OIG evaluated SITC’s corrective actions from a prior audit report and the controls over the identification of internet sales of prohibited products for calendar year 2019.
The Animal and Plant Health Inspection Service’s (APHIS) mission is to protect the health and value of United States (U.S.) agriculture and natural resources. Within APHIS, Plant Protection and Quarantine (PPQ) programs are designed to safeguard U.S. agriculture and natural resources from risks associated with the entry, establishment, and spread of economically and environmentally significant pests. In 2001, PPQ established the Smuggling Interdiction and Trade Compliance (SITC) Program to handle smuggling and trade compliance issues, primarily at marketplace locations, both to prevent and detect those compliance issues that impact U.S. markets. APHIS staff conducting SITC activities focus their attention on suspected non-compliant or prohibited products of foreign origin observed in commerce. In 2009, SITC started monitoring prohibited agricultural products that enter the United States through e-commerce businesses and other internet sales. The Animal Health Protection Act, the Plant Protection Act (PPA), and associated Federal regulations provide SITC’s authority to hold, seize, and destroy animal or plant prohibited products.
The SITC director, national policy manager, and national operations managers provide oversight for various SITC activities, such as recalls, and issues that are sensitive or national in scope. In the field, the State plant health directors and/or first-line supervisors have overall supervisory oversight and direction for daily SITC field activities performed by 83 SITC officers located throughout the United States.
SITC officers carry out their mission by performing unannounced visits to marketplaces—called market surveys and inspections—to identify, seize, trace to source, and close pathways for prohibited product. Closing a pathway prevents future shipments of prohibited products from entering the U.S. marketplace. Once a prohibited product is identified and seized, SITC officers and analysts work closely with the Department of Homeland Security’s Customs and Border Protection (CBP) at the ports-of-entry to interdict other prohibited products and close the pathway. SITC notifies CBP by preparing an Interagency Referral/Request Form (IRRF) or Agricultural Request for Action (ARFA) form that identifies the prohibited product.
APHIS may issue a recall on a product if it is deemed to pose a high risk to U.S. agriculture. During a recall, SITC officers work with the importer or owner for the voluntary removal of prohibited products from commerce, and the subsequent treatment, remediation, or destruction of the prohibited product. SITC officers also perform followup market surveys and inspections to validate compliance with the recall by the importer or owner and ensure all of the prohibited product was removed and the pathway was closed.
For internet sales, SITC’s internet team searches e-commerce businesses to identify prohibited products. When the SITC internet team identifies a prohibited product, it notifies the e-commerce business’ legal department that an import violation occurred. The team requests the seller’s name and location and a list of all buyers of the product. SITC then initiates a virtual trace, which is a request for SITC officers to complete a market survey and inspection to retrieve prohibited products from all buyers. In addition, SITC requests the e-commerce business to remove the sales information and to remind the seller that the product needs to comply with U.S. import regulations.
SITC also conducts market surveys and inspections at courier distribution sites, called secondary express courier operations (ECOs), that receive and distribute imported packages that have been cleared by CBP at the port-of-entry and entered U.S. commerce. With permission from a local ECO official, SITC officers enter the secondary ECOs to open and inspect the contents of sealed packages to identify prohibited products. If the product is not prohibited and is compliant, the SITC officer re-seals the package and allows it to continue to the intended recipient or consignee. If the product is prohibited, SITC officers seize the contents and notify the recipient or consignee.
SITC officers record their activities (market surveys, seizures, traces, IRRFs, and ARFAs) in the SITC National Information, Communication, and Activity System (SNICAS). SITC managers, supervisors, and analysts use the system to track and analyze data from the results of SITC activities. SNICAS computes a risk score for each marketplace based on animal and plant risk levels, demographics, and results from past market surveys. SITC guidance identifies the number of times a market should be visited based on risk level.
APHIS’ Policy and Program Development staff provides policy analysis and budgetary and regulatory development for APHIS consistent with the agency’s environmental stewardship goals and legal authorities. APHIS’ Policy and Program Development includes the Program Assessment and Accountability (PAA) staff. PAA conducts program reviews that often include examining the effectiveness of internal controls as one of the review objectives. PAA proposes an annual cohort of projects for the APHIS Administrator’s consideration by analyzing program risk, conducting environmental scans, and choosing from an established list of programs. If a program has recently been subject to a performance audit—such as by the Office of Inspector General (OIG)—PAA typically considers it to be lower risk as compared to a program or activity that has not been reviewed.
Prior OIG Audit
In August 2012, OIG reported on the effectiveness of SITC. Specifically, SITC’s control environment did not include a system of management accountability in order to foster efficiency, adequacy, or accuracy in either achieving its core mission or in reporting its results. OIG concluded that the lack of controls increased the risk that prohibited products would not be identified by SITC officers. OIG issued 13 recommendations, which targeted SITC’s ability to provide its officers with guidance to better identify and close new and existing pathways, establish procedures for performing followup market surveys, and ensure managers and supervisors oversee these efforts to analyze officers’ effectiveness.
To evaluate the corrective actions taken by APHIS’ SITC Program to implement 13 recommendations from a previous audit issued in August 2012. We also evaluated SITC’s controls related to the identification of prohibited product imported through internet sales.
During this audit, we determined that APHIS fully implemented 7 of the 13 prior audit recommendations and the related corrective actions were effective. Finding 1 includes a discussion of our determinations for the remaining six recommendations. (See Exhibit A in report).
WHAT OIG FOUND
We reviewed the corrective actions the Animal and Plant Health Inspection Service’s (APHIS) Smuggling Interdiction and Trade Compliance (SITC) Program implemented following a previous audit. While SITC officials implemented the 13 prior audit recommendations, we determined that 4 were not fully implemented and 2 were implemented but not followed. This occurred because APHIS relied on SITC Program officials to fully implement corrective actions without verifying internal controls were in place and functioning. As a result, conditions related to these recommendations persist.
We also found that the SITC Program needs to enhance its controls for searches of prohibited products purchased through internet sales. SITC management relied on the internet team’s knowledge and experience instead of documenting controls, such as policies and procedures, and establishing routine training. As a result, this could lead to inconsistent instructions on how to complete tasks effectively. We found the SITC internet team inconsistently interacted with e-commerce businesses in 2019 and did not request necessary information from 20 of the 22 e-commerce businesses. This occurred because SITC did not have a process for requesting this information, such as a formal agreement or memoranda of understanding. As a result, SITC could not identify all related internet sales of a previously identified prohibited product that had already entered the United States.
Finally, we found that SITC officers were not consistently inspecting sealed package contents, which may or may not constitute prohibited product, at courier distribution sites. This occurred because SITC management relied on their interpretation of statutory authorities without requesting formal clarification and did not develop a separate policy for these inspections. As a result, this increased potential risk for the Department and brings more uncertainty to its managers and officers. Additionally, this could lead to a loss of public trust. APHIS generally agreed with our recommendations, and we accepted management decision on all 13 recommendations.
This audit report contains sensitive information that has been redacted for public release due to concerns about the risk of circumvention of the law.