March 9, 2000

The Honorable Spencer Abraham
United States Senate
Washington, DC 205 10 

Dear Senator Abraham:

Thank you for your letter of February 25 concerning three issues relating to the KPMG H-1B audit. We appreciate your staff's continued interest in the audit and I want to address each of your concerns.

Concern: Counting all approved petitions in which 2A and 4A¹ are checked will automatically include in the count any such individual who is processed abroad. Petitions for individuals who are already in H-1B status and who are changing employers should not count against the numerical limitations, regardless of where the processing is done. To address this issue, your staff suggested we review the supplements attached to the petition to help identify those individuals with previous H-IB status who were counted against the cap in FY 1999. You have asked for an explanation of the instructions we provided EPMG for this supplemental review.

To ensure that we fully addressed this issue and that the KPMG audit stayed on track, the Office of Internal Audit assembled a team to perform a complete review of all supplemental forms in KPMG's sample. The objective was to determine if information contained on the supplement to the H-1B petition would have caused a change to part 2 of the petition. Each supplemental form was examined to determine whether the alien had current or prior H-1B status. For your information, of the 1,516 petitions sampled that had been counted against the Fiscal Year (FY) 1999 cap, 44 (2.9 percent) of the beneficiaries had prior H-1B status noted on the supplemental form.  Three of the beneficiaries were still in H-1B status at the time of the petition, and as a result should not have been applied against the cap for FY 1999. In each of these cases, however, Block 2 of the form had been incorrectly marked and not revised based on the adjudicator's review. The remaining 41 petitions covered individuals who gave up their H-1B status by leaving the country (27) or changing their status to a classification other than H-1B while remaining in the country (14). For the remaining 1,472 petitions reviewed (97.1 percent), the beneficiary had never had H-1B status. The impact of this analysis on the FY 1999 cap will be disclosed in KMPGs final report.

Concern: The KPMG's procedures for identifying multiple petitions for the same beneficiary are too stringent and would miss instances involving the same individual where there are variations of spelling. Your staff recommended that petitions with identical dates of birth should be screened for possible duplicates.

The KPMG will screen data by country and dates of birth to identify other possible duplicates. The results of this step will be discussed in the final report.

Concern: Since INS' methodology is to count approved petitions without regard to whether an individual actually used the H-1B visa, this counts individuals against the cap who may not have worked in the United States. Your staff suggested we instruct KPMG to, at a minimum, call a subset of companies to estimate what percentage of cases involving approved H-1B petitions had instances of individuals who did not actually show up for work and use the visa (and thus should not be counted against the numerical limitation.)

We did not ask KPMG to include this within the scope of their work because there is no statutory or regulatory requirement to only count people against the cap who show up for work. 8 CFR § 214.2 (h)(8)(D)(ii)(A) states that only aliens issued visas or otherwise provided nonimmigrant status will be counted for purposes of the numerical limitation. In accordance with implementing regulations, promulgated in 1991, the cap is based on approved petitions filed by U.S. employers on behalf of H-1B nonimmigrant aliens with certain modifications. 8 CFR § 214.2 (h)(8)(D)(ii)(D) states that when an approved petition is not used because the alien does not apply for admission to the United States, the employer shall notify the INS so the petition approval can be revoked, and the unused number, if applicable, can be returned to the fiscal year allocation. Contacting employers would facilitate an assessment of their compliance with the regulation, but the results could not be used to adjust the FY 1999 number. At this time we are bound by existing regulations, but we will revisit this issue in our upcoming proposed rulemaking.

We will continue to consult with you regarding KPMG's progress with the audit. If you require additional information about our efforts to improve the H-1B programs, please let me know.

Sincerely,

/s/Doris Meissner