DHS Management:

Enhanced Oversight Could Better Ensure Programs Receiving Fees and Other Collections Use Funds Efficiently

GAO-16-443: Published: Jul 21, 2016. Publicly Released: Jul 21, 2016.

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What GAO Found

The Department of Homeland Security (DHS) received $15 billion in fees and other collections across 38 programs in fiscal year 2014 that help fund homeland security functions, such as the screening and inspection of persons and goods entering the United States. Our analysis of DHS collections and cost data showed that 14 of the 38 programs receiving fees and other collections in fiscal year 2014 collected amounts that fully covered identified program costs. Of the remaining 24 programs, collections for 20 programs partially covered identified program costs, and DHS did not provide cost data, or we determined such data may not be reliable, for 4 programs. DHS components have taken action to address the estimated $6 billion difference between collections and identified program costs, with 6 programs comprising about 85 percent of the difference. However, components did not document processes for managing differences and making decisions on how to address the estimated $726 million difference across the 10 remaining programs. Such documentation of processes and decisions could help improve transparency and accountability over cost recovery efforts.

DHS components have processes in place to manage unobligated balances carried over across fiscal years for 25 programs, with such balances totaling $2.6 billion at fiscal year-end 2014. These processes generally focused on ensuring continuity of program operations rather than efficiently using funds. For example, while components established targets for minimum balances for 21 of these 25 programs, none of the components established processes and related maximum targets to manage excessive unobligated carryover balances. Establishing such management processes and targets for minimum and maximum balances would enable components to show that management actions will be sufficient and appropriate to ensure the efficient use of funds—such as the Immigration Examinations Fee Account, which had an approximately $983 million unobligated balance as of fiscal year end 2014, and the User Fee Facility program account for small airports which has an unobligated balance of $14 million that has exceeded 100 percent of total operating costs each year from fiscal year 2010 through fiscal year 2014.

DHS does not ensure that all components review their programs or monitor component actions to address management and operational deficiencies identified in those reviews. GAO found that three of the seven DHS components that have fee or other collection programs did not conduct such reviews for 6 of their programs, and that components had not taken recommended actions to address 9 of 20 deficiencies identified through program reviews as of fiscal year-end 2014. Further, DHS did not report the extent to which components are conducting such reviews or any proposals to address identified management and operational deficiencies. DHS oversight to ensure that components complete these reviews and report the results for all programs would enable Congress and others to receive information necessary to better ensure that fee and other collection programs are operating effectively and efficiently.

Why GAO Did This Study

The uncertain budgetary environment highlights the need for DHS to effectively manage and oversee billions of dollars in fees and other collections from users of homeland security program services. Each DHS component is responsible for administering, managing, and reviewing their respective programs to ensure that, consistent with law and policy, rates charged to users of program services are set to collect amounts sufficient to recover program costs and ensure efficient operations, but not in excess of operational needs.

GAO was asked to review DHS's management and oversight of these programs. This report examines the extent to which (1) DHS components receive fees and other collections to recover program costs and manage any differences, as appropriate; (2) DHS components have processes in place to manage unobligated balances; and (3) DHS ensures components review their programs and monitors component action to address any management and operational deficiencies.

GAO analyzed DHS financial information for 38 programs receiving fees and other collections in fiscal year 2014, examined DHS fee reviews and study results, and interviewed agency officials.

What GAO Recommends

GAO recommends that DHS ensure components document processes for managing differences in collections and costs, establish balance targets, and conduct program reviews and address identified deficiencies. DHS concurred with the recommendations.

For more information, contact Andrew Von Ah at (213) 830-1011 or vonaha@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: DHS's Fee Governance Council, led by the Deputy CFO plans to draft and publish a revised section of the Financial Management Policy Manual devoted to documenting the processes and analyses for assessing and managing the difference between program costs and collections and document resulting decisions. The Council is currently working to establish interim milestones associated with this objective.

    Recommendation: To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to document the processes and analyses for assessing and, as appropriate, for managing the difference between program costs and collections and document resulting decisions.

    Agency Affected: Department of Homeland Security

  2. Status: Open

    Comments: The Fee Governance Council will draft and publish a revised section of the Financial Management Policy Manual devoted to managing unobligated carryover balances. The Council is currently working to develop specific milestones associated with this objective.

    Recommendation: To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to establish processes for managing unobligated carryover balances, to include targets for minimum and maximum balances for programs that lack such processes and targets.

    Agency Affected: Department of Homeland Security

  3. Status: Open

    Comments: The DHS Fee Governance Council plans to publish a revised section of the Financial Management Policy Manual devoted to how components conduct studies of fee programs to identify any management or operational deficiencies. The Council is currently working to establish specific milestones associated with this objective.

    Recommendation: To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to conduct reviews to identify any management and operational deficiencies.

    Agency Affected: Department of Homeland Security

  4. Status: Open

    Comments: The DHS Fee Governance Council will publish a revised section of the Financial Management Policy Manual devoted to how regular biennial reviews are conducted at DHS and how any findings and recommendations on management and operational deficiencies identified in these fee studies are tracked and reported.

    Recommendation: To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to take action to track and report on management and operational deficiencies--including reasons supporting any decisions to not pursue recommended actions--identified in fee reviews or through other means.

    Agency Affected: Department of Homeland Security

  5. Status: Closed - Implemented

    Comments: This recommendation was closed as implemented, per agency inclusion of general biennial fee review actions in the DHS 2016 Annual Financial Report. DHS provided general disclosures in the FY2016 Agency Financial Report regarding the centralized oversight and monitoring of the DHS Fee Governance Council and biennial fee reviews consistent with research of user fee disclosures in other federal Agency Financial Reports.

    Recommendation: The Secretary of Homeland Security should direct the DHS Chief Financial Officer to discuss the results of biennial fee reviews and any resultant proposals in the annual Agency Financial Report, annual performance report, or other reporting mechanism, consistent with the Chief Financial Officer Act and Office of Management and Budget Circular A-25.

    Agency Affected: Department of Homeland Security

 

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