"Because of repeated changes in focus and direction, (the agency) has tended to duplicate previous modernization initiatives and has not demonstrated the ability to execute its planned strategy," states the report.

For instance, because information technology staff and assets were not centralized under the control of the agency's chief information officer, staff in field offices "continue to develop non-standard systems that may not integrate with the enterprise-wide architecture." As a result, some offices could not be upgraded to Windows XP, because locally developed software programs were not compatible with the new system, investigators found.

They added that work to transfer management of the staff and assets to the chief information officer had stalled.

They also noted that there are neither risk-management nor security plans for the modernization process, meaning that there has been no serious assessment by security professionals of the potential vulnerabilities the proposed changes might create.

Michael Maxwell, the former head of the agency's office of security and investigations, who sought whistle-blower protection after revealing security problems at the agency to Congress, told United Press International that he had been "concerned that foreign agencies might be able to hack into our computer systems."

"Because the system wasn't modernized, it was vulnerable," he said. "We know that the Departments of Defense and Commerce were penetrated last year (by suspected Chinese military hackers), who's to say that (U.S. Citizenship and Immigration Services) isn't on that list?"

Maxwell said hackers would be able to get immigration benefits for foreign agents or even terrorists if they could successfully penetrate and manipulate the agency's systems.

"You could, in theory, make someone a U.S. citizen," he said.

The inspector general's report paints a picture of repeated, overlapping efforts to develop a modernization strategy, but says that the agency often did not implement its own plans.

"By repeatedly revising and delaying implementation" of pilot modernization programs, like a new system for managing the HIB visa for technology workers, management at the agency "may be losing momentum and user confidence in its transformation approach."

In comments on the report, the agency said it "generally agree(d) with your summary as to the status of our progress," but stressed that "transforming our business processes coupled with updating our information technology remains a high priority."

The agency, a part of the Department of Homeland Security, processes requests from foreigners in the United States for so-called Green Cards -- legal permanent residency -- and naturalization as U.S. citizens and other immigration benefits.

If Congress enacts any immigration reform legislation, the agency will face two huge tasks. Firstly, it will be responsible for administering the "path to earned citizenship" -- derided by opponents as an amnesty -- for undocumented workers who want to regularize their status. In addition, the agency will have to handle any new verification process the law mandates to get employers to check the immigration status of workers they hire.

Previously part of the notoriously inefficient Immigration and Naturalization Service, which was broken up and folded into Homeland Security in 2003, U.S. Citizenship and Immigration Services inherited a decades-old, paper-based, manual system for processing immigration benefits.

In September 2005 the inspector general found the agency's "processes were largely manual, paper-based, and duplicative, resulting in an ineffective use of human and financial resources." That report recommended the agency develop an information technology modernization strategy to computerize its records and processing.

But this latest review shows the agency is still wrestling with the changes it needs to make. U.S. Citizenship and Immigration Services "remains entrenched in a cycle of continual planning, with limited progress towards achieving its long-term transformational goals."

Without an effective plan to overhaul its business processes and match computer upgrades to needed tasks in adjudicating applications, the new report notes, the agency will not get the money for improvements.

"According to the 2007 (Homeland Security) Appropriations Act, transformation funding may not be obligated until the Senate and the House Committees receive and approve a ... transformation strategic plan that has been approved by the Secretary of Homeland Security and reviewed by the Government Accountability Office."

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