Homeland Security: Better Management Practices Could Enhance	 
DHS's Ability to Allocate Investigative Resources (28-MAR-06,	 
GAO-06-462T).							 
                                                                 
Immigration and Customs Enforcement's (ICE) mission is to prevent
terrorist attacks within the United States and reduce the	 
vulnerability of the United States to terrorism while ensuring	 
its mandated customs, immigration, and federal protective	 
enforcement functions are not diminished. The ICE Office of	 
Investigations (OI) supports that mission by investigating	 
customs and immigration violations. This testimony addresses the 
following key questions that were answered in GAO-06-48SU, a	 
restricted report issued with the same title: (1) What structure 
and activities has OI adopted to address its mission? (2) In	 
fiscal year 2004 and the first half of fiscal year 2005, how did 
OI use its investigative resources to achieve its goals? (3) How 
does OI ensure that its resource use contributes to its ability  
to prevent the exploitation of systemic vulnerabilities in	 
customs and immigration systems?				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-462T					        
    ACCNO:   A50257						        
  TITLE:     Homeland Security: Better Management Practices Could     
Enhance DHS's Ability to Allocate Investigative Resources	 
     DATE:   03/28/2006 
  SUBJECT:   Agency missions					 
	     Counterterrorism					 
	     Customs administration				 
	     Homeland security					 
	     Immigration and naturalization law 		 
	     Internal controls					 
	     Investigations by federal agencies 		 
	     Risk management					 
	     Case management					 

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GAO-06-462T

     

     * Summary
     * Background
          * Carryover Organizational Structure and Investigative Activit
     * OI Investigative Resources Were Used for Investigations Rela
          * OI Places Priority on National Security Investigations, but
     * Conclusions
     * Recommendations
     * GAO Contacts and Staff Acknowledgments
     * GAO's Mission
     * Obtaining Copies of GAO Reports and Testimony
          * Order by Mail or Phone
     * To Report Fraud, Waste, and Abuse in Federal Programs
     * Congressional Relations
     * Public Affairs

Testimony before the Chairman, Subcommittee on National Security, Emerging
Threats, and International Relations, Committee on Government Reform,
House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 2:00 p.m. EST

Tuesday, March 28, 2006

HOMELAND SECURITY

Better Management Practices Could Enhance DHS's Ability to Allocate
Investigative Resources

Statement of Richard Stana, Director

Homeland Security and Justice

GAO-06-462T

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to share our views on the progress the
Department of Homeland Security's (DHS), U.S. Immigration and Customs
Enforcement (ICE) Office of Investigations (OI) has made in pursuing its
homeland security mission. OI was formed in March 2003, mainly from legacy
INS and Customs investigative components. OI is responsible for conducting
investigations covering a broad array of national security, financial, and
smuggling violations, including illegal arms exports, financial crimes,
trade violations, human trafficking, narcotics smuggling, child
pornography/exploitation, and immigration fraud. OI is also responsible
for conducting investigations aimed at protecting critical infrastructure
industries. This testimony is an unrestricted version of our recent Law
Enforcement Sensitive report we did for this subcommittee entitled
HOMELAND SECURITY: Better Management Practices Could Enhance DHS's Ability
to Allocate Investigative Resources.1 In my testimony today, I will
discuss the following topics:

           o  What structure and activities has OI adopted to address its
           mission?

           o  How did OI use its investigative resources in fiscal year 2004
           and the first half of fiscal year 2005?

           o  How does OI ensure that its resource use contributes to its
           ability to prevent the exploitation of systemic vulnerabilities in
           customs and immigration systems?

To identify OI's structure and the activities it uses to address its
mission we met with OI officials and reviewed documents used to support
organizational decisions. To determine how OI used its investigative
resources to address its goals, we analyzed case management data that
showed the types of investigations performed nationally between October
2003 and March 2005-the most recent period for which comparable data were
available. In addition, we interviewed the management staff of OI and the
special agents-in-charge (SAC) at 7 of the 26 ICE OI field offices to
learn how they set investigative priorities and allocate human resources
to investigations. We selected the special agent-in-charge offices based
on their size (the number of agents) and location, seeking to include a
variety of offices representing differing investigative focuses. Because
our sample was a nonprobability sample, the opinions of these special
agents-in-charge cannot be projected beyond those interviewed.2 We also
collected and analyzed data specific to the 7 offices we visited. We
assessed the reliability of the investigative resource data-the hours
spent on different types of investigations-by reviewing the internal
controls of the case management system and through interviews with
knowledgeable OI staff about these controls and the quality assurance
procedures in place to ensure data reliability. We determined the
investigative resource data were sufficiently reliable for our purposes.
We determined how OI ensures that its resource use contributes to its
ability to prevent the exploitation of systemic vulnerabilities in customs
and immigration systems using information collected during interviews with
OI officials, including the special-agents-in-charge and by examining
documents used to support organizational decisions. We evaluated OI's
current approach to resource allocation decision making by comparing this
information with the standards for internal control in the federal
government and to the risk management approach that we have advocated in
our prior work.3

1GAO, HOMELAND SECURITY: Better Management Practices Could Enhance DHS's
Ability to Allocate Investigative Resources, GAO-06-48SU (Washington,
D.C.: December 9, 2005).

                                    Summary

OI's organizational structure and investigative activities reflect those
of its legacy agencies-the U.S. Customs Service and the Immigration and
Naturalization Service. OI retained responsibility for enforcing customs
and immigration laws and its field structure was created by relying on the
strategic priorities of its legacy agencies-for example, proximity to
high-volume smuggling corridors, to state and federal prisons, and
significant money laundering infrastructure-to determine the composition
and locations of field offices. Senior OI officials told us that rather
than concentrating on any particular category of investigation, OI seeks
to accomplish its homeland security mission by focusing on cases that seem
to have a connection to national security. This would include placing a
priority on activities to prevent terrorism.

2Nonprobability sampling is a method of sampling where observations are
selected in a manner that is not completely random, usually using specific
characteristics of the population as criteria. Because each unit in a
population does not have an equal chance to be selected, it is possible
for a nonprobability sample to contain a systematic bias that limits its
ability to describe the entire population.

3GAO, Homeland Security: Summary of Challenges Faced in Targeting
Oceangoing Cargo Containers for Inspection, GAO-04-557T (Washington, D.C.:
Mar. 31, 2004); Transportation Security: Systematic Planning Needed to
Optimize Resources, GAO-05-357T (Washington, D.C.: Feb. 15, 2005);
Strategic Budgeting: Risk Management Principles Can Help DHS Allocate
Resources to Highest Priorities, GAO-05-824T (Washington, D.C.: June 29,
2005); Standards for Internal Control in the Federal Government,
GAO/AIMD-00-21 .3.1 (Washington, D.C.: November 1999).

Data from ICE's case management system indicate between 10 and 15 percent
of investigative resources were used for investigations considered by ICE
to have a link to national security. These investigations are primarily
related to munitions control, illegal exports, compliance enforcement of
visa violations, and terrorism. Most of OI's investigative activities
generally relate to legacy missions, with roughly half of OI resources
during fiscal year 2004 and the first half of 2005 used for cases related
to drugs, financial crimes, and general alien investigations. Most of
these investigations did not contain a nexus to national security.
Moreover, with regard to the resources used for general alien
investigations, the equivalent of about 400 of OI's 5,600 special agents
were working full time to identify incarcerated aliens who were eligible
for removal from the United States, an ICE responsibility. This activity
does not require the skills and training of criminal investigators. ICE
plans to free investigators for more appropriate duties by shifting these
functions to other ICE units, and to submit a plan for the expanded use of
a noninvestigatory job series for civil and administrative violations.

OI tries to ensure that its resources contribute to the prevention of
exploitation of systemic vulnerabilities in customs and immigration
systems by making most investigative resource use decisions in OI's major
field offices, based on the judgment of the agents in charge, with
priority on investigating national security-related cases that arise.
Divisions and units within OI headquarters also develop and manage special
programs that are implemented in multiple field offices. For example,
Project Shield America is a National Security Division program where OI
conducts outreach to private sector companies to prevent the illegal
export of sensitive U.S. munitions and strategic technology. The
Cornerstone program in the Financial and Trade Division is a similar
outreach program to the financial industry. Operation Community Shield is
a national law enforcement initiative that is designed to bring all of
ICE's immigration and customs-related law enforcement powers to bear in
the fight against violent street gangs. Although we found no evidence that
OI has failed to investigate any national security-related lead that came
to its attention, applying a risk management approach to determine what
types of customs and immigration violations represent the greatest risks
for exploitation by terrorists and other criminals could provide OI with
greater assurance that it is focusing on preventing violations with the
greatest potential for harm, while striking a balance among its various
objectives. OI has taken some initial steps to introduce principles of
risk management into its operations, but has not conducted a comprehensive
risk assessment of the customs and immigration systems to determine the
greatest risks for exploitation, nor analyzed all relevant data to inform
the evaluation of alternatives and allow OI to make risk-based resource
allocation decisions. OI also lacks outcome-based performance goals that
relate to its objective of preventing the exploitation of these systemic
vulnerabilities. Finally, OI does not have sufficient systems to help
ensure ongoing monitoring and communication of vulnerabilities discovered
during its investigations. We made recommendations to address these
deficiencies.

                                   Background

ICE is the largest investigative arm of DHS. ICE is composed of four
offices: (1) Investigations, (2) Intelligence, (3) Detention and Removal
Operations (DRO), and (4) the Federal Protective Service. As of September
2005, OI had more than 5,600 special agents; about 94 percent of these are
assigned to 26 major field offices, headed by Special Agents-in-Charge
(SAC), and OI's foreign attache offices. These offices and their
subordinate units were created using the immigration and customs staff and
locations in existence at the time ICE was formed.

At headquarters ICE, OI is divided into five divisions as shown in figure
1. Three of the five divisions-National Security, Finance and Trade, and
Smuggling and Public Safety-were created to incorporate the core missions
and functions of legacy immigration and customs investigations. These
divisions and the units within them are to provide a functional line of
communication from the Director of OI to the groups in the SAC offices
that conduct investigations. Divisions and units within OI headquarters
also develop and manage special programs that are implemented in multiple
field offices. For example, Project Shield America is a National Security
Division program where OI conducts outreach to private sector companies to
prevent the illegal export of sensitive U.S. munitions and strategic
technology. The Cornerstone program in the Financial and Trade Division is
a similar outreach program to the financial industry. Operation Community
Shield is a national law enforcement initiative that is designed to bring
all of ICE's immigration and customs-related law enforcement powers to
bear in the fight against violent street gangs.

The Investigative Services Division provides direct forensic, undercover,
and other operational support to OI investigations carried out by the
three core divisions, and the Mission Support Division provides policy
guidance and services to facilitate executive oversight.

Figure 1. ICE Office of Investigations Organizational Structure

Carryover Organizational Structure and Investigative Activities from Legacy
Agencies Affect OI's Investigative Focus

The headquarters and field organizational structures adopted by OI reflect
the legacy functions of the customs and immigration services-e.g. drug
investigations, human smuggling, and commercial fraud-and include
activities to prevent terrorism within this structure. In April 2005, ICE
completed an interim strategic plan that established as its mission to
prevent terrorist attacks within the United States and reduce the
vulnerability of the United States to terrorism while ensuring all of its
mandated trade, immigration, and federal protective functions are not
diminished. According to ICE officials, the national security objectives
are not accomplished through any particular type or category of
investigation. Instead, these objectives are addressed by examining
investigations on a case-by-case basis and determining the relationship of
any single case to national security. For example, although OI has the
authority to investigate any employer that might have violated laws that
regulate alien employment eligibility, OI instructs investigators to focus
on employers at critical infrastructure sites.

When ICE was created, it retained responsibility for enforcing the customs
and immigration laws that were the purview of its legacy agencies. These
include criminal statutes addressing the illegal import and export of
drugs, weapons, child pornography, stolen antiquities, and other
contraband, as well as alien smuggling, human trafficking, and the
international laundering and smuggling of criminal proceeds. OI also is
responsible for legacy customs enforcement of certain intellectual
property and trade-related commercial fraud statutes and legacy
immigration enforcement of laws prohibiting document fraud, benefit fraud,
illegal entry into the United States or violations of the terms and
conditions of entry, and employment without authorization.4 OI's field
structure was created by merging the existing Customs and INS field
offices located primarily in cities near major ports of entry. In
addition, ICE relied on the strategic priorities of the legacy agencies to
determine the composition and locations of SAC offices-for example,
high-volume smuggling corridors, proximity to state and federal prisons,
and significant money laundering infrastructure.

There are some long-standing functions of the legacy agencies that OI
continues to perform, which also drive some of the types of investigative
activities that are conducted. For example, OI has continued the legacy
Customs practice of responding to violations concerning seized drugs or
merchandise or detained persons uncovered at ports of entry by Customs and
Border Protection (CBP) inspectors. U.S. Customs had historically been
involved with helping to implement the President's National Drug Control
Strategy. Consistent with this involvement, DHS now receives funding
specifically to support activities related to the strategy. A senior OI
official said OI will continue to be responsible for performing a
significant level of drug investigations because there simply is no other
agency available to conduct the large number of border-related drug
investigations U.S. Customs has historically performed and that are now
carried out by OI. Another carryover function that OI now performs is the
legacy INS practice of identifying aliens incarcerated in prisons and
jails that are eligible for removal from the United States.

4OI also has investigatory responsibilities for certain international
terrorism offenses, such as providing material support to foreign
terrorist organizations. Although anti-terrorism laws passed before and
after the creation of DHS, such as the USA PATRIOT Act of 2001, Pub. L.
No. 107-56, 115 Stat. 273, and the Intelligence Reform and Terrorism
Prevention Act of 2004, Pub. L. No. 108-458, 118 Stat. 3638, did not give
ICE additional authority, they did expand many of the criminal statutes
ICE enforces, especially those concerning certain terrorism and
money-laundering offenses.

 OI Investigative Resources Were Used for Investigations Related to Its Legacy
    Missions, but Most Were Not Considered to Have a National Security Nexus

Between 10 and 15 percent of investigative hours were classified by OI as
having a direct nexus to national security. Although there is no firm
standard for how OI should distribute its investigative resources, ICE's
interim strategic goals and objectives place a strong emphasis on national
security-related activities. According to OI, the majority of the national
security-related investigative hours were charged in a few case categories
related to munitions control, illegal exports, compliance enforcement of
visa violations, and terrorism. Most of the investigative hours within
those case types that consumed roughly half of OI resources-drugs,
financial, and general alien-were rarely classified as having a direct
nexus to national security.5 In its fiscal year 2007 budget justification,
DHS requested funds to increase the level of resources dedicated to visa
compliance enforcement by more than 40 percent through the addition of
over 50 special agent and support staff dedicated to these types of
investigations.

Roughly half of OI investigative resources during fiscal year 2004 and the
first half of fiscal year 2005 were used for cases related to drugs,
financial crimes, and general alien violations. The resource use in the
other case categories pertains to investigations of a variety of customs
and immigration violations including commercial fraud, general smuggling,
human smuggling and trafficking, identity fraud, document fraud, and
worksite enforcement. None of the investigative categories that apply to
these violations individually accounted for more than 8 percent of
investigative resource use during the period under study. In most
instances these other case categories accounted for 5 percent or less of
resource use.

5Although they do not fall into the categories that OI identified as
having a national security link, OI officials told us that there may be
other investigative categories that could be considered national security
related. National Security Presidential Directive 25 designated
international drug trafficking organizations and their linkages to
international terrorist organizations as a threat to national security. If
the OI resources dedicated to the investigation of drug trafficking that
involves major criminal organizations are included in the national
security-related measure, then the percentage of investigative resources
devoted to national security might be as high as 18 percent in fiscal year
2004 and 19 percent in fiscal year 2005.

Moreover, with regard to general alien investigations, the equivalent of
about 400 OI investigators performed, as a central part of their daily
duties, functions that are noninvestigative in nature (i.e., not
consistent with the position description of a criminal investigator as
defined by the Office of Personnel Management.) According to OI officials,
some of these noninvestigative activities were formerly performed by
legacy INS investigators and include identifying incarcerated criminal
aliens who are eligible for removal, an ICE responsibility, and responding
to state and local police agencies that have apprehended illegal aliens.
According to ICE's interim strategic plan, ICE plans to shift this duty to
ICE's Office of Detention and Removal Operations (DRO). A DRO official
told us DRO planned to take over this role from OI incrementally by first
assuming responsibility for this activity in several major metropolitan
areas in 2005 and 2006.

OI investigators also perform worksite enforcement, which according to the
OI Deputy Assistant Director responsible for this function, includes
activities that might be more economically performed by noninvestigatory
staff. This function-verifying that employees at critical and noncritical
worksites are eligible to work in the United States-was described by OI
officials as a compliance function that is not clearly aligned with the
criminal investigator job description. Since the late 1990s, the level of
investigative resources legacy INS and then ICE dedicated to this function
has decreased. Since the terrorist attacks of September 11, 2001, INS and
ICE have concentrated worksite investigative resources at critical
infrastructure facilities. In its fiscal year 2007 budget justification,
DHS requested funds to support the addition of 206 positions-171 of which
are special agents-to conduct worksite enforcement. If these resources are
approved and used for worksite enforcement, this would increase OI's
worksite enforcement effort significantly compared to what was done in
fiscal year 2005.

The fiscal year 2006 Department of Homeland Security Appropriations
Conference Report6 directs ICE to submit a plan for the expanded use of
immigration enforcement agents to focus on civil and administrative
violations, raising the possibility that additional noninvestigative
duties may be shifted from OI investigators, making them available for
criminal investigations.

6H.R. Conf. Rep. No. 109-241, at 47 (2005).

OI Places Priority on National Security Investigations, but Key Management
Practices Could Enhance OI's Resource Allocation Decision-Making

OI tries to ensure that its resources contribute to the prevention of the
exploitation of systemic vulnerabilities in customs and immigration
systems by making most investigative resource use decisions in OI's major
field offices, based on the judgment of the agents in charge, with
priority on investigating national security-related cases that arise.
Although we found no evidence that OI has failed to investigate any
national security-related lead that came to its attention, applying a risk
management approach to proactively determine what types of customs and
immigration violations represent the greatest risks for exploitation by
terrorists and other criminals could provide OI with greater assurance
that it is focusing most intensely on preventing those violations with the
greatest potential for harm while striking an appropriate balance among
its various objectives. According to the Standards for Internal Control in
the Federal Government, one of the foundational components of a good
control environment is risk assessment-including the assessment of risks,
estimation of their significance, the likelihoods of their occurrence, and
decisions about how to respond to them.

OI has taken some initial steps to introduce principles of risk management
into its operations-for example, encouraging its field managers to think
about violations in terms of vulnerabilities to the customs and
immigration systems. In addition, OI classifies each investigation using
the numeric designations 1, 2, and 3, with class 1 indicating the highest
relative importance within that category of investigation. However, it has
not conducted a comprehensive risk assessment of the customs and
immigration systems to determine the greatest risks for exploitation or
analyzed these data to provide information to evaluate alternative
investigative strategies and allow OI to make risk-based resource
allocation decisions. Such a system could provide OI with greater
assurance that it is striking an appropriate balance among its various
objectives while focusing most intensely on preventing those violations
with the greatest potential for harm.

Application of a risk management approach by OI involves a risk assessment
that would provide information in three areas: (1) threat-what strategic
intelligence and experience suggest about how customs and immigration
systems might be exploited by terrorists and other criminals; (2)
vulnerabilities-the ways that customs and immigration systems are open to
exploitations and the kinds of protections that are built into these
systems; and (3) consequence-the potential results of exploitation of
these systems, including the most dire prospects. For example, ICE's
strategic goal to prevent the unlawful movement across U.S. borders of
people, money, and materials, includes as one of its strategies giving
highest priority to closing those vulnerabilities that pose the greatest
threat to our national security. However, OI has not performed a risk
assessment to determine which vulnerabilities pose the greatest threat so
that it can direct resources to those investigations that best address
these vulnerabilities. Figure 2 demonstrates how the risk assessment and
investigator's judgment would combine to inform case selection and
resource allocation.

Figure 2. Potential Decision-Making Approach for Evaluation and Selection
of Investigative Resource Allocation Alternatives

ICE has begun to incorporate elements of risk management into its resource
allocation decision making. OI has several ongoing programs within its
National Security Division designed to identify and mitigate national
security threats. One is Project Shield America, where special agents
conduct outreach to the export industry to educate these businesses about
U.S. export laws and to solicit their assistance in preventing the illegal
foreign acquisition of their products. OI also uses the Threat Analysis
Unit and Compliance Enforcement Unit within the National Security Division
to screen nonimmigrant students, exchange students, and other visitors for
the purpose of identifying potential national security threats. The value
of risk management goes beyond these types of resource allocation,
however. Specifically, a more comprehensive risk management approach would
enable OI to better ensure that its resources are effectively and
efficiently applied to its national security and other missions by giving
it a foundation for determining how resources might be best distributed
within and across investigation types, for example, (1) how to best
allocate its resources among case categories (e.g., visa violations, drug
smuggling, and financial crimes); (2) the appropriate level of investment
in national-security related investigations; and (3) the appropriate mix
of case classifications within each category (i.e., the three-level
classification of cases based on relative importance).

Effective risk management also requires outcome-based performance measures
and goals. We found OI lacks outcome-based performance goals to monitor
the full range of its efforts to prevent the systemic vulnerabilities that
allow terrorists and other criminals to endanger the United States.
Performance goals-consisting of a target (acceptable level of performance)
and a measure (a means to assess the performance level)-are an essential
management tool in managing programs for results. In addition, our
Standards for Internal Control in the Federal Government and the Office of
Management and Budget call for agencies to have performance measures and
indicators that are linked to mission, goals, and objectives to allow for
comparisons to be made among different sets of data (for example, desired
performance against actual performance) so that corrective actions can be
taken if necessary.

Currently, OI relies primarily upon statistics related to investigative
resource use-such as arrests, seizures, and convictions-to monitor
performance. In fact, ICE reports only one output performance measure for
OI on the DHS Performance and Accountability Report-the percentage of
investigations that result in an enforcement action (e.g., an arrest,
conviction, or fine). Measuring the percentage of investigations that
result in enforcement action provides only an indirect indicator of
success in preventing systemic vulnerabilities that allow terrorists and
other criminals to endanger the United States. Among other things, it
lacks the ability to reflect successes of OI's programmatic activities
that are designed to deter the exploitation of systemic vulnerabilities
before a crime is committed-for example, a measure of the outcomes of
actions taken to close or control identified vulnerabilities. Without
outcome-based performance goals, it is difficult for OI to gauge the
effectiveness of its operational activities and to use this information to
assess what types of corrective actions might be required-such as changes
to programs or work processes in order to better align activities with
strategic objectives.

Finally, OI does not have sufficient systems to help ensure ongoing
monitoring and communication of vulnerabilities discovered during its
investigations. These controls could enhance OI's ability to take action
to eliminate those vulnerabilities or to recommend mitigation practices to
entities that control the applicable customs or immigration system.
Standards for Internal Control in the Federal Government calls for
agencies to establish monitoring and communication systems that assess the
quality of performance over time and ensure that findings of deficiencies
are corrected and result in improvements to the process. OI officials said
they are trying to use Cornerstone-a program to identify and reduce
systemic vulnerabilities in financial systems-as a model for creating such
a feedback loop (see fig. 3). Cornerstone was created by ICE to encourage
coordination with the financial industry. OI officials in headquarters and
field offices conduct outreach to the private sector and partner with
private industry as well as with state and other federal law enforcement
and regulatory agencies. The private sector provides ICE with information
regarding the vulnerabilities it has observed, and ICE uses this
information to develop criminal investigations. ICE also disseminates
information on vulnerabilities to financial sector stakeholders through
the Cornerstone Report. When vulnerabilities are identified that cannot be
addressed by the private sector alone, ICE officials told us that a joint
law enforcement and regulatory approach is utilized to eliminate or
minimize vulnerabilities.

Figure 3. The Cornerstone Process

With the exception of the Cornerstone program for financial
investigations, OI does not have a complete system in place to help ensure
that information gained during the course of investigations feeds back
into the operations of other DHS components, other federal agencies, state
and local partners, and relevant private sector entities to proactively
reduce the vulnerabilities that facilitate violations. OI has taken
initial steps to apply parts of the Cornerstone approach to all its
investigative areas. For example, Project Shield America uses the same
outreach techniques to the export sector as Cornerstone does to the
financial sector, without the emphasis on changing policies and practices
to reduce identified vulnerabilities. However, OI officials told us that
OI does not have a process to help ensure that action is taken to mitigate
the risks from the vulnerability identified during the course of its
investigations across all SACs. A systemwide process for capturing the
information and ensuring that OI takes appropriate actions in response to
information, extending beyond financial crimes, would better support its
ability to reduce vulnerabilities in immigration and customs systems by
allowing OI to monitor the progress of efforts to reduce vulnerabilities
and the identification of those involved in these efforts. Such a process
is especially important for OI, since so many of its operations are
collaborative, and the vulnerabilities identified through its
investigations may require legal or policy changes that are controlled by
external stakeholders.

                                  Conclusions

Although OI, as the primary investigative agency of the Department of
Homeland Security states that it places priority on national security,
from a practical standpoint, it is focused on enforcing all laws and
regulations governing the customs and immigration systems. Before the
creation of the DHS, these efforts, carried out by legacy INS and U.S.
Customs service had a limited relation to national security-and indeed
even since becoming a part of DHS, cases considered to be directly related
to national security have demanded a relatively small portion of OI's
resources. Particularly considering its wide-ranging mission, a more
comprehensive risk management approach could provide OI with better
information to evaluate its alternatives and balance its resource
allocations most effectively across the broad array of violations it is
responsible for investigating. Although OI has applied some of the
principles of risk management to its operations, applying a comprehensive
risk management approach would provide a stronger evidence-based
foundation to help it ensure that its resource allocation best supports
its ability to prevent those systematic vulnerabilities with the most
potential to endanger the United States. Specifically, a more
comprehensive risk management approach would enable OI to better ensure
that its resources are effectively and efficiently applied to its national
security and other missions by giving it a foundation for determining how
resources might be best distributed within and across investigation types,
for example, (1) how to best allocate its resources among case categories
(e.g., visa violations, drug smuggling, and financial crimes), (2) the
appropriate level of investment in national-security related
investigations, and (3) the appropriate mix of case classifications within
each category (i.e., the three-level classification of cases based on
relative importance).

Lacking OI-wide outcome-based performance goals to assess its ability to
prevent the exploitation of systematic vulnerabilities in customs and
immigration systems that allow terrorists and other criminals to endanger
the United States makes it difficult for OI to evaluate the results of its
efforts in light of that objective. In addition, this lack may promote a
tendency for OI to stay in the functional mindset of its legacy agencies.
In particular, using data like the number of arrests, fines, drug and
other seizures, prosecutions, and convictions gives OI some ability to
assess the outputs of its activities. However, relying primarily on this
type of performance data may make it more difficult for OI to determine if
it should alter its investigative focus because favorable outputs (e.g.,
high numbers of arrests) tend to reinforce the current focus whether or
not it is helping accomplish the ICE mission. Without outcome-based
performance goals that are tied to ICE's mission and objectives, the
agency will lack a sufficient basis for assessing the alignment of
resources that might offer the greatest contribution to this broad
mission. Developing measures that can meaningfully gauge performance
related to an expansive deterrence mission like ICE's is not an easy task.
However, armed with information about the relative risk to the customs and
immigration systems, OI could be in a better position to measure its
performance and make resource use decisions based on the potential to
mitigate the most crucial identified risks.

Finally, a critical part of the ICE mission is to reduce the vulnerability
of the United States to terrorism. OI's Cornerstone program and efforts to
extend this approach to other investigative areas are intended to reduce
vulnerabilities by feeding lessons learned from criminal investigations
back into the organization's systems and practices. However, these efforts
do not include sufficient monitoring and communication systems to ensure
that information is systematically fed back and that it consistently
results in corrective actions. A feedback process that includes processes
and procedures (for example, clearly established lines of reporting and
authority and documented protocols) to help ensure that vulnerabilities OI
uncovers during its investigations will result in mitigation measures or
in recommendations for such measures to entities responsible for the
applicable system would enhance OI's ability to reduce vulnerabilities in
customs and immigration systems.

                                Recommendations

To put OI in a better position to allocate its investigative resources in
a manner that maximizes their contribution to the achievement of ICE's
mission, we recommended that the Secretary of Homeland Security direct the
Assistant Secretary of ICE to take the following three actions:

           o  Conduct comprehensive threat, vulnerability, and consequence
           risk assessments of the customs and immigration systems to
           identify the types of violations with the highest probability of
           occurrence and most significant consequences in order to guide
           resource allocation for OI national programmatic activity and to
           expand the available information upon which SACs base their
           decisions to open new cases.

           o  On the basis of the results of the risk assessment, develop
           outcome-based performance goals (measures and targets) that
           reflect the contribution of various investigative activities to
           ICE's mission and objectives and develop a reliable method for
           tracking national security-related activity and classification
           criteria for the case management system that express the
           contributions of each investigation.

           o  Develop an OI-wide system to monitor and communicate the more
           significant vulnerabilities in customs and immigration systems
           that are identified during the course of OI investigations. This
           process should include a method to mitigate the vulnerability
           internally or to ensure that the vulnerability and associated
           mitigation recommendations are communicated to external
           stakeholders with responsibility for the applicable system.

In response to our first recommendation, DHS agreed risk management is a
valuable tool to establish priorities in a multiple threat environment and
said ICE intends to take a broader, component-wide approach to assessing
risk. DHS agreed that the ICE Office of Investigations resource decisions
should be based on priorities derived from a strategic-planning process in
which directors and unit managers from all ICE OI program areas
participate, including mission support. DHS said priorities set forth in
the strategic plan should be reviewed annually, revised as necessary, and
communicated to each SAC.

While DHS agreed with our second recommendation, it said that ICE needs to
maintain the flexibility to develop performance goals that reflect its
mission and may not necessarily be measurable in an outcome-based manner.
DHS said the Office of Management and Budget has acknowledged that for
certain activities (e.g., law enforcement) "outcome-oriented" performance
measures may be difficult to identify and performance may be tracked by
using a variety of output as well as qualitative measures. DHS said each
division within OI uses standard law enforcement statistics covering all
of its program units that can be shared, understood, and compared over the
years, including arrests, indictments and convictions, broken out by
category. We agree that developing outcome-based performance measures for
law enforcement activities can be difficult and that some output measures
can be beneficial. However, we continue to believe that where possible OI
should seek to develop outcome-based performance measures that would
better demonstrate the value of its efforts. OI needs to allocate
resources to the types of investigations that have the best chance of
mitigating potential vulnerabilities in customs and immigration systems to
terrorism.

With regard to our third recommendation, DHS said that OI headquarters'
program managers regularly communicate with the SAC offices to obtain
feedback on significant cases and identified vulnerabilities. This
information is documented in reports that are transmitted two times a day
to both the OI and DHS leadership. A weekly report also is prepared that
summarizes the significant cases of the week. DHS said that OI has
established designated liaisons to both U.S. Citizenship and Immigration
Services and CBP and they communicate specific vulnerabilities and
threats. While these efforts are useful, our recommendation envisions a
more comprehensive strategy to identify and mitigate vulnerabilities in
customs and immigration systems and processes. We are encouraged that OI
intends to continue to expand such outreach and partnership efforts. In
implementing our recommendation, we believe that OI should obtain and use
feedback from all relevant governmental and nongovernmental organizations
in its efforts to mitigate potential vulnerabilities.

Mr. Chairman, this concludes my statement. I would be pleased to respond
to any questions that you or other members of the Subcommittee may have at
this time.

                     GAO Contacts and Staff Acknowledgments

For further information about this testimony, please contact Richard Stana
at 202-512-8777.

Other Key contributors to this statement were Michael Dino and Tony
DeFrank.

(440492)

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www.gao.gov/cgi-bin/getrpt? GAO-06-462T .

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Highlights of GAO-06-462T , testimony before the Chairman, Subcommittee on
National Security, Emerging Threats, and International Relations,
Committee on Government Reform, House of Representatives

March 2006

HOMELAND SECURITY

Better Management Practices Could Enhance DHS's Ability to Allocate
Investigative Resources

transparent illustrator graphic

Immigration and Customs Enforcement's (ICE) mission is to prevent
terrorist attacks within the United States and reduce the vulnerability of
the United States to terrorism while ensuring its mandated customs,
immigration, and federal protective enforcement functions are not
diminished. The ICE Office of Investigations (OI) supports that mission by
investigating customs and immigration violations. This testimony addresses
the following key questions that were answered in GAO-06-48SU, a
restricted report issued with the same title: (1) What structure and
activities has OI adopted to address its mission? (2) In fiscal year 2004
and the first half of fiscal year 2005, how did OI use its investigative
resources to achieve its goals? (3) How does OI ensure that its resource
use contributes to its ability to prevent the exploitation of systemic
vulnerabilities in customs and immigration systems?

What GAO Recommends

GAO recommended that Homeland Security implement management practices to
support resource allocation decisions, including a risk assessment,
revised performance measures, and monitoring and communication systems to
provide meaningful data about resource use.

The Department of Homeland Security concurred with GAO's recommendations.

OI's organizational structure and investigative activities reflect those
of its legacy agencies-the U.S. Customs Service and the Immigration and
Naturalization Service-and include activities to prevent terrorism. OI
retained responsibility for enforcing customs and immigration laws, and
its field structure was created by relying on the strategic priorities of
its legacy agencies to determine the composition and locations of field
offices. Senior OI officials said that OI seeks to accomplish its homeland
security mission by focusing on cases that seem to have a connection to
national security.

Data from ICE's case management system indicate that its investigative
activities generally relate to legacy missions, with about half of OI
resources during fiscal year 2004 and the first half of 2005 used for
cases related to drugs, financial crimes, and general alien
investigations-investigations unlikely to contain a nexus to national
security. Overall, between 10 and 15 percent of investigative resources
were used for investigations considered to have a link to national
security. OI's current method of tracking these cases captures data about
the cases where a nexus to national security is assumed due to the nature
of the violation, primarily investigations of munitions control, illegal
exports, visa violations, and terrorism. Additionally, the equivalent of
about 400 of its 5,600 special agents worked full time to identify
incarcerated aliens who were eligible for removal from the United States,
a function that does not require the skills and training of criminal
investigators. ICE plans to free investigators for more appropriate duties
by shifting these functions to other ICE units and to study whether other
functions could be shifted to employees in a noninvestigatory job series.

To make resource use decisions in pursuit of OI's goal to prevent the
exploitation of systemic vulnerabilities in customs and immigration
systems, OI primarily relies on the judgment of staff in its major field
offices, in addition to national programs developed in headquarters that
are implemented in multiple field offices. Although GAO found no evidence
that OI has failed to investigate any national security-related lead that
came to its attention, applying a risk management approach to determine
what types of customs and immigration violations represent the greatest
risks for exploitation by terrorists and other criminals could provide OI
with greater assurance that it is focusing on preventing violations with
the greatest potential for harm, while striking a balance among its
various objectives. OI has taken some initial steps to introduce
principles of risk management into its operations, but has not conducted a
comprehensive risk assessment of the customs and immigration systems to
determine the greatest risks for exploitation, nor has OI analyzed all
relevant data to inform the evaluation of alternatives and allow
risk-based resource allocation decisions. OI also lacks outcome-based
performance goals that relate to its objective of preventing the
exploitation of these systemic vulnerabilities. Finally, OI does not have
sufficient systems to help ensure ongoing monitoring and communication of
vulnerabilities discovered during its investigations.
*** End of document. ***