DHS OIG, OIG-12-36, Independent Review of the U.S. Customs and Border Protection's Reporting of FY 2011 Drug Control Performance Summary Report ( (2012)

Department of Homeland Security Independent Review of the U.S. Customs and Border Protection’s Reporting of FY 2011 Drug Control Performance Summary Report OIG-12-36 January 2012 Office of Inspector General U.S. Department of Homeland Security Washington, DC 20528 JAN 30 2012 Preface The Department of Homeland Security (DHS) Office of Inspector General (OIG) was established by the Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector General Act of 1978. This is one of a series of audit, inspection, and special reports prepared as part of our oversight responsibilities to promote economy, efficiency, and effectiveness within the Department. This report presents the results of the review of the Performance Summary Report of the U.S. Customs and Border Protection (CBP) for the year ending September 30, 2011, for the Office of National Drug Control Policy (ONDCP). We contracted with the independent public accounting firm KPMG LLP to perform the review.

The CBP prepared the Performance Summary Report and management assertions to comply with requirements of ONDCP Circular, Drug Control Accounting, dated May 1, 2007. Based on the review, nothing came to KPMG LLP’s attention that caused them to believe that the Performance Summary Report for the year ended September 30, 2011, is not presented, in all material respects, in conformity with ONDCP’s Circular, or that management’s assertions are not fairly stated, in all material respects, based on the criteria set forth in ONDCP’s Circular. KPMG LLP is responsible for the attached independent accountants’ report dated January 20, 2012, and the conclusions expressed in it. We do not express an opinion on the Performance Summary Report and management’s assertions.

We trust this report will result in more effective, efficient, and economical operations. We express our appreciation to all of those who contributed to the preparation of this report. Anne L. Richards Assistant Inspector General for Audits KPMG LLP Suite 12000 1801 K Street, NW Washington, DC 20006 Independent Accountants’ Report Acting Inspector General U.S. Department of Homeland Security: We have reviewed the accompanying Performance Summary Report of the U.S. Department of Homeland Security’s (DHS) Customs and Border Protection (CBP) for the year ended September 30, 2011. We have also reviewed the accompanying management’s assertions for the year ended September 30, 2011.

CBP’s management is responsible for the Performance Summary Report and the assertions. Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants, and applicable standards contained in Government Auditing Standards, issued by the Comptroller General of the United States. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on the Performance Summary Report and management’s assertions. Accordingly, we do not express such an opinion.

Management of CBP prepared the Performance Summary Report and management’s assertions to comply with the requirements of the Office of National Drug Control Policy (ONDCP) Circular, Drug Control Accounting, dated May 1, 2007 (the Circular). Based on our review, nothing came to our attention that caused us to believe that (1) the Performance Summary Report for the year ended September 30, 2011, is not presented, in all material respects, in conformity with the Circular, or that (2) management’s assertions referred to above are not fairly stated, in all material respects, based on the criteria set forth in the Circular. This report is intended solely for the information and use of the management of DHS and CBP, the DHS Inspector General, the ONDCP, and the U.S. Congress, and is not intended to be and should not be used by anyone other than these specified parties. January 20, 2012 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity.

JAN 2 0 2012 MEMORANDUM FOR: FROM: SUBJECT: 1300 Pennsylvania Avenue NW WashingtOn, DC 20 229 u.s. Customs and Border Protection Charles K. Edwards Acting Inspector General Department of Homeland Security Deborah J. Schilling Chief FinanciaJ Officer U.S. Customs and Border Protection Management' s Assertions for U.S. Customs and Border Protection Performance Summary Report to ONDCP In compliance with the Office of National Drug Control Policy (ONDCP) Circular, Drug Control Accounting, dated May 1,2007, U.S. Customs and Border Protection (CBP) submits the attached Performance Summary Report to ONDCP. The report contains the results of CSP's FiscaJ Year (FY) 20 II performance in support of the National Drug Control Strategy. CSP makes the following assertions: (I) Performance reporting system is appropriate and applied. CBP has a system to capture performance information accurately, and the system was properly applied to generate the performance data; (a) The source of the data for the performance measure, amount of currency seized on exit from the United States, is obtained from TECS (Drug Control Decision Unit - Salaries and Expenses); (b) The source of the data for the performance measure - Percentage of Joint lnteragency Task Force- South annual mission hour objective achieved is TECS (Drug Control Decision Unit - Air and Marine Operations); and (c) The source of the data for the performance measure, number of apprehensions on the sou thwest border between the ports of entry is the e3 Processing Database (Drug Control Decision Unit - Salaries and Expenses).

(2) The performance targets were met for the above performance measures in FY 2011; thus, no explanation is required for not meeting the performance target; (3) Methodology to establish performance targets is reasonable and applied. Professional judgement was used in establishing performance measure targets based on subject matter experts with several years of experience in the field; and Management's Assertions for U.S. Customs and Border Protection Perfonnance Summary Report to oNDep (4) Adequate performance measures exist for all significant drug control activities. CBP has established at least one acceptable perfonnance measure for each Drug Control Decision Unit identified in reports. Each performance measure considers the intended purpose of the National Drug Control Program Activity.

To address any questions you have regarding this submission, please contact me at (202) 344-2300, or a member of your staff may contact Mr. James McNally, Director, Investment Analysis Office, at (202) 344- 1651. Deborah J. Schilling Attachment U.S. Department of Homeland Security U.S. Customs and Border Protection Performance Summary Report FY20Il The performance measures presented below directly link to the 2011 National Drug Control Strategy by evaluating U.S. Customs and Border Protection (CBP) success in disrupting domestic drug trafficking. This Performance Summary Report (PSR) contains at least one performance measure per drug control decision unit as required by the Office of National Drug Control Policy (ONDCP) Circular, Drug Control Accounting, dated May I, 2007. The drug control decision units are as follows: (1) Salaries and Expenses, and (2) Air and Marine Operations.

Based on this PSR, the attached Management Assertions letter states the following: (I) the performance reporting system is appropriate and applied; (2) performance targets in FY 20 II were met so an explanation for not meeting targets is not necessary; (3) the methodology used to establish performance targets is reasonable and applied; and (4) adequate performance measures exist for all significant drug control activities. Drug Control Decision Unit Salaries and Expenses Performance Measure - Office of Field Operations - Amount of currency seized on exit from the United States. (1) Performance Measures This measure assists in evaluating CBP's success in disrupting domestic drug trafficking at the land border ports of entry, a key outcome for the National Drug Control Strategy. Since this measure is based upon the seizure-related enforcement outcomes ofCBP's Outbound enforcement program, the measure provides an indicator of the success that CBP has in disrupting domestic drug trafficking at the land borders by stemming the flow of potential narcotics-related proceeds destined to criminal or transnational groups.

The CBP Office of Field Operations (OFO) conducts Outbound operations at land border ports of entry enabling CBP to enforce U.S. laws and regulations applying to the Outbound arena, including immigration and drug laws. The Outbound enforcement program is part ofCBP's effort to effectively monitor and control the flow of goods and people leaving the United States. The goal of CBP's Outbound enforcement program is to keep the United States safe by preventing the illicit export of goods, ranging from firearms to components of weapons of mass destruction, from falling into the hands of terrorists, criminal elements and individuals seeking to circumvent U.S. export control laws and to disrupt criminal elements and terrorist organizations by interdicting their proceeds and arresting members of their organizations. A number of presidential strategies, including the President's National Export Initiative, the President's Export Control Refonn Initiative, the National Drug Control Strategy, and the National Southwest Border Countemarcotics Strategy, designate the Outbound program as a crucial component in the war on drugs. u.s. Customs and Border Protection Summary Report FY 2011 This measure is calculated from Outbound seizure-related enforcement action data entered into TEeS by the CBP Officer at the time of occurrence of the violation.

TECS provides computer based access to enforcement files of common interest, on-line access to the Federal Bureau of Investigation's National Crime Information Center, as well as an interface with the National Law Enforcement Telecommunications System. Its enforcement transaction data is made available to the Border Stat information system. The summary data is compi led and extracted into the Operations Management Report (OMR) module in Border Stat on a monthly basis. The monthly summary data is reviewed by OFO's Outbound Program Manager to verify accuracy and identify anomalies.

The monthly data in support of this measure is compiled on a quarterly and annual basis and reported to Department of Homeland Security (DHS). (2) Prior Years Performance Targets and Results Fiscal Year (FY): Target: Actual: FY 2007 None None FY2008 None None FY2009 None None FY 2010 None None FY2011 $40.0M $47.3M This was a new DHS selected Government Performance and Results Act strategic measure for FY 20 J 1. The target of $40M for FY 2011 was derived from analysis of available Outbound program seizure data collected during part of the 2010 fiscal year when Outbound enforcement operations commenced on a limited pulse and surge basis. The start of Outbound operations resulted in changes in illegal activity observed over the course of the year, with a noticeable decrease in the average size of each seizure.

The deterrence effect of conducting Outbound enforcement operations is expected to result in a decrease in the amount of currency seized over time as smuggling organizations make adjustments to their activities. (3) Current Year Performance Targets Fiscal Year: FY 2012 Target: $35.0M Currently, CBP conducts limited Outbound enforcement operations, examining only departing goods and travelers identified as high-risk based on CBP Officer assessment at the ports and/or automated systems alerts triggered by available data. Based upon this limited operational strategy and the deterrence effect associated with a new program (as described above), a decrease in the amount of currency seized is an expected outcome, which resulted in setting a perfonnance target for FY 2012 at $35.0M. If Outbound enforcement operations are maintained at the same level in FY 2013 and beyond, then it is expected that there will be additional deterrence effects upon illegal activities and that the target will decrease to $30.0M for FY 2013 and subsequent years. u.s. Customs and Border Protection Summary Report FY 20 11 (4) Quality of Performance Data The data underlying this measure is accurate, complete and unbiased.

Data is entered into TEeS by the arresting Officer at the time of occurrence of the violation. The data required to calculate the measure is extracted and reported through CBP's OMR and Border Stat. The reported results are reviewed by the Outbound Program Manager for accuracy and identification of anomalies, whi ch are researched and resolved . Drug Control Decision Unit Salaries and Expenses Performance Measure - Office of Border Patrol· Number of apprehensions on the southwest border between the ports of entry. (1) Performance Measures This measure assists in gauging CBP's success in addressing areas of greatest ri sk, including areas that experience narcotics smuggling, along our Nation 's borders.

The measure targets a . steady overall reduction in the number of apprehensions along the southwest border. Although many factors, including e nforcement, the economy, and natural disasters, can contribute to the ebbs and flows of apprehensions. a key change in CBP's enforcement posture over the past several years si nce 9/1 1 has been a healthy build-up in resources and capabi lities. This vastly improved enforcement posture has coincided with a steady decrease in apprehensions since 2005. The U.S. Border Patrol is the principal operational component that works to mitigate all threats terrorists and weapons of terrorism, smuggling of narcotics, other contraband, and people, and the illegal entry of people across the border.

Border Patrol agents prepare for, detect, and intercept any and all combinations of these threats that present themselves along the borders. The enforcement advantage gained from fen cing, other infrastructure, and technology, such as sensors and cameras, allows agents to more effectively and efficiently perform their duties to detect, identify, and intercept threats. Funds and resources provided for in 20 I 0 created an even stronger enforcement environment for 20 II , as noted in the 2011 NationaL Drug Control Strategy. I These came in the fonn of the Emergency Supplemental for Border Security (Public Law 111 -230) signed in August 20 I 0 by President Obama, which provided fund s for hiring additional Border Patrol agents and other law enforcement and Department of Ju stice resources ; the continuation of the Alliance to Combat Transnational Threats (ACTT); and, the 2010 authorization for the temporary deployment of additional National Guard troops along the Southwest border - for a time period that included all of FY 20 11 .

The deployments contributed "additional capabilities and capacity to assist law enforcement agencies as a bridge to longer-tenn enhancements in the efforts to target illicit networks' trafficking in people, drugs, ill egal weapons, money, and violence associated with these illegal activities ... (tJheir support has allowed CBP to bridge the gap and hire additional , E}lccutive Oflice orthc President of the United States, 201 I National Drug Comrol Strategy, 20 11 , p, 60, u.s. Customs and Border Protection Summary Report FY 2011 Page 4 agents to support the southwest border, as well as fi eld additional technology and communications capabilities that Congress provided."z One of the principal areas of concern in FY 20 II was Tucson Sector, Arizona, where both apprehensions and marijuana seizures were higher than in any other Border Patrol secror. 3 Accordingly, many of the resources discussed above were focused on Tucson Sector in FY 20 II. Stronger enforcement resources and better detection capabilities correlated with a decrease in apprehensions,4 as shown in the measure results below.

Concurrently, as fewer people attempted illegal enLries, agents were able to tum more attention and capabilities towards detecting and intercepting other threats, such as narcotics. In fact, in Tucson Sector, as apprehensions decreased from 212,202 in FY 2010 to 123,285 in FY 2011, marijuana seizures in Tucson Sector increased from 1,033,227 pounds to 1,039,443 pounds. With Tucson Sector setting the tone, the entire southwest border also experienced a similar decrease in apprehensions (from 447,731 in FY 20 I 0 to 327,577 in FY 2011) and an increase in marijuana seizures (from 2,417,170 pounds in FY 2010 to 2,5 18,211 pounds in FY 2011). (2) Prior Years Performance Targets and Results This perfonnance measure began in FY 2011.

Fiscal Year: FY 2007 Target: Actual: None None FY2008 None None FY2009 None None FY 2010 None None FY2011 < =390,000 327,577 The Border Patrol was successful in meeting its target to reduce apprehensions along the southwest border during a time when comprehensive and focused activities by the Border Patrol took place, especially in the Tucson Sector of Arizona, where apprehensions were highest. Measures taken in FY 2011 that were aimed at decreasing apprehensions included the continuation of the operation AC1T; the positioning of 1,000 additional agents along the southwest border; and, the deployment of National Guard troops along the southwest border. (3) Current Year Performance Targets Fiscal Year: FY 2012 Target: < = 371,000 apprehensions The goal to decrease apprehensions on the southwest border to 390,000 in FY 20 J I from 447,731 in FY 2010 was based on the recognition that with less illegal alien volume across the border, agents can devote more time to other law enforcement efforts and techniques, including the detection and interdiction of narcotics. As di scussed above, significant efforts and resources were training in FY 2011 in the Tucson Sector of Arizona to drive down apprehensions.

This led to an even greater reduction in apprehensions than had been projected. In fact, apprehensions in 2 Ibid . J In 2010. Tucson sector was responsible ro r 2 12.202 or the total 463,382 apprehensions, or 46%; and ror 1,033,227 Funds orth~ total 2,~31 ,214 pounds ~r marijuana seizures. or 42%.

ApprehensIOns fell In Tucson seclor In 201110 123,285 from 212,202, a 42% reducllon, U.S. Customs and Border Protection Summary Report FY 20 I I FY 2011 fell to 327,577 - below the level of 335,000 that had been predicted for FY 2014. While the Border Patrol continues to expect decreasing apprehensions due to targeted enforcement efforts in Tucson Sector, other factors may act to counter the decline in apprehensions in FY 2012, such as improvements in the United. States' economy. In addition, targets are projected conservatively, since apprehensions have now reached record lows, and our "floor" is not yet fully understood.

The Border Patrol will always strive to keep apprehensions at low levels since this allows for better mitigation of other threats, such as the entry of illegaJ drugs into our country. Yet our way of life and freedom from a militarized border means that apprehensions will never reach a level of zero. (4) Quality of Performance Data The data underlying this measure is valid, accurate, complete, timely and consistent. In an independent Verification and Validation (V&V) review of this performance measure completed in June 2011, the measure was found to "demonstrate exemplary data quality and the dala is highly useable as it applies to this measure.

The measure is considered complete and reliable." 5 Five factors were considered in the V &V. These factors, along with the corresponding overall score for each factor, are shown below: Valid: Accurate: Complete: Timely: Consistent: 8 (out of 10) 8 (out of 10) 8 (out of 10) 10 (out of 10) 10 (out of 10) This resulted in an overall V&V score of9 (out of 10). The highlights of each factor are presented below: Valid: • Measure meets performance goal and contributes to Department of Homeland Security strategic goals and objectives; • Measure aJigns to U.S. Customs and Border Protection and Border Patrol strategic goals and objectives; and, • The measure is valid as a short-term measure, since specific enforcement enhancements in the Tucson sector were used to explain the decrease in apprehensions. Other factors that could influence the level of apprehensions remained fairly constant during this short time period. Accurate: • Potential sources of error in data entry of apprehensions are identified by monthly data quality reports at the Headquarters level, and any discovered errors are corrected at the station level by designated points of contact; ~ Energetics (a subsidiary of VSE Corporations), Independem Verification alld Validatioll of Peifomwnce Measure Dala, June 2011, p. I. u.s. Customs and Border Protection Summary Report FY 2011 Page 6 • Detailed processes and procedures for gathering and entering apprehension data are documented in the Border Patrol Handbook.

The Border Patrol Training Academy conducts a six~day course for all incoming agents on processing and en(ering apprehension data into the system of record; and, • As per the Border Patrol Handbook, supervisors at the station level are responsible for the integrity of data entered into the system on their shifts. Complete: • The parameters of an apprehension constitute a defined scope, giving clarity to data that shou ld be entered as an apprehension; • Data is reported for the entirety of the southwest border between the ports of entry on a daily, monthly, annual, and ad hoc basis; and, • Reporting controls ensure that all stations report apprehension data daily. Timely: • An apprehension report is run and delivered at the Headquarters level for each calendar month, no later than the i h day of the following month; • Quarterly results for this measure are forwarded to CBP's Performance Management and Analysis Division by the end of the month following the close of the quarter; date stamps for transmission show that reports were sent on time; and, • Field and Headquarters personnel receive a daily apprehension report from the Headquarters Statistics unit, showing apprehensions, narcotics seizures, and other data from each sector. These reports can also be run as needed for any defined time period, allowing field teams to adjust resources and operations as needed to respond to trends.

Consistent: • Uniform definitions and concepts for processing illegal aliens are established in the Border Patrol Handbook and at the Academy; and, • The same system, e3 Processing Database, is used across all field stations for collecting and processing data. Drug Control Decision Unit Air and Marine Operations Performance Measure - Office of Air and Marine - Percentage of Joint Interagency Task Force~South (HATF~S) annual mission hour objective achieved. (1) Performance Measures This performance measure identifies the degree to which the CBP Office of Air and Marine (OAM) meets its intended flight hours for JlA TF~S in support of the National Drug Control Strategy. The National Interdiction Command and Control Plan (NICCP) sets the overarching operational architecture for organizations involved in interdicting illicit drugs in keeping with the goals and objectives of the National Drug Control Strategy. flA TF-S is the tasking coordinator and controller for counter-drug missions within the transit and source zones.

Each year, JLA TF~S submits its resource allocation requirements through the NICCP. The Department of Homeland Security responds to the requirements in a Statement of Intent. OAM typically supports JlATF~S u.s. Customs and Border Protection Summary Report FY 2011 Page 7 requests with P-3 Airborne Early Warning (AEW) and P-3 Long-Range Tracker (LRT) aircraft, but has also supported J IA TF-S with other aircraft, including its Dash 8, Chet, and C 12M flXed wing aircraft~ Blackhawk rotor-wing aircraft; and, unmanned aircraft systems. As a result of the August 19, 2003, Presidential Determination Regarding U.S. Assistance to the Government of Colombia Airbridge Denial Program, OAM began receiving funding in FY 2005 to support JLATF-S as part of its base budget.

The FY 2005 funding enabled OAM to increase P-3 flight hour support to JLATF-S from 200 hours per month to 600 hours per month, which is 7,200 flight hours per year. Despite the fact that this funding level has remained constant since FY 2005, OAM has continued to allemptto meet or exceed the original 7,200 flight hour annual commitment through FY 20 II. (2) Prior Years Performance Targets and Results The Percentage of JIATF-S Annual Mission Hour Objective Achieved is a new measure in FY 2011. Fiscal Year: FY 2007 Target: Actual: None None FY2008 None None FY2009 None None FY 2010 None None FY2011 100% 100% In the NICCP, dated Marcb 17,2010, JIATF-S forecasted its FY 2011 support requirements for a range of aircraft.

In its FY 2011 Statement of Intent, the Department of Homeland Security responded to the requirements in the N1CCP. The Statement of Intent included CSP's intent to provide 7,200 flight hours for detection and monitoring activities with P-3 AEW and P-3 LRT aircraft in support of counterdrug and counter narcoterrorism operations with the JLA TF-S Joint Operating Area. During FY 2011, DAM met JLA TF-S requests with P-3 aircraft. The OAM P-3 aircraft flew a total of 7,206.8 hours, exceeding 100 percent of the FY 2011 Statement of Intent commitment to JlA TF-S for support in the transit zone.

(3) Current Year Performance Targets Fiscal Year: 2012 Target: Provide 100 percent of the 5,000 hours of JIATF-S support budgeted for the transit zone. In a memorandum dated October 27, 2011, U.S. Customs and Border Protection Commissioner Alan Bersin notified Office of National Drug Control Policy Director R. Gil Kerlikowske the following: "based on current anticipated budgets and planning estimates, CBP expects to be able to support between 5,000 and 6,000 P-3 flight hours in the transit zone" with the amount of funding budgeted for this effort. u.s. Customs and Border Protection Summary Report FY 2011 (4) Quality of Performance Data The data underlying this measure is accurate, complete and unbiased. OAM P-3 fljghl data are recorded using a PostFlight Record Form (CBPA VP-05J-2 RI26 July 2004). The flight data entry is then validated against the Computerized Aircraft Reporting and Material Control System. which is utilized by aircraft maintenance to track flight time accrued on the aircraft.

The flight data is then checked monthly against the Air and Marine Operations Report module of TEeS; its data can be queried through any CBP computer with appropriate access. Report Distribution Department of Homeland Security Secretary Deputy Secretary Chief of Staff Deputy Chief of Staff General Counsel Executive Secretariat Director, GAO/OIG Liaison Office Assistant Secretary for Office of Policy Assistant Secretary for Office of Public Affairs Assistant Secretary for Office of Legislative Affairs Chief Financial Officer Chief Information Officer Office of Management and Budget Chief, Homeland Security Branch DHS OIG Budget Examiner Office of National Drug and Control Policy Associate Director for Planning and Budget United States Coast Guard Commandant Chief Financial Officer Chief Information Officer Congress Congressional Oversight and Appropriations Committees, as appropriate ADDITIONAL INFORMATION AND COPIES To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202)254-4100, fax your request to (202)254-4305, or e-mail your request to our OIG Office of Public Affairs at [email protected]. For additional information, visit our OIG website at www.oig.dhs.gov or follow us on Twitter @dhsoig.

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