Collections for Over One-Third of Programs Fully Covered Identified Costs, but DHS Has Not Consistently Documented Cost Recovery Processes and Decisions

		Collections for 14 Programs Fully Covered Identified Costs, and Components Cited Actions to Increase Cost Recovery for 10 Additional Programs

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. Specifically, these officials said that they  established such targets for 21 of 25 programs with unobligated balances  carried over to fiscal year 2014 based on historical trends in collections  and projected program costs. Our  analysis of DHS OCFO data showed that DHS components carried over  unobligated balances totaling $2.6 billion from fiscal year 2014 to fiscal  year 2015 across the 25 fees and other collections. CBP’s User Fee Facility Program

CBP has not established a target for the maximum unobligated carryover  balance necessary for its User Fee Facility program or taken action  necessary to reduce the approximately $14 million balance as of fiscal  year end 2014 within the collection program that, while relatively small,  consistently constituted over 100 percent of the program’s operational  costs each year from fiscal years 2010 through 2014. DHS Does Not Ensure Components Conduct Program Reviews and Does Not Monitor Components’ Actions to Address Identified Management and Operational Deficiencies

		DHS Does Not Provide Oversight to Ensure That All Components Review and Report on Programs Receiving Fees and Other Collections

DHS OCFO distributes instructions to components for submitting the  results of biennial reviews of their fee and other collections programs to  DHS, but does not provide oversight to ensure that components conduct  these reviews. With regard to reporting, our review of DHS’s CFO Act report—The  Department of Homeland Security’s Agency Financial Report for Fiscal  Year 2014 (Agency Financial Report)—showed that DHS OCFO did not  report the extent to which all components are conducting such reviews or  any proposals to address management and operational deficiencies  identified by components, such as those relating to the adjustment of fee  and other collection rates. However, components have not taken  action to address 9 of these 20 deficiencies. Conclusions

The uncertain budgetary environment highlight the need for DHS and its  components to effectively manage, use, and oversee the approximately  $15 billion in collections by DHS components across 38 homeland  security-related programs. For example, ensuring that for all fee and other collections  programs DHS OCFO and components are (1) documenting decisions  about whether or not to take action, as appropriate, to address  differences between program costs and collections; (2) establishing  targets for appropriate minimum and maximum unobligated carryover  balances; (3) conducting fee reviews; and (4) tracking and reporting the  status of recommended actions would allow the DHS Fee Governance  Council, the DHS OCFO, or others to provide oversight and ensure that  management practices and decisions are appropriate and effective to  ensure continuity of operations and equity in amounts charged to users of  program services. Recommendations for Executive Action

To ensure effective management and oversight of DHS programs  receiving fees and other collections, we recommend that the Secretary of  Homeland Security direct the DHS Chief Financial Officer to use some  means, such as the DHS Fee Governance Council, to ensure that  component management take the following actions for each fee and other  collections program that they administer: document the processes and analyses for assessing and, as  appropriate, for managing the difference between program costs and  collections and document resulting decisions; establish processes for managing unobligated carryover balances, to  include targets for minimum and maximum balances for programs that  lack such processes and targets;  conduct reviews to identify any management and operational  deficiencies; and  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. Specifically, DHS  stated that GAO characterizes these processes as being too heavily  focused on ensuring continuity of program operations rather than efficient  use of funds, when in fact components actively manage carryover  balances to ensure effective use of program funds. Appendix I: Department of Homeland Security (DHS) Programs Receiving Fees and Other Collections in Fiscal Year 2014

In fiscal year 2014, the Department of Homeland Security (DHS) received  fees and other collections totaling approximately $15 billion from 38  programs with an estimated $17 billion in identified program costs.
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.

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.

What GAO Recommends

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.