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entitled 'State Department: Stronger Action Needed to Improve Oversight 
and Assess Risks of the Summer Work Travel and Trainee Categories of 
the Exchange Visitor Program' which was released on October 19, 2005. 

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Report to the Chairman, Subcommittee on Immigration, Border Security, 
and Claims, Committee on the Judiciary, House of Representatives: 

October 2005: 

State Department: 

Stronger Action Needed to Improve Oversight and Assess Risks of the 
Summer Work Travel and Trainee Categories of the Exchange Visitor 
Program: 

GAO-06-106: 

GAO Highlights: 

Highlights of GAO-06-106, a report to the Chairman, Subcommittee on 
Immigration, Border Security, and Claims, Committee on the Judiciary, 
House of Representatives: 

Why GAO Did This Study: 

Exchange programs, which bring over 280,000 foreign visitors to the 
United States annually, are widely recognized as an effective way to 
expose citizens of other countries to the American people and culture. 
Past GAO and the Department of State (State) Office of Inspector 
General reviews have reported that some exchange visitors have 
participated in unauthorized activities and cited problems in the 
management and oversight of the programs. Strong management oversight 
is needed to ensure that the programs operate as intended and are not 
abused. 

This report examines how State manages the Summer Work Travel and the 
Trainee programs to ensure that only authorized activities are carried 
out under the programs and identifies potential risks of the programs 
and the data available to assess these risks. 

What GAO Found: 

State has not exerted sufficient management oversight of the Summer 
Work Travel and the Trainee programs to guard against abuse of the 
programs and has been slow to address program deficiencies. State 
attempts to ensure compliance with program regulations through its 
processes of approving and annually reviewing the organizations that 
sponsor exchange visitors. These processes, however, are not sufficient 
to ensure that visitors participate only in authorized activities 
because the procedures consist primarily of document reviews, and State 
rarely visits the sponsors or host employers of the exchange visitors 
to make sure they are following the rules to investigate complaints. 
Moreover, some sponsors have asserted that the program regulations need 
updating. Further, State officials believe that the sanctions provided 
in the regulations are difficult to enforce. State acknowledged that it 
has been slow to address identified deficiencies and update the 
regulations, but had indicated that it is beginning to revise the 
regulations and is establishing a unit to monitor exchange activities. 
However funding of the unit has not been secured. 

A number of potential risks are associated with the programs, including 
that exchange visitors might use it to remain in the United States 
beyond their authorized time. There is also the potential for the 
Trainee Program to be misused as an employment program. Further, 
negative experiences for exchange participants could undermine the 
purpose of the programs. However, State has little data to measure 
whether such risks to the program are significant. As a result, State 
cannot determine if additional management actions are needed to 
mitigate the risks. 

Summer Work Travel Participants and Trainee Participants, 2003 and 2004 

Program: Summer Work Travel; 
2003: 88,000; 
2004: 89,453[A]. 

Program: Trainee; 
2003: 31,084; 
2004: 27,475. 

Source: The Department of State. 

[A] As of November 2004. 

[End of table] 

What GAO Recommends: 

This report recommends that the Secretary of State take strong action 
to enhance the overall management and monitoring of the Summer Work 
Travel and Trainee programs, including fully implementing a compliance 
unit to monitor exchange activities; updating and amending regulations; 
and developing strategies to obtain data on overstays, program abuses, 
and other risks associated with the programs. State acknowledged 
weaknesses in the programs and described actions it is taking to 
address our recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-06-106. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Jess Ford (202) 512-4128 
or fordj@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

State Has Maintained Limited Oversight of Exchange Programs: 

State Has Not Assessed Potential Risks: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of State: 

Appendix III: GAO Contacts and Staff Acknowledgments: 

Table: 

Table 1: Top-10 Countries Participating in the Summer Work Travel and 
the Trainee Programs in 2004: 

Figures: 

Figure 1: J-1 Visas Issued Fiscal Years 1995-2004: 

Figure 2: Roles and Responsibilities of Sponsoring Organizations: 

Abbreviations: 

DHS: Department of Homeland Security: 

OMB: Office of Management and Budget: 

OIG: Office of Inspector General: 

SEVIS: Student and Exchange Visitor Information System: 

Letter October 14, 2005: 

The Honorable John N. Hostettler: 
Chairman, 
Subcommittee on Immigration, Border Security, and Claims: 
Committee on the Judiciary: 
House of Representatives: 

Dear Mr. Chairman: 

Exchange programs are widely recognized as an effective way to expose 
citizens of other countries to the American people and culture. 
According to former Secretary of State Colin Powell, a good stay in 
this country is the best public diplomacy tool the United States has. 
The Department of State's (State) 2004 public diplomacy strategy calls 
for broader and deeper use of exchanges--people-to-people contacts-- 
that, according to the strategy, can change hearts and minds. More than 
280,000 foreign nationals travel to the United States annually using a 
J-1 visa[Footnote 1] to participate in the Exchange Visitor Program. 
This program encompasses 13 categories of educational and cultural 
exchanges designed to enhance understanding between the people of the 
United States and those of other countries. Among the largest exchange 
programs are the Summer Work Travel Program, which allows bona fide 
foreign college and university students to learn about life in the 
United States through temporary work and travel, and the Trainee 
Program, which, through a structured training program, allows 
participants to enhance their skills in their chosen career field. 
State's Bureau of Educational and Cultural Affairs administers the 
Exchange Visitor Program through the Office of Exchange Coordination 
and Designation. Past GAO and State Office of Inspector General (OIG) 
reviews cited a few specific cases where J-1 visa holders participated 
in unauthorized activities and cited problems in program management. In 
particular, the OIG reported instances where companies were using 
exchange visitors to fill regular staff positions and not trainee 
positions as mandated by the Exchange Visitor Program 
regulations.[Footnote 2] 

This report (1) examines how State manages the Summer Work Travel and 
the Trainee programs to ensure that only authorized activities are 
carried out under the programs and (2) identifies potential risks of 
the programs and the data available to State to assess these risks. 

To accomplish our objectives, we reviewed previous GAO and OIG reports 
and examined current and proposed program regulations, State cables, 
sponsoring organizations' annual reports, agency databases, and other 
information pertaining to the Summer Work Travel and Trainee programs. 
We also met with representatives of nine sponsoring organizations of 
the Summer Work Travel Program that accounted for 75 percent of the 
participants in 2004 and representatives of 13 sponsors of the Trainee 
Program that accounted for 54 percent of the participants in 2004. 
Additionally, we visited three overseas posts--Minsk, Belarus; Warsaw, 
Poland; and Dublin, Ireland--where we discussed the programs with U.S. 
embassy officials, including consular officers, and the overseas 
partners of the U.S. sponsors of the exchanges. We selected these posts 
because they are among the top sending countries for the Summer Work 
Travel Program. We focused on the Summer Work Travel and the Trainee 
programs because they bring in nearly one-half of the Exchange Visitor 
Program participants. In addition, the Trainee Program was the subject 
of a 2000 OIG report. We conducted our review from November 2004 to 
August 2005 in accordance with generally accepted government auditing 
standards. Appendix I provides more information on our scope and 
methodology. 

Results in Brief: 

State has not exerted sufficient management oversight of the Summer 
Work Travel and the Trainee programs to ensure that only authorized 
activities are undertaken. Sponsoring organizations, employers, third- 
party organizations, and exchange visitors are required to comply with 
the Exchange Visitor Program regulations. These regulations require, 
for example, that sponsors monitor the exchange visitors to ensure that 
they engage only in activities consistent with the Exchange Visitor 
Program category listed on their certificate of eligibility. State 
attempts to ensure compliance with the regulations through its 
processes of designating and redesignating (every 2 years) 
organizations that sponsor J-1 exchange visitors. However, the process 
of redesignating sponsor organizations and the review of sponsors' 
annual reports are not sufficient to ensure that visitors participate 
only in authorized activities. State officials rarely visit the 
sponsors, host employers or third-party organizations of the exchange 
participants to ensure compliance with the rules or investigate 
complaints. For example, in the last 4 years, State officials made just 
eight visits to its 206 designated Summer Work Travel and/or Trainee 
sponsors. Moreover, some sponsors stated that the regulations need 
updating to clarify how the programs should be implemented. In 
addition, State officials in charge of the programs said the sanctions 
outlined in the regulations are difficult to enforce. State is 
currently establishing a compliance unit and revising the regulations, 
including developing new sanction regulations; but these changes have 
not been fully implemented. 

There are a number of potential risks associated with the Summer Work 
Travel and the Trainee exchange programs. These include the potential 
risk of (1) foreign nationals using the program as a means of entering 
the United States and remaining illegally after their visa expires; (2) 
the Trainee Program being misused as a work program; and (3) exchange 
participants being exploited, resulting in negative experiences, which 
could undermine the purpose of the programs. State and Department of 
Homeland Security (DHS) officials and some sponsors that we met with 
provided evidence of such abuse. For example, DHS and the overseas 
posts provided data on potential overstays[Footnote 3] that indicated 
that some exchange visitors had remained in the United States after 
their programs concluded. As an example of abuse of the Trainee 
Program, State and some of the sponsors described an incident in which 
650 electrical engineers entered the United States to participate in 
training programs but were instead employed on construction projects as 
electricians, contrary to the program's intent. In another example, a 
State official described an incident in which about 45 current Summer 
Work Travel participants were placed in substandard housing, which was 
apparently leased by an employee of the sponsoring organization. GAO 
internal control standards instruct agencies to identify risks that 
could impede the efficient and effective achievement of program 
objectives and assess their impact. However, State has insufficient 
data to assess whether potential risks to the programs are significant. 
For example, due to weaknesses in the DHS' system for tracking 
visitors' arrivals and departures,[Footnote 4] the full extent of the 
overstays is not known. Moreover, State does not systematically 
document program abuse. Furthermore the State and the Department of 
Labor (Labor) do not compile or analyze data concerning the potential 
impact of program abuse on the U.S. labor market, although Labor 
officials said that it is not likely that the exchange programs will 
have any effect on U.S. employment opportunities because of the small 
number of J-1 exchange visitors relative to the U.S. workforce. 
Additionally, State does not know the extent to which participants have 
negative experiences because it does not systematically document and 
analyze reports of complaints made by program participants and serious 
problems submitted by the sponsors. 

This report recommends that the Secretary of State take the following 
three actions to enhance the overall management and monitoring of the 
Summer Work Travel and the Trainee programs: 

* fully implement a compliance unit to better monitor Exchange Visitor 
Program activities and address deficiencies; 

* update and amend the regulations where necessary; and: 

* develop strategies to obtain data, such as information on overstays 
and labor market abuses, to assess the risks associated with the 
exchange program categories, and use the results of its assessment to 
focus its management and monitoring efforts. 

In commenting on a draft of this report, State acknowledged weaknesses 
in its oversight and administration of the Exchange Visitor Program and 
reported that it has designated program oversight and administration as 
a weakness under the Federal Managers Financial Integrity Act.[Footnote 
5] State described a number of actions it is taking to implement each 
of our recommendations. 

Background: 

The Mutual Educational and Cultural Exchange Act of 1961[Footnote 6] 
authorizes the J-1 Exchange Visitor Program. The program provides 
foreign nationals with opportunities to participate in exchange 
programs in the United States and return home to share their 
experiences, while also encouraging Americans to participate in 
educational and cultural programs in other countries. Foreign nationals 
who participate in the program enter the United States with a J-1 visa. 
The program has grown considerably over the years. Figure 1 shows the 
number of J-1 visas issued since 1995. 

Figure 1: J-1 Visas Issued Fiscal Years 1995-2004: 

[See PDF for image] 

Source: GAO analysis of Department of State data. 

[End of figure] 

The program is comprised of 13 categories of exchanges, which are 
grouped under private sector programs or academic and government 
programs. The private sector programs include the Alien Physician, Au 
Pair, Camp Counselor, Summer Work Travel, and Trainee categories. The 
academic and government programs include the Government Visitor, 
International Visitor, Professor and Research Scholar, Short-Term 
Scholar, Specialist, Student (Secondary School Student, 
College/University Student), and Teacher categories. The Exchange 
Visitor Program had about 282,000 exchange visitors in the 13 program 
categories for fiscal year 2004. 

State's Bureau of Educational and Cultural Affairs administers the 
Exchange Visitor Program through the Office of Exchange Coordination 
and Designation. This office administers the program through the 
designation of United States organizations to conduct exchange programs 
in the various exchange categories. There are 1,457 designated exchange 
programs. Designated sponsors are responsible for screening and 
selecting qualified applicants for program eligibility. The office 
determines which organizations will be designated to administer the 
international exchange programs on the basis of information provided 
during the application process in accordance with regulatory 
requirements. The office also develops and administers policy and 
regulations for the exchange categories and oversees sponsoring 
organizations' compliance. 

Sponsors may be for profit or nonprofit organizations; businesses; 
state, local, or federal government agencies; and education-related 
institutions. Sponsors sometimes contract with overseas organizations-
-such as student travel agencies--as local partners to help identify 
and screen exchange program applicants. Some sponsors serve as 
intermediaries between the exchange visitor and a third party, which 
engages the exchange visitor in the program activity for the category 
in which they are being sponsored. For example, for trainees, the third 
parties are the organizations where the exchange visitors will receive 
training. Third parties consist of a variety of organizations, which 
include--but are not limited to--hotels, law firms, restaurants, 
Internet companies, and other private and public sector businesses and 
organizations. Sponsors are responsible for overseeing the operations 
of their overseas partners, and any third parties they work with. 

Also chief among the sponsors' responsibilities is that of managing 
information on the exchange participant in DHS' Student and Exchange 
Visitor Information System (SEVIS), which has been in operation since 
January 2003. SEVIS, which is maintained and administered by DHS' U.S. 
Immigration and Customs Enforcement, is an Internet-based system that 
electronically collects information on all nonimmigrants that enter the 
United States with student visas and exchange visitor visas, and their 
dependents. Once a participant's data are entered into SEVIS by the 
sponsor, a Form DS-2019 is issued by the system in the applicant's 
name. This identifying information in SEVIS can be reviewed by a 
consular officer at the time of the visa interview and during the 
processing of the exchange visitor at the port of entry. Upon the 
arrival of the Exchange Visitor Program participant, the sponsor is 
required to document their participation in their program activity and 
record information on the location of the visitor's employment or 
training and U.S. residence address. Figure 2 describes the sponsoring 
organizations' roles and responsibilities. 

Figure 2: Roles and Responsibilities of Sponsoring Organizations: 

[See PDF for image] 

[End of figure] 

Summer Work Travel and Trainee Programs: 

The Summer Work Travel Program is among the largest of the 13 
categories of exchanges, with about 89,453[Footnote 7] participants in 
2004. This program is designed to achieve the educational objectives of 
international exchange by involving bona fide foreign college or 
university students directly in the daily lives of U.S. citizens 
through travel and temporary work opportunities. The Trainee Program, 
with about 27,475 participants in 2004, provides foreign nationals the 
opportunity to enhance their skills in their chosen career field 
through participation in a structured training program. Summer Work 
Travel sponsors help the participants obtain jobs[Footnote 8] and 
provide pre-arrival information, an orientation to life in the United 
States, and contact information in the event of problems. Sponsors of 
trainees are also required to provide pre-arrival information to the 
trainees and are directly responsible for all aspects of the trainees' 
program, including the selection, orientation, training, supervision, 
and evaluation. About 52 Summer Work Travel and 170 Trainee sponsors 
operated programs in 2005.[Footnote 9] 

Thousands of employers participate in the Summer Work Travel and the 
Trainee programs. Typical Summer Work Travel employers include 
amusement parks, resorts, hotels, and restaurants. The jobs generally 
include ride operators, waiters, lifeguards, receptionists, and guides. 
The types of organizations that utilize trainees include corporations, 
architectural firms, hotels, restaurants, development organizations, 
airlines, investment and financial services entities, and manufacturing 
companies. The participants are placed in locations wherein they 
receive training in engineering, drafting and design, biomedical 
technology, agricultural technology, hospitality administration and 
management, marketing, agricultural and food products processing, 
culinary arts and chef training, financial management, and many other 
careers. 

Throughout the existence of the Summer Work Travel Program, there has 
been a geographic shift in which countries provide the most program 
participants. In the past, Western Europe had the largest numbers of 
participants. However, more recently, the largest numbers of Summer 
Work Travel participants have been citizens of Eastern European 
countries, including Poland, Bulgaria, Czech Republic, and Romania. 
Table 1 lists the 10 countries with the largest numbers of Summer Work 
Travel and Trainee participants. 

Table 1: Top-10 Countries Participating in the Summer Work Travel and 
the Trainee Programs in 2004: 

Summer Work Travel Program: Country: Poland; 
Summer Work Travel Program: Number of participants: 18,691; 
Trainee Program: Country: Germany; 
Trainee Program: Number of participants: 3,021. 

Summer Work Travel Program: Country: Russia; 
Summer Work Travel Program: Number of participants: 9,962; 
Trainee Program: Country: France; 
Trainee Program: Number of participants: 1,748. 

Summer Work Travel Program: Country: Bulgaria; 
Summer Work Travel Program: Number of participants: 6,993; 
Trainee Program: Country: United Kingdom; 
Trainee Program: Number of participants: 1,023. 

Summer Work Travel Program: Country: Slovakia; 
Summer Work Travel Program: Number of participants: 5,581; 
Trainee Program: Country: Canada; 
Trainee Program: Number of participants: 660. 

Summer Work Travel Program: Country: Brazil; 
Summer Work Travel Program: Number of participants: 5,477; 
Trainee Program: Country: China; 
Trainee Program: Number of participants: 458. 

Summer Work Travel Program: Country: Ireland; 
Summer Work Travel Program: Number of participants: 4,309; 
Trainee Program: Country: Netherlands; 
Trainee Program: Number of participants: 408. 

Summer Work Travel Program: Country: Czech Republic; 
Summer Work Travel Program: Number of participants: 3,053; 
Trainee Program: Country: Mexico; 
Trainee Program: Number of participants: 403. 

Summer Work Travel Program: Country: Peru; 
Summer Work Travel Program: Number of participants: 2,978; 
Trainee Program: Country: Japan; 
Trainee Program: Number of participants: 371. 

Summer Work Travel Program: Country: Romania; 
Summer Work Travel Program: Number of participants: 2,901; 
Trainee Program: Country: Ireland; 
Trainee Program: Number of participants: 364. 

Summer Work Travel Program: Country: Belarus; 
Summer Work Travel Program: Number of participants: 2,607; 
Trainee Program: Country: India; 
Trainee Program: Number of participants: 344. 

Source: Department of State. 

[End of table] 

State Has Maintained Limited Oversight of Exchange Programs: 

State has not exerted sufficient management oversight of the Summer 
Work Travel and the Trainee programs to guard against abuse of the 
programs. State primarily ensures compliance with program regulations 
through a paperwork review, and there is inconsistent monitoring by 
sponsors. Moreover, some sponsors believe that the program regulations 
need updating, and State officials have expressed concerns about the 
enforceability of the sanction/revocation process provided for in the 
Exchange Visitor Program regulations. Sponsors have also expressed 
concern about their communication with State. State has acknowledged 
problems, is establishing a compliance unit to monitor program 
activities, and is revising the regulations; however progress has been 
slow. 

State's Monitoring Efforts Are Minimal: 

State's monitoring efforts largely consist of reviewing written 
information provided by sponsors, with minimal efforts of verifying 
such information through program visits. State relies on sponsors to 
provide written information, primarily through annual reports, which 
describe the number of individuals a sponsor has placed and a brief 
narrative on program activities, difficulties encountered, and their 
resolution. Exchange program regulations require that sponsors promptly 
notify State about any serious problem or controversy that could cause 
State or the sponsor's Exchange Visitor Program notoriety or disrepute. 
When a sponsor reports a problem, State officials follow-up by 
telephone, e-mail, fax or letter, according to sponsors and State 
officials. However, State rarely visits sponsors to observe program 
activities and verify the information that they provide, although such 
visits are a good internal control practice for ensuring that 
management's directives are being carried out. We found that in the 
past 4 years, State officials made visits to only 8 of its 206 Summer 
Work Travel and/or Trainee sponsors. 

Additionally, information on problematic incidents provided by the 
sponsors and any notes or correspondence on the matter are filed as 
part of the material that is examined when the sponsor applies for 
redesignation, which is required every 2 years.[Footnote 10] In their 
applications for redesignation to State, all sponsors are required to 
estimate the number of exchange visitors their organization would like 
to place and provide information on their legal, financial, and 
managerial resources to manage exchange programs in compliance with 
federal regulations. State reviews these applications along with the 
annual reports and other documentation collected over the 2-year period 
and determines whether it should grant a 2-year designation to a 
sponsor and the number of participants the sponsor will be authorized 
to include in their exchange program activity. The vast majority of 
sponsors who apply for redesignation are approved. State officials said 
that their staffing levels and lack of travel funds do not allow for 
intensive monitoring of the Exchange Visitor Program sponsors. The 
Office of Exchange Coordination and Designation has five Program 
Designation officers who serve as the point of contact and are 
responsible for the day-to-day administration and management of the 13 
exchange programs. 

Sponsors' Monitoring of Employers and Third Parties Is Limited: 

Exchange Visitor Program regulations require sponsors to effectively 
administer and monitor their Exchange Visitor Program and ensure 
exchange participants engage in activities consistent with the 
appropriate exchange category. Nevertheless, recent discoveries by 
consular officers overseas suggest that some sponsors do not 
consistently carry out their oversight and monitoring responsibilities. 
For example: 

* A trainee applicant submitted a training offer that included the name 
and organizational information of a legitimate financial services 
company, but listed as a contact an individual with a noncompany e-mail 
address. When the consular officer checked the contact information, he 
learned that the contact person was not affiliated with the financial 
services company. The sponsor admitted to only spot-checking the 
viability of third party organizations and training plans. 

* When a consular officer at another post checked a company's Web site 
to verify the job offer of a foreign student applying for the Summer 
Work Travel Program, he discovered that the company was a topless bar. 

* In another case, consular officers noticed a number of trainee 
applicants who said they were going to the United States to work as 
kitchen help and wait staff. When State contacted the U.S. sponsor 
about these applicants, the sponsor stated that it relied on another 
organization to help it select and place the trainees and admitted that 
it had not followed up directly with each trainee and employer to 
ensure that its standards were being satisfied. 

Sponsors are required to take all reasonable steps to ensure that third 
parties know and comply with applicable provisions of the Exchange 
Visitor Program regulations. However, State does not offer any guidance 
on how the sponsors should carry out their monitoring and oversight 
responsibilities. Two of the sponsors we met with said that, after they 
discovered that trainees whom they had sponsored were not receiving any 
training, they established new practices to visit at least 10 percent 
of their exchange program participants and all employers and exchange 
participants where there were problems. 

Various Concerns Exist About Program Regulations: 

During our review, several sponsors we met with raised concerns about 
the clarity of the program regulations and also complained that varying 
interpretations of the regulations make it difficult for them to 
implement the program. Moreover, State officials believed that the 
sanctions provided in the regulations are not adequate to control the 
activities of sponsors who incorrectly implemented the program. State 
has been revising the regulations but has not finalized the changes. 

Regulations Need Revising: 

Six of the 13 sponsors that we met with described a range of problems 
pertaining to the regulations, particularly regarding the Trainee 
Program. Their comments included the following: 

* The Trainee regulations lack specificity and are open to differing 
interpretation by State and the sponsors. 

* Dealing with State has become more complicated for sponsor 
organizations because State has at times changed rules outside of the 
formal regulation-setting process. 

* The Trainee regulations are so cumbersome that it is unclear what 
should be included in a training plan. 

* Training plans vary widely among sponsors, and there is no guidance 
on what constitutes a good plan. 

* The regulations should include a separate category for interns. 

A past OIG report also cited problems with the regulations and 
recommended in particular that, for the Trainee Program, the training 
regulations should more clearly define what is not considered 
training.[Footnote 11] 

Six of the sponsors we met with and the representative of an 
association of sponsors expressed concern with State's interpretation 
of certain provisions of the regulations, while seven sponsors and the 
association representative also said that State does not consistently 
disseminate its interpretations or guidance on the regulations to the 
sponsors. For example, the regulations state that the maximum period of 
the participation in the Exchange Visitor Program for a trainee, with 
the exception of flight training, shall not exceed 18 months. Some 
sponsors said they interpreted this provision to mean that an 
individual could come to the United States one or more times as a 
trainee as long as the combined duration of the visits did not exceed 
18 months. In 2002, however, some sponsors said they were told that the 
Trainee Program was restricted to a one-time training session not to 
exceed 18 months. This clarification in regulations has surprised some 
sponsors, according to one of the sponsors who was notified about this 
change through a fax from State. A State official explained that all 
Trainee sponsors were sent a message through SEVIS in October 2003, 
explaining State's policy on this matter. According to the 
documentation, the message was to be addressed to all sponsors that 
conduct Trainee programs and all responsible officers and their 
alternates. 

Moreover, a few sponsors said guidance or interpretations of various 
provisions of the regulations have been communicated inconsistently. 
For example, representatives of two sponsoring organizations said that 
State is no longer requiring that sponsors recruit no more than 10 
percent of repeat Summer Work Travel participants, as specified in the 
regulations, but State did not make any formal effort to inform the 
sponsors of the change. One of the sponsors said that the organization 
learned about the change from the U.S. Embassy in Warsaw. A State 
official explained that policy changes are announced in the Federal 
Register or by written notice to all sponsors. According to the 
official, two cables were sent to all overseas posts clarifying the 
requirements of the Summer Work Travel Program and the removal of the 
10 percent rule regarding repeat participants. In addition, copies of 
these cables were sent, by e-mail, to all Summer Work Travel sponsors, 
according to the official. 

State Officials Believe Regulations Lack Enforceable Sanctions: 

State is also reviewing the sanctions provided in the regulations. 
State officials, including the Principal Deputy Assistant Secretary of 
the Bureau of Educational and Cultural Affairs, said the current 
sanction/revocation process that State may use to limit the activities 
of sponsors that do not comply with the regulations--or remove a 
sponsor from the program altogether--is difficult to enforce. The 
sanctions range in severity from a letter of reprimand to an action to 
revoke a sponsor's designation. One sanction that State uses is to deny 
the sponsor's request for certification forms until the compliance 
issue has been resolved. For example, State officials described a 
recent case in which State's attempt to revoke a sponsor's designation 
was challenged by the sponsor in district court. In this case, State 
received complaints from two trainees who alleged they were not 
receiving the training that they had expected and were displeased with 
their training assignments and compensation. The sponsor in this case 
had placed individuals in positions in the hospitality industry. State 
investigated the sponsor's operation, interviewed a number of program 
participants, and concluded that the sponsor was not placing 
participants in management training positions but was operating a work 
program, in violation of the regulations. State's in-house revocation 
board agreed and supported the sanction of revocation. However, in 
remanding the matter to the board for further proceedings, the district 
court concluded that State's investigation had been too limited and had 
not produced evidence adequate to support the severe punishment of 
revocation. After a second hearing, the board overturned the 
revocation, thereby enabling the sponsor to resume its program. State 
concluded that the sanctions' provisions needed streamlining and 
tightening for more effective and assured application. 

State Slow to Revise Regulations: 

State has acknowledged that the regulations need revising; however, 
more than 3 years after revisions were suggested by the exchange 
industry they are still in draft form. According to the Acting Director 
of the Office of Exchange Coordination and Designation revisions are in 
process. For example, State is revising the Trainee regulations to 
create a separate Intern category to accommodate younger, less 
experienced applicants, such as students or recent university graduates 
seeking to gain practical work experience. The exchange community 
generally supports the creation of a new Intern category and, in 
November 2001, an association of organizations that sponsor exchange 
students submitted its proposals for revising the regulations to State. 
The Acting Director of the Office of Exchange Coordination and 
Designation said that the sections of the regulations on interns and 
trainees are still being reviewed at State and attributed the delay in 
completing the regulations to the review process. He also stated that 
State's Office of Legal Advisor was given the responsibility to develop 
new sanctions for the program 2 years ago. According to the Assistant 
Legal Advisor for Public Diplomacy and Public Affairs, revised 
sanctions regulations were drafted and shared with the Bureau of 
Educational and Cultural Affairs for review and comment. The Assistant 
Legal Advisor stated that recent guidance from the Bureau's Principal 
Deputy Assistant Secretary suggested that further revisions were 
warranted to best suit evolving program needs. Once State has completed 
its review, the Department of Justice will be consulted prior to 
publication of the revised regulations. She stated that while this 
process could take an additional 2 to 6 months to complete, the timing 
should fall well within the time lines and milestones set forth in a 24-
month corrective action plan proposed by the Bureau in March 2005. 

Communication between State and Sponsors and with Posts Has Raised 
Concerns: 

According to GAO guidance on internal controls, managers should ensure 
that effective external communications occur with groups that impact 
its program, projects, operations, and other activities. According to 
seven of the sponsors we met with and the organization representing 
sponsors, communication with State is a problem. For example, one 
sponsor described State as reactive rather than proactive in its 
communication practices. Representatives of four of the sponsoring 
organizations complained that program officers were not always 
responsive to their inquiries or were difficult to reach. Some sponsors 
attributed the difficulties to an insufficient number of State staff. 

Some sponsors also complained about a lack of feedback from a study 
commissioned by State on SEVIS compliance and other issues, which was 
completed in December 2003. The report concluded that in some cases the 
sponsors' staff was not adequately trained, that the sponsors did not 
maintain required records, and did not fully provide oversight of their 
foreign partners, employers, third-party organizations, or the exchange 
participants. The report made a number of recommendations on how State 
should further clarify the program regulations and help train the 
sponsors on both State regulations and their role in maintaining SEVIS 
data. We met with six sponsors that participated in the study, and none 
had received feedback from State on the results of the study. One said 
the Acting Director of the Office of Exchange Coordination and 
Designation made some general comments about the study at a meeting of 
an industry association. 

Communication between the Office of Exchange Coordination and 
Designation and the overseas posts has also been cited as a concern. 
For example, one sponsor said there is no mechanism to ensure 
consistent interpretation of the regulations by the overseas posts, 
while another said the posts are the last to know about program 
changes. For example, a sponsor said that even though the office has 
told them that applicants can have only one trainee placement, one post 
was still telling applicants in 2004 that they can participate more 
than once. Further, a representative of an exchange industry 
organization stated that the Office of Exchange Coordination and 
Designation knows too little about what is really going on in the 
field. This situation may have been the reason ineligible students from 
at least one country, Ireland, were allowed to participate in the 
Summer Work Travel Program for over 30 years before an apparent 
misinterpretation of the regulations was discovered. In 2002, a 
consular officer in Dublin asked for clarification on the eligibility 
of students who had completed their course work but had not formally 
graduated, according to an embassy official. In response, State 
instructed the posts not to change their selection procedures for the 
2003 season. However, according to the Acting Director of Office of 
Exchange Coordination and Designation, State ultimately confirmed that 
such students were not eligible for the program, unless they could 
demonstrate enrollment in another degree program, and sent a cable to 
the posts with its decision in 2004. According to the local program 
representatives, such students had constituted up to a third of the 
participants from Ireland. 

Establishment of a Compliance Unit Not Fully Implemented: 

State has been slow to implement the OIG's 2000 recommendation that it 
devote the necessary resources to perform more rigorous oversight. The 
Principal Deputy Assistant Secretary of the Bureau of Educational and 
Cultural Affairs and the Acting Director of the Office of Exchange 
Coordination and Designation acknowledged that State has been slow to 
establish a compliance unit. The Acting Director of the Office of 
Exchange Coordination and Designation said funding to establish a 
compliance unit has been requested for several years without success. 
The Bureau requested funding in fiscal years 2002 and 2003 for five 
additional positions for the compliance unit, but State did not approve 
the request for submission to the Office of Management and Budget 
(OMB), according to a State official. The Principal Deputy Assistant 
Secretary of the Bureau of Educational and Cultural Affairs stated that 
the unit was not funded initially because of a lack of senior 
managerial support. State has since supported the request for funding 
because of congressional interest and the increased emphasis on 
strengthening program management, according to the Principal Deputy 
Assistant Secretary. Subsequent requests for funding for the unit for 
fiscal years 2004 to 2006 were approved by State but not approved by 
OMB. However, the officials told us they realized that the program 
regulations have been ignored by some exchange program sponsors, agreed 
that a compliance unit was needed, and are in the process of the 
establishing the unit by diverting existing positions. 

According to State officials, the unit as it is currently conceived 
would initially consist of one Foreign Service officer and two program 
analysts and will report to the Principal Deputy Assistant Secretary. 
The officials stated that the compliance unit will rely on structured 
reviews conducted by contractors. They said State will utilize the 
system currently in place at DHS, which uses contractors for on-site 
reviews of schools to verify their eligibility to register foreign 
students into the SEVIS system. The contractors will verify the 
information that the sponsors submit as part of the redesignation 
process and may check the names of the responsible and alternate 
responsible officers--and possibly board members--through law 
enforcement databases, according to the State officials. They said that 
as part of the new compliance effort, sponsors for all nonacademic 
exchanges will be required to contract for and submit annual audits of 
their activities. The compliance unit will develop a management 
template to guide the audits. Currently only sponsors of the Au Pair 
Program are required to submit such audits.[Footnote 12] 

It is too early to determine whether implementation of the planned 
compliance unit will resolve all of the issues identified by GAO and 
OIG. For example, using contractors to visit the sponsors will address 
OIG's criticism that State does not visit the sponsors. However, State 
has not determined what information the contractors need to review to 
assess how well the sponsors monitor employers and third parties. 
Moreover, State has not provided a written plan describing in detail 
how the compliance unit will operate. Funding also remains an issue. 
State initially plans to cover the cost of the new compliance unit by 
redirecting current appropriations and obtaining--as agreed upon by 
OMB--about $450,000 of the SEVIS fees collected from exchange program 
sponsors by DHS. Further, State will again request funding for the 
compliance unit in the 2007 budget request. 

State Has Not Assessed Potential Risks: 

GAO internal control standards instruct agencies to identify risks that 
could impede the efficient and effective achievement of its objectives 
and assess their impact. A number of potential risks are associated 
with the Summer Work Travel and the Trainee programs, including the 
risk of participants using the programs to remain in the United States 
beyond their authorized time. Exchange participants may also use the 
programs as a means to fraudulent immigration. There is also the 
potential for the Trainee Program being misused as an employment 
program, although State does not have data on the extent that such 
abuse occurs. The exchange participants could be exploited by employers 
or other third parties. While State investigates complaints, it does 
not know the extent to which participants have negative experiences 
because it does not systematically document and analyze complaints made 
by program participants and reports of serious problems reported by the 
sponsors. 

Some Exchange Participants Have Used the Programs to Remain in the 
United States: 

Although exchange program participants are expected to return to their 
country following completion of their program, there is information 
indicating that some participants remain beyond the time that they were 
authorized to stay. Information on overstays is available from DHS's 
arrival and departure database and the results of returnee validation 
studies conducted by overseas posts. For example, we asked DHS to check 
the total number of J-1 visa recipients in all exchange categories who 
had completed their program since January 2003 against its arrival and 
departure database to determine which visa holders had departed the 
country. The results showed that about 362,000 exchange participants 
had concluded their program during this period. The data showed that 
about 36 percent of the participants had departed the United States by 
the end of their program and about 24 percent were potential 
overstays.[Footnote 13] However, the full extent of overstays is 
uncertain because DHS could not find information on an additional 40 
percent of the J-1 visa holders because they may have entered the 
United States before the current entry system was operational. DHS' 
primary method for estimating overstays is to match the arrival portion 
of a form collected by DHS when the visitor enters the United States to 
the departure portion of the form generally collected by the airlines 
when the visitor departs. One of the weaknesses in this system is that 
the departure portion of the form is not always submitted to airline 
staff. Further, data entry errors by DHS contractors also make it 
difficult to match the forms. The U.S. government is phasing in a more 
comprehensive entry-exit system, US-VISIT, to correct the weaknesses in 
its current system. 

Some overseas posts periodically conduct validation studies to 
determine if visa applicants who received J-1 visas at their post have 
returned to that country. These studies generally consist of telephone 
inquiries to the visa recipient, while some posts have required J-1 
visa recipients to report to the post upon their return. The results 
vary. For example, one post in the former Soviet Union conducted a 
study of its 2004 Summer Work Travel season that showed that, as of 
January 20, 2005, 26 percent of the 2004 participants from that country 
remained in the United States. This post reported overstay rates of 29 
percent for 2003, 25.6 percent for 2002, and 27 percent for 2001. Other 
posts have reported lower overstay rates. For example, a post in a 
Western European country conducted a validation study of its 2004 
Summer Work Travel Program that showed that all of the visa applicants 
in the sample who were issued J-1 visas returned home, as required. The 
posts can use the results of such studies to guide their decision 
making when they adjudicate visas. For example, the post with a 26 
percent overstay rate in 2004 developed additional selection factors 
for the 2005 Summer Work Travel season to assess the potential for 
individuals to return to their country after their programs are 
completed. However, these studies are not always statistically valid. 
Moreover, the Acting Director of Exchange Coordination and Designation 
said the post validation studies are not useful to program officials 
because the posts do not follow a standardized methodology. 

J-1 visitors who remain in the United States beyond their program do 
not necessarily stay for long periods of time, and not all of them 
remain in the United States illegally. According to consular officials 
we talked with at one post, some participants in the Summer Work Travel 
Program from their country who remain in the United States beyond their 
program date might typically overstay anywhere from a few days to no 
more than a few months. The consular officials said the participants 
sometimes remain in the United States longer if they have not earned 
sufficient money to cover their expenses. Others change their visa 
status to another nonimmigrant category. For example, the 2004 
validation study by one post in the former Soviet Union country showed 
that 39 percent of those who had remained in the United States beyond 
the completion of the program had either changed their visa status, got 
married, or were seeking asylum. Changing status from a J-1 visa to 
another visa category is permitted under U.S. immigration laws in 
certain circumstances, but Bureau of Consular Affairs and other 
officials have stated that it is not the intent of the program. 

Potential Exists for Fraudulent Immigration Claims: 

DHS data show that a growing number of J-1 visa holders had applied for 
political asylum between 1995 and 2004, about 6,300 individuals who 
entered the United States with J-1 visas applied for asylum. According 
to DHS, the numbers of asylum applications from J-1 visa holders from 
former Soviet Union countries have more than doubled since 2000. These 
countries include Russia, Belarus, Armenia, and Ukraine. The officials 
are concerned that some of these claims are fraudulent, as they doubt 
that J-1 visa holders--who have to be students in good standing in 
their countries--are being persecuted. The recent increase in numbers 
of such claims and the similarities of the stories--which indicate 
coaching, are also indicators of fraud, according to DHS officials. 
DHS' Fraud Detection and National Security Unit and State's Bureau of 
Consular Affairs Office of Consular Fraud Prevention are monitoring 
this issue. These units would turn over any suspected fraud to U.S. 
Immigration and Customs Enforcement for investigation. According to a 
DHS official, U.S. Immigration and Customs Enforcement is conducting 
asylum fraud investigations in Los Angeles and Cleveland. Among the 
targets of those investigations are individuals who were admitted with 
J-1 visas, as well as several other classes of nonimmigrants. 

Trainee Category Is Vulnerable to Misuse as Employment Program: 

The potential exists for the Trainee Program to be misused as an 
employment program. Regulations strictly prohibit the use of the 
trainee category for ordinary employment purposes, stating in 
particular that sponsors may not place trainee participants in 
positions that are filled or would be filled by full-time or part-time 
employees. State and the overseas posts provided some information 
describing Trainee Program abuses, but they did not have information on 
the extent of the problem. 

* In one example, a sponsor learned that an organization it had 
contracted with to help select and place trainees had placed the 
participants with employers that had contracts to provide H-2B 
temporary workers.[Footnote 14] The organization had participated in 
the Trainee Program because the H-2B visa category was at its limit and 
it was looking for an alternative way to receive foreign workers. 

* In another example, a staffing agency recruited about 650 electrical 
engineers, primarily from Slovakia, Bulgaria, and Romania, to come to 
the United States as trainees. Ostensibly, the plan was to train the 
engineers in the United States because they would be working on 
projects in Europe that required knowledge of U.S. standards. However, 
the organization served as an electrical contractor, placing the 
trainees on U.S. construction projects as electricians. Because it was 
not designated to sponsor trainees, the staffing agency approached a 
few designated sponsors to issue the DS-2019 forms. State received 
complaints from the trainees and the electrician's union and 
investigated this case. To correct the situation, the sponsors and the 
union eventually found appropriate placements for some of the 
engineers. Others returned to their countries. According to a State 
official, the staffing agency went out of business, and the principal 
party was indicted on criminal charges. 

The Acting Director of the Office of Exchange Coordination and 
Designation described agricultural training programs as problematic 
because of the potential for fraud. He said the abuses are not hidden 
and that there is not even an attempt to represent jobs as training, 
and that employers refer to the participants as employees rather than 
trainees. For example, a 2004 DHS investigation involved four Chinese 
nationals brought to the United States by an individual to participate 
in an agricultural program sponsored by a Florida university. The 
trainees were placed with a dairy farm that had an agreement with the 
university. DHS found that only one trainee had a firm grasp of 
English, which called into question the trainees' eligibility for a J- 
1 visa as well as whether the trainees were receiving training or 
simply employed at the farm. Upon further investigation DHS found that 
the individual had brought 17 trainees to the United States to 
participate in the university's training program. The trainees were 
placed at four participating dairies. DHS also found that only one of 
the dairies reported having a structured training plan. According to 
DHS, the university violated regulations concerning sponsoring 
organizations for exchange trainees by failing to ensure that the J-1 
trainees were properly compensated and possessed the required language 
ability to participate in an English language-based training program. 
DHS further stated that the dairies were exploiting the J-1 trainees 
for cheap labor and in most cases were not concerned with actually 
training them beyond what was necessary to perform their work. The 
OIG's 2000 report also described abuse of the Trainee Program. In two 
of the cases that the OIG investigated, U.S. workers complained that 
they were replaced by trainees. 

Despite such misuses, Labor officials stated that it is not likely that 
the exchange programs will have any effect on the U.S labor market 
because of the small number of J-1 exchange visitors (about 283,000 in 
fiscal year 2004) relative to the U.S. workforce.[Footnote 15] However, 
the U.S. government does not collect data to assess any potential 
effect of exchange programs on the U.S. labor market. Labor officials 
said that a monthly household survey, the Current Population Survey, 
reviews a sample of households to compile labor statistics on foreign- 
born workers. However, the numbers of exchange program participants is 
so small that even if they were captured by these surveys there is no 
way to separate out the effect of their labor participation from that 
of the other foreign-born workers. Also, it is possible that exchange 
participants would not be captured in the survey because of their 
housing arrangements. For instance, if they do not reside in 
traditional housing units and live in dormitories or resort-provided 
housing, they may not be included in the survey sample. 

Some Exchange Participants Could Be Exploited or Have Otherwise 
Negative Experiences: 

The Summer Work Travel and Trainee participants generally have positive 
experiences in the United States, according to the sponsors and 
participants we met with. Some sponsors and overseas representatives 
survey their participants on their experiences. One of the sponsors 
said its research showed that about 85 percent of its participants were 
satisfied with their placement. All of the Summer Work Travel and 
Trainee participants whom we met with described their overall 
experiences as positive. 

When the participants do complain, the complaints are generally minor, 
usually involving disappointments with their placement, housing, or 
location. The Office of Exchange Coordination and Designation 
investigates all complaints that are brought to its attention, 
according to State officials. In addition, the regulations require the 
sponsors to inform State of any serious problems or controversy that 
could be expected to bring State or the sponsors' exchange programs 
into disrepute. However, we found that although State may follow up on 
such reports, it does not systematically document or analyze them. Such 
an analysis could be used to identify program weaknesses. State 
acknowledged that is does not have procedures for recording and 
maintaining all complaints in all categories and stated such procedures 
are currently being prepared and will be incorporated into the Foreign 
Affairs Manual. 

Occasionally, the exchange participants have negative experiences as a 
result of exploitation by a third party. A State official described an 
incident in which about 45 current Summer Work Travel participants were 
placed in substandard housing. Apparently, the housing was leased by an 
employee of the sponsoring organization. The sponsor subsequently 
placed the students in better housing, and the OIG is investigating the 
incident at the Exchange Visitor Program office's request. State 
officials described another situation in which they fear a third party 
might have exploited the exchange participants. In this case, Bulgarian 
Summer Work Travel participants were approached by an employee of the 
local program representative while they were still in Bulgaria and told 
that the jobs arranged for them in New Jersey by the U.S. sponsor were 
no longer viable and that they were instead to report to jobs in 
Florida. As a result, when the Bulgarians arrived in the United States, 
they refused to continue on to New Jersey with the sponsor's 
representative, who met them at the airport. Instead, they had tickets 
to Florida and went there to work for a third-party organization that 
provided cleaning services to hotels. State and DHS are currently 
investigating this case. 

When such situations receive negative media attention, it can further 
undermine the purpose of the program. For example, a July 13, 2005, 
article in a New Hampshire newspaper reported on the plight of three 
students from Romania who arrived in the United States on July 5, 2005, 
to find that the jobs they were promised no longer existed. News of 
these situations may even reach the foreign media. For example, a June 
2004 United Press International article concerning an incident 
affecting Russian students stated the incident was also reported by the 
Moscow Times. As a result of such situations at least one foreign 
government has discussed its concerns with U.S. embassy officials in 
their country, according to a Bureau of Consular Affairs official. 

Conclusions: 

The Summer Worker Travel and Trainee Exchange Visitor Program 
categories are important components of U.S. public diplomacy efforts. 
However, State has not exercised sufficient management oversight of the 
programs to ensure that they operate as intended and are not abused. 
State has taken some action to address identified deficiencies, such as 
beginning efforts to revise the regulations; but progress has been 
slow. Also, State has been slow in establishing a compliance unit, 
which would bolster oversight efforts, despite recommendations from 
State's OIG to do so. GAO guidance on internal control standards 
instructs agencies to identify risks that could impede the efficient 
and effective achievement of program goals. Once these risks are 
identified, they should be analyzed for possible effect. For example, 
an analysis of complaints and problems that participants and sponsors 
report could uncover program weaknesses, and these results could be 
used to guide the efforts of the compliance unit. Assessing such risks 
is a necessary step to mitigating the risks. But State has not taken 
action to assess the risks associated with the Summer Work Travel and 
the Trainee programs, in part because limited data are available. 

Recommendations for Executive Action: 

This report recommends that the Secretary of State take the following 
three actions to enhance the overall management and monitoring of the 
Summer Work Travel and the Trainee programs: 

* fully implement a compliance unit to better monitor exchange program 
activities and address deficiencies; 

* update and amend the regulations where necessary; and: 

* develop strategies to obtain data, such as information on overstays 
and program abuses, to assess the risks associated with the program, 
and use the results of its assessment to focus its management and 
monitoring efforts. 

Agency Comments and Our Evaluation: 

State provided written comments on a draft of this report. These 
comments are reprinted in appendix II. State and DHS also provided 
technical comments, which we have incorporated into the report as 
appropriate. 

In its comments, State acknowledged weaknesses in its oversight and 
administration of the Exchange Visitor Program and reported that it has 
designated program oversight and administration as a weakness under the 
Federal Managers Financial Integrity Act. State described a number of 
actions it is taking to implement each of our recommendations, 
including developing a corrective action plan, establishing a 
compliance unit, working to revise program regulations, and working 
with DHS to gather data related to the tracking of overstays. 

As we agreed with your office, unless you publicly announce the 
contents of this report earlier, we plan no further distribution of it 
until 30 days from the date of this letter. We will then send copies of 
this report to interested congressional committees, and the Secretaries 
of State, DHS, and Labor. We will also make copies available to others 
upon request. In addition, the report will be available at [Hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-4128 or [Hyperlink, fordj@gao.gov]. Contact 
points for our Offices of Congressional Relations and Public Affairs 
may be found on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix III. 

Sincerely yours, 

Signed by: 

Jess T. Ford: 
Director, International Affairs and Trade: 

[End of section] 

Appendixes: 

Appendix I: Scope and Methodology: 

To examine how State manages the Summer Work Travel and the Trainee 
programs to ensure that only authorized activities are carried out 
under the programs, we: 

* reviewed previous GAO and OIG reports, program regulations and 
guidance, cables, sponsors' annual reports, and other information 
pertaining to the programs; 

* reviewed program files maintained by the Bureau of Educational and 
Cultural Affairs, Office of Exchange Coordination and Designation, for 
selected Summer Work Travel and Trainee sponsors to gain an 
understanding about the kinds of problems that the sponsors report to 
the Department of State (State) and how State has addressed them; 

* interviewed State officials, including the Bureau of Educational and 
Cultural Affairs and the Bureau of Consular Affairs, and the Department 
of Homeland Security (DHS) to discuss how the U.S. government manages 
the programs; 

* interviewed Department of Labor (Labor) officials about the impact of 
the programs on the U.S. labor market, and the Social Security 
Administration on issues related to Social Security cards for exchange 
visitors; and: 

* met with nine sponsors of the Summer Work Travel Program that 
accounted for 75 percent of the participants in 2004 and 13 sponsors of 
the Trainee Program that accounted for 54 percent of the participants 
in 2004,[Footnote 16] as well as an official of an association of 
exchange program sponsors to discuss how sponsors carry out their 
monitoring and oversight responsibilities. 

We relied on data from DHS' Student and Exchange Visitor Information 
System (SEVIS) to identify sponsors and the number of participants. The 
SEVIS database is used by exchange program managers, sponsors, and U.S. 
government agencies to keep track of individuals who enter the United 
States on exchange visitor and student visas. We reviewed SEVIS data 
and discussed its reliability with State and DHS officials and 
sponsors, based on the descriptions of the database, procedures for 
entering and managing the data, and the internal checks that are part 
of the system. We believe these data are sufficiently reliable for our 
purposes. We relied on data from the sponsors to identify their 
overseas representatives, exchange participants, employers, and host 
companies. 

We met with 28 exchange participants to discuss their views of the 
programs. We reviewed data provided by the sponsors to identify 
exchange participants who were in their programs during our fieldwork 
and who were in nearby locations. We visited exchange participants in 
Boston, Massachusetts; Bolton Valley and Smugglers' Notch, Vermont; and 
Washington, D.C. We used the results of our interviews for illustrative 
purposes and not to generalize to all participants. 

We also visited three overseas posts--Minsk, Belarus; Warsaw, Poland; 
and Dublin, Ireland--where we observed visa interviews of exchange 
program applicants, reviewed post validation studies and other exchange 
program guidance, and discussed the exchange programs with consular and 
embassy officials. We also met with the local representatives of the 
U.S. sponsors to discuss how they recruited and screened Summer Work 
Travel and Trainee applicants. We selected Belarus because of consular 
concerns about overstays and the integrity of the overseas partners. 
Belarus is also one of the top sending countries for the Summer Work 
Travel Program. We selected Poland because it was the number one 
sending country for Summer Work Travel participants and within the top- 
10 sending posts for trainees in 2004. We selected Ireland because it 
is also within the top-10 sending countries for both the Summer Work 
Travel and the Trainee programs and because of the decreased 
participation in the Summer Work Travel Program after State's ruling 
concerning the eligibility of certain students. We used the results of 
our fieldwork for illustrative purposes and not to generalize to all 
posts. 

To examine the potential risks of the programs we reviewed past GAO and 
OIG reports, and examined post validation studies, cables, and other 
documents. We followed up on information we obtained in Belarus on 
asylum seekers with J-1 visas with (1) the Bureau of Consular Affairs' 
Office of Consular Fraud Prevention; (2) DHS' Citizenship and 
Immigration Services, Asylum Division; and (3) DHS' Fraud Detection 
National Security Unit. We also requested data on overstays from the 
National Security Investigations Division of DHS' Office of 
Investigation, U.S. Immigration and Customs Enforcement. The overstay 
data that DHS provided were primarily obtained from DHS' arrival and 
departure information system. Past GAO reports have discussed the 
weaknesses in the U.S. government's methods of collecting overstay 
data. However, despite the lack of precision of both the DHS and post 
data on overstays, these data are sufficiently reliable to indicate 
overstays are a cause for concern. 

We conducted our review from November 2004 to August 2005 in accordance 
with generally accepted government auditing standards. 

[End of section] 

Appendix II: Comments from the Department of State: 

United States Department of State: 
Assistant Secretary and Chief Financial Officer: 
Washington, D. C. 20520: 

Ms. Jacquelyn Williams-Bridgers: 
Managing Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548-0001: 

OCT - 4 2005: 

Dear Ms. Williams-Bridgers: 

We appreciate the opportunity to review your draft report, "STATE 
DEPARTMENT: Stronger Action Needed to Improve Oversight and Assess 
Risks of the Summer Work Travel and Trainee Categories of the Summer 
Work Travel and Trainee Categories of the Exchange Visitor Program," 
GAO Job Code 320322. 

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report. 

If you have any questions concerning this response, please contact 
Stanley Colvin, Director, Bureau of Educational and Cultural Affairs, 
at (202) 203-7415. 

Sincerely, 

Signed by: 

Sid Kaplan (Acting): 

cc: GAO - Maria Oliver; 
ECA - Dina Powell; 
State/OIG - Mark Duda: 

Department of State Comments on GAO Draft Report STATE DEPARTMENT: 
Stronger Action Needed to Improve Oversight and Assess Risks of the 
Summer Work Travel and Trainee Categories of the Exchange Visitor 
Program (GAO-06-106, GAO Code 320322): 

Thank you for the opportunity to comment on your draft report entitled 
"State Department: Stronger Action Needed to Improve Oversight and 
Assess Risks of the Summer Work Travel and Trainee Categories of the 
Exchange Visitor Program." This Report recommends that the Department 
(1) fully implement a compliance unit; (2) update and amend program 
regulations; and, (3) develop strategies to obtain data, such as 
information on overstays and program abuses, to assess the risks 
associated with the program, and use the results of its assessment to 
focus its management and monitoring efforts. 

The Department has reviewed the recommendations of this Report and 
offers the following comment thereon: 

1. The Bureau of Educational and Cultural Affairs (ECA) brought various 
issues regarding the Department's oversight and administration of the 
Exchange Visitor Program (EVP) to the attention of the Department's 
Management Controls Steering Committee (MCSC) in February of 2005. The 
MCSC determined that the issues regarding oversight and administration 
merited the listing of EVP oversight as a reportable condition for the 
Federal Managers Financial Integrity Act purposes. 

2. ECA has prepared and presented to the MCSC a corrective action plan 
regarding oversight and administration of the EVP. This corrective 
action plan identified the establishment and staffing of a compliance 
unit as a milestone toward correcting oversight deficiencies. The 
compliance unit has been administratively established and its chief 
appointed. Recruitment and selection efforts are underway at this time 
to staff two compliance officer positions. 

3. ECA is working towards a revision of existing EVP regulations. Draft 
regulations addressing the revision of trainee regulations and the 
establishment of an intern category have been drafted and are in the 
internal clearance process. Internal review will be completed in 
October, the Office of Management and Budget has 90 days to review and 
a 60-day public comment period is given. ECA has identified October of 
2006 as the completion date for the revision of the trainee 
regulations. 

4. The Department welcomes the recommendation regarding the development 
of strategies to obtain information on overstays and program abuses. As 
the GAO report "Overstay Tracking, A Key Component of Homeland Security 
and a Layered Defense, GAO-04-82," points out, overstay tracking is the 
responsibility of the Department of Homeland Security. The Department 
of State will work with DHS to gather data related to the tracking of 
EVP participant overstays. The Department has also established a law 
enforcement working group comprised of representatives from the 
Department's Office of Inspector General, Diplomatic Security, Consular 
Affairs, and Legal Adviser's Office. This working group is focused on 
the gathering of information and analysis thereof for enforcement 
purposes. 

[End of section] 

Appendix III: GAO Contacts and Staff Acknowledgments: 

GAO Contact: 

Jess T. Ford (202) 512-4128: 

Staff Acknowledgment: 

In addition to the individual named above, John Brummet, Assistant 
Director; Joseph Brown; Joseph Carney; Maria Oliver; and La Verne 
Tharpes made key contributions to this report. 

(320322): 

FOOTNOTES 

[1] A J-1 visa is a nonimmigrant visa issued to foreign nationals to 
visit the United States temporarily to teach, instruct or lecture, 
study, observe, conduct research, consult, demonstrate special skills, 
or receive training. 

[2] Office of Inspector General, The Exchange Visitor Program Needs 
Improved Management and Oversight, 00-CI-028 (Washington, D.C.: 
September 2000). 

[3] An overstay is a foreign national who was legally admitted to the 
United States as a nonimmigrant for a specific period but remained in 
the country after that period expired. 

[4] Weaknesses include noncollection of many departure forms that 
visitors to the United States are required to submit when they leave 
the United States and an inability to match departure forms to data on 
arrivals. 

[5] The Federal Managers Financial Integrity Act of 1982 (P. L. 97-255) 
requires agency heads to establish a continuous process for assessment 
and improvement of their agency's internal control and to annually 
report on the status of their efforts. 

[6] P. L. 87-256, as amended, 22 U.S.C. 2451 et seq. 

[7] As of November 2004. 

[8] Regulations require sponsors to ensure that at least half of their 
Summer Work Travel participants identify jobs before they leave their 
home country. The rest of the participants can look for jobs once they 
arrive in the United States. 

[9] Some sponsors are designated to administer exchange programs in 
more than one exchange category. In 2005, there were 206 individual 
organizations that sponsored the Summer Work Travel and/or the Trainee 
programs. 

[10] According to the program regulations, sponsors' designations are 
effective for 5 years, although State may designate a shorter period. 
The Enhanced Border Security and Visa Entry Reform Act of 2002 (P.L. 
107-173) requires State to conduct a review every 2 years of the 
entities designated to sponsor exchange programs to determine if they 
are in compliance with certain recordkeeping and reporting 
requirements. State designated all sponsors for 2 years when they were 
entered in SEVIS in January 2003. State has drafted revisions to its 
regulations that will reflect the change in the period of designation 
from 5 to 2 years. 

[11] OIG OO-CI-028. 

[12] Compliance unit staff will analyze the results of the contractor 
reviews and the audits, although a regulatory change is needed to 
implement the audit requirement, according to the Acting Director of 
the Office of Exchange Designation and Coordination. 

[13] Some of these individuals may have changed their immigration 
status legally. DHS would need to analyze each individual record to 
determine if these individuals were actually overstays. 

[14] An H-2B visa is a nonimmigrant visa issued to foreign nationals 
who are temporarily coming to the United States to perform 
nonagricultural services or labor, if an unemployed person capable of 
performing such work cannot be found in the United States. 

[15] For example, the total civilian workforce in the United States was 
over 147 million as of September 2004. 

[16] We visited 13 sponsors in all. Seven of the 13 managed both Summer 
Work Travel and Trainee programs. 

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