OR&R Headquarters Improved Response Time for Issuing Prospective Rulings

Our review of a sample of prospective ruling request cases showed that in  response to the Customs Commissioner’s January 2002 mandate, OR&R  headquarters improved its response time for issuing prospective rulings. Our review showed that about 75 percent of  the cases were completed in 120 days or less, the old goal, and about 64  percent were completed within 90 days, the new goal. OR&R reported that its efforts to eliminate the backlog of 757  headquarters ruling request cases open 90 days or more as of February 1,  2002, were successful. Actions Taken by OR&R Headquarters to Improve the Timeliness of Rulings and Eliminate the Backlog

Since the Customs Commissioner required in January 2002 that OR&R  issue rulings within 90 days and the existing backlog of ruling requests be  eliminated, OR&R has given ruling requests its highest priority, according  to OR&R officials. Conclusions

OR&R headquarters improved the timeliness of its prospective rulings  since we issued our September 2000 report concluding that most rulings  were untimely. LCIS, OR&R’s automated database, continued to face data reliability  challenges. OR&R has taken corrective actions to improve the accuracy  and reliability of LCIS data. However, these actions do not provide  assurance that OR&R has resolved its LCIS data reliability challenges  because some of the actions lack specific procedures for their effective  implementation. In addition, our report identifies that OR&R improved  its response time for cases in the latter part of our sample (i.e., cases  opened and closed from July through October 2002, after OR&R had made  significant progress in reducing the size of its ruling request backlog), with  an estimated 94 percent of these cases completed within 90 days. We  excluded other prospective ruling cases that the Trade Act of 2002 did not  require us to study. OR&R Headquarters Actions on Rulings

To determine what actions OR&R headquarters took to improve the  timeliness of its prospective rulings and eliminate its backlog of ruling  request cases, we interviewed OR&R management officials and collected  and reviewed pertinent documentation (e.g., OR&R reports to the  Commissioner regarding the status of efforts to implement procedural  changes to issue rulings within 90 days and eliminate the backlog; the July  2002 draft Standard Operating Procedure intended to provide a  standardized approach for processing and issuing rulings).
Why GAO Did This Study

GAO previously reported that the U.S. Customs Service Office of Regulations and Rulings (OR&R) headquarters was not timely in issuing most of its prospective rulings, which establish the duties importers pay on imported goods. The Trade Act of 2002 required GAO to determine whether OR&R has improved the timeliness of its prospective rulings. In addition, GAO determined what actions OR&R took to improve the timeliness of rulings and whether OR&R resolved challenges it faced with the reliability of automated rulings data.

What GAO Found

OR&R headquarters improved its response time for issuing prospective rulings since GAO issued a September 2000 report concluding that most rulings were untimely. GAO's review of a sample of prospective ruling request cases opened and closed from February through October 2002 showed that OR&R headquarters completed about 75 percent of these cases within its prior goal of 120 days, with about 64 percent of the cases completed within the 90-day goal mandated by the Customs Commissioner in January 2002. For cases in the latter part of our sample that were opened and closed from July through October 2002, after significant progress had been made in reducing a backlog of ruling requests, OR&R completed an estimated 94 percent of the cases within 90 days. OR&R also reported that it was successful in its efforts to eliminate the February 1, 2002 backlog of 757 ruling requests that had been open more than 90 days. Since the Commissioner's January 2002 mandate to issue rulings within 90 days, OR&R has given ruling requests the highest priority, with increased attention to balancing workloads and increased management oversight. OR&R has also taken other actions to help issue rulings within 90 days and prevent delays. OR&R continued to face data reliability challenges with its automated rulings database. OR&R has taken corrective actions to improve the accuracy and reliability of the database. However, these corrective actions do not provide assurance that OR&R has resolved the data reliability challenges because some of the actions lack specific procedures for their effective implementation.