Oversight of U.S. Citizenship and Immigration Services: Ensuring Agency Priorities Comply with the Law before the Senate Committee on the Judiciary, Subcommittee on Immigration and National Interest on March 2015

JOINT WRITTEN TESTIMONY

OF

JOSEPH MOORE

SENIOR FINANCIAL OFFICIAL

U.S. CITIZENSHIP AND IMMIGRATION SERVICES

DONALD NEUFELD

ASSOCIATE DIRECTOR, SERVICE CENTER OPERATIONS

U.S. CITIZENSHIP AND IMMIGRATION SERVICES

DANIEL RENAUD

ASSOCIATE DIRECTOR, FIELD OPERATIONS

U.S. CITIZENSHIP AND IMMIGRATION SERVICES

FOR A HEARING ON

“OVERSIGHT OF U.S. CITIZENSHIP AND IMMIGRATION SERVICES: ENSURING AGENCY PRIORITIES COMPLY WITH THE LAW”

BEFORE

THE SENATE COMMITTEE ON THE JUDICIARY, SUBCOMMITTEE ON IMMIGRATION AND THE NATIONAL INTEREST

MARCH 3, 2015 2:30 PM

226 DIRKSEN SENATE OFFICE BUILDING

WASHINGTON, DC

Chairman Sessions, Ranking Member Schumer, and Members of the Subcommittee, we represent U.S. Citizenship and Immigration Services (USCIS), a component of the Department of Homeland Security (DHS). We would ask to begin by introducing ourselves and our respective responsibilities. Joseph Moore serves as the Senior Financial Official of USCIS. Donald Neufeld serves as the USCIS Associate Director of Service Center Operations (SCOPS). Daniel Renaud serves as the USCIS Associate Director of Field Operations (FOD). The experience you see at this table represents over three-quarters of a century in the operations and administrative management of this agency, and the operational elements of the former Immigration and Naturalization Service (INS). All of us have been with USCIS since it was created in 2003, and all of us appreciate the role our agency plays in protecting the homeland, supporting the economy, providing humanitarian relief, and ensuring the orderly and expeditious flow of legal immigration. We very much appreciate the opportunity to appear before you today to testify regarding the operations of USCIS and the financial management that supports those operations.

On behalf of USCIS Director Rodríguez and all of our colleagues we are grateful to the Members of this Subcommittee for your continued strong interest in USCIS and its programs. USCIS has a proud history of providing immigration benefits to individuals from all over the world. These immigration benefits support the fundamental values and needs of our nation, be they economic, humanitarian, or in the public interest. USCIS delivers these immigration benefits while being ever vigilant to identify those who seek to undermine the integrity of our immigration system—or worse—those who seek to do us physical or economic harm. USCIS is only able to accomplish its complex and vital mission through the efforts of approximately 19,000 dedicated public servants and supporting contractor personnel, each of whom proudly comes to work each day to administer our complex immigration system fairly, effectively, and professionally.

We have been asked to provide information to you regarding our agency’s financial expenditures, service centers and field operations. As this Committee is aware, until recently, our agency had been preparing to implement certain elements of the Administration’s recently announced executive actions on immigration. Since February 17th, the agency has carefully evaluated the impact of the district court injunction on these efforts and has paused on the implementation of DACA expansion and DAPA until the stay and appeal of the injunction is resolved.

Before discussing current operations, we would like to take a few minutes to provide some information on USCIS finance and expenditures. USCIS occupies a special position within the Federal Government’s fiscal structure as its operations are primarily funded by immigration and naturalization benefit fees charged to applicants and petitioners, rather than by congressional appropriations. The Immigration Examinations Fee Account (IEFA) is the primary funding source for USCIS as most immigration benefit application and petition fees collected are deposited into the IEFA and used to fund the cost of the day to day operating expenses of the agency.

In addition to the IEFA fee account, USCIS also receives funding through two additional fee accounts: the H-1B Nonimmigrant Petitioner Fee Account and the Fraud Prevention and Detection Account. The Fraud Prevention and Detection Account supports activities related to preventing and detecting fraud in the delivery of all immigration benefit types. These funds primarily support the USCIS priority of ensuring the security and integrity of the immigration system. USCIS fee accounts represented approximately 96% of the agency’s fiscal year (FY) 2014 budget.

USCIS also receives a limited amount of funding (approximately 4% of its FY 2014 budget) under the Salaries and Expenses (S&E) appropriation. These funds are provided to support the operation of the E-Verify program, and in part, the Citizenship and Integration Grant Program (CIGP). Through the S&E appropriation, USCIS ensures the integrity of the immigration system through the operation and enhancement of the E-Verify system, which aids United States employers by helping them to ensure that they are hiring only those individuals who are legally authorized to work, and promotes increased awareness and understanding of citizenship through the CIGP.

Through its network of 226 domestic and foreign offices, USCIS uses fee funding to process applications, petitions, and requests related to immigration. These include, but are not limited to:

• Family-based petitions for close relatives of U.S. citizens and lawful permanent residents;

• Employment-based petitions for current and prospective employees to work in the United States, either on a temporary or permanent basis;

• Asylum and refugee applications; and

• Naturalization applications filed by those who wish to become U.S. citizens.

Legislative Authority of USCIS Fee Accounts

The three fee accounts that USCIS relies upon to provide revenues to finance ongoing agency operations were each established under differing legislative authorities. This is an important point to highlight because two of the fee accounts – the H-1B Nonimmigrant Petitioner Account and the Fraud Prevention and Detection Account – were established in statute and prescribe specific fees be charged to certain entities such that USCIS cannot change the fee charged. Conversely, the IEFA account was established by legislation which provides DHS the authority to set and adjust IEFA fees through rulemaking. The specific legislative authorities of the USCIS fee accounts are described in detail below.

Immigration Examinations Fee Account (IEFA) – As enacted in 1988, sections 286(m) and (n) of the Immigration and Nationality Act (INA) (8 U.S.C. 1356(m) and (n)) provide:

Section (m) provides that all adjudication fees, as are designated by the Attorney General in regulations, shall be deposited as offsetting receipts into a separate account entitled "Immigration Examinations Fee Account" in the Treasury of the United States. In addition, these fees for providing adjudication and naturalization services may be set at a level that will ensure recovery of the full costs of providing all such services, including the costs of similar services provided without charge to asylum applicants or other immigrants. These fees may also be set at a level that will recover any additional costs associated with the administration of the fees collected.

Section (n) provides that all fee-based revenues deposited into the "Immigration Examinations Fee Account” shall remain available until expended to pay the expenses incurred in providing immigration adjudication and naturalization services.

Under the Homeland Security Act of 2002, these authorities are exercised by the Secretary of Homeland Security. Sections 286(m) and (n) of the INA reflect that the IEFA is a no-year account that possesses permanent, indefinite appropriation authority, as opposed to funds provided to DHS in an annual appropriation bill.

Premium Processing Fees – Premium processing authority is found in section 286(u) of the INA (8 U.S.C. 1356(u)). The premium processing fee was statutorily authorized in 2000 for employment based applications and petitions and was set at $1,000. These fee receipts are to be used to provide premium processing services to business customers and to make infrastructure improvements in adjudications and customer service processes. USCIS began offering a voluntary premium processing service fee in FY 2001. In 2010, the fee was adjusted for inflation and is now set at $1,225. This is a service that allows a petitioner for a nonimmigrant worker to voluntarily pay an extra amount to ensure that the petition will be processed in 15 days. Failure on the part of USCIS to meet this processing timeframe requires that the premium fee be refunded. Premium processing fees are collected and deposited into the IEFA and, since 2010, USCIS has used them to finance the cost of its business transformation initiative, known as the Electronic Immigration System (ELIS), as well as infrastructure improvements identified as critical to sustaining USCIS operations.

Fraud Prevention and Detection Account – INA section 286(v) (8 U.S.C. 1356(v)) specifies that certain supplemental fees shall be collected and deposited into the Fraud Prevention and Detection Account, and remain available until expended. As provided under section 214(c)(12) and (13) of the INA (8 U.S.C. 1184(c)(12) and (13)), a $500 Fraud Prevention and Detection Fee must be paid by an employer petitioning for a beneficiary’s initial grant of H-1B or L nonimmigrant classification, as well as a beneficiary who is changing employers within these classifications. The $500 fee is charged in addition to the base filing fee for the Form I-129 petition for nonimmigrant worker. In addition, the law further prescribes that an additional fee of $150 be paid by an employer filing a petition on behalf of an H-2B worker. This fee is also in addition to the Form I-129 base filing fee. These additional fees are used for anti-fraud purposes.

The fees that USCIS collects for deposit into this account are split between DHS, the Department of Labor and the Department of State, with each receiving one-third of the revenue collected. Funds provided by the Fraud Prevention and Detection Account represented approximately 1.5% of USCIS’ FY 2014 budget. INA Section 286(v) reflects that the Fraud Prevention and Detection Account, like the IEFA, is a no year account that possesses permanent, indefinite appropriation authority.

H-1B Nonimmigrant Petitioner Account – INA section 286(s) (8 U.S.C. 1356(s)) specifies that certain other supplemental fees shall be collected and deposited into the H-1B Nonimmigrant Petitioner Account, and remain available until expended. As provided under section 214(c)(9) and (11) of the INA (8 U.S.C. 1184(c)(9) and (11)), certain employers who participate in the H‑1B program must pay $1,500 (or $750 for those petitioners who employ 25 or fewer full-time equivalent employees) in addition to the Form I-129 base filing fee. Of the amounts deposited into the H–1B Nonimmigrant Petitioner Account, 55% of the fee revenue is provided to the Department of Labor, 40% is provided to the National Science Foundation and 5% percent is retained by USCIS.

Funds provided by the H-1B Nonimmigrant Petitioner Fee Account represented less than 1% of USCIS’ FY 2014 budget. Section 286(s) of the INA reflects that the H-1B Nonimmigrant Petitioner Account also is a no year account that possesses permanent, indefinite appropriation authority.

Review of User Fees

Fees have been charged for certain immigration services since at least the enactment of the INA in 1952. The establishment of the IEFA in 1988 led to a fundamental change in the management of the fees in that the INS (now USCIS) was authorized to retain the user fees and use those fees to provide services, rather than to remit the fees to the Treasury as miscellaneous receipts, which is the case with most other federal user fees. The IEFA provides the legal basis to operate USCIS as an almost entirely fee funded agency.

The Chief Financial Officers Act of 1990 (CFO Act of 1990) implemented the requirement that a federal agency perform biennial fee reviews to determine the full cost of providing fee-based services, and USCIS strictly adheres to this biennial review schedule. USCIS reviews its fees on a regular basis so that the agency can continue to provide superior service for an ever increasing number of benefits and services, while also enhancing the security and integrity of adjudication processes.

The largest fee adjustment in USCIS history came into effect on July 30, 2007, when the agency increased fees by an average of 86% for each benefit and eliminated a number of fee waivers. As a result of this historic fee adjustment, more than 95% of the agency’s budget now derives from user fees. Accordingly, in the years since DHS was created, USCIS has largely depended upon fees to fund its services, with direct appropriations being limited mainly to provide for the operation of the E-Verify program and, in recent years, the CIGP.

In accordance with the principles and guidance of the CFO Act of 1990, the Office of Management and Budget’s (OMB) Circular A-25: User Charges, and the Federal Accounting Standards Advisory Board’s publication of its Statement of Federal Financial Accounting Standards 4: Managerial Cost Accounting Standards and Concepts, USCIS last adjusted its fee schedule on November 23, 2010 for the FY 2010/2011 fiscal periods. The attached table displays the current USCIS fee schedule. (Please see Appendix A).

USCIS Core Functions

USCIS performs a variety of functions that cumulatively determine the agency’s costs and, by extension, the fees that it must charge to recover those costs for providing fee-based services. While most of the functions are directly tied to the agency’s processing functions, other costs such as administrative overhead originate indirectly from those functions. The following activities represent a high level summation of the USCIS core functions for which agency spending is directed to ensure the mission of USCIS is successfully achieved.

Immigration Adjudications and Services

USCIS is responsible for determining the eligibility of immediate relatives and other family members of U.S. citizens, as well as spouses and children of lawful permanent residents (LPRs), employees of U.S. businesses, and other foreign nationals who meet specified criteria to obtain LPR or other applicable immigration status. To ensure that national security and public safety threats are recognized and addressed, USCIS conducts a combination of automated and manual biographic and biometric background checks. USCIS is committed to ensuring that immigration benefits are not granted to individuals who pose a threat to national security or public safety, or who seek to defraud the U.S. immigration system.

Naturalization Adjudications

USCIS is responsible for naturalization, a process by which LPRs and certain other individuals (e.g., Military Naturalization under INA Section 329) may become U.S. citizens if they meet criteria established in the INA. These criteria generally include continuous residence, good moral character, literacy, and U.S. history and government knowledge requirements, as well as a willingness to take an oath to support the Constitution and laws of the United States. Individuals will only be naturalized after undergoing a rigorous background and security screening process.

Humanitarian Functions

Officers in the Refugee, Asylum and International Operations Directorate adjudicate refugee applications and conduct background and record checks related to some immigrant petitions abroad. The largest component of this program is the asylum officer corps, whose members interview and screen asylum applicants. Although a relatively small portion of the overall USCIS workload, it is a vital and particularly high-profile activity.

Other USCIS Immigration-Related Matters

USCIS makes determinations on a range of immigration-related benefits and services. The agency decides whether a foreign national in nonimmigrant status (e.g., F-1 student) is eligible to change to another nonimmigrant classification (e.g., H-1B worker). USCIS also provides employment authorization documents to certain aliens who meet certain conditions and provides other immigration benefits to aliens under the Secretary of Homeland Security’s discretionary authority under the INA.

Fraud Prevention and Detection

USCIS adjudicates millions of applications, petitions, and requests for immigration benefits each year. Adjudication of these various immigration and naturalization benefit requests, however, is not a simple matter of processing routine paperwork. USCIS established the Fraud Detection and National Security Directorate (FDNS) to identify and resolve national security concerns, work with law enforcement and intelligence partners to share information, and detect and deter fraud. FDNS officers are specially trained to detect and deter systemic fraud that may be present in immigration benefit requests. Over 900 FDNS officers are located in every domestic USCIS Asylum Office, Field Office, District Office, Regional Office, Service Center, the National Benefits Center and Headquarters. FDNS officers are also posted in selected overseas locations.

Administrative Overhead

In addition to the processing-related functions listed above, USCIS is also responsible for a host of administrative tasks that contribute to overhead costs, including the maintenance of agency databases and facilities, administering recruitment and hiring actions, and managing the agency’s budget and finances.

Systematic Alien Verification for Entitlements

Systematic Alien Verification for Entitlements (SAVE) is an intergovernmental information-sharing program that assists Federal, State, and local benefit-granting agencies in verifying individuals’ immigration status, or naturalized or derived citizenship, when they apply for licenses or public benefits. Customers include Federal agencies, State departments of motor vehicles, licensing bureaus, etc. SAVE is also used to verify the immigration status, or naturalized or derived citizenship, of applicants for health insurance under the Patient Protection and Affordable Care Act (PPACA). SAVE helps other government agencies ensure that only persons eligible for benefits receive them by providing relevant immigration status information.

USCIS Operational Components

USCIS administers the world’s largest immigration system that includes more than 100 immigrant and nonimmigrant classifications and more than 200 different forms and applications. In FY2014, USCIS adjudicated nearly 7 million petitions and requests, including applications for naturalization, applications for adjustment to lawful permanent residence, immigrant visa petitions (both employment and family based), nonimmigrant petitions, asylum and refugee requests, requests for humanitarian protections under the Violence Against Women Act (VAWA) and by victims of trafficking and crimes, requests for humanitarian parole, and for a broad array of deferred action requests, among others.

In order to administer this system, USCIS employs a staff of approximately 13,000 federal employees and an additional 6,000 contractors in facilities throughout the United States and overseas. USCIS maintains four major Service Centers under its Service Center Operations Directorate, and 83 Field Offices and a National Benefits Center (NBC) under its Field Operations Directorate. USCIS distributes responsibility for processing and adjudicating various categories of applications and requests among the Field Offices and Service Centers in order to achieve maximum efficiency, reliability, consistency, and accuracy.

In addition to the Field Offices and Service Centers, USCIS also uses three centralized “lockboxes” for the initial receipt and processing of most applications, requests, and fee payments received by the agency. At the lockbox, every application and request is opened and reviewed for basic filing requirements. Once those basic requirements are met, fees are accepted, and data is captured. In order to ensure reliability and proper processing, each application and request is logged into one of the USCIS computerized tracking systems. Paper applications and requests are scanned and payments are processed. Once an application or request is accepted, a receipt is issued, and the hardcopy applications and requests are distributed to the appropriate Field Office, Service Center, or the NBC for further processing.

The Service Centers are designed to adjudicate applications, petitions and requests that do not require face to face interactions with the public. These caseloads are generally high-volume and include employment based nonimmigrant visa petitions (such as H-1Bs), family and employment-based immigrant visa petitions, employment-based applications for adjustment of status, multiple forms of humanitarian protection (including temporary protected status, protection under VAWA, and nonimmigrant status for victims of crimes and trafficking), requests for deferred action under the 2012 Deferred Action for Childhood Arrivals (DACA) policy guidance, and requests for deferred action related to the VAWA and U nonimmigrant programs.

The Service Center Operations Directorate comprises a Headquarters component in Washington, DC, and Service Centers located in Dallas, Texas; Laguna Niguel, California; Lincoln, Nebraska; and St. Albans, Vermont. The Service Center Operations Directorate FY2015 authorized staffing total is approximately 3,600 federal employees with contract support provided by approximately 1,500 contractors. In FY2014, these employees processed nearly 4 million applications, petitions and requests.

The Field Operations Directorate was established to oversee and manage operations that generally require personal interactions. Whenever individuals are required to appear in person before an immigration officer or they seek information in person, employees of the directorate handle the interactions. The Directorate comprises a Headquarters component in Washington, DC, and a reporting structure that includes 4 Regional Offices, 26 District Offices, and 83 Field Offices located throughout the continental United States, Alaska, Hawaii, Puerto Rico, Guam, the Commonwealth of the Northern Mariana Islands and the U.S. Virgin Islands. The Field Operations Directorate’s authorized FY2015 staffing total is approximately 5,500 federal employees, with an estimated 3,040 contractors who operate in support of the Directorate’s missions.

The core work for Field Operations centers on two distinct immigration benefit types: applications from persons seeking to adjust their status to that of LPR, and applications from LPRs seeking to become United States citizens. In many cases, foreign nationals seeking LPR status are physically present in the United States. Generally, and subject to statutory and regulatory restrictions, individuals who meet the criteria for an immigrant classification and also meet statutory requirements may have their status adjusted to that of an LPR. Individuals interviewed at our offices typically seek this benefit based on a family-based immigrant classification—most commonly marriage to a United States citizen. All applicants for permanent resident status are fully vetted though multiple background and security checks, and officers who suspect fraud refer cases to FDNS for an administrative investigation. If granted adjustment of status, these individuals would then receive a Permanent Resident Card (also known as a green card) as evidence of their LPR status. Typically, Field Operations adjusts the status of over a half-million individuals during the course of a year.

While USCIS and the greater Federal Government encourage qualified persons to seek citizenship and the benefits and responsibilities that citizenship encompasses, it is ultimately the personal decision of the individual. Individuals seeking citizenship through the naturalization process must appear in person before a USCIS officer, normally at a field office. There, USCIS will conduct an examination of the applicant. All applicants are thoroughly vetted, and must meet multiple statutory requirements and take an oath of allegiance to the Constitution and laws of the United States in order to obtain citizenship. Typically, USCIS naturalizes over 700,000 persons during the course of a year, though during periods in advance of national elections our filings for naturalization typically increase, as individuals seek to participate in the democratic process through voting in those elections.

In addition to the District and Field Offices, the Field Operations Directorate also includes components that perform specialty functions. These include:

National Benefits Center: Located in Lee’s Summit, Missouri, the NBC, established in 2000 to process cases filed to qualify for provisions under the Legal Immigration Family Equity (LIFE) Act, now performs a number of operations that generally support field offices. Among these operations are scheduling cases for biometrics collection and interviews, preparing cases for interview by conducting and recording the results of required background checks, creating and consolidating A-files, and shipping files to the field offices for adjudication. The NBC also performs the majority of all adjudications of domestically-filed requests for inter-country adoptions, Permanent Resident Card renewals and replacements, and provisional waivers of unlawful presence.

Investor Program Office: In 2014, the Investor Program Office was consolidated under the Field Operations Directorate and relocated from the California Service Center to Washington, DC. This program adjudicates petitions for EB-5 immigrant investor visas. The move allows greater oversight of this important program, while also allowing USCIS to leverage expertise in areas of financial transactions, economics, business planning, intelligence, and other subjects necessary for efficient and accurate adjudication.

USCIS is committed to fulfilling its mission to secure America’s promise as a nation of immigrants by providing accurate and useful information to our customers, granting immigration and citizenship benefits, promoting awareness and understanding of citizenship, and ensuring the integrity of our immigration system. In accomplishing this task the agency relies upon its abilities to accurately forecast workload demands and the associated fee revenues so that it is able to responsibly and professionally operate within an often uncertain fiscal climate. This uncertainty is attributable to volatility inherent in relying on fee collections that are directly tied to applicant and petitioner demands that change each year.

USCIS recognizes that certain form types require special attention because they must be processed within certain time periods due to reasons of statute, regulation or humanitarian considerations. Understanding this, USCIS conducts production planning, staffing analysis, and resource allocation decisions as a matter of routine business operations. Through a long-standing practice of carefully tracking the receipt, progress and inventory of cases received from customers, USCIS is able to ensure the most efficient allocation of resources to support the timely processing of every form type we receive. Whenever USCIS receives a sudden or unexpected increase in workload, a detailed analysis of the factors causing the surge is performed, and resources allocated to minimize delay in any program, especially those with urgent humanitarian or statutory requirements. By keeping a focus on special emphasis form types, we are able to make initial risk-based resource allocation decisions so that all USCIS customers are given the attention and service they deserve.

In 2015, USCIS faces challenges that are common to most large federal agencies, while also addressing challenges that are unique to our agency. Keeping our agency fully staffed with the most qualified persons is one such common challenge. As for other federal agencies operating in large, high-cost metropolitan areas, it is often challenging for USCIS to recruit and retain qualified candidates. Once hired, new officers must be fully trained in immigration law and

procedures, fraud detection and interviewing techniques, and cultural awareness. USCIS must also prepare officers dedicated to specialized programs such as asylum, refugee, and EB-5 with additional training and tools.

Quality and integrity in the adjudication and decision-making processes are areas that demand constant attention. In order to integrate quality into every facet of the adjudication process, USCIS decided to transition from traditional production-based goals to a performance structure that focuses on the quality of work products. This shift will ensure that immigration benefit decisions are informed, adhere to the law and the facts, and further the integrity and goals of the immigration system. This retooling has largely been successful. Officers, free from the traditional production quotas, now take a greater degree of ownership in the decision making process. However, officers are more conscious of the responsibilities that their decisions reflect, and thus take more time to make them. Therefore, processing times have increased in some of our offices and with some of our types of adjudication. Needless to say, this concerns us. To address this management challenge, we are working to perfect a model where we remain quality driven, but are also able to render the right decision on any type of case before us in a reasonable amount of time. As stated, USCIS will not sacrifice the integrity of the adjudication process to speed up a decision on a case. The agency consistently works to maximize its efficiency and is flexible about where work is assigned to best achieve it.

We are proud of the work that we and our USCIS colleagues around the world perform. Recognizing the importance of providing immigration services that support humanitarian, family reunification, and economic goals of our country, we strive to do our work with the greatest of integrity and efficiency. We hope that our testimony provides the Members with a glimpse into the challenges we face, the care with which we address them, and finally, the successes that we achieve.

On behalf of USCIS Director Rodríguez and our leadership team and colleagues, we thank you Chairman Sessions, Ranking Member Schumer, and Members of the Subcommittee for the opportunity to share this information concerning USCIS expenditures and operations with you today. We will be happy to address any questions or concerns you may have.

Appendix A