We have received and reviewed the INS response to our draft audit report. Where appropriate, we made changes to the final report based on the INS response.
In the transmittal letter for the INS response, the Executive Associate Commissioner, Office of Field Operations, makes some assertions to which we wish to respond.
First, the Executive Associate Commissioner asserts, "Contrary to the OIG's conclusion, the INS believes that the time required to adjudicate routine applications and petitions has not been adversely affected by the [Premium Processing program]."
OIG Response: In our discussion of the backlogs of routine applications and petitions, we described several factors that, in the view of INS officials, contributed to the increases in backlogs. We also stated explicitly that "when situations occur that disrupt general processing times, those times are likely to be further exacerbated by the premium service. As has occurred with the implementation of IBIS checks, more petitioners will choose the premium service if general processing times are prolonged. Because Premium Processing receives priority, backlogs for routine cases may continue to grow. In this way, a program that was intended to reduce backlogs may actually have the effect of increasing backlogs for routine applications."
We based our analysis on data provided to us by INS during the audit. As shown in the table on page 18, the number of pending applications and petitions has increased notably at each of the service centers and nationally. At the end of FY 2000, there were 1,876,391 pending applications and petitions at the four service centers; by the end of FY 2002, that figure had grown to 3,249,226, an increase of 73 percent. We reported the INS's alternative explanations but nonetheless concluded that they do not sufficiently explain such a dramatic growth in the backlog for routine applications. We also note that the INS has not provided data to support these alternative explanations. Finally, the pressure on the INS to take resources from routine adjudications when Premium Processing receipts increase is great, and we believe that diversion contributed to the backlog.
Second, the Executive Associate Commissioner states "The Office of the Inspector General (OIG) in its recent report …focused to a large extent on the INS' use of the Interagency Border Inspection System (IBIS), one critical though relatively minor aspect of the overall [Premium Processing program]."
OIG Response: We cannot agree with the confusing description of IBIS as both "critical" and "minor." The INS made the judgment that the screening of applicants and petitioners through IBIS is of vital importance to national security. Because the service centers failed to implement IBIS checks when directed to do so, some 387,596 total applications and petitions, including 11,830 premium cases, were processed without IBIS checks. The failure of the INS service centers to conform to INS Headquarters policy directives that they begin IBIS screening had potential consequences that could be quite serious.
The INS response to the draft report also addresses each of our five recommendations. Our comments on the INS responses are given below, together with status of recommendations and actions needed to close the report:
- The INS concurs with our recommendation to strengthen internal communication to ensure that affected field offices receive advance notice of policy changes that will affect adjudication practices.
Resolved. This recommendation can be closed when we receive the INS policy requiring Headquarters to provide to all service centers and district offices advance notice of relevant policy and/or procedural changes that affect the adjudication process.
- The INS concurs in part with our recommendation to ensure that excess revenues, not used for adjudication processing and fraud investigation, are utilized for backlog reduction efforts. The INS states that it "agrees with the OIG that it is unable to directly link the expenditure of Immigration Examination Fee Account funds to the specific application, petition or premium fee revenue source. Fee revenue is, however, separately tracked for purposes of statistical analyses and accounting. When funds are allocated to the INS operating units to support day-to-day operations, the specific source of the revenue provided is not tracked. All fee revenues once deposited are consolidated within the Exams Fee Account, and their original link to a specific application or petition is lost. The only way the INS could specifically tie the premium process revenue to the program expenditure would be for Congress to establish a new fee account and mandate the deposit of premium fees into such account…. Although unable to specifically show through its financial systems that program expenditures for backlog reduction are being funded by the premium fee revenue, the INS does believe that through its specific tracking of premium fee revenues, its use of an annual Operating Plan, and its yearly workload and staffing updates that it is able to ensure that the appropriate portion of the premium processing revenues are being used to reduce INS' adjudications backlogs."
Our intent was not to compel the INS to change its existing accounting system, but to ensure that excess Premium Processing revenues are expended for infrastructure improvements and backlog reduction. As we reported on page 17, based on our review of the INS accounts, "we could not determine whether any of the additional premium service revenues were actually used to fund the infrastructure improvements and backlog reduction efforts."
In its response, the INS states it can "ensure that the appropriate portion of the premium processing revenues are being used to reduce INS' adjudications backlogs" through "specific tracking of premium fee revenues, its use of an annual Operating Plan, and its yearly workload and staffing updates." However, the INS does not state how those devices will ensure the proper allocation of premium fee revenues, why the INS has not yet used those means, or how the INS might use them in the future. The need remains for the INS to develop policy or procedures to ensure that Premium Processing revenues are expended in keeping with the budget approved annually by Congress. If the INS believes it cannot develop such policy or procedure without creating a separate account for Premium Processing revenues, the INS should seek Congressional authorization for such an account.
Unresolved. This recommendation can be closed when we receive documentation showing the INS has implemented a policy or procedures to ensure that Premium Processing program revenues that are not used for adjudication processing and fraud investigation, are utilized only for the backlog reduction efforts.
- The INS concurs in part with our recommendation to accumulate statistical data for Premium Processing by adding a separate category to the INS work measurement databases. "The INS agrees that it should strive to improve the integrity of the data collected to manage the Premium Processing Program. INS has made provisions to track premium processing within the Performance Analysis System (PAS) beginning in FY 2004. The INS does not agree, however, that PAS is the best mechanism to implement this improvement. As a secondary system dependent on 'the various reporting systems from the individual service centers,' PAS does not provide a consistent methodology, or accurate, standardized reporting and program analyses called for by the OIG. The ISD is developing a new primary system that will incorporate the automatic collection of performance management data. We expect this initiative to eliminate the need for secondary collection systems like the PAS."
Based on our work on this audit and others, we recognize that PAS has shortcomings. Our experience in other audits involving the INS has shown that initiatives such as the one to develop "a new primary system that will incorporate the automatic collection of performance management data" take considerable time and money to implement and often result in less than satisfactory results. However, the fact remains that INS management needs current, complete, and accurate data to manage each of its programs, including Premium Processing.
Resolved. This recommendation can be closed when we receive documentation showing that the INS has modified the work measurement databases to accumulate Premium Processing statistical data. Based on the INS response, we understand that Premium Processing data will be incorporated in the Performance Analysis System in FY 2004. Later, the data may be collected in a successor system.
- The INS concurs in part with our recommendation to conduct a time and motion study to determine appropriate costs for processing premium cases in order to ensure that the service centers have adequate staff and resources. Its response states, "The INS acknowledges that additional customer service features have been added to the adjudication process to support the [Premium Processing program]. However, we do not recognize the need for a formal independent study isolating the [Premium Processing program] to determine unit costs per adjudication….The INS employs an activity based cost (ABC) methodology to determine the cost of immigration adjudications and naturalization services for which we charge fees…. When the INS next conducts a biennial fee study in FY 2005, it will in any event consider the cost implications of providing enhanced customer service activities, such as dedicated phone lines, e-mail addresses and more direct communications with customers by INS personnel to applicants filing for premium service. Should the fee study indicate a different cost for processing premium service cases vs. normal applications, the INS would advise the Congress of any adjustment needed through legislation…. In this vein, the INS conducts a comprehensive workload and staffing analysis twice per year to determine necessary staff and resources and distribution. INS believes that the ISD has assigned adequate staff and other resources to meet the needs of the [Premium Processing program] as well as other adjudications foci, and that a formal study is not required."
We believe the INS response does not undermine the need for implementing our recommendation. Premium Processing includes a number of steps that are specific to that program. The fact that the INS uses an activity based cost methodology to determine the cost of adjudications further supports the need for a separate analysis of premium applications and petitions. As stated in our report, we monitored the adjudication process for premium petitions and observed certain distinguishing factors. For example, "Premium Processing petitions are adjudicated by the most experienced and skilled workers, and are reviewed much more frequently and thoroughly than routine cases." Surely, the reliance on more experienced, and presumably higher paid, adjudicators and the frequent supervisory review imply at least the possibility of greater cost than that of routine adjudications. Similarly, the telephone and e-mail contacts with applicants and petitioners are added costs associated with Premium Processing, but not typically with routine adjudications. Finally, we noted that Premium Processing cases represent a steadily increasing portion of total receipts of the Form I-129, a phenomenon that is likely to increase pressures on the existing resources at the service centers. In our judgment, because the INS has no regularized workload measurement mechanisms and will not have one until sometime in FY 2004 (see Recommendation 3), the INS should conduct a study to determine the unit costs for premium cases and to ensure the assignment of adequate resources at the service centers.
Resolved. This recommendation can be closed when we receive documentation showing the INS has determined the appropriate unit cost for processing premium service cases in addition to the cost to process a routine I-129 application ($130).
- "The INS does not concur that a formal analysis of the $1,000 [Premium Processing program] fee is necessary to ensure revenues are allocated as mandated…. It is the special appropriation code that allows the INS to separately track and record the premium processing revenue from all other adjudication and naturalization application and petition revenues that are received…. This is reinforced insofar as the INS Operating Plan includes documentation of approved program and project funding. For all these reasons, the INS does not believe that conducting a formal analysis of the premium fee is mandated…. Alternatively, the INS proposes to modify its Operating Plan to isolate through a specific column, the planned program and project spending associated with the premium fee revenues approved by Congress in its annual appropriations bill…. INS maintains that as long as these funds are used to deliver the specific services promised to Congress in exchange for the resources, the agency's legal obligation is satisfied."
The $1,000 fee was determined without the benefit of any analysis; in fact, some INS officials told us the figure was reached arbitrarily. In our judgment, a fee analysis should have been conducted prior to implementation of Premium Processing to ensure that the INS was maximizing the revenue potential while taking into account the possible effects on various business sectors and sizes.
In addition, the INS response does not address the main point of our recommendation. On page 25, our report describes the current allocation of the $1,000 premium fee: 22 percent to adjudication processing, 9 percent to fraud investigation, 25 percent to backlog reduction and processing, and 44 percent to general infrastructure improvements. The INS needs to conduct a formal study to confirm the appropriateness of that allocation or to establish the basis for a different allocation.
Unresolved. This recommendation can be closed when we receive documentation showing the INS has conducted an analysis of the $1,000 Premium Processing fee to ensure the appropriate amounts of the Premium Processing revenues are being allocated for applications processing, fraud investigations, infrastructure improvements, and backlog reduction.
In addition to responding to our recommendations, the INS offered other comments on the report, to which we wish to reply.
- The INS states, "the draft audit report does not explicitly state whether INS is achieving the goal of processing Premium Processing petitions in 15 days or less."
OIG Response: This is incorrect. The lead paragraph for Finding II begins, "although the INS has generally met the requirement of processing premium applications within 15 days…." We also added this statement to the Executive Summary of the final report for further clarification.
In addition, it should be noted that the 15-day processing of Premium Processing applications and petitions is not the sole objective of the program. Premium Processing was also established to provide revenues to hire additional staff and to improve the INS infrastructure so as to reduce the adjudications backlog of the INS. In our report, we have expressed some doubts that the Premium Processing fees have had the desired effect on the overall adjudications backlog.
- The INS states, "the Inspector General finds that the processing times for similar routine petitions have increased dramatically since implementation of the Premium Processing program. However, INS believes the Inspector General relied on an inappropriate measurement of processing time to reach this finding…. Rather, INS measures application processing time using official data derived from its Performance Analysis System."
OIG Response: In response to Recommendation 3, the INS said the Performance Analysis System "does not provide a consistent methodology, or accurate, standardized reporting and program analyses called for by the OIG." By its own terms, the INS is on shaky ground when it "measures application processing time using official data derived from its Performance Analysis System."
In formulating Finding II, we used data provided to us by the INS, specifically processing times for routine Forms I-129. The data provided to us by the INS showed that the processing times for routine Forms I-129 increased from about 37 days to 112 days after implementation of the IBIS checks.
In our report we took great care to describe the effect of Premium Processing on routine adjudications. This effect is a cumulative one that compounds the adverse consequences of other factors. We state in the report, "under ideal conditions the Premium Processing program should have little impact on the processing times for other visa types. However, when situations occur that disrupt general processing times, those times are likely to be further exacerbated by the premium service. As has occurred with the implementation of IBIS checks, more petitioners will choose the premium service if general processing times are prolonged."
- The INS states, "…the Inspector General finds that refunds of Premium Processing fees have increased eight-fold since implementation of the IBIS check procedures and suggests that this increase is attributable to the procedural change. However, because the 13 cases refunded prior to the implementation of IBIS checks represented .02% of the volume, almost any increase after the initial overwhelming success of the program would appear large. The 116 refunds made after the implementation of IBIS represent .15% of the volume. Because the numbers are so small this change cannot be construed to be a statistically significant trend. It does highlight the high preparedness and training level at the inception of the program, however."
OIG Response: We specifically state in the report, "as a result of the increased time required to process routine applications, the service centers have reported sizeable increases in the number of premium service cases being filed." The impact, therefore, on the Premium Processing Program is the filing of considerably more premium cases than anticipated by the INS. While it is true that the refunds due to failure to meet the 15-day requirement are still a very small percentage, it is important to recognize that the refunds were almost at zero prior to the implementation of the IBIS checks and have grown since the implementation of the IBIS checks.
Statement on Management Controls
- The INS states, "there were many stages of implementation of IBIS checks in the adjudication process. Full implementation of IBIS checks for all applications and petitions at service centers, while a useful step in the Country's war on terrorism, was not a critical step in the use of IBIS by the INS. The Inspections Program has utilized the IBIS process for years and the Department of State (DOS) visa issuing process has also provided a check of databases during the screening process. Currently, the INS and DOS perform IBIS checks at visa application, port of entry application for admission, application submission, and adjudication of application (if more than 35 days following submission). These multiple checks of the same individual provide many opportunities for the identification of problem individuals and are not hampered by failure of any individual check in the entire process."
OIG Response: On January 28, 2002, IBIS checks were mandated for all applications and petitions, including Form I-129 petitions. The failure of the service centers to conduct IBIS checks on 357,766 routine and 11,830 premium petitions until March 18, 2002 was a significant breakdown of management controls in a matter relating to national security. The INS cannot provide assurance that no other breakdowns in management controls occurred throughout the other layers of IBIS checks. Consequently, we do not believe that the failure to implement IBIS checks in a timely manner was mitigated by the INS's presumption that IBIS checks were supposed to be done by another agency (Department of State) and at other locations (ports of entry). INS Headquarters made the determination that IBIS checks should be performed on all applications adjudicated at service centers but these checks were not performed until more than two months after they were required.
- The INS states, "it can be seen that since the inception of the premium processing program, as well as since the beginning of the latest backlog reduction plan in October 2001 most form types' backlogs have actually decreased while others have increased very slightly. Since the second quarter of 2002 most forms have experienced a very slight increase. This was during the period when IBIS, SEVIS, NSEERS, and the special alien registration programs were put into effect. At the end of FY 2002 the INS met its own backlog reduction goals for forms I-129, I-539, I-751, and N-600/643."
OIG Response: The data provided to us by the INS showed a steady and dramatic increase in the service-wide backlog for all petitions since the second quarter of 2002. While the INS describes reduction in the backlogs for four specific forms, we based our conclusion on the overall backlogs for all forms. As stated previously, the number of pending applications and petitions at the four service centers increased from 1,876,391 at the end of FY 2000 to 3,249,226 at the end of FY 2002, an increase of 73 percent.