Immigration Courts: Observations on Restructuring Options and Actions Needed to Address Long-Standing Management Challenges

DOJ's EOIR is responsible for conducting immigration court proceedings, appellate reviews, and administrative hearings to fairly, expeditiously, and uniformly administer and interpret U.S. immigration laws and regulations.

This statement addresses (1) scenarios that experts and stakeholders have proposed for restructuring EOIR's immigration court system and the reasons they offered for or against these proposals; and (2) how EOIR manages and oversees the immigration courts, including hiring and performance assessment, among other things.

This statement is based on a report GAO issued in June 2017, with selected updates conducted through April 2018 to obtain information from EOIR on actions it has taken to address the report's recommendations. GAO's report incorporated information obtained by reviewing EOIR documentation, analyzing EOIR data, and interviewing agency officials and immigration court experts and stakeholders. For the selected updates, GAO reviewed EOIR documentation.

In June 2017, GAO reported that some immigration court experts and stakeholders have recommended restructuring the Executive Office for Immigration Review's (EOIR) administrative review and appeals functions within the immigration court system—immigration courts and Board of Immigration Appeals—to improve its effectiveness and efficiency. The 10 experts and stakeholders GAO interviewed stated that they generally supported one of the following scenarios for restructuring the immigration court system, all of which would require a statutory change to implement:

a court system outside of the executive branch to replace EOIR's immigration court system, including both trial and appellate tribunals;

a new, independent administrative agency within the executive branch to carry out EOIR's quasi-judicial functions with both trial-level immigration judges and an appellate level review board; or

Six of the 10 experts and stakeholders GAO interviewed supported restructuring the immigration court system into a court independent of the executive branch. Experts and stakeholders offered several reasons for each of the proposed scenarios, such as potentially improving workforce professionalism and credibility. They also provided reasons against restructuring options, including that restructuring may not resolve existing management challenges, such as difficulties related to hiring immigration judges.

GAO also reported in June 2017 that EOIR could take several actions to address management challenges. EOIR has since taken some steps to address these challenges, but additional actions are needed. For example, GAO found that EOIR did not have efficient practices for hiring immigration judges, which contributed to judges being staffed below authorized levels. EOIR hiring data showed that on average from February 2014 through August 2016, EOIR took more than 21 months to hire an immigration judge. GAO recommended that EOIR assess the immigration judge hiring process to identify opportunities for efficiency. As of January 2018, EOIR had increased the number of its judges but remained below its authorized level for fiscal year 2017. Hiring additional judges is a positive step; however, to fully address GAO's recommendation, EOIR needs to assess its hiring process to identify opportunities for efficiency.

In June 2017, GAO also reported on ways EOIR could enhance its video teleconferencing (VTC) program, through which judges conduct hearings by VTC. GAO found that EOIR had not, in accordance with best practices, established a mechanism to solicit feedback and comments about VTC from those who use it regularly to assess whether it meets user needs. GAO recommended EOIR develop and implement such a mechanism. EOIR concurred and implemented this recommendation in December 2017 by establishing a mechanism on its public website to solicit feedback from respondents regarding their satisfaction with VTC hearings. This effort should help EOIR ensure VTC hearings it conducts meet all user needs.

In its June 2017 report GAO made 11 recommendations to improve EOIR's hiring process and performance assessment, among other things. EOIR generally concurred with the recommendations, has implemented 1, and reported actions planned or underway to address the remaining 10.

I am pleased to be here today to discuss our work on expert and  stakeholder proposals for restructuring the immigration court system and  management challenges facing the Department of Justice’s (DOJ)  Executive Office for Immigration Review (EOIR). As you know, EOIR is  responsible for conducting immigration court proceedings, appellate  reviews, and administrative hearings to fairly, expeditiously, and uniformly  administer and interpret U.S. immigration laws and regulations. Each  year, the Department of Homeland Security (DHS) initiates hundreds of  thousands of cases with the U.S. immigration court system to decide  whether respondents—foreign nationals charged on statutory grounds of  inadmissibility or deportability—are removable as charged; and, if so,  should be ordered removed from the United States or granted any  requested relief or protection from removal and permitted to lawfully  remain in the country.

A significant and growing case backlog—the number of cases pending at  the start of each fiscal year—before the immigration courts has been the  subject of attention by Congress, immigration court experts and  stakeholders, and others. In June 2017, we reported that the immigration  courts’ case backlog more than doubled from fiscal years 2006 through  2015, reaching a backlog of about 437,000 cases pending in 2015.  Further, our analysis showed that initial case completion time increased  more than fivefold over this 10-year period. For example, the median  number of days to complete a removal case, which comprised 97 percent  of EOIR’s caseload for this time period, increased by 700 percent from 42  days in fiscal year 2006 to 336 days in fiscal year 2015. Since we  completed our work, DOJ has indicated that the case backlog remains a  challenge. For example, a December 2017 memorandum from the  Attorney General indicated that there were well above a half million cases  pending before the immigration courts.

To address the case backlog and other challenges, various organizations,  such as the American Bar Association, have recommended, among other  things, management improvements; incremental reform of the  immigration courts within the existing EOIR structure; and major structural  changes, such as creating an immigration court system independent of  any executive branch department or agency. Experts and stakeholders,  such as individuals affiliated with professional legal organizations and  former EOIR immigration judges, have also proposed changing the  immigration court system’s structure, organizational location among the  three branches of government, and aspects of its operations.

EOIR’s quasi-judicial functions are carried out by the immigration court  system, which includes 58 immigration courts located nationwide that are  overseen by the Office of the Chief Immigration Judge, whose  immigration judges preside over removal proceedings to determine  respondents’ removability and eligibility for any relief being sought, and  the Board of Immigration Appeals (BIA), whose members hear and issue  decisions regarding appeals of immigration judges’ decisions and certain  DHS decisions. Additionally, the Office of the Chief Administrative  Hearing Officer adjudicates immigration-related employment and  document fraud cases.

In June 2017, we reported on, among other things, (1) scenarios that  experts and stakeholders have proposed for restructuring EOIR’s  immigration court system and the reasons they offered for or against  these proposals; and (2) how EOIR manages and oversees immigration  court operations, including workforce planning, hiring, performance  assessment, and technology utilization. This statement summarizes information on immigration court restructuring and EOIR’s management  of the immigration courts from that report as well as actions EOIR has  taken, as of April 2018, to address resulting recommendations for  addressing management challenges.

For the June 2017 report, we identified scenarios that experts and  stakeholders have proposed for restructuring the immigration court  system and their reasons for or against these proposals. To identify these  scenarios, we reviewed publications and interviewed individuals affiliated  with eight entities and two former immigration judges, all selected based  on their expertise in immigration court issues. In selecting these 10  experts and stakeholders, we considered, among other things, their depth  of experience with the immigration court system and the relevance of their  published work to immigration court restructuring. We also considered  input from our identified experts and stakeholders, as well as EOIR, on  any additional experts or stakeholders we should interview. To ensure a  diversity of perspectives regarding proposed scenarios for restructuring  the immigration court system, we selected experts and stakeholders from  a variety of organizations, including federal agencies, immigration lawyer  and respondent advocacy groups and individuals, and the immigration  judges’ union.

To assess EOIR’s workforce planning, hiring, performance assessment,  and technology utilization, we analyzed relevant documentation, such as  contracts for workforce planning services; EOIR data on, among other  things, immigration judge hiring; and interviewed EOIR and DHS officials  from headquarters and six immigration courts. More detailed information  on our objectives, scope, and methodology is contained in our June 2017  report. Additionally, after the issuance of our report through April 2018 we  obtained and analyzed information and documentation on actions EOIR  has taken to address our recommendations. The work upon which this  statement is based was conducted in accordance with generally accepted  government auditing standards. Those standards require that we plan  and perform the audit to obtain sufficient, appropriate evidence to provide  a reasonable basis for our findings and conclusions based on our audit  objectives. We believe that the evidence obtained provides a reasonable  basis for our findings and conclusions based on our audit objectives.

Experts and Stakeholders Have Proposed Restructuring EOIR’s Immigration Court System

As we reported in June 2017, some immigration court experts and  stakeholders have recommended restructuring EOIR’s administrative  review and appeals functions within the immigration court system— immigration courts and BIA—and the Office of the Chief Administrative  Hearing Officer, to improve the effectiveness and efficiency of the system  or, among other things, increase the perceived independence of the  system and professionalism and credibility of the workforce.

We found that the 10 experts and stakeholders we interviewed generally  supported one of the following scenarios for restructuring the immigration  court system, all of which would require a statutory change to implement: a court system independent (i.e., outside) of the executive branch to  replace EOIR’s immigration court system, including both trial and  appellate tribunals; a new, independent administrative agency within the executive branch  to carry out EOIR’s quasi-judicial functions with both trial-level  immigration judges and an appellate level review board; or a hybrid approach, placing trial-level immigration judges in an  independent administrative agency within the executive branch, and  an appellate-level tribunal outside of the executive branch.

Six of the 10 experts and stakeholders we interviewed supported  restructuring the immigration court system into a court independent of the  executive branch. Two of the experts and stakeholders we contacted  supported a new independent administrative agency within the executive  branch. One of the experts and stakeholders supported the hybrid  scenario, placing trial-level immigration judges in an independent,  administrative agency within the executive branch, and an appellate-level  tribunal outside of the executive branch.

As we reported in June 2017, experts and stakeholders offered several  reasons for each of the proposed scenarios, such as potentially  increasing judicial autonomy over courtrooms and dockets; as well as  provided reasons against restructuring options, such as that restructuring  may not resolve existing management challenges. These reasons for and  against each of the scenarios are summarized in table 1 and discussed  further below. We are not taking a position on any of these restructuring  proposals, or on any of the reasons offered for or against them. We  present the information we obtained from the experts and stakeholders to  inform policymakers about proposals that have been put forth regarding  restructuring the immigration court system.

We found in our June 2017 report that experts and stakeholders we  interviewed cited several reasons for the proposed restructuring  scenarios, as described in table 1 and below.

Independence: Six of the 10 experts and stakeholders we  interviewed stated that establishing a court system independent (i.e.,  outside) of the executive branch could increase the perceived  independence of the system. For example, 1 of the 10 experts and  stakeholders we interviewed explained that the public’s perception of  the immigration court system’s independence might improve with a  restructuring that removes the quasi-judicial functions of the  immigration courts and the BIA from DOJ, because DOJ is also  responsible for representing the government in appeals to the U.S.  Circuit Courts of Appeals by individuals seeking review of final orders  of removal. Another 1 of the 10 experts and stakeholders we  interviewed explained that under the existing immigration court  system, respondents may perceive, due to the number of immigration  judges who are former DHS attorneys and the co-location of some  immigration courts with DHS U.S. Immigration and Customs  Enforcement’s Office of the Principal Legal Advisor offices, that  immigration judges and DHS attorneys are working together. Two of  the 10 experts and stakeholders we interviewed also proposed that an  immigration court system independent of the executive branch would  be less susceptible to political pressures within the executive branch.  Experts and stakeholders cited similar independence-related reasons  for supporting the administrative agency and hybrid scenarios.

Judicial autonomy: Four of the 10 experts and stakeholders we  interviewed stated that a court system independent of the executive  branch might give immigration judges and BIA members more judicial  autonomy over their courtrooms and dockets. For example, 1 of the  10 experts and stakeholders we interviewed stated that immigration  judges in an independent court system would be able to file  complaints against private bar attorneys directly with the state bar  authority instead of filing the complaint with DOJ first, as required for  immigration judges acting in their official capacity. EOIR officials  explained that while immigration judges cannot directly file a  complaint with the state bar authority, EOIR’s Disciplinary Counsel,  which is charged with investigating these complaints, can file a  complaint with the state bar on behalf of the immigration judge.

Workforce professionalism or credibility: Experts and stakeholders  also stated reasons why a court system independent of the executive  branch might also improve the professionalism or credibility of the  immigration court system’s workforce. For example, 1 of the 10  experts and stakeholders we interviewed explained that if the judge  career path was improved under a restructuring such that immigration  judges were able to advance to more prestigious judgeships, this  could assist in attracting candidates to the immigration bench.  Regarding the hybrid scenario, 1 of the 10 experts and stakeholders  we interviewed noted that this proposal may attract a more diverse  and balanced pool of candidates for immigration judge positions.

Organizational capacity or accountability: Experts and  stakeholders who supported a court system independent of the  executive branch also cited enhanced organizational capacity or  accountability as a reason for adopting this scenario. One of the 10  experts and stakeholders we interviewed explained that this type of  restructuring may allow the immigration court system to improve its  organizational capacity by changing the way it staffs its managerial  and supervisory positions. For example, this individual explained that  instead of placing immigration judges in managerial positions, EOIR  could, as an independent court system, more easily attract and fill  managerial positions with individuals who have experience in court  management and public administration instead of placing immigration  judges in these positions. Similarly, this same individual also noted  that if the restructured immigration court system was placed within the  purview of the Administrative Office of the U.S. Courts, which provides  a wide range of support services to the federal judiciary (including  administrative, technological and legal services), it could use its  expertise in court management to assist with managing the system.

In terms of enhancing organizational accountability, 1 of the 10 experts  and stakeholders we interviewed explained that an independent court  system could also increase the transparency of the performance  evaluation system for immigration judges by incorporating feedback from  court stakeholders, such as DHS and private bar attorneys, on the judges’  performance as well as increasing the transparency of the process for  making complaints against immigration judges. According to this  individual, the complaint process for other federal judges is more  transparent and the judges are given an opportunity to address the  complaint and appeal any decisions that resulted from the complaint.

We also found in our June 2017 report that the experts and stakeholders  we interviewed cited several reasons against the proposed restructuring  scenarios, as described in table 1 and below.

Appointment of immigration judges: Two of the 10 experts and  stakeholders we interviewed noted that requiring the presidential  nomination and Senate confirmation of immigration judges under an  independent court system could further complicate and delay the  hiring of new judges by making the appointment of additional judges  more dependent on external parties.

Administrative challenges: Two of the 10 experts and stakeholders  we interviewed stated that it may be difficult to establish and  administer a court system independent of the executive branch.  Specifically, these experts and stakeholders expressed concern that  the Administrative Office of the U.S. Courts may be reluctant to  assume the vast responsibility of administering a newly created court  system. Regarding administrative challenges associated with the  establishment of an independent administrative agency, 1 of the 10  experts and stakeholders we interviewed explained that this scenario  might be overly complicated to implement since EOIR would need to  develop its own administrative functions outside of DOJ. According to  another 1 of the 10 experts and stakeholders we interviewed, creating  a hybrid court system may further complicate the administration of the  immigration court system and potentially result in difficulties for  respondents.

Procurement of resources: Five of the 10 experts and stakeholders  we interviewed expressed the concern that a restructured immigration  court system, regardless of the scenario, would not be able to procure  sufficient resources outside of DOJ. For example, 1 of the 10 experts  and stakeholders noted that a restructured independent court or  administrative agency might have less leverage outside of DOJ to  compete for resources.

Trial level disconnection from the appellate level: One of the 10  experts and stakeholders we interviewed stated that if the hybrid  scenario were to be adopted, the trial level may become more  disconnected from the appellate level, due to the placement of the  immigration courts within the executive branch and the appellate body  outside of the executive branch.

Resolution of existing management challenges or case backlog:  Two of the 10 experts and stakeholders we contacted stated that a  court system independent of the executive branch may not address  the immigration courts’ management challenges, such as the case  backlog. For example, 1 of the 10 experts and stakeholders stated  that the immigration court system would likely have a large caseload  regardless of how it is structured.

EOIR Has Initiated Actions to Improve Its Management of the Immigration Courts, but Additional Steps Are Needed to Address Long- Standing Challenges

We also reported in June 2017 that EOIR could take several actions to  address long-standing management and operational challenges and  reduce the case backlog. In particular, we identified challenges related to,  and made 11 recommendations to improve, EOIR’s workforce planning,  hiring, performance assessment, and technology utilization. EOIR  generally concurred with our recommendations, and, has initiated actions  to address them. Overall, EOIR has fully implemented 1 recommendation  but needs to take additional steps to fully implement the remaining 10  recommendations to help strengthen the agency’s management and help  reduce the case backlog.

Workforce Planning. In June 2017, we reported that EOIR could help  address its case backlog and staffing challenges, such as by hiring more  immigration judges to meet its authorized number of judges and through  better workforce planning and hiring practices. During the course of our  review we found that EOIR estimated staffing needs using an informal  approach that did not account for long-term staffing needs, reflect EOIR’s  performance goals, or account for differences in the complexity of court  cases. For example, in developing its staffing estimate, EOIR did not  calculate staffing needs beyond the next fiscal year or take into account  resources needed to achieve the agency’s case completion goals.

Furthermore, we found that, according to EOIR data, approximately 39  percent of all immigration judges were eligible to retire as of June 2017,  but EOIR had not systematically accounted for these impending  retirements in its staffing estimate.

At the time of our review, EOIR had begun to take steps to account for  long-term staffing needs, such as by initiating a workforce planning report  and a study on the time it takes court staff to complete key activities.  However, we found that these efforts did not align with key principles of  strategic workforce planning that would help EOIR better address current  and future staffing needs. EOIR officials also stated that the agency had  begun to develop a strategic plan for fiscal years 2018 through 2023 that  could address its human capital needs. We recommended that EOIR  develop and implement a strategic workforce plan that addresses key  principles of strategic workforce planning.

EOIR agreed with our recommendation. In February 2018, EOIR officials  told us that they had established a committee and working group to  examine the agency’s workforce needs and would include workforce  planning as a key component in EOIR’s forthcoming strategic plan.  Specifically, EOIR officials stated that the agency had established the  Immigration Court Staffing Committee in April 2017 to examine how to  best leverage its existing judicial and court staff workload model to  address its short- and long-term staffing needs, assess the critical skills  and competencies needed to achieve future programmatic results, and  develop strategies to address human capital gaps, among other things. In  February 2018, EOIR officials stated that the agency replaced this  committee, which had completed its work, with a smaller working group of  human resource employees charged with addressing the agency’s  strategic workforce planning. Additionally, EOIR officials stated that the  agency was developing a strategic plan that includes human capital  planning as a critical component, which will be used to guide workforce  planning for the agency. These are positive steps, but to fully address our  recommendation, EOIR needs to continue to develop, and then  implement a strategic workforce plan that: (1) addresses the agency’s  short- and long-term staffing needs; (2) identifies the critical skills and  competencies needed to achieve future programmatic results; and (3)  includes strategies to address human capital gaps. Once this strategic  workforce plan is completed, EOIR needs to monitor and evaluate the  agency’s progress toward its human capital goals.

Hiring. Additionally, in our June 2017 report, we found that EOIR did not  have efficient practices for hiring new immigration judges, which has  contributed to immigration judges being staffed below authorized levels  and to staffing shortfalls. For example, in fiscal year 2016, EOIR was  allocated 374 immigration judge positions and had 289 judges on board  at the end of the fiscal year. EOIR officials attributed these gaps to  delays in the hiring process. Our analysis of EOIR hiring data supported  their conclusion. Specifically, we found that from February 2014 through  August 2016, EOIR took an average of 647 days to hire an immigration  judge—more than 21 months. As a result, we recommended that EOIR  (1) assess the immigration judge hiring process to identify opportunities  for efficiency; (2) use the assessment results to develop a hiring strategy  that targets short- and long-term human capital needs; and (3) implement  any corrective actions related to the hiring process resulting from this  assessment.

In response to our report, EOIR stated that it concurred with our  recommendation and was implementing a new hiring plan as announced  by the Attorney General in April 2017 intended to streamline hiring.  Among other things, EOIR stated that the new hiring plan sets clear  deadlines for assessing applicants moving through different stages of the  process and for making decisions on advancing applicants to the next  stage, and allows for temporary appointments for selected judges  pending full background investigations. In February 2018, EOIR indicated  to us that it had begun to use the process outlined in its hiring plan to fill  judge vacancies. The Attorney General also announced in April 2017 that  the agency would commit to hire an additional 50 judges in 2018 and 75  additional judges in 2019. In January 2018, EOIR officials told us that the  agency had a total of 330 immigration judges, an increase of 41 judges  since September 2016. Hiring these additional judges is a positive step;  however, EOIR remains below its fiscal year 2017 authorized level of 384  immigration judges based on funding provided in fiscal years 2016 and  2017. Additionally, the Consolidated Appropriations Act, 2018 provided  funding for EOIR to hire at least 100 additional immigration judge teams,  including judges and supporting staff, with a goal of fielding 484  immigration judge teams nationwide by 2019. To fully address our  recommendation, EOIR will need to continue to improve its hiring process  by (1) assessing the prior hiring process to identify opportunities for  efficiency; (2) developing a hiring strategy targeting short- and long-term  human capital needs; and (3) implementing corrective actions in response  to the results of its assessment of the hiring process.

Performance Assessment. Regarding EOIR’s performance assessment,  we reported in June 2017 that EOIR had previously established  performance monitoring activities and measures to assess aspects of the  immigration courts, but it had eliminated several of these performance  assessment mechanisms. EOIR also had goals for some cases it  adjudicated, such as respondents in detention, but no longer had goals  for most cases, including some cases it had prioritized for adjudication.  For example, we found that EOIR did not have performance measures or  goals for completing cases in which the respondent is not detained (non- detained cases), which comprised 83 percent of immigration courts’ total  caseload from fiscal year 2010 through fiscal year 2015. To help EOIR  more effectively monitor its performance and fully evaluate whether the  immigration courts are achieving EOIR’s mission, we recommended that  EOIR establish and monitor comprehensive case completion goals,  including a goal for completing non-detained cases not captured by  performance measures, and goals for cases it considers a priority.

EOIR agreed with this recommendation and has taken steps to address it.  For example, EOIR issued guidance in January 2018 to all immigration  court staff that established the agency’s goals for each immigration court  in adjudicating cases. In particular, EOIR identified in this guidance a  case completion goal for non-detained cases: courts must complete 85  percent of all non-detained removal cases that do not qualify as a “status  case” within 1 year of filing of the Notice to Appear (NTA) in court,  reopening or recalendaring of the case, remand from the Board of  Immigration Appeals, or notification of release from custody. According  to this guidance, EOIR has also retained case completion goals for other  categories it considers a priority, such as cases in which the respondent  is detained and credible fear reviews. In its January 2018 guidance,  EOIR stated that it will track these measures and the courts’ performance  in meeting them as well as regularly auditing these measures. To fully  address this recommendation, EOIR needs to monitor courts’  performance in meeting these goals.

In June 2017, we also reported that EOIR collected information on the  extent and reasons why immigration judges issue continuances— temporary adjournments of case proceedings until a different day or  time—but did not systematically assess these data to identify and  address potential operational challenges affecting the immigration courts  or areas where immigration judges could benefit from additional guidance  or training. An immigration judge may continue a case for good cause  shown, such as to allow respondents to obtain legal representation or  DHS to complete required background investigations and security checks. Our analysis of continuance records from fiscal year 2006  through fiscal year 2015 showed that the use of continuances had grown  over time. Specifically, all types of continuances increased by 23 percent  from fiscal year 2006 through fiscal year 2015 and operational  continuances, such as those caused by a lack of foreign language  interpretation or a video-teleconference (VTC) malfunction, increased by  33 percent over this same time period. We recommended that EOIR  systematically analyze immigration court continuance data to identify and  address any operational challenges faced by courts or areas for  additional guidance or training.

EOIR agreed with this recommendation and, in July 2017, issued updated  guidance for immigration judges on fair and efficient docket management  relating to the use of continuances. For instance, according to this  guidance, judges must annotate the case worksheet on disposition of the  case with a continuance code describing the reason for the continuance  and court staff must ensure that each continuance code is accurately  entered into the agency’s case management system for all cases. EOIR  also issued guidance in October 2017 updating case continuance codes  and their definitions to assist immigration judges in recording this  information on the case worksheet. These are positive steps, and  analyzing the use of continuances on a systematic basis would give EOIR  greater insight into more widespread operational issues that the courts  may be facing. To fully address our recommendation, EOIR will need to  systematically analyze immigration court continuance data to identify and  address any operational challenges faced by courts or areas for  additional guidance or training.

We also reported in June 2017 that EOIR could improve the reliability of  its case management data and reports on case completion times by  ensuring that court staff accurately record NTAs in a timely manner. We  found that EOIR did not have guidance or data integrity efforts to ensure  the timely and accurate recording of NTAs in its case management  system, and that at least 16 percent of NTA dates were unreliable. EOIR  uses NTA dates to calculate case completion times, which are used to  assess court performance. The agency reports this information publicly in  DOJ’s Annual Performance Report. We concluded that improving the  reliability of NTA data would allow EOIR to provide more accurate  information on case completion times to Congress and the public. We  recommended that EOIR update its policies and procedures to promote  the timely and accurate recording of NTAs. In response to our report,  EOIR stated that it partially concurred with our recommendation and  stated that it would continue to monitor the timeliness and accuracy of  NTA recording, and implement corrective actions as needed. In January  2018, as part of its policy on case completion goals, EOIR also created a  goal that 100 percent of all electronic and paper records be accurate and  complete. This goal is a positive step, and updating policies and  procedures to remind staff about the importance of timely and accurate  recording of all NTAs would provide EOIR greater assurance that this  goal could be consistently met. To fully address our recommendation,  EOIR will need to update its policies and procedures to ensure the timely  and accurate recording of NTAs.

Technology Utilization. We also made several recommendations to  EOIR in our June 2017 report to improve its technology utilization,  including the agency’s oversight of the ongoing development of a  comprehensive electronic-filing (e-filing) capability—a means of  transmitting documents and other information to immigration courts  through an electronic medium, rather than on paper. EOIR identified the  implementation of an e-filing system as a goal in 2001, but has not, as of  April 2018, fully implemented this system. In 2001, EOIR issued an  executive staff briefing for an e-filing system that stated that only through  a fully electronic case management and filing system would the agency  be able to accomplish its goals. This briefing also cited several benefits  of an e-filing system, including, among other things, reducing the data- entry, filing, and other administrative tasks associated with processing  paper case files; and improving communication with external court  stakeholders, such as respondents and attorneys, providing the ability to  file court documents from private home and office computers. As we  reported in June 2017, EOIR initiated a comprehensive e-filing effort in  2016—the EOIR Court and Appeals System (ECAS)—for which EOIR  had documented policies and procedures governing how its primary  ECAS oversight body—the ECAS Executive Committee—would oversee  ECAS through the development of a proposed ECAS solution. However,  we found that EOIR had not yet designated an entity to oversee ECAS  after selection of a proposed solution during critical stages of its  development and implementation.

In our June 2017 report, we recommended that in order to help ensure  EOIR meets its cost and schedule expectations for ECAS, the agency  identify and establish the appropriate entity to oversee ECAS through full  implementation. EOIR concurred and stated that it had selected and  convened the EOIR Investment Review Board to serve as the ECAS  oversight body with the Office of Information Technology directly  responsible for the management of the ECAS program. EOIR officials told  us in February 2018 that the board convened in October 2017 and  January 2018 to discuss, among other things, the ECAS program.  However, as we reported in June 2017, EOIR officials previously told us  that the EOIR Investment Review Board was never intended to oversee  ECAS implementation due to the detailed nature of this system’s  implementation. EOIR has recently provided us with documentation  related to its oversight of ECAS, which we are reviewing to help  determine the extent to which EOIR has met the intent of our  recommendation. Additionally, we recommended in June 2017 EOIR  develop and implement a plan that is consistent with best practices for  overseeing ECAS to better position the agency to identify and address  any risks and implement ECAS in accordance with its cost, schedule, and  operational expectations. As of April 2018, EOIR has not indicated that it  has developed such a plan.

In June 2017 we also reported on ways EOIR could enhance its VTC  program. EOIR is authorized by statute to hold immigration removal  proceedings through VTC. According to EOIR officials, EOIR largely  uses VTC for hearings for detained individuals, including both master  calendar and individual merits hearings. We reported in June 2017 that  officials from all six of the immigration courts we visited identified  challenges related to VTC hearings, including difficulties maintaining  connectivity, hearing respondents, exchanging paper documents,  conducting accurate foreign language interpretation, and assessing the  demeanor and credibility of respondents and witnesses. We further found  that EOIR had not, in accordance with best practices, (1) evaluated its  VTC program to ensure that it is outcome-neutral, or (2) established a  mechanism to solicit feedback and comments about VTC from those who  use it regularly to assess whether it meets user needs.

Therefore, we recommended that EOIR take three actions to provide  further assurances that its use of VTC in immigration hearings is  outcome-neutral, including that it collect more complete and reliable data  related to its VTC use (e.g., the number of hearings it conducts by VTC)  and use the data to assess any effects of VTC on immigration hearings.  EOIR partially concurred with these actions and has since taken some  steps to implement these recommendations, such as piloting a project to  collect data on respondent appeals related to the use of VTC in their  cases. Additionally, EOIR officials told us in August 2017 that the agency  is studying how to collect more complete and reliable data on the number  and type of hearings it conducts through VTC and use these and other  data to assess any effects of VTC on immigration hearings.

We also recommended that EOIR develop and implement a mechanism  to solicit and monitor feedback from respondents regarding their  satisfaction and experiences with VTC hearings. EOIR concurred and  implemented this recommendation in December 2017 by establishing a  mechanism on its public website to solicit open-ended feedback from  respondents regarding their satisfaction with VTC hearings, including the  audio and visual quality of the hearing. According to EOIR officials, a  group of individuals within EOIR’s Office of the Chief Immigration Judge is  responsible for monitoring and addressing feedback received through this  portal. These efforts should help EOIR ensure VTC hearings it conducts  meet all user needs and identify and address technical issues with VTC  hearings.

Chairman Cornyn and Ranking Member Durbin, this completes my  prepared statement. I would be happy to respond to any questions you or  the members of the committee may have.

If you or your staff have any questions about this testimony, please  contact Rebecca Gambler at (202) 512-8777 or gamblerr@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of this statement. GAO staff who  made key contributions to this testimony are Taylor Matheson (Assistant  Director), Kathleen Donovan, Sasan J. “Jon” Najmi, Robin Nye, and Erin  O’Brien.

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Military Recruiting: Army National Guard Has Implemented Internal Controls for Soldier Incentives but Needs to Better Plan to Maintain the Integrity of Those Controls

ARNG provides trained and equipped units ready to defend life and property in the 54 states, territories, and the District of Columbia. In 2011, the Army Audit Agency reported weaknesses in internal controls over soldier incentive payments in the California ARNG that led to some improper payments. DOD initially took actions to recoup some of these payments, but the National Defense Authorization Act for Fiscal Year 2017 allowed for the waiver or other forgiveness of debt.

The National Defense Authorization Act for Fiscal Year 2017 included a provision for GAO to assess policies and procedures for minimizing and waiving the recoupment of improper payments. This report (1) evaluates the extent to which ARNG has implemented and planned to adjust the internal controls for its Selected Reserve Incentive Program to prevent improper payments and (2) describes which DOD organizations have the authority to waive ARNG incentive debts and steps taken to improve waiver documentation. GAO conducted site visits to six states based on the value of their incentive programs, reviewed documentation used to manage incentive programs, examined incentive debt waiver cases, and interviewed DOD officials.

In response to the over $22 million in improper payments the California Army National Guard (ARNG) made in cash bonuses and other soldier incentives from 2004 through 2010, ARNG officials implemented some internal controls to prevent future improper incentive payments. These internal controls include automated and manual checks of soldier incentive contracts to verify soldiers' eligibility for incentive payments. For example, ARNG implemented automated rules in its Guard Incentive Management System—an online system that tracks incentive contracts—to monitor a soldier's eligibility for an incentive by comparing the data received from multiple personnel systems against the soldier's contract. If any issues are found, the Guard Incentive Management System will flag the incentive case for review by state ARNG officials and will stop future payments until the issue is resolved.

While these internal controls have improved accountability over soldier incentive payments, ARNG is still in the process of completing further actions. For example, in April 2017, ARNG issued the fiscal year 2017 Selected Reserve Incentive Program policy. However, ARNG did not incorporate changes as a result of this policy into the Guard Incentive Management System to ensure that the automated checks captured these policy changes—including one that affects approximately 8,000 solider incentive contracts, according to ARNG officials. ARNG officials told us that they had not updated the Guard Incentive Management System with this policy because of technical challenges resulting from a transition in vendors for the Reserve Component Manpower System—an information system that houses the Guard Incentive Management System. ARNG officials also told us that they plan to update the Guard Incentive Management System to include the 2017 policy in February 2018.

GAO also found that ARNG had not developed and implemented a plan for future significant changes that could affect its internal controls over soldier incentive payments. These changes include, for example, the end of the current vendor contract in 2020 to support the Reserve Component Manpower System and the Army National Guard's migration to the Integrated Personnel and Pay System – Army that is scheduled to occur in 2018. Standards for Internal Control in the Federal Government states that management should identify, analyze, and respond to significant changes that could affect an internal control system. Specifically, because conditions affecting an organization and its environment continually change, management needs to anticipate and plan for significant changes by using a forward-looking process to prepare for those changes. Without taking action to plan for such changes, ARNG puts itself at risk of making improper payments in the future.

The Defense Finance and Accounting Service and the Defense Office of Hearings and Appeals review and adjudicate requests for waivers of incentive debt. DOD has taken two steps to improve the availability of documentation needed to adjudicate waiver cases. First, DOD has clarified the policy in its Financial Management Regulation on the documentation soldiers are required to provide. Second, officials review documentation in the Guard Incentive Management System before validating an incentive payment, which may reduce delays associated with missing documentation when processing waiver requests.

GAO recommends that ARNG develop and implement a plan that identifies, analyzes, and responds to significant changes that could affect internal controls for its Selected Reserve Incentive Program. ARNG concurred with the recommendation and has identified planned actions to address the recommendation.

The Army National Guard (ARNG) provides trained and equipped units  ready to defend life and property in the United States, including serving  key roles in responding to natural disasters and protecting the homeland.  Additionally, ARNG assists in bolstering the nation’s active-duty military  forces in times of need. ARNG is authorized to have an end strength of  343,500 in fiscal year 2018. In order to recruit and retain personnel to  reach this end strength, ARNG contracts with current and prospective  soldiers to provide enlistment, re-enlistment, and other financial  incentives for specified terms of service in certain occupational  specialties. In order to receive these incentives, soldiers must fulfill the  obligations specified in their contracts. In fiscal year 2016, ARNG  disbursed more than $185 million to soldiers for these incentives.

Following a 2011 report by the Army Audit Agency detailing weaknesses  in internal controls over incentive payments—including fraud—in the  California ARNG, the National Guard Bureau (NGB) conducted a review  of all payments to California ARNG soldiers under its Selected Reserve  Incentive Program, which provides cash bonuses and other payments,  during fiscal years 2004 through 2010. California ARNG officials had  identified more than $22 million in improper incentive payments during  that time period. While the Department of Defense (DOD) initially took  actions to recoup some of these payments, subsequent guidance from  the Office of the Secretary of Defense in October 2016 and the National  Defense Authorization Act for Fiscal Year 2017 allowed for the waiver or  other forgiveness of debt for most of the affected California ARNG  soldiers.

The National Defense Authorization Act for Fiscal Year 2017 included a  provision for us to assess policies and procedures for identifying and  minimizing improper payments and requests to waive the recoupment of  improper payments. This report (1) evaluates the extent to which ARNG  has implemented and planned to adjust the internal controls for its  Selected Reserve Incentive Program to prevent improper payments and  (2) describes which DOD organizations have the authority to waive ARNG  soldiers’ incentive debt and any steps DOD has taken to improve the  availability of documentation to adjudicate waiver cases.

For objective one, we reviewed applicable DOD guidance on the use of  incentive programs and compared this guidance with our observations of  how this guidance was implemented in six selected states. We selected a nonprobability sample of six states based on the value of the incentives  their respective programs awarded in fiscal year 2016 and the number of  soldier contracts ARNG was considering for termination (termination  being a necessary step before beginning recoupments). The six states we  selected were California, Delaware, Illinois, Nebraska, Nevada, and  Virginia. We conducted site visits to each of our six selected states to  catalogue their procedures related to incentive payments. Specifically, we  conducted interviews with state incentive managers to discuss their  procedures for managing incentive payments, and we observed incentive  managers performing these procedures in information systems such as  the Guard Incentive Management System, among others. We also  discussed challenges they experienced using these systems. Although  the findings from our site visits to these six selected states are not  generalizable to all states and territories, they provide important insights  into how the incentive process is managed across a range of states.

Because ARNG serves as the focal point for processing all incentive  cases, we also conducted interviews with ARNG officials to discuss their  roles in managing incentive payments, and we observed their use of the  Guard Incentive Management System. We discussed challenges they  experienced using the system. Based on these discussions, we  performed additional work to identify the steps that NGB was taking to  address these challenges. This work included reviewing documents  associated with the Reserve Component Manpower System and its  associated modules, such as the Guard Incentive Management System;  interviewing vendors that were awarded the contracts to manage the  Reserve Component Manpower System; and interviewing NGB officials to  discuss their roles in managing contracts associated with the Reserve  Component Manpower System and the ARNG Incentive Support Team.  We compared our observations against federal internal control standards  related to risk assessment.

For objective two, we reviewed applicable DOD guidance on the roles  and responsibilities of the organizations that participate in the process— the Defense Finance and Accounting Service and the Defense Office of  Hearings and Appeals. We interviewed officials at these organizations to  better understand the source of delays in adjudicating waivers, which they  identified as a lack of documentation. Based on these interviews, we  collected and examined ARNG Selected Reserve Incentive Program  recoupment waiver cases that were adjudicated by the Defense Office of  Hearings and Appeals in calendar years 2014 through 2016 to identify the  frequency with which documentation was missing. During site visits to our  selected states, we also interviewed ARNG officials to determine the  processes designated for generating and maintaining documentation.

We conducted this performance audit from January 2017 to February  2018 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

ARNG is one of two reserve components of the Department of the Army;  it has units located in each of the 54 states, territories, and the District of  Columbia. The Secretary of the Army is responsible for creating  overarching policy and guidance for all of the components of the Army,  including ARNG. The Chief of NGB, among other responsibilities, acts as  the official channel of communication between the Department of the  Army and the 54 states, territories, and the District of Columbia in which  ARNG has personnel assigned and is responsible for ensuring that  ARNG personnel are accessible, capable, and trained to protect the  homeland and to provide combat resources to the Army.

During fiscal years 2010 through 2016, ARNG disbursed more than $1.8  billion in financial incentives to bolster its recruiting and retention efforts.  The ARNG program, called the Selected Reserve Incentive Program,  includes cash bonuses and other payments. The ARNG regulation for  Selected Reserve Incentive Programs includes over a dozen sub- categories of cash bonuses, such as those for newly enlisted soldiers,  active duty soldiers who join ARNG, and soldiers who re-enlist or extend  with ARNG. In addition to cash bonuses, ARNG makes incentive  payments as part of the Student Loan Repayment Program. Under this  type of incentive, ARNG disburses incentive payments directly to a third  party lender.

The Director of ARNG is responsible for determining the overall policy for  the Selected Reserve Incentive Program and issued the regulation that  governs incentive procedures and eligibility criteria for soldiers entering  into an incentive agreement. On a periodic basis, ARNG updates the  policy for a specific fiscal year through a policy or an education and  incentive operational message. These updates, which are intended to  help ARNG meet its readiness requirements, can provide instructions on  the value and frequency of incentives, as well as directing the targeting of  incentives to address a particular skill or unit need. The updates can also  direct changes to eligibility requirements in order to enable a soldier to  receive an incentive.

Each of the 54 states, territories, and the District of Columbia has a state  incentive manager in ARNG who provides oversight for authorization,  verification, validation, establishment, monitoring, and termination of all  incentive payments, including recoupment of incentives. State incentive  managers work with recruiting and retention personnel to assist in the use  of bonuses. For example, state incentive managers can ensure that the  contracts used by recruiting and retention personnel comply with ARNG  policy. Additionally, each ARNG unit has personnel who track information  on soldier performance, such as attendance, physical fitness, and  training. To manage these activities, ARNG uses the Reserve Component  Manpower System— an information system that houses manpower  readiness data and includes approximately 40 subsystems.

Improper Payments in the California ARNG

A 2008 California National Guard audit revealed that Selected Reserve  Incentive Program incentives, including student loan repayments, were  being improperly paid to numerous California ARNG soldiers and that  some of these cases were results of fraud. In subsequent audits of  California ARNG, 17,485 soldiers were identified as having received a  bonus or student loan repayment in the period of 2004 through 2010 that  was potentially improper and subject to recoupment. By the end of 2016,  several follow-on reviews had identified improper incentive payments to  more than 1,400 soldiers.

These investigations and audits determined that ARNG lacked internal  controls over its incentive process. For example, the state incentive  manager could authorize and approve an incentive and then forward the  payment request to the state’s U.S. Property and Fiscal Office, the office  responsible for authorizing payment. To improve the process, in 2010  ARNG established a contract for an Incentive Support Team to, among  other things, review soldier incentives. In 2011, ARNG developed a  module within the Reserve Component Manpower System called the  Guard Incentive Management System. The Guard Incentive Management  System was designed to aid in managing the incentive process across all  states by providing an online system to track, monitor, and prioritize all  incentive cases. The Guard Incentive Management System was also  intended to increase oversight through automated notifications and  reporting features and to add a budget control mechanism for NGB and  the states, among other things. In 2012, ARNG began a phased  implementation of the Guard Incentive Management System in each state  and territory. ARNG subsequently expanded the Guard Incentive  Management System to include the Student Loan Repayment Program.

NGB goes through a process before it establishes and collects on a  debt. State incentive managers are responsible for ensuring that  soldiers receiving incentive payments are satisfying contractual  requirements. If the state incentive manager determines that the soldier  has violated the contract tied to the incentive payment, the state incentive  manager sends a certified letter to the soldier that (1) states the reason  the payment may potentially be determined to be improper and (2) lists  the steps that the soldier can take to adjudicate the issue. ARNG officials  informed us that, if the soldier does not respond to the letter within 45  days, a debt is established in Defense Finance and Accounting Service  systems. In response, the soldier may provide documents to address the  issue or, should documents already exist, may request that NGB make an  exception to policy—a determination by NGB that the circumstances of a  soldier’s case merit allowing the soldier to retain the incentive payment.  Incentive managers in some states told us that they will assist soldiers in  requesting an exception to policy and will sometimes request these  exceptions on their behalf in the case of events—such as a  reorganization of a state’s ARNG units—that could result in a large  number of soldiers not meeting the terms of their incentive contracts. If  these steps do not resolve the issue, the soldier can seek recourse  through the Army Board for the Correction of Military Records. Once  these options are exhausted, the debt is established in Defense Finance  and Accounting Service systems.

ARNG Has Implemented Internal Controls to Prevent Improper Payments but Has Not Planned for Future Significant Changes That Could Affect Its Internal Controls ARNG Has Implemented Internal Controls to Prevent Improper Incentive Payments

ARNG has implemented internal controls, including automated and  manual reviews, to prevent improper incentive payments, and it also  reviews its incentive programs on a periodic basis. First, ARNG has  implemented the Guard Incentive Management System and expanded its  use over time to oversee its incentive contracts through automation. In  2012, ARNG began using the Guard Incentive Management System to  manage the life cycles of contracts between ARNG and soldiers for  incentives and education entitlements, including those for the Selected  Reserve Incentive Program. When a soldier signs a contract with a  recruiter or retention officer, the Guard Incentive Management System  alerts the state incentive manager that an incentive is ready for review.  ARNG has also implemented automated rules in the Guard Incentive Management System—known as monitor rules—that continuously  monitor a soldier’s eligibility for an incentive. The system does this by  comparing the data it receives from multiple personnel systems against  the soldier’s contract. If any issues are found, the Guard Incentive  Management System will flag the incentive case for review by the state  incentive manager and will stop future payments until the issue is  resolved. In California, for example, we observed an incentive manager  reviewing a case that had been flagged for violating a monitor rule  because the soldier was no longer in the unit stipulated in the incentive  contract. The incentive manager told us that the soldier was informed of  the situation and that corrective action would be required before any  additional payments could be made. If a soldier is deemed ineligible or  loses eligibility at any time during this process, the state incentive  manager will stop payments and review the case to determine whether  the contract needs to be terminated.

State incentive managers are also required to verify certain eligibility  criteria and personnel documents manually in the Guard Incentive  Management System. State incentive managers use checklists to review  a soldier’s incentive contract and unit orders to determine eligibility. The  Selected Reserve Incentive Program requires that incentive contracts of  more than three years be paid out in installments. State incentive  managers or their designees are required to manually review each  incentive contract before making an anniversary payment. During our site  visits, we observed state incentive managers using the Guard Incentive  Management System to review whether a soldier was eligible to receive a  payment. For example, in Nebraska we observed an incentive manager  using the Guard Incentive Management System to verify a soldier’s  contract period, unit assignment, and physical fitness test scores, among  other items, to confirm the soldier’s eligibility to receive a payment. In  Illinois, we observed an incentive manager using the Guard Incentive  Management System to verify a soldier’s identity, unit transfer orders, and  an eligible student loan before approving a student loan repayment for  further review at the national level. We also observed an incentive  manager in Illinois reviewing a soldier’s incentive contract, which was  being terminated because the soldier had failed to attend required drills.  ARNG personnel in each of the states we visited told us that the Guard  Incentive Management System provides a strong barrier against soldiers  receiving improper payments. The Guard Incentive Management System  also tracks and records each user’s actions on each incentive case to  provide an audit trail, which we observed in multiple states.

In addition to reviews conducted at the state level, ARNG conducts  another review of incentive payments using the Guard Incentive  Management System. Once a contract has been reviewed at the state  level, state incentive managers forward it to the ARNG Incentive Support  Team for another review. The ARNG Incentive Support Team has  provided assistance to all 54 states, territories, and the District of  Columbia, by conducting reviews of 100 percent of incentive payments  and terminations, among other things. After the ARNG Incentive Support  Team’s review, ARNG officials perform a final review of an incentive  payment before it is certified. Specifically, ARNG officials review a  random sample of 10 percent of contracts from a batch of incentive  payments that the Guard Incentive Management System generates.  ARNG officials told us that if 25 percent or more of this 10 percent sample  is rejected because it contains errors, all of the contracts in the batch are  returned to the ARNG Incentive Support Team or their respective states  for additional review. If less than 25 percent are rejected, the individual  contracts with errors are returned to the ARNG Incentive Support Team  or their respective states for additional review. The remainder of the batch  passes ARNG review, and the Guard Incentive Management System  generates payment files electronically and transfers them to the Defense  Finance and Accounting Service, which disburses funds to the soldiers,  as shown in figure 1.

Second, ARNG conducts periodic reviews of its incentive program.  Specifically, National Guard Regulation 600-7, Selected Reserve  Incentive Program—issued in August 2014—classifies incentive  programs as a high-risk function that should be evaluated every year to  mitigate risks, and that management controls must be evaluated at least  once every five years. Each of the six states we visited had either  conducted an internal review of its incentive program since 2016 or told  us that it had plans to conduct one within the next year. For example,  ARNG officials in Nevada had evaluated and certified the internal controls  of their incentive program in 2017, and ARNG officials in Delaware told us  that they plan to request an external evaluation of their incentive program  in 2018.

ARNG Has Taken Steps to Address Some Weaknesses Affecting Its Internal Controls but Has Not Planned for Future Significant Changes

ARNG took steps to address some identified weaknesses to its internal  controls for managing soldier incentive contracts, but has not developed  and implemented a plan for future significant changes that could affect its  internal controls. For example, in October 2015, a previous contract to  support the ARNG Incentive Support Team expired, and performance of  the follow-on contract was delayed for approximately two years—until  September 2017—by actions related to two GAO bid protests. From  October 2015 to January 2016, ARNG used a 3-month bridge contract  with the previous contractor to provide support and enable the ARNG  Incentive Support Team to continue to perform 100 percent reviews.  However, in January 2016, the ARNG Incentive Support Team stopped  conducting 100 percent reviews of incentive contracts. At that time,  according to ARNG officials, ARNG increased their review of incentive  contracts from 10 percent to 30 percent to help mitigate the loss of the  100 percent review that the ARNG Incentive Support Team had  previously provided. On September 30, 2017, the current contract for the  ARNG Incentive Support Team was awarded and according to ARNG  officials, the ARNG Incentive Support Team reinstated 100 percent  reviews of soldier incentive contracts on December 8, 2017. ARNG also  adjusted their review of soldier incentive contracts from 30 percent back  to 10 percent.

As another example, in April 2017, ARNG issued the fiscal year 2017  Selected Reserve Incentive Program policy. Among other things, the  policy changed the eligibility requirement for receiving an incentive  payment based on soldier performance on the Army Physical Fitness  Test. Under the previous policy, soldiers who failed two consecutive  fitness tests would be ineligible to receive an incentive. The fiscal year  2017 policy changed this requirement to two failures during the lifetime of  a soldier’s incentive contract, which could be up to six years. According to  ARNG officials, approximately 8,000 incentive contracts are affected by  this requirement. NGB requires the vendor managing the Reserve  Component Manpower System, which includes the Guard Incentive  Management System, to update the system with any policy changes.  However, ARNG officials told us that they had not updated the Guard  Incentive Management System with the fiscal year 2017 policy.  Therefore, the system’s automated reviews are unable to check for this  eligibility requirement.

Additionally, according to ARNG officials, ARNG did not publish official  guidance regarding this discrepancy. Instead, ARNG informally discussed  with state incentive managers that the fiscal year 2018 policy, once  issued, would eliminate this requirement. ARNG officials told us that a  separate transition of vendors for the Reserve Component Manpower  System that began in 2016 had delayed their ability to update the Guard  Incentive Management System with the fiscal year 2017 policy. ARNG  had not anticipated that the vendor would be unable to update the Guard  Incentive Management System as a result of technical challenges  following the transition. ARNG officials also told us that they are currently  developing the fiscal year 2018 policy and would update the Guard  Incentive Management System with this policy when it is ready. On  December 6, 2017, we provided our observations to ARNG on the  inability of the Guard Incentive Management System to perform  automated monitoring on these 8,000 incentive contracts. According to  ARNG officials, on December 7, 2017, they submitted a formal change  request to the vendor to incorporate this rule in the Guard Incentive  Management System, and they expect the rule to be incorporated in  February 2018.

ARNG has also taken steps to address unforeseen technical issues that  have affected its incentive program. For example, ARNG officials told us  that they have implemented several recommendations that were made as  part of the Army’s administrative investigation of the transition in vendors  managing the Reserve Component Manpower System, of which the  Guard Incentive Management System is a component. The investigation  determined that ARNG was not positioned to provide sufficient technical  oversight of the transition, and in September 2016, the investigation’s  report recommended that ARNG, among other things, assign a highly  skilled Information Technology subject matter expert to provide oversight  of all government and contractor activities related to the Reserve  Component Manpower System. ARNG officials also told us they had  since assigned this expert and had implemented other recommendations  from the investigation, but were not tracking progress on those recommendations. Additionally, ARNG officials told us that, as of October  2017, they were in the process of revising their performance work  statement for the current vendor. These revisions may include, among  other things, providing other types of technical support and reducing the  amount of time that the system would be unavailable to ARNG and  others. Finally, ARNG officials told us that they plan to use an existing  Information Technology steering committee to provide oversight for the  Reserve Component Manpower System; however, these same officials  told us that the steering committee had not met from May 2017 through  October 2017.

While ARNG has taken steps to remedy some technical issues and  weaknesses in its internal controls, it has not demonstrated that it has  learned from its past experiences by planning for significant changes to  its incentive program that could affect its internal controls, such as its  information systems not functioning correctly or data related to incentive  contracts not being readily updated or available for an extended period of  time. These changes include, for example, the next vendor transition for  the Reserve Component Manpower System, which is expected to be re- competed in 2020. Additionally, as ARNG continues deployment of the  Integrated Personnel and Pay System – Army in 2018, it is anticipated  that aspects of the Reserve Component Manpower System will change.  Standards for Internal Control in the Federal Government states that  management should identify, analyze, and respond to significant changes  that could affect the entity’s internal control system. Because conditions  affecting the entity and its environment continually change, management  can anticipate and plan for significant changes by using a forward-looking  process to prepare for change. Planning for significant changes— including those cited earlier—requires time and coordination in advance  of the changes occurring. However, ARNG officials have been unable to  demonstrate their planning efforts to identify, analyze, and respond to any  significant changes to ARNG’s internal controls that may arise if, for  example, the contract is awarded to a new vendor or as the Reserve  Component Manpower System fully interfaces with the Integrated  Personnel and Pay System – Army. Without taking action to plan for  potentially significant changes to its internal controls for the Reserve  Component Manpower System, ARNG is at risk of not being prepared for  these changes that could contribute to the potential for making improper  payments.

DOD Components Have the Authority to Waive Soldier Incentive Debt, and DOD Has Improved the Availability of Documentation to Adjudicate Waiver Cases Two DOD Components Have the Authority to Waive ARNG Soldier Incentive Debts for Military Pay and Allowances

The Defense Finance and Accounting Service (DFAS) and the Defense  Office of Hearings and Appeals (DOHA) have the authority to waive  erroneous incentive debts for ARNG soldiers. DFAS is a DOD  component that maintains records of soldiers’ debts and has the authority  to waive established debts of $10,000 or less. DOHA, another DOD  component, adjudicates waivers for debts of more than $10,000. For  established debts, DFAS will notify the soldier that a debt exists and will  be collected. In response, the soldier can submit a request to DFAS to  waive the debt. DFAS has the statutory authority to waive debts incurred  as a result of erroneous payments of up to $10,000 to members of the  armed services, including ARNG soldiers. If DFAS denies all or part of the  waiver request, it informs the waiver applicant of the right to file an appeal  of the denial to DOHA within 30 days. Soldiers can file for a waiver of  indebtedness from DFAS for a period of up to 5 years from the date an  erroneous payment is discovered. DFAS may not consider waiver  applications that it receives after that 5-year period.

DOHA has the authority to review waiver cases forwarded by DFAS and  to adjudicate appeals from soldiers whose waiver applications have been  denied. According to DOHA officials, they review only cases in which (1)  the payment has been identified as erroneous, (2) a collection action has  been started, and (3) the soldier has been given rights under the Fair  Debt Collection Practices Act. DOHA officials told us that they do not  have authority over the establishment or collection of a debt or the  authority to conduct a hearing for a soldier contesting the validity of a  debt. However, DOHA officials told us that they will verify the correctness  of the debt before adjudicating a waiver case and may request  information from DFAS—such as documentation—including enlistment  contracts, payment vouchers, and leave and earnings statements.  Additionally, DOHA officials told us that they do not have the authority to  adjudicate debts for payments made under the Student Loan Repayment  Program—one type of payment under the Selected Reserve Incentive  Program—because of their determination that their authority to waive  debts for erroneously paid “pay and allowances” as defined in 32 U.S.C. §  716 and 10 U.S.C. § 2774(a) does not apply to payments to lenders for  educational expenses. Those cases are reviewed and adjudicated at the  discretion of the Secretary of the Army. If DOHA denies a soldier’s waiver  application, the soldier may request that DOHA reconsider its decision,  which DOHA officials told us is accomplished by an appeals panel of  three DOHA attorneys. The decision of this panel is final and ends the  waiver of indebtedness adjudication process, as depicted in figure 2.

DOD has improved the availability of the documentation that is used to  adjudicate waiver cases for soldiers’ debts. DOHA officials told us that  adjudication was sometimes delayed because case files lacked  documentation. As part of our review of DOHA waiver case files, we  found several examples of ARNG cases involving Selected Reserve  Incentive Program debts that had been adjudicated between January  2014 and December 2016, in which DOHA adjudicators had to acquire  missing information, including documentation, from external sources  before adjudicating the case. For example, in one case from Alabama  that was adjudicated in 2014, it was 83 days before DOHA officials  received the documentation they needed. DOHA officials told us this  information included the soldier’s bonus agreement, leave and earnings  statements, and transfer orders. In another case from California that was  adjudicated in 2016, it took adjudicators 74 days to obtain additional information. DOHA officials told us this information included payment  vouchers.

DOD’s use of the Guard Incentive Management System has facilitated  the availability of documentation needed to adjudicate waiver cases. For  example, the system stores incentive payment and eligibility  documentation, which may help to reduce delays in the adjudication of  waivers associated with missing documentation. Before making an  incentive payment, state incentive managers are required to inspect case  documentation in the Guard Incentive Management System to validate  the payment. During our site visits to selected states, we observed state  incentive managers using the Guard Incentive Management System to  review documents, such as re-enlistment contracts and unit orders. In  several cases, we observed state incentive managers identifying errors in  documents, and we observed their ability to correct these documents. For  example, in Nebraska we observed a case in which a soldier’s military  occupational specialty code in the Guard Incentive Management System  was not in line with what was in the incentive contract, because the unit  had been reorganized. We then observed a state incentive manager  confirming the soldier’s transfer orders and uploading this documentation  into the Guard Incentive Management System. Our observations are not  generalizable across all states or for all contracts, but they suggest that  documentation required to adjudicate waiver cases is now more readily  available and will continue to be in the future.

DOD also updated its Financial Management Regulation to improve the  availability of documentation. DOHA officials told us that DOD had  updated the Financial Management Regulation in January 2016.  Specifically, Volume 16, Chapter 4, Section 040403 of the DOD Financial  Management Regulation instructs applicants to include in their waiver  requests (1) copies of all supporting documentation, (2) copies of leave  and earnings statements, (3) copies of notifications of personnel actions,  and (4) any statements from the applicant in support of the waiver  application. DOHA officials stated that this revision should reduce  documentation-related delays during their review of future waiver  submissions. Additionally, DOHA officials told us that they have taken  steps to train DFAS personnel, who are responsible for reviewing waiver  applications, in an effort to reduce delays.

ARNG has made progress in improving its internal controls since  widespread improper payments were identified in California in 2008. By  using the Guard Incentive Management System and requiring multiple  levels of review before incentives are paid, ARNG may have reduced the  likelihood of future widespread improper payments similar to what  occurred in California. However, it is important for ARNG to be forward  looking in preserving the integrity of its internal controls. ARNG has faced  challenges during the transition between vendors managing the system  that resulted in the weakening of internal controls, including those built  into the Guard Incentive Management System. To its credit, ARNG has  taken mitigating actions to prevent improper payments while attempting to  address those issues. These challenges, and the need for mitigating  actions, could have been prevented if ARNG had identified and prepared  in advance for challenges potentially resulting from the vendor transition.  If ARNG does not proactively identify, analyze, and plan to respond to  significant changes that could affect the internal controls to its incentive  program, there is an increased risk that additional weaknesses to its  internal controls could emerge and result in an increased likelihood of  improper payments.

We are making one recommendation to ARNG:  The Director of the Army National Guard should develop and implement a  plan to identify, analyze, and address any significant changes that could  affect internal controls for its Guard Incentive Management System.  (Recommendation 1)

We provided a draft of this report to ARNG for comment. In its comments,  reproduced in appendix I, ARNG concurred with our recommendation and  stated that they initiated a project to improve internal control measures as  significant changes are made to the Guard Incentive Management  System to align the system with policy. ARNG also stated that the project  would look at the time required to adjust incentives to effect change within  the organization and achieve its strength goals. ARNG expects the  project to be completed in August 2018. We believe this action would  meet the intent of our recommendation.

We are sending copies of this report to the Secretary of Defense, the  Chief of the National Guard Bureau, and the Director of the Army National  Guard. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-9971 or kirschbaumj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix II.

Appendix I: Comments from the Army National Guard

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Tina Won Sherman (Assistant  Director), David Blanding Jr., Vincent Buquicchio, Wesley Collins, Joanne  Landesman, Amie Lesser, Jim Melton, and Paul Seely made significant  contributions to this report.