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Highlights

What GAO Found

GAO's analysis of the Agricultural Quarantine Inspection (AQI) fee and cost data revealed a more than $325 million gap between fee revenues and total program costs in fiscal year 2011, or 38 percent of AQI program costs. The program, which is co-administered by the Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) and Department of Homeland Security (DHS) Customs and Border Patrol (CBP), has a gap for several reasons: 1) APHIS's authority does not permit it to charge all persons seeking entry to the United States (e.g., pedestrians) and does not permit it to charge the costs of those inspections to others; 2) APHIS has chosen not to charge some classes of passengers, citing administrative fee collection difficulties; 3) CBP does not charge a portion of all primary inspections to agriculture functions, as required by CBP guidance; 4) APHIS does not consider all imputed costs (that is, costs incurred by other agencies on behalf of the AQI program) when setting fees; and 5) the allowable rates for overtime services are misaligned with the personnel costs of performing those services. APHIS is considering fees that would better align many, but not all, AQI fees with related inspection activity costs. APHIS and CBP can take additional steps to better align fees with costs; however, additional authority will be needed to fully recover all program costs.

Contrary to APHIS-CBP agreements and APHIS policy, the distribution of fee collections between CBP and APHIS is significantly misaligned with AQI costs. In 2005, CBP and APHIS agreed to divide AQI collections in proportion to each agency's share of AQI costs. However, in fiscal year 2011, for example, CBP incurred over 80 percent of total program costs but received only 60 percent of collections, while APHIS incurred 19 percent of program costs but retained 36 percent of collections. CBP bridges the gap between its AQI costs and its share of the fee revenues with its annual appropriation. In keeping with its authorities and with good practices for fee-funded programs, APHIS carries over a portion of AQI collections from year to year to maintain a shared APHIS-CBP reserve to provide a cushion against unexpected declines in fee collections. APHIS's stated goal is to maintain a 3- to 5-month reserve but the preliminary fee proposal would fund the reserve at a level higher than the 5 month maximum. Further, the 5-month maximum target balance is the amount officials say they would need to completely shut down the program, and therefore does not reflect realistic program risks. Further, this is more than the amount required to cover shortfalls during both the 2009 financial crisis and the events of September 11, 2001, and would increase reliance on appropriated funds to cover current program costs.

APHIS's and CBP's collection processes do not provide reasonable assurance that all AQI fees due are collected. Specifically, APHIS does not collect AQI fees for railcars consistent with its regulations, resulting in a revenue loss of $13.2 million in 2010. Further, CBP does not verify that it collects fees due for every commercial truck, private aircraft, and private vessel, resulting in an unknown amount of revenue loss annually. CBP has tools available to help remedy these issues but does not require their use. Until APHIS and CBP improve oversight of these collection processes, they will continue to forgo revenue due the government, which will increase reliance on appropriated funds to cover program costs.

Why GAO Did This Study

The AQI program guards against agriculture threats by inspecting international passengers and cargo at U.S. ports of entry, seizing prohibited material, and intercepting foreign agricultural pests. The program, which cost $861 million in 2011, is funded from annual appropriations and user fees. GAO has reported several times on the need to revise the fees to cover program costs as authorized. In 2010, APHIS initiated a review of AQI costs and fee design options. APHIS and CBP are considering options for a new fee structure. Pending departmental approval, APHIS expects to issue a proposed rule in fall 2013. GAO was asked to examine issues related to the AQI fees. This report examines 1) the fees currently charged and proposed revisions; 2) how fee revenues are allocated between the agencies; and 3) the extent to which fee collection processes provide reasonable assurance that all AQI fees due are collected. To do this, GAO reviewed AQI fee and cost data, and relevant laws, regulations, and policies; observed inspections at ports of entry; and interviewed APHIS and CBP officials.

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Recommendations

GAO is making a number of recommendations aimed at more fully aligning fees with program costs, aligning the division of fees between APHIS and CBP with their respective costs, and ensuring that fees are collected when due. Further, GAO suggests Congress amend the AQI fee authority to allow the Secretary of Agriculture to set fee rates to recover the full costs of the AQI program. USDA and DHS generally agreed with the recommendations.

Matter for Congressional Consideration

Matter Status Comments
In light of declining discretionary budgets, to reduce or eliminate the reliance of the AQI program on taxpayer funding, Congress should consider allowing USDA to set AQI fees to recover the aggregate estimated costs of AQI services--thereby allowing the Secretary of Agriculture to set fee rates to recover the full costs of the AQI program.
Open
As of June 2021, Congress had not passed legislation to give the Secretary of Agriculture authority to set fee rates to fully recover the aggregate costs of agricultural quarantine inspection (AQI) services, as GAO suggested in March 2013. The current AQI fee authority does not permit the U.S. Department of Agriculture to set AQI fees to recover the aggregate estimated costs of AQI services (21 U.S.C. ? 136a). Authorizing the Secretary of Agriculture to set fee rates to recover the full costs of the AQI program would save the federal government money by reducing the program's reliance on U.S. Customs and Border Protection's annual Salaries and Expenses appropriation.
Congress should consider amending USDA's authorization to assess AQI fees on bus companies, private vessels, and private aircraft and include in those fees the costs of AQI services for the passengers on those buses, private vessels, and private aircraft.
Open
As of February 2021, Congress had not passed legislation to give the Secretary of Agriculture authority to assess agricultural quarantine inspection (AQI) fees on private vessels, private aircraft, and commercial buses and include in those fees the costs of AQI services for the passengers on those vehicles. The current AQI fee authority does not permit the U.S. Department of Agriculture to assess AQI fees on private vessels, private aircraft and commercial buses and to recover, through those fees, the costs of AQI services for the passengers on those vehicles (21 U.S.C. ? 136a).

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Agriculture To help ensure that USDA considers full AQI program costs when setting AQI fee rates, the Secretary of Agriculture should include all imputed costs borne by other federal agencies and attributable to the AQI program.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to add new agricultural quarantine and inspection (AQI) fee categories and adjust the rates of the existing fee categories. According to APHIS, the adjustments are designed to recover the full costs of providing related AQI services, including imputed costs borne by other agencies.
Department of Homeland Security To help ensure that USDA considers full AQI program costs when setting AQI fee rates, the Secretary of Homeland Security should direct CBP to update and widely disseminate comprehensive guidance to ports on the correct use and review of Cost Management Information System (CMIS) codes. Specifically, the guidance should reiterate that a portion of CBP officers' primary inspection time should be charged to agriculture and cover how, and with what frequency, ports should conduct work studies to determine the correct allocation of staff time. CBP should also consider making CMIS training mandatory for CMIS practitioners.
Closed - Implemented
According to DHS's May 2013 statement of actions to address the recommendations in GAO-13-268, CBP planned to (1) review and revise current policies and guidance for its processes to ensure that it accurately captures the work activities performed by CBP officers; (2) develop methodology and reporting requirements; (3) regularly review implementation of these processes and requirements; and (4) require CMIS training for employees that have access to create schedules. As of October 2014, according to CBP officials, CBP has updated process and procedural guidance for appropriate logging and reporting of work activities and also updated training policies and reviewed procedures to help standardize practices across ports of entry. CBP also held Cost Management Information System training sessions in August 2013 and January 2014. According to CBP, these actions enable CBP to correctly charge time spent on agriculture-related functions and provide accurate cost information to the U.S. Department of Agriculture Animal and Plant Health Inspection Service (APHIS). With complete and accurate cost information, APHIS can better align fee rates with the actual costs of these services.
Department of Agriculture To help ensure that fee rates are set to recover program costs, as authorized, and to enhance economic efficiency and equity with consideration of the administrative burden, the Secretary of Agriculture should establish an AQI cruise passenger fee aligned with the costs of inspecting cruise passengers and vessels and collected using the existing processes for collecting cruise passenger customs fees.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to add new agricultural quarantine and inspection (AQI) fee categories, including a new fee on cruise vessel passengers. According to the final rule, the new $1.75 per ticket fee is set to cover the costs of AQI services for cruise passengers and applies to cruise ship tickets purchased beginning December 28, 2015.
Department of Agriculture To help ensure that fee rates are set to recover program costs, as authorized, and to enhance economic efficiency and equity with consideration of the administrative burden, the Secretary of Agriculture should establish a fee for passenger railcars aligned with the costs of inspecting rail passengers and railcars and collected using the existing processes for collecting passenger railcar customs fees.
Closed - Not Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to add new agricultural quarantine and inspection (AQI) fee categories and adjust the rates of some of the existing fee categories. Under the new rule, rail passengers continue to be exempt from the AQI fees and the costs of AQI services for rail passengers continue to be paid through the U.S. Customs and Border Protection Salaries and Expenses appropriation.
Department of Agriculture To help ensure that fee rates are set to recover program costs, as authorized, and to enhance economic efficiency and equity with consideration of the administrative burden, the Secretary of Agriculture should eliminate caps on the commercial vessel and commercial rail AQI fees.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to add new agricultural quarantine and inspection (AQI) fee categories and adjust the rates of some of the existing fee categories. The AQI fee adjustments remove the caps on the commercial cargo vessel and railcar fees effective December 28, 2015.
Department of Agriculture To help ensure that fee rates are set to recover program costs, as authorized, and to enhance economic efficiency and equity with consideration of the administrative burden, the Secretary of Agriculture should set truck fee rates to recover the costs of AQI services for trucks while maintaining a financial incentive for trucks to use transponders.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service published a final rule adding new agricultural quarantine and inspection (AQI) fee categories and adjusting the rates of some of the existing fee categories. According to the rule, the revised per entry truck fee is aligned with AQI costs, while the cap on fees for trucks with transponders maintains an incentive for trucks to use transponders. The rule also explains that the difference between the cost of providing inspections for trucks with transponders and the revenue collected from trucks with transponders will be covered by appropriations. The revised fee schedule was effective beginning December 28, 2015.
Department of Agriculture To help ensure that fee rates are set to recover program costs, as authorized, and to enhance economic efficiency and equity with consideration of the administrative burden, the Secretary of Agriculture should recover the costs of AQI services for buses and bus passengers by either establishing a bus passenger fee that is remitted by the bus companies or seeking legislative authority to establish a bus fee that covers the costs of bus passenger inspections.
Closed - Not Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to add new agricultural quarantine and inspection (AQI) fee categories and adjust the rates of some of the existing fee categories. Under the new rule, bus passengers continue to be exempt from the AQI fees and the costs of AQI services for bus passengers continue to be paid through the U.S. Customs and Border Protection Salaries and Expenses appropriation. As of March 2017 APHIS officials said the agency does not plan to implement a bus passenger fee.
Department of Homeland Security To align reimbursable overtime revenues with the costs of those agriculture inspections, the Secretaries of Agriculture and Homeland Security should work together to amend overtime regulations for agriculture services so that reimbursable overtime rates that CBP and APHIS charge are aligned with the costs of those services.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to increase the APHIS reimbursable overtime fee rates for agricultural inspections, laboratory testing, certification, and quarantine services consistent with the full costs of those services. The APHIS rule also clarified the regulations to indicate that reimbursable overtime agricultural inspections performed by the Department of Homeland Security (DHS) may be billed in accordance with DHS regulations on overtime services. According to U.S. Customs and Border Protection (CBP) officials, effective November 2, 2015, CBP will bill users for reimbursable overtime agricultural inspections based on the amount paid to the CBP Agricultural Specialist for performing the service.
Department of Agriculture To align reimbursable overtime revenues with the costs of those agriculture inspections, the Secretaries of Agriculture and Homeland Security should work together to amend overtime regulations for agriculture services so that reimbursable overtime rates that CBP and APHIS charge are aligned with the costs of those services.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule to increase the reimbursable overtime fee rates for agricultural inspections, laboratory testing, certification, and quarantine services. According to APHIS, the fee adjustments align the fee rates with the full costs of providing the overtime services.
Department of Homeland Security To align reimbursable overtime revenues with the costs of those agriculture inspections the Secretary of Homeland Security should (1) ensure that ports consistently charge for agriculture overtime services that are eligible for reimbursement and (2) deny agriculture-related reimbursable overtime inspection services to entities with bills more than 90 days past due, consistent with APHIS regulations.
Closed - Implemented
According to DHS's May 2013 statement of actions to address the recommendations in GAO-13-268, CBP will review its policies, provide additional training and guidance, and ensure proper administrative controls and oversight to provide reasonable assurance that ports consistently charge for agriculture overtime services that are eligible for reimbursement and deny agriculture-related reimbursable overtime services to entities with bills more than 90 days past due. In May 2014, CBP implemented the recommendation by (1) establishing protocols and procedures for optimal utilization of agriculture reimbursable overtime, (2) disseminating guidance and trade notices, and (3) training subject matter experts on reimbursable overtime.
Department of Agriculture To help ensure that AQI fee rates are structured to maximize economic efficiency and equity while minimizing administrative burden, the Secretary of Agriculture should charge user fees for AQI permit applications.
Closed - Not Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agrigultural quarantine and inspection (AQI) fee catetories and adjusting the rates of some of the existing fee categories. The rule does not establish fees for AQI permit applications. APHIS's April 2014 proposed rule for the AQI fees explained that they did not propose AQI permit fees due to concerns about the impact on importers and relationships with trading partners, as well as a concern that a permit fee could discourage research.
Department of Homeland Security To better align the distribution of AQI fee revenues with AQI costs, the Secretaries of Agriculture and Homeland Security should work together to allocate AQI fee revenues consistent with each agency's AQI costs.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agricultural quarantine and inspection (AQI) fee categories and adjusting the rates of some of the existing fee categories. The final rule states that the basis for distribution of AQI user fee revenues between APHIS and Customs and Border Protection (CBP) is the cost to each agency of performing the AQI functions covered by a particular fee. In January 2017, the agencies updated their revenue-sharing agreement to reflect the new AQI fee structure. Per the agreement, in fiscal year 2017, 72 percent of AQI fee collections will be transferred to CBP which, according to APHIS officials, is consistent with the final rule.
Department of Agriculture To better align the distribution of AQI fee revenues with AQI costs, the Secretaries of Agriculture and Homeland Security should work together to allocate AQI fee revenues consistent with each agency's AQI costs.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agricultural quarantine and inspection (AQI) fee categories and adjusting the rates of some of the existing fee categories. The final rule states that the basis for distribution of AQI user fee revenues between APHIS and Customs and Border Protection (CBP) is the cost to each agency of performing the AQI functions covered by a particular fee. In January 2017, the agencies updated their revenue-sharing agreement to reflect the new AQI fee structure. Per the agreement, in fiscal year 2017, 72 percent of AQI fee collections will be transferred to CBP which, according to APHIS officials, is consistent with the final rule.
Department of Agriculture To better align the distribution of AQI fee revenues with AQI costs, the Secretary of Agriculture should establish an AQI reserve target that is more closely aligned with program needs and risks, based on past experience.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agricultural quarantine and inspection (AQI) fee categories and adjusting the rates of some of the existing fee categories. APHIS estimated that the updated fees will enable APHIS to meet its goal of maintaining a 3- to 5-month operating reserve in the AQI reserve account. The new fee rates were effective beginning December 28, 2015. According to APHIS, the target level for the reserve ensures that funding is available in the event of temporary reduction in the demand for AQI services, leading to reduced fee collections, as was experienced in 2008. In addition, in June 2017 APHIS updated its user fee directive to specify that, when setting new fee amounts, the agency will review and document operating reserve targets including analysis of program needs, risks, and probable contingencies.
Department of Agriculture To ensure that inspection fees are collected when due, the Secretary of Agriculture should revise its processes for collecting AQI railcar fees to conform to USDA regulation.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agricultural quarantine and inspection (AQI) fee categories and adjusting the rates of some of the existing fee categories. The rule eliminates the cap on railcar fees and thereby the requirement for prepayment of the capped fee, ensuring that railcar fees are no longer collected in a manner that does not conform to USDA regulations.
Department of Homeland Security To ensure that inspection fees are collected when due, the Secretary of Homeland Security should establish internal controls to alert personnel when fees are not paid, and use available information to verify that arriving trucks, private aircraft, and private vessels pay applicable inspection user fees.
Closed - Implemented
Customs and Border Protection (CBP) developed procedures to help ensure that inspection fees are collected when due. Specifically, as of November 2016, commercial truck fees for all ports of entry may be paid online prior to arriving at the border. CBP officers can then identify whether the fee has been paid when a truck arrives at the border. In addition, as of August 2017 officers inspecting vessels use tablet computers that allow them to assess whether fees have been paid. In September 2017, CBP updated its electronic system and related inspection processes to help ensure that private aircraft fees are collected when due.
Department of Agriculture To help ensure that AQI fee rates are structured to maximize economic efficiency and equity while minimizing administrative burden, the Secretary of Agriculture should charge user fees for treatment services.
Closed - Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agricultural quarantine and inspection (AQI) fee categories, including a new fee for treatment services. The AQI fee for conducting and monitoring treatments was effective beginning December 28, 2015 and will be phased-in over a 5-year period.
Department of Agriculture To help ensure that AQI fee rates are structured to maximize economic efficiency and equity while minimizing administrative burden, the Secretary of Agriculture should charge user fees for the costs of monitoring compliance agreements for regulated garbage.
Closed - Not Implemented
In October 2015, the USDA Animal and Plant Health Inspection Service (APHIS) published a final rule adding new agricultural quarantine and inspection (AQI) fee categories and adjusting the rates of some of the existing fee categories. The revised fee schedule does not introduce separate fees for monitoring compliance agreements for regulated garbage, but includes the costs of those activities in the fees assessed on arriving international passengers and vehicles. The revised fee schedule was effective beginning December 28, 2015.

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