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INS, DEPARTMENT OF JUSTICE RESPOND TO H-1B COUNTING CONCERNS
Both the INS and the Department of Justice have issued letters to Senator Spencer Abraham, responding to his concerns about the accuracy of the H-1B visa count.  
The INS addressed three specific points in its letter:  
the possibility of incorrectly counting someone toward the cap who already has H-1B status but is obtaining the visa at a consulate abroad, 
counting petitions granted for employment that never occurred, and 
inaccurate counting caused by the use of multiple names by a single beneficiary.  
On the first issue, the INS noted that of a sample of 1516 petitions, only 44 indicated that the beneficiary had previously held H-1B status, and of these, 41 had relinquished that status prior to obtaining the new visa, leaving only three that were improperly counted toward the cap.  With respect to issue number two, the INS agreed to adopt Sen. Abraham’s suggestion that beneficiaries be matched by date and country of birth rather than name alone.  Finally, on the issue of counting petitions in which employment never occurred, the INS responded that there is no statutory or regulatory authority by which these cases can be exempted from the cap, because the cap is based on the number of petitions approved, not the number of visas issued.  For such a case to not be counted toward the cap, the employer would have to ask the INS to revoke the petition, thus freeing that visa.  The INS did say, however, that it would revisit this issue next time it promulgates new regulations, which it is planning on doing this spring. 
The Department of Justice letter began with an overview of the H-1B counting requirements and the procedures developed to comply with those requirements.  It then identified three areas in which there are systemic problems leading to inaccurate counts:  manual errors that result in revoked petitions being subtracted from the count twice, communication problems between the networks at each Service Center and the national database that have resulted in lost data, and test records in the national database that have been counted as approved petitions.  The Justice Department says it does not know the full impact of these problems, but expects the KPMG audit to address them.  The report from the audit is due in mid-April.  The Department notes that the INS is preparing new regulations, as well as revising the Form I-129 to make it clearer whether the beneficiary will be subject to the cap.