Immigration Application Fees:

Current Fees Are Not Sufficient to Fund U.S. Citizenship and Immigration Services' Operations

GAO-04-309R: Published: Jan 5, 2004. Publicly Released: Jan 5, 2004.

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The Homeland Security Act of 2002 (HSA) established the Bureau of Citizenship and Immigration Services (CIS) within the Department of Homeland Security (DHS). CIS is responsible for several functions transferred from the former Immigration Services Division of the Immigration and Naturalization Service (INS) under the Department of Justice. CIS's functions include adjudicating and processing applications for U.S. citizenship and naturalization, administering work authorizations and other petitions, and providing services for new residents and citizens. CIS collects fees from applicants to process the various immigrationrelated applications and petitions. CIS also receives appropriated funds to pay for administrative and overhead costs such as records management and backlog reduction. HSA requires that we report on whether CIS is likely to derive sufficient funds from fees to carry out its functions in the absence of appropriated funds.

We determined that fees were not sufficient to fully fund CIS's operations. In part, this has resulted because (1) the current fee schedule is based on an outdated fee study that did not include all costs of CIS's operations and (2) costs have increased since that study was completed due to an additional processing requirement and other actions. While it is clear fees are insufficient to fully fund CIS's operations, there is insufficient cost data to determine the full extent of the shortfall. A fundamental problem is that CIS does not have a system to track the status of each application as it moves through the process. Accordingly, CIS does not have information on the extent to which work on applications in process remains to be finished. In addition, CIS does not know the current cost of each step to process each application. The effect is that CIS knows neither the cost to process new applications nor the cost to complete pending applications. Further, because DHS is still determining how administrative and overhead functions will be carried out and the related costs allocated, CIS does not know what future administrative and overhead costs will be. For the 3-year period from fiscal year 2001 through 2003, CIS's reported operating costs exceeded available fees by almost $460 million, thus creating the need for appropriated funds. CIS projects that this situation will remain in fiscal year 2004. Since the beginning of fiscal year 2001, the number of pending applications increased by more than 2.3 million (about 59 percent) to about 6.2 million at the end of fiscal year 2003. This increase occurred despite additional appropriations beginning in fiscal year 2002 of $80 million annually to address the backlog. In addition, CIS has not performed an analysis of the steps needed to reduce processing times to the 6-month average goal established in the President's backlog initiative. These times increased significantly in fiscal year 2003 to levels well above the 6-month target established in CIS's March 2002 Backlog Elimination Plan. Absent actions to increase fees, reduce processing costs and times, or both, as well as to improve the timeliness and completeness of fee schedule updates, CIS will continue to need appropriated funds to avoid even greater increases in the backlog of pending applications. The full costs of CIS's operations cannot be determined until analyses of the costs to process incoming and pending applications and administrative and overhead costs are completed.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DHS established workgroups to address the integration of sharing of mission support services among CIS and other DHS agencies. CIS representatives participated in the workgroups. A result was a series of Service Level Agreements between CIS and other DHS agencies that established relationships to cover services provided and corresponding reimbursable agreements for fiscal years 2004 and 2005 which include the costs of those services. The Service Level Agreements cover areas such as human resource management, facilities and logistics management, safety and health inspections, and finance operations.

    Recommendation: In order for CIS to know the full cost of its operations, the Secretary of Homeland Security should direct the Deputy Secretary to identify which support services and functions, such as shared services, modernizing and supporting shared databases, shared infrastructure, and other forms of support, and the cost of those functions should be transferred or allocated to CIS.

    Agency Affected: Department of Homeland Security: United States Citizenship and Immigration Services

  2. Status: Closed - Implemented

    Comments: CIS completed a comprehensive fee study, and based on the improved application processing cost information obtained through the study, proposed new, increased fees in February 2007. According to CIS, the new fee schedule will improve service levels and ensure the security and integrity of the immigration system and prevent future backlogs. Because CIS performed a comprehensive fee study, it now knows the level of funding it needs to process applications timely and is better able to prevent backlogs from recurring.

    Recommendation: In order to determine the cost to process new and pending applications, the Secretary of Homeland Security should direct the Director of CIS to determine the costs to eliminate the backlog of pending applications.

    Agency Affected: Department of Homeland Security: United States Citizenship and Immigration Services

  3. Status: Closed - Implemented

    Comments: USCIS enlisted the help of a contractor and conducted a comprehensive fee review. Using a widely accepted methodology--activity-based costing--CIS determined the full costs of processing immigration benefit applications. The result was a proposed rule published on February 1, 2007, in the Federal Register (8 CFR Part 103) to increase immigration and naturalization benefit applications fees by a weighted average of $174 per application. This increase should help ensure sufficient funding to meet CIS's immediate national security, customer service, and standard processing time goals, and to sustain and improve delivery.

    Recommendation: In order to determine the cost to process new and pending applications, the Secretary of Homeland Security should direct the Director of CIS to perform a comprehensive fee study to determine the costs to process new immigration applications.

    Agency Affected: Department of Homeland Security: United States Citizenship and Immigration Services

  4. Status: Closed - Implemented

    Comments: U.S. Citizenship and Immigration Services (CIS) issued a Backlog Elimination Plan in June 2004. The plan includes steps to increase productivity and reduce the processing time to an average of 6 months or less by (1) reengineering processes and automating manual workflow processes, (2) updating procedures to streamline adjudications and increase the percentage of cases completed at initial review, and (3) initiating pilot projects to test alternative processing approaches for selected applications. In a November 2004 update/progress report, CIS reported that processing times for many applications had decreased and the number of applications completed increased, resulting in a decrease in the backlog.

    Recommendation: In order to achieve the goals of the President's backlog initiative, the Secretary of Homeland Security should direct the Director of CIS to perform an analysis of current processing functions to determine steps needed to reduce the processing time to an average of 6 months or less.

    Agency Affected: Department of Homeland Security: United States Citizenship and Immigration Services

  5. Status: Closed - Implemented

    Comments: CIS has initiated two improvements in the way fee increases will be implemented. CIS was able to issue its April 2004 fee rule as a Final Rule with implementation 15 days following publication in the Federal Register (rather than the 60 days or more as in the past). This action expedited the implementation of new fees which are to cover all costs. Also, CIS gained OMB's support to automatically adjust fees at the start of each new fiscal year (starting with fiscal year 2006) to capture the cost of general price inflation. The ability to annually adjust fees for general price inflation will help ensure that CIS does not automatically suffer devaluation of its fees and operate at a loss each new year.

    Recommendation: Regarding the timing of fee schedule updates, the Secretary of Homeland Security should direct the Director of CIS to identify options to improve the timeliness for implementing fee updates to help ensure that all costs are captured.

    Agency Affected: Department of Homeland Security: United States Citizenship and Immigration Services

 

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