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Highlights

What GAO Found

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

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

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

Why GAO Did This Study

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

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

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

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Recommendations

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

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Homeland Security To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to document the processes and analyses for assessing and, as appropriate, for managing the difference between program costs and collections and document resulting decisions.
Closed - Implemented
In July 2016, we reported on the Department of Homeland Security's (DHS) management of programs receiving fees and other collections. We found that certain programs receiving fees and other collections in fiscal year 2014 collected amounts that fully covered their identified program costs. However, we found that, for 10 programs our analysis showed collected $726 million less than their identified program costs, DHS component officials did not document the analyses and processes they used to manage differences between costs and collections or document decisions related to cost recovery. We reported that without such documentation, transparency was lacking regarding whether DHS component decisions not to address differences in program collections and costs were reasonable and appropriate. We recommended that DHS use some means to document processes and analyses for assessing and, as appropriate, for managing the difference between program costs and collections and document resulting decisions. In September 2018, DHS's Deputy Chief Financial Officer approved cost recovery guidance, which was published in DHS's Financial Management Policy Manual. Consistent with our recommendation, the guidance documents processes for managing the difference between program costs and collections. For example, the guidance directs that if a fee is set at a rate that does not achieve full cost recovery, DHS components must provide an explanation for the difference and recommendation for adjusting the fee(s), as well as document any reasons for not pursuing the recommended actions. In March 2019, DHS provided us with reviews components completed of programs receiving fees and other collections in which they included this information in accordance with the cost recovery guidance. DHS's development and implementation of the cost recovery guidance should help improve transparency and accountability over the department's cost recovery efforts. As a result, this recommendation is closed as implemented.
Department of Homeland Security To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to establish processes for managing unobligated carryover balances, to include targets for minimum and maximum balances for programs that lack such processes and targets.
Closed - Implemented
In July 2016, we reported on the Department of Homeland Security's (DHS) management of programs receiving fees and other collections. We found that DHS components had processes in place to manage unobligated balances carried over across fiscal years for 25 such programs, with such balances totaling $2.6 billion at fiscal year-end 2014. These processes generally focused on ensuring continuity of program operations rather than efficiently using funds. For example, while components established targets for minimum balances for 21 of these 25 programs, none of the components established processes and related maximum targets to manage excessive unobligated carryover balances. We recommended that DHS use some means, such as the DHS Fee Governance Council, to establish processes for managing unobligated carryover balances, to include targets for minimum and maximum balances for programs that lack such processes and targets. In September 2018, DHS's Deputy Chief Financial Officer approved unobligated carryover balance guidance for fee accounts, which was published in DHS's Financial Management Policy Manual. This guidance contains processes for managing unobligated carryover balances, including setting targets for minimum and maximum balances. The Office of the Chief Financial Officer then required that components develop and implement procedures to comply with the guidance and submit supporting evidence. DHS's development and implementation of guidance for carryover balances for fee accounts should help enable DHS components to show that management actions will be sufficient and appropriate to ensure the efficient use of funds. As a result, this recommendation is closed as implemented.
Department of Homeland Security To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to conduct reviews to identify any management and operational deficiencies.
Closed - Implemented
In July 2016, we reported on the Department of Homeland Security's (DHS) management of programs receiving fees and other collections. We analyzed DHS financial information for 38 programs receiving fees and other collections in fiscal year 2014 and found DHS does not ensure that all components review their programs. We recommended that DHS use some means, such as the DHS Fee Governance Council, to conduct reviews to identify any management and operational deficiencies. In September 2018, DHS's Deputy Chief Financial Officer issued guidance requiring biennial reviews for fee accounts, which was published in DHS's Financial Management Policy Manual. This guidance requires that each component complete a biennial fee review for all programs for which it has been granted fee authority to determine whether changes to existing fee levels are required, determine whether new fees need to be established, and to identify any management and operational deficiencies. To implement this guidance, DHS components completed fiscal year 2018 fee reviews for 30 programs and submitted them to the DHS Office of the Chief Financial Officer for review. DHS components did not complete fiscal year 2018 fee reviews for two U.S. Citizen and Immigration Services (USCIS) programs that, in DHS's assessment, are not subject to biennial fee review requirements because, among other considerations, either USCIS does not have authority to adjust the fees or USCIS does not provide any services to those entities required by law to pay these fees. However, the department is not precluded from conducting reviews of such fees and we have reported that, consistent with the CFO Act of 1990 and OMB implementing guidance, opportunities remain for agencies to improve the transparency and accountability of all programs in their portfolio. We continue to believe that DHS should include these programs in its biennial reviews. Nonetheless, the steps DHS has taken to institute oversight to ensure that components complete biennial reviews and report the results should help promote awareness of opportunities to improve fee design and management processes, and DHS has therefore meant the intent of our recommendation.
Department of Homeland Security To ensure effective management and oversight of DHS programs receiving fees and other collections, and to ensure that component management take the following actions for each fee and other collections program that they administer, the Secretary of Homeland Security should direct the DHS Chief Financial Officer to use some means, such as the DHS Fee Governance Council, to take action to track and report on management and operational deficiencies--including reasons supporting any decisions to not pursue recommended actions--identified in fee reviews or through other means.
Closed - Implemented
In July 2016, we reported on the Department of Homeland Security's (DHS) management of programs receiving fees and other collections. We found that DHS did not ensure that all components review these programs to ensure that rates charged to users of program services are set to collect amounts sufficient to recover program costs and ensure efficient operations, or monitor component actions to address management and operational deficiencies identified in those reviews. We recommended that DHS use some means, such as the DHS Fee Governance Council, to take action to track and report on management and operational deficiencies-including reasons supporting any decisions to not pursue recommended actions-identified in fee reviews or through other means. In September 2018, DHS's Deputy Chief Financial Officer approved guidance requiring biennial reviews for fee accounts, which was published in DHS's Financial Management Policy Manual. This guidance requires that the DHS Office of the Chief Financial Officer (OCFO) meet with all DHS component subject matter experts at least once a year to discuss biennial fee review deficiencies and recommendations, to include any fees that do not achieve full cost recovery. The guidance further requires that the OCFO compile, assess, and report the components' biennial fee reviews, deficiencies, and recommendations. DHS has since undertaken efforts to implement this guidance. For example, in August 2019 the DHS Fee Governance Council-comprising Chief Financial Officers from components responsible for collecting fees and other collections and DHS OCFO representatives, among others-held a quarterly meeting at which officials discussed deficiencies and recommendations from fiscal year 2018 fee reviews. DHS's steps to enhance oversight of its components' actions to address biennial fee review deficiencies should help ensure that deficiencies are addressed in a timely manner. As a result, this recommendation is closed as implemented.
Department of Homeland Security The Secretary of Homeland Security should direct the DHS Chief Financial Officer to discuss the results of biennial fee reviews and any resultant proposals in the annual Agency Financial Report, annual performance report, or other reporting mechanism, consistent with the Chief Financial Officer Act and Office of Management and Budget Circular A-25.
Closed - Implemented
This recommendation was closed as implemented, per agency inclusion of general biennial fee review actions in the DHS 2016 Annual Financial Report. DHS provided general disclosures in the FY2016 Agency Financial Report regarding the centralized oversight and monitoring of the DHS Fee Governance Council and biennial fee reviews consistent with research of user fee disclosures in other federal Agency Financial Reports.

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