Customs Service:

Trade Enforcement Activities Impaired by Management Problems

GGD-92-123: Published: Sep 24, 1992. Publicly Released: Sep 24, 1992.

Additional Materials:

Contact:

Norman J. Rabkin
(202) 512-3610
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO provided information from its general management review of the Customs Service's ability to fulfill its trade enforcement mission, focusing on Customs': (1) management processes; (2) management of employees; and (3) organizational structure.

GAO found that: (1) Customs lacks effective detection of cargo that violates trade laws, information it needs to assess the effectiveness of duty, fee, and penalty collection programs; (2) Customs lacks a clear trade enforcement strategy, ineffectively uses its automated selectivity processes, develops inadequate information systems in support of trade enforcement and management oversight, and lacks critical data on programs aimed at trade law violators; (3) planning deficiencies and communication problems create continuing confusion among Customs managers on organizational priorities and the balancing of enforcement goals; (4) management information and accountability problems prevent Customs from effectively managing oversight operations, and management assessments are narrowly focused and untimely, and lack attention to corrective measures; (5) problems relating to effective management of information resources include narrowly focused planning efforts, development of deficient systems, and insufficient attention to effectiveness of information management practices; (6) improvement in information resources management depends on identifying user information needs, development of an information systems architecture, and greater attention to governmental guidance and procedure; (7) Customs has made limited progress in addressing human resources problems, including ineffective management processes, inadequate training, and frequent staff changes; (8) Customs' organizational structure ineffectively focuses managers' attention on the trade enforcement mission and emphasizes differences, rather than relationships in overall goals; and (9) Customs' lack of movement on inspection improvements, organizational structure improvements, and a plan to integrate electronic processing threatens attempts to modernize data processing operations.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The deputy commissioner headed a task force on the restructuring and a report on its findings is pending appropriate approvals.

    Matter: To enable Customs to undertake an objective review and realignment of its current structure, Congress should remove those legislative restrictions that prohibit Customs from planning changes to the current field structure.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Customs reorganization was based upon a clearly communicated vision statement supported by goals, compliance measures, processing standards, and communication with the trade community, including importers, exporters, and trade organizations. The Office of Strategic Trade was established to address major trade issues, such as NAFTA, transhipment, and intellectual property rights, all concerns in the international trade environment.

    Recommendation: Any Customs reorganization should be based on a clearly communicated statement of Customs' mission and a translation of this mission into goals developed from a thorough, analytical assessment of the current international trade environment.

    Agency Affected: Department of the Treasury: United States Customs Service

  2. Status: Closed - Implemented

    Comments: Customs believes that it has complied with the intent of this recommendation by developing a Strategic Plan, the Trade Enforcement Plan, annual plans and measurable objectives. The Trade Enforcement Plan, in particular, contains compliance measurement baselines for various importing industries and commodities, as well as compliance assessments of the top 1,000 large-volume importing firms and the eight primary industries. By using compliance measurement, an effective trade enforcement strategy and process has been implemented. The strategy places a higher priority on examining companies with unsatisfactory compliance levels, rather than examining those with satisfactory compliance levels.

    Recommendation: In developing a strategic management framework, the Commissioner of Customs should reassess the five-year plan with a view toward establishing measurable objectives and setting mission priorities. An important part of this effort will be defining effective trade enforcement and developing a viable enforcement strategy.

    Agency Affected: Department of the Treasury: United States Customs Service

  3. Status: Closed - Implemented

    Comments: Customs believes that it has complied with the intent of this recommendation by developing a Strategic Plan, redesigning its budget process, working with GPRA advisory groups on a monthly basis, and supporting Treasury's GPRA efforts toward designing and implementing programs with measurable outcomes, such as the Trade Enforcement Plan, based on measurable importer compliance rates.

    Recommendation: The Secretary of the Treasury and the Commissioner of Customs should work together to develop a strategic management framework that integrates planning, budgeting, performance monitoring, and other essential functions for directing and controlling operations.

    Agency Affected: Department of the Treasury: United States Customs Service

  4. Status: Closed - Implemented

    Comments: Customs believes that it has complied with the intent of this recommendation by developing a Strategic Plan, redesigning its budget process, working with GPRA advisory groups on a monthly basis, and supporting Treasury's GPRA efforts toward designing and implementing programs with measurable outcomes, such as the Trade Enforcement Plan, based on measurable importer compliance rates.

    Recommendation: The Secretary of the Treasury and the Commissioner of Customs should work together to develop a strategic management framework that integrates planning, budgeting, performance monitoring, and other essential functions for directing and controlling operations.

    Agency Affected: Department of the Treasury

  5. Status: Closed - Implemented

    Comments: A working group identified elements for a monthly electronic mail report to be manually prepared and provided to headquarters by each district. Customs is enhancing the existing automated system to enable system generation of part of the report. Complete automation of the report and its inclusion in the operations management report is Customs' long-term goal.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should, in response to Customs' own findings, develop comprehensive information systems to oversee agencywide commercial fraud enforcement efforts.

    Agency Affected: Department of the Treasury: United States Customs Service

  6. Status: Closed - Implemented

    Comments: Customs is providing an annual report to Congress on the status of the AD/CV program, but has no process or personnel to ensure that liquidations are being performed within the NAFTA-required 6-month limit.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should improve the process for identifying antidumping and countervailing (AD/CV) duty entries that can be liquidated and institute controls to ensure that AD/CV duty entries that can be, are liquidated within 90 days.

    Agency Affected: Department of the Treasury: United States Customs Service

  7. Status: Closed - Implemented

    Comments: Customs has redesigned the fines, penalties and forfeiture and seized property tracking systems. The new systems will be operating in a training mode in several areas by October 1, 1996.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should expedite the improvement of fines, penalties, and forfeitures information, as part of the development of an integrated accounts receivable system, to improve oversight of Customs' collection activities.

    Agency Affected: Department of the Treasury: United States Customs Service

  8. Status: Closed - Implemented

    Comments: Customs' business process redesign under its reorganization plan, People, Processes, and Partnerships, and the trade enforcement redesign were accomplished by multi-disciplinary teams from all levels of Customs, including import specialists, inspectors, entry specialists, finance specialists, and operational analysis specialists.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should involve import specialists and inspectors in analyzing problems with trade enforcement processes.

    Agency Affected: Department of the Treasury: United States Customs Service

  9. Status: Closed - Not Implemented

    Comments: This recommendation is no longer applicable because Customs does not focus on a transaction entry summary system or review. Customs is using compliance measurement data to identify importing trends and then addressing possible compliance problems. Customs is well along in moving toward a whole new compliance measurement and automated environment for enforcing trade laws.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should implement a consistent national program to ensure the quality of entry summary reviews.

    Agency Affected: Department of the Treasury: United States Customs Service

  10. Status: Closed - Implemented

    Comments: The Selectivity Redesign Task Force is developing random statistical sampling strategies to profile industry compliance patterns. Cargo selectivity random exams and entry summary random exams have been reduced from 55,000 per year to 5,000 to free resources to conduct the new stratified sampling strategy.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should test compliance with the laws Customs enforces using accepted statistical techniques and redirect any freed-up resources toward testing compliance in areas of highest risk.

    Agency Affected: Department of the Treasury: United States Customs Service

  11. Status: Closed - Not Implemented

    Comments: This recommendation is no longer applicable because Customs does not focus on classification and value reviews, but rather on importer compliance by industry and commodity groups. Further, the Automated Commercial Environment under development will support the redesigned process, eliminating the Entry Summary and Selectivity System, part of the Automated Commercial System, which is reaching the limits of its capabilities.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should develop the capability within the Entry Summary Selectivity System for analyzing results of classification and value reviews and use this analysis to gauge the effectiveness of these reviews, reassess its high-risk priority areas, and revise its enforcement strategies.

    Agency Affected: Department of the Treasury: United States Customs Service

  12. Status: Closed - Not Implemented

    Comments: The Trade Enforcement Plan's focus on the nature and rate of compliance by various industries and commodity groups changed the entire process by which trade violations were assessed. The violation categories, such as marking, are no longer used. The trade compliance measurement system is much more advanced and comprehensive than this recommendation envisioned. Customs considers this recommendation to be no longer applicable because of the complete trade enforcement redesign and focus on compliance measurement rather than violation categories.

    Recommendation: To improve Customs' ability to analyze the results of its trade enforcement efforts, the Commissioner of Customs should improve Customs' means of assessing the significance of the cargo violations it detects, including an evaluation of the usefulness of the current violation categories.

    Agency Affected: Department of the Treasury: United States Customs Service

  13. Status: Closed - Implemented

    Comments: As part of its overall Trade Enforcement Plan, Customs is producing full 1-year baseline compliance levels for each of over 1,200 commodity groups, including the eight high-risk focus industries. Customs calculates compliance rates for the industries and commodity groups to estimate the percentage of all import entries that contain no discrepancies in tariff classification or calculation, country of origin, and other requirements. For fiscal year 1995, the compliance rate for all imports was 78.6 percent. Customs will use the compliance measurement data to measure progress toward achieving 100-percent compliance, and will be able to use the data to demonstrate effectiveness in accordance with GPRA requirements.

    Recommendation: As part of an overall strategy to achieve its trade enforcement objectives, the Commissioner should identify and prioritize areas of noncompliance with the trade laws. Analysis of the results of its own enforcement efforts should be an integral part of this risk assessment process.

    Agency Affected: Department of the Treasury: United States Customs Service

  14. Status: Closed - Implemented

    Comments: Customs has developed a management and outcome measurement framework through its strategic, trade enforcement, reorganization, and annual plans. The business process redesign under the reorganization plan assigned process owners the responsibilities for setting forth a series of strategic goals and measures to gauge agency-wide success in trade compliance, passenger processing, outbound trade, information management and technology, finance, and human resource management. Customs is in the early stages of instituting business process management and some functions, such as trade enforcement, are further along than others. Customs, nonetheless, believes that it has satisfied the intent of this recommendation.

    Recommendation: In developing a strategic management framework, the Commissioner of Customs should ensure that current efforts to develop performance measures are integrated with the five-year plan and receive the necessary automated systems support. Measures of both efficiency and effectiveness should be developed that permit the assessment of agencywide performance.

    Agency Affected: Department of the Treasury: United States Customs Service

  15. Status: Closed - Implemented

    Comments: The Office of Information Management has developed a strategic plan (February 1994) which is linked with Customs' 5-Year Plan and trade enforcement strategy.

    Recommendation: The Commissioner of Customs should provide the top management commitment to effectively manage Customs' information resources by revising the long-range information management strategic plan so that it communicates a clear and measurable trade enforcement objective, describes how various programs will support the mission objective, relates information development strategies to program objectives, and establishes project priorities.

    Agency Affected: Department of the Treasury: United States Customs Service

  16. Status: Closed - Implemented

    Comments: In place of a single management office, Customs created the Office of Human Resources Management, the Office of Planning and Evaluation, and Information Resources Management. These offices were created as part of Customs' plan, People, Processes, and Partnerships, for restructuring its organization and work processes. Customs considers these actions fully responsive to the intent of this recommendation and plans no further action.

    Recommendation: To provide better support to the Commissioner of Customs in planning, management analysis, resource management, and external relations, Customs should consider the consolidation of these functions into an Office of Management, able to create coordinated solutions to the agency's long-term needs.

    Agency Affected: Department of the Treasury: United States Customs Service

  17. Status: Closed - Implemented

    Comments: Based on its September 1994, reorganization report People, Processes, and Partnerships, Customs reorganized effective October 1, 1995. It reduced its headquarters staff, eliminated field management layers, established 20 Customs Management Centers, and established offices of Field Operations and Investigations. Top officials in these two offices have line authority over the 301 port operations and 20 special agents-in-charge agency-wide.

    Recommendation: To combine national perspective with mission responsibility, Customs should consider organizing headquarters offices according to broadly defined mission components and vesting the top officials in these offices with the line authority over field operations.

    Agency Affected: Congress

  18. Status: Closed - Implemented

    Comments: Customs' 5-year plan and annual plan provided detailed actions to improve its staff training program. One of the objectives is to redesign training content and to more effectively combine formal and on-the-job training components. Another objective is to use business process improvements techniques to enhance the ability to identify gaps between existing and required skill levels.

    Recommendation: In addition to continuing to address the recommendations of the Blue Ribbon Panel, the Treasury Inspector General, and the internal study of OHR, the Commissioner of Customs should evaluate the quality of Customs' training program and staff training needs from an agencywide perspective.

    Agency Affected: Department of the Treasury: United States Customs Service

  19. Status: Closed - Not Implemented

    Comments: From a practical standpoint, Customs is not looking at this area. The recommendation is no longer applicable because Customs' reorganization realigned personnel and processes in line with its business improvement plan to ensure oversight responsibility, accountability, linkages with other processes, and standards and measures to better serve the internal and external customers of each process.

    Recommendation: In addition to continuing to address the recommendations of the Blue Ribbon Panel, the Treasury Inspector General, and the internal study of OHR, the Commissioner of Customs should measure and evaluate the extent of staff changes and their impact on the organization.

    Agency Affected: Department of the Treasury: United States Customs Service

  20. Status: Closed - Implemented

    Comments: OHR completed a human resource management plan for four occupations. These reports provide the framework for addressing workforce and occupational trends with a focus on future program and recruiting needs. Customs has also initiated studies of its recruitment activities, training, and workforce database needs.

    Recommendation: In addition to continuing to address the recommendations of the Blue Ribbon Panel, the Treasury Inspector General, and the internal study of OHR, the Commissioner of Customs should develop empirically based staff allocation models that more closely correlate resources with workload.

    Agency Affected: Department of the Treasury: United States Customs Service

  21. Status: Closed - Implemented

    Comments: The Assistant Commissioner for Human Resources coordinates national training efforts, but other training occurs at the local level (e.g. ports) that is not under direct central control. However, Customs believes that the intent of this recommendation was met by establishing the Office of Human Resources Management and vesting most training oversight in that office, and plans no further action.

    Recommendation: In addition to continuing to address the recommendations of the Blue Ribbon Panel, the Treasury Inspector General, and the internal study of OHR, the Commissioner of Customs should develop central control over training budgets to account for all training programs, course expenditures, reporting, and attendance.

    Agency Affected: Department of the Treasury: United States Customs Service

  22. Status: Closed - Implemented

    Comments: The Office of Human Resources Management is working toward developing plans, goals, and workload measures as part of its GPRA process. GAO's report on the Blue Ribbon Panel confirms Customs' progress (See GGD-96-163).

    Recommendation: In addition to continuing to address the recommendations of the Blue Ribbon Panel, the Treasury Inspector General, and the internal study of OHR, the Commissioner of Customs should institute a human resource management program that identifies agencywide work force issues affecting accomplishment of Customs' mission, establishes measurable goals, develops implementation plans, and monitors and evaluates progress toward achieving these goals.

    Agency Affected: Department of the Treasury: United States Customs Service

  23. Status: Closed - Implemented

    Comments: Customs continues to address the Blue Ribbon Panel recommendations and, as of April 1996, had implemented most of them. In addition, the Office of Human Resources Management, led by an Assistant Commissioner, was established to centralize Customs human resources support functions.

    Recommendation: In addition to continuing to address the recommendations of the Blue Ribbon Panel, the Treasury Inspector General, and the internal study of the Office of Human Resources (OHR), the Commissioner of Customs should develop a central capability for leading an agencywide human resource management program.

    Agency Affected: Department of the Treasury: United States Customs Service

  24. Status: Closed - Implemented

    Comments: Customs centralized responsibility of the IRM review program under the Office of Information Management. Other efforts include an IRM handbook, an automated reporting system, and the designation of IRM review coordinators in field and headquarters offices. A recent Treasury review of Customs' IRM planning and review process indicates vast improvement.

    Recommendation: The Commissioner of Customs should provide the top management commitment to effectively manage Customs' information resources by emphasizing the importance of information resources management reviews as a means of testing the adequacy of information management plans and systems development and implementation practices.

    Agency Affected: Department of the Treasury: United States Customs Service

  25. Status: Closed - Implemented

    Comments: In early 1996, GAO issued a report critical of Custom's efforts to adhere to federal system development guidelines. Corrective action is ongoing (See AIMD-96-57).

    Recommendation: The Commissioner of Customs should provide the top management commitment to effectively manage Customs' information resources by ensuring that Customs adheres to federal systems development guidelines.

    Agency Affected: Department of the Treasury: United States Customs Service

  26. Status: Closed - Implemented

    Comments: The ADP Steering Committee continues to determine ADP priorities and serves as a focal point for coordinating all projects that cross functional lines.

    Recommendation: The Commissioner of Customs should provide the top management commitment to effectively manage Customs' information resources by exerting leadership in ensuring that Customs' information needs are defined and an architecture is developed to guide Customs in creating efficient and effective information management systems.

    Agency Affected: Department of the Treasury: United States Customs Service

  27. Status: Closed - Implemented

    Comments: Customs developed and implemented a comprehensive Trade Enforcement Plan focused on, but not limited to, eight primary industries in the U.S. economy. Customs considers this plan fully operational and responsive to the recommendation. The plan includes a statistically valid compliance measurement system that provides a baseline for measuring importing compliance of the eight industries, and of other selected commodity groups. The eight industries include automobiles and parts, steel and telecommunications. The baseline allows Customs to ensure future compliance by the industries and to take appropriate action through an informed compliance approach, rather than concentrating on trade law violations. Prior to developing the plan, Customs did not have an institutional standard for the significance of violations discovered. More than 60 percent were marking violations, inaccurate representations of required information on imports, judged not very significant by Customs.

    Recommendation: The Secretary of the Treasury should direct the Commissioner of Customs to reassess Customs' trade enforcement activities and develop measurable objectives for Customs' trade enforcement mission.

    Agency Affected: Department of the Treasury

 

Explore the full database of GAO's Open Recommendations »

Oct 10, 2014

Sep 30, 2014

Sep 22, 2014

Jul 9, 2014

May 14, 2014

Apr 30, 2014

Mar 26, 2014

Jan 13, 2014

Dec 9, 2013

Dec 6, 2013

Looking for more? Browse all our products here