    Homeland Security: Management of First Responder Grant Programs
    Has Improved, but Challenges Remain (02-FEB-05, GAO-05-121).

    The Office for Domestic Preparedness (ODP)--originally
    established in 1998 within the Department of Justice to help
    state and local first responders acquire specialized training and
    equipment needed to respond to terrorist incidents--was
    transferred to the Department of Homeland Security upon its
    creation in March 2003. After September 11, 2001, the scope and
    size of ODP's grant programs expanded. For example, from fiscal
    year 2001 through fiscal year 2003, ODP grants awarded to states
    and some urban areas grew from about $91 million to about $2.7
    billion. This growth raised questions about the ability of ODP
    and states to ensure that the domestic preparedness grant
    programs--including statewide and urban area grants--are managed
    effectively and efficiently. GAO addressed (1) how statewide and
    urban area grants were administered in fiscal years 2002 and 2003
    so that ODP could ensure that grant funds were spent in
    accordance with grant guidance and state preparedness planning
    and (2) what time frames Congress and ODP established for
    awarding and distributing grants, and how time frames affected
    the grant cycle.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-05-121
        ACCNO:   A16736
      TITLE:     Homeland Security: Management of First Responder Grant
    Programs Has Improved, but Challenges Remain
         DATE:   02/02/2005
      SUBJECT:   Counterterrorism
    	     Emergency preparedness
    	     Federal aid to localities
    	     Federal aid to states
    	     Grant administration
    	     Grants to states
    	     National preparedness
    	     Federal agency reorganization
    	     Intergovernmental relations
    	     Grant monitoring
    	     Grants to local governments
    	     First responders
    	     DHS Urban Area Security Initiative
    	     State Homeland Security Grant Programs

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    GAO-05-121

                     United States Government Accountability Office

    Report to the Chairman, Committee on

    GAO

                        Appropriations, House of Representatives

    February 2005

    HOMELAND SECURITY

    Management of First Responder Grant Programs Has Improved, but Challenges Remain

    GAO-05-121

    HOMELAND SECURITY

    Management of First Responder Grant Programs Has Improved, but Challenges
    Remain

      What GAO Found

    ODP has established and refined grant award procedures for states and
    localities to improve accountability in state preparedness planning. For
    fiscal years 2002 and 2003, ODP developed procedures and guidelines for
    awarding statewide and urban area grants to states and for determining how
    states and localities could expend funds and seek reimbursement for first
    responder equipment or services. ODP gave states flexibility by allowing
    them to determine how grant funds were to be managed and distributed
    within their states. In fiscal year 2003, ODP required states to update
    homeland security strategies and related needs assessments prepared in
    earlier years. These efforts are intended to guide states and localities
    in targeting grant funds. ODP also took steps to improve grant oversight
    procedures. Finally, to help meet mandates contained in a presidential
    directive, ODP has begun drafting national preparedness standards to
    identify and assess gaps in first responder capabilities on a national
    basis.

    Congress and ODP have acted to expedite grant awards by setting time
    limits for grant application, award, and distribution processes. For
    fiscal year 2002 through February 2003, the appropriations statutes did
    not require ODP to award grant funds to states within a specific time
    frame. Then, in April 2003, the supplemental appropriations act imposed
    new deadlines on ODP and the states. As a result, ODP reported that all
    states submitted grant applications within the mandated 30 days of the
    grant announcement, and that over 90 percent of grants were awarded within
    the mandated 15 days of receipt of the applications. ODP also took steps
    to expedite the transfer of funds from states to local jurisdictions.
    Nevertheless, the ability of states and localities to spend grant funds
    expeditiously was complicated by the need to adhere to various legal and
    procurement requirements. ODP is identifying best practices to help states
    address the issue.

    In reviewing a draft of the report, the Department of Homeland Security
    generally agreed with GAO's findings; however, it questioned whether the
    report's title adequately reflected the agency's progress in meeting grant
    management challenges.

    United States Government Accountability Office

    Contents

    Letter 1
    Results in Brief 4
    Background  5
    ODP Established Grant Award Procedures for States and Localities   That
    Support Efforts to Improve Accountability in State   Preparedness Planning
         9
    Congress, ODP, States, and Localities Have Acted to Expedite  Grant
    Awards, but Challenges Remain  24
    Concluding Observations 30
    Agency Comments and Our Evaluation  31
    Appendix IV Comments from the Department of Homeland Security 45
    Appendix V Related GAO Products Appendix VI GAO Contacts and Staff
    Acknowledgments 49
    GAO Contacts 49
    Staff Acknowledgments 49

    Appendix I Scope and Methodology

    Appendix II  Fiscal Years 2002 and 2003 SDPP/SHSGP and UASI Funding and
    Draw Downs by State

    Appendix III Grant Award, Distribution, and Reimbursement Process for
    Selected States and Local Jurisdictions

    Tables
                  Table 1: ODP Grant Program Funding for Fiscal Years 2002 and
               2003                                                             7
                 Table 2: Appropriations Acts for Fiscal Years 2002 and 2003
                         SDPP/SHSGP and UASI I and II Grant Programs            9
                 Table 3: Fiscal Year 2002 State Domestic Preparedness Program
                           (SDPP) and Fiscal Year 2003 State Homeland Security
                           Grant Programs (SHSGP) Funding and Draw Downs as of
               July 31, 2004                                                   36
                     Table 4: Fiscal Year 2003 Urban Areas Security Initiative
                                                                      (UASI) I
                       and II Grant Funding and Draw Downs as of July 31, 2004 38
    Figures
                    Figure 1: ODP and OC Grant Management and Monitoring        6
               Figure 2: SDPP/SHSGP and UASI II Grant Award, Distribution, and
                         Reimbursement Processes for First Responder Equipment 11
                  Figure 3: State Homeland Security Assessment and Strategy
                        Development Process for Fiscal Years 1999 through 2003 14
                 Figure 4: Key Dates Associated with FY 2002 State Domestic
                           Preparedness Program Grant Distribution for State A 40
                 Figure 5: Key Dates Associated with FY 2002 State Domestic
                           Preparedness Program Grant Distribution for State B 41
                 Figure 6: Key Dates Associated with FY 2003 State Homeland
                       Security Grant Program I Grant Distribution for State B 42
                 Figure 7: Key Dates Associated with FY 2003 State Homeland
                      Security Grant Program II Grant Distribution for State B 43
                 Figure 8: Key Dates Associated with FY 2003 State Homeland
                       Security Grant Program I Grant Distribution for State C 44

    Abbreviations

    CBRNE            chemical, biological, radiological, nuclear, or explosive
    DHS           Department of Homeland Security
    GAO           Government Accountability Office
    HSPD-8        Homeland Security Presidential Directive-8
    IG            Inspector General
    ISIP          Initial Strategy Implementation Plans
    MOU           memorandum of understanding
    OC            Office of the Comptroller
    ODP           Office for Domestic Preparedness
    OJP           Office of Justice Programs
    SDPP          State Domestic Preparedness Program
    SHSGP         State Homeland Security Grant Program
    SLGCP              Office of State and Local Government Coordination and
                     Preparedness
    UASI          Urban Areas Security Initiative

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office Washington, DC 20548

    February 2, 2005

    The Honorable Jerry Lewis Chairman  Committee on Appropriations House of
    Representatives

    Dear Mr. Chairman:

    The terrorist attacks of September 11, 2001, placed enormous demands  upon
    the capacities of state and local police and fire departments,  emergency
    medical and public health services, and other first responders.  After the
    attacks, Congress, federal agencies, state and local governments,  and a
    range of independent research organizations acknowledged that  additional
    resources and intergovernmental coordination were needed to  ensure that
    state and local first responders would be better prepared to  respond to
    future domestic terrorist threats or attacks.

    The Department of Justice established the Office for Domestic
        Preparedness (ODP) in 1998 within the Office of Justice Programs (OJP)
        to assist state and local first responders in acquiring specialized
    training  and equipment needed to respond to and manage terrorist
    incidents  involving weapons of mass destruction. ODP, which was
    transferred to the  Department of Homeland Security (DHS) upon its
    creation in March 2003, 1  has been a principal source of domestic
    preparedness grant funds. 2 These grants are a means of achieving an
    important goal-enhancing the ability  of first responders to prevent,
    prepare for, respond to, and recover from  terrorist incidents with
    well-planned and well-coordinated efforts that  involve police, fire,
    emergency medical, public health, and other personnel  from multiple
    jurisdictions. Since the events of September 11, the amount  of grant
    funds awarded and managed by ODP has grown significantly. For  example, in
    fiscal year 2001, ODP awarded about $91 million in domestic  preparedness
    grants. In fiscal year 2003, ODP awarded about $2.1 billion  through its
    State Homeland Security Grant Programs (SHSGP) I and II and  an additional
    $596 million for Urban Areas Security Initiative (UASI)

    1

    Homeland Security Act of 2002 S: 403(5), 6 U.S.C. S: 203(5) (Supp. 2002).

    2

    Grant funds for domestic preparedness programs for state and local
    governments are also provided by other DHS components and other agencies,
    including the Departments of Justice and Health and Human Services.

        Page 1 GAO-05-121 Homeland Security

    grants I and II. 3 The scope of ODP's grant programs expanded as well,
    from funding only first responder equipment in fiscal year 2001 to funding
    a range of preparedness planning activities, exercises, training,
    equipment purchases, and related administrative costs in fiscal year 2003.

    In your request, you raised questions about how, given the growth in
    funding, ODP, states, 4 and local jurisdictions work together to ensure
    that grant funds are spent in accordance with both ODP's grant guidance
    and the state and urban area homeland security strategies that ODP
    required states to develop as a condition of receiving grant funds. In
    response to your request, we first briefed your office on ODP's structure
    and processes for program and financial management of its grants and its
    monitoring policies and processes. In this report, we address two other
    issues:

    (1) How were SHSGP and UASI grants administered in fiscal years 2002 and
    2003 so that ODP could ensure that grant funds were spent in accordance
    with grant guidance and state preparedness planning? (2) What time frames
    did Congress and ODP establish for awarding and distributing grants, and
    how did these time frames affect the grant cycle?

    In addition to this work, we have recently issued other reports and
    delivered congressional testimonies on issues relating to federal funding
    and oversight of grants for first responders, which include ODP grants as
    well as grants from other federal sources. Among other things, we reported
    that a major challenge in managing first responder grants is balancing two
    goals: (1) minimizing the time it takes to distribute grant funds to state
    and local first responders and (2) ensuring appropriate planning and
    accountability for effective use of the funds. 5 (See appendix V for the
    list of Related GAO Products.)

    3

    SHSGP I and II grants are formula grants that provide each state a minimum
    base amount plus an additional amount based on the state's population.
    UASI I and II grants are awarded to selected urban areas across the nation
    on the basis of such factors as population density, critical
    infrastructure, and current threat estimates. In fiscal year 2003, SHSGP
    and UASI grant programs were designated as I or II because they were
    funded by different appropriations in the same fiscal year.

    4

    For this report, the term "states" refers to the 50 states; the District
    of Columbia; the Commonwealths of Puerto Rico and the Northern Mariana
    Islands; American Samoa; Guam; and the U.S. Virgin Islands.

    5

    See GAO, Emergency Preparedness: Federal Funds for First Responders,
    GAO-04-788T (Washington, D.C.: May 13, 2004).

    To address the objectives in this report, we met with officials from ODP
    and selected states and local jurisdictions to obtain information about
    the grant management process. 6 We identified 25 domestic preparedness
    grant programs managed by ODP in fiscal years 2002 and 2003, 7 and for our
    detailed review, we selected the five largest in terms of federal funding
    provided to state and local jurisdictions. As part of our review, we also
    selected five states (Arizona, California, Florida, Missouri, and
    Pennsylvania) and 19 local jurisdictions within those states that have
    received state and urban area grants. The five states were selected on the
    basis of the amount of ODP grant funding received, population size, and
    other factors. The local jurisdictions were selected for a more detailed
    analysis of grant administration. We collected and analyzed grant data
    from ODP. Specifically, we obtained and analyzed data from ODP on the time
    frames associated with the grant award and distribution processes. We
    reviewed these data for obvious inconsistency errors and completeness and
    compared these data for the five selected states with hard-copy documents
    we obtained from these states. When we found discrepancies, we brought
    them to the attention of ODP and state and local officials and worked with
    them to correct the discrepancies before conducting our analyses. In
    addition, we obtained and analyzed data on the number of ODP's
    office-based and on-site monitoring reviews conducted in fiscal year 2004.
    We also reviewed these data for obvious inconsistency errors and
    completeness and compared these data with onsite monitoring reports
    prepared and provided by ODP. From these assessments, we determined that
    the grant data were sufficiently reliable for the purposes of this report.

    We also reviewed relevant reports and studies on homeland security and
    domestic preparedness. We conducted our work from November 2003 through
    November 2004 in accordance with generally accepted government auditing
    standards. (See appendix I for more details on our scope and methodology.)

    6

    In this report, the terms "local jurisdictions" and "localities" are used
    interchangeably to refer to diverse political and governmental entities,
    such as counties, cities, towns, municipalities, Indian tribes, and
    others.

    7

    In addition to SDPP and SHSGP and UASI I and II grant programs, some of
    the other grant programs are for the same or similar purposes and are
    counted as separate grants because they are funded by separate
    appropriations in different years.

    Page 3 GAO-05-121 Homeland Security

      Results in Brief

    ODP has established and refined grant award procedures for states and
    localities that have supported efforts to improve accountability in the
    state preparedness planning process. For fiscal years 2002 and 2003, ODP
    developed procedures and guidelines for awarding SHSGP and UASI grants to
    states and for determining how states and localities could expend funds
    and seek reimbursement for first responder equipment or services they
    purchased. As part of this process, ODP gave states flexibility by
    allowing them to determine how grant funds were to be managed and
    distributed within their states and whether purchases would be made
    locally or at the state level. In fiscal year 2003, ODP also required
    states to update homeland security strategies and related needs
    assessments prepared in earlier years. These strategies are intended to
    guide state and local jurisdictions in targeting grant funds. As directed
    by statute, ODP required states to submit these updated strategies to ODP
    for approval in order to receive fiscal year 2004 grant funds. In tandem
    with this effort, ODP revised its grant-reporting method, moving away from
    requiring states, localities, and urban areas to submit itemized lists of
    first responder equipment they plan to purchase toward a more
    results-based approach, whereby grant managers at all levels must
    demonstrate how grant expenditures are linked to larger projects that
    support goals in the states' homeland security strategies. ODP also took
    steps to improve grant oversight procedures in part by setting new goals
    in fiscal year 2004 for monitoring states' progress toward meeting
    preparedness goals and objectives in their homeland security strategies.
    ODP planned to visit all 56 grantees at least once a year. ODP completed
    44 of 56 planned visits to grantees in fiscal year 2004. In addition, ODP
    cited staffing challenges in filling all of its authorized positions,
    which have affected grant management; ODP has worked to fill federal
    vacancies. ODP also is addressing concerns that some states have about the
    accuracy of the needs assessments upon which the fiscal year 2003 state
    homeland security strategies are based, citing, among other things, a
    mismatch between local jurisdictions' estimates of need and the states'
    estimates. Finally, as part of a broader effort to meet mandates contained
    in a presidential directive, ODP has begun drafting national preparedness
    standards to identify and assess gaps in first responder capabilities on a
    national basis.

    Congress, ODP, states, and localities have acted to expedite grant awards
    by setting time limits for the grant application, award, and distribution
    processes and by instituting other procedures. For all of fiscal year 2002
    through February 2003, the appropriations statutes did not require ODP to
    award grant funds to states within a specific time frame. For fiscal year
    2002, ODP took roughly 4 months to make applications available to states.

    Page 4 GAO-05-121 Homeland Security

    In April 2003, the supplemental appropriations act imposed new deadlines
    on ODP and the states. As a result, ODP made the grant application
    available within the mandated 15 days of the congressional appropriation
    for the grant cycle, and all states returned their applications within 30
    days of the grant announcement. ODP reported that over 90 percent of grant
    awards were made to the states within 14 days of receipt of state
    applications. ODP also took steps to expedite the transfer of funds from
    states to local jurisdictions, allowing states, for example, to transfer
    grants to localities before all required grant application documentation
    had been submitted to ODP. Nevertheless, the ability of states and
    localities to spend grant funds expeditiously was complicated by the need
    to adhere to state and local legal and procurement requirements and
    approval processes, which in some cases added months to the purchasing
    process. Some states have modified their procurement practices, and ODP is
    identifying best practices to aid in the effort.

    After reviewing a draft of this report, DHS generally agreed with our
    findings and provided technical comments, which were incorporated as
    appropriate. The agency also expressed the view that progress made in
    addressing challenges related to managing first responder grant programs
    was not appropriately reflected in the report's title. We disagree. The
    agency's comments are in appendix IV.

    When DHS was created in March 2003, ODP was transferred from the

    Justice Department's OJP to DHS's Directorate of Border and Transportation
    Security. In March 2004, the Secretary of Homeland Security consolidated
    ODP with the Office of State and Local Government Coordination to form the
    Office of State and Local Government Coordination and Preparedness
    (SLGCP). 8 In addition, other preparedness grant programs from agencies
    within DHS were transferred to SLGCP. 9 SLGCP, which reports directly to
    the Secretary, was created to provide a "one-stop shop" for the numerous
    federal preparedness initiatives applicable to state and local first
    responders. As shown in figure 1, while

    8

    For the purpose of this report, we cite ODP in discussing the first
    responder grant management functions of SLGCP.

    9

    Among the grant programs transferred were the following: Assistance to
    Firefighters Grant Program, Citizen Corps Program, and Emergency
    Management Performance Grants from the Federal Emergency Management Agency
    within the Emergency Preparedness and Response Directorate; and Port
    Security Grant Program from the Transportation Security Administration
    within the Border and Transportation Security Directorate. In addition, a
    new program, the Law Enforcement Terrorism Prevention Program, was
    initiated in SLGCP.

    SLGCP/ODP has program management and monitoring responsibility for
    domestic preparedness grants, it relies upon the Justice Department's
    Office of the Comptroller (OC) for grant fund distribution and assistance
    with financial management support, which includes financial monitoring.

                  Figure 1: ODP and OC Grant Management and Monitoring

    Source: GAO based on ODP and OC data. Copyright (c) Corel Corp. all rights
    reserved (image).

    Within ODP, the Preparedness Programs Division (formerly the State and
    Local Program Management Division) is specifically tasked with enhancing
    the capability of state and local emergency responders to prevent, deter,
    respond to, and recover from terrorist attacks involving the use of
    chemical, biological, radiological, nuclear, or explosive (CBRNE) weapons.
    For these purposes, ODP provides grant funds to the 50 states, the
    District of Columbia, the Commonwealths of Puerto Rico and the Northern
    Mariana Islands, American Samoa, the Virgin Islands, Guam, and selected
    urban areas. In addition to this grant funding for specialized equipment
    and other purposes, ODP provides direct training, exercises, technical
    assistance, and other counterterrorism expertise.

    Program Funding and During fiscal years 2002 and 2003, ODP managed 25
    grant programs Allocation for Fiscal Years totaling approximately $3.5
    billion. About $2.98 billion (85 percent) of the total ODP grant funds for
    both years was for statewide grants-the State

        2002 and 2003

    Domestic Preparedness Program (SDPP), which is a predecessor grant program
    to SHSGP, and SHSGP I and II-and grants targeted at selected urban areas
    (UASI I and II). The SDPP/SHSGP grant funds accounted for about 68 percent
    ($2.38 billion) and the UASI I and II grant funds about 17 percent ($596
    million). Table 1 shows the amounts provided for these and other ODP
    grants.

           Table 1: ODP Grant Program Funding for Fiscal Years 2002 and 2003

                                  Dollars in thousands

    Percent of total Grant program 2002 2003 Total funding

    a

                               SDPP $315,700 $315,700 9.1

    a

    SHSGP I $566,295 566,295

    a

    SHSGP II 1,500,000 1,500,000

    Total SDPP/SHSGP 315, 700 2,066,295 2,381,995

    a

    UASI I 96,351 96,351

    a

    UASI II 500,000 500,000

    a

    Total UASI I and II 596,351 596,351

    Total SDPP/SHSGP and UASI I and II 315, 700 2,662,646 2,978,346

    UASI-other 190,000c 190,000

    Other grants 119,979b 198,081d 318,060

          Total $435,679 $3,050,727 $3,486,406

    Source: ODP.

    a

    Program not funded in this year.

    b

    Includes the following five grant programs: Law Enforcement Enhancement
    Program, New York Equipment Replacement Program, National Domestic
    Preparedness Consortium, Homeland Defense Equipment Reuse Program Pilot
    Project Support Grant, and Domestic Preparedness Training and Technical
    Assistance Program-St. Petersburg College.

    Includes the following four grant programs: the UASI Port Security Grant
    Program, UASI Transit Security Grant Program, UASI Pilot Projects, and
    UASI Radiological Defense System.

    d

    Includes the following 11 grant programs: Counterterrorism Institute Grant
    Program, TOPOFF II, Washington Metropolitan Area Transit Authority,
    Airborne Imaging in Support of Emergency Operations, Testing and
    Evaluation of Emergency Response Equipment, Terrorism Early Alert and
    Strategic Planning System, Homeland Defense Equipment Reuse Program,
    Northern Virginia Emergency Response Coalition Grant Program, Domestic
    Preparedness Equipment Training and Technical Assistance Program, National
    Domestic Preparedness Consortium, and Multistate Anti-Terrorism
    Information Exchange Project.

    See appendix II for the SDPP/SHSGP grant funding awarded in fiscal years
    2002 and 2003 and the UASI I and II grant funding awarded in fiscal year
    2003.

    The SDPP/SHSGP grant programs expanded from funding equipment, exercises,
    and administrative activities in fiscal year 2002 to include, in fiscal
    year 2003, the cost of planning and training. The SDPP generally provided
    funding for advanced equipment, 10 exercises, and administrative
    activities. The SHSGP I provided, among other things, funding for
    specialized equipment, exercises, training, and planning and
    administrative costs. From a separate appropriation, the SHSGP II
    supplemented funding available through SHSGP I for basically the same
    purposes, but included separate funding for critical infrastructure
    protection. The SDPP/SHSGP grant funds were distributed using a base
    amount of 0.75 percent of the total allocation to each state, the District
    of Columbia, and the Commonwealth of Puerto Rico, and 0.25 percent of the
    total allocation to the Commonwealth of the Northern Mariana Islands,
    American Samoa, Guam, and the Virgin Islands, with the balance being
    distributed on a population-share basis. The UASI I grant funds were
    provided directly to seven selected urban areas to address the unique
    equipment, training, planning, and exercise needs of large high-threat
    urban areas and specifically, to assist in building an enhanced and
    sustainable capacity to prevent, respond, and recover from threats or acts
    of terrorism. From a separate appropriation, UASI II provided funding
    through the states (not directly) to 30 selected urban areas for basically
    the same purposes. 11 The UASI grant funds were awarded on the basis of
    the following factors: population density, critical infrastructure, and
    current threat estimates. 12 (See appendix II for the urban areas that
    received UASI I and II grant funds.) Table 2 shows the funding authority
    for these grant programs.

    10

    For the fiscal year 2002 SDPP, states and local jurisdictions were allowed
    to acquire advanced levels of first responder equipment, including bomb
    mitigation and remediation gear, remote sensing devices, and mass casualty
    decontamination equipment.

    11

    In fiscal year 2004, 50 urban areas received UASI grant funding.

    12

    Each of these factors was weighted in a linear formula; the results were
    ranked and used to calculate a proportional allocation of grant funds.

    Page 8 GAO-05-121 Homeland Security

      ODP Established Grant Award Procedures for States and Localities That Support
      Efforts to Improve Accountability in State Preparedness Planning

    Table 2: Appropriations Acts for Fiscal Years 2002 and 2003 SDPP/SHSGP and
    UASI I and II Grant Programs

                                       2002 2003

    Grant   Appropriations                       Appropriations
    program acts                  Date enacted   acts             Date enacted
    SDPP    Pub. L. No. 107-77a , Nov. 28, 2001,
                Pub. L. No. 107-117b Jan. 10, 2002
                                                    Pub. L. No.
    SHSGP I                                      108-7c          Feb. 20, 2003

    SHSGP II                                Pub. L. No. 108-11d  Apr. 16, 2003
    UASI I                                   Pub. L. No. 108-7c  Feb. 20, 2003
    UASI II                                 Pub. L. No. 108-11d  Apr. 16, 2003

    Source: Congressional legislation.

    a

    Departments of Commerce, Justice, and State, the Judiciary, and Related
    Agencies Appropriations Act, 2002.

    b

    Department of Defense and Emergency Supplemental Appropriations for
    Recovery from and Response to Terrorist Attacks on the United States Act,
    2002.

    c

    Consolidated Appropriations Resolution, 2003.

    d

    Emergency Wartime Supplemental Appropriations Act, 2003.

    Over time, ODP has developed and modified its procedures for awarding
    grants to states, governing how states distribute funds to local
    jurisdictions, and facilitating reimbursements for states and localities
    purchasing first responder equipment and services. ODP also developed
    requirements intended to hold states and localities accountable for how
    grant expenditures were planned, justified, expended, and tracked. These
    accountability-related requirements evolved over time. For instance, prior
    to fiscal year 2004, the states were primarily required to provide
    information on the specific items they and localities planned to purchase
    on the basis of ODP's evolving authorized equipment lists. In fiscal year
    2004, to better determine the impact of expenditures on preparedness
    efforts, ODP began placing more emphasis on results-based reporting of
    planned and actual grant expenditures. ODP instituted new state and local
    reporting requirements aimed at ensuring that grant expenditures would
    align with goals and objectives contained in state and urban area homeland
    security strategies. ODP also, over time, has stepped up its state
    grant-monitoring activities.

        ODP Gave States Flexibility in Administering and Distributing Grants

    For fiscal years 2002 and 2003, ODP developed procedures and guidelines
    for awarding SDPP/SHSGP and UASI grants to states that enabled states to
    distribute grant funds and states and localities to expend funds and seek
    reimbursement for first responder equipment or services they purchased
    directly. After enactment of appropriations for the grant programs, ODP
    developed and made available program guidelines including the grant
    application for each grant program. 13 With the exception of UASI I, once
    a grant application was submitted to and approved by ODP, ODP awarded
    grant funds directly to each state, which was required to designate a
    state administrative agency to administer the grant funds. 14 States in
    turn transferred or subgranted the funds to local jurisdictions 15 or
    urban areas, with a designated core city and county/counties. For UASI I
    grants, ODP awarded grant funds directly to selected urban areas (i.e.,
    selected cities). Figure 2 illustrates the main steps involved in the
    SDPP/SHSGP and UASI II grant cycle.

    13

    The applications are posted and must be submitted in OJP's Web-based
    Grants Management System.

    14

    For UASI I, the Chief Executive of each city was required to designate a
    program administering agency to administer the grant funds.

    15

    For SDPP and SHSGP I, states were required to provide 80 percent of their
    funding allocations for equipment to local jurisdictions. States were
    permitted to retain 20 percent of the equipment funds, and the
    pass-through requirement did not apply to other components of the grants.
    For SHSGP II and UASI II, states were required to provide at least 80
    percent of the total grant funding for all permissible purposes
    (equipment, exercises, training, and planning and administrative costs) to
    local jurisdictions. States were permitted to retain up to 20 percent of
    their total funding. For SHSGP II and UASI II, 3 percent of the total
    grant award could be used for administrative purposes.

     Figure 2: SDPP/SHSGP and UASI II Grant Award, Distribution, and Reimbursement
                        Processes for First Responder Equipment

    Grant award and distribution process Reimbursement process

    Source: GAO analysis of ODP and selected states' data.

    Note: The term "reimbursement" as used here includes the process by which
    states and localities may request and receive federal funds to pay
    invoices for goods or services before payment is due. Localities receive
    their funds through the states, which request the funds on behalf of the
    localities.

    For SDPP/SHSGP grant programs, ODP allowed the states flexibility in
    deciding how the grant programs were structured and implemented in their
    states. In general, states were allowed to determine such things as the
    following:

         o the formula for distributing grant funds to local jurisdictional
           units;
         o the definition of what constitutes a local jurisdiction eligible to
           receive funds, such as a multicounty area;
         o the organization or agency that would be designated to manage the
           grant program; and
         o whether the state or local jurisdictions would purchase grant-funded
           items for the local jurisdictions.

    UASI I grantees, for the most part, have had flexibilities similar to
    those of the states and could, in coordination with members of the Urban
    Area Working Group, 16 designate contiguous jurisdictions to receive grant
    funds. For UASI II, while the states subgranted the grant funds to
    selected urban areas, states retained responsibility for administering the
    grant program. The core city and county/counties worked with the state
    administrative agency to define the geographic borders of the urban area
    and coordinated with the Urban Area Working Group.

    Once the grant funds were awarded to the states and then subgranted to the
    local jurisdictions or urban areas, certain legal and procurement
    requirements had to be met, such as a city council needing to approve
    acceptance of grant awards. Once these requirements were satisfied,
    states, local jurisdictions, and urban areas could then obligate their
    funds for first responder equipment, exercises, training, and services.
    Generally, when a local jurisdiction or urban area directly incurred an
    expenditure for first responder equipment, it submitted related
    procurement documents, such as invoices, to the state. The state would
    then draw down the funds from the Justice Department's OJP. According to
    OJP, funds from the U.S. Treasury were usually deposited with the states'
    financial

    The Urban Area Working Group consists of points of contact from
    jurisdictions within the defined urban area. The working group is
    responsible for coordinating development and implementation of all program
    elements within the area.

    Page 12 GAO-05-121 Homeland Security

        States Updated Homeland Security Strategies to Guide Grant Spending, and ODP
        Revised Grant Reporting and Monitoring Procedures

    institution within 48 hours. The states, in turn, provided the funds to
    the local jurisdiction or urban area. 17

    In addition to the guidelines ODP developed for the grant award,
    distribution, and reimbursement process, ODP developed separate guidance
    that required every state to develop a homeland security strategy as a
    condition of receiving grant funds. Specifically, ODP required states to
    develop homeland security strategies that would provide a roadmap of where
    each state should target grant funds for fiscal years 1999 to 2001
    (subsequently extended to fiscal year 2003). To assist the states in
    developing these strategies, state agencies and local jurisdictions were
    directed to conduct needs assessments on the basis of their own threat and
    vulnerability assessments. The needs assessments were to include related
    equipment, training, exercise, technical assistance, and research and
    development needs. In addition, state and local officials were to identify
    current and required capabilities of first responders to help determine
    gaps in capabilities.

    ODP directed the states in fiscal year 2003 to update their homeland
    security strategies to better reflect post-September 11 realities and to
    identify progress on the priorities originally outlined in the initial
    strategies. 18 As with these initial strategies, the updated strategies
    included goals and objectives the states wanted to achieve to meet
    homeland security needs, such as upgrading emergency operations centers
    and command posts. As directed by statute, ODP required completion and
    approval of these updated strategies as a condition for awarding fiscal
    year 2004 grant funds. As of July 2004, ODP had approved or conditionally
    approved 19 all state strategies and awarded all fiscal year 2004 SHSGP

    17

    According to ODP officials, this process for the transfer of funds is
    intended to allow for the use of federal monies to pay the bill, rather
    than state or local funds. (For further discussion of steps taken by ODP
    to expedite grant funding and remaining challenges, see pp. 23-30.)

    18

    In fiscal year 2003, the urban area grantees were required to prepare
    jurisdictional needs assessments that would support the development of
    urban area homeland security strategies. Twenty-five percent of the fiscal
    year 2003 UASI I and II grant funds could be used prior to the submission
    and approval of the urban area strategies to assist jurisdictions in
    developing their strategies as well as for other purposes.

    19

    According to ODP, it conditionally approved some state strategies,
    provided that all issues were addressed within a set time period. States
    with conditionally approved strategies received their grant award but
    could not draw down grant funds until their strategies were approved.
    Among the reasons that ODP provided for conditional approvals were time
    lines that were vague, missing, or too broad and not realistic; objectives
    that did not tie in with the goals; and goals that were not well defined.

    Page 13 GAO-05-121 Homeland Security

    funds. 20 Figure 3 shows an overview of the state homeland security
    assessment and strategy development process in place for fiscal years 1999
    through 2003.

     Figure 3: State Homeland Security Assessment and Strategy Development Process
                           for Fiscal Years 1999 through 2003

    Source: GAO based on ODP data. a

    In fiscal year 2003, states and jurisdictions could also complete an
    optional agricultural vulnerability assessment in addition to the
    vulnerability assessment.

    In conjunction with the development of the states' updated homeland
    security strategies, ODP revised its approach to how states and localities
    reported on grant spending and use. Specifically, ODP took steps to shift
    the emphasis away from reporting on specific items purchased and toward
    results-based reporting on the impact of states' expenditures on
    preparedness. ODP maintains a list of authorized items that all states and

    20

    As part of ODP's fiscal year 2003 State Homeland Security Assessment and
    Strategy Program, states were instructed to prepare new homeland security
    strategies using an electronic template provided by ODP. The aggregated
    results from the local jurisdiction needs assessment were automatically
    populated in data fields in the state homeland security strategy template.
    These data fields included, for example, the total number of potential
    threat elements in the state, the number of jurisdictions facing
    vulnerabilities from various hazards and their grouped ranking from low to
    high risk, and the total equipment needs for nine categories of equipment.
    State program managers completed the other sections of the strategy
    template that described the state's vision, focus, goals and objectives,
    jurisdictional prioritizations, and implementation steps.

    localities were required to use as a guideline for making purchases. This
    evolving list, comprising hundreds of first responder items, is arranged
    by category, such as personal protection equipment; explosive device
    mitigation and remediation equipment; CBRNE search and rescue equipment;
    interoperable communications equipment; and more. Under this arrangement,
    states and localities consulted ODP's authorized equipment list and
    selected the equipment and quantity they planned to purchase-including
    such diverse items as personal protection suits for dealing with hazardous
    materials and contamination, bomb response vehicles, and medical supplies.
    This information is in turn listed on itemized budget detail worksheets
    that localities submitted to states for their review. Prior to the fiscal
    year 2004 grant cycle, states submitted the worksheets to ODP. States also
    compared purchased items against these worksheets when approving
    reimbursements to localities.

    According to ODP, this list-based reporting method made it difficult to
    track the cumulative impact of individual expenditures on the goals and
    objectives in a state's and urban area's homeland security strategy. While
    the budget detail worksheets reflected the number and cost of specific
    items that states and localities planned to purchase, neither states nor
    ODP had a reporting mechanism to specifically assess how well these
    purchases would, in the aggregate, meet preparedness planning needs or
    priorities, or the goals and objectives contained in state or urban area
    homeland security strategies. To help remedy this situation, ODP revised
    its approach for fiscal year 2004. Rather than being required to submit
    budget detail worksheets to ODP, 21 states, urban areas, and local
    jurisdictions were required instead to submit new Initial Strategy
    Implementation Plans (ISIP). These ISIPs are intended to show how planned
    grant expenditures for all funds received are linked to one or more larger
    projects, which in turn support specific goals and objectives in either a
    state or urban area homeland security strategy. The state administrative
    agency is responsible for submission of all ISIPs to ODP within 60 days of
    the state's grant award. 22 The final submission is to include one ISIP
    from the state administrative agency if the agency retains a portion of
    the funding, and one ISIP for every local jurisdiction, state

    21

     The budget detail worksheets are to be maintained by the state administrative
                                        agency.

    22

    The agency is also responsible for reviewing all completed ISIPs prior to
    submitting them to ODP.

    Page 15 GAO-05-121 Homeland Security

        ODP, State, and Local Officials Expressed Concerns about the 2003 Needs
        Assessments

    agency, or nongovernmental organization receiving grant funds. ODP said
    that almost all of the states have submitted their ISIPs. 23

    In addition to the ISIPs, ODP now requires the states to submit biannual
    strategy implementation reports showing how the actual expenditure of
    grant funds at both the state and local levels was linked by projects to
    the goals and objectives in the state and urban area strategy. According
    to ODP, this reporting process is intended to better enable states and ODP
    to track grant expenditures from all funding sources against state and
    urban area homeland security strategies as well as collect critical
    project output and performance data. The first biannual strategy
    implementation reports covering the 6-month period ending December 31,
    2004, were due to ODP on January 31, 2005. At the time of our review, it
    was too early to determine whether the new approach would improve
    expenditure tracking and performance reporting.

    While progress has been made in updating state homeland security
    strategies and planned improvements for reporting and tracking
    grantrelated expenditures are under way, some federal, state, and local
    officials expressed concerns about the accuracy of the needs assessments
    on which the state strategies were based. When ODP instructed states and
    local jurisdictions to update their fiscal year 1999 needs assessments in
    fiscal year 2003, the agency told them not to constrain their estimates of
    needs to a specific period of time or take potential sources of funding
    into account. At the same time, ODP instructed states to review and
    analyze local jurisdictions' needs assessments and the aggregated results
    before submitting their needs assessment data to ODP. The needs
    assessments for equipment received by ODP from 56 states and territories
    as a result of this process totaled $352.6 billion. By contrast, the
    funding available for SHSGP I and II in fiscal year 2003 totaled roughly
    $2.1 billion.

    State and local officials in three of the five states we visited cited
    concerns about the accuracy of the needs assessments for their individual
    states. For example, the needs assessment for one state we reviewed
    amounted to about $11.8 billion-nearly 300 times the $39.5 million in
    total state homeland security grant funds awarded to the state in fiscal
    year 2003.

    23

    According to ODP, as of September 30, 2004, 19 states and territories
    submitted their ISIPs by the due date, 35 were submitted late, and 2 had
    not been submitted. Of the two that had not been submitted, one was late,
    and one was not due to be submitted as of that date.

    Page 16 GAO-05-121 Homeland Security

    Grant managers in this state said that they had reviewed the local
    jurisdictions' threat estimates and determined that, because of a
    misinterpretation of the term "threat" by local officials, the number of
    critical assets needing protection was higher than estimated by the state.
    In their opinion, the local jurisdictions included items in their needs
    assessments that were not needed to protect the state's critical assets.
    Nevertheless, state officials did not revise the aggregated needs
    assessment estimates included in their state strategy. ODP conditionally
    approved the strategy for this state, noting, among other things, a
    "disconnect" between the state's mission and goals and that time lines
    were "too broad" and "not realistic." 24 Grant managers in a second state
    said that the state did not base its strategy on the needs assessments
    prepared by the local jurisdictions, in part, because they judged the
    unconstrained assessments for equipment to be unrealistically high-
    approximately $13 billion over an open-ended, multiyear period. While the
    state submitted the total of these local assessments to ODP; it submitted
    a strategy on the basis of its own planning procedures for 1 year only,
    resulting in a $92 million estimate of needs. After discussions with ODP,
    the state later submitted a broader, multiyear $9.6 billion needs
    assessment for equipment.

    ODP has taken steps to address its concerns, and some states' concerns,
    related to the estimates included in the needs assessments. In a
    conference held with state officials in March 2004, ODP personnel
    discussed concerns that arose from their review of aggregated needs
    assessment data and identified some possible sources of the problems. They
    determined that, before submitting their fiscal year 2003 needs
    assessments to ODP, states might not have adequately considered such
    factors as mutual aid agreements for first responder assistance within
    jurisdictions or whether jurisdictions within a region could share
    resources, rather than submit separate or overlapping requests for first
    responder equipment. 25 In response, ODP requested the states to validate
    and revise, if necessary, the needs assessment data to take these factors
    into account and to resubmit their assessments. States were to submit
    their validated assessments to ODP by October 15, 2004. According to an

    ODP approved the state strategy in August 2004.

    25See GAO, U.S. Infrastructure: Agencies' Approaches to Developing
    Investment Estimates Vary, GAO-01-835 (Washington, D.C.: July 20, 2001).
    This report describes best practices followed by agencies in performing
    needs assessments in the area of public infrastructure, such as
    considering alternatives ways to address needs.

    Page 17 GAO-05-121 Homeland Security

        ODP Has Begun Drafting National Preparedness Standards to Better Assess
        First Responder Needs

    ODP document, ODP is currently completing its analysis of the assessment
    data.

    In addition to the issues raised about the accuracy of the fiscal year
    2003 needs assessments, other factors may affect ODP's and states'
    abilities to identify and assess first responder needs and priorities. For
    example, according to some state officials we interviewed as well as
    recent reports by DHS's Office of Inspector General (IG) 26 and the House
    Select Committee on Homeland Security, 27 efforts by state and local
    jurisdictions to prioritize expenditures to enhance first responder
    preparedness have been hindered by the lack of clear guidance in defining
    the appropriate level of preparedness and setting priorities to achieve
    it.

    Additionally, in our recent report on the management of first responder
    grants in the National Capital Region, we reported that the lack of
    national preparedness standards that could be used to assess existing
    first responder capacities (such as the number of persons per hour that
    could be decontaminated after a chemical attack), identify gaps in those
    capacities, and measure progress in achieving specific performance goals
    was a challenge. 28 We also reported that effectively managing federal
    first responder grant funds requires the ability to measure progress and
    provide accountability for the use of public funds. This required a
    coordinated strategic plan for enhancing preparedness, performance
    standards to guide how funds are used to enhance first responder
    capacities and preparedness, and data on funds available and spent on
    first responder needs.

    National performance standards for assessing domestic preparedness
    capabilities and identifying gaps in those capabilities that reflect
    post-September 11 priorities are being developed. ODP has submitted to the
    Secretary of DHS a definition of a national preparedness goal that is
    intended to provide assurance of the nation's capability to prevent,
    prepare for, respond to, and recover from major events, especially

    26

    Department of Homeland Security: Office of Inspector General, An Audit of
    Distributing and Spending "First Responder" Grant Funds, OIG-04-15
    (Washington, D.C.: March 2004).

    27

    House Select Committee on Homeland Security, An Analysis of First
    Responder Grant Funding (Washington, D.C.: April 2004).

    28See GAO, Homeland Security: Management of First Responder Grants in the
    National Capital Region Reflects the Need for Coordinated Planning and
    Performance Goals , GAO 04-443 (Washington, D.C.: May 28, 2004).

    terrorism. ODP plans call for achieving the full capability needed to
    sustain the preparedness levels required by the new national standards by
    September 2008. In order to develop performance standards that will allow
    ODP to measure the nation's success in achieving this goal, ODP is using a
    capabilities-based planning approach-one that defines the capabilities
    required by states and local jurisdictions to respond effectively to
    likely threats. These capability requirements are to establish the minimum
    levels of capability required to provide a reasonable assurance of success
    against a standardized set of 15 scenarios for threats and hazards of
    national significance. 29

    ODP's efforts to develop national preparedness standards are, in part, a
    response to Homeland Security Presidential Directive-8 (HSPD-8), issued by
    the President in December 2003. HSPD-8 called for a new national
    preparedness goal and performance measures, standards for preparedness
    assessments and strategies, and a system for assessing the nation's
    overall preparedness. 30 The directive required the DHS Secretary to
    submit the new national preparedness goal to the President through his
    Homeland Security Council for review and approval prior to, or
    concurrently with, DHS's fiscal year 2006 budget submission to the Office
    of Management and Budget in September 2004. 31 HSPD-8 also requires the
    preparation and approval of statewide, comprehensive all-hazards
    preparedness strategies in order to receive federal preparedness
    assistance at all levels of government, including grants, after fiscal
    year 2005.

    As part of the HSPD-8 implementation process, ODP plans to develop a list
    of capability requirements by the end of January 2005 in keeping with the

    29

    The interagency working group under the direction of the White House
    Homeland Security Council developed these scenarios. They involve a
    variety of potential emergencies, including four chemical (including both
    chemical warfare and toxic industrial chemicals), three biological
    (including both contagious and noncontagious agents and pandemic
    influenza), two agricultural (including food safety and animal disease),
    two natural disasters (a catastrophic earthquake and major hurricane), one
    radiological, one nuclear, one improvised explosive device, and one cyber
    attack.

    30

    HSPD-8 also requires that the preparedness goal pertain to "all hazards,"
    addressing the nation's readiness to respond to all major events,
    including natural disasters as well as acts of terrorism.

    31

    The recently enacted fiscal year 2005 DHS appropriation legislation, Pub.
    L. No. 108-334 (2004), included other deadlines relative to HSPD-8, such
    as the requirement that final guidance on the implementation of the
    national preparedness goal be issued by March 31, 2005.

        ODP Increased Grant Monitoring Activities for Fiscal Year 2004 but Did Not
        Meet Its Monitoring Goal for All States

    fiscal year 2005 DHS appropriations act. 32 To help define the
    capabilities that jurisdictions should set as targets, ODP first drafted a
    list of tasks required to prevent or respond to incidents of national
    consequence. They include such generic tasks as integrating private-sector
    entities into incident response activities or coordinating housing
    assistance for disaster victims. The list of target capabilities includes
    the policies, procedures, personnel, training, equipment, and mutual aid
    arrangements needed to perform the tasks required to prevent or respond to
    the national planning scenarios. ODP further plans to develop performance
    measures, on the basis of the target capability standards that define the
    minimal acceptable proficiency required in performing the tasks outlined
    in the task list. ODP plans to complete initial development of the
    performance measures by March 2005 and to refine them subsequently.
    According to ODP's plan, the measures will allow the development of a
    rating methodology that incorporates preparedness resources and
    information about overall performance into a summary report that
    represents a jurisdiction's or agency's ability to perform essential
    prevention, response, or recovery tasks. The office acknowledges that this
    schedule may result in a product that requires future incremental
    refinements but has concluded that this is preferable to spending years
    attempting to develop a "perfect" process. ODP held a workshop in
    mid-October 2004 to obtain input from representatives from states,
    national associations, and other federal departments and agencies
    regarding the implementation of HSPD-8. At the workshop, some participants
    voiced concerns that the process, among other things, was moving too fast
    and did not consider the state and local needs assessments that had
    already been done. In addition, some participants believed that better
    communication and a more collaborative process was needed. ODP officials
    promised to address the participants' concerns and asked for additional
    input on how ODP could better implement the process and work better with
    state and local jurisdictions.

    ODP has taken steps to improve its oversight procedures with respect to
    state, urban area, and local grantees. ODP is responsible for ensuring
    administrative and programmatic compliance with relevant statutes,
    regulations, policies, and guidelines of the grants it manages. ODP also
    monitors the progress that states make toward the goals and objectives
    contained in their homeland security strategies. Prior to September 11,

    32

    The act requires ODP to provide state and local jurisdictions with
    nationally accepted first responder preparedness levels no later than
    January 31, 2005.

    Page 20 GAO-05-121 Homeland Security

    2001, ODP formally monitored grantees through such activities as
    officebased reviews at ODP of grantees' financial reports and other
    documents, followed by on-site visits to state grant officials.
    Office-based reviews entail a review of grant files to ensure that all
    grant documentation is complete and up-to-date and that any apparent
    problems are addressed through follow-up telephone or e-mail contact with
    the state or urban area. Upon completion of an office-based review, an ODP
    preparedness officer prepares a memorandum for the file. This review
    usually takes place before an on-site visit is scheduled, according to
    ODP. During an on-site visit, an ODP preparedness officer is to discuss
    administrative and financial issues and programmatic issues such as
    whether the state or urban area is meeting the goals and objectives in the
    homeland security strategies. The ODP preparedness officer is to prepare a
    monitoring report for each on-site visit.

    ODP officials told us that formal on-site monitoring visits were
    temporarily discontinued after September 11, 2001, because of a high
    volume of work. For fiscal years 2002 and 2003, ODP did not set formal
    monitoring goals, such as a specific number of on-site visits to be made
    in a given year. ODP officials said they continued to maintain active,
    almost daily contact with the states by telephone, e-mail, and regular
    correspondence and through informal visits to monitor programmatic and
    financial aspects of the grants; however, no memorandums or formal
    site-visit reports were filed during that period. In fiscal year 2004, ODP
    updated its grant-monitoring guidance and established new monitoring
    goals. According to the guidance, at least one office file review and one
    on-site visit-resulting in a monitoring visit report-should be completed
    for each state (inclusive of urban area grantees) each fiscal year. As of
    September 30, 2004, ODP had completed 44 office file reviews and 44
    on-site visits for the 56 states and territories. According to ODP, of the
    remaining 12 reviews and visits for the fiscal year 2004 monitoring cycle,
    8 have been conducted as of December 2004. ODP officials said that these
    reviews and visits were delayed, in part, because of turnover in
    preparedness officer positions and scheduling problems. These on-site
    monitoring visits are a principal tool for, among other things,
    ascertaining a grantee's progress on its strategy implementation, and
    noting problems with implementing the grant program and the steps the
    grantee and ODP will take to resolve them. These on-site visits are needed
    to track whether and how grantees are managing their program funds.

    Page 21 GAO-05-121 Homeland Security

        ODP and Some State and Local Jurisdictions Cite Staffing Challenges

    ODP cited staffing challenges that have affected its grant management in
    general. ODP has made progress in filling authorized staff positions, but
    vacancies remain. ODP had 146 full-time equivalent positions authorized
    for fiscal years 2003 and 2004, 30 of which were preparedness officers. As
    of September 2004, ODP had filled 138 of these positions compared with 63
    filled positions at the end of fiscal year 2003. Of the eight vacancies
    remaining, five were preparedness officer positions. In addition to
    performing office-based and scheduled on-site monitoring, these officers
    serve as day-to-day liaisons to designated states. According to ODP, the
    ODP preparedness officers currently have responsibility for one to five
    states each, depending on the state's population.

    ODP officials told us that, in hiring staff, they face challenges shared
    by other agencies. ODP has acknowledged that it experienced significant
    staffing shortages in fiscal years 2002 and 2003 because of a hiring
    freeze. In addition, officials cited other factors, including staff
    turnover, the lack of recruitment and relocation bonuses, the high cost of
    living in the Washington metropolitan area, and competition with other DHS
    entities and contracting firms for high-quality candidates. These
    officials also said that the lengthy federal hiring process is further
    extended by the need to conduct security clearances for job candidates. To
    deal with some staff shortages, ODP has relied on outside contractors and
    temporary employees, but they are not working directly with states and
    local jurisdictions on grants, and none are ODP preparedness officers. 33

    State and local officials in two of the five states visited also cited a
    lack of sufficient state and local personnel to administer and manage
    their grant programs. While the fiscal years 2002 and 2003 grants provided
    funding that states and local jurisdictions could use to administer the
    grants, 34 these officials said that the 3 percent limit on grant
    management and administrative costs imposed by ODP in the fiscal year 2003
    SHSGP II was not sufficient to cover the grant administrative costs needed
    to administer and manage the grants. This allowance can be used at the
    state and/or local levels, but the combined allowance cannot exceed 3
    percent of the

    33

    As of the end of fiscal year 2003, ODP had 72 contract employees and as of
    July 2004, 147.

    34

    The fiscal year 2002 SDPP included up to $150,000 or up to 2.5 percent of
    each state's total award (whichever was greater) for administrative costs
    associated with implementing the state strategies. For the fiscal year
    2003 SHSGP I, the amount of grant funds that each state could use for
    planning and administrative costs was specified in the program guidelines.
    The amount ranged from $104,000 to about $3.2 million.

    Page 22 GAO-05-121 Homeland Security

    total first responder preparedness grant funds for each state. 35 For
    SHSGP II first responder preparedness grant funds, the allowable
    administrative costs ranged among all states from a low of about $102,000
    to a high of about $3.1 million per state. Some officials said they have
    not been able to hire the personnel necessary to administer and manage the
    grant programs, in part, because of the limit on funds used for
    administrative costs. DHS's IG and Homeland Security Advisory Council Task
    Force 36 also cited similar reports from state and local officials they
    spoke with. In responding to DHS's IG report, ODP said that the homeland
    security grant programs allow for the hiring of both full- and part-time
    personnel and contractors to implement the program and that this option
    could be more widely used by states to address the issue of inadequate
    staffing. ODP officials recently told us that the fiscal year 2005 grant
    guidelines allow states to retain 3 percent of the total grant award and
    local jurisdictions to use 2.5 percent of their grant allocation for
    management and administrative purposes. According to these officials, this
    change should alleviate some of the staffing issues.

    35

    For the fiscal year 2003 SHSGP II, states received separate funding for
    both first responder preparedness and the cost incurred for protecting
    critical infrastructure.

    36

    U.S. Department of Homeland Security, The Homeland Security Advisory
    Council, A Report from the Task Force on State and Local Homeland Security
    Funding (June 2004).

    Page 23 GAO-05-121 Homeland Security

      Congress, ODP, States, and Localities Have Acted to Expedite Grant Awards, but
      Challenges Remain

    Statutory Deadlines Were Congress, the Conference of Mayors, 37 some state
    and local officials, and Imposed to Expedite the others expressed concerns
    about the time ODP was taking to award grant Grant Award and funds to
    states and for states to transfer grant funds to local jurisdictions.
    Distribution Process For SDPP and SHSGP I grants, ODP was not required to
    award grant funds to states within a specific time frame. During fiscal
    year 2002, ODP took 123 days to make the SDPP grant application available
    to states and, on average, about 21 days to approve states' applications
    after receipt. For SHSGP II, however, the appropriations statute required
    that ODP make the grant application available to states within 15 days of
    enactment of the appropriation and approve or disapprove states'
    applications within 15 days of receipt. According to ODP data for SHSGP
    II, ODP made the grant application available to states within the required
    deadline and awarded over 90 percent of the grants within 14 days of
    receiving the applications. For SHSGP II, the appropriations statute also
    mandated that states submit grant applications within 30 days of the grant
    announcement. 38 According to ODP data, all states met the statutory
    30-day mandate. For SHSGP II, the average number of days from grant
    announcement to application submission declined from about 81 days in
    fiscal year 2002 to about 23 days.

    To expedite the transfer of grant funds from the states to local
    jurisdictions, ODP program guidelines and subsequent appropriations acts
    imposed additional deadlines on states. For SDPP, there were no

    37

    The United States Conference of Mayors Homeland Security Monitoring
    Center, First Mayors' Report to the Nation: Tracking Federal Homeland
    Security Funds Sent to the 50 State Governments (Washington, D.C.:
    September 2003).

    38

    In fiscal year 2002, ODP required that states submit their grant
    application by July 31, 2002 (79 days after the grant application was made
    available to the states). For the fiscal year 2003 SHSGP I, ODP required
    that the application be submitted in 45 days from the release of the grant
    application.

    mandatory deadlines or dates by which states should transfer grant funds
    to localities. One of the states we visited, for example, took 91 days to
    transfer the SDPP grant funds to a local jurisdiction while another state
    we visited took 305 days. In addition, a DHS IG report found that for
    SDPP, two of the states it visited took 73 and 186 days, respectively, to
    transfer funds to local jurisdictions. Beginning with SHSGP I, ODP
    required in its program guidelines that states transfer grant funds to
    local jurisdictions within 45 days of the grant award date. Congress
    subsequently included this requirement in the appropriations statute for
    SHSGP II grant funds. To ensure compliance, ODP required states to submit
    a certification form indicating that all awarded grant funds had been
    transferred within the required 45-day period. 39 States that were unable
    to meet the 45-day period had to explain the reasons for not transferring
    the funds and indicate when the funds would be transferred. According to
    ODP, for SHSGP I and II, respectively, 33 and 31 states certified that the
    required 45-day period had been met. 40

    To further assist states in expediting the transfer of grant funds to
    local jurisdictions, ODP also modified its requirements for documentation
    to be submitted as part of the grant application process for fiscal years
    2002 and 2003. In fiscal year 2002, ODP required states to submit budget
    detail worksheets and program narratives indicating how the grant funds
    would be used for equipment, exercises, and administration-and have them
    approved. If a state failed to submit the required documentation, ODP
    would award the grant funds, with the special condition that the state
    could not transfer, expend, or draw down any grant funds until the
    required documentation was submitted and approved. In fiscal year 2002,
    ODP imposed special conditions on 37 states for failure to submit the
    required documentation and removed the condition only after the states
    submitted the documentation. The time required to remove the special
    conditions ranged from about 1 month to 21 months. For example, in one
    state we reviewed, ODP awarded SDPP grant funds and notified the state of
    the special conditions on September 13, 2002; the special conditions

    39

    For the fiscal year 2003 SHSGP II, states had to certify that they had met
    the statutory requirement to transfer 80 percent of the awarded funds for
    first responder preparedness and 50 percent of the awarded funds for
    critical infrastructure protection to local jurisdictions within the
    required 45-day period.

    40

    According to ODP, follow-up letters were distributed to states that had
    not submitted the certification form or were not certified, followed by a
    series of phone calls to collect the pertinent information.

    were removed about 6 months later on March 18, 2003, after the state had
    met those conditions.

    However, in fiscal year 2003, ODP allowed states to move forward more
    quickly, by permitting them to transfer grant funds to local jurisdictions
    before all required grant documents had been submitted. If a state failed
    to submit the required documentation for SHSGP I, ODP awarded the grant
    funds and allowed the state to transfer the funds to local jurisdictions.
    While the state and local jurisdictions could not expend-and the state
    could not draw down-the grant funds until the required documentation was
    submitted and approved, they could plan their expenditures and begin state
    and locally required procedures such as obtaining approval of the state
    legislature or city council to use the funds. For SHSGP I, ODP imposed
    special conditions on 47 states for failure to submit the required
    documentation and removed the condition only after the states submitted
    the documentation. The special conditions were removed approximately 1
    month to 15 months after the grant funds were awarded to the states. For
    the SHSGP II grant cycle, in order to further expedite the award process
    and availability of fiscal year 2003 funds for expenditure, ODP no longer
    required states to submit the budget detail worksheets and certain other
    documents as part of the grant application process. 41 Rather, these
    documents could be submitted later with the state's biannual progress
    report. 42 Thus, states were able to transfer, expend, and draw down grant
    funds immediately after ODP awarded the grant funds. (See appendix III for
    grant award and distribution timelines for selected state and local
    grantees.)

    41

    For the fiscal year 2004 Homeland Security Grant Program, Congress
    required states to obligate grant funds to localities within 60 days of
    the grant award date. States did not have to submit budget detail
    worksheets and program narratives as part of the grant application
    process. However, states were expected to maintain complete and accurate
    accounting records and make those records available to DHS upon request.
    In addition, states were to provide information on how the expenditure of
    grant funds will support the goals and objectives included in the state
    homeland security strategy in the Initial Strategy Implementation Plan
    report due no later than 60 days after the grant award date.

    42

    The Categorical Assistance Progress Report for the period ending June 30,
    2003, was due July 30, 2003. This report describes, among other things,
    the total amount of funds expended and the progress made to date in
    achieving the state's overall goals and objectives identified in the state
    homeland security strategy.

        Some States Have Revised Procurement Requirements Affecting Grant Time
        Lines, and ODP Is Developing Related Best Practices

    Despite congressional and ODP efforts to expedite the award of grant funds
    to states and the transfer of those funds to localities, some states and
    local jurisdictions could not expend the grant funds to purchase equipment
    or services until other, nonfederal requirements were met. Some state and
    local officials' ability to spend grant funds was complicated by the need
    to meet various state and local legal and procurement requirements and
    approval processes, which could add months to the process of purchasing
    equipment after grant funds had been awarded. For example, in one state we
    visited, the state legislature must approve how the grant funds will be
    expended. If the state legislature is not in session when the grant funds
    are awarded, it could take at least 4 months to obtain state approval to
    spend the funds. 43 In another state we visited, a city was notified on
    July 17, 2003, that SHSGP I grant funds were available for use, but the
    city council did not vote to accept the funds until almost 4 months later.
    A 2004 report by the House Select Committee on Homeland Security also
    cited instances of slowness at the state and local government levels in
    approving the acceptance and expenditure of grant funds. For example,
    according to the committee report, one county took about 7 months after
    receiving its SHSGP I grant award to get authorization to spend the grant
    funds. Some state and local officials we talked with said that complying
    with their normal procurement regulations could also take months. They
    said that these regulations require, among other things, competitive
    bidding for certain purchases-a frequently lengthy process in their view.

    Some states, in conjunction with DHS, have modified their procurement
    practices to expedite the procurement of equipment and services. Officials
    in two of the five states we visited told us they established centralized
    purchasing systems that allow equipment and services to be purchased by
    the state on behalf of local jurisdictions, freeing them from some local
    legal and procurement requirements. As reported by the House Select
    Committee on Homeland Security in April 2004, many states were looking to
    move to a centralized purchasing system for the same reason. In addition,
    the DHS's Homeland Security Advisory Council Task Force reported that
    several states developed statewide procurement contracts that allow local
    jurisdictions to buy equipment and services using a prenegotiated state
    contract. According to DHS, it has offered options for

    43

    When the state legislature is not in session, changes of over $1 million
    in the budget must be reviewed and approved by the Legislative Budget
    Commission, which generally meets quarterly.

    Page 27 GAO-05-121 Homeland Security

    equipment procurement, through agreements with the U.S. Department of
    Defense's Defense Logistics Agency and the Marine Corps Systems Command,
    to allow state and local jurisdictions to purchase equipment directly from
    their prime vendors. DHS said that these agreements provide an alternative
    to state and local procurement processes and often result in a more rapid
    product delivery at a lower cost. For example, one state we visited is
    using a Defense Logistics Agency prime vendor to make equipment purchases.
    Local jurisdictions can order the equipment without having to go through
    their own locally based competitive bidding process.

    Congress has also taken steps to address a problem that some states and
    localities cited concerning a federal policy that provides reimbursement
    to states and localities only after they have incurred an obligation, such
    as a purchase order, to pay for goods and services. Until fiscal year
    2005, after submitting the appropriate documentation, states and
    localities could receive federal funds to pay for these goods and services
    several days before the payment was due so that they did not have to use
    their own funds for payment. However, according to DHS's Homeland Security
    Advisory Council Task Force, many municipalities and counties had
    difficulty participating in this process either because they did not
    receive their federal funds before payment had to be made or their local
    governments required funds to be on hand before commencing the procurement
    process. Officials in one city we visited said that, to solve the latter
    problem, the city had to set up a new emergency operations account with
    its own funds. The task force recommended that for fiscal year 2005, ODP
    homeland security grants be exempt from the Cash Management Improvement
    Act 44 to allow funds to be provided to states and municipalities up to
    120 days in advance of expenditures. The fiscal year 2005 DHS
    appropriations legislation includes a provision that exempts formula-based
    grants (SHSGP) and discretionary grants, including UASI and other ODP
    grants, from the act's requirement that an agency schedule the transfer of
    funds to a state so as to minimize the time elapsing between

    Pub. L. No. 101-453, 104 Stat. 1058 (1990). The purpose of the law is to
    ensure efficiency, effectiveness, and equity in the exchange of funds
    between the federal government and the states. The Cash Management
    Improvement Act responded to previously alleged instances in which either
    the states drew cash advances well before federal funds were needed to
    make payment or states used their own funds to satisfy federal program
    needs and were not reimbursed in a timely manner by the federal agencies.
    The act provided that states would pay interest to the federal government
    if they draw funds in advance of need and that the federal government
    would pay interest to states if the federal program agency does not
    reimburse the states in a timely manner when states use their own funds.

    the transfer of funds from the U.S. Treasury and the state's disbursement
    of the funds for program purposes.

    In addition, DHS efforts are under way to identify and disseminate best
    practices, including how states and localities manage legal and
    procurement issues that affect grant distribution. DHS's Homeland Security
    Advisory Council Task Force stated in a June 2004 report that some
    jurisdictions have been "very innovative" in developing mechanisms to
    support the procurement and delivery of emergency-response-related
    equipment. For example, one state cited in the report was in the process
    of forming a procurement working group to address issues as they arise.
    The report also cited that several states have developed statewide
    procurement contracts that allow municipal government units to buy first
    responder equipment and services. One state created a passwordprotected
    Web site that allowed local jurisdictions to view their allocation balance
    and place orders for equipment up to their funding allocation limit.
    According to the task force, these efforts substantially reduced the time
    it takes for localities to purchase and receive their equipment. The task
    force recommended that, among other things, DHS should, in coordination
    with state, county, and other governments, identify, compile, and
    disseminate best practices to help states address grant management issues.
    According to ODP, in an effort to complement and reinforce the task
    force's recommendations, in partnership with the National Criminal Justice
    Association, 45 it established a new Homeland Security Preparedness
    Technical Assistance Program service to enhance the grant management
    capabilities of state administrative agencies. In an August 30, 2004,
    Information Bulletin, ODP requested that state administrative agencies
    complete a survey designed to gather information on their grant management
    technical needs and best practices related to managing and accounting for
    ODP grants, including the procurement of equipment and services at the
    state and local levels. The information that ODP is gathering is to serve
    as a foundation for the development of a tailored, onsite assistance
    program for states to ensure that identified best practices are
    implemented and critical grant management needs and problems are
    addressed. According to ODP, this program will be operational in December
    2004.

    The National Criminal Justice Association represents state, tribal, and
    local criminal and juvenile justice system concerns to the federal
    government. Among other things, it promotes the development of justice
    systems in states, tribal nations, and units of local government that
    enhance public safety.

    Page 29 GAO-05-121 Homeland Security

    Despite efforts to streamline local procurement practices, some challenges
    remain at the state and local levels. An ODP requirement that is based on
    language in the appropriations statute could delay procurements,
    particularly in states that have a centralized purchasing system.
    Specifically, for the fiscal 2004 grant cycle, states are required by
    statute to pass through no less than 80 percent of total grant funding to
    local jurisdictions within 60 days of the award. In order for states to
    retain grant funds beyond the 60-day limit, ODP requires states and local
    jurisdictions to sign a memorandum of understanding (MOU) indicating that
    states may retain-at the local jurisdiction's request-some or all funds in
    order to make purchases on a local jurisdiction's behalf. The MOU must
    specify the amount of funds to be retained by the state. A state official
    in one state we visited said that, while the state's centralized
    purchasing system had worked well in prior years, the state has
    discontinued using it because of the MOU requirement, since establishing
    MOUs with every locality might take years. The state transferred the
    fiscal year 2004 grant funds to local jurisdictions so they can make their
    own purchases. In another state, officials expressed concern that this
    requirement would negatively affect their ability to maintain homeland
    security training provided to local jurisdictions at state colleges that
    had been previously funded from local jurisdictions' grant funds. In a
    June 23, 2004, ODP Information Bulletin, ODP strongly recommended that
    states retaining funds at the state level on behalf of local jurisdictions
    have the MOUs reviewed by DHS's Office of General Counsel to ensure that
    the MOUs meet the requirements of the appropriation language and ODP
    program guidelines. ODP officials told us that they were assisting states
    to adapt to the new requirement.

    The terrorist attacks of September 11, 2001, forced the nation to
    reexamine its requirements for domestic safety, including the capacity and
    Observations  resources that would be needed at the state and local levels
    to prevent,

    prepare for, respond to, or recover from potential future threats from

    terrorists and minimize their impact. Congress addressed this concern in

    the months after the attacks, in part by increasing the grant funds that

    states would receive to enhance their emergency first responder and

    public health and safety capabilities to deal with terrorist attacks
    involving

    CBRNE weapons. Not surprisingly, the enormous effort required to bolster

    first responder capacity nationwide posed challenges for government

    administrators at the federal, state, and local levels. A major challenge
    in

    administering first responder grants is balancing two goals: minimizing
    the

    time it takes to distribute grant funds to state and local first
    responders,

    and ensuring appropriate planning and accountability for the effective use

    of grant funds. ODP's approach to striking this balance has been evolving

    Page 30 GAO-05-121 Homeland Security

                           Agency Comments and Our Evaluation

    from experience, congressional action, and feedback from states and local
    jurisdictions.

    Over the last 2 years, working in concert with state governments and
    others, DHS has made progress, through ODP, in managing its state homeland
    security grant programs. ODP has addressed management problems regarding
    how grants were awarded and funds distributed, which arose following the
    dramatic increase in federal funding for first responders after September
    11. While some localities continue to face legal and procurement
    challenges that can tie up access to grant funds, ODP is taking steps to
    provide technical assistance that will, among other things, give state and
    local officials access to best-practice information on how other
    jurisdictions have successfully addressed procurement challenges.

    As ODP continues to administer its state and urban first responder grant
    programs, it will likely face new challenges. In particular, as DHS and
    ODP work to develop national preparedness standards, it will be important
    to listen and respond fully to the concerns of states, local
    jurisdictions, and other interested parties about, among other things, the
    planned time frames for implementing the new standards. It will also be
    important to ensure that there is adequate collaboration and guidance for
    moving forward. Effective collaboration among ODP, states, and others in
    developing appropriate preparedness performance goals and measures will be
    essential to ensuring that the nation's emergency response capabilities
    are appropriately identified, assessed, and strengthened.

    DHS generally agreed with the report's findings. In particular, the agency
    concurred that it faced a number of challenges related to effectively
    managing first responder grants and highlighted the progress it has made
    in addressing them. The agency expressed the view, however, that the
    progress already achieved in meeting these challenges was not
    appropriately reflected in the title of the report. We disagree. As DHS
    notes, our report acknowledges the efforts the agency has made in revising
    grant procedures to expedite awards while maintaining accountability.
    Nevertheless, not all of the agency's efforts have gone smoothly, as
    attested, for example, by the problems that DHS and the states experienced
    in realistically defining first responder equipment needs in 2003. In view
    of the concerns recently expressed by state and other officials, DHS may,
    in our view, continue to face significant challenges in meeting its time
    tables to develop realistic capability requirements and performance
    measures for first responders. DHS also provided further details on some
    grant management issues we raised in the report. We have revised the
    report as appropriate to include these and other technical comments
    provided.

    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 30 days from
    its issue date. At that time, we will send copies of this report to
    relevant congressional committees and subcommittees, the Secretary of
    Homeland Security, and to other interested parties. We will also make
    copies available to others upon request. In addition, the report will be
    available at no charge on GAO's Web site at http://www.gao.gov.

    If you have any questions about this report or wish to discuss it further,
    please contact me at (202) 512-8777 or jenkinswo@gao.gov. Key contributors
    to this report are listed in appendix VI.

    Sincerely yours,

    William O. Jenkins, Jr. Director, Homeland Security and Justice Issues

                           Appendix I: Scope and Methodology

    We initially addressed our researchable questions regarding the Office for
    Domestic Preparedness's (ODP) structure and processes for program and
    financial management of its grants and its monitoring policies and
    processes in a briefing to the Subcommittee on Homeland Security of the
    House Committee on Appropriations. In addressing those questions, we
    identified 25 domestic preparedness programs managed by ODP in fiscal
    years 2002 and 2003. 1 For this report, we selected the five largest
    programs in terms of federal funding provided to state and local
    jurisdictions for our detailed review. Three of the five programs that
    addressed state and local preparedness issues were basically for the same
    purposes but received funding from separate appropriations. These were the
    fiscal year 2002 State Domestic Preparedness Program (SDPP) and the fiscal
    year 2003 State Homeland Security Grant Programs (SHSGP) I and II. The
    other two programs were awarded to selected urban areas. These were the
    fiscal year 2003 Urban Areas Security Initiatives (UASI) I and II grant
    programs.

    We also selected Arizona, California, Florida, Missouri, and Pennsylvania
    and 19 local jurisdictions within those states:

         o The cities of Phoenix and Pima and Maricopa and Coconino Counties in
           Arizona.
         o The cities of Los Angeles and Sacramento and the County of Los Angeles
           in California.
         o The city of Miami, Miami-Dade County, and the Miami and Tallahassee
           Regional Domestic Security Task Forces in Florida.
         o The city of St. Louis, St. Louis and Franklin Counties, and the rural
           cities of Jackson and Sikeston in Missouri.
         o The city of Philadelphia and the Southeastern and South Central
           Regional Terrorism Task Forces in Pennsylvania.

    The five states were selected on the basis of the amount of ODP grant
    funding received, population size, and other factors. The local
    jurisdictions

    1

    Even though some of the grant programs were basically for the same or
    similar purposes, they are counted as separate grants in part because of
    separate appropriations in the same and different years and name changes.

    Page 33 GAO-05-121 Homeland Security Appendix I: Scope and Methodology

    were selected on the basis of a mix of urban and rural locations to
    include cities and counties that received UASI funding.

    To determine how SHSGP and UASI were administered in fiscal years 2002 and
    2003 so that ODP could ensure that grant funds were spent in accordance
    with grant guidance and state preparedness planning, we interviewed ODP
    officials and homeland security and grant management officials and first
    responders in the five selected states and from selected local
    jurisdictions within those states. We also obtained and reviewed related
    ODP policy guidance and program guidelines for the SDPP/SHSGP and UASI
    grant programs. We also obtained and reviewed documentation on grant
    awards to state and local jurisdictions. We spoke with ODP officials about
    their grant monitoring and reporting processes and obtained and reviewed
    related ODP grant-monitoring guidance and monitoring reports for fiscal
    year 2004. We also obtained and analyzed data on the number of
    office-based and on-site-monitoring reviews conducted in fiscal year 2004.
    We reviewed these data for obvious inconsistency errors and completeness
    and compared these data with onsite-monitoring reports prepared by ODP. On
    the basis of these efforts, we determined that the monitoring review data
    were sufficiently reliable for the purpose of this report. In addition, we
    spoke with ODP and state and local officials about staffing issues that
    affect grant management. We also interviewed ODP and state and local
    officials and reviewed documentation about ODP's state homeland security
    needs assessment and strategy development process and the similar needs
    assessment and strategy development process for selected urban areas. In
    addition, we obtained and reviewed the state domestic preparedness
    strategies for the selected five states. In conjunction with this effort,
    we also obtained information about the steps that ODP is taking to
    implement Homeland Security Presidential Directive-8 regarding national
    preparedness goals and performance standards. We also reviewed relevant
    reports on homeland security and domestic preparedness that discuss the
    development of national performance standards.

    To determine the time frames for awarding and distributing SHSGP and UASI
    grants established by ODP grant guidance or by law, and how these time
    frames affected the grant cycle, we obtained and analyzed appropriations
    acts and program guidelines for the grant programs. We also met with ODP
    officials and state homeland security and grant management officials, and
    local grant managers and first responders in the selected states and local
    jurisdictions to discuss how the time lines affected the grant cycle. We
    obtained and analyzed data on the time frames associated with the grant
    award and distribution processes. We

    Page 34 GAO-05-121 Homeland Security Appendix I: Scope and Methodology

    reviewed these data for obvious inconsistency errors and completeness and
    compared these data with hard-copy documents we obtained for these states.
    When we found discrepancies, we brought them to the attention of ODP and
    state and local officials and worked with them to correct the
    discrepancies before conducting our analyses. On the basis of these
    efforts, we determined that the time-frame data were sufficiently reliable
    for the purpose of this report. We also obtained information about local
    procurement policies and practices. In addition, we reviewed recent
    reports and studies on issues related to federal funding and oversight of
    grants for first responders. We also obtained grant funding and
    expenditures as of July 31, 2004, for the 56 states and territories and
    the urban areas. Given that the grant funding and expenditure data are
    used for background purposes only, we did not assess the reliability of
    these data. We also obtained and analyzed key dates associated with the
    grant award, distribution, and reimbursement processes for selected states
    and local jurisdictions. We conducted this work from November 2003 through
    November 2004 in accordance with generally accepted government auditing
    standards.

    Appendix II: Fiscal Years 2002 and 2003 SDPP/SHSGP and UASI Funding and Draw
    Downs by State

    Given that these grant-funding and drawn-down amounts are used for
    background purposes only, we did not assess the reliability of these data.

    Table 3: Fiscal Year 2002 State Domestic Preparedness Program (SDPP) and
    Fiscal Year 2003 State Homeland Security Grant Programs (SHSGP) Funding
    and Draw Downs as of July 31, 2004

                                  Dollars in thousands

                            FY 2002 SDPP FY 2003 SHSGP Total

    Drawn SHSGP I Drawn SHSGP II Drawn Drawn States and territories Funding
    down funding down funding down Funding down

            Alabama $5,317 $3,259 $9,457 $360 $25,049 $2,514 $39,823 $6,133

                   Alaska 2,783 203 4,995 485 13,230 855 21,008 1,543

                  American Samoa 828 714 1,482 0 3,926 874 6,236 1,588

              Arizona 5,770 3,929 10,584 3,069 28,033 6,463 44,387 13,461

              Arkansas 4,141 2,169 7,394 4,234 19,585 7,964 31,120 14,367

          California 24,831 12,403 45,023 11,903 119,256 33,262 189,110 57,568

              Colorado 5,220 3,776 9,480 4,068 25,111 5,249 39,811 13,093

             Connecticut 4,626 3,133 8,265 2,281 21,893 1,515 34,784 6,928

                Delaware 2,887 2,643 5,185 515 13,733 2,698 21,805 5,856

           District of Columbia 2,747 2,559 4,910 0 13,006 1,967 20,663 4,526

             Florida 12,967 12,967 23,654 9,966 62,655 12,107 99,276 35,041

              Georgia 7,797 1,628 14,188 5,319 37,579 9,253 59,564 16,200

                      Guam 892 783 1,596 209 4,226 227 6,714 1,219

                  Hawaii 3,172 737 5,693 484 15,079 2,066 23,944 3,286

                 Idaho 3,226 963 5,803 2,306 15,375 4,412 24,404 7,680

             Illinois 10,604 7,559 18,879 10,399 50,005 1,478 79,488 19,435

              Indiana 6,400 4,834 11,399 6,844 30,194 23,327 47,993 35,005

                  Iowa 4,308 4,307 7,657 725 20,282 1,747 32,247 6,779

                Kansas 4,151 4,064 7,401 1,303 19,603 1,401 31,155 6,767

              Kentucky 5,048 2,857 9,001 4,369 23,838 5,444 37,887 12,670

              Louisiana 5,331 4,976 9,451 1,028 25,037 4,367 39,819 10,371

                Maine 3,213 2,771 5,751 1,769 15,232 3,378 24,196 7,919

              Maryland 5,881 5,850 10,585 3,550 28,037 3,437 44,503 12,836

            Massachusetts 6,579 6,437 11,711 815 31,020 12,598 49,310 19,850

              Michigan 8,958 8,124 15,918 5,099 42,162 2,414 67,038 15,638

              Minnesota 5,631 5,207 10,076 1,965 26,690 2,374 42,397 9,546

              Mississippi 4,255 599 7,582 1,933 20,083 2,955 31,920 5,487

              Missouri 6,079 5,042 10,834 3,872 28,697 7,285 45,610 16,199

    Appendix II: Fiscal Years 2002 and 2003 SDPP/SHSGP and UASI Funding and
    Draw Downs by State

    Dollars in thousands
                      FY 2002 SDPP             FY 2003 SHSGP                    Total
                           Drawn    SHSGP I  Drawn    SHSGP II   Drawn                 Drawn
    States and   Funding    down    funding     down    funding     down    Funding     down
    territories
    Montana         2,967  2,589      5,303    1,272     14,047      730     22,317    4,591
    Nebraska        3,502  2,560      6,255    2,877     16,568    6,310     26,325   11,747
    Nevada          3,693  3,000      6,771    2,491     17,935    3,442     28,399    8,933
    New             3,187      687    5,727    1,113     15,172    6,887     24,086    8,687
    Hampshire
    New Jersey      7,948  2,839     14,222    1,470     37,671    6,765     59,841   11,074
    New Mexico      3,574  1,947      6,401    1,286     16,956    1,302     26,931    4,535
    New York       14,953  12,000    26,492  23,400      70,172  63,000     111,617   98,400
    North           7,706  6,322     13,908    3,995     36,840    4,337     58,454   14,654
    Carolina
    North Dakota    2,794  2,670      4,983    2,026     13,200    1,500     20,977    6,196
    Northern
    Mariana           835      632    1,496      892      3,963      815      6,294    2,338
    Islands
    Ohio            9,897  8,350     17,510    6,757     46,378    8,403     73,785   23,511
    Oklahoma        4,656      524    8,304      978     21,996      222     34,956    1,724
    Oregon          4,637  1,857      8,336    1,884     22,081    4,760     35,054    8,501
    Pennsylvania   10,512  6,168     18,570    6,906     49,189    4,249     78,271   17,323
    Puerto Rico     4,894      490    8,727        0     23,118        0     36,739      490
    Rhode Island    3,063  1,171      5,489    1,899     14,540    9,286     23,092   12,356
    South           5,028  4,552      9,017    2,032     23,882    6,626     37,927   13,210
    Carolina
    South Dakota    2,868  2,745      5,131    1,265     13,591    6,027     21,590   10,036
    Tennessee       6,140  4,089     10,978    1,961     29,080      374     46,198    6,424
    Texas          16,196  8,878     29,538  10,324      78,238  14,078     123,972   33,280
    Utah            3,849  2,608      6,937    4,184     18,374    7,833     29,160   14,625
    Vermont         2,772  2,352      4,963    2,652     13,147    3,688     20,882    8,692
    Virgin            861      133    1,542    1,227      4,085    2,409      6,488    3,770
    Islands
    Virginia        7,062  6,226     12,716    7,846     33,683  22,956      53,461   37,028
    Washington      6,276  5,368     11,294    6,877     29,917    3,655     47,487   15,899
    West            3,567  3,567      6,340    5,758     16,792    8,856     26,699   18,181
    Virginia
    Wisconsin       5,925  5,238     10,565    7,545     27,985  20,800      44,475   33,584
    Wyoming         2,696  2,285      4,827    1,410     12,784    2,205     20,307    5,899
    Total        $315,700 $216,339 $566,295 $201,197 $1,500,000 $385,146 $2,381,995 $802,682

    Source: Office for Domestic Preparedness (ODP) grant guidance and Office
    of Justice Programs/Office of the Comptroller (OJP/OC) financial
    management data.

      Appendix II: Fiscal Years 2002 and 2003 SDPP/SHSGP and UASI Funding and Draw
                                     Downs by State

    Table 4: Fiscal Year 2003 Urban Areas Security Initiative (UASI) I and II Grant
                       Funding and Draw Downs as of July 31, 2004

                                  Dollars in thousands

      UASI I

    Drawn State, city, county Funding down UASI II Total

    Drawn Drawn Funding down Funding down

                                          a a

    Arizona $11,033 $471 $11,033 $471 Phoenix and Maricopa County

    California $22,771 $560 62,202 6,014 84,973 6,574

    Los Angelesb and Los Angeles

    County; San Franciscob and San

    Francisco County; San Diego City and

    San Diego County; Sacramento and

    Sacramento County; and Long Beach

    and Los Angeles County

                                           aa

    Colorado 15,568 93 15,568 Denver and Denver County

                                           aa

    Florida 18,960 3,296 18,960 3,296

    Miami and Miami-Dade County;

    Tampa and Hillsborough County

                                          a a

    Hawaii 6,871 1,718 6,871 1,718 Honolulu and Honolulu County

    Illinois 10,896 0 29,976 0 40,872 0 Chicago b and Cook County

                                          a a

    Louisiana 6,283 350 6,283 350 New Orleans and Orleans Parish

                                           aa

    Maryland 10,901 1,468 10,901 1,468

    Baltimore and Anne Arundel and

    Baltimore Counties

                                           aa

    Michigan 12,273 0 12,273 Detroit and Wayne County

                                           aa

    Missouri 19,549 1,605 19,549 1,605

    St. Louis and St. Louis County;

    Kansas City and Clay, Jackson,

    Platte, and Cass Counties

                                          a a

    Massachusetts 16,727 0 16,727 Boston and Suffolk County

    National Capital Region b 18,081 459 42,410 186 60,491

                                          a a

    New Jersey 11,893 0 11,893 Newark and Essex County

    Appendix II: Fiscal Years 2002 and 2003 SDPP/SHSGP and UASI Funding and
    Draw Downs by State

    Dollars in thousands
                                UASI I             UASI II            Total
                                       Drawn              Drawn             Drawn
    State, city, county     Funding  down   Funding   down   Funding      down
    New York                24,768  2,706   135,267  103,103 160,035   105,809
    New York Cityb; Buffalo
    and Erie
    County
    Ohio                       a         a    13,859     16   13,859        16
    Cincinnati and Hamilton
    County;
    Cleveland and Cuyahoga
    County
    Oregon                     a         a     6,766      1   6,766          1
    Portland and
    Washington, Multnomah,
    and Clackamas Counties
    Pennsylvania               a         a     21,039     0   21,039         0
    Philadelphia and
    Philadelphia County;
    Pittsburgh and
    Allegheny County
    Tennessee                  a         a     6,072      0   6,072          0
    Memphis and Shelby
    County
    Texas                    8,634    0        34,165     8   42,799         8
    Houston b and Harris,
    Fort Bend, and
    Montgomery Counties;
    Dallas and
    Denton, Rockwell,
    Kaufman
    Collin, and Dallas
    Counties
    Washington              11,201   335      18,187     24   29,388       359
    Seattleb and King
    County
    Total                   $96,351 $4,060 $500,000 $118,354 $596,351 $122,414

    Source: ODP grant guidance and ODP and OJP/OC financial status
    information.

    a

    Data not applicable.

    b

    Six cities and the National Capital Region also received UASI I grant
    funding.

    Appendix III: Grant Award, Distribution, and Reimbursement Process for Selected
    States and Local Jurisdictions

    Figure 4: Key Dates Associated with FY 2002 State Domestic Preparedness Program
                             Grant Distribution for State A

    Source: GAO based on ODP, state, and local jurisdiction data.

    Notes: ODP = Office for Domestic Preparedness SAA = state administrative
    agency SDPP = State Domestic Preparedness Program

    Appendix III: Grant Award, Distribution, and Reimbursement Process for
    Selected States and Local Jurisdictions

    Figure 5: Key Dates Associated with FY 2002 State Domestic Preparedness Program
                             Grant Distribution for State B

    Source: GAO based on ODP, state, and local jurisdiction data.

    Notes: ODP = Office for Domestic Preparedness SAA = state administrative
    agency SDPP = State Domestic Preparedness Program

    Appendix III: Grant Award, Distribution, and Reimbursement Process for
    Selected States and Local Jurisdictions

    Figure 6: Key Dates Associated with FY 2003 State Homeland Security Grant
                        Program I Grant Distribution for State B

    Source: GAO based on ODP, state, and local jurisdiction data.

    Notes: ESO = emergency services office ODP = Office for Domestic
    Preparedness SAA = state administrative agency SHSGP = State Homeland
    Security Grant Program

    Appendix III: Grant Award, Distribution, and Reimbursement Process for
    Selected States and Local Jurisdictions

    Figure 7: Key Dates Associated with FY 2003 State Homeland Security Grant
                       Program II Grant Distribution for State B

    Source: GAO based on ODP, state, and local jurisdiction data.

    Notes: ESO = emergency services office ODP = Office for Domestic
    Preparedness SAA = state administrative agency SHSGP = State Homeland
    Security Grant Program

    Appendix III: Grant Award, Distribution, and Reimbursement Process for
    Selected States and Local Jurisdictions

    Figure 8: Key Dates Associated with FY 2003 State Homeland Security Grant
                        Program I Grant Distribution for State C

    Source: GAO based on ODP, state, and local jurisdiction data.

    Notes: ODP = Office for Domestic Preparedness SAA = state administrative
    agency SHSGP = State Homeland Security Grant Program

             Appendix IV: Comments from the Department of Homeland Security

                          Page 45 GAO-05-121 Homeland Security

    Appendix IV: Comments from the Department of Homeland Security

                          Page 46 GAO-05-121 Homeland Security

    Appendix IV: Comments from the Department of Homeland Security

                          Page 47 GAO-05-121 Homeland Security

                            Appendix V: Related GAO Products

    Homeland Security: Effective Regional Coordination Can Enhance Emergency
    Preparedness. GAO-04-1009. Washington, D.C.: September 15, 2004.

    Homeland Security: Federal Leadership Needed to Facilitate Interoperable
    Communications between First Responders. GAO-04- 1057T. Washington, D.C.:
    September 8, 2004.

    Homeland Security: Federal Leadership and Intergovernmental Cooperation
    Required to Achieve First Responder Interoperable Communications.
    GAO-04-740. Washington, D.C.: July 20, 2004.

    Homeland Security: Federal Leadership and Intergovernmental Cooperation
    Required to Achieve First Responder Interoperable Communications.
    GAO-04-963T. Washington, D.C.: July 20, 2004.

    Homeland Security: Coordinated Planning and Standards Needed to Better
    Manage First Responder Grants in the National Capital Region. GAO-04-904T.
    Washington, D.C.: June 24, 2004.

    Homeland Security: Management of First Responder Grants in the National
    Capital Region Reflects the Need for Coordinated Planning and Performance
    Goals. GAO-04-433. Washington, D.C.: May 28, 2004.

    Emergency Preparedness: Federal Funds for First Responders. GAO-04- 788T.
    Washington, D.C.: May 13, 2004.

    Homeland Security: Challenges in Achieving Interoperable Communications
    for First Responders. GAO-04-231T. Washington, D.C.: November 6, 2003.

    Homeland Security: Reforming Federal Grants to Better Meet Outstanding
    Needs. GAO-03-1146T. Washington, D.C.: September 3, 2003.

    Appendix VI: GAO Contacts and Staff Acknowledgments

    William O. Jenkins, Jr., (202) 512-8757

      GAO Contacts

    Robert White (202) 512-5463

    In addition to those persons mentioned above, David Alexander,

      Staff

    Leo Barbour, Amy Bernstein, Mona Nichols Blake, Laura Helm,
    Acknowledgments Carlos Garcia, Jessica Kaczmarek, and Katrina Moss made
    key contributions to this report.

    (440244)

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