approved to participate in U.S. educational
institutions—and their dependents. 6 Designated school officials are
responsible for monitoring students and entering and maintaining
students’ information in SEVIS, such as information on their courses of
study. 7 SEVP-certified schools span all education levels from
kindergarten to secondary education, as well as post-secondary
academic, vocational, English language, and flight schools. 8 SEVP’s
fiscal year 2012 enacted budget authority is $120 million, and, as of
December 2011, the program includes authorized staff of 151 full-time
government employees and approximately 600 full- and part-time
contractors.

You asked us to review ICE’s fraud prevention and detection procedures,
including whether it uses risk factors to inform its efforts to monitor SEVP-
certified schools. This report examines the extent to which ICE has (1)
identified and assessed risks in SEVP, and (2) developed and
implemented policies and procedures to prevent and detect fraud during
the initial school certification process and once schools begin accepting
foreign students.


6
 The Illegal Immigration Reform and Immigrant Responsibility Act of 1996, as amended,
requires a program to collect information for tracking and monitoring foreign students from
approved institutions of higher education, other approved educational institutions, and
designated exchange visitor programs in the United States. See 8 U.S.C. § 1372. The
statute, as amended by the Enhanced Border Security and Visa Entry Reform Act of 2002
(Border Security Act), requires that an electronic means be established to monitor and
verify the acceptance of foreign students by schools and that schools inform DHS of
foreign students who fail to enroll within 30 days after the end of a school’s enrollment
period. See Pub. L. No. 107-173, § 501(a)(1), 116 Stat. 543, 560-61 (codified at 8 U.S.C.
§ 1372(a)(3)-(4)).
7
 A designated school official is a regularly-employed member of the school administration
whose office is located at the school and whose compensation does not come from
commissions for recruitment of foreign students. The designated school official is required
to be familiar with the regulations governing nonimmigrant students and school
certification (8 C.F.R. § 214.3(l)).
8
 Vocational schools are community colleges, junior or 2-year institutions, high schools,
and other types of schools that provide vocational or technical training, usually leading to
a job rather than a bachelor’s degree.




Page 2                                    GAO-12-572 Student and Exchange Visitor Program
To evaluate the extent to which ICE has identified and assessed risks in
SEVP, we analyzed documentation on ICE’s efforts to evaluate SEVP
risk, including a current contract to develop a risk management approach.
We also analyzed ICE news bulletins to help determine the magnitude of
previous cases of fraud and evaluated information provided by the
Counterterrorism and Criminal Exploitation Unit (CTCEU)—ICE’s
investigative component responsible for investigating school fraud cases,
among other things—on criminal investigations related to school
certification fraud. We reviewed publicly available information on 12 cases
of school fraud dating from 2006 to 2011, which allowed us to better
understand SEVP program risks. Because we selected a
nongeneralizable sample of 12 cases to review, the information obtained
from them is not necessarily representative of all school fraud cases
nationwide. We also compared ICE’s risk management practices for
SEVP against Standards for Internal Control in the Federal Government 9
and DHS’s Policy for Integrated Risk Management. 10 To determine the
extent to which ICE has developed and implemented policies and
procedures to prevent and detect school fraud, we reviewed standard
operating procedures and tested internal controls designed to ensure
school oversight. To test SEVP’s internal controls, we selected a
nongeneralizable, stratified random sample of 50 SEVP-certified schools
and reviewed their case files to verify that evidence required for
certification existed, such as designated school officials’ proof of
citizenship or lawful permanent residency. The results of our case file
review provided us with insights into SEVP’s internal controls and case
management practices. Further, we reviewed SEVP’s compliance case
log, as of December 2011, which identifies specific SEVP-certified
schools that are under additional review for suspected non-compliant
activity, to identify common school attributes such as type of school.

To address both objectives, we interviewed officials from each of SEVP’s
seven branches 11 and criminal investigators from CTCEU, as well as



9
 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1
(Washington, D.C.: Nov. 1, 1999).
10
  Department of Homeland Security, DHS Policy for Integrated Risk Management
(Washington, D.C.: May 27, 2010).
11
 SEVP has seven branches: School Certification, Response, Policy, Analysis and
Operations Center, Field Representative Program, Mission Support, and Information
Technology.




Page 3                                GAO-12-572 Student and Exchange Visitor Program
eight ICE field offices, which allowed us to obtain their perspective on the
magnitude and risks associated with school fraud. 12 We selected these
locations based on their experience in investigating previous and/or
ongoing cases of school fraud. Although the results from these interviews
cannot be generalized to officials at all 26 ICE field offices, they provided
us with useful insights into lessons learned from fraud cases. Additionally,
we compared ICE’s risk management and fraud prevention and detection
practices to the Standards for Internal Control in the Federal
Government 13 and the United Kingdom National Audit Office’s Good
Practice in Tackling External Fraud. 14 Our review encompassed ICE’s
management of SEVP since 2003, when the agency assumed
responsibility for managing the program. Our scope did not include the
Exchange Visitor Program, a separate program administered by the
Department of State. 15 Appendix I presents more details about our
objectives, scope, and methodology.

We conducted this performance audit from September 2011 through June
2012 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe


12
  We interviewed officials from ICE field offices in Atlanta, Ga; Dallas, Tex; Miami, Fla;
New York, N.Y.; Washington, D.C.; and Los Angeles, San Diego, and San Francisco,
Calif.
13
  GAO/AIMD-00-21.3.1.
14
  U.K. National Audit Office, Good Practice in Tackling External Fraud (London, England:
2008). This guidance on fraud control practices was prepared by the U.K.’s National Audit
Office, which is among the internationally recognized, leading organizations in fraud
control. This guidance includes a discussion of sound management practices for
controlling fraud that complements the internal control standards. See GAO, Immigration
Benefits: Additional Controls and a Sanctions Strategy Could Enhance DHS’s Ability to
Control Benefit Fraud, GAO-06-259 (Washington, D.C.: Mar. 10, 2006).
15
  The Exchange Visitor Program allows nonimmigrants to travel to the United States on a
J visa to teach, study, conduct research, and receive on-the-job training. Such
nonimmigrants are monitored by program sponsors, including employers, cultural
exchange organizations, professional associations, and government agencies. We did not
evaluate this program because it is a separate process administered by the Department of
State, and our focus was on DHS’s oversight of schools that enroll foreign students. For
more information on the Exchange Visitor Program, see GAO, State Department: Stronger
Action Needed to Improve Oversight and Assess Risks of the Summer Work Travel and
Trainee Categories of the Exchange Visitor Program, GAO-06-106 (Washington, D.C.:
Oct.14, 2005).




Page 4                                    GAO-12-572 Student and Exchange Visitor Program
             that the evidence obtained provides a reasonable basis for our findings
             and conclusions based on our audit objectives.


             Foreign students interested in studying in the United States must first be
Background   admitted to a school or university before applying for a visa at a U.S.
             embassy or consulate overseas. 16 The process for determining who will
             be issued or refused a visa, including F and M visas, contains several
             steps, including documentation reviews, in-person interviews, collection of
             applicants’ fingerprints, and cross-references against State’s name-check
             database. 17 F visas are for academic study at 2- and 4-year colleges and
             universities and other academic institutions. 18 M visas are for
             nonacademic study at institutions, such as vocational and technical
             schools. 19 An increasing number of foreign students have applied for
             visas to attend school in the United States since fiscal year 2005.
             Specifically, the Department of State issued approximately 244,000 F and
             M visas in fiscal year 2005 and approximately 457,000 in fiscal year 2011
             (see figure 1).




             16
               According to the Department of State’s regulations, a student visa applicant must meet
             the following requirements to qualify: (1) acceptance at an approved school; (2)
             possession of sufficient funds; (3) sufficient knowledge of the English language to
             undertake the chosen course of study or training (unless coming to participate exclusively
             in an English language training program); and, (4) present intent to leave the United
             States at conclusion of studies. See 22. C.F.R. § 41.61(b)(1). According to the
             Department of State guidance for consular officers, if an applicant fails to meet one or
             more of the above criteria, he or she must be refused a visa under section 214(b) of the
             Immigration and Nationality Act (8 U.S.C. § 1184(b)). If consular officers have reason to
             believe that a visa applicant engaged in fraud or misrepresentation to garner acceptance
             into a school, then consular officers are instructed to consider this as an important factor
             in determining if the applicant has a bona fide intent to engage in study in the United
             States. If consular officers have reason to question the authenticity of a school, they are
             instructed to contact SEVP and the fraud prevention office in the Bureau of Consular
             Affairs.
             17
               We have previously reported on visa process issues. For example, see GAO, Border
             Security: Strengthened Visa Process Would Benefit from Improvements in Staffing and
             Information Sharing, GAO-05-859 (Washington, D.C.: Sept. 13, 2005).
             18
               8 U.S.C. § 1101(a)(15)(F); 8 C.F.R. § 214.2(f).
             19
               8 U.S.C. § 1101(a)(15)(M); 8 C.F.R. § 214.2(m).




             Page 5                                   GAO-12-572 Student and Exchange Visitor Program
Figure 1: Total Academic (F) and Vocational (M) Visas Issued by the Department of
State, Fiscal Years 2005 through 2011




Note: Data include initial issuances and any renewals per fiscal year.


A visa allows a foreign citizen to travel to a U.S. port of entry and request
permission from an officer with DHS’s Customs and Border Protection to
enter the United States; it does not guarantee entry into the country.
Among other things, foreign students remain “in status” and therefore
eligible to remain in the United States as students as long as they are
enrolled in a school certified by SEVP. Individuals traveling on student
visas generally are not issued a specific date until which they are
authorized to remain in the United States, but instead are admitted for
what is referred to as “duration of status.” This means that they may
remain in the country as long as they maintain their student status (e.g.,




Page 6                                        GAO-12-572 Student and Exchange Visitor Program
by being enrolled in an academic or work-study program). 20 Some
nonimmigrants enter the country on a non-student visa and subsequently
apply to U.S. Citizenship and Immigration Services for a change in status
to a student visa. In general, if students fail to maintain their student
status or to depart on time, they are considered out of status and begin to
accrue unlawful presence either on the day after U.S. Citizenship and
Immigration Services or an immigration judge determines that they are
out of status or on the day after their authorized period of admission
expires. 21

Schools interested in accepting foreign students on F and M visas must
petition for SEVP certification by submitting a Form I-17 to ICE and
paying an application fee. Once certified, schools are able to accept
foreign students by issuing Forms I-20 for students, which enable the
students to apply for nonimmigrant student status. As of March 2012,
students applying for F or M visas were required to pay a $140 fee to the
Department of State for visa processing and a $200 fee to DHS for
SEVIS, and schools applying for initial certification were required to pay
DHS $1,700, as well as a $655 site visit fee per campus. 22 The Border
Security Act requires DHS to confirm, every 2 years, SEVP-certified
schools’ continued eligibility and compliance with the program’s
requirements. 23 During the initial petition and recertification processes, a
school must provide ICE with evidence of its legitimacy and its eligibility.
Such evidence includes the following:




20
  Students traveling on M visas (students in vocational or other nonacademic institutions)
generally are admitted for a fixed time period, although extensions are possible. See 8
C.F.R. § 214.2(m)(5), (10).
21
  They are subject to 3- to10-year bars on their readmission to the country, respectively, if
they accrue more than 180 days or 1 year of unlawful presence. See 8 U.S.C. §
1182(a)(9)(B).
22
  SEVP and the program’s management of SEVIS are funded solely with the fees it
collects from foreign students as well as schools applying for certification. When the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) first required the
establishment of SEVIS, it required that schools collect the SEVIS fee. See Pub. L. No.
104-208, div. C, § 641(e), 110 Stat. 3009-546, 3009-706. The Visa Waiver Permanent
Program Act amended IIRIRA to require that the government collect the fee. See Pub. L.
No. 106-396, § 404(1), 114 Stat. 1637, 1649 (2000).
23
  8 U.S.C. § 1762.




Page 7                                    GAO-12-572 Student and Exchange Visitor Program
•   designated school officials’ attestation statements that both the school
    and officials intend to comply with program rules and regulations,
    such as ensuring that students attend classes, and that the school is
    eligible for certification. The attestations provide that willful
    misstatements constitute perjury;
•   designated school officials’ proof of U.S. citizenship or lawful
    permanent residency; and
•   proof of licensing by an appropriate state-level licensing or approving
    agency.
In addition, accredited schools must provide proof of certification by an
accrediting agency recognized by the Department of Education. 24
Unaccredited schools must provide other evidence, including:

•   a school catalog or written statement including information on the
    school’s facilities and faculty;
•   for unaccredited schools seeking to enroll F visa students, “in lieu of”
    letters from three accredited institutions stating that graduates or
    credits of the petitioning school are unconditionally accepted at the
    accredited institution;
•   for unaccredited schools seeking to enroll M visas students, “in lieu of”
    letters from three employers stating that graduates of the petitioning
    school are fully qualified in the field of training provided by the
    petitioning school; and
•   for schools offering flight training, Federal Aviation Administration
    (FAA) certificates.
Following a school’s petition and receipt of supporting evidence, ICE uses
contracted firms to conduct a site visit to the school, including each
instructional site foreign students attend, to interview school officials and
review the facilities. In particular, site inspectors review whether schools’
facilities are commensurate with the number of students and type of
academic programs. After receiving all necessary evidence and a site
visit report from the contracted firm, ICE staff in the SEVP School


24
  The goal of accreditation is to ensure that education provided by institutions of higher
education meets acceptable levels of quality. Accrediting agencies, which are private
educational associations of regional or national scope, develop evaluation criteria and
conduct peer evaluations to assess whether or not those criteria are met. Institutions
and/or programs that request an agency’s evaluation and that meet an agency’s criteria
are then “accredited” by that agency. There are more than 70 accrediting bodies
recognized by the Department of Education, including the Accrediting Council for
Continuing Education and Training, and the Accrediting Commission of Career Schools
and Colleges.




Page 8                                   GAO-12-572 Student and Exchange Visitor Program
                                          Certification Branch analyze the documentation, determine the school’s
                                          eligibility, and certify those schools that they determine meet all of the
                                          program’s requirements. According to the School Certification Branch
                                          Chief, the initial certification process takes at least 4 months. During the
                                          recertification process, the School Certification Branch requires schools to
                                          resubmit evidence for certification and evaluates schools’ compliance with
                                          recordkeeping and reporting on its enrolled foreign students. Figure 2
                                          illustrates the initial certification and recertification processes that are
                                          described in SEVP’s regulations, policy, and guidance.

Figure 2: Key Steps in SEVP’s Initial and Recertification Processes




                                          ICE’s SEVP Analysis and Operations Center (compliance unit) may
                                          conduct out-of-cycle, compliance reviews of certified schools at its


                                          Page 9                            GAO-12-572 Student and Exchange Visitor Program
                     discretion. The compliance unit may decide to conduct a compliance
                     review if it has evidence that indicates a school may no longer be
                     legitimate or eligible. As part of these reviews, SEVP staff may conduct
                     unannounced site visits to schools. Based on the results of compliance
                     reviews, some schools may be withdrawn from the program or referred to
                     CTCEU for possible criminal investigation. 25

                     CTCEU tracks, coordinates, and oversees criminal investigations related
                     to potential cases of student and school certification fraud. In that role,
                     CTCEU identifies both foreign students who fail to enroll in or maintain
                     status at their schools and SEVP-certified schools that do not remain in
                     compliance with program requirements. For example, CTCEU takes the
                     lead in pursuing criminal investigations against school officials that may
                     have exploited the system by operating “sham” institutions, which are
                     operating solely to admit foreign nationals into the country without
                     participation in educational programs. CTCEU refers leads to ICE field
                     offices for further review and investigation, and these offices also open
                     their own investigations based on local leads. CTCEU also conducts
                     outreach to schools through its Campus Sentinel program which aims to
                     foster relationships between ICE law enforcement officials and schools
                     through on-site visits and information sessions at national and regional
                     conferences.


                     ICE does not have a process to identify and analyze risks across schools
Identifying and      applying for certification, as well as across the more than 10,000 schools
Assessing Risks to   that are SEVP-certified. Specifically, SEVP faces two key challenges in
                     (1) evaluating information on prior and suspected cases of school
SEVP Could           noncompliance and fraud, and (2) obtaining and assessing information
Strengthen ICE’s     from CTCEU and ICE field offices’ investigations and school outreach
                     events to identify possible trends and lessons learned. In addition, ICE
Management of the    has not conducted an analysis to assess how to allocate resources based
Program              on risk to help ensure that SEVP resources are targeted to the highest-
                     risk program activities. ICE has taken initial actions to study the potential



                     25
                       Withdrawing a school’s certification is the final action in the compliance process. SEVP
                     notifies schools of withdrawal decisions through a letter and schools have an opportunity
                     to appeal these decisions. If SEVP denies the appeal, the program disseminates an
                     official notification of certification withdrawal to the school. SEVP requires students who
                     are enrolled at a school that is withdrawn from the program to transfer to another SEVP-
                     certified school to maintain their student visa status.




                     Page 10                                  GAO-12-572 Student and Exchange Visitor Program
                          risks posed by schools that are not in compliance with requirements, but it
                          is too early to evaluate the results of these actions.


ICE Does Not Have a       ICE has not developed and implemented a process to identify and
Process to Identify and   analyze program risks since assuming responsibility for SEVP in 2003,
Assess Risks Posed by     making it difficult for ICE to determine the potential security and fraud
                          risks across the more than 10,000 SEVP-certified schools and to identify
Schools in SEVP           actions that could help mitigate these risks and reduce schools’
                          noncompliance. SEVP and CTCEU officials expressed concerns about
                          the security and fraud risks posed by schools that do not comply with
                          program requirements. For example, investigators at CTCEU and each of
                          the eight ICE field offices we interviewed told us that they are concerned
                          about the cases of school certification fraud they have seen. They stated
                          that identifying and assessing risk factors, such as the type of school
                          (accredited or unaccredited), is critical to addressing security
                          vulnerabilities and removing opportunities for criminal exploitation within
                          SEVP. In 2011, CTCEU began tracking data on school fraud using
                          increased resources funded with SEVP’s fee collections. For example,
                          CTCEU focused more attention on fraud detection through its SEVIS
                          Exploitation Unit, established in September 2011, which analyzes SEVIS
                          data to identify potentially fraudulent activity among schools and allows
                          CTCEU to generate additional leads on school fraud or noncompliance. In
                          its Fiscal Year 2013 Congressional Budget Justification, DHS reported
                          that during fiscal year 2011, CTCEU analyzed 48 percent more leads on
                          potential school and student visa fraud than in fiscal year 2010. In
                          addition, various cases of school fraud have demonstrated vulnerabilities
                          in the management and oversight of SEVP-certified schools. For
                          example:

                          •   In the case of California Union University, foreign students stated they
                              paid the school owner fees ranging from $600 to more than $10,000
                              for documentation enabling the students to fraudulently obtain visas
                              and, in some cases, bogus degrees, despite the fact that they never
                              attended class. In the case affidavit, one student who purportedly
                              received his bachelor’s degree in education from California Union
                              University recounted how the school owner staged a graduation
                              ceremony at the campus where students received their phony
                              diplomas.
                          •   In the case of Florida Language Institute, foreign nationals who had
                              been issued Forms I-20—a key document required in obtaining a
                              student visa—were not required to attend classes. When ICE officials
                              conducted a site visit at the Institute while the school was supposed to



                          Page 11                           GAO-12-572 Student and Exchange Visitor Program
      be conducting classes, no students were present. The school had
      reported to ICE that 150 students attended class daily.
•     In other instances, school officials have run criminal enterprises that
      are tied to illegitimate schools. For example, in the Tri-Valley
      University case in California, the owner was indicted for issuing
      fraudulent Forms I-20, which falsely certified that its students were
      required to attend a full course of study. Investigators believe school
      officials were intentionally maintaining false information in SEVIS in an
      effort to acquire and maintain immigration status for students that
      were actually ineligible for that status.
ICE could benefit from a process that identifies and analyzes risks
because previous investigations of school fraud indicate that there are
vulnerabilities within the program. Moreover, given that there are more
than 10,000 SEVP-certified schools, identifying and assessing
programwide risks could help ICE target its operations to those program
areas that are of highest risk. Standards for Internal Control in the Federal
Government provides guidance on the importance of identifying and
analyzing risks, and using that information to make decisions. 26 These
standards address various aspects of internal control that should be
continuous, built-in components of organizational operations. One internal
control standard, risk assessment, calls for identifying and analyzing risks
that agencies face from internal and external sources and deciding what
actions should be taken to manage these risks. The standards indicate
that conditions governing risk continually change and periodic updates
are required to ensure that risk information, such as vulnerabilities in the
program, remains current and relevant. Information collected through
periodic reviews, as well as daily operations, can inform the analysis and
assessment of risk. Furthermore, DHS’s Policy for Integrated Risk
Management states that DHS and its component agencies should use a
risk-based approach when managing programs that includes, among
other things, identifying potential risks; assessing and analyzing identified
risks; and using risk information and analysis to inform decision making.

SEVP faces two primary challenges to identifying and assessing risks
posed by schools: (1) it does not evaluate program data on prior and
suspected instances of school fraud and noncompliance and (2) it does
not obtain and assess information from CTCEU and ICE field office
school investigations and outreach events. Information from these


26
    GAO/AIMD-00-21.3.1.




Page 12                             GAO-12-572 Student and Exchange Visitor Program
sources could help ICE identify trends and lessons learned from prior and
ongoing cases and outreach events, providing it with factors it could
consider in identifying and assessing SEVP programwide risks.

Evaluating SEVP information on prior and suspected cases of
school noncompliance and fraud. SEVP does not have a process to
evaluate prior and suspected cases of school fraud and noncompliance to
identify lessons learned from such cases, which could help it better
identify and assess program risks. SEVP has maintained a compliance
case log since 2005—a list of approximately 172 schools as of December
2011—that officials have determined to be potentially noncompliant with
program requirements. The compliance case log represents those
schools that SEVP, based on tips and leads and out-of-cycle reviews, is
monitoring for potential noncompliance. SEVP uses this log for monitoring
potentially noncompliant schools, but, according to SEVP officials, it has
not looked across schools on this list to identify and evaluate possible
trends in schools’ noncompliance, which could provide useful insights to
SEVP to assess programwide risks. Further, according to SEVP officials,
SEVP has not looked across previous cases of school fraud and school
withdrawals to identify lessons learned on program vulnerabilities and
opportunities to strengthen internal controls. They stated that developing
a comprehensive list of prior cases for school fraud would require
significant time and effort because information on school fraud and
noncompliance is maintained in multiple databases and files are not
linked electronically and do not share information, including SEVIS, the
Student and Exchange Visitor Program Automated Management
System, 27 and paper-based case files. However, SEVP could use the
existing compliance case log as a starting point to identify any trends or
factors in schools’ noncompliance. Further, SEVP could select a sample
of prior school fraud cases to analyze for possible trends and lessons
learned, and leverage this analysis to help identify programwide risks.

As of March 2012, ICE reported that it had withdrawn 860 SEVP-certified
schools from the program since 2003 for various reasons including
compliance issues, voluntary withdrawals, and school closures. ICE
reported that it has withdrawn at least 88 of these schools since 2003 for
noncompliance issues, such as failure to report a change in ownership.


27
  The Student and Exchange Visitor Program Automated Management System is a
document management system that contains case file information on schools, such as site
visit reports and evidence provided to support the I-17petition.




Page 13                                GAO-12-572 Student and Exchange Visitor Program
However, a senior official told us that SEVP has not conducted a lessons
learned evaluation of school withdrawals to determine potential trends in
their noncompliant actions, and use that information to focus compliance
activities. Our analysis indicates that there are patterns in the
noncompliant schools, such as the type of school. For example, of the
172 post-secondary institutions on SEVP’s December 2011 compliance
case log, about 83 percent (or 142) offer language, religious, or flight
studies, with language schools representing the highest proportion.
CTECU identified, and shared with SEVP officials other potential
indicators of higher-risk schools based on prior school fraud cases,
including school location/type of campus; the ratio of foreign students to
overall students; the ratio of enrolled students to reported average annual
number of students; the concentration of online courses; and the average
length of time that students, particularly foreign language students, have
been in the United States.

SEVP’s Policy Branch Chief told us that while the program has not
conducted a comprehensive analysis of previous fraud cases, the Policy
Branch developed a lessons learned analysis in response to the 2011 Tri-
Valley University case in California and submitted this analysis to SEVP
senior management. In the Tri-Valley University case, the school’s owner
was indicted for issuing fraudulent documentation without regard for
students’ academic qualifications or intent to pursue a course of study
required to maintain lawful immigration status. In February 2012, SEVP’s
Director stated that he did not recall this analysis and thus had not made
any policy or operational changes recommended in the analysis. He
noted, however, that his office had made a number of changes as a direct
result of the Tri-Valley University case, including establishing a separate
compliance unit in August 2011 and instituting a process to identify
schools that have more enrolled students than their stated capacity,
which is an indicator of risk. 28 The SEVP Director further stated that
although the program has not systematically evaluated previous fraud
cases, it has devoted increased attention to fraud prevention and
detection since the Tri-Valley University case, such as through funding


28
  As part of initial certification, schools are required to report to SEVP their average
annual number of students. In the case of Tri-Valley University, the school reported the
average annual number of students as less than 100. However, at the time that ICE began
investigating the school, the population of students was close to 1,000. Based on the Tri-
Valley University case, SEVP officials stated that they began evaluating discrepancies
between schools’ average annual number of students and the number of Forms I-20
issued.




Page 14                                 GAO-12-572 Student and Exchange Visitor Program
additional investigative resources in CTCEU. Officials at both SEVP and
CTCEU stated that evaluating prior school fraud cases could help in
assessing program risks, but the agency has not completed an analysis
on data from school case files. According to DHS’s Policy for Integrated
Risk Management, risk information and analysis can help provide
defensible decisions, made with the best available tools and information,
for the best achievable outcomes. In addition, the U.K. National Audit
Office’s Good Practice in Tackling External Fraud advises that in the
fraud context, a risk-based approach involves such things as assessing
areas most vulnerable to fraud and the characteristics of those who
commit fraud. SEVP officials told us that case information is not
organized well, and that they generally operate on a reactive basis after
evidence indicates that a fraud has been perpetrated and do not have
sufficient quantitative data to help detect the fraud before it occurs.
However, ICE could use its existing compliance case log and a sample of
prior cases of school fraud, which contain qualitative information, as a
starting point to help identify and assess factors that could pose security
and fraud risks to the program. Without an evaluation of prior and
suspected cases of school fraud and noncompliance, ICE is not well-
positioned to identify and apply lessons learned from prior school fraud
cases, which could help it take action to identify and mitigate program
risks going forward.

Obtaining information from CTCEU and ICE field offices’
investigations and outreach efforts. SEVP’s Director and other senior
officials stated that SEVP has not established a process to obtain
information from CTCEU’s criminal investigators. Investigators may have
valuable knowledge in working cases of school fraud for identifying and
assessing program risks, including information such as the characteristics
of schools that commit fraud, how school officials exploited weaknesses
in the school certification process, and what actions ICE could take to
strengthen internal controls. For example, according to investigators in
one ICE field office, CTCEU was hampered in pursuing a criminal
investigation because SEVP officials did not obtain a signed attestation
statement within the I-17 application from a school official stating that the
official agreed to comply with rules and regulations. Another risk area is
designated school officials’ access to SEVIS. In 2011, CTCEU provided
SEVP officials with a position paper expressing concerns that designated
school officials, who are not required to undergo security background
checks, are responsible for maintaining updated information of foreign
students in SEVIS. Further, according to investigators at three of the eight
field offices we interviewed, SEVP allowed designated school officials to
maintain SEVIS access and the ability to modify records in the system


Page 15                           GAO-12-572 Student and Exchange Visitor Program
while being the subject of an ongoing criminal investigation, despite
requests from CTCEU to terminate SEVIS access for these officials. The
SEVP office has the authority to immediately terminate SEVIS access
upon request from CTCEU in cases where criminal wrongdoing is
suspected, and SEVP officials stated that they have taken action in the
past to terminate SEVIS access due to noncompliance. SEVP’s Director
stated that his office has, on occasion, requested more information or
evidence from CTCEU to substantiate a request to terminate SEVIS
access for a designated school official. In addition, he stated that, in some
instances, his office may be hesitant to terminate access because doing
so might alert the school to an open investigation and thus compromise
CTCEU’s efforts.

In addition to information from CTCEU’s criminal investigations, CTCEU
collects data on its outreach efforts with schools through its Campus
Sentinel program; however, the SEVP Director stated that his office has
not obtained and analyzed reports on the results of these visits. CTCEU
initiated Campus Sentinel in 2011, which ICE operates across all of its
field offices nationwide. Funded with SEVP fee collections and facilitated
based on SEVP’s outreach and liaison efforts with schools, the program
aims to foster relationships between ICE law enforcement officials and
schools through on-site visits and information sessions at national and
regional conferences and to make school officials more aware of recent
investigations of school fraud. CTCEU officials stated that the goal of
Campus Sentinel is to enable CTCEU officials and schools to better
identify and report criminal behavior within the population of certified
schools.

From October 1, 2011 through March 6, 2012, CTCEU conducted 314
outreach visits to schools. According to CTCEU investigators that we
interviewed, these visits provide an opportunity to identify potential risks,
including whether schools have the physical capacity and necessary
resources to support programs for foreign students. As of March 2012,
CTCEU initiated two criminal investigations based on information
obtained as part of Campus Sentinel outreach. ICE field offices document
the results of each site visit, as well as information on school
investigations, in the Treasury Enforcement Communication System
(TECS), which is accessible to SEVP officials in the compliance unit,




Page 16                           GAO-12-572 Student and Exchange Visitor Program
including an SEVP compliance liaison in CTCEU. 29 Standards for Internal
Control in the Federal Government states that management needs to
comprehensively identify risks and ensure there are adequate means of
obtaining information from external stakeholders that may have a
significant impact on the agency achieving its goals. SEVP officials,
including the Director, stated that the program conducts ongoing outreach
with schools through annual conferences and efforts related to the
Campus Sentinel program, among other things. The Director indicated
that SEVP officials helped launch and fund it through SEVP fee
collections, but were not aware of the site visit reports and thus have not
taken steps to obtain information on them. A senior SEVP official stated
that the program lacks processes to obtain information from CTCEU due
to a strained relationship between the organizations. CTCEU officials
disagreed that the relationship is strained and stated that there are
processes in place to share information, such as through regular,
bimonthly meetings between CTCEU and SEVP officials that began in
late 2011; however, they stated that SEVP has not adequately
emphasized enforcement in its mission. In February 2012, SEVP’s
Director stated that data on the results of Campus Sentinel would be
valuable and planned to follow up with staff on how best to utilize access
to available case information in TECS. Obtaining information on lessons
learned from CTCEU investigators could help provide SEVP with
additional insights on such issues as characteristics of schools that have
committed fraud and the nature of those schools’ fraudulent activities,
which ICE could leverage in identifying and assessing programmatic
risks.

In addition, ICE has taken some initial actions to study the potential risks
posed by schools that are not in compliance with SEVP requirements, but
it is too early to evaluate the results of these actions. Specifically, in
September 2011, ICE hired a contractor to develop a risk-based
approach to overseeing schools applying for certification as well as those
already certified schools under the program. The objective of this contract
is to define and document programmatic risks and incorporate such
information into a risk-based approach to school oversight. As of March
2012, the contractor had reviewed ICE’s SEVP standard operating
procedures and interviewed agency officials responsible for school


29
  TECS is an automated enforcement and antiterrorism database that provides
information for law enforcement and border security purposes, and can exchange
information automatically with other U.S. government systems.




Page 17                               GAO-12-572 Student and Exchange Visitor Program
                          certification and recertification, among other areas. Using the results from
                          background research and interviews of subject matter experts, the
                          contractor completed several deliverables, including identifying and
                          defining preliminary program risks (e.g., non-accredited schools);
                          developing a risk scorecard, which ICE plans to use to categorize schools
                          by risk level (e.g. high, medium, low); and developing a risk-based testing
                          plan to ensure that adequate internal controls exist and are followed.
                          However, this methodology was limited because ICE does not have
                          complete and reliable historical data on its schools, according to the
                          contractor. In November 2011, the contractor reported that there are
                          several key limitations to its ongoing analysis of risk factors in SEVP,
                          including that it must rely on qualitative, rather than quantitative data. In
                          particular, the contractor reported that it faced challenges in accessing
                          compliance data, given that is it maintained in multiple data sources.
                          SEVP’s Deputy Director stated that DHS’s Office of Risk Management
                          Analysis has begun developing such quantitative data separate from its
                          risk management contract. As of March 2012, ICE has not yet
                          implemented any of the contractor’s recommendations because the
                          contractor had just completed the work. Going forward, ICE plans to
                          evaluate the results before determining actions for implementation.


ICE Has Not Allocated     SEVP revenues have increased in recent years, but ICE has not analyzed
SEVP Resources Based on   how to allocate its resources among mission areas, such as certification,
Program Risks             compliance monitoring, and recertification. Once ICE has assessed risks
                          in SEVP, analyzing how to allocate resources based on those risks could
                          help ensure that SEVP is using its resources in a cost-effective manner.
                          We have previously reported that homeland security resource
                          investments should be informed by risk. 30 In particular, we reported that
                          DHS must carefully weigh the benefit of homeland security endeavors
                          and allocate resources where the benefit of reducing risk is worth the
                          additional cost. Additionally, risk-based, priority-driven decisions can help
                          inform decision makers in allocating finite resources to the areas of
                          greatest need. In the homeland security arena, this means determining
                          which vulnerabilities should be addressed in what ways with available
                          resources.




                          30
                           GAO, Strategic Budgeting: Risk Management Principles Can Help DHS Allocate
                          Resources to Highest Priorities, GAO-05-824T (Washington, D.C.: Jun. 29, 2005).




                          Page 18                                GAO-12-572 Student and Exchange Visitor Program
                                         SEVP is funded entirely by the fees that ICE collects from schools and
                                         students. In fiscal year 2009, based on an internal fee study, application
                                         fees for students and schools increased, which contributed to
                                         approximately 60 percent increase in fee collection revenue from fiscal
                                         year 2008. 31 As shown in table 1, fee collections for SEVP have
                                         increased from approximately $53 million in fiscal year 2006 to about
                                         $123 million in fiscal year 2011. Subsequent fee studies in 2009 and 2011
                                         projected that the program’s revenues would be sufficient to meet
                                         resource needs for the period covering fiscal years 2009 through 2013.

Table 1: ICE’s Budget Authority, Obligations, and Fee Collections for SEVP, Fiscal Years 2006 through 2012

Dollars in millions
                                                  2006          2007              2008              2009      2010          2011          2012a
Enacted budget authority                          66.6           54.3             56.2b            120.0      120.0         120.0         120.0
Fee collections                                   52.9           57.9              63.3            101.0      113.2         122.7          33.9c
Obligations                                       45.8           44.7              63.0              81.0      72.9          95.6         120.0
                                         Source: GAO analysis of SEVP documentation and DHS budget data.
                                         a
                                             Based on fiscal year 2012 enacted budget authority.
                                         b
                                             SEVP also received $9.7 million in supplemental funding in fiscal year 2008.
                                         c
                                          Data as of March 2012. Also, SEVP’s forecast takes into account that the majority of some fee
                                         payments occur during the second half of the fiscal year. As a result, 73 percent, or $93 million, of
                                         SEVP’s revenue is forecast to be collected over the remaining months in 2012.


                                         With the exception of fiscal year 2011, ICE’s fee collections for SEVP
                                         since fiscal year 2009 have generally fallen short of its enacted budget
                                         authority. 32 ICE had intended to use the projected increases in fee
                                         collections to fund several initiatives, including developing SEVIS II,
                                         establishing field liaisons nationwide for school coordination and
                                         monitoring purposes, and hiring additional personnel for recertification.



                                         31
                                           In fiscal year 2009, student fees increased from $100 to $200; school certification and
                                         petitions for change in ownership fees increased from $230 to $1,700; school site-visit
                                         fees increased from $350 to $655; and additional campus site visit increased from $350 to
                                         $655.
                                         32
                                           Budget authority refers to the authority provided by federal law to enter into financial
                                         obligations that will result in immediate or future outlays involving federal government
                                         funds. The basic forms of budget authority include (1) appropriations, (2) borrowing
                                         authority, (3) contract authority, and (4) authority to obligate and expend offsetting receipts
                                         and collections. See GAO, A Glossary of Terms Used in the Federal Budget Process,
                                         GAO-05-734SP (Washington, D.C.: Sept. 2005).




                                         Page 19                                               GAO-12-572 Student and Exchange Visitor Program
SEVP deferred funding these initiatives, however, for a number of
reasons such as challenges in designing SEVIS II, delays in hiring
additional staff members, and lower than expected fee collections. For
example, based on the fiscal year 2009 fee increase, ICE planned to
allocate approximately $3 million to hire additional staff for SEVP
recertification; however, an SEVP official stated that they did not
complete hiring these staff in fiscal year 2010 because of the
unanticipated reduction in fee collections. 33 A senior policy official
indicated it is important to hire additional staff for recertification activities
to help address school noncompliance and meet the statutory
requirements for recertification as set forth in the Border Security Act.
Although fee collections were lower than expected during this time frame,
from October 2008 through October 2011, SEVP’s carryover cash
balance increased from approximately $40 million to $105 million. SEVP’s
Director stated that the program transferred staff from the Policy Branch
to the compliance unit in 2011, and that there may be additional
opportunities to target resources based on risk. SEVP is a fee-funded
program, and revenues can and do fluctuate from fiscal year to fiscal year
(see Table 1). However, SEVP’s director stated that SEVP has not
conducted an analysis of its resource allocations based on risk to ensure
that those resources are allocated in an efficient manner to high-risk
activities. Additionally, in February 2012, SEVP’s Director realigned the
organization into two main divisions, one focused on internal operations,
such as information technology and human resources, and one focused
on external operations, such as school certification. However, he stated
that SEVP had not conducted a resource analysis or considered risk
information to support this reorganization. By analyzing how to allocate its
resources based on risk, SEVP could be better positioned to ensure that
it is using those resources in a cost-effective manner to help address the
program’s highest risk activities.




33
   SEVP plans to complete hiring additional staff for recertification activities by the end of
fiscal year 2012.




Page 20                                    GAO-12-572 Student and Exchange Visitor Program
                            ICE has not consistently implemented certain controls to verify schools’
Weaknesses in ICE’s         legitimacy and eligibility during initial SEVP-certification and ongoing
Monitoring and              monitoring processes. In particular, ICE has not consistently implemented
                            policies that require schools offering flight training to have certain FAA
Oversight of SEVP-          certifications to remain eligible to enroll foreign nonimmigrant students. In
Certified Schools           addition, weaknesses in managing and sharing information on SEVP-
Contribute to Security      certified schools among ICE stakeholders hinder the agency’s efforts to
                            prevent and detect school certification fraud.
and Fraud
Vulnerabilities

Inconsistent                ICE has not consistently implemented its procedures to verify and monitor
Implementation of Certain   schools’ legitimacy and eligibility, hindering efforts to prevent and detect
Controls Impede ICE’s       school fraud. Regulations require schools to establish that the schools are
                            legitimate and meet other eligibility criteria for the program to obtain
Efforts to Verify and       certification from ICE. 34 ICE’s policies and procedures direct SEVP
Monitor Schools’            officials to collect, validate, and maintain evidence of schools’ eligibility
Legitimacy and Program      during the initial certification, recertification, and ongoing review
Eligibility                 processes. Internal control standards advise that controls should be
                            generally designed to ensure that ongoing monitoring occurs in the
                            course of normal operations. Further, according to fraud control practices,
                            agencies should strengthen internal controls where needed for fraud
                            prevention. However, ICE officials have not consistently implemented
                            existing internal control procedures for SEVP in four areas: (1) initial
                            verification of evidence submitted in lieu of accreditation, (2)
                            recordkeeping to ensure schools’ continued eligibility, (3) ongoing
                            compliance monitoring of school licensing and accreditation status, and
                            (4) certification of schools offering flight training.

                            Initial verification of evidence submitted in lieu of accreditation. ICE
                            requires schools to present evidence demonstrating that the school is
                            legitimate; is an established institution of learning or other recognized
                            place of study; possesses the necessary facilities, personnel, and
                            finances to conduct instruction in recognized courses; and is engaged in
                            instruction in those courses. Non-accredited, post-secondary schools, in
                            particular, must provide “in lieu of” letters, which are evidence provided by


                            34
                              8 C.F.R. § 214.3(a)(3) states that a school, to be eligible for certification, must establish
                            that it is bona fide. For the purposes of this report, we use the term “legitimate”
                            synonymously with the term “bona fide.”




                            Page 21                                    GAO-12-572 Student and Exchange Visitor Program
petitioning schools in lieu of accreditation by a Department of Education-
recognized accrediting agency. ICE policy and guidance require that
SEVP adjudicators render an approval or denial of schools’ petitions
based on such evidence and supporting documentation. 35 This includes
verifying that schools’ claims in the Form I-17—such as accreditation
status and “in lieu of” letters are accurate. Verifying an “in lieu of” letter
would generally involve contacting the letter’s source and confirming that
the letter is legitimate and that the signee has authority to issue
statements of the school’s acceptance of the petitioning school’s credits
and students. Based on our review of SEVIS data on the approximately
10,000 SEVP-certified schools, we estimate that approximately 1,250
schools are non-accredited, post-secondary schools and, therefore,
should have provided “in lieu of” letters to ICE. 36 However, SEVP
adjudicators have not consistently verified “in lieu of” letters submitted by
schools that demonstrate their legitimacy and eligibility. For example,
according to SEVP’s School Certification Branch Chief, adjudicators have
not verified all “in lieu of” letters submitted to ICE by the approximately
1,250 non-accredited, post-secondary schools, as required by ICE’s
policy. Rather, adjudicators use their discretion to determine whether to
verify a letter’s source and the signatory authority of the signee based on
any suspicions of the letters’ validity. Investigators at one of the eight ICE
field offices we interviewed stated SEVP officials certified at least one
illegitimate school—Tri-Valley University in California—because the
program had not verified the evidence provided in the initial petition.
These investigators directly attributed the initial certification of Tri-Valley
University in California to the lack of verification of the school’s “in lieu of”
letters. Investigators stated that if SEVP’s adjudicators had taken action
to verify the letters, they may have discovered that the letters were
manufactured by Tri-Valley University school officials to feign legitimacy
and eligibility.



35
  SEVP adjudicators are federal government employees responsible for reviewing all
school certification petitions, for researching and sending requests for additional evidence,
and issuing a decision either certifying or denying schools’ SEVP-certification.
36
  To identify those schools that are post-secondary, we sorted SEVIS school data as of
December 8, 2011, based on the “Type of Education” offered and excluded those schools
that offered only elementary through high school education. From our list of post-
secondary schools, we cross referenced each school’s reported accrediting agency (if
any) against the Department of Education’s list of approved accrediting agencies. We
considered schools non-accredited if they reported having no accreditation or reported an
accrediting agency that was not approved by the Department of Education.




Page 22                                  GAO-12-572 Student and Exchange Visitor Program
Furthermore, CTCEU officials and investigators at five of the eight ICE
field offices we interviewed stated that School Certification Branch
officials should scrutinize non-accredited schools to a higher degree
because such schools have demonstrated a higher risk of fraud than
other schools. Subsequent to investigation, Tri-Valley University closed
and the owner was indicted on 33 criminal counts, including charges of
visa fraud, money laundering, and alien-harboring. In another case, the
owner of an English language school in Georgia provided fraudulent
documents to ICE, including forged or fraudulently obtained “in lieu of”
letters supposedly issued by three educational institutions of higher
learning. Following the English language school’s certification, the school
began facilitating the issuance of student visas to foreign nationals and
further manufactured and provided false documents, including resumes,
school transcripts, diplomas, financial plans and statements, to those
foreign nationals. Furthermore, in March 2012, CTCEU officials stated
that several of their ongoing investigations involve schools that provided
fraudulent evidence of accreditation or evidence in lieu of accreditation to
ICE. SEVP adjudicators have not consistently verified all evidence
submitted in lieu of accreditation, specifically “in lieu of” letters” that
support non-accredited schools’ petitions for SEVP certification because,
according to SEVP officials, the program has not historically focused
enough attention on fraud prevention until the Tri-Valley University case
demonstrated the program’s vulnerabilities. In analyzing the Tri-Valley
University case, a senior official in SEVP’s Policy Branch reiterated that
adjudicators should verify all “in lieu of” letters per the program’s current
procedures. Consistent verification of these letters could help ICE ensure
that schools are legitimate and detect potential fraud early in the
certification process.

Recordkeeping to ensure continued eligibility of schools. ICE’s
standard operating procedures for recordkeeping require SEVP officials
to maintain records to document ongoing compliance. Our analysis of
selected school case files indicates that ICE has not consistently
maintained certain evidence of selected schools’ eligibility for the
program. Based on our review of a stratified random sample of 50 SEVP-
certified school case files, 30 files lacked at least one piece of evidence
required by the program’s policies and procedures. In addition, ICE was
unable to produce two schools’ case files that we requested as part of our




Page 23                           GAO-12-572 Student and Exchange Visitor Program
randomly selected sample. 37 The results of our analysis of the 48
remaining case files are not generalizable, but the following summarizes
these results.

•    7 of the 48 school case files did not include reports of the required
     initial site visit;
•    22 of the 48 school case files did not include proof of the designated
     school officials’ U.S. citizenship or lawful permanent residency;
•    7 of the 34 case files for non-flight schools and non-accredited
     schools lacked adequate evidence in lieu of accreditation (e.g. “in lieu
     of” letters); and
•    7 of the 11 case files for schools offering flight training included
     expired FAA certificates.
Without the schools’ information and evidence contained in these case
files, including attestation statements, site visit reports, and designated
school officials’ proof of citizenship, ICE does not have an institutional
record to provide reasonable assurance that these schools were initially
and continue to be legitimate and eligible for certification. The Mission
Support Branch Chief indicated that school case files may be missing or
may lack pieces of evidence because of the transition from the legacy
Immigration and Naturalization Service (INS) to DHS in 2003. DHS
initially delegated authority for school certification and monitoring to U.S.
Citizenship and Immigration Services (USCIS), but DHS later delegated
that responsibility to ICE in February 2005. The Mission Support Branch
Chief stated that DHS attempted to facilitate a smooth transition from INS
and USCIS by accepting schools’ prior certifications without additional
review. Although the INS offices where school case files had been
maintained were required to send the school case files to USCIS, which
subsequently transferred files to SEVP, the Mission Support Branch Chief
and School Certification Branch Chief stated that some files were
completely or partially destroyed prior to the transfer. The School
Certification Branch Chief told us that ICE has not followed up on the
missing case files and that files may be available from former INS offices.
Both officials stated that they have not conducted an analysis of the gaps
in school information among case files and do not know the number of
files that may be incomplete or missing. The Mission Support Branch
Chief stated that they have not prioritized the analysis of the case files



37
  Because ICE was unable to produce 2 schools’ case files, our results include the 48 files
that we were able to analyze.




Page 24                                 GAO-12-572 Student and Exchange Visitor Program
because the program is relying on their various processes, including
petition updates, compliance reviews, and recertification, to address
previous deficiencies in information in case files. Based on our review of
data on the initial certification dates of SEVP-certified schools, 7,130 of
10,038 (71 percent) were certified prior to 2005, indicating that these
schools were initially certified by INS or USCIS and then transferred to
ICE. Internal control standards indicate that operating information, such
as the evidence in school case files, is necessary to determine whether
an agency is meeting its compliance requirements. Further, our analysis
indicated that case files for schools that have been certified since
February 2005 were also incomplete. Of the 30 schools that we identified
as lacking at least one piece of evidence required by the program’s
policies and procedures, 13 (46 percent) were certified from 2005 through
2010. Therefore, gaps in the case files used to maintain evidence of
schools’ eligibility affect those schools that ICE accepted from the former
INS and USCIS as well as those that ICE certified after taking
responsibility for the program.

According to ICE officials, the school recertification process would help
address issues with incomplete and missing school files because schools
are required to resubmit all evidence required by regulation when going
through recertification. The School Certification Branch Chief and the
Policy Branch Chief stated that recertification would also help ICE
address noncompliant schools and withdraw those that may have
become illegitimate and ineligible since initial certification. The Border
Security Act required recertification for all SEVP-certified schools (as well
as State’s program sponsors of exchange students) by May 2004 and
every 2 years thereafter. 38 However, ICE began the first recertification
cycle in May 2010 and, according to senior SEVP officials, will not
recertify all schools during this 2-year cycle, which ends in May 2012,
because the process has taken longer than officials planned. As of March
31, 2012, ICE reported to have recertified 1,870 schools (approximately
19 percent of SEVP-certified schools) during the program’s first
recertification cycle (see figure 3).



38
  See 8 U.S.C. § 1762. The statute requires the review of institutions and other entities
authorized to enroll or sponsor certain nonimmigrants. In addition to requiring DHS to
review institutions certified to receive nonimmigrants under F and M visas, the act requires
the Department of State to review entities designated to sponsor exchange visitor program
participants under J visas. The Act requires that these reviews determine whether the
institutions or entities are in compliance with recordkeeping and reporting requirements.




Page 25                                  GAO-12-572 Student and Exchange Visitor Program
Figure 3: ICE’s Recertification Milestones




                                             Note: Border Security Act of 2002 required that INS recertify schools every 2 years; however, DHS
                                             assumed this responsibility when it took over management of SEVP in 2003.


                                             According to ICE, the program intended to complete approximately 450
                                             recertifications per month to finish the cycle in 2 years. However, it
                                             completed an average of 107 recertifications per month in 2011.
                                             According to SEVP’s Director and other senior officials, ICE delayed the
                                             recertification process until after SEVIS was deployed in 2003 and the
                                             program fee was increased in 2008 to support more staff in the program.
                                             SEVP senior management stated that the office is recruiting additional
                                             adjudicators, which may increase the program’s ability to recertify schools
                                             and potentially reach the program’s goal of recertifying 450 schools per
                                             month. Given the delays in completing the first recertification cycle, ICE is
                                             not positioned to address gaps in SEVP’s case files and cannot provide
                                             reasonable assurance that schools that were initially certified to accept
                                             foreign students are still compliant with SEVP regulations.




                                             Page 26                                     GAO-12-572 Student and Exchange Visitor Program
Ongoing compliance monitoring of school licensing and
accreditation status. ICE does not have a process to monitor the
ongoing eligibility of licensed and accredited, non-language schools
enrolling foreign students. ICE regulations require all certified schools to
maintain state licensing (or exemption) and provide various forms of
evidence to ICE supporting schools’ legitimacy and eligibility. ICE has
taken action to monitor the accreditation status of English language
schools; however, it does not have a process to monitor schools’ state
licensing status and non-language schools’ accreditation status. For
English language schools, ICE is enforcing a legislative change enacted
in December 2010, which requires, as of June 2011, such schools to be
accredited by a Department of Education-recognized accrediting agency
to be eligible for SEVP certification. 39 The act allows English language
schools already certified on the date of enactment to continue issuing
Forms I-20 until December 2014, as long as they apply for accreditation
by December 14, 2011. Subsequent to this change, ICE took actions to
coordinate with nationally recognized accrediting agencies to determine
which English language schools applied for accreditation by the
legislatively mandated date of December 14, 2011.

ICE does not have a similar process for monitoring the state licensing
status of all schools and the accreditation of schools offering higher
education or vocational training other than language training. If a school’s
licensing or accreditation status changes after initial certification, ICE’s
regulations and policy require designated school officials to report this
change to ICE through SEVIS. 40 At initial certification, ICE requires
designated school officials to report which agencies license or accredit
their school in SEVIS, but the system allows school officials to list any
response. For example, a school may list an accrediting agency that is
not Department of Education-recognized in an attempt to fulfill SEVP
requirements. Because schools may enter any information in this field,
SEVP officials cannot easily query the number of schools that are
accredited by Department of Education-recognized agencies or sort such
data by the accrediting agencies. According to SEVP Information
Technology officials, the planned November 2014 deployment of SEVIS II
is intended to improve the program’s analytical capabilities by addressing



39
 See Act of Dec. 14, 2010, Pub. L. No. 111-306, 124 Stat. 3280.
40
 8 C.F.R. § 214.3(g)(2)(i).




Page 27                               GAO-12-572 Student and Exchange Visitor Program
the variation in self-reported licensing and accreditation statuses. 41
Specifically, SEVIS II is intended to provide drop-down menus or other
multiple choice selections for state licensing agencies as well as
Department of Education-recognized accrediting agencies. These data
collection tools are intended to address the inconsistent reporting of
licensing or accrediting agencies’ names but not the issue of inaccurate
(both intentional and unintentional) self-reporting by schools. Therefore,
even with the planned SEVIS II deployment in 2014, ICE does not have
reasonable assurance that SEVIS data on schools’ licensing or
accreditation status is accurate following initial certification. If a school
loses its state license, the school would be unable to operate legally as a
school within that state. However, ICE does not have controls to ensure
that SEVP compliance unit officials would be aware of this issue;
therefore, a school without a proper business license may remain certified
to enroll foreign students and the school’s designated school officials may
continue to access SEVIS. For example, SEVP had been notified by ICE
investigators that a religious school was closed in September 2011; as of
March 2012, the school remained SEVP-certified. In another example,
SEVP officials learned in May 2011 that a flight school had closed; as of
March 2012, the school remained SEVP-certified. After we brought these
issues to attention of ICE officials in March 2012, they stated that, while
they initially thought these two schools had been withdrawn, the schools
were SEVP-certified. ICE officials stated that they are working on
withdrawing the schools.

SEVP’s Policy Branch Chief and Deputy Director stated that they rely on
the recertification process in addition to other methods, such as
information-sharing with CTCEU and compliance reviews by the
compliance unit, to verify that schools are self-reporting changes in their
status consistent with ICE policies. However, ICE has not yet completed
its first round of recertification of all certified schools. Moreover, since ICE
is mandated to conduct recertification on schools every two years, a


41
  ICE is developing the functional requirements for SEVIS II, a second generation version
of the data system that is intended to be more technologically advanced and user-friendly
and to streamline the process of students obtaining student visas and studying in the
United States. Initially planned for deployment in September 2009, SEVIS II has been
delayed until November 2014 due to difficulties in system design. ICE terminated the
original contractor based on its challenges in developing an accurate and complete set of
functional requirements for the system, which required the agency to hire a new contractor
for system design. ICE also plans to hire a contractor for SEVIS II development and
implementation.




Page 28                                 GAO-12-572 Student and Exchange Visitor Program
process to monitor the ongoing status of schools would help ensure their
continuous eligibility. For example, this process could include notification
from Department of Education-recognized accrediting agencies regarding
changes in schools’ accreditation status. In addition to recertification, the
SEVP Director stated that the planned field liaison initiative will improve
school compliance, as well as data integrity in SEVIS. SEVP’s Director
stated that the field liaisons will establish a more proactive relationship
with schools and provide additional resources for schools and designated
school officials to access to better understand and comply with
immigration laws, regulations, and SEVP policies and procedures.
However, the initiative remains under development and ICE has not
deployed any liaisons as of March 2012. Developing and implementing a
process to monitor the ongoing status of schools enrolling foreign
students could better position ICE to reduce the risk of fraud and ensure
schools’ legitimacy and eligibility.

Certification of schools offering flight training. ICE’s policies and
procedures require flight schools to have FAA Part 141 or 142
certification to be eligible for SEVP certification; however, ICE has
certified schools offering flight training without such FAA certifications. As
the federal agency responsible for regulating safety of civil aviation in the
United States, FAA administers pilot certification (licensing) and conducts
safety oversight of pilot training. 42 FAA’s regulations for pilot training and
certification can be found in three parts—Parts 61, 141, and 142. 43 Part
61 relates to individual providers/instructors that are not subject to direct
FAA oversight beyond the initial certification and subsequent renewal of
each flight instructor’s certificate. Parts 141 and 142 outline requirements
for flight schools and training centers. FAA oversees these Part 141 and
142 flight schools and training centers with annual inspections and by
reviewing and approving the schools’ facilities and programs. FAA
requires the flight training programs to include, among other things,
detailed training course outlines or curriculums for approval. ICE
established a policy that requires Part 141 and 142 for eligibility in
SEVP—and excluded Part 61 providers—because FAA directly oversees



42
  For more information on FAA’s oversight of pilot training, see GAO, Initial Pilot Training:
Better Management Controls Are Needed to Improve FAA Oversight, GAO-12-117
(Washington, D.C.: Nov. 15, 2011).
43
 Federal aviation regulations are found under title 14 of the United States Code of
Federal Regulations (14 C.F.R. pts. 61, 141, and 142).




Page 29                                   GAO-12-572 Student and Exchange Visitor Program
Part 141 and 142 flight schools and training centers on an ongoing basis.
The Form I-17 petition for certification specifies that only FAA Part 141
flight schools are eligible to apply for certification to enroll foreign
students.

We identified 434 SEVP-certified schools that, as of December 2011,
offer flight training to foreign students. 44 However, 167 (38 percent) of
these flight training providers do not have FAA Part 141 or 142
certification. SEVP’s Director, Policy Branch Chief, and Compliance Unit
Chief acknowledged that all SEVP-certified schools offering flight training
do not have FAA Part 141 or 142 certification even though the program
requires it. In 2011, SEVP’s compliance unit initially identified schools
offering flight training that appeared to not have Part 141 or 142
certification and began determining those schools’ statuses by contacting
designated school officials and FAA Flight Standard District Offices. 45
During the course of our review, the SEVP Director stated that they plan
to take action to address these noncompliant flight schools. Specifically,
he stated that his office plans to notify all SEVP-certified schools that do
not have the required FAA certification that they must re-obtain Part 141
or 142 certification. Moreover, SEVP School Certification Branch officials
stated that they plan to coordinate directly with FAA to determine which
schools have not met the requirements by the deadlines and will take
withdrawal actions against such schools. While these are positive steps,
SEVP officials have not yet established target time frames for
implementing and completing these planned actions. Program
management standards state that successful execution of any program
includes developing plans that include a time line for program
deliverables. 46 Setting target time frames to notify certified flight schools
that lack FAA certifications that they must re-obtain Part 141 or 142
certification could help ICE hold SEVP accountable for taking such




44
 This is a relatively small percentage of providers nationwide that offer flight training.
45
   As of April 2012, SEVP’s compliance unit identified 469 SEVP-certified schools that offer
flight training and determined that 153 of those may not be Part 141 or 142 certified. The
discrepancy in the population that we identified and the population that SEVP identified is
due to the fact that SEVP’s compliance unit included schools that have issued Forms I-20
for flight training without having flight training approved through the Form I-17 petition.
46
 The Project Management Institute, The Standard for Program Management © (Newton
Square, Pa., 2006).




Page 30                                   GAO-12-572 Student and Exchange Visitor Program
actions and better position ICE to reduce the risk of fraud and ensure all
flight schools’ legitimacy and eligibility.

There are various reasons why ICE has certified or allowed non-Part 141
or 142 schools to remain in the program. For example, a DHS flight
training working group conducted a flight study that found that many FAA
Part 61 schools were providing equal if not superior instruction than Part
141 schools. Based on that finding, the DHS flight training working group
recommended that ICE re-examine the program’s requirement for Part
141 or 142 certification for flight schools to enroll foreign students. Based
on the DHS group’s recommendation, ICE conducted a preliminary
review and certified a limited number of non-Part 141 or 142 flight
schools. Specifically, ICE certified one Part 61 provider following a site
visit during which SEVP officials determined that the provider was equally
qualified as a Part 141 or 142 flight school. Subsequent to this
certification, additional Part 61 providers petitioned for SEVP certification,
resulting in the certification of at least two additional flight providers that
did not meet SEVP’s policy requiring Part 141 or 142 certification. SEVP
officials in the Policy Branch stated that the program certified these
providers because, in their view, there is no difference in quality between
Part 61 providers and Part 141 or 142 flight schools.

ICE also indicated that in most of the cases, it may have initially certified
flight schools with Part 141 or 142 certification but the schools allowed
their FAA certification to expire, and ICE did not identify or take
compliance action against these schools. Further, a senior SEVP
compliance official stated that ICE may also be unaware of flight schools
that have had their FAA certification revoked. We identified one school
that offers flight training that remains SEVP-certified (as of February
2012) after FAA revoked its Part 141 certification in 2007 for multiple
violations, including certifying and graduating students who have not
completed the required curriculum and training as well as not following
FAA-approved courses of training. Senior SEVP officials stated that the
school officials have never updated the school’s petition in SEVIS
following its initial certification in 2003; thus, ICE was unaware of this
revocation. Additionally, ICE was unable to locate the school’s case file
upon our request. We also identified a previous case of school
certification fraud involving a flight school in El Cajon, California. This
school lost its FAA certification to train commercial pilots but remained
SEVP-certified, continued to issue Forms I-20 and enroll foreign
nonimmigrant students, and illegally hired such students as flight
instructors. Specifically, school officials issued Forms I-20 in SEVIS for
more than 100 foreign students in 3 months and illegally hired 11 such


Page 31                            GAO-12-572 Student and Exchange Visitor Program
students as flight training instructors from 2001 through 2008. According
to ICE field investigators, the actions taken by the school and its officials
posed a significant security threat, especially considering the schools
involvement in flight training. In particular, CTCEU recommended in 2011
that SEVP should not allow Part 61 providers into the program. In
November 2011, we reported that FAA rarely uses punitive means such
as revoking licenses and assessing penalties against Part 141 schools,
having revoked certificates in three cases. 47 Because ICE has certified or
maintained certification of schools that provide flight training without the
required FAA certification and oversight, the program is vulnerable to
security and fraud risks.

ICE has not consistently verified and maintained all evidence submitted in
support of schools’ petitions and has not monitored schools’ state
licensing, accreditation, and FAA certification status because, according
to SEVP officials, ICE has not historically focused enough attention on
fraud prevention and detection. To effectively prevent and detect fraud,
Standards for Internal Control in the Federal Government, as well as the
U.K. National Audit Office’s Good Practice in Tackling External Fraud,
suggest agencies clearly define key areas of authority and responsibility
for operating activities and develop specific strategies to coordinate their
fraud control efforts, ensuring that someone is fully responsible for
implementing the plans as intended. Following the case of Tri-Valley
University, ICE created the SEVP compliance unit in August 2011 to
target more of the program’s resources on school oversight and to
strengthen compliance monitoring. The SEVP Director stated that his
office’s branches historically operated in an autonomous manner, which
has created past coordination challenges when responding to compliance
cases, and the newly established compliance unit aims to correct these
issues. However, SEVP has drafted but not finalized the unit’s standard
operating procedures as of April 2012. The SEVP official in charge of the
compliance unit stated that SEVP has not finalized the compliance unit’s
procedures because the unit was established quickly in response to Tri-
Valley University and has relied upon previous compliance procedures



47
  GAO-12-117. In addition, we plan to report later in 2012 on general aviation security,
including the Alien Flight Student Program, which is a program administered by the
Transportation Security Administration to screen foreign nationals applying for flight
training in the United States. We are conducting this work at the request of the House of
Representatives Committee on Homeland Security and Subcommittee on Transportation
Security.




Page 32                                 GAO-12-572 Student and Exchange Visitor Program
                           when the process was managed by the School Certification Branch.
                           Specifically, the compliance unit is responsible for addressing the
                           deficiencies in SEVP’s ongoing monitoring of schools’ licensing and
                           accreditation, as well as flight schools’ FAA certification. Because the
                           compliance unit operates without clearly defined parameters, the majority
                           of its fraud control efforts are reactionary and performed on an ad hoc
                           basis. For example, SEVP’s compliance staff began comparing the
                           number of Forms I-20 issued to the schools’ reported number of students
                           in reaction to the Tri-Valley University case, which highlighted that
                           schools issuing Forms I-20 well above the schools’ reported average
                           number of students is a potential fraud indicator. SEVP officials stated
                           that they plan to finalize their procedures by summer 2012. Completing
                           procedures by which the compliance unit monitors school compliance
                           could better position ICE to conduct fraud control efforts on a systematic
                           basis, which could help provide ICE with reasonable assurance that
                           previously certified schools remain legitimate and eligible on an ongoing
                           basis.


Weaknesses in Managing     ICE has not consistently followed the standard operating procedures that
and Sharing Key            govern the communication and coordination process between SEVP,
Information Impede ICE’s   CTCEU, and ICE field offices. Specifically, these procedures delineate
                           roles and responsibilities on criminal investigations and establish
Prevention and Detection   protocols for SEVP taking administrative actions against schools during
of School Fraud            and following a criminal investigation. In some instances, SEVP
                           management has not followed CTCEU requests to take or cease
                           administrative actions and has not referred potentially criminal cases to
                           CTCEU in accordance with ICE’s procedures. ICE’s standard operating
                           procedure for coordination requires SEVP to defer to CTCEU regarding
                           whether to proceed with administrative actions during ongoing criminal
                           investigations because criminal investigations take precedence over
                           administrative actions. Additionally, this procedure states that ICE field
                           offices determine the timing and extent of SEVP engagement in criminal
                           investigations based on the needs of those investigations, which includes
                           requesting SEVP to take administrative action in SEVIS to remove
                           designated school officials’ access to the system and to withdraw school
                           certification. ICE’s procedure also directs SEVP to refer allegations or
                           leads revealing possible criminal violations to CTCEU in a timely manner,
                           but it does not include criteria for determining when a compliance-type
                           case under SEVP’s review becomes a potentially criminal case. Internal
                           control standards advise agencies to develop strategies for coordinating
                           fraud prevention and control efforts, including establishing means of



                           Page 33                          GAO-12-572 Student and Exchange Visitor Program
information exchange and developing approaches to identifying and
addressing potential fraud.

Under the standard operating procedure, CTCEU is to inform SEVP
officials of a pending criminal investigation of school fraud (or other
fraudulent activity) to prevent SEVP from unknowingly compromising
such investigations through conducting compliance reviews or other
administrative processes. The procedure requires that SEVP officials
defer to the judgment of the CTCEU Unit Chief regarding whether to
proceed with an administrative action or review during an ongoing
criminal investigation. However, in our interviews with eight ICE field
offices, field investigators at two offices gave examples of SEVP officials
continuing administrative activities when asked to cease such activity. In
one case, investigators stated that the target (an owner of a flight school)
became suspicious of increased attention by SEVP officials and fled the
United States in 2011 to avoid prosecution. Our review of the December
2012 compliance case log confirms that the SEVP office was aware of
this specific criminal investigation and continued to take administrative
actions. SEVP officials indicated that there were mitigating circumstances
related to this case, including challenges in communicating with the ICE
field office. SEVP officials also stated that SEVP and CTCEU
management later agreed that the investigation was not compromised by
SEVP’s administrative activities. In another ongoing case in California,
field investigators stated that SEVP officials conducted a site visit to an
institution following the owner’s indictment after the local ICE field office
investigators instructed SEVP to stop administrative activities. SEVP’s
Director stated that, in some cases, they believe it is necessary to
communicate with or conduct routine activities related to schools under
investigation in order to not alert these schools to a potential
investigation. The SEVP Director stated that these two examples were
outliers and that the program typically works well with the field office
investigators, fully supporting criminal investigations and abiding by
investigator directions to cease activity.

The standard operating procedure also allows CTCEU and ICE field
offices to request that SEVP take administrative action in SEVIS to
support criminal investigations either while the investigation is ongoing or
following the investigation. Such administrative actions may include the
removal of designated school officials from SEVIS access or withdrawal
of a school’s certification. Because each criminal investigation is unique,
the procedures state that the ICE field office determines the timing and
extent of SEVP engagement based on the needs of the investigation.
However, an ICE field office provided us with an example of SEVP


Page 34                           GAO-12-572 Student and Exchange Visitor Program
officials not complying with this administrative action protocol. According
to this field office, as of February 2012, although CTCEU requested
withdrawal of a school, SEVP had not begun withdrawal procedures for
the school or denied SEVIS access to a school owner, following the
owner’s indictment in May 2011 on charges including conspiracy and
false statements. SEVP officials stated that they revoked the school
owner’s SEVIS access following the indictment, but accidently restored
his access following the owner’s call to SEVP’s response center. SEVP
officials stated that the compliance unit immediately terminated the
owner’s access after becoming aware of the situation. SEVP officials
stated that, as of March 2012, the compliance unit is preparing the notice
of intent to withdraw the school.

SEVP officials stated that staff typically will follow instruction from CTCEU
or field investigators regarding either ceasing or taking administrative
action, but the SEVP office may not know which schools are under
investigation and CTCEU and field offices may not be fully informed on
SEVP’s policies and procedures. SEVP officials stated that they may
conduct administrative activities on schools that are not known to be
under investigation because CTCEU and field office investigators have
not routinely shared information regarding which schools are under
investigation. However, the SEVP Director stated that his compliance unit
staff have access to the TECS database, which includes information on
ongoing investigations being directed by CTCEU and field office
investigators. He also stated that it is important for all program branches
to coordinate to assure that those responsible for administrative activities
do not continue activities when CTCEU or ICE field office investigators
have requested such activity to cease. SEVP officials in the School
Certification and Policy Branches stated that the program has previously
taken administrative actions requested by CTCEU and ICE field offices in
support of criminal investigations. However, these officials stated that
because SEVP is responsible for taking administrative actions, the
program officials need details on why the school is being withdrawn to
include in the notice of withdrawal letters to protect the program against
appeals and potential lawsuits. The SEVP Director stated that the
standard operating procedure is a high-level document that does not
account for the mitigating factors that may influence how his staff should
respond to ongoing criminal investigations. According to the Director, the
intent of the procedure, given past coordination issues, is to ensure his
office receives ample notification from CTCEU of criminal investigations
so that SEVP can take appropriate and timely administrative actions. The
standard operating procedure does not specifically state what information
CTCEU or field office investigators should provide to SEVP. Without


Page 35                           GAO-12-572 Student and Exchange Visitor Program
specification of this information, it will be difficult for CTCEU, field office
investigators, and SEVP officials to share a clear of understanding of
information needs for taking administrative action. Revising the standard
operating procedure that governs the communication and coordination
process between SEVP, CTCEU, and ICE field offices to more
specifically delineate what information to share among the stakeholders
during a criminal investigation could better position ICE to conduct
criminal investigations and to better prevent and detect school fraud.

In addition, while the coordination standard operating procedure for
SEVP, CTCEU, and ICE field offices requires that SEVP refer allegations
or leads revealing possible criminal violations to CTCEU in a timely
manner, the procedure does not have criteria for determining when
certain noncompliant activity becomes potentially criminal. The SEVP
compliance unit first shared its compliance case log with CTCEU in
October 2011, during the course of our review. Upon review of this
information, CTCEU officials stated that several of the compliance cases
could involve potential criminal violations. CTCEU officials identified
examples of potentially criminal violations, including designated school
officials sharing SEVIS passwords, a school not holding classes but
reporting attendance, a school reporting its own address as students’
addresses, and a school charging additional fees for showing students as
compliant. CTCEU officials stated that SEVP officials had not previously
shared these cases with them; therefore, CTCEU had not distributed the
information to ICE field offices as potential leads for further investigation.
Officials at six of the eight ICE field offices that we interviewed reported
not having opened any school fraud investigations based on leads from
SEVP and have relied on locally generated leads. According to officials at
all eight ICE field offices that we interviewed, referrals of schools that may
exhibit criminal behavior within the offices’ area of responsibility would
prove useful in that agents could better target these potentially fraudulent
schools for further review or investigation. The Compliance Unit Chief and
the Policy Branch Chief stated that the program had not previously
shared its compliance case log or other information regarding the
program’s compliance monitoring activities with CTCEU because the unit
has never asked for such information. However, the coordination
standard operating procedures as well as internal control guidance
indicate that agencies could benefit from sharing internally generated
information with key stakeholders, which may help with fraud
management efforts. By establishing criteria for identifying potentially
criminal activity, SEVP would be better positioned to adhere to existing
requirements of referring criminal cases to CTCEU for investigation.



Page 36                             GAO-12-572 Student and Exchange Visitor Program
              ICE aims to facilitate study in the United States for hundreds of thousands
Conclusions   of foreign students each year. Effective oversight of SEVP entails
              balancing this objective against the program’s potential risks, including
              security vulnerabilities and opportunities for criminal exploitation. To find
              this balance, ICE is responsible for identifying the risks posed by schools,
              and being in a position to mitigate them. ICE has taken initial actions to
              identify program risks; however, it has not analyzed available information
              to identify and assess programwide risks, and make resource allocation
              decisions based on identified risks. Identifying and assessing program
              risks based on various factors, including information on prior and
              suspected cases of school noncompliance and fraud, and information
              from CTCEU and field office investigations and outreach events, could
              better position ICE to determine actions to help prevent school
              noncompliance and fraud and to address noncompliance and fraud when
              they occur. Further, developing and implementing a process to identify
              and assess risks could allow ICE to identify and address program
              weaknesses, take actions to strengthen school oversight, and allocate
              program resources in a more efficient and effective manner.

              Moreover, there are opportunities for ICE to improve its ability to prevent
              and detect fraud through the initial certification and ongoing monitoring of
              schools. By implementing existing fraud control practices, ICE could
              enhance its ability to detect school certification fraud and gain greater
              assurance that its operations are designed to protect the integrity of the
              system, even as it strives to enhance service and address work backlogs,
              such as in the recertification process. Specifically, establishing
              procedures for verifying and ensuring the completeness of school
              evidence; addressing missing case files; monitoring the licensing,
              accreditation status, and FAA certification status of schools; and setting
              target time frames for completing procedures to address SEVP-certified
              flight schools that do not have, or have not maintained, required FAA
              certifications, could help ICE ensure that legitimate institutions participate
              in SEVP. Further, by strengthening coordination and communication
              between SEVP and CTCEU, ICE could better ensure that SEVP, CTCEU,
              and ICE field offices understand information to be shared with regarding
              whether to take administrative actions during criminal investigations and
              that clear criteria exist for referring cases from CTCEU based upon
              potentially criminal behavior.




              Page 37                            GAO-12-572 Student and Exchange Visitor Program
                      To enhance ICE’s ability to assess program risks, prevent and detect
Recommendations for   school certification fraud, and improve the controls over SEVP, we
Executive Action      recommend that the Assistant Secretary of Immigration and Customs
                      Enforcement take the following eight actions:

                      •   Develop and implement a process to identify and assess risks in
                          SEVP, including
                          o evaluating prior and suspected cases of school noncompliance
                               and fraud to identify potential trends, and
                          o obtaining and assessing information from CTCEU and ICE field
                               office investigative and outreach efforts.
                      •   Once a risk assessment process is in place, conduct an analysis of
                          how to allocate SEVP’s resources based on risk and use the results of
                          that analysis in making resource allocation decisions.
                      •   Consistently implement procedures for ensuring schools’ eligibility,
                          including consistently verifying “in lieu of” letters.
                      •   Establish a process to identify and address all missing school case
                          files, including determining the magnitude of the problem; obtaining
                          required documentation for schools whose case files are missing
                          evidence, as appropriate; and taking necessary compliance actions.
                      •   Develop and implement a process to monitor state licensing and
                          accreditation status of all SEVP-certified schools.
                      •   Establish target time frames for notifying SEVP-certified flight schools
                          that lack required FAA certification that they must re-obtain FAA
                          certification.
                      •   Revise the standard operating procedure that governs coordination
                          among SEVP, CTCEU, and ICE field offices to specify what
                          information to share among stakeholders during criminal
                          investigations.
                      •   Establish criteria for referring cases of a potentially criminal nature
                          from SEVP to CTCEU.

                      We provided a draft of this report to DHS and the Department of State for
Agency Comments       their review and comment. DHS provided written comments, which are
and Our Evaluation    reproduced in full in appendix II. DHS concurred with our eight
                      recommendations and described actions under way or planned to
                      address them. DHS indicated that ICE plans to develop and complete a
                      process to identify and assess risks in SEVP, as well as conduct an
                      organizational analysis to determine if resources are properly allocated by
                      risk. In addition, DHS indicated that ICE is developing a quality assurance
                      process to ensure the completeness of records associated with school
                      certification. DHS also indicated that SEVP personnel are developing
                      procedures to ensure frequent validation of license or accreditation



                      Page 38                           GAO-12-572 Student and Exchange Visitor Program
information on SEVP-certified schools. These actions should help
address the intent of our recommendations. DHS also provided technical
comments, which we incorporated as appropriate.

The Department of State did not have formal comments on our draft
report, but provided technical comments, which we incorporated as
appropriate.


As agreed with your offices, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from the
report date. At that time, we will send copies of this report to the
Secretaries of Homeland Security and State, and appropriate
congressional committees. In addition, the report will be available at no
charge on the GAO web-site at http://www.gao.gov. If you or your staff
have any questions concerning this report, please contact me at (202)
512-6912, or gamblerr@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. Key contributors are listed in appendix III.




Rebecca Gambler
Acting Director, Homeland Security and Justice Issues




Page 39                          GAO-12-572 Student and Exchange Visitor Program
List of Requesters

The Honorable Charles E. Grassley
Ranking Member
Committee on the Judiciary
United States Senate

The Honorable Charles E. Schumer
Chairman
Subcommittee on Immigration, Refugees and Border Security
Committee on the Judiciary
United States Senate

The Honorable Dianne Feinstein
United States Senate

The Honorable Claire McCaskill
United States Senate




Page 40                          GAO-12-572 Student and Exchange Visitor Program
Appendix I: Scope and Methodology
             Appendix I: Scope and Methodology




             This report examines the extent to which U.S. Immigration and Customs
             Enforcement (ICE) has (1) identified and assessed risks in Student and
             Exchange Visitor Program (SEVP), and (2) developed and implemented
             policies and procedures to prevent and detect fraud during the initial
             school certification process and once schools begin accepting foreign
             students.

             To determine the extent to which ICE identifies and assesses risk in the
             SEVP, we analyzed program documentation, collected and analyzed data
             on the population of SEVP-certified schools as of December 8, 2011, and
             interviewed officials from the Department of Homeland Security (DHS)
             and its components. We evaluated the extent to which ICE’s practices
             were consistent with Standards for Internal Control in the Federal
             Government and DHS’s Policy for Integrated Risk Management. 1 In
             particular, we analyzed ICE and SEVP documentation, such as standard
             operating procedures, policy statements, and guidance for adjudicators,
             to determine how ICE’s processes and systems identify and assess risk
             in SEVP. To understand the magnitude of previous cases of fraud, we
             collected and evaluated information on previous cases of fraud through
             analyzing ICE press releases, as well as collecting documents and
             interviewing investigators from ICE’s Counterterrorism and Criminal
             Exploitation Unit (CTCEU). We reviewed publicly available information on
             12 cases of fraud dating from 2006 to 2011. The information obtained
             from these cases is not representative of all school fraud cases
             nationwide, but provided us with examples of school fraud. We also
             collected information from ICE on resources for SEVP, including budget
             data since fiscal year 2006, and information from ICE on SEVP’s contract
             to develop a risk-based approach for overseeing SEVP-certified schools.
             To evaluate ICE’s ability to identify and assess risk in SEVP, we
             examined information on SEVP’s data management systems, including
             the Student and Exchange Visitor Information System (SEVIS), SEVP
             Automated Management System (SEVPAMS), and I-17 Tracking and




             1
              GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1
             (Washington, D.C.: Nov. 1, 1999) and Department of Homeland Security, DHS Policy for
             Integrated Risk Management (Washington, D.C.: May 27, 2010).




             Page 41                               GAO-12-572 Student and Exchange Visitor Program
Appendix I: Scope and Methodology




Reporting System. 2 We analyzed SEVP’s compliance case log, which
identifies specific SEVP-certified schools that are under additional review
for suspected noncompliant activity. We analyzed these schools for
specific school attributes—such as the type of school—of the potentially
noncompliant schools. To determine the potential threat posed by
designated school officials, who issue the Forms I-20 to the students and
oversee all enrolled foreign students, we cross-referenced SEVP’s list of
primary designated school officials (as of December 2011) with the
Department of Justice’s National Security Division list of individuals
convicted as a result of terrorism-related investigations through March
2010, which was previously used in GAO’s work on criminal alien
statistics, and found no matches. 3

Moreover, we interviewed SEVP officials to evaluate the extent to which
the program identifies and assesses risk. We met with senior officials
from SEVP, including SEVP’s Director, Deputy Directors, and
management for all branches—School Certification, Response, Policy,
Analysis and Operations Center, Field Representative Program, Mission
Support, and Information Technology. We also interviewed officials from
CTCEU and criminal investigators from 8 of the 26 ICE field offices. We
visited ICE field offices located in Atlanta, Georgia; Dallas, Texas; Miami,
Florida; New York, New York; and Washington, D.C. We conducted
telephone interviews with the ICE field offices in Los Angeles, San Diego,
and San Francisco, California. We selected these locations based on a
mix of criteria, including whether the office had any of the following
characteristics: (1) investigated a case of school fraud; (2) had previous
or current experience with school fraud based on CTCEU referrals; and
(3) was investigating a school according to SEVP’s compliance case log
during the period of this review. As we did not select a probability sample
of ICE field offices to interview, the results of these interviews cannot be
projected to all of ICE’s 26 field offices. However, the interviews provided


2
 SEVIS is a web-based application that is used by SEVP-certified schools to submit
petitions for certification and recertification, update petition information, issue forms to
students, and update student data. SEVIS is used by SEVP to certify and recertify
schools, track students, and monitor schools’ program compliance. SEVPAMS is a system
used by SEVP and intended to store and create documents associated with SEVP-
certified schools such as documentation of initial petition, compliance review activity, and
school information updates. The I-17 Tracking and Reporting System is a system used by
SEVP and is intended to track the progress of schools applying for SEVP-certification.
3
 GAO, Criminal Alien Statistics: Information on Incarcerations, Arrests and Costs,
GAO-11-187 (Washington, D.C.: Mar. 24, 2011).




Page 42                                  GAO-12-572 Student and Exchange Visitor Program
Appendix I: Scope and Methodology




us with the perspectives of ICE officials responsible for conducting school
fraud investigations, including their views on the processes SEVP has
established for certifying and monitoring these schools and any
challenges field offices have faced in their investigations.

To determine the extent to which DHS has implemented policies and
procedures to prevent and detect fraud, we analyzed the processes
SEVP uses to (1) initially certify schools to enroll nonimmigrant foreign
students; (2) maintain records to ensure schools’ continued eligibility; (3)
monitor schools’ eligibility once certified; and (4) oversee schools offering
flight training. We also analyzed the processes SEVP uses to manage
and share key information with other ICE stakeholders, including CTCEU
and ICE field offices. As part of our effort to evaluate these processes, we
reviewed applicable laws and regulations, such as the Border Security
Act and regulations governing nonimmigrant visa classes. 4 We also
reviewed ICE’s standard operating procedures for certifying and
recertifying schools, recordkeeping, compliance reviews, and information-
sharing during criminal investigations. In addition, we reviewed SEVP’s
internal policies and guidance specifically concerning English language
and flight schools and the recertification process. We compared these
processes to criteria established in laws and regulations, as well as to
criteria in the Standards for Internal Control in the Federal Government,
the U.K. National Audit Office’s Good Practice in Tackling External Fraud,
and the Project Management Institute’s The Standard for Program
Management. 5

We collected and analyzed data from ICE’s SEVIS (as of December 8,
2011) to identify schools certified by SEVP to enroll nonimmigrant foreign
students under F and M visas. We assessed the reliability of these data
by (1) reviewing existing documentation on the controls in the system and
the policies for ensuring data reliability; and (2) interviewing agency
officials about the data’s sources, the system’s built-in internal controls,
and any quality assurance steps performed after data are entered into the
system. We identified several limitations to the data due to ICE’s reliance



4
 8 U.S.C. § 1762. The regulations governing nonimmigrant classes are found in 8 C.F.R.
pt. 214.
5
 U.K. National Audit Office, Good Practice in Tackling External Fraud (London, England:
2008) and Project Management Institute’s The Standard for Program Management ©
(2006).




Page 43                                GAO-12-572 Student and Exchange Visitor Program
Appendix I: Scope and Methodology




on school officials for data entry and updates. SEVIS is used by school
officials to apply for and receive certification as well as to keep records of
individual students who enter the United States on F and M visas.
Although SEVP officials may allow a designated school official to make
edits to the school’s petition, all data or information corrections are
incumbent upon those school officials. Therefore, invalid data elements
appear in the data, including entries for school names, as well as for
mailing and physical location addresses, cities, and states. While we
identified such limitations, we found the data sufficiently reliable for
providing general background information on the population of SEVP-
certified schools and selecting a sample of schools for which to conduct a
case file review. We used SEVIS school data as the population from
which to select a nongeneralizable stratified random sample of 50 SEVP-
certified schools’ case files. To select the sample, we relied upon the data
on certified schools (as of December 8, 2011) provided by SEVP. We
focused our analysis on post-secondary schools that reported either
being unaccredited or not being accredited by a Department of
Education-recognized accrediting agency. We then stratified the
population of post-secondary, unaccredited schools based on the
schools’ reported type of education provided. These five strata included
flight training, language training, religious training, combination of
flight/language/religious training, and general post-secondary education.
Our random sample of 50 SEVP-certified schools included at least one of
each strata indicated. We analyzed the schools’ case files to evaluate
SEVP maintenance of school records per program requirements found in
SEVP’s recordkeeping standard operating procedure. Specifically, we
verified that SEVP maintained historic and more current records of the
schools’ accreditation or evidence provided in lieu of accreditation, school
officials’ proof of citizenship or residency, school officials’ attestation
statements, and flight schools’ FAA certification.

Further, we used the SEVIS data to identify all SEVP-certified schools
that offer flight training by querying the following SEVIS categories: Type
of Education and Nature of Subject Matter. We cross-referenced the list
of schools that reported offering flight training to FAA’s lists of Part 141
and Part 142 schools. We also cross-referenced the list of SEVP-certified
schools offering flight training to information on FAA certificate
revocations. We previously used FAA’s data on Part 141 and 142 flight




Page 44                             GAO-12-572 Student and Exchange Visitor Program
Appendix I: Scope and Methodology




schools and revocations in work on pilot training in the United States and
found such data reliable. 6

In addition to document and data collection and analysis, we interviewed
the SEVP Director, Deputy Directors, and officials from SEVP’s branches
as well as officials from CTCEU and our selected 8 SAC field offices to
determine the extent to which ICE has policies and procedures to prevent
and detect fraud within SEVP and to discuss SEVP’s management and
information-sharing practices with CTCEU and SAC field offices. We also
interviewed officials from Department of State to obtain officials’ views on
State’s redesignation of exchange visitor sponsors and SEVP’s
recertification of certified schools, which were both mandated in the
Border Security Act.

We conducted this performance audit from September 2011 through June
2012, in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.




6
 GAO, Initial Pilot Training: Better Management Controls Are Needed to Improve FAA
Oversight, GAO-12-117 (Washington, D.C.: Nov. 15, 2011).




Page 45                               GAO-12-572 Student and Exchange Visitor Program
Appendix II: Comments from the Department
             Appendix II: Comments from the Department
             of Homeland Security



of Homeland Security




             Page 46                               GAO-12-572 Student and Exchange Visitor Program
Appendix II: Comments from the Department
of Homeland Security




Page 47                               GAO-12-572 Student and Exchange Visitor Program
Appendix II: Comments from the Department
of Homeland Security




Page 48                               GAO-12-572 Student and Exchange Visitor Program
Appendix III: GAO Contact and Staff
                  Appendix III: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Rebecca Gambler, (202) 512-6912 or gamblerr@gao.gov
GAO Contact
                  In addition to the contact named above, Kathryn H. Bernet, Assistant
Staff             Director; Frances Cook, Mike Dino, Elizabeth Dunn, Anthony Fernandez,
Acknowledgments   David Greyer, Kirsten Lauber, Lara Miklozek, Richard Stana, and Julia
                  Vieweg made significant contributions to this work.




(441005)
                  Page 49                               GAO-12-572 Student and Exchange Visitor Program
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