DHS OIG Finds Oversight of Fines, Penalties and Forfeitures Lacking

CBP needs to improve its oversight of penalty cases, including more consistent oversight of its Fines, Penalties and Forfeitures field offices, so that CBP is more effective in collecting penalty revenue, DHS' Office of Inspector General recommended in a Sept. 3 report on its audit of CBP.

The OIG said in the report that it conducts audits like these to protect revenue. The office noted that in a prior audit, it had identified lost revenue totaling $858 million from 152 penalty cases with an "open" status.

The office laid out two recommendations to CBP. First, the Executive Assistant Commissioner of CBP’s Office of Field Operations must "develop and implement a plan to ensure effective oversight and monitoring by assessing the results of the monthly statute of limitations report reviews from the Fines, Penalties, and Forfeitures field offices."

The OIG issued this recommendation because it found a lack of communication between the field offices and headquarters over penalty cases nearing their expiration. Field personnel are responsible for identifying and monitoring cases nearing expiration; if a penalty case has less than two years remaining on the statute, CBP personnel should request a statute of limitations waiver, the OIG said. However, CBP's prevailing guidance doesn't require field personnel to communicate the results in the Seized Assets and Case Tracking System (SEACATS). This disconnect potentially results in loss of revenue, according to the OIG.

The second recommendation also pertains to CBP headquarters' relationship with those same field offices. The OIG recommended that the executive assistant commissioner of CBP’s Office of Field Operations "implement a plan to ensure effective oversight and monitoring by increasing the frequency of oversight surveys of Fines, Penalties, and Forfeitures field offices. This includes establishing a plan to follow up with field offices with unsatisfactory survey results in a timely manner."

The OIG noted that CBP guidance requires headquarters to conduct oversight surveys of at least two of its 42 Fines, Penalties, and Forfeitures field offices each fiscal year. This survey includes how the field offices use SEACATS reports and whether cases are processed consistently. However, if CBP performed only two oversight surveys per year, the length of time between an office's surveys would be 21 years, according to the OIG. The office also said three field offices haven't been surveyed since 2010.

"Without routine field office surveys, CBP cannot ensure it effectively monitors field office compliance with established standards related to the penalty case process," the OIG said.

In addition to providing the recommendations, the OIG said it couldn't identify lost revenue because it couldn't determine whether the penalty amounts were accurate -- penalty cases can have a lifespan of a decade or even longer if litigation is involved.

"Reviewing the nearly 10 years of penalty process is complex because of the legal expertise and amount of time needed to conduct an extensive review of the vast amount of associated SEACATS documentation," the OIG said.

The OIG noted that CBP received and agreed with its recommendations, and the next steps are for CBP to implement the recommendations and submit a formal closeout letter to the OIG.

In the report, the OIG said CBP would be taking steps on both recommendations; CBP expects to complete those steps by Dec. 31.

For the first recommendation, CBP will issue a memorandum to the OFO field offices to implement policy guidance for oversight of the field’s statute of limitations reports annually, and it will update the Seized Asset Management and Enforcement Procedures Handbook with any related policy changes/updates in SEACATS and CBP Office of Field Operations' internal SharePoint site, according to the OIG.

For the second recommendation, CBP said it would issue updated policy guidance to include an increase in the number of oversight surveys, program expectations, composition of survey review team, and follow-up actions required by the ports, field offices and CBP's Fines, Penalties and Forfeitures Division. If unsatisfactory conditions are flagged during an oversight survey, the Fines, Penalties and Forfeitures Division will conduct another review no sooner than 12 months and no later than 24 months from the date of the unsatisfactory rating notification to allow time for the corrective actions to be implemented and properly assessed, CBP said, according to the OIG.