Scope and Methodology

To determine (1) INS’ overall fiscal condition, and (2) how factors such as overhiring and a decline in Examinations Fee applications have affected INS’ fiscal situation, we interviewed officials in INS’ Offices of Budget, Personnel, Facilities, and Field Operations. As discussed below, this policy, combined with other fiscal pressures, resulted in most INS programs having less discretionary funding in fiscal year 1999 than in fiscal year 1998. The Border Patrol program accounted for most of the projected deficit. To successfully implement the policy of hiring up to funded levels during fiscal year 1998, INS had to commit a larger share of its budget to pay for personnel costs. Although, overall, the Office of Field Operations received more discretionary funds than in fiscal year 1998, some programs within the Office of Field Operations received less. Declines in Examinations Fee Revenues and Delays in Detecting the Declines Added to INS’ Fiscal Stress

In formulating its fiscal year 1999 budget, INS projected in November 1997 that it would receive 6.9 million Adjudications and Naturalization applications, and that these would produce $862 million in revenues for its Examinations Fee account. INS overestimated the number of applications—in particular, the number of naturalization applications--that would be submitted to INS, and because of computer problems, it was not able to detect the downturn in applications in a timely fashion. In August 1998, DOJ submitted a reprogramming request for $171 million, of which $88 million was to help cover the decline in Examinations Fee revenues. However, it turned out that CBOs were not stockpiling naturalization applications, and the expected surge did not occur. For several reasons, Justice officials said, it is difficult to accurately project rent costs, and the shortfall in INS’ funds for rent is not inconsistent with what it has incurred in prior years.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed the fiscal year (FY) 2000 budget request for the Immigration and Naturalization Service (INS), focusing on: (1) INS' overall fiscal condition in FY 1999; and (2) how factors such as overhiring and a decline in Examinations Fee applications have affected INS' fiscal situation.

What GAO Found

GAO noted that: (1) after discussions with officials in INS, the Department of Justice, and the Office of Management and Budget, and based on GAO's analysis of INS budget documents, GAO concluded that INS is not experiencing an overall budget shortfall at this time; (2) the hiring policy that INS followed in FY 1998 in an attempt to meet congressional and administrative expectations resulted in INS having to commit a greater share of its FY 1999 budget to salaries and benefits than in prior years; (3) overall, however, INS has more discretionary funds than it had in FY 1998; (4) with respect to the Examinations Fee account, INS overestimated the number of applications it would receive and did not detect the consequent revenue shortfall for months because of computer programming errors; (5) when it became apparent that the anticipated revenues would not be realized, INS decided to seek reprogramming of funds from other accounts to cover the costs; (6) the overhiring and reduced Examinations Fee revenues contributed to most INS programs having less discretionary funding in FY 1999 than in FY 1998; and (7) although INS has not experienced an overall budget shortfall, the combination of higher personnel costs, declining Examinations Fee revenues, and the resultant need to reduce discretionary funding allocations to most programs has created fiscal stress for the agency.