Immigration and Naturalization Service Report No. 01-09
Immigration and Naturalization Service
Report No. 01-09
The INS did not adequately safeguard property. We found that the agency could not account for at least 61,000 property items with a cost of over $68.9 million and as many as 81,700 items with a cost of over $107.6 million. These statistical projections represent 20 to 27 percent of the universe of property items from which the sample was selected. Additionally, the INS did not record property costing about $860,000 in AMIS. The INS also did not properly implement and document physical inventories, provide sufficient training for Property Custodians, adequately control certain computer equipment with data storage capabilities, or adequately document property returned by INS employees who leave the agency. Without immediate corrective actions, property will remain at substantial risk.
The Office of Management and Budget Circular A-123 requires that a management control system provide management with reasonable assurance that assets are safeguarded against waste, loss, unauthorized use, and misappropriation. Further, agencies must ensure that transactions are promptly recorded, properly classified, and accounted for in order to prepare timely accounts and reliable financial and other reports.
We assessed the INS's compliance with OMB Circular A-123 and Federal Property Management Regulations. In total 5 we reviewed property management at 13 District Offices, 6 Border Patrol Sectors, 6 Headquarter field offices, 6 and INS Headquarters. 7 For a matrix containing our tests, deficiencies, and their magnitude, by office, see Appendix III.
First, we verified the existence of all property reported in AMIS as having a cost of $1 million or more. All 12 items (total costs over $18.9 million) were found. These high-dollar items included one rotary wing aircraft and various types of computer-related equipment.
Second, we attempted to verify the existence of 1,205 property items selected by statistical sampling. Types of property in the sample included computer equipment, firearms, communications equipment, vehicles, aircraft, and "other" items. Our test results were projected to the entire universe with 95% confidence. Applying the statistical model discussed in Appendix IV, we projected that the INS could not account for at least 61,028 items with a cost of $68,907,085 and as many as 81,723 items with a cost of $107,645,022. To be conservative, we questioned costs at the lower projected amount of $68.9 million.
The lower projection of 61,028 items that were not adequately accounted for represents over 20 percent of the universe (300,236) from which these items were selected. The magnitude of these numbers reflects the extent of the property accountability problem at the INS.
By further analyzing the results of our statistical sample, 8 we identified two subcategories of property that should be of particular concern to the INS: (1) property costing $5,000 or less but greater than $2, and (2) property located at INS Headquarters.
While on-site at 26 audit locations, we selected a total of 679 items observed during a walk-through inventory and attempted to trace them to AMIS. We determined that 180 (27 percent) of the 679 property items costing approximately $860,000 9 were not recorded in AMIS. Although our testing was not based on a statistical sample and was limited to a fraction of INS facilities, we believe that a significantly higher amount of property was not recorded in AMIS. The following table identifies the results by office type.
Among the 180 items not recorded in AMIS were helicopter rotor balancers, a boat motor, an air compressor, and an engine analyzer located in INS aircraft facilities or auto garages. Because these types of locations may be overlooked during a physical inventory, the INS should emphasize the importance of identifying and safeguarding similar equipment in off-site locations.
We were particularly concerned that four items met the $25,000 capitalization test 10 but were not included in AMIS. These items are listed in the table on the following page.
We followed up on one of these types of equipment to determine whether the INS maintained complete property records. While AMIS included records for 19 weapons training systems, one vendor informed us that he sold 37 such systems to the INS at a cost of about $1.8 million 12 as of July 22, 1999. If the vendor was correct, there may be 18 additional weapons training systems, at a total cost of approximately $845,000, that were not included on INS financial statements and that were also at risk of loss because they were not recorded in the INS's official property management system.
INS Headquarters and field offices make local purchases through the use of purchase orders, credit cards, and blanket purchase agreements. Local Property Custodians were responsible for entering these purchases into AMIS.
We judgmentally selected 198 purchases costing about $1.6 million at 25 locations 13 to determine if the items purchased were recorded in AMIS. Our tests showed that 51 purchases (26 percent) costing about $542,000, were not completely 14 recorded in AMIS. Examples of property purchased locally and not entered into AMIS included laptop computers, a laserjet color printer, a digital camcorder, and a color copier. Specifics of this test by type of office are detailed in the following table.
Eleven (42 percent) of the 26 local INS Property Custodians interviewed were not aware of any written procedures on how locally purchased property should be entered into AMIS. Further, six (23 percent) stated they were not notified of local property purchases.
To assess property management controls in general, we evaluated the INS's procedures and practices for: (1) conducting and documenting physical inventories, (2) providing training to Property Custodians, and (3) retrieving property from employees who leave the INS.
To determine the adequacy of the INS's Service-wide inventory of all firearms, vehicles, and property with a reported acquisition cost of over $5,000, we interviewed local INS officials and reviewed inventory records at the 26 sites audited. We also examined documentation for biennial inventories of property acquired at a cost between $1,001 and $5,000. Specifically, we examined evidence to determine if: (1) individual team member statements for those involved in the inventory were prepared, (2) adjustment reports were prepared documenting the results of the inventory, and (3) proper certifications were signed attesting to the execution of the inventory. We determined that the INS did not have adequate documentation to support the execution of proper inventories.
Individual Team Member Statements. The Justice Property Management Regulations and the INS Property Handbook require adequate separation of duties between those individuals who maintain the property records and those who physically verify property during inventories. Separation of duties is a key management control designed to ensure that duties and responsibilities related to authorizing, processing, recording, and reviewing transactions are not performed by the same individual. To ensure adequate separation of duties occurs, the Property Handbook requires individuals who take part in the inventories to sign a statement attesting to their participation and role. A review of these statements revealed:
Adjustment Reports. INS policy includes the requirement that offices prepare inventory adjustment reports upon completion of a physical inventory. An adjustment report would identify property that should be added to or subtracted from the property records. This requirement provides a management control by establishing a record of changes and an audit trail for post-inventory follow-up. Our review of this management control revealed:
Certifications of Inventory. INS policy requires certifications to confirm that all appropriate property was inventoried. These are required to be completed by both the Primary Property Custodian (such as the District Director or Chief Patrol Agent) and each Subordinate Property Custodian for different property types. We found:
Equipment with Data Storage Capability. The INS's inventory policies raise a security concern for computer equipment with data storage capabilities that are purchased for $1,000 or less. Current INS policies do not require that such equipment be periodically inventoried. A review of the AMIS property database revealed almost 11,800 laptop, notebook, and desktop computers with reported acquisition costs of $1,000 or less.
Property management officials from other major DOJ components 15 informed us that they control and physically inventory this type of property due to the potential that sensitive data could be stored in the equipment. In our judgment, the INS's lack of physical inventories of computers with data storage capability places its equipment at risk for loss, which could result in unauthorized persons gaining access to sensitive information. The INS must initiate action to include all computer equipment with data storage capabilities in its inventory process.
Property Management Training. Approximately 75 percent of the 89 individuals with property management responsibilities that we interviewed indicated they had no general property management training. In addition, about 33 percent of these same people indicated they did not have training in AMIS. Without adequate training both in general property management and in AMIS, the potential for problems and errors increases. Also, until sufficient training is provided to staff, the overall quality of property management within the INS will further diminish.
Retrieving Property From Employees Leaving INS. At each of the 26 sites audited we attempted to review personal property cards for the last five law enforcement employees who resigned or transferred to another agency to determine whether property was returned when the employee left the INS. We examined the individual property cards for a total of 99 departing law enforcement employees at 22 locations. 16 We found:
Over the past two years, INS management has initiated some corrective actions to improve property management within the agency. The lapse in prior physical inventories has been addressed with annual inventories being conducted in August 1998, August 1999, and August 2000 for property costing over $5,000, weapons, vehicles, and certain other property. A contractor was hired to audit these inventories and it has reported continued improvement in the accuracy of the inventories over the 3-year span. Inventories for property costing between $1,001 and $5,000 have also been scheduled. In addition, complete inventories of firearms by independent INS staff have been conducted at various locations. (Refer to Finding II.)
Further, in response to the initial findings of this audit, the INS's chief property management officer issued a memorandum in June 2000 initiating the FY 2000 Service-wide inventory and providing guidance in the following areas:
In July 2000, the Commissioner also issued a memorandum advising the INS Management Team 17 of our preliminary audit results and the contractor's findings that recent inventories indicated improvement. The Commissioner's memorandum added, however, that the program still has weaknesses. She requested that each member of the Management Team who supervises a property custodian or subordinate property custodian who is not a member of an INS bargaining unit immediately add a critical element pertaining to the accuracy of certified inventories to the custodian's performance workplan. 18
Also, the INS is in the process of reviewing its property management system and was considering implementing a commodity-based approach. This type of system requires that INS managers with oversight responsibilities of commodity types (e.g., vehicles, computer equipment, and firearms) gain certain property management responsibilities. Designated staff would be responsible for populating and maintaining property-related records for their specific commodity. Because this study is still in process, we have not reviewed any decisions made by the INS in regard to implementing a commodity-based system.
The INS could not account for at least 61,028 property items with an acquisition cost of over $68.9 million and as many as 81,723 items with a cost of over $107.6 million. Further, the agency did not record property costing about $860,000 in the AMIS. Property that is not contained in the official property management system, AMIS, is vulnerable to waste, loss, unauthorized use, or misappropriation. We noted additional deficiencies in the performing and documenting of physical inventories, controlling computer equipment with a unit cost of $1,000 or less that had data storage capabilities, training staff, and documenting the return of property by law enforcement officers.
The INS has attempted to strengthen its physical inventory efforts and has made some progress. In response to our audit, the INS categorized property management as a material weakness in the U.S. Department of Justice Management Controls Report for Fiscal Year 2000. However, while the INS has established more stringent written policies related to the performance of property inventories, its efforts will not have full impact on the amount of property that is at risk until adequate training is provided to staff and existing policies are enforced.
We recommend that the INS Commissioner:
In November 1999, the INS identified 539 weapons that were lost, missing, or stolen. We performed an extensive evaluation of these weapons and found that INS staff often did not report the status of lost, missing, or stolen weapons through proper channels and, as a result, did not initiate timely follow-up action. In our judgment, insufficient controls over weapons could result in the illicit use of INS firearms. In fact, we identified at least six instances in which stolen or missing INS weapons were linked to the commission of a serious crime and were subsequently recovered by local law enforcement agencies. Although the INS recognizes its control weaknesses and has initiated some corrective actions, it is critical that significant changes be made.
Prior to October 1995, property records for INS weapons were centrally maintained at the INS training facility in Glynco, Georgia. According to INS officials, the maintenance and accuracy of the property records was mediocre at best. INS staff attempted to reconcile and organize the weapons-related records; however, by October 1995, discrepancies still existed. According to INS officials, the unreconciled data were originally entered into AMIS when it was initially implemented in October 1995. 19
In 1996, the INS conducted a national weapons inventory; however, the exercise fell short of its goal of resolving existing weapon discrepancies. One of the reasons cited by INS officials for this failure was that not all INS offices conducted weapon inventories. In addition, those offices that did perform inventories did not necessarily physically verify the weapons on hand, but instead relied on property cards and quarterly firearms qualification records. In our judgment, the use of these records to confirm the existence of property is highly questionable in terms of reliability.
Beginning in August 1998, the INS established a national initiative to conduct annual physical inventories of all weapons, along with other types of property. According to INS officials, the National Firearms Unit (NFU) 20 has made significant progress in reconciling discrepancies between the physical inventory results and records maintained in AMIS records. At the time of our review, AMIS contained records for 50,306 weapons costing approximately $14.6 million.
As a result of the August 1998 Service-wide inventory, the INS identified 497 weapons that could not be located. We identified an additional 42 weapons that were reported to the Administrative Centers in Burlington, Vermont; Dallas, Texas; Laguna Niguel, California; and INS Headquarters that did not appear on the August 1998 inventory as lost, missing, or stolen.
The INS categorized the 539 weapons as lost (23), missing (382), or stolen (134). According to INS officials, a weapon was designated as "lost" if the INS knew with certainty that the weapon was lost and could not be immediately recovered. On the other hand, a "missing" weapon meant that it was recorded on the property records, but the INS could not find it and the circumstances surrounding its disappearance were unknown. "Stolen" weapons meant that a weapon was the subject of a theft.
We reviewed the data provided by the INS and found that the 539 weapons included 452 handguns, as well as shotguns, rifles, machine guns, and a gas grenade launcher. The table below provides details on the status of the 539 weapons by type.
We also determined that 432 (80 percent) of the 539 weapons were assigned to 14 INS locations. 21 As illustrated below, the Glynco Training Facility and INS Headquarters had the highest number of lost, missing, or stolen weapons.
A complete breakdown of all 539 lost, missing, or stolen weapons by location and weapon type is found in Appendix V.
Due to the inherent danger of firearms, it is critical that each incident of a lost, missing, or stolen weapon be fully investigated and the results of the investigation documented. We reviewed the INS's policies, procedures, and practices to determine the adequacy of weapon controls in general, and to determine the adequacy of follow-up actions taken after the 539 weapons were identified.
Weapon Control Policies. INS Firearms Policy, dated August 1996, requires that lost or stolen firearms be reported to a supervisor as soon as practicable upon discovery of the loss. INS managers must then initiate an administrative inquiry and notify local law enforcement authorities of the unaccounted-for weapon. INS staff must request that the Federal Bureau of Investigation (FBI) enter the firearm data into the National Crime Information Center (NCIC) 22 as soon as possible. Further, INS staff must provide written notification to the NFU when a weapon is lost or stolen so that the AMIS can be properly updated. 23
Since August 1995, the INS Property Handbook has included the requirement: "Immediately upon becoming aware, observing, detecting or suspecting government-owned or controlled property is lost, stolen, or damaged, an employee must provide an initial Report of Survey through official channels. The Property Custodian must ensure that an investigation of the loss is conducted." A Report of Survey must be prepared and should include a description and valuation of the property, the names of all individuals involved, the facts related to the loss, and any other relevant information or documentation. INS Policy OI 287.10, 24 dated February 26, 1996, requires that the INS OIA be notified of all losses of government property. A supervisor or manager is responsible for ensuring that the OIA is notified no later than the first business workday following the loss or theft of government property. The OIA is to review the information and determine the most appropriate method for resolving the problem. The OIA may conduct its own investigation of the circumstances surrounding the loss or theft.
Referrals to the National Crime Information Center (NCIC). The NCIC is generally regarded by law enforcement agencies to be the primary system for tracking stolen or recovered firearms. We evaluated the extent to which information on the 539 weapons was entered into the NCIC as required by INS policy.
We requested the FBI to query the NCIC, on our behalf, to obtain information on each of the 539 lost, missing, or stolen weapons. The FBI's results, received from November 1999 through January 2000, revealed that 394 of the 539 weapons, or 73 percent, were not entered into the NCIC. Of the remaining 145 weapons, 138 were reported to the NCIC by the INS and 7 were entered into the NCIC as a result of someone other than the INS reporting the weapon as lost, missing, or stolen.
Further review of the 145 weapons entered into the NCIC revealed that 7 were subsequently recovered by local law enforcement agencies. (the INS categorized one of the seven weapons as missing; the remaining six were categorized as stolen.) We contacted federal, county, and local law enforcement agencies to confirm recovery of the weapons and to determine the circumstances surrounding their recovery. Based on our contacts with local law enforcement authorities, we determined that five of the recovered weapons were connected to crimes.
Through discussions with local authorities on the above cases and our review of the NCIC data, we also identified two employees who each reported the theft of multiple INS weapons that were assigned to them. One of these stolen weapons was also linked to a crime.
In our judgment, multiple thefts or losses of weapons from one individual warrant additional examination by the OIA.
Referrals to the INS OIA. We reviewed files to determine if the OIA was notified of the 539 weapons in accordance with INS policy. We found that, from January 1, 1996 through September 30, 1999, the OIA received only 45 referrals pertaining to the loss or theft of a weapon. In contrast, we determined that at least 74 INS weapons were reported to the NCIC since 1996. We did not have sufficient information to determine if the 45 weapons reported to the OIA were included in the 74 that were reported to the NCIC.
The absence of referrals precludes the OIA's ability to independently review each circumstance and to assess the need for individual or systemic corrective action. Additionally, failure to report each lost, missing, or stolen weapon to the OIA precludes its ability to determine whether an individual has a pattern of losing weapons.
Weapon Purchases. In 1995, the INS began a major initiative of replacing its revolvers with semi-automatic pistols. At that time, the NFU was designated as the only office authorized to purchase weapons. This meant that local offices were no longer allowed to purchase weapons as they occasionally did in the past.
During our review of local purchases at 26 locations, 25 we identified one field office that purchased three gas grenade launchers without the NFU's knowledge. We notified INS officials of the improper purchases and, as a result, the NFU confiscated one launcher because it was an unauthorized model. In our judgment, this occurrence illustrates that additional measures must be taken to ensure that field offices do not circumvent established controls over weapons.
Transferring Law Enforcement Officers. According to NFU officials, it was common for INS law enforcement officers to transfer to other offices within the INS. When this happens, the employee may transfer with a service weapon; however, the Firearms Control Officer (FCO) in either office may not be aware of the transfer. The FCO is a law enforcement officer designated to perform administrative duties relating to weapons. One of these duties is to maintain property records in AMIS on all weapons within his or her jurisdiction. At least one FCO is designated for every office or organizational unit that maintains weapons. We were told that there was little, if any, communication between personnel offices and the FCOs. In addition, the size and turnover rate of many installations precludes the FCO from becoming aware of all personnel actions. If the FCO is not made aware of transferring employees, he or she cannot update the AMIS property records to accurately track the new location of a weapon.
Property Records. As illustrated by the number of weapons that were not reported to the NCIC or to the OIA as required, the INS did not maintain complete files for lost, missing, or stolen weapons. In our judgment, an independent review of the case files would ensure that necessary documents are obtained and that important actions such as obtaining police reports, entering the weapons into the NCIC, and notifying the OIA, are taken. During the audit, INS officials informed us that the NFU had been assigned the responsibility to review each of the 539 cases and obtain necessary documentation for the case files so that appropriate corrective actions could be taken.
In FY 1999, the NFU began visiting field offices to perform a comprehensive review of weapons management. The review includes a physical inventory of all INS weapons, 26 an inspection of firearms, a review of quarterly firearms qualifications, an evaluation of ammunition management, training of FCOs and their assistants, and guidance on how to maintain property records for accountability. As of January 2001, the NFU had conducted 22 field office reviews and the INS anticipates completing at least 6 additional reviews in FY 2001.
In our judgment, comprehensive reviews performed by the NFU should supplement the annual physical inventory by providing additional training, guidance, and general direction for controlling and managing weapons. However, while we strongly support the INS's efforts to provide more detailed weapons reviews, we were concerned that the planned review schedule will not provide sufficient coverage in a reasonable time frame. Ideally, the INS should perform these technical assistance visits at a faster pace in order to correct serious weapons accountability and control problems. If increased coverage is not possible, the NFU should, at a minimum, prioritize the site visits based on risk assessments. Factors that should be considered are: (1) the number of weapons reported in the past as lost, missing, or stolen; (2) the adequacy and integrity of the last physical inventory; (3) the number of weapons under an office's jurisdiction; (4) input from the OIA, (5) Reports of Survey, and/or (6) results of internal reviews.
Historically, the INS has experienced significant problems in controlling and accounting for weapons. As evidenced in this report, the INS maintains extensive written policies and procedures related to the reporting of lost, missing, or stolen property. However, these policies were not being followed by INS staff. The fact that INS weapons ended up in the hands of criminals is cause for serious concern. The INS's weapons controls and follow-up actions to investigate lost, missing, and stolen firearms must be immediately improved to prevent this type of situation from recurring in the future.
Recently the INS has attempted to rectify some of the control problems and to increase accountability over weapons. However, the INS needs to ensure that its actions are not one-time efforts. In our judgment, corrective actions must result in systemic changes in the way the INS controls and manages its weapon inventory in the future.
We recommend that the INS Commissioner: