Drug Control: The Office of National Drug Control Policy Should Develop Key Planning Elements to Meet Statutory Requirements

Almost 70,000 people died from drug overdoses in 2018, according to the latest Centers for Disease Control and Prevention data. The 2018 SUPPORT Act reauthorized ONDCP and imposed new requirements. GAO noted in its March 2019 High Risk report that the federal effort to prevent drug misuse is an emerging issue requiring close attention.

Pursuant to 21 U.S.C. § 1708a(b), GAO has periodically assessed ONDCP's programs and operations. This report assesses the extent to which ONDCP (1) met selected statutory requirements related to the National Drug Control Strategy in 2017, 2018, and 2019, and (2) has planned or implemented actions to meet selected new requirements in the SUPPORT Act. GAO assessed the 2019 Strategy and companion documents against four key statutory requirements that were consistent with or similar to ONDCP's ongoing responsibilities under the SUPPORT Act. GAO also assessed ONDCP's progress in addressing seven new SUPPORT Act requirements, and interviewed ONDCP officials.

The Office of National Drug Control Policy (ONDCP) is responsible for overseeing and coordinating the development and implementation of U.S. drug control policy across the federal government. However, ONDCP did not issue a National Drug Control Strategy for either 2017 or 2018, as required by statute. ONDCP was also required to assess and certify federal agencies' drug control budgets to determine if they were adequate to meet Strategy goals and objectives. Without a Strategy in 2017 and 2018, ONDCP could not complete this process according to statutory requirements. ONDCP issued a 2019 Strategy and companion documents that addressed some but not all of the selected statutory requirements GAO reviewed. For example, the Strategy and companion documents did not include the required 5-year projection for budget priorities.

The October 2018 Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) retained some requirements and introduced new ones for ONDCP. ONDCP met some SUPPORT Act requirements GAO reviewed. For example, ONDCP filled all five coordinator positions described in the SUPPORT Act. However, its approach to meeting other requirements does not incorporate key planning elements. For example, the SUPPORT Act requires that future iterations of the Strategy include a description of how each goal will be achieved, performance evaluation plans, and a plan for expanding treatment of substance use disorders. ONDCP could not provide in writing or otherwise describe its planned steps, interim milestones, resource investments, or overall timeframes—all key planning elements—that would provide assurance it can meet these requirements by the deadline for the next Strategy—February 2020. The SUPPORT Act also required ONDCP to publish an online searchable Data Dashboard of drug control data, with information including quantities of drugs and frequency of their use. While ONDCP published (and later updated) a public version of this resource on its website, as of December 2019, it was not complete (e.g., lacked required data on the unmet need for substance use disorder treatment). Further, ONDCP officials had no information on next steps for fully meeting the requirements. Developing, documenting, and implementing key planning elements to meet these requirements—including resource investments, time frames, and any processes, policies, roles, and responsibilities—would be consistent with key principles for achieving an entity's objective and standards for project management. Importantly, doing so would help ONDCP structure its planning efforts and comply with the law.

GAO is making 4 recommendations to ONDCP to develop, document, and implement key planning elements to meet certain requirements in the SUPPORT Act. ONDCP agreed to implement 2 recommendations related to the Strategy, but disagreed with 2 related to the Drug Control Data Dashboard, noting that recent updates satisfy the law. GAO maintains that they do not fully do so, and that implementing key planning elements would help address the law, as discussed in the report.

The scale and impact of illicit drug use and prescription drug misuse has  profoundly affected individuals, their families, and the communities in  which they live, and continues to represent a significant threat to public  health. Almost 70,000 people died from drug overdoses in 2018, a 27  percent increase in deaths since 2015, according to the latest, preliminary  data from the Centers for Disease Control and Prevention. Since 2011,  these deaths have also outnumbered injury deaths by firearms, motor  vehicle crashes, suicide, and homicide, according to the Drug  Enforcement Administration. Opioids—particularly highly potent synthetic  opioids like fentanyl that are manufactured to mimic naturally occurring  opioids such as morphine—are currently the main driver of these deaths.  Primarily due to increasing rates of opioid-related deaths and opioid use  disorder, the then-acting secretary of the Department of Health and  Human Services (HHS) declared the opioid crisis a public health  emergency on October 26, 2017. Overdose deaths due to other  potentially dangerous drugs—including cocaine and  methamphetamines—have also increased in recent years.

The Office of National Drug Control Policy (ONDCP), within the Executive  Office of the President, is responsible for coordinating and overseeing the  implementation of national drug control policy, including the National Drug  Control Strategy, across the federal government. ONDCP is also  responsible for evaluating the effectiveness of national drug control policy  efforts by developing and applying specific goals and performance  measurements and monitoring certain agencies’ program-level spending.  According to the President’s fiscal year 2020 budget, federal drug control  funding for fiscal year 2018 was $33 billion. Federal drug control efforts  span a range of activities across multiple agencies—known as National  Drug Control Program agencies—including efforts to prevent illicit drug  use and prescription drug misuse, treat drug use disorders, enforce drug  laws, and stop the importation of illicit drugs into the United States. As  part of overseeing and coordinating these efforts, the Director of ONDCP  is required to promulgate a National Drug Control Strategy and assess  and certify the adequacy of the annual drug control budgets submitted by  National Drug Control Program agencies.

ONDCP was established by the Anti-Drug Abuse Act of 1988, and, until  2018, was most recently reauthorized by the Office of National Drug  Control Policy Reauthorization Act of 2006 (ONDCP Reauthorization Act  of 2006). The ONDCP Reauthorization Act of 2006 reauthorized  ONDCP through September 30, 2010. After that date, ONDCP continued  to operate under the provisions of the ONDCP Reauthorization Act of  2006 pursuant to continued funding in annual appropriations acts. In  October 2018, the Substance Use-Disorder Prevention that Promotes  Opioid Recovery and Treatment for Patients and Communities Act  (SUPPORT Act), among other things, reauthorized ONDCP and  amended its authorities. In particular, the SUPPORT Act continues to  require the ONDCP Director to promulgate the National Drug Control  Strategy, and also includes a number of detailed new requirements for its  content and development. For example, the Strategy is required to  include a performance evaluation plan for each long-range goal in the  Strategy for each National Drug Control Program agency. Furthermore,  the SUPPORT Act includes other new requirements, such as the creation  of a publicly accessible Drug Control Data Dashboard that captures an  array of drug related data.

Pursuant to 21 U.S.C. § 1708a(b), we have periodically assessed  ONDCP’s programs and operations. This report assesses the extent to  which (1) ONDCP met selected statutory requirements related to the  National Drug Control Strategy for 2017, 2018, and 2019, and (2) ONDCP  has planned or implemented actions to meet selected new requirements  of the SUPPORT Act. In March and May 2019, we provided testimony on  our preliminary findings regarding the extent to which ONDCP’s 2019  National Drug Control Strategy met selected statutory requirements.

To assess the extent to which ONDCP met selected statutory  requirements related to the Strategy for 2017, 2018, and 2019, we  reviewed the current National Drug Control Strategy and three associated  companion documents that ONDCP stated are intended to fulfill their  statutory requirements, and assessed these documents against selected  provisions of the ONDCP Reauthorization Act of 2006. ONDCP officials  told us that they began preparing the current National Drug Control  Strategy, which they issued on January 31, 2019, in early 2018—prior to  the enactment of the SUPPORT Act in October 2018. Officials stated that  they intended for the 2019 National Drug Control Strategy to respond to  the requirements of the ONDCP Reauthorization Act of 2006 because this  was the applicable law at the time that they began drafting the Strategy.  In light of ONDCP’s stated approach, we based our analysis of the 2019  Strategy and companion documents on requirements in the ONDCP  Reauthorization Act of 2006, focusing on the same four provisions we  discussed in our March and May 2019 testimonies. These four  requirements were that the National Drug Control Strategy must contain  (1) annual and quantifiable objectives and targets, (2) a 5-year projection  for program and budget priorities, (3) specific drug trend assessments,  and (4) a description of a performance measurement system. We  selected these four provisions from the ONDCP Reauthorization Act of  2006 because we determined them to be related to aspects of ONDCP’s  role in (a) setting a strategic direction to oversee and coordinate national  drug control policy and (b) ensuring a framework for measuring results.  We also selected these provisions because they were consistent with or  similar to ONDCP’s ongoing responsibilities under the SUPPORT Act,  which is the governing statute for future iterations of the National Drug  Control Strategy. In addition to our analysis of the 2019 Strategy, we  interviewed ONDCP officials about their activities and responsibilities in  overseeing and coordinating national drug control policy.

To assess the extent to which ONDCP has planned or implemented  actions to meet selected new requirements in the SUPPORT Act, we  reviewed the SUPPORT Act and the ONDCP Reauthorization Act of 2006  to identify requirements from the SUPPORT Act that were relevant to  ONDCP and excluded, for example, requirements for other federal  agencies. Due to the large number of requirements in the SUPPORT Act,  we focused on those that were new and notably different from the  ONDCP Reauthorization Act of 2006. Based on this review, we selected  seven requirements to examine. Specifically, we selected two requirements to designate officials to fill new coordinator positions—the  performance budget coordinator and the emerging and continuing threats  coordinator; four requirements for new elements to be included in the  National Drug Control Strategy, such as a performance evaluation plan  for each long-range goal in the Strategy; and one requirement to establish  and maintain a drug control data dashboard. We then assessed relevant  documents and information gathered during interviews with ONDCP  officials about any efforts they had taken to address selected  requirements and compared these against the relevant statute and  Standards for Internal Control in the Federal Government related to  defining and establishing an entity’s objectives.

To provide additional context for both of our objectives, we also  interviewed officials from three National Drug Control Program  agencies—HHS, the Department of Justice (DOJ), and the Department of  Homeland Security (DHS)—about their views on and contributions to  ONDCP’s development and implementation of the 2019 National Drug  Control Strategy. We also interviewed these officials about their agencies’  and components’ engagement with ONDCP during the 2017, 2018, and  2019 budget certification process. We selected these agencies because  they received the largest share of 2018 drug control funding. For each  agency, we interviewed headquarters officials who had responsibilities  related to drug control policy and annual drug control budget  submissions. We also selected and interviewed officials from one  component from each agency—the Substance Abuse and Mental Health  Services Administration from HHS, the Drug Enforcement Administration  from DOJ, and U.S. Customs and Border Protection from DHS. We chose  these components because of their drug control program responsibilities  and their share of the 2018 drug control funding. The information  collected from these interviews is not generalizable to all National Drug  Control Program agencies but provides perspective on their experiences.

We conducted this performance audit from September 2018 to December  2019 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.

ONDCP was established by the Anti-Drug Abuse Act of 1988 as a  component of the Executive Office of the President, and its Director is to  assist the President in the establishment of policies, goals, objectives,  and priorities for the National Drug Control Program. ONDCP is  responsible for (1) leading the national drug control effort, (2) coordinating  and overseeing the implementation of national drug control policy, (3)  assessing and certifying the adequacy of National Drug Control Programs  and the budget for those programs, and (4) evaluating the effectiveness  of national drug control policy efforts. About a dozen National Drug  Control Program agencies, as identified by ONDCP, have responsibilities  for drug prevention, treatment, and law enforcement activities.

Developing the National Drug Control Strategy

Among other responsibilities, the Director of ONDCP is required to  develop and promulgate the National Drug Control Strategy. The National  Drug Control Strategy is to set forth a comprehensive plan to reduce illicit  drug use and the consequences of such illicit drug use in the United  States by limiting the availability of and reducing the demand for illegal  drugs. Many of the SUPPORT Act’s requirements for the National Drug  Control Strategy are the same as, or similar to, those that applied under  the ONDCP Reauthorization Act of 2006. For example, both laws require  the National Drug Control Strategy to include a 5-year projection for the  National Drug Control Program and budget priorities. However, there  are certain differences, and the SUPPORT Act includes a wide range of  detailed new requirements that were not included under the ONDCP  Reauthorization Act of 2006. One of these is that the National Drug  Control Strategy include a description of how each comprehensive,  research-based, long-range quantifiable goal established in the Strategy  for reducing illicit drug use and the consequences of illicit drug use in the  United States will be achieved. Other examples of new requirements  include creating plans to increase data collection and expand treatment of  substance use disorders. The SUPPORT Act also requires the Director  to release a statement of drug control policy priorities in the calendar year  of a presidential inauguration (but not later than April 1). The President is  then required to submit to Congress a National Drug Control Strategy not  later than the first Monday on February following the year in which the  term of the President commences, and every two years thereafter.

The Director of ONDCP is also responsible for developing a consolidated  National Drug Control Program budget proposal for each fiscal year,  which is designed to implement the National Drug Control Strategy and  inform Congress and the public about total federal spending on drug  control activities. As part of this effort, the Director of ONDCP is  required to assess and certify National Drug Control Program agencies’  drug control budgets on an annual basis to determine if they are  adequate to meet the goals and objectives of the National Drug Control  Strategy. Figure 1 illustrates ONDCP’s budget certification process.

ONDCP Did Not Fully Address Selected Statutory Requirements Related to the National Drug Control Strategy in 2017, 2018, or 2019

For 2017 and 2018, ONDCP Did Not Issue a National Drug Control Strategy

ONDCP did not issue a National Drug Control Strategy for 2017 or 2018.  Pursuant to the ONDCP Reauthorization Act of 2006, the Director of  ONDCP was required to promulgate the National Drug Control Strategy  annually and the President was to submit the National Drug Control  Strategy to Congress by February 1 of each year. According to ONDCP  officials, ONDCP did not issue a National Drug Control Strategy for these  years because (1) ONDCP did not have a Senate-confirmed Director  during those years; and (2) 2017 was the administration’s inaugural year,  and previous administrations also did not issue a Strategy during their  first years. By statute, in the absence of a Director, the Deputy Director of  ONDCP is to perform the functions and duties of the Director temporarily  in an acting capacity. ONDCP had officials serving as Acting Director  beginning in January 2017. The current Director of ONDCP was  appointed Deputy Director beginning in February 2018 and served as  Acting Director from February 2018 until April 2018. As of April 2018, the  current Director continued in his role as Deputy Director until he was  confirmed by the Senate as Director of ONDCP in January 2019. The  previous administration also did not issue a National Drug Control  Strategy in its inaugural year—2009—but it did issue a National Drug  Control Strategy in its second year, as shown in table 1. On January 31,  2019, ONDCP issued its National Drug Control Strategy for 2019, which  we discuss in more detail later in the report.

Without a National Drug Control Strategy, ONDCP Could Not Complete the Drug Control Budget Certification Process in Accordance with Statutory Requirements in 2017 and 2018

The ONDCP Reauthorization Act of 2006 required the Director of ONDCP  to issue drug control funding guidance to the heads of departments and  agencies with responsibilities under the National Drug Control Program  by July 1 of each year. ONDCP is to issue funding guidance for agency  budget proposals for the fiscal year two years in the future. For example,  ONDCP was to issue funding guidance to agencies in 2017 for  development of the 2019 budget, and issue funding guidance in 2018 for  development of the 2020 budget. Such funding guidance was required to  address funding priorities developed in the National Drug Control  Strategy. National Drug Control Program agencies are to submit their  budget requests to ONDCP in the summer of each year (before  submission to the Office of Management and Budget) and in the fall of  each year (at the same time as submission to the Office of Management  and Budget).The Director of ONDCP then determines whether National  Drug Control Program agencies’ summer budget requests are adequate  to meet the goals of the National Drug Control Strategy and certifies  whether fall budget submissions include the funding levels and initiatives  identified during the summer budget review.

Since ONDCP did not issue a Strategy in 2017 or 2018, ONDCP could  not develop and issue funding guidance, nor could it review and certify  budget requests and submissions of National Drug Control Program  agencies, in accordance with the statutory requirement. ONDCP officials  stated that—in lieu of a Strategy—they used other sources to formulate  the administration’s priorities, which served as the basis for drug control  funding guidance in 2017 and 2018. For example, for the development of  the fiscal year 2019 drug control budget in calendar year 2017, ONDCP  officials stated that they relied upon the following sources for drug policy  guidance:  Initial development of the President’s Initiative to Stop Opioid Abuse  and Reduce Drug Supply and Demand;

Draft recommendations from the President’s Commission on  Combating Drug Addiction and the Opioid Crisis; policy statements made by the President as a candidate; and policy priorities identified in the fiscal year 2018 President’s Budget.

Additionally, for the development of the fiscal year 2020 funding guidance  in calendar year 2018, ONDCP officials stated that they relied upon the  following sources for drug policy priorities:  the interim and final Report of the President’s Commission on  Combating Drug Addiction and the Opioid Crisis;  the President’s Initiative to Stop Opioid Abuse and Reduce Drug  Supply and Demand;  the draft National Security Council Strategic Framework; and a draft 2018 National Drug Control Strategy that ONDCP officials told  us they drafted but did not issue.

These sources may have provided ONDCP officials with some  information about policy priorities and actions. However, ONDCP officials  stated they did not consider these documents to be the National Drug Control Strategy, and none of the sources fulfill the statutory requirements  under the ONDCP Reauthorization Act of 2006, which require funding  guidance to address priorities from the National Drug Control Strategy.  ONDCP officials told us that they provided drug control funding guidance  to the heads of departments and agencies with responsibilities under the  National Drug Control Program in 2017 and 2018. As described by  ONDCP officials, drug control funding guidance identifies key program  goals and the programs and activities that require agency funding to  achieve the objectives of the National Drug Control Strategy.

ONDCP has since issued the 2019 National Drug Control Strategy which  states that it establishes the administration’s drug control priorities. The  Strategy also states that the priorities provide federal drug control  departments and agencies strategic guidance for developing their own  drug control plans and strategies, and that the Strategy is intended to  ensure federal drug control budget dollars are allocated in a manner  consistent with the administration’s priorities. ONDCP officials told us that  the agency intends to issue the next National Drug Control Strategy in  February 2020 in accordance with the SUPPORT Act.

ONDCP Issued a 2019 National Drug Control Strategy that Addresses Some, But Not All, Selected Requirements

The 2019 National Drug Control Strategy and companion documents  include information to address some but not all selected requirements  under the ONDCP Reauthorization Act of 2006. ONDCP issued multiple  documents that together were intended to address the requirements for  the National Drug Control Strategy. The first document, the 2019 National  Drug Control Strategy, was issued January 31, 2019, with three  companion documents issued later in April and May 2019. These  companion documents were the 2019 Data Supplement, the 2019  Performance Reporting System, and the 2019 Budget and Performance  Summary. In our March 2019 testimony, we reported that the first  document—the National Drug Control Strategy, which was the only one of  the four documents available at the time of our testimony—did not include  certain information required under the ONDCP Reauthorization Act of  2006. These selected requirements included: annual quantifiable and measurable objectives and specific targets; a 5-year projection for program and budget priorities;  specific drug trend assessments; and a description of a performance measurement system.

Following our March 2019 testimony, we reviewed the three companion  documents and found that while they provide some additional information  to address these same selected requirements, they do not completely  address the requirements. As stated earlier, we based our analysis of the  2019 National Drug Control Strategy and companion documents on the  ONDCP Reauthorization Act of 2006, which was the applicable law at the  time ONDCP began drafting the Strategy. Current law is reflected in the  SUPPORT Act, which includes some of the same requirements from the  ONDCP Reauthorization Act of 2006 and some new or different  requirements. In the paragraphs below, we identify which selected  requirements from the ONDCP Reauthorization Act of 2006 were retained  under the SUPPORT Act, and therefore represent current law, and which  selected requirements were not retained. For those selected  requirements that were not retained, we identify comparable current  requirements in the SUPPORT Act.

Annual quantifiable and measurable objectives and specific targets.  Pursuant to the ONDCP Reauthorization Act of 2006, the National Drug  Control Strategy was required to include “annual quantifiable and  measurable objectives and specific targets to accomplish long-term  quantifiable goals that the  Director determines may be achieved  during each year beginning on the date on which the National Drug  Control Strategy is submitted.” The SUPPORT Act retained this  requirement.

We testified in March 2019 that while the 2019 National Drug Control  Strategy lists seven items it designates as measures of performance or  effectiveness, the document did not indicate how these would be  quantified or measured. The document also did not include targets to be  achieved each year. Our subsequent analysis of the three companion  documents showed that one additional document provided more  information related to this requirement. The 2019 Performance Reporting  System includes 9 goals and 17 quantifiable and measurable objectives  with specific targets for certain years. Specifically, the goals and  objectives identified in the 2019 Performance Reporting System included  educating the public about the dangers of drug use; expanding access to  evidence-based treatment; decreasing the over-prescribing of opioid  medications; and reducing the availability of illicit drugs in the United  States through reduced production, increased seizure trends, and  increased prices and reduced drug purity, among other things. The  document states that each goal “is accompanied by aggressive, but  achievable, objectives with two- and five-year targets from a baseline of  2017.”

However, the 2019 Strategy does not meet the statutory requirement  because it does not have annual targets that may be achieved each year.  Instead, the Performance Reporting System states that 16 of the 17  objectives in the Strategy have 2-year targets to be achieved in 2019, and  14 of the 17 objectives have 5-year targets to be achieved in 2022. The  objectives do not include annual targets for the other intervening years— 2018, 2020, and 2021, as required. The Performance Reporting System  states that while ONDCP assumes a linear progression from the baseline  year—2017, in most cases—to the 2022 target, the trajectory may not  actually be linear, “but rather it may occur at varying rates over the 5-year  period due to multiple factors which influence the ability to achieve each  of the stated goals and objectives.” In contrast, other information ONDCP  provided to us stated that annual targets can readily be determined from  the linear paths between the 2- and 5-year targets. Without identifying  annual targets, the 2019 National Drug Control Strategy and companion  documents do not meet the statutory requirement. Further, annual targets  would better position ONDCP to monitor progress in intervening years  and make any needed changes to achieve its goals and objectives.

The SUPPORT Act continues to require ONDCP to establish annual  quantifiable and measurable objectives and specific targets in future  Strategy iterations. By taking steps to address this requirement ONDCP  could further demonstrate whether it is making meaningful progress every  year toward the targets it sets.

A 5-year projection for program and budget priorities. Pursuant to the  ONDCP Reauthorization Act of 2006, the National Drug Control Strategy  was required to include “a 5-year projection for program and budget  priorities.” The SUPPORT Act retained this requirement.

As we testified in March 2019, the 2019 National Drug Control Strategy  did not include this information. Our subsequent analysis of the three  companion documents showed that one document—the 2019  Performance Reporting System—provided more information about  ONDCP’s program priorities but not ONDCP’s budget priorities.  Specifically, 14 of the 17 objectives ONDCP included in the 2019  Performance Reporting System contain various 5-year targets, such as to  reduce the rates of illicit drug and opioid use among youth by 15 percent.  According to ONDCP officials, the objectives and targets in the 2019  Performance Reporting System satisfy the requirement for 5-year  program and budget priorities. However, the document does not include  how these objectives and targets relate to 5-year budget priorities.

The SUPPORT Act continues to require ONDCP to include a 5-year  projection of program and budget priorities in future Strategy iterations.  By taking steps to address this requirement, ONDCP and National Drug  Control Program agencies will be better positioned to plan for the  resources needed to achieve the efforts that will have the greatest impact.

Specific drug trend assessments. Pursuant to the ONDCP  Reauthorization Act of 2006, the National Drug Control Strategy was  required to include assessments of the reduction of the consequences of  illicit drug use and availability and the reduction of illicit drug availability.  We testified in March 2019 that the 2019 National Drug Control Strategy  did not include these assessments. Our subsequent analysis of the three  companion documents showed that the 2019 Data Supplement provided  more information to address the required assessments but did not  address all of the requirements. For example, the assessment of the  reduction of the consequences of illicit drug use and availability was to  include, among other things, the annual national health care cost of illicit  drug use. However, the most recent national health care cost data in the  2019 Data Supplement is from 2007, and ONDCP did not indicate in the  supplement whether more recent data were available. In another  example, the assessment of the reduction of illicit drug availability was to  be measured by, among other things, the number of illicit drug  manufacturing laboratories seized and destroyed and the number of  hectares of marijuana, poppy, and coca cultivated and destroyed  domestically and in other countries. The 2019 Data Supplement  provided data for marijuana and poppy until 2016 and for the quantity of  coca eradicated until 2015.

The SUPPORT Act no longer requires these specific assessments.  However, the SUPPORT Act does include a new requirement that the  National Drug Control Strategy provide “ description of the current  prevalence of illicit drug use in the United States, including both the  availability of illicit drugs and the prevalence of substance use  disorders.” The SUPPORT Act also contains a new requirement—which  we describe later in this report—for ONDCP to describe how each  comprehensive, research-based, long-range quantifiable goal in the  National Drug Control Strategy was determined, including data, research,  or other information used to inform the determination. We address  ONDCP’s implementation of this new requirement under the SUPPORT  Act later in the report.

A description of a performance measurement system. Pursuant to the  ONDCP Reauthorization Act of 2006, the National Drug Control Strategy  was required to include a “description of a national drug control  performance measurement system” that: develops 2-year and 5-year performance measures and targets; describes the sources of information and data that will be used for  identifies major programs and activities of the National Drug Control  Program agencies that support the goals and annual objectives of the  National Drug Control Strategy; evaluates the contribution of demand reduction and supply reduction  activities implemented by each National Drug Control Program  agency in support of the Strategy; monitors consistency between the drug-related goals and objectives  of the National Drug Control Program agencies and ensures that each  agency’s goals and budgets support and are fully consistent with the  National Drug Control Strategy, among others; and  coordinates the development and implementation of national drug  control data collection and reporting systems to support policy  formulation and performance measurement, including certain  assessments.

We testified in March 2019 that the 2019 National Drug Control Strategy  did not include a description of a performance measurement system  pursuant to the ONDCP Reauthorization Act of 2006. Our subsequent  analysis of the three companion documents showed that the 2019  Performance Reporting System provides information about some of the  elements the performance measurement system is required to do. For  example, the 2019 Performance Reporting System includes 2-year and 5- year targets for many of its objectives and describes some of the sources  of data that will be used to measure each target. However, it does not  include a description of the system that will accomplish each of the  requirements in the ONDCP Reauthorization Act of 2006. For example, it  does not describe a performance measurement system that identifies  major programs and activities of the National Drug Control Program  agencies that support the goals and annual objectives of the National  Drug Control Strategy. Such programs and activities could indicate how  ONDCP expects to achieve these objectives, such as how to educate the  public about the dangers of drug use, or how to expand access to  evidence-based treatment. Additionally, it does not describe how the  performance measurement system monitors consistency between the  drug-related goals and objectives of the National Drug Control Program  agencies and ensures that each agency’s goals and budgets support and  are fully consistent with the National Drug Control Strategy. ONDCP  officials stated they believe the 2019 Performance Reporting System  meets the statutory requirement for a description of a performance  measurement system.

The SUPPORT Act, as originally enacted in October 2018, no longer  required a description of a performance measurement system. However,  the ONDCP Technical Corrections Act of 2019, enacted in November  2019, amended the SUPPORT Act to reinstate the requirement for a  description of a performance measurement system. Therefore, this  requirement will apply to the 2020 National Drug Control Strategy and  future Strategy iterations.

ONDCP Has Met Some SUPPORT Act Requirements That GAO Reviewed but Its Approach to Meeting Others Does Not Incorporate Key Planning Elements

ONDCP Has Addressed Requirements for New Coordinator Positions

As of August 2019, ONDCP filled all five coordinator positions described  in the SUPPORT Act, two of which are substantively new positions.  Specifically, ONDCP officials stated that they have designated officials for  the new positions of performance budget coordinator and emerging and  continuing threats coordinator. By filling each of these positions, ONDCP  is better positioned to fulfill the responsibilities for which each position is  accountable, as described in figure 2 below.

ONDCP’s Approach to Meeting Selected New Requirements for the National Drug Control Strategy and the Drug Control Data Dashboard Does Not Incorporate Key Planning Elements

As of October 2019, ONDCP officials could not provide in writing or  otherwise describe key planning elements to ensure ONDCP can meet  selected new requirements in the SUPPORT Act related to the  development of the 2020 and future National Drug Control Strategy  iterations, and related to the development and implementation of the Drug  Control Data Dashboard. Figure 3 outlines the selected requirements for  the Strategy, which were effective upon enactment of the SUPPORT Act  in October 2018.

Each of the four selected SUPPORT Act requirements described in  Figure 3 requires ONDCP to include specific information in the 2020 and  future National Drug Control Strategy iterations. For example, for each  comprehensive, research-based, long-range, quantifiable goal, the  National Drug Control Strategy must contain (1) a description of how each  goal will be achieved; (2) a performance evaluation plan for each goal;  and (3) a description for how each goal was determined. The National  Drug Control Strategy must also include a plan to expand treatment for  substance use disorders. Officials from ONDCP and selected agencies  told us that in spring 2019 ONDCP requested that the National Drug  Control Program agencies determine how their existing programs and  activities align with the 2019 National Drug Control Strategy, including the  goals and objectives articulated in the 2019 Performance Reporting  System. In October 2019, ONDCP officials told us that the 2020 Strategy  would be issued in accordance with the SUPPORT Act, by the first  Monday in February (February 3, 2020). ONDCP also provided us with  two documents to describe its approach for meeting this deadline. One  document includes a table that lists SUPPORT Act requirements along  with the ONDCP component(s) responsible for implementation and the  deadline. The other document provides a high-level summary of the  National Drug Control Strategy development and interagency review  process. For example, the plan to monitor progress on the drafting of  components’ sections of the Strategy notes that it is to occur through “as- needed (but frequent)” meetings with the deputy chief of staff and the  components and their heads.

The extensive nature of the new SUPPORT Act requirements, as  described above, indicates that significant implementation steps may be  necessary, such as, a description of the specific steps necessary to  accomplish this overarching task, identification of who will be responsible  for each step, and a schedule of interim milestones. However, neither of  these documents describes such critical implementation steps. Further,  neither specifies what resources or processes, for example, would be  needed and by what specific milestone date ONDCP would accomplish  any particular step to complete the overall work in a timely manner. For  example, the document that includes the table indicates that the deadline  for all requirements related to the National Drug Control Strategy is February 2020. However, some requirements associated with the  development of the Strategy, such as consultation requirements, would  need to be completed before the Strategy’s due date—February 2020.

According to Standards for Internal Control in the Federal Government  under Internal Control Principle 6, to achieve an entity’s mission,  management should define objectives in specific terms so they are  understood at all levels of the entity. This involves clearly defining what  it is to be achieved, who is to achieve it, how it will be achieved, and the  time frames for achievement—in other words, key planning elements.  Standards for project management also state that managing a project  involves developing a plan with specific actions and milestone dates.

Defining these key planning elements will help provide assurance that  ONDCP’s efforts will result in a National Drug Control Strategy—for 2020  and future years—that fully addresses the requirements of the SUPPORT  Act. In addition, developing and documenting these planning elements  would help ONDCP structure its planning efforts through consideration of  resource investments, time frames, and any necessary processes,  policies, roles, and responsibilities to address each requirement.  Furthermore, implementing these planning elements will help ensure that  ONDCP follows a routine planning process going forward, and that future  iterations of the National Drug Control Strategy that ONDCP develops are  consistent with the law.

Additionally, as of December 2019, ONDCP has not documented key  planning elements to ensure it will meet the SUPPORT Act’s  requirements for the Drug Control Data Dashboard, to make timely  information publicly available on the scope and complexity of drug use  and drug control activities. The SUPPORT Act includes requirements for  what data is to be included in the Drug Control Data Dashboard as well  as its functionality, to ensure it is searchable and sortable. Figure 4  outlines the requirements for the Drug Control Data Dashboard, which  were effective upon enactment of the SUPPORT Act in October 2018.

In August 2019, ONDCP posted a public version of the Drug Control Data  Dashboard that included information from the 2019 Data Supplement in  spreadsheet format, but did not provide all of the data required by the  SUPPORT Act. For example, the Drug Control Data Dashboard does  not include required data on the extent of the unmet need for substance  use disorder treatment. ONDCP officials shared information regarding  potential data sources they may use to fulfill the additional required data  elements. In addition, ONDCP officials told us that some data  requirements listed in the statute do not exist at this time. For example,  ONDCP officials stated that data do not exist regarding the known and  estimated flow of substances into the United States for the current  calendar year and each of the three previous years. ONDCP officials  stated that there was more work necessary to ensure all the required data  are incorporated into the Drug Control Data Dashboard. At that time, they  also stated that they expected to address all required elements by the  end of 2019. However, we found that they do not have key planning  elements, such as a specific timeline with interim milestones or  documented plans for when and how they would complete this work.  ONDCP subsequently posted an updated version of the Drug Control  Data Dashboard, which we reviewed in December 2019. While the  updated Drug Control Data Dashboard identifies required data elements  that are unavailable, ONDCP has not addressed how or when ONDCP  planned to provide them, such as by identifying alternative data sources  or identifying additional resources that may be necessary for enhanced  data collection efforts.

The SUPPORT Act also requires the Drug Control Data Dashboard to be  machine-readable and searchable by year, agency, drug, and location, to  the extent practicable. Officials stated in September 2019 they planned to  add this functionality to the Drug Control Data Dashboard in the fall of  2019. In written comments on a draft of this report in December 2019,  ONDCP indicated that the data have been posted in a machine-readable,  sortable, and searchable format. However, as of December 2019, we  found that the Drug Control Data Dashboard is still not fully searchable by  year, agency, drug and location. We have previously reported on key  practices for agencies to follow when reporting government data. These  practices describe, for example, that agencies should ensure their  website’s data search functions and overall interface is intuitive to users.  While effective implementation of such functions can be a significant  undertaking, ONDCP does not have plans to account for timing, content,  functionality, or any additional resources required to fully implement this  requirement. ONDCP officials stated in September 2019 they may need  to consult Congress about additional resources to fulfill all of the  requirements related to the Drug Control Data Dashboard, but stated that  they do not have specific plans for what resources they may request.

Internal control standards call for agencies to define key planning  elements, including how a task will be accomplished and associated  timeframes. Developing and documenting key planning elements— including resource investments, time frames, and any necessary  processes, policies, roles, and responsibilities—will better position  ONDCP to fully implement all of the law’s requirements for the Drug  Control Data Dashboard. Once implemented, the Drug Control Data  Dashboard will help enable ONDCP to capitalize on available data to  better understand the scope and nature of the drug crisis.

ONDCP is responsible for leading the nation’s fight against a persistent  drug epidemic that continues to devastate Americans’ lives. However, the  2019 National Drug Control Strategy does not fully comply with the law,  and the agency has not developed key planning elements to help ensure  it will meet its significant additional responsibilities under the SUPPORT  Act. These responsibilities include issuing the National Drug Control  Strategy in accordance with statutory requirements to help prioritize and  measure key efforts to address the drug epidemic and creating a Drug  Control Data Dashboard that contains timely information about the scope  and complexity of the drug epidemic. These responsibilities also extend  beyond the upcoming 2020 Strategy, with requirements to complete  future Strategy iterations on a regular basis. Developing and documenting  key planning elements, such as resource investments, time frames, and  any necessary processes, policies, roles, and responsibilities—will help  ONDCP structure its ongoing efforts. Implementing this approach will then  better position ONDCP to meet statutory requirements for the next  Strategy, due in February 2020, and satisfy all requirements related to the  Drug Control Data Dashboard. Implementing this approach over time will  also help ONDCP ensure it is meeting statutory requirements for future  iterations of the National Drug Control Strategy.

We are making 4 recommendations to ONDCP.

The Director of ONDCP should develop and document key planning  elements to help the agency meet the SUPPORT Act requirements for  the 2020 National Drug Control Strategy and future Strategy iterations.

These planning elements should include descriptions of resource  investments, time frames, and any processes, policies, roles, and  responsibilities needed to address each requirement. (Recommendation  1)

The Director of ONDCP should—after developing and documenting key  planning elements to meet the SUPPORT Act requirements—routinely  implement an approach, based on these planning elements, to meet the  requirements for the 2020 National Drug Control Strategy and future  Strategy iterations. (Recommendation 2)

The Director of ONDCP should develop and document key planning  elements to help the agency meet the SUPPORT Act requirements to  establish a Drug Control Data Dashboard that would include descriptions  of resource investments, time frames, and any processes, policies, or  roles, and responsibilities needed to address this requirement.  (Recommendation 3)

The Director of ONDCP should—after developing and documenting key  planning elements—implement an approach, based on these planning  elements, to meet the SUPPORT Act requirements to establish a Drug  Control Data Dashboard. (Recommendation 4)

We provided a draft of this report for review and comment to ONDCP,  DHS, DOJ, and HHS. ONDCP provided written comments, which are  summarized below and reproduced in appendix I. ONDCP, DHS, and  DOJ also provided technical comments, which we incorporated, as  appropriate. In an email, an HHS official stated that HHS did not have any  comments on the report.

In its written comments, ONDCP stated that it accepted the first two  recommendations regarding the need for a robust internal planning  process for National Drug Control Strategies.  Specifically, the first  recommendation is for ONDCP to develop and document key planning  elements to help the agency meet the SUPPORT Act requirements for  the 2020 National Drug Control Strategy and future Strategy iterations.  The second recommendation is for ONDCP to routinely implement an  approach to meet these requirements. In particular, ONDCP agreed to  implement key planning elements for future Strategies that will include  detailed descriptions of planned steps, identifying which ONDCP  component will be responsible for each step, resource investments,  interim milestones, and overall time frames. If implemented as planned,  these actions would address the intent of these recommendations.

Regarding the third and fourth recommendations related to the Drug  Control Data Dashboard, ONDCP noted that these recommendations  have been rendered moot because the agency has already fully complied  with posting the Data Dashboard to its website. ONDCP also stated that it  has posted to the Data Dashboard all of the drug-related data required by  ONDCP’s statute that currently exists. Further, ONDCP stated that the  data has been posted in machine-readable, sortable, and searchable  format as required and it will be updated on a continuous basis  throughout the year as new data become available. While ONDCP has  included additional information on the Dashboard, the two  recommendations are to develop, document, and implement key planning  elements for the Dashboard to fully meet the law’s requirements, which  ONDCP has not yet done. For example, ONDCP identifies in the  Dashboard which of the required data elements are unavailable, such as  required data on the extent of the unmet need for substance use disorder  treatment. However, as stated in the report, ONDCP has not documented  key planning elements for how it will address these missing data. Such  planning elements could include approaches for collecting the missing  data, such as articulating a plan to work with Congress to identify  alternative data sources or to identify additional resources that may be  necessary for enhanced data collection efforts. Furthermore, ONDCP has  not developed or implemented key planning elements to ensure the Drug  Control Data Dashboard has the search features noted in the statute. In  its current format, the Dashboard is not fully searchable by year, agency,  drug, and location. While the statute indicates that search features should  have been implemented “to the extent practicable,” ONDCP did not  explain why it was not practical to implement them. Therefore, we  continue to believe that developing, documenting, and implementing key  planning elements for the Dashboard to fully meet the law’s requirements  will help enable ONDCP to capitalize on available data to better  understand the scope and nature of the drug crisis.

ONDCP also noted several points related to our specific findings, as  discussed below.

First, ONDCP noted that it did issue robust drug budget guidance to  National Drug Control Program agencies during 2017 and 2018. The  report acknowledges that ONDCP provided this guidance. However, as  explained in the report, the guidance is statutorily required to address  funding priorities developed in the National Drug Control Strategy. Since  ONDCP did not issue a Strategy in 2017 or 2018, it could not meet this  statutory requirement.

In addition, ONDCP stated that it maintains that the 2019 National Drug  Control Strategy met all statutory requirements, and therefore does not  agree with our analysis of its adherence to those requirements. ONDCP  also noted that the four requirements we assessed constitute only a small  portion of the many requirements for the 2019 National Drug Control  Strategy and that the report gives the misleading impression that ONDCP  did not comply with some significant number of requirements. We  recognize that there are a number of requirements for the Strategy;  however, as stated in the report, our review focused on these four  provisions because we determined them to be significant to ONDCP’s  role in setting a strategic direction to oversee and coordinate national  drug control policy, and because they are critical to ensuring a framework  for measuring results. Specifically, the provisions related to including  information in the Strategy related to annual quantifiable and measurable  objectives and specific targets, a 5-year projection for program and  budget priorities, specific drug trend assessments, and a description of a  performance measurement system.  As detailed in the report, we found  that the 2019 Strategy addressed some—but not all—of these four  statutory requirements. For example, we found that the Strategy did not  include a 5-year projection for budget priorities and included only some  information related to specific drug trend assessments. In its written  comments, ONDCP provided additional explanation for why it did not  agree with our characterization of the requirements. For example,  ONDCP stated that it is not able to provide quantitative fiscal year  projections for future years because this would go against long-standing  Office of Management and Budget policy.  Related to drug trend  assessments, ONDCP noted that it reports data generated by other  government agencies, and that policy research funding for ONDCP has  not been appropriated since fiscal year 2011.  We made  recommendations, which ONDCP agreed to implement, focused on  developing and implementing key planning elements such as descriptions  of resource investments; timeframes; and processes, policies, and  responsibilities needed to address each requirement. Implementing these  planning elements could, for example, help ensure that ONDCP  addresses any policy considerations or additional resources needed to  help ensure that future iterations of the Strategy fully meet all statutory  requirements.

We are sending copies of this report to the appropriate congressional  committees, the Director of the Office of National Drug Control Policy, the  Secretary of the Department of Health and Human Services, the Acting  Secretary of the Department of Homeland Security, the Attorney General,  and other interested parties. In addition, this report is available at no  charge on GAO’s website at http://www.gao.gov.

If you or your staff has any questions concerning this testimony, please  contact Triana McNeil at (202) 512-8777 or McNeilT@gao.gov or Mary  Denigan-Macauley at (202) 512-7114 or McNeilT@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 Office of National Drug Control Policy

Appendix II: GAO Contacts and Staff Acknowledgments

In addition to the contacts named above, Joy Booth (Assistant Director),  Will Simerl (Assistant Director), Michelle Loutoo Wilson (Analyst-in- Charge), Billy Commons, Wendy Dye, Jane Eyre, Kaitlin Farquharson,  Susan Hsu Michael, Amanda Miller, and Jan Montgomery made key  contributions to this report.

The Office of National Drug Control Policy (ONDCP) oversees and coordinates federal drug policy. In 2018, new legislation reauthorized ONDCP and imposed a number of new requirements.

We found that ONDCP met some of the new requirements. For instance, ONDCP designated officials for two new coordinator positions. However, ONDCP does not have key planning elements needed to ensure it can meet other requirements related to, for example, its online database of drug control data.

We recommended that ONDCP develop these planning elements to meet these requirements.


Commonwealth of the Northern Mariana Islands: Recent Economic and Workforce Trends

The Consolidated Natural Resources Act of 2008, which amended the 1976 covenant between the United States and the CNMI, established federal control of CNMI immigration beginning in 2009. Under the act, the Department of Homeland Security began implementing a foreign worker permit program that was specific to the CNMI. The Northern Mariana Islands U.S. Workforce Act of 2018 extended the CNMI-Only Transitional Worker (CW-1) program for 10 additional years, through the end of 2029.

The Northern Mariana Islands U.S. Workforce Act of 2018 included a provision for GAO to examine the ratio of United States workers to other workers over the 5 previous calendar years in the CNMI. This report examines (1) recent economic trends in the CNMI through 2018, and (2) recent trends in the composition of the CNMI workforce from 2001 through 2018, including the ratio of United States workers to foreign workers for each of the 5 previous calendar years. GAO analyzed CNMI government and U.S. agency data, prior GAO reports, and interviewed officials from the CNMI government, and the U.S. Departments of Commerce, Homeland Security, the Interior, and Labor.

Although the Commonwealth of the Northern Mariana Islands (CNMI) economy grew in 2016 and 2017, it declined in 2018. The U.S. Department of Commerce's Bureau of Economic Analysis (BEA) reports that the CNMI's gross domestic product (GDP) grew 28.4 percent in 2016 and 25.5 percent in 2017, which reflected continued growth in visitor spending, particularly for casino gambling. However, BEA estimates that GDP in the CNMI fell by 20 percent in 2018, with a sharp drop in tourist spending and casino gambling revenues following the severe damage of Super Typhoon Yutu, which made landfall in October 2018. According to BEA, revenue from casino gambling dropped over 50 percent in 2018. In August 2019, the parent company of the casino in the CNMI warned shareholders and potential investors that it expected to record a loss for the first 6 months of 2019 as compared with a profit for the same period in 2018. The company's independent auditor also concluded that the financial information for the first 6 months of 2019 might cast significant doubt on the ability of the company to continue as a going concern.

The ratio of United States workers to foreign workers in the CNMI remained close to 50 percent from 2014 through 2018, with United States workers making up 49 percent of the workforce in 2018, according to CNMI tax data. The size of the workforce grew each year from 2014 through 2017, before contracting by almost 2,000 workers in 2018. For 2018, the Department of Homeland Security approved about 9,000 CW-1 foreign worker permits, and approved more than 11,000 permits for 2019.

The 1976 covenant defining the political relationship between the United  States and the Commonwealth of the Northern Mariana Islands (CNMI)  exempted the CNMI from certain federal immigration laws but reserved  the right of the U.S. government to apply federal law in these exempted  areas without the consent of the CNMI government. The Consolidated  Natural Resources Act of 2008 (CNRA) amended the U.S.–CNMI  covenant to establish federal control of CNMI immigration beginning in  2009.

Under the CNRA, the U.S. Department of Homeland Security (DHS)  established the CNMI-Only Transitional Worker program (CW-1 program)  in fiscal year 2011 to provide for an orderly transition from the CNMI  immigration system to the U.S. federal immigration system during a  transition period. The transition period was recently set to expire on  December 31, 2019. However, the Northern Mariana Islands U.S.  Workforce Act of 2018 (the Act) amended the CNRA to, among other  things, extend the transition period through December 31, 2029.

The Act also included a provision for GAO to biennially report on the ratio  between United States workers and other workers in the CNMI workforce  during each of the previous 5 calendar years. This report examines (1)  recent economic trends in the CNMI and (2) recent trends in the  composition of the CNMI workforce, including the ratio of United States  workers to foreign workers in the CNMI during the previous 5 calendar  years.

To examine the trends in the CNMI economy, we obtained and analyzed  data from the U.S. Department of Commerce’s Bureau of Economic  Analysis (BEA) on the gross domestic product (GDP) of the CNMI,  including contributions to GDP by select industries. We also obtained and  analyzed data on visitor arrivals from the Marianas Visitors Authority. In addition, we reviewed prior GAO reports, BEA press releases on GDP,  annual reports from the CNMI casino operator, among other sources, to  understand ongoing events that could affect the CNMI economy.

To examine the trends in the CNMI workforce, we obtained and analyzed  data from the CNMI government and DHS. Specifically:

We obtained summary level tax data from the CNMI government,  which included information on the number of workers in the CNMI and  their citizenship, to examine the ratio between United States and  foreign workers in the CNMI workforce. The data available for  inclusion in this report do not match the definition of a United States  worker established in the 2018 Act. The Act defines a United States  worker as any worker who is: a citizen or national of the United  States; an alien who has been lawfully admitted for permanent  residence; or a citizen of the Federated States of Micronesia, the  Marshall Islands, or the Republic of Palau who has been lawfully  admitted to the United States pursuant to their respective compacts of  free association. In 2018, the CNMI government began collecting data  on worker visa status recorded on employee tax documents filed by  the employer. But about one-third of collected 2018 tax forms did not  include information about the visa type or status of the worker.  Therefore, with incomplete data, we could not identify people lawfully  admitted for permanent residence. However, we found the summary- level tax data we received were sufficiently reliable for our purposes of  examining trends in the CNMI workforce.

We obtained record-level data (such as the worker’s name, date of  birth, and petition receipt number) from DHS’s U.S. Citizenship and  Immigration Services (USCIS) for fiscal years 2012 through 2019 to  examine CW-1 program information on workers and their employers  since the program began. To assess the reliability of the USCIS data,  we tested the data electronically to identify and resolve  inconsistencies in personally identifiable information for permit holders  and tax identification numbers for employers and to ensure accuracy  in tracking these individuals over time, and we discussed the results  of our reliability tests with USCIS officials. We determined that the  USCIS data were sufficiently reliable for our purposes.

We conducted this performance audit from August 2019 to February 2020  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.

Background CNMI Geography, Population, and the 2018 Typhoon

Part of the Mariana Islands Archipelago, the CNMI—one of five U.S.  territories—consists of 14 islands in the western Pacific Ocean, just north  of Guam and about 3,200 miles west of Hawaii. In 2018, the CNMI had  an estimated total population of 51,994, according to the U.S. Census  Bureau. According to the CNMI’s 2016 Household, Income, and  Expenditures Survey, 89 percent of the population lived on the island of  Saipan, with an additional 6 percent on the island of Tinian and 5 percent  on the island of Rota (see fig. 1).

On October 24, 2018, Super Typhoon Yutu made landfall in the CNMI  causing widespread damage to the islands. Saipan, Tinian, and Rota  experienced heavy rainfall and extremely high winds, which caused  damage to homes, businesses, and critical infrastructure. The typhoon  severely damaged utility infrastructure on all three islands, including  downed power lines, transformers, and poles, which caused power  outages across all the islands (see fig. 2). Damage from Yutu also closed  the Saipan International Airport, which was unable to restore full flight  services until March 2019, according to the Marianas Visitors Authority.

The United States captured the Northern Mariana Islands from Japan  during the latter part of World War II. After the war, the U.S. Congress  approved a trusteeship agreement making the United States responsible  to the United Nations for the administration of the islands. In 1976, the  District of the Mariana Islands entered into the Covenant with the United  States establishing the island territory’s status as a self-governing  commonwealth in political union with the United States. This Covenant  grants the CNMI the right of self-governance over internal affairs and the  United States complete responsibility and authority for matters relating to  foreign affairs and defense affecting the CNMI. The Covenant initially  made many federal laws applicable to the CNMI, including laws that  provide federal services and financial assistance programs. However, the  Covenant preserved the CNMI’s exemption from certain federal laws that  had previously been inapplicable to the Trust Territory of the Pacific  Islands, including certain federal minimum wage provisions and  immigration laws, with some limited exceptions. Under the terms of the  Covenant, the federal government has the right to apply federal law in  these exempted areas without the consent of the CNMI government.

Application of Federal Immigration Law to the CNMI

In 2008, the CNRA amended the joint resolution approving the U.S.– CNMI covenant to apply federal immigration law to the CNMI, with a  transition period for foreign workers that would end on December 31,  2014, unless extended by the U.S. Secretary of Labor. To provide for an  orderly transition from the CNMI immigration system to the U.S. federal  immigration system under the immigration laws of the United States,  DHS, through USCIS, established the CW-1 program in 2011. The  transition period was previously extended through December 31, 2019,  under the Consolidated and Further Continuing Appropriations Act,  2015. Through the program, employers petition for nonimmigrant CW-1  permits that allow foreign workers who meet certain requirements to work  temporarily in the CNMI.

Since 2008, Congress has amended the CNRA several times, with  provisions that affected the length of the transition period, the number of  CW-1 permits allocated, and the distribution of permits. The CNRA, as  amended by the Northern Mariana Islands U.S. Workforce Act of 2018,  extends the CW-1 program through December 31, 2029, defines the  number of permits DHS may issue annually, and reduces that number  each year until the end of the transition period. In addition, the Northern  Mariana Islands Long-Term Legal Residents Relief Act of June 2019  established a new category of long-term residents in the CNMI, assuming  they met certain qualifications (see table 1).

Figure 3 shows the numerical limits on CW-1 permits established by DHS  and the numerical limits for permits specified in the Northern Mariana  Islands U.S. Workforce Act of 2018. The limits shown are the maximum  number of permits available for each fiscal year through the end of the  transition period and may not reflect the number of permits for which  employers would petition and that DHS would approve.

Trends in the CNMI Economy The CNMI Economy Grew between 2012 and 2017, but Declined in 2018

The CNMI’s GDP, adjusted for inflation, grew every year from 2012 to  2017, but declined in 2018, according to BEA. GDP, in 2018 inflation- adjusted dollars, grew from $1.022 billion in 2015, to $1.311 billion in  2016, and to $1.646 billion in 2017, before contracting to $1.323 billion in  2018. See figure 4 below for CNMI inflation-adjusted gross domestic  product over this time.

BEA estimates that the CNMI’s GDP, adjusted for inflation, increased by  28.4 percent in 2016 and by 25.5 percent in 2017 (see fig. 5). BEA  attributes this economic growth to exports of services, which reflected  continued growth in visitor spending, particularly for casino gambling. In  2018, inflation-adjusted GDP fell by 20 percent, which reflected  decreases in exports of services and private fixed investment.  According to BEA, exports of services decreased 39 percent, due to a  drop in visitor spending, in particular spending on casino gambling where  revenues fell over 50 percent in 2018.

The CNMI Economy Increasingly Relies on Tourism, but the Casino Operation Faces Challenges Accommodations and Amusement Was 45 Percent of CNMI GDP in 2017

BEA data on the value added to GDP by individual industries show the  change in the composition of the CNMI economy as accommodations and  amusement became the largest component of the economy and garment  manufacturing declined. In particular:

From 2007 to 2017, the contribution to GDP by accommodations and  amusement, which partially includes the tourism sector, grew from  less than 12 percent to 45 percent.

From 2007 to 2017, the contribution to GDP by manufacturing  declined from 19 percent to 1 percent, according to BEA. This reflects  the decline of the garment manufacturing industry.

Between 2007 and 2017, the contribution to GDP by government  declined from about 24 percent to 16 percent of GDP.

See figure 6 for value added by industry as a percentage of CNMI GDP.

CNMI Visitor Arrivals Declined in Fiscal Years 2018 and 2019

Following a period of growth in visitor arrivals—from about 338,000 in  fiscal year 2011 to more than 653,000 in fiscal year 2017—visitor arrivals  dropped in fiscal year 2018 to about 607,000 and in fiscal year 2019 to  less than 425,000 (see fig. 7). According to BEA, the decline in visitors in  early fiscal year 2019 was attributable to Super Typhoon Yutu, which  devastated the CNMI in October 2018.

In November 2018, following Super Typhoon Yutu, visitor arrivals in the  CNMI plummeted from the previous month’s total of 32,108 to 5,595. This  drop also represented an 88 percent decline from November 2017, when  48,039 visitors arrived in the CNMI. See figure 8 below, which compares  monthly visitor arrivals for fiscal years 2018 and 2019, which started on  October 1, 2017 and October 1, 2018, respectively.

The composition of visitors by country of residence has also significantly  shifted since 2005. Data from the Marianas Visitors Authority show that  the decline in Japanese arrivals from fiscal years 2005 to 2019 was offset  by the increase in arrivals from China and South Korea (see fig. 9). In  particular,  Japanese arrivals declined from about 376,000 in 2005 (71 percent of  total visitors) to about 12,000 in 2019 (3 percent).

South Korean arrivals increased from about 65,000 in 2005 (12  percent) to about 192,000 in 2019 (45 percent).

Chinese arrivals increased from about 32,000 in 2005 (6 percent) to  186,000 in 2019 (44 percent).

While eligible Japanese and South Korean visitors enter the CNMI under  a visa waiver program, Chinese visitors are ineligible for the program  but can remain temporarily in the CNMI under DHS’s discretionary parole  authority, according to DHS officials. DHS exercises parole authority to allow, on a case-by-case basis, eligible nationals of China to enter the  CNMI temporarily as tourists when there is significant public benefit,  according to DHS. U.S. Customs and Border Protection, a DHS  component, recently announced a reduction in the length of stay for  Chinese citizens from 45 to 14 days for their entry into the CNMI under  discretionary parole. CNMI’s Comprehensive Economic Development  Strategy 2019 Update indicates that visa-free access to Chinese visitors  serves as the linchpin for the CNMI casino investment.

On January 29, 2020, the Governor of the CNMI issued an executive  order that declared a state of significant emergency in the Commonwealth  related to the spread of the coronavirus from China. Among other  measures, the Governor suspended the arrival of travelers from mainland  China for a period of 30 days. The Governor also directed the CNMI  Secretary of Finance and the CNMI Office of Management and Budget to  undertake a cost-impact analysis on the effects the ban will have on the  economy.

CNMI Licensed Casino Development on Two Islands, but Operations Have Faced Challenges

Within the tourism sector, the CNMI government has provided for the  licensing of casinos on Tinian and Saipan, but both casinos have faced  challenges.

Tinian: Tinian Dynasty Hotel and Casino was established in 1998 to  boost economic development. In operation for over a decade, the casino  was investigated and cited by several federal agencies and closed in  2015. Most recently, following an Internal Revenue Service  investigation, the U.S. Department of Justice filed a criminal complaint  against the casino operator and two individuals on April 19, 2013, alleging  that between September 2009 and April 2013 the casino failed to file  reports on currency transactions greater than $10,000, and engaged in a  pattern of accommodating gamblers in conducting transactions greater  than $10,000. The U.S. Department of Treasury Financial Crimes  Enforcement Network reported on June 3, 2015, that it had assessed a  $75 million civil money penalty against the casino operator for willful and  egregious violations of the Bank Secrecy Act.

Saipan: In March 2014, while needing a new revenue source to fund  government policies, such as a generous government retirement  program, the CNMI government passed a public law that authorized and  established an exclusive casino license in Saipan, which was awarded to  Imperial Pacific International Holdings of Hong Kong. The operator  began construction of a casino and hotel complex originally scheduled for  completion no later than 36 months from the date of the casino license, or  by August 2017. After facing construction challenges, the CNMI Casino  Commission approved delays in the completion schedule. The new  casino opened for business on July 6, 2017. As of August 2019, the  casino was operating, but hotel construction had not progressed beyond  the structural frame and a partial facade. According to a casino  representative, labor shortages and Super Typhoon Yutu have delayed  construction. Figure 10 shows the casino and hotel tower in August 2019.

Several federal agencies have investigated and cited the casino operator  and its construction contractors. The casino operator and its contractors  have been fined for unfair labor practices:

On May 30, 2017, the U.S. Department of Labor’s Occupation Safety  and Health Administration reported proposed penalties of $193,750  against three contractors that exposed workers to numerous  workplace hazards at the casino site in Saipan.

On March 5, 2018, the U.S. Department of Labor announced it had  finalized a series of settlements with contractors that would pay $13.9  million in back wages and damages to thousands of Chinese  employees who had come to build the Saipan casino and hotel.

On April 25, 2019, the U.S. Department of Labor announced it had  secured a $3.3 million consent judgment against the casino’s  developer for minimum wage, overtime, and recordkeeping violations  of the Fair Labor Standards Act.

On September 24, 2019, the U.S. Equal Employment Opportunity  Commission filed suit against the casino, alleging the casino operator  had violated federal law by subjecting female employees to sexual  harassment, other sex-based discrimination, and retaliation.

Financial reporting from the casino operator in 2019 included warnings  about losses in 2018 and 2019. Specifically:

On April 29, 2019, the casino operator released its 2018 Annual  Report. In this report, independent auditors found that the casino  operator had incurred a net loss of almost $3 billion in Hong Kong  dollars, or about $379 million in US dollars, and had accumulated  current liabilities greater than this amount, for calendar year 2018.  The auditors concluded that these conditions, along with others noted  in the report, indicate the existence of a material uncertainty, which  may cast significant doubt on the operator’s ability to continue in  business.

On August 9, 2019, the casino operator issued a warning to  shareholders and potential investors that it expected to record a loss  for the first 6 months of 2019 as compared to a profit for the same  period in 2018.

On August 30, 2019, the casino operator released its 2019 Interim  Report. An independent auditor noted that during the 6-month period  ending June 30, 2019, the casino operator incurred a net loss of  almost $1.9 billion Hong Kong dollars, or more than $240 million in  U.S. dollars. The auditor included the same warning of a material  uncertainty reported in the 2018 Annual Report.

On November 7, 2019, the casino operator posted an announcement to  the Hong Kong Stock Exchange that it had assisted in an investigation at  the request of local enforcement authorities, and provided relevant  information and documents as required by the enforcement authorities.

Trends in CNMI Workforce The Ratio of United States to Foreign Workers in the CNMI Has Remained Close to 50 Percent from 2014 to 2018

Between 2014 and 2018, the ratio of United States to foreign workers in  the CNMI remained close to 50 percent, according to CNMI Department  of Finance tax data that identified the citizenship of workers. In 2018,  United States workers constituted 49 percent of the workforce. These  workers included U.S. citizens and nationals, and citizens from the Freely  Associated States—the Federated States of Micronesia, the Republic of  the Marshall Islands, and the Republic of Palau. The size of the CNMI  workforce grew every year from 2014 through 2017 before contracting by  about 2,000 workers, or 5.6 percent, in 2018, according to CNMI tax data.  While the ratio between United States workers and foreign workers has  remained steady over the past 5 years, the number and share of foreign  workers in the overall CNMI workforce fell significantly from 2001 through  2018. Over this same period, the number of United States workers  remained more stable, dropping from about 15,500 workers in 2001, to  about 13,700 workers in 2018, or a 12 percent decline in total United  States workers. United States workers represented 30 percent of the  workforce in 2001 and 49 percent in 2018 (see fig. 11).

On 2018 tax forms, the CNMI government started collecting information  from employers on workers’ visa type, in response to the Northern  Mariana Islands U.S. Workforce Act of 2018. According to a CNMI  government report, the new information will help identify workers lawfully  admitted for permanent residence. However, about one-third of the  2018 CNMI tax forms collected did not include information on the worker’s  visa type. According to the report, the missing data may be attributed to  the new reporting procedure for the 2018 tax form. The report indicated  that after Super Typhoon Yutu devastated the islands of Saipan and  Tinian, there was very little time to adequately inform and prepare  employers of the new procedure for the tax form before the end of tax  year 2018. Although the CNMI Department of Labor conducted a training  presentation in December 2018, not all employers attended and so were  unaware of the new procedure.

Approved CW-1 Permits Rose for Fiscal Year 2019, after Falling for Fiscal Years 2017 and 2018

Numbers of Approved CW-1 Permits Rose for FY 2019

The overall number of approved CW-1 permits fell from a high of 13,581  for fiscal year 2016 to 9,016 for fiscal year 2018. The number of approved  permits rose by 23 percent for fiscal year 2019 to 11,093. However, the  number of approved CW-1 permits for 2019 was about 2,000 below the  updated 2019 cap established in 2018. As figure 12 shows, the number  of CW-1 permits approved by USCIS for fiscal years 2012 to 2015  remained well under the annual numerical limits and exceeded or neared  those limits for fiscal years 2016 through 2018.

Most CW-1 Permit Holders Were Born in the Philippines or China and Most Commonly Worked in Building or Food Services in Fiscal Year 2019

According to USCIS data, most individuals with approved CW-1 permits  for fiscal year 2019 were born in the Philippines or China. In addition, as  table 2 shows, the number of permits approved for workers born in China  was four times higher for fiscal years 2016 and 2017 than for fiscal year  2015, although that number fell by more than half for fiscal year 2018. As  we reported in 2017, firms involved in building the casino in Saipan have  primarily employed Chinese workers.

CW-1 permit data for fiscal year 2019 show that the CW-1 permit holders  most commonly worked in building service or food service. See table 3 for  the top 10 occupations for CW-1 permits for 2015 through 2019 based on  2019’s top 10 occupations.

Construction Worker Constraints Continue

In 2017, Congress amended the CNRA to, among other things, restrict  future CW-1 permits for workers in construction and extraction  occupations (as defined in the U.S. Department of Labor’s Standard  Occupational Classification system) to allow extensions only of those  permits first issued before October 1, 2015. This restriction was later  modified in 2018 to only allow permits for construction and extraction  occupations to be issued for those who qualified as long-term workers,  those being workers who were admitted as CW-1 workers during fiscal  year 2015 and during every subsequent fiscal year beginning before July  24, 2018. The number of CW-1 permits for construction trades fell from  3,119 for fiscal year 2017 to 347 for fiscal year 2019 (see table 3 above).

According to CNMI officials, the islands continue to rebuild following the  devastation of Super Typhoon Yutu in late 2018. These officials noted  that one of their challenges is the limited number of construction workers.

We have previously reported on the limited number of construction  workers in the CNMI.

In 2017, when Congress restricted the use of CW-1 permits for the  construction trade, employers could continue to petition for construction  workers using H-2B visas. In January 2019, because of concerns about  overstays and human trafficking, DHS removed the Philippines from the  list of countries eligible for the H-2B program. CNMI government  officials, among others, had previously voiced concerns that the removal  of the Philippines from the list would make it more difficult to hire  construction workers in the aftermath of Super Typhoon Yutu.

On September 24, 2019, a bill, H.R.4479—the Disaster Recovery  Workforce Act, was introduced in the House of Representatives that  would increase by 3,000 the number of CW-1 permits available for  construction and extraction occupations for fiscal years 2020 through  2022, and also included an exception to the restriction on issuing such  permits to individuals other than long-term workers for those fiscal years.  On December 20, 2019, an amended version of this bill, which retained  the 3,000 permit increase and the exception, was signed into law as part  of the Further Consolidated Appropriations Act, 2020.

Fewer Than a Quarter of FY 2019 CW-1 Permit Holders Had Maintained Continuous Employment in the CNMI since 2015

As provided in Public Law 115-218, long-term workers may obtain CW-1  permits valid for up to 3 years and may renew their permits for up to 3  years during the transition program. About 23 percent of FY 2019 CW-1  permit holders had maintained continuous employment in the CNMI since  2015. USCIS CW-1 permit data for fiscal years 2015 through 2019 show  that, of the 11,093 foreign workers with CW-1 permits approved by  USCIS for fiscal year 2019, 2,517 workers (22.7 percent) had maintained  continuous employment in the CNMI since fiscal year 2015, as shown in  table 4. Public Law 115-218 defines a long-term worker as an alien who  was admitted to the CNMI as a CW-1 worker during fiscal year 2015 and  every subsequent fiscal year prior to enactment of the law in 2018.

We provided a draft of this product to the CNMI government, and the U.S.  Departments of Commerce, Homeland Security, and the Interior for  comment. The CNMI government and the Department of the Interior told  us they had no comments on the draft report. The Departments of  Commerce and Homeland Security provided technical comments, which  we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Governor of the CNMI, the Secretary of Commerce, the  Secretary of Homeland Security, and the Secretary of the Interior. In  addition, the report will be available at no charge on the GAO website at  http://www.gao.gov.

If you and your staff have any questions about this report, please contact  me at (202) 512-3149 or gootnickd@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: Objectives, Scope, and Methodology

The Northern Mariana Islands U.S. Workforce Act of 2018 included a  provision for GAO to biennially report on the ratio between United States  workers and other workers in the Commonwealth of the Northern Mariana  Islands (CNMI) workforce during each of the previous 5 calendar years.  This report examines (1) economic trends in the CNMI and (2) trends in  the composition of the CNMI workforce, including the ratio of United  States workers to foreign workers in the CNMI during the previous 5  calendar years.

To examine the trends in the CNMI economy, we reviewed prior GAO  reports and we obtained and analyzed data from the Department of  Commerce’s Bureau of Economic Analysis (BEA) on the Gross Domestic  Product (GDP) of the CNMI, including contributions to GDP by select  industries, for calendar years 2007 through 2018. We converted the GDP  figures from 2009 base year dollars to 2018 base year dollars. We also  obtained and analyzed data on visitor arrivals from the Marianas Visitor  Authority for fiscal years 2005 through 2019. We compared the data  against data we have previously reported. As it relates to visitor arrivals,  we discussed with officials from the Mariana Visitors Authority whether  Super Typhoon Yutu disrupted the collection of data. All data were  deemed reliable for our purposes. To examine the CNMI casinos, we  reviewed annual reports from the Saipan casino operator, U.S. and CNMI  government documents, press releases and news reports. We also  interviewed CNMI government officials from the Departments of Finance  and Labor, the Commonwealth Casino Commission, and a casino  representative in Saipan, and reviewed documents from U.S. government  agencies, to understand potential challenges that could affect the CNMI  economy.

To examine the trends in the CNMI workforce, we obtained and analyzed  data from the CNMI government and the Department of Homeland  Security (DHS). Specifically:

We obtained summary level tax data from the CNMI government on  December 18, 2019, which included information on the number of  workers in the CNMI and their citizenship, to examine the ratio  between United States and foreign workers in the CNMI workforce.  These data were compiled by the CNMI Department of Finance, and  were rolled up to provide counts of workers based on the workers’  reported citizenship. The data available for inclusion in this report do  not match the definition of United States worker established in the  2018 Act. The Act defines a United States worker as any worker who  is: a citizen or national of the United States; an alien who has been  lawfully admitted for permanent residence; or a citizen of the Marshall  Islands, the Federated States of Micronesia, or the Republic of Palau  who has been lawfully admitted to the United States pursuant to their  respective compacts of free association. In 2018, the CNMI  government began collecting data on worker visa status recorded on  employee tax documents filed by the employer. But about one-third of  collected tax forms did not include information about the visa type or  status of the worker. Therefore, with incomplete data, we could not  identify people lawfully admitted for permanent residence who remain  foreign citizens. The summary-level citizenship data have been used  in prior GAO reports. We reviewed those reports to ensure that the  data were being collected using the same procedures as in the past,  and we were using the data in the same manner. We also interviewed  knowledgeable CNMI officials about the data collection methods and  how the data were extracted from CNMI government data systems,  and checked available documentation from those prior GAO reports to  confirm our use of them. We found the data were sufficiently reliable  for our purposes of summarizing the numbers of United States  workers and foreign workers.

We obtained record-level data (such as worker’s name, worker’s date  of birth, and petition receipt number) from DHS’s U.S. Citizenship and  Immigration Services (USCIS) for fiscal years 2012 through 2019 to  examine CNMI-Only Transitional Worker (CW-1) program information  on workers since the program began. We compared the annual  number of approved CW-1 permits with the annual numerical limit, or  cap, on CW-1 permits that USCIS set for fiscal years 2012 through  2019. Using computerized algorithms, we analyzed the data for key  characteristics of workers who were granted CW-1 permits, such as  years of continuous employment in the CNMI. To assess the reliability  of the USCIS data, we tested the data electronically to identify and  resolve inconsistencies in personally identifiable information for permit  holders and to ensure accuracy in tracking these individuals over  time, and we discussed our results with USCIS officials. We have  previously used the same methods for assessing the reliability of this  data, and USCIS had agreed with that methodology. We determined  that the USCIS data were sufficiently reliable for our purposes of  reporting on characteristics of CW-1 permit holders for fiscal year  2019 and for identifying trends over time.

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Emil Friberg (Assistant Director),  Joshua Akery, Kathryn H. Bernet, Martin de Alteriis, Christopher Hayes  (Analyst in Charge), Christopher Keblitis, Andrew Kurtzman, Moon Parks,  Aldo Salerno, and Alexander Welsh made key contributions to this report.

The Commonwealth of the Northern Mariana Islands is a U.S territory in the Pacific. It has been exempt from some U.S. immigration and other laws, but is transitioning to the U.S. immigration system. We reviewed trends in its workforce and economy.

The ratio of U.S. to foreign workers remained around 50% from 2014-2018

GDP increased about 28% in 2016 and 26% in 2017, which coincided with the opening of a casino

However, the economy contracted 20% after a devastating 2018 typhoon

The casino has been cited by several federal agencies for unfair labor practices, and its financial reporting raises questions about its viability