DHS Inspector General Continues to Find Problems with Drawback, Entry Processes
The Department of Homeland Security's Office of Inspector General continued to find a number of problems with CBP's drawback program and called the agency's oversight of the program a "material weakness" in a new audit report (here). While the DHS OIG has called attention to the problems for several years in the annual reports, it added some new recommendations for the fiscal year 2014 report. The OIG noted that while the problematic conditions "have existed for several years," CBP's "planned remediation" depends on funding for information technology systems. There were other problematic areas, including single-transaction bond and information technology policies, though no other issues were considered to rise to the level of a "material weakness."
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There continues to be a lack of "effective controls to prevent, or detect and correct excessive drawback claims," said the OIG. CBP should dedicate manual controls to oversee drawback claims and add requirements to automated bond sufficiency, said the report. Because the drawback claim lifecycle often goes beyond the statutorily required document retention period, CBP should ask Congress to update the statute so CBP will have more time to review evidence that recorded drawback claims are accurate. CBP should also add periodic monitoring control to make sure timely reconciliations are done, said the OIG.
The audit also found problems with internal control over single-transaction bonds. CBP should "implement a centralized approach to the bonds, it said. The OIG also had concerns with CBP's in-bond policy, it said. While CBP updated the in-bond processes in April last year, "port personnel did not have a clear understanding of how to operate the newly implemented compliance module, which led to inconsistent implementation across ports," said the OIG. CBP should do more training at the ports and add policies to resolve insufficient records retention, it said.
CBP port personnel also did not "adhere to existing policies and procedures for review and verification of entry edit/exception report," it said. CBP should "redistribute" the "relevant directives communicating the steps for completing report reconciliations," it said. CBP concurred with the material weakness and significant deficiencies mentioned in the report. The agency "indicated that management will continue to work to resolve all identified weaknesses," said the OIG.