GAO Issues Report Critical of C-TPAT Progress

On April 25, 2008, the U.S. Government Accountability Office (GAO) issued a report entitled, "U.S. Customs and Border Protection Has Enhanced Its Partnership with Import Trade Sectors, but Challenges Remain in Verifying  Security Practices." Highlights can be found here and a summary can be found here

In 2005, GAO reviewed the C-TPAT program and noted operational challenges. Under the program, roughly 8,000 importers are granted benefits such as reduced scrutiny of their cargo. In exchange, the companies submit a security plan that must meet U.S. Customs and Border Protection's (CBP) minimum standards and allow officials to verify their measures are being followed. For this report, GAO was asked to assess the progress CBP has made since 2005 in:  (1) improving its benefit award policies for C-TPAT members, (2) addressing challenges in validating members' security practices, and (3) addressing management and staffing challenges. 

Among the problems noted in the report were:

    ·    A company is generally certified as safer based on its self-reported security information that Customs employees use to determine if minimum government criteria are met. But due partly to limited resources, the agency does not typically test the member company's supply-chain security practices and thus is "challenged to know that members' security measures are reliable, accurate and effective."

    ·    Customs employees are not required to utilize third-party or other audits of a company's security measures as an alternative to the agency's direct testing, even if such audits exist.

    ·    Companies can get certified for reduced Customs inspections before they fully implement any additional security improvements requested by the U.S. government. Under the program, Customs also does not require its employees to systematically follow up to make sure the requested improvements were made and that security practices remained consistent with the minimum criteria. 

"Until Customs overcomes these collective challenges, Customs will be unable to assure Congress and others that C-TPAT member companies that have been granted reduced scrutiny of their U.S.-bound containerized shipments actually employ adequate security practices," GAO stated in its report. "It is vital that Customs maintain adequate internal controls to ensure that member companies deserve these benefits." 

Responding in part, CBP officials in the report agreed they could do more to follow up on suggested security improvements but noted that employees often use their expert discretion in assessing the potential danger before certifying a company. CBP also said the program overall has made the nation safer. 

In sum, GAO recommends that CBP improve its electronic validation instrument, improve the validation process, enhance its records management system, and establish performance measures for improving supply chain security. CBP concurred with each of its recommendations.