This report highlights Customs strategic initiatives, performance goals, mission accomplishments, and presents related financial management information that represents an ongoing effort to provide useful information to internal and external customers. Because of Customs responsibilities at the Nation’s borders, Customs was put on a priority mission of protecting America against the threat of international terrorism. Combating terrorism is the number one priority and will continue to be in the foreseeable future. Other Customs responsibilities are facilitating the legitimate trade and commerce crucial to the Nation’s economy, defending the country from illegal drugs, defending children from predators that roam the Internet, and developing and using world-class tools and technology. In addition to maintaining its seizures of large quantities of cocaine and marijuana, Customs seizures of heroin and ecstasy increased by approximately 6 percent and 4 percent, respectively, compared to FY 2001 levels. Customs has conducted follow-up investigations that have identified and led to the prosecution of key members of drug smuggling and money laundering organizations. Trade entries, the number of individual commercial transactions processed by Customs, increased from 23.7 million entries in FY 2001 to 24.9 million. Tremendous progress was made in FY 2002 to continue evolving Customs into leading edge systems technology. The Office of Finance helped to secure $300 million in appropriations and provide procurement expertise for the continued development and implementation of the Automated Commercial Environment (ACE). ACE will replace Customs Automated Commercial System (ACS) and serve as a state-of-the art platform for fully integrated information management across all Customs operations. Efforts to modernize customs financial systems continued with the implementation of the SAP/R3 first release of integrated financial management software (Real Property) and the development of plans for the second release (Procurement and Personal Property). Full implementation will remedy core financial systems weaknesses, resulting in the improved integration of financial systems and the production of more reliable, timely financial information and statements.