II. THE IDENTITY CARD REPLACEMENT PROCESS COULD BE STREAMLINED
Permanent resident aliens face a 6 months to 1 year waiting period between replacement card application and receipt of a card. The delays undermine the integrity of the identity card system, as the INS must use easily counterfeited temporary stamps so applicants may obtain employment and public benefits in the interim. Streamlining the identity card replacement process will improve system integrity and allow the INS to more effectively use an estimated $45 million it will otherwise spend if it fails to streamline the process.
Replacement Application Backlogs
Legal permanent residents must apply for replacement identity cards whenever their card has been lost, stolen, mutilated or recalled by the INS. Replacement identity card applications are reviewed at district offices and then sent to the service centers. Acceptable applications are adjudicated7 by service center personnel and then sent to the Immigration Card Facility (ICF) for card production and database updates. The card facility produces and mails identity cards to the applicants.
We found no sizeable replacement application backlogs at the district offices. We reviewed the Statistical Tracking Application Reporting System (STARS) reports compiled by the ICF for a 6 months period. We found a monthly average of 41,000 replacement applications backlogged for 39 days at the card facility.
At the four INS service centers, we sampled processed applications awaiting adjudication in order to determine the elapsed time between receipt of the applications at district offices to the date of our review. The elapsed time ranged from 3 months at the Texas Service Center to 7 months at the Vermont Service Center.8 The number of backlogged replacement applications ranged from 14,574 at the Texas Service Center to 115,906 at the Vermont Service Center (see Table 3).
BACKLOGGED REPLACEMENT APPLICATIONS
Source: 1995 INS Adjudications Summary Report (Form G-22.2)
Application backlogs at the service centers were caused by a class action lawsuit, the recently completed I-151 replacement program, resource shortages, rejected applications, manual search requests9, and changes in the law.
Difficulties with the I-151 replacement program and funding and hiring constraints contributed to the application backlogs. At the district offices in New York, Dallas, Chicago, Atlanta, Miami and Los Angeles, and service centers in Vermont, Texas, Nebraska and California, we reviewed the staffing levels during the initial I-151 card replacement period. The INS hired 15 district employees and 160 service center employees to implement the I-151 replacement program. However, when the program was suspended in November 1992 as a result of a class action lawsuit, 145 of the 175 employees were terminated. None was rehired when the program was reinstated in September 1993. As a result, although the INS had received authorization to implement the replacement card program, district offices and service centers were inadequately staffed to do so.
We also found that rejected applications added to processing delays of replacement applications. District offices contributed to backlogs at service centers by sending unacceptable fingerprints or photographs. If rejected, cases remain open at the service centers while information is obtained. At INS district offices in Atlanta, Chicago, Dallas, Los Angeles, Miami, and New York, we sampled 70 rejected cases that had been returned by either the service centers or the ICF. We found that 60 (86 percent) of the applications were rejected due to the unacceptable quality of the fingerprints and photographs submitted (see the following graph).
At the time of our field work, rejected applications returned to district offices ranged from a high of 4,806 in Chicago to a low of 255 in Atlanta. Service center and ICF personnel indicated that unacceptable fingerprints were caused by district officers who did not always use the special ink and pads provided to take prints. Fingerprint data forms deemed unacceptable by the ICF were returned to the district office.
Manual search request procedures initiated by service center personnel also contributed to backlogs and time delays. Manual search requests ranged from a low of about 100 at the Texas Service Center to a high of about 16,000 at the California Service Center. To facilitate replacement application processing, the INS changed the manual search request procedures in January 1995. Prior to this change, service center personnel were required to request verification of applicant information to immigrant files for those applicants without biographical information in the Central Index System (CIS)10. After January 1995, service center personnel were directed to request a manual search only if an application was deemed suspicious or needed additional information. This change decreased the backlog, but may have increased the issuance of replacement identity documents based on fraudulent applications, as many I-151 replacement applications were not verified based on a review of INS records.
The passage of Subsection 245(i) of the Immigration and Nationality Act increased both the backlog of applications and the delays in identity card issuance, as it greatly increased the number of applications submitted. Subsection 245(i) permits certain eligible aliens to apply for permanent resident status without leaving the United States. This amendment was implemented in October 1994 and will remain in effect until October 1997.
As a result of the backlogs, the INS adopted interim measures to provide documentation of status for those who are eligible for employment and public benefits. During the waiting period between card application and receipt, INS officers stamp passports or arrival/departure records with an "I-551 pending" rubber stamp. The arrival/departure record is printed on either card or paper stock without security features. Since rubber stamps and ink can be purchased commercially at any office supply store, the use of temporary stamps creates a weakness in the INS employer sanctions effort and mitigates any advantage the INS may obtain from the development of a secure, counterfeit-resistant identity card.
INS Forensic Document Laboratory personnel suggested to us that a sticker with a holographic label affixed to temporary documents could improve the security of these documents. In our judgment, a reduction of the waiting period from application to card receipt would be the best solution. In the interim, however, use of a sticker with a holographic label would be an improvement over using a temporary stamp on official documents.
Streamlining the Card Replacement Process
We previously recommended the replacement of an estimated 10 million I-551 cards. The impact of a program to replace 10 million cards would severely limit the effectiveness of district offices. However, if district offices were relieved of the responsibility to process replacement card applications, associated delays and the number of rejected applications should be minimized. In order to bypass the district offices, the INS could require replacement card applicants to have their fingerprint and photograph taken at Designated Fingerprint Services (DFS)11, and mail their applications directly to the service centers. The use of DFS and the direct mailing of replacement card applications should reduce costs currently incurred by the district offices, thereby making funds available for more efficient application processing at the service centers. The INS is currently planning to use this streamlined process for a similar large-scale program involving Employment Authorization Documents (EAD). In our judgment, it could be used for the resident alien identity card replacement process as well. The service centers have the demonstrated ability to process applications more efficiently by hiring additional staff and creating special adjudication positions to process replacement applications.
Forensic Document Laboratory personnel have stated that the use of DFS and the direct mail-in process may cause an increase in the number of fraudulent applications. To combat possible application fraud, a random selection of replacement applications could be checked against biometric data stored in the Image Retrieval System.12 Further verification could be completed by requiring selected applicants to sign for identity cards at the district offices. At that time, INS staff could compare applicant fingerprints to existing biographical and biometric data. Although it is possible that impostors could obtain replacement cards, service center adjudicators can perform periodic random reviews comparing data on the applications to biographical and biometric information contained in the databases. Applications containing questionable information could then be referred to district offices for interviews of applicants. This should identify impostors who may otherwise slip through the adjudication process.
More Effective Use of Funds
To quantify the effect of streamlining card replacement, we used INS' earlier estimate for a similar recently completed process, namely the replacement of the I-151 cards. The INS estimated in 1992 that 135 district workyears were needed to replace the estimated 1.2 million I-151 cards in circulation with the I-551. Using this ratio, we estimate that INS would need 1,125 workyears to replace the estimated 10 million I-551 cards with the new card.13 The cost of these district workyears is $45 million, as illustrated in Table 4.
ESTIMATED FUNDS TO BETTER USE RESULTING FROM STREAMLINED PROCEDURES
|General schedule - FY 1996 grade 9 salary and benefits||$ 39,966|
|District workyears needed for replacement program||1,125|
|Funds to better use||$45 million|
Source: INS data
The use of Designated Fingerprint Services and the direct mailing of replacement card applications would streamline the replacement process by bypassing the district offices. As noted earlier, our audit determined the errors made by district office personnel in taking the fingerprints contributed to the backlog of applications, and to the 6 months to 1 year waiting period between card application and receipt. The estimated $45 million that would be needed to fund the district positions could be more effectively used to increase the number of staff at the service centers, thus decreasing application backlogs. This would have a significant effect on the replacement card process.
* * * * *
We discussed this finding with INS officials and they generally concurred with utilizing direct mailing and DFS for replacement card applications. According to some INS officials, the lack of direct contact with applicants may cause an increase in the number of fraudulent applications. We believe the service centers will be able to institute procedures to lessen the possibility that application fraud will increase as a result of the implementation of these procedures. For example, in addition to requiring randomly selected applicants to pick up and sign for identity cards at the district offices, the service centers could verify suspicious application data by referring to alien files.
In our judgment, streamlining the replacement process should reduce the waiting period, improve the level of service, and eliminate the use of temporary stamps. Expansion of the Direct Mail Program and DFS to include replacement I-551 applications would reduce current processing time. Under the Government Performance and Results Act of 1993, this would be a good opportunity for the INS to set a reasonable time period for a replacement identity card to be processed, adjudicated, manufactured, and delivered to the customer.
We recommend that the Commissioner, INS:
4. Require applicants to use certified Designated Fingerprint Services to process replacement card applications.
5. Streamline the replacement card process by using the Direct Mail Program.
III. COST-BENEFIT ANALYSES ARE NEEDED TO DETERMINE OPTIMAL CARD PRODUCTION CAPACITY
The INS intends to implement production of new cards at multiple sites. This decision was not based on the results of a cost-benefit analysis to determine optimal card production capacity. Without analysis to determine the most effective use of program funds, the INS may purchase equipment with the capacity to produce approximately 8 million cards in excess of anticipated needs. Based on the equipment contract, the estimated excess production equipment may cost over $7 million.
The INS strategic plan states that INS will manage all resources on a service-wide basis to ensure maximum management flexibility and accountability. To accomplish this, the INS should support all major funding decisions with a comprehensive cost-benefit analysis in order to make informed decisions when evaluating the costs of actions needed to achieve program improvements.
The OMB Circular A-130, Management of Federal Information Resources, requires agencies to prepare cost-benefit analyses at a level of detail appropriate to the size of the investment for all proposed information system investments. A January 6, 1995 Justice Management Division (JMD) memorandum states that Department of Justice (DOJ) agencies must perform cost-benefit analyses for information technology initiatives that exceed $5 million during the equipment life cycle or $2 million in any one year. DOJ Order 2830.1d, Automated Information Systems Policies, prescribes specific policies and a procedural approach for the management of automated information systems. Some requirements of the DOJ order were met prior to the award of the ICPS contract. For example:
However, INS has not performed a cost-benefit analysis to determine card production requirements. As a result, INS cannot determine whether the expenditures will be the most efficient and effective use of program funds.
A March 1995 Request for Proposal (RFP) cited various options for a new card production system and stated that the INS may purchase as many as nine machines. In October 1995, the INS awarded a contract for as many as six machines for a maximum of $275 million to produce identity cards. The first card scheduled to be tested and produced is the EAD. If successful, the INS will produce the ARC, Border Crossing Cards (BCC), and INS Passenger Accelerated Service System (INSPASS) cards. Production of the ARC is scheduled to begin in the fourth quarter of FY 1997.
According to INS officials, production equipment for the proposed card has been purchased and installed at two service centers. Equipment testing has begun at one service center and production was scheduled to begin in July 1996 at the Nebraska Service Center.
In the ICPS contract, the INS estimated an annual production total of 3.5 million identity cards. The contract provides cost data for the base system and optional system upgrades. The contract requires that a single machine produce a minimum average of 300 cards per hour, operating 24 hours per day, 7 days a week.
To determine the number of card production units that will be needed to meet INS production requirements, we used the following INS data: the INS estimated it will produce about 950,000 EADs, 1.5 million (initial and replacement) permanent resident alien cards, 265,000 BCCs and 30,000 INSPASS cards for an annual production total of 2.745 million cards. To this number we added 1.7 million14 identity cards per year, over a 3 year period to include the replacement of I-551 cards with the proposed card, per our previous recommendation. Therefore, we based our estimate of production needs on 4.445 million cards per year.
Based on a minimum average of 300 cards per hour, each card production machine is capable of an annual production rate of 2.6 million cards per year. As we have estimated a maximum requirement of 4.445 million cards annually, two units will be sufficient to meet card production needs. However, as continued card production is necessary, a third machine may be needed in the event of equipment failure. Three units would yield an annual production of 7.8 million cards. Six units would give the INS the capacity to produce an excess of 7.8 million cards annually, as illustrated in the following graph.
INS officials have indicated that card production will be relocated from the existing contract card facility to the service centers. According to INS officials, the cost of transmitting data to a centralized location may be prohibitive. We were not able to analyze this data because the INS could not identify specific service center cost data for the transmission of biometric data for identity cards. If, in the opinion of the INS, transmission costs will prohibit the use of one site, the INS may purchase multiple units in order to produce cards at each of the four service centers. In our judgment, labor, security, and overhead cost savings realized by centralization should offset additional transmission costs.
Centralization of production should be more cost effective than production at each of the four service centers. Other government agencies have centralized the production of identity documents. The California Department of Motor Vehicles produces 20 million identification cards and licenses annually from one location in Sacramento, California. The U.S. Department of State issues 5 million passports annually, all of which are produced at one location.
To estimate the potential unnecessary cost to INS, we compared the cost of the three units that may be needed to meet INS' production requirements, to the six units that may be purchased under the ICPS contract provisions (see Table 5).
|CARD PRODUCTION COST DATA|
|3 units||6 units|
|Base System and Optional System Upgrades||$7,050,000||$ 14,100,000|
|Funds to better use with 3 units versus 6||$ 7,050,000|
Source: Calculations based on INS cost data.
The purchase of three units, instead of the six units permitted under the contract, will allow the INS to more efficiently use over $7 million for other purposes.
* * * * *
We discussed this finding with INS officials and they agreed that a cost-benefit analysis should be performed, but believe it cannot be completed until the ICPS has been operational for at least a year. In our judgment, a cost-benefit analysis should have been performed prior to dedicating resources to the ICPS, and must be completed before finalizing any plans to produce cards on the ICPS or purchasing additional production equipment. The cost-benefit analysis should determine the minimum number of card production systems needed, and provide a comparison of costs and benefits associated with different production management approaches, as well as production at one location versus production at multiple locations.
INS officials stated four production machines are needed, given current plans to operate the production equipment for 16 hours per day, 5 days per week. This is contrary to the contract requirement that each machine be capable of operating 24 hours per day, 7 days per week. Additionally, INS has proposed producing the INS naturalization and student cards, as well as Department of State BCCs, which would increase annual production needs.
We believe that all major funding decisions should be supported by a comprehensive cost-benefit analysis in order to provide management with the necessary information to make decisions when comparing the cost of an action to needed program improvements. Such an analysis may have prevented the INS from issuing a RFP for up to nine production machines in March 1995, and then revising the number of machines that could be purchased to six when the contract was awarded in October 1995.
Based on the production capacity of each machine as required by the contract, two fully utilized card production machines have sufficient capacity to meet INS' known identity card production needs. We also recognize the potential need for one back-up machine. However, at the rate of production cited by INS officials as discussed above, the ICPS equipment will operate at about 50 percent of the production rate required by the contract.
We recommend that the Commissioner, INS:
6. Complete cost-benefit analyses, which should include the number of card production systems and locations necessary to meet annual production requirements, prior to the purchase of additional ICPS equipment.
IV. THE FUTURE OF IDENTITY CARDS
While the INS continues to rely on an identity card as the cornerstone of its verification system, future events may limit the usefulness of the card. Political issues and technological advances produce a continually changing environment, which could result in the need for less technologically advanced cards, or a cardless system. In our judgment, the INS should begin to consider alternatives to the use of cards as the primary means of establishing resident alien identity.
INS managers have recognized that a changing political environment and advances in technology may have a significant effect on INS programs. Its strategic plan states that the INS will develop the capability to anticipate trends, potential crises, and changes in the immigration environment, and that INS will systematically explore, develop, and integrate new technology into computer architecture. Although it is difficult to identify in advance that changes will occur, the INS can begin to consider alternative means, which can be used in the future if the utility of identity cards is reduced due to Immigration Reform Commission proposals, Congressional action, or technological advances.
Immigration Reform Commission and Congressional Proposals
Immigration Reform Commission proposals and recent Congressional legislation will, if enacted, affect the use of the INS identity card. In the future, responsibility for employment verification may shift from the INS to the Social Security Administration (SSA), the annual level of immigration may be reduced, and immigrant eligibility for public benefits may be restricted. These measures would relegate the INS identity card to a document used for immigration benefits only, reducing the need for extensive card security measures. Recent proposals and legislation include:
Card verification may, in the future, be replaced by biometric recognition systems that rely on identification of the individual rather than a document. Some biometric technologies currently being marketed and used include hand geometry, retina scan, voice verification, and signature verification. Technological advances and limits to the effectiveness of the current card-based verification system were among the issues discussed during recent Congressional hearings. Additional legislation that may be enacted as a result of these and other hearings must be considered by the INS because advanced technology may decrease reliance on a card as the primary vehicle for identity verification.
The GAO found that electronic fingerprint identification offers a promising solution for fraud deterrence in both the enrollment and disbursement phases of the government's proposed Electronic Benefit Transfer (EBT) program. Applicant fingerprints are scanned during the benefit enrollment process that allows identity verification through a database search. During disbursement at ATM or point-of-sale terminals, this technology allows for self-verification by using a fingerprint reader to compare a live scanned fingerprint with the same print encoded on an EBT card.
In Congressional testimony, the Automated Fingerprint Identification System was named as a state-of-the-art automated system in the field of identification. This computer system stores electronically scanned fingerprint files, which may be used for comparison when matching fingerprint records. Fingerprint technology is currently utilized in the Automated Fingerprint Image Reporting and Match System in the Los Angeles County welfare program to verify the identity of all applicants and to defeat fraudulent application schemes. The system was developed in response to multiple identity fraud cases in the Los Angeles general relief program and was later expanded for use in the Aid to Families with Dependent Children program. A study of the system was conducted by an independent audit firm that found the system to be accurate, to have caused no undue inconvenience to applicants, and to have provided gross savings of $14 million during the period of review. According to the testimony, systems that allow fingerprints to be matched to biometric database information are foolproof, as long as the individual with the print supplies accurate biographical information.
During the Integrity of Government Documents hearing before the Subcommittee on Government Management, Information and Technology on March 7, 1995, an INS Associate Commissioner stated the Identification System (IDENT) relies on standard telecommunication circuits to transmit two index fingerprints. The Commissioner stated that the INS plans to apply the system to the processing of public benefits applications. According to the testimony, the use of positive identification technology to verify applicant identity will not only ensure accuracy and integrity by linking the applicant to the proper records, but will also deter claims abuse such as filing separate applications under different names, posing as an original applicant, and falsifying identity information.
Improved INS Technology
The INS has developed and implemented several database projects. In doing so, the INS is moving toward a decreased reliance on a highly technological card, and increased reliance on accurate biometric indicators subject to database verification. Current INS database projects include the Telephone Verification System (TVS), Systematic Alien Verification System for Entitlements (SAVE), and the enhancement of CLAIMS.15 In 1984, the INS implemented SAVE as a pilot project to provide alien status verification information to benefit granting agencies responsible for administering unemployment compensation and other federal benefits. The TVS demonstration pilot was implemented by executive order.16 The stated purpose of the pilot was to determine the feasibility and effectiveness of a system allowing employers to confirm employment eligibility to an INS database. The INS has also proposed physical verification of applicant fingerprints through the development of CLAIMS.17 The imaging capability of CLAIMS can be used to capture, store, and reproduce the digitized image of fingerprints submitted by applicants for benefits. This will allow INS adjudicators to compare an image of a print generated by the system to a print taken during the interview, thereby decreasing fraud and the use of counterfeit documents.
* * * * *
We discussed this finding with INS officials and were told that due to the modular nature of the ICPS, the INS will have enough flexibility to respond to any legislative changes and technological advances that may affect future uses of the proposed card. In subsequent discussions, we were advised that the agency could develop a plan to account for the effect that changes in legislation and emerging technology would have on the use of the proposed card.
The increasing use of advanced technology, the possibility of wider use of the Social Security card for employment as a result of Immigration Reform Commission recommendations, and pending legislation limiting social benefits all point to a decreased reliance on a card with expensive, technologically advanced security features. In our judgment, INS managers should begin to consider alternatives to the use of cards as the primary means of establishing resident alien identity. However, because of the uncertainty of future events, we are not making a formal recommendation.
STATEMENT ON COMPLIANCE WITH LAWS AND REGULATIONS
We audited the replacement of resident alien identity cards. We reviewed replacement procedures for the identity cards in circulation during 1995, to include adjudications, card manufacturing, and database update operations. The audit was conducted in accordance with generally accepted government auditing standards.
In connection with this audit, and as required by the standards, we tested transactions and records to obtain reasonable assurance of compliance with laws and regulations that, if not complied with, we believe could have a material effect on program operations. Compliance with laws and regulations applicable to identity cards is the responsibility of INS management.
Our audit included examining, on a test basis, evidence concerning laws and regulations. The specific laws and regulations for which we conducted tests are contained in Sections 264 - 266 of the Immigration and Nationality Act, relevant portions of Title 8 United States Code and Title 8 Code of Federal Regulations, and an INS policy contained in a June 5, 1992 memorandum issued by the Commissioner outlining the plan for the replacement of the Alien Registration Receipt Card, I-151. In addition, requirements for conducting a cost-benefit analysis are noted in the OMB Circular A-130, Management of Federal Information Resources, and DOJ Order 2830.1d, Automated Information Systems Policies.
The results of our test indicated that, for the transactions and records tested, we identified noncompliance with OMB Circular A-130 pertaining to the requirements for cost-benefits analyses (see Finding III).
With respect to those transactions not tested, nothing came to our attention that caused us to believe that INS management was not in compliance with the laws and regulations cited above, other than those for which we noted violations in our testing.
SCHEDULE OF DOLLAR-RELATED FINDINGS
|FUNDS TO BETTER USE:18|
|Streamlining the card replacement process over a period of three years (FYs 1999-2001)||$45 million||15|
|The purchase of three units, instead of the six units permitted by the contract||$7 million||20|
7 Adjudication is the act of reviewing an application, determining its merit, and granting or denying an identity card.
8 The elapsed time includes mailing and initial service center processing. It does not include the time required to adjudicate the application, send the application to the ICF, produce the card and mail the card to the applicant; we estimated this process would take from 6 months to 1 year to complete.
9 A manual search request is a request to search for a hard copy immigrant file. Supporting data for some of those cards issued prior to 1977 were not entered to the Central Index System database, so verification must be made to hard copy alien files.
10 The Central Index System was designed to serve as a repository of permanent resident alien status information, function as the link to other INS databases, and to document the current location of immigrant files.
11 A DFS is a private business certified and approved by INS to take fingerprints and photographs of applicants.
12 An automated system in use since 1990 that allows service centers and Immigration Card Facility personnel to review automated files containing applicant biometric data. Biometric data gathered prior to 1990 are stored on data forms in alien files.
13 1,200,000 I-151 cards divided by 135 district workyears equals 8,889 cards replaced per district workyear allocated. 10,000,000 I-551 cards divided by 8,889 equals 1,125 district workyears needed.
14 The figure includes 1 million I-551 cards without expiration dates and 700,000 I-551 cards with expiration dates, which will begin to expire in 1999.
15 CLAIMS is used to record the payment of fees and track applications for immigration benefits.
16 Executive Order Number 12781 (effective 11/20/91) authorized the implementation of an employment verification demonstration pilot. The duration and scope of the pilot have been extended and expanded since its initial implementation; in 1996, the project expanded from nine to 200 employers in Southern California.
17 Federal Register, Volume 60, Number 93; May 15, 1995.
18 Defined as monies not yet spent that could be more efficiently used in the future if management acts on our findings.