[Survey Report on the Guam U.S. Passport Office, Government of Guam]
[From the U.S. Government Printing Office, www.gpo.gov]
Report No. 00-i-332
Title: Survey Report on the Guam U.S. Passport Office, Government
of Guam
Date: April 14, 2000
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U.S. Department of the Interior
Office of Inspector General
SURVEY REPORT
GUAM U.S. PASSPORT OFFICE,
GOVERNMENT OF GUAM
REPORT NO. 00-I-332
APRIL 2000
EXECUTIVE SUMMARY
Guam U.S. Passport Office, Government of Guam
Report (No. 00-i-332)
BACKGROUND
The Office of the Governor of Guam was authorized by the U.S.
Department of State to assist in processing passports for U.S.
citizens on Guam. Accordingly, the Governor established the Guam
U.S. Passport Office to accept application and renewal forms for
U.S. passports; review them to ensure that they are completed
correctly and have the required supporting documents; and forward
them to Honolulu, Hawaii, for final processing by the Honolulu
Passport Agency, U.S. Department of State. During the 21-month
period reviewed (October 1997 through June 1999), the Passport
Office processed 21,895 passport applications and collected
related fees totaling $1,328,334. During the same period, the
Passport Office had seven employees, five of whom processed
passport applications.
OBJECTIVE
The objective of the survey was to determine whether the Passport
Office's internal controls over cash collected for fees were
adequate. This survey was performed based on a request from a
Senator of the 24th Guam Legislature.
RESULTS IN BRIEF
We concluded that the Passport Office's internal controls
provided reasonable assurance that transactions were properly
recorded, cash and passports were adequately safeguarded, and
fees were properly assessed and collected. However, the Passport
Office did not assess and collect execution fees for no-fee
passports, as required by the United States Code and U.S.
Department of State regulations. An execution fee of $15 is to
be collected upon execution of each passport license regardless
of whether a passport fee is applicable. Based on our review, we
determined that the Passport Office should have assessed and
collected execution fees totaling $4,350 for 290 no-fee passport
applications processed during fiscal years 1998 and 1999 (through
June 30, 1999).
RECOMMENDATION
We recommended that the Chief Passport Officer of the Guam
Passport Office develop and implement written procedures that are
in conformance with the Federal requirements regarding the
assessment and collection of execution fees.
AUDITEE COMMENTS AND OIG EVALUATION
In its response to the draft report, the Passport Office
concurred with the report's recommendation and stated that a
tracking system had been established for execution fees. We
considered the recommendation resolved and implemented.
Therefore, no further response to the report is required.
N-IN-GUA-004-99-R
SURVEY REPORT
Ms. Andrea Finona
Chief Passport Officer
Guam U.S. Passport Office
101-B Street
Tiyan, Guam 96913
Subject: Survey Report on the Guam U.S. Passport Office,
Government of Guam (No. 00-i-332)
Dear Ms. Finona:
This report presents the results of our review of the operations
of the Guam U.S. Passport Office. The objective of our survey
was to determine whether the internal controls of the Guam U.S.
Passport Office over the cash collected for fees were adequate.
This survey was performed based on a request from a Senator of
the 24th Guam Legislature.
BACKGROUND
The Governor's Office has been authorized by the U.S. Department
of State to assist in processing passports for U.S. citizens on
Guam. The Governor's Office established the Guam U.S. Passport
Office to accept application and renewal forms for U.S.
passports; review them to ensure that they are completed
correctly and have the required supporting documents; and to
forward them to Honolulu, Hawaii, for final processing by the
Honolulu Passport Agency, U.S. Department of State. This review
process reduces the overall processing time by identifying
procedural problems before the forms are sent off-island. The
Guam U.S. Passport Office also assesses and collects fees related
to the processing of the passport applications.
During the 21-month period reviewed (October1997 through June
1999), the Passport Office processed 21,895 passport applications
and collected related fees totaling $1,328,334. The passport
fees collected are deposited into Guam's General Fund. The U.S.
Code Annotated (U.S.C.A.) and Section 30 of the Revised Organic
Act of Guam authorize the Government of Guam to retain the
passport fees. Specifically, 48 U.S.C.A. *1421h states that
"passport [and other] fees collected in Guam shall be covered
into the treasury of Guam and held in account for the government
of Guam, and should be expended for the benefit of the government
of Guam in accordance with the annual budgets; except that
nothing in this chapter shall be construed to apply to any tax
imposed by chapter 2 or 21 of Title 26 of the Internal Revenue
Code . . .."
Passport Office operations are funded by Guam's General Fund. The
Passport Office received appropriations of $248,966 for fiscal
year 1998 and $250,966 for fiscal year 1999 and had expenditures
of $240,088 for fiscal year 1998 and $170,026 for fiscal year
1999 (though June 30, 1999). During the 21 months reviewed, the
Passport Office had seven employees, five of whom processed
passport applications.
SCOPE OF SURVEY
The scope of our survey included a review of the internal
controls at the Passport Office relating to the processing of
passport applications and the assessment and collection of
passport fees during fiscal years 1998 and 1999 (through June 30,
1999) and the safeguarding of cash and passports. Our review was
performed at Guam's U.S. Passport Office in Tiyan, Guam. To
accomplish the survey objective, we reviewed selected transmittal
forms, deposit slips, and supporting documentation; interviewed
employees who processed passport applications; and discussed our
finding with management to determine whether procedures were
adequate. We also interviewed the Treasurer of Guam, Department
of Administration, regarding collection requirements.
Our review was made, as applicable, in accordance with the
"Government Auditing Standards," issued by the Comptroller
General of the United States. Accordingly, we included such
tests of records and other auditing procedures that were
considered necessary under the circumstances.
Based on our review, we identified an internal control weakness
related to assessing and collecting execution fees. This
internal control weakness is discussed in the Results of Survey
section of this report. Our recommendation, if implemented,
should improve the internal controls in this area.
PRIOR AUDIT COVERAGE
During the past 5 years, neither the U.S. General Accounting
Office nor the Office of Inspector General has issued any audit
reports on the internal controls over passport fees assessed and
collected by the Guam U.S. Passport Office.
RESULTS OF SURVEY
We determined that the Guam U.S. Passport Office's internal
controls provided reasonable assurance that transactions were
properly recorded, cash and passports were adequately
safeguarded, and fees were properly assessed and collected.
Although the Passport Office had adequate controls over its
operations, the Office did not assess and collect all required
fees. Specifically, the Passport Office did not assess and
collect execution fees for no-fee passports. The requirements
for assessing and collecting execution fees are contained in the
U.S. Code Annotated, the Code of Federal Regulations (CFR), and
the U.S. Department of State's "Passport Agent's Reference Guide,
Passport Services." The deficiency occurred because management
had not established written procedures for processing passport
applications and collecting the fees. As a result, the Passport
Office did not collect execution fees of $4,350 (see Appendix 1).
Execution Fees
According to 22 U.S.C.A. * 214, "[T]here shall be collected . . .
a fee, prescribed by the Secretary of State by regulation, for
each passport issued and a fee, prescribed by the Secretary of
State by regulation, for executing each application for a
passport." Additionally, according to 22 CFR * 51, "Fees,
including execution fees, shall be collected for the following
passport services in the amounts prescribed in the Schedule of
Fees for Consular Services." Further, the "Passport Agent's
Reference Guide" states that "the Passport Agent collects the
required fees when the application is executed. The passport fee
for a DSP-11 Passport Application is $25 for passports issued to
persons under 16 years of age and $45 for passports issued to
persons 16 years old or older. The execution fee is $15 for
both minors and adults." The Guide also states, "State, county
or municipal officials collect the execution fee for executing
both fee and no-fee passport applications."
Based on these requirements, we reviewed the fee collection
process for passport applications included on 532 transmittal
forms processed in January, February, and March 1999 and in July,
August, and September 1998. We identified 5,738 passport
applications, with fees totaling $341,120, and found that the
Passport Office did not assess and collect execution fees for
no-fee passport applications. The transmittal forms were used to
list the names of applicants and various fees (such as passport
fee, execution fee, expedite fee, and special postal service
fee) paid by the applicants. We compared information concerning
the number of passport applications processed and the amount of
fees collected and deposited as shown on the transmittal forms
with the information shown on the Passport Office's summary
worksheets and found no discrepancies. Therefore, using the
summary worksheets, we determined that 290 no-fee passport
applications had been processed: 165 during fiscal year 1998 and
125 during fiscal year 1999 (through June 30, 1999). Based on
the stated execution fee of $15, the Passport Office should have
assessed and collected execution fees totaling $4,350 for the 290
no-fee applications.
The Deputy Chief responsible for overseeing the collection of
passport fees told us that she was not aware that execution fees
were required for no-fee passports. The Deputy Chief contacted
the Director, Honolulu Passport Office, by telephone concerning
the execution fee for no-fee passports. The Customer Service
Manager of the Honolulu Passport Office wrote a memorandum, dated
September 23, 1999, instructing the Guam U.S. Passport Office to
"accept and execute applications for no-fee passports if you are
not already accepting them." The memorandum further stated,
"Upon execution of the application for a no-fee passport . . .
Your office will be entitled to collect and retain the $15
execution fee."
Recommendation
We recommend that the Chief Passport Officer of the Guam U.S.
Passport Office develop and implement written procedures that are
in conformance with Federal requirements/guidance regarding the
assessment and collection of execution fees.
Guam U.S. Passport Office Response and Office of Inspector
General Reply
In its February 8, 2000, response (Appendix 2) to the draft
report, the Passport Office stated that it had "been assessing
the execution fee for no-fee passports since September 27, 1999."
In a March 8, 2000, supplemental response (Appendix 3), the
Passport Office stated that it had established "a tracking system
for execution fees." Based on the responses, we consider the
recommendation resolved and implemented.
Since the report's recommendation is considered resolved and
implemented, no further response to this report is required (see
Appendix 4).
Section 5(a)(3) of the Inspector General Act (5 U.S.C. app 3)
requires the Office of Inspector General to list this report in
its semiannual report to the Congress. In addition, the Office
of Inspector General provides audit reports to the Congress.
Sincerely,
Earl E. Devaney
Inspector General
cc: Governor of Guam
APPENDIX 1
CLASSIFICATION OF MONETARY AMOUNTS
Unrealized
Finding Area Revenues
Execution fees $4,350
APPENDIX 2
February 8, 2000
Mr. Robert J. Williams
Assistant Inspector General for Audits
Office of the Inspector General, Pacific Office
U.S. Department of the Interior
415 Chalan San Antonio, Suite 306
Tamuning, Guam 96911
Dear Mr. Williams,
To begin, let me express my appreciation for the efforts your
office and staff expended performing the review of the operations
of the Guam U.S. Passport Office. As the Acting Chief Passport
Officer for Guam, I welcome any review from which may be drawn
constructive ideas and practices to render our service more
effective and efficient for all.
Relative to the review findings that the Guam Passport Office had
not implemented execution fees for Fiscal Year 1998 and 1999, the
Office of the Governor u as informed of the requirement for the
assessment of an execution fee for no-fee passports as
established under Federal statutes (22 U.S.C.A 51 & 214). As a
result of the correspondence from the Honolulu Passport Agency,
the Guam Passport Office has been assessing the execution fee for
no-fee passports since September 27, 1999. The operational review
covered the period October 1997 to June 1999, thus, this
assessment w as not yet in place when Agency records were
reviewed. Prior to September, 1999, and since no-fee passports
are those authorized for federal officials applications were
accepted and processed. without charge
If there are any further questions regarding this matter, or any
other points raised in the operational review, please feel free
to call me at 47-8974.
Sincerely yours,
Andrea M. Finona
Acting Chief Passport Officer
cc: The Governor
The Governor's Chief of Staff
APPENDIX 3
March 8, 2000
Mr. Robert J. Williams
Assistant Inspector General for Audits
Office of the Inspector General, Pacific Office
U.S. Department of the Interior
415 Chalan San Antonio, Suite 306
Tamuning, Guam 96911
Dear Mr. Williams,
In response to your letter regarding the assessment of the
execution fee for no-fee passports as established under federal
statutes, the Guam Passport Office has implemented this process.
As a result of this, our office has garnered additional
responsibilities, which includes the establishment of a tracking
system for execution fees.
To date, this management tool has worked well with our system and
my staff has adapted well to the process. We continue to work
harmoniously with the wonderful staff in the Honolulu Passport
Agency, whose direction and experience enhances our local
Passport Office.
Please feel free to contact me for further discussions regarding
this matter. I may be contacted at 477-8974.
Sincerely,
Andrea Finona
Chief Passport Officer
cc: Governor Carl T. C. Gutierrez
APPENDIX 4
STATUS OF SURVEY REPORT RECOMMENDATION
--------------------------------------------------
Findings/Recommendation Status Action
Reference Required
--------------------------------------------------
| 1 Implemented No further
| action is
| required.
--------------------------------------------------
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