GAO Reports that HMF, MPF, and Inspection User Fees Need to be Aligned with Programs They Support

The GAO concludes that substantive reviews are needed to align these port-related fees with the programs they support.

Highlights of GAO Criticism on Fees' Misalignment, Collection, Review

The GAO states that the port-related fees it examined vary in how they are set, collected, used, and reviewed, creating misalignments between the fees and corresponding services, as well as administrative and oversight challenges. The following are highlights of the GAO's criticisms (partial list):

Misalignment of costs/activities. According to the GAO, all of the fees it reviewed suffer from some misalignment (of respective costs, activities, etc.), which affects how the fees are used. For example, since 2003, HMF collections have far exceeded funds appropriated for harbor maintenance, resulting in a large and growing surplus in the trust fund.

In addition, not all MPF and customs inspection activities are reimbursable, and not all reimbursable activities are inspection related.

Collection problems. The GAO states that collection methods function best when they minimize administrative costs and maximize compliance, as seen in the automated system U.S. Customs and Border Protection uses to process the MPF as well as HMF assessed on imports.

However, the GAO had the following criticisms regarding other assessments (partial list):

a lack of coordination between the U.S. Army Corps of Engineers (Corps) and CBP which inhibits oversight of HMF payments made by passenger vessel owners/operators, domestic shippers, and importers shipping into foreign trade zones;

CBP not charging interest or penalties on the above HMF payments when they are late, therefore failing to use an important tool to encourage timely payment; and

quarterly remittance of certain fees delaying the availability of funds.

Inadequate review, communication. Among other criticisms, the GAO states that CBP's review of the MPF does not detail program costs and project fee collections, or provide enough information to determine if the amount, structure, or authorized uses of the fee should be updated. Further, limited opportunities for substantive communication with HMF stakeholders hamper their understanding of the fee.

GAO's Recommendations

The GAO offers a number of recommendations, including the following (partial list):

reviewing the link between the amount of the HMF and the amount of expenditures for the harbor maintenance program;

establishing an advisory committee on the HMF and the activities that it funds that includes payers of the fee;

assessing interest and penalties on late HMF payments for domestic shipments, shipments into foreign trade zones, and sea passengers;

directing CBP to automate its systems for collecting commercial vessel fees to reduce the reliance on paper receipts for tracking payments and to support electronic payments, rather than payment by check or cash;

developing a method for the Corps to provide information on domestic vessel movements to CBP;

directing CBP to include in its biennial report on the MPF, information on total program collections relative to total program costs, over time, as well as any recommendations for updating the amount and authorized uses of the fee;

conducting joint reviews of the customs, immigration, and AQI fees and consolidating reporting, to include the activities and proportion of fees for which CBP, Immigration and Customs Enforcement (ICE), and the Animal and Plant Health Inspection Service (APHIS) are each responsible; and

developing a legislative proposal, in consultation with Congress, to harmonize the customs, immigration, and AQI fees.

GAO report, "Substantive Reviews Needed to Align Port-Related Fees with the Programs They Support" (GAO-08-321, dated February 2008) available at http://www.gao.gov/new.items/d08321.pdf