Follow-up Review on the Immigration and Naturalization Service's Efforts to Track Foreign Students in the United States through the Student and Exchange Visitor Information System

Report Number I-2003-003
March 2003

OIG ANALYSIS OF MANAGEMENT'S RESPONSE

On February 27, 2003, the Evaluation and Inspections Division sent copies of the draft report to the Immigration and Naturalization Service's (INS) senior management. On March 1, 2003, the INS transferred to the Department of Homeland Security (DHS). The Acting Assistant Secretary, Bureau of Immigration and Customs Enforcement, DHS, which is now responsible for the Student and Exchange Visitor Information System (SEVIS), responded by memorandum dated March 5, 2003 (the "response"). This response is included in Appendix II.

The response commented on five issues in our report: SEVIS implementation, the INS's approval of schools for timely access to SEVIS, compliance audits, training and guidance for adjudicators and inspectors, and enforcement resources. Our analysis of the comments regarding each of the five issues follows.

SEVIS Implementation

In response to our finding that SEVIS was not fully implemented by the January 1, 2003, deadline imposed by Congress, the response argued that the INS had met the deadline because it "successfully developed and deployed all facets of the SEVIS system." The response distinguished between the technical availability of SEVIS and the implementation of the Student and Exchange Visitor Program, which includes elements such as re-certification processes, a fee payment system, a dedicated budget, and training. The response also disagreed with "the OIG's finding that SEVIS implementation was insufficient because of the phased-in schedule" it is using to deploy SEVIS. The response stated that this phased-in approach was fully described in the May 2002 proposed SEVIS rule and is necessary to provide schools with adequate time to review and convert data on their continuing students for transfer to SEVIS.

OIG analysis: The argument that SEVIS was in fact fully implemented by the January 1, 2003, deadline is based on the INS's interpretation that "implementation" means technical availability of SEVIS. However, in our view, SEVIS cannot be viewed separately from the overall Student and Exchange Visitor Program. Full deployment requires that all elements of the program be functional to ensure the integrity of SEVIS. Our finding that SEVIS was not fully implemented as of January 1, 2003, was not based solely on the INS's deployment of a phased-in schedule. Instead, as stated in our testimony in September 2002 and in this report, we believe full implementation includes not only the technical availability of SEVIS, but also: ensuring that sufficient resources are devoted to the foreign student program; ensuring that only bona fide schools are provided access to SEVIS; adequately training DHS employees and school representatives; ensuring that schools are completely and accurately entering information on their foreign students into SEVIS in a timely manner; and establishing procedures for using SEVIS data to identify noncompliant and fraudulent operations as well as following up when SEVIS data indicates fraud in a school's program.

As our report indicates, as of January 1, 2003, many critical aspects of the program had not yet been implemented. Specifically, we found that the INS did not devote sufficient resources to performing the certification reviews of the schools' applications; the on-site reviews of the schools conducted by contract investigators were deficient and there was no assurance that only bona fide schools were approved for access to SEVIS; adjudicators needed additional training to help them identify fraud indicators; no process was in place to verify the integrity of the data that the schools are entering into SEVIS; and there are insufficient procedures in place to use SEVIS to identify noncompliant and fraudulent operations and to follow up when SEVIS data indicates fraud.

Schools Not Approved for Timely Access

In response to our finding that the INS failed to meet its promised deadline of January 30, 2003, for adjudicating all school applications filed by November 15, 2002, the response stated that the majority of those filings were incomplete (e.g., they did not include the appropriate fee or necessary evidence) and therefore not ready for adjudication. According to the response, of the 893 applications still pending as of January 30, 2003, 394 cases had not been acted upon, 347 had been reviewed but were pending due to payment problems, and 152 had been reviewed but were pending due to outstanding requests for supporting documentation. The response also stated that the INS contacted schools to determine whether they had an immediate need to issue I-20s, and noted that the INS ultimately extended the deadline to February 15, 2003, by which time it was able to complete the adjudication of all applications submitted by November 15, 2002.

OIG analysis: As we describe in our report, the INS process called for schools to submit electronic I-17 applications to the INS. The INS then relied on its contract investigators to collect supporting documentation from the schools during on-site reviews. Therefore, all applications initially submitted by the schools would necessarily be incomplete. During our review, neither INS management nor INS field adjudicators cited payment problems as the reason for delays in approving applications. Instead, both INS management and INS field adjudicators attributed the processing delays to the failure of the contract investigators to conduct timely on-site reviews and to properly collect and submit the supporting documentation to the INS field adjudicators. Because the INS was responsible for monitoring the contractors, this is a failure on the part of the INS - not the schools.

We agree that the INS took appropriate action by extending its deadline when it realized it could not process all the school applications by January 30, 2003. This protected schools from being penalized for the INS's program management problems. However, we concluded the INS did not properly manage the adjudication process to complete all applications due by January 30, 2003.

Compliance Audits Not Properly Performed

In response to our finding that the INS is inappropriately using contract investigator checklists to determine if schools have adequate internal controls in place and whether schools are entering data into SEVIS accurately, completely, and timely, the response stated that the purpose of the on-site reviews was to summarize schools' understanding of regulations and their past compliance with recordkeeping and reporting requirements. Further, the response stated that the review of five student records was not intended to establish the comprehensiveness of the SEVIS records. The response also added that future regulations will include criteria for identifying a school's compliance with SEVIS.

OIG analysis: The response is not consistent with the INS's earlier representations to us about how it planned to accomplish reviews of schools' internal controls. In our May 2002 report, we recommended that the INS conduct audits of approved schools to determine whether proper internal controls were in place and that data was entered into SEVIS completely, accurately, and timely. On July 15, 2002, the INS responded that the primary audit mechanism would be site visits conducted every two years, and that the need for additional audits would be identified through analytical reviews. On September 13, 2002, we expressed our concerns to the INS about contract investigators' qualifications to perform audits. On December 23, 2002, the INS responded and referred us to the on-site review checklists that would be used by contract investigators. Our review of that process led us to conclude that it is ineffective to meet the need for independent audits of schools' internal controls.

We continue to believe that compliance audits are essential to ensure that schools are entering data on foreign students into SEVIS timely, completely, and accurately, and that schools have adequate internal controls in place to prevent and detect fraud in their foreign student program. Without these audits, the data in SEVIS will be unreliable. While the deficiencies in verifying schools' compliance with reporting and recordkeeping requirements may be addressed by future regulations, the contract investigator site visits and checklists are not effective for ensuring proper internal controls.

Additional Training and Guidance for Adjudicators and Inspectors

In response to our finding that more SEVIS training is needed, the response described the SEVIS training that the INS provided to its adjudicators. In addition, the INS held pilot training sessions at nine locations during the week of December 17, 2002, and SEVIS training at 107 sites (including the original nine) during the week of January 13, 2003. According to the response, the training participants "reported satisfaction with the information supplied and opportunity for interactive questioning."

OIG analysis: The training provided to the adjudicators (in June and August 2002), as well as the training provided during the week of January 13, 2003, were discussed in our report. Specifically, our report includes a description of the two training sessions provided to INS adjudicators in 2002, and the adjudicators' impressions of that training at the ten INS district offices we contacted. Contrary to the response, in our discussions the adjudicators cited several training areas that were deficient, which we noted in the report. In addition, during our review we found that adjudicators were unfamiliar with the types of responses on the contract investigator checklist that might indicate a fraudulent school. We therefore maintain our recommendation that the INS incorporate the identification of fraud indicators into its future adjudicator training sessions. Our report also included information on the January 13, 2003, training conducted for the INS training officers at ports of entry. At the time of our review, this training was on-going and therefore we were unable to assess its effectiveness.

During our review, neither INS management nor INS field personnel mentioned the December 17, 2002, pilot testing cited in the response. After receiving the response, we requested additional information from INS management regarding this "training," and confirmed that it was a pilot test of the SEVIS training program, which the INS had developed on December 2, 2002. The training session ultimately developed was repeated at the pilot locations.

Sufficient Resources Needed for Enforcement Procedures

The response acknowledged that additional resources are needed to ensure proper enforcement of SEVIS, but stated that the resources are currently unavailable. The DHS plans to seek approval of a regulation establishing a foreign student fee, which would provide funding for the SEVIS program.

OIG analysis: The response is consistent with recommendations we have made in the past. In our May 2002 report, we suggested that the INS use the fees paid by foreign students to fund adjudicator, investigator, and analyst positions.