Homeland Security: Management of First Responder Grant Programs
and Efforts to Improve Accountability Continue to Evolve
(12-APR-05, GAO-05-530T).
In fiscal years 2002 through 2005, the Office for Domestic
Preparedness (ODP) within the Department of Homeland Security
managed first responder grants totaling approximately $10.5
billion. The bulk of this funding has been for statewide grants
through the State Homeland Security Grant Program and urban area
grants through the Urban Areas Security Initiative. This
testimony provides information on the history and evolution of
these two grant programs, particularly with respect to ODP grant
award procedures; timelines for awarding and transferring grant
funds; and accountability for effective use of grant funds.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-05-530T
ACCNO: A21418
TITLE: Homeland Security: Management of First Responder Grant
Programs and Efforts to Improve Accountability Continue to Evolve
DATE: 04/12/2005
SUBJECT: Accountability
Counterterrorism
Emergency preparedness
Federal grants
Funds management
Grant administration
Grant monitoring
Intergovernmental relations
National preparedness
Procurement practices
Strategic planning
Terrorism
Data collection
Data integrity
First responders
Homeland security
State Homeland Security Grant Programs
Urban Area Security Initiative Grants
******************************************************************
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GAO-05-530T
United States Government Accountability Office
GAO Testimony
Before the Subcommittee on Emergency Preparedness, Science, and
Technology, Committee on Homeland Security, House of Representatives
For Release on Delivery
Expected at 2:00 p.m. EDT HOMELAND SECURITY
Tuesday, April 12, 2005
Management of First Responder Grant Programs and Efforts to Improve
Accountability Continue to Evolve
Statement of William O. Jenkins, Jr., Director Homeland Security and Justice
GAO-05-530T
[IMG]
April 12, 2005
HOMELAND SECURITY
Management of First Responder Grant Programs and Efforts to Improve
Accountability Continue to Evolve
What GAO Found
Federal first responder 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 and other incidents with well-planned,
wellcoordinated efforts that involve a variety of first responders from
multiple jurisdictions. ODP has led federal efforts to develop these
capabilities in part through its management of federal first responder
grants.
ODP has modified grant award procedures for states and localities. ODP
developed procedures and guidelines for awarding the State Homeland
Security Grant Program and the Urban Areas Security Initiative 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 some 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.
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. Nevertheless, the ability
of states and localities to spend grant funds expeditiously was
complicated by the need to fulfill state and local legal and procurement
requirements, 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, but challenges remain.
ODP has taken steps to improve accountability in the state preparedness
planning process, in part by requiring states to update homeland security
strategies. 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
towards 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 state homeland security strategies. As part
of a broader effort to meet mandates contained in Homeland Security
Presidential Directive 8, addressing national preparedness goals for all
hazards, ODP has taken steps to ensure more assessments of first responder
needs are conducted on a national basis. Finally, ODP recently issued
interim national preparedness goals that reflect the department's progress
in developing readiness targets, priorities, standards for preparedness
assessments and strategies, and a system for assessing the nation's
overall level of preparedness. However, DHS's task of finalizing these
goals and translating them into capabilities that are meaningful and
readily transferable to the wide variety of local jurisdictions around the
nation is still not complete.
United States Government Accountability Office
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss federal funding for first
responders. The events of September 11, 2001, highlighted the critical
role of the nation's first responders in preventing, preparing for,
responding to, and recovering from the effects of a terrorist attack. In
fiscal years 2002 through 2005, the Office for Domestic Preparedness (ODP)
within the Department of Homeland Security (DHS)1 managed first responder
grants totaling approximately $10.5 billion. The bulk of this funding has
been for the State Homeland Security Grant Program2 (statewide) and the
Urban Areas Security Initiative (urban area) grants. Although the grant
programs have evolved over time, this money has generally been available
for planning, equipment, exercises, training, and administrative costs.
The grants have also generally been targeted at preventing, preparing for,
responding to, and recovering from terrorist events.
The amount of federal funding for ODP grant programs has increased
significantly since September 11. Accompanying this increase has been a
discussion at the federal, state, and local levels of the most appropriate
means of allocating these funds, developing plans that set priorities for
their use, and assessing the effective use of the funds. Several factors
could affect how these things are done in the future. For example, recent
congressional proposals have addressed the most appropriate means to
allocate grant funds to states. In addition, the issuance of Homeland
Security Presidential Directive 8 (HSPD-8) in December 2003-calling for,
among other things, a new national preparedness goal and performance
measure that pertained to "all hazards"-placed first responder grant
programs, including those managed by ODP, into a broader context that is
to consider the nation's readiness to respond to all major events,
including natural disasters as well as acts of terrorism.
We are currently conducting a review of DHS's implementation of HSPD-8 and
expect to issue our report in the summer of 2005, looking at how DHS is
working with state and local governments and first responders to implement
it.
1Grants 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.
2In fiscal year 2002, the grant program was called the State Domestic
Preparedness Program.
Summary
My statement today provides information on the history and evolution of
the two largest grant programs, particularly with respect to ODP grant
award procedures; timelines for awarding and transferring grant funds; and
accountability for effective use of grant funds. My comments are based on
our report3 on the management of first responder grant programs as well as
updated information on DHS's progress since the report's issuance in
addressing its challenges.
Federal first responder grants are a means of achieving an important
goal-enhancing the ability-through equipment, skills, and training--of
first responders to prevent, prepare for, respond to, and recover from
terrorist and other incidents with well-planned, well-coordinated efforts
that involve police, fire, emergency medical, public health, and other
personnel from multiple jurisdictions. As we noted in our May 2004 report
on the management of first responder funds in the National Capital Region,
effectively managing first responder grant funds requires the ability to
measure progress and provide accountability for the use of public funds.
This includes developing and implementing strategies, establishing
baselines, developing and implementing performance goals and data quality
standards, collecting reliable data, analyzing the data, assessing the
results, and taking action based on the results. This strategic approach
to homeland security includes identifying threats and managing risks,
aligning resources to address them, and assessing progress in preparing
for those threats and risks.
ODP has modified grant award procedures for states and localities. 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
3See GAO, Homeland Security: Management of First Responder Grant Programs
Has Improved, but Challenges Remain, GAO-05-121, (Washington, D.C.: Feb.
2, 2005). As part of the review, we visited five selected states: Arizona,
California, Florida, Missouri, and Pennsylvania. We conducted our work
from November 2003 through November 2004 in accordance with generally
accepted government auditing standards. See also GAO, Emergency
Preparedness: Federal Funds for First Responders, GAO-04-788T,
(Washington, D.C.: May13, 2004); 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); and GAO, Homeland Security: Federal Leadership and
Intergovernmental Cooperation Required to Achieve First Responder
Interoperable Communications, GAO-04-740 (Washington, D.C.: July 20,
2004).
services they purchased. As part of this process, ODP gave states some
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.
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. ODP also took steps to
expedite the transfer of funds from states to local jurisdictions,
allowing states, for example, to transfer grant funds to localities before
all required documentation had been submitted to ODP. Nevertheless, the
ability of states and localities to spend grant funds expeditiously was
complicated by the need to fulfill state and local legal and procurement
requirements, 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, but challenges remain.
ODP has taken steps to improve accountability in the state preparedness
planning process. For example, in fiscal year 2003, ODP required states to
update homeland security strategies. These strategies are intended to
guide state and local jurisdictions in targeting 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. In addition, as
part of a broader effort to meet mandates contained in HSPD-8, ODP has
begun drafting national preparedness standards that are intended to ensure
more assessments of first responder needs on a national basis. DHS
recently issued a document entitled "Interim National Preparedness Goal",
which reflects the department's progress in developing readiness targets,
priorities, standards for preparedness assessments and strategies, and a
system for assessing the nation's overall level of preparedness.
In our prior work, we have recommended that expenditures in the National
Capital Region and state and local expenditures for interoperable
communications be guided by a strategic plan that identifies priorities,
and that fund expenditures be monitored to ensure that they are targeted
in compliance with the goals and priorities identified in the plan. The
National Capital Region's Senior Policy Group and DHS generally agreed
with these respective recommendations. The Senior Policy Group, in
conjunction with representatives from the jurisdictions in the National
Background
Capital Region, has been working to develop a regionwide plan for the use
of first responder funds. On November 1, 2004, DHS's SAFECOM program
issued its methodology to assist states in developing statewide
interoperable communications plans that could be used to guide future
expenditures.
The task of enhancing first responder capabilities across the nation is a
complex and daunting one. ODP must continue to work with state, local, and
tribal governments, and the private sector to finish the tasks it has
begun. At the same time, state, local, and tribal governments, and the
private sector must recognize that the process is iterative, will include
periodic adjustments and refinements, and that risks are not equally
distributed across the nation.
The Department of Justice established the ODP in 1998 within the Office of
Justice Programs 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 DHS upon its creation in March 2003, has been a principal
source of domestic preparedness grant funds. 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. 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). In addition, other preparedness grant programs
from agencies within DHS were also transferred to SLGCP. 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. Within SLGCP, ODP continues to have program
management and monitoring responsibilities for the domestic preparedness
grants.
Status of Grant Funding and Allocation
From fiscal year 2002 through fiscal year 2005, the amount of domestic
preparedness grants awarded by ODP increased from about $436 million to
about $3.3 billion. The scope of ODP's grant programs expanded as well,
from funding only first responder advanced equipment, exercises, and
administrative activities in fiscal year 2002 to funding a range of
preparedness planning activities, exercises, training, equipment
purchases, and related program management and administrative costs in
fiscal year 2005. During fiscal years 2002 through 2005, the State
Homeland Security
Grant Program and Urban Areas Security Initiative program accounted for
about 69 percent of total ODP grant funds. Table 1 shows the amounts
provided for the domestic preparedness grant programs.
Table 1: ODP Grant Program Funding for Fiscal Years 2002 through 2005
Dollars in thousands
Percent
of
Grant 2002 2003 2004 2005 Total total
program funding
State
Homeland
Security
Grant $315,700 $2,066,295 $1,675,058 $1,062,285 $5,119,338
Program
Urban Areas
Security a 596,351 671,017 854,657 2,122,025
Initiative
Subtotal 315, 700 2,662,646 2,346,075 1,916,942 7,241,363
Other Grants 119,979b 388,081c 1,349,491d 1,361,637e 3,219,188
Total $435,679 $3,050,727 $3,695,566 $3,278,579 $10,460,551 100.0
Source: ODP.
aNot funded in this year.
bIncludes 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.
cIncludes the following 15 grant programs: Urban Areas Security Initiative
Port Security Grant Program, Urban Areas Security Initiative Transit
Security Grant Program, Urban Areas Security Initiative Pilot Projects,
Urban Areas Security Initiative Radiological Defense System,
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.
dIncludes the following seven grant programs: Assistance to Firefighters
Grant, Citizen Corps Program, Competitive Training Grants Program,
Information Technology and Evaluation Program, Law Enforcement Terrorism
Prevention Program, Operation Safe Commerce-Phase III, and Urban Areas
Security Initiative Transit Security Program.
eIncludes the following eight grant programs: Assistance to Firefighters
Grant, Buffer Zone Protection Program, Citizen Corps Program, Competitive
Training Grants Program, Emergency Management Performance Grants, Law
Enforcement Terrorism Prevention Program, Metropolitan Medical Response
System, and Operation Safe Commerce-Phase III.
For fiscal years 2002 through 2005, ODP awarded approximately $2.1 billion
in urban area grant funds to selected urban areas identified by DHS. The
amount of individual urban area grants is determined through a combination
of factors, including current threat estimates, an assessment of each
area's critical assets, and population density. For the same period, ODP
awarded approximately $5.1 billion in statewide grant funds to states
to enhance domestic preparedness. Under its current funding formula,4
approximately 40 percent of statewide grant funds are shared equally among
states, while the remaining amount is distributed according to state
population.5
Several congressional proposals have been advanced to alter the statewide
funding formula to base it more directly on risk considerations. One
proposal would largely maintain the portion of funds shared equally by the
states but would base the distribution of the remaining funds on a
riskbased formula similar to the one currently used for urban area grants.
Another proposal from the House Homeland Security Committee would reduce
the minimum amount of funding shared equally by states to approximately 14
percent of total funding and establish a board to allocate the remaining
funds through an evaluation of threat, vulnerability, and the potential
consequences of a terrorist attack.
GAO supports a risk-based approach to homeland security. Adoption of a
risk management framework can aid in assessing risk by determining which
vulnerabilities should be addressed in what ways within available
resources. Assessing risk for specific assets or locations is defined by
two conditions: (1) probability or likelihood, quantitative or
qualitative, that an adverse event would occur, and (2) consequences, the
damage resulting from the event, should it occur. Because it is unlikely
that sufficient resources will be available to address all risks, it
becomes necessary to prioritize both risks and the actions taken to reduce
those risks, taking cost into consideration. For example, which actions
will have the greatest net potential benefit in reducing one or more
risks?
Over time, ODP has modified its grant application processes and procedures
for awarding grants to states, governing how states distribute funds to
local jurisdictions, and facilitating reimbursements for states and
localities. To obtain funding, state and urban area grantees must submit
applications to ODP and have them approved. In fiscal year 2004, ODP began
to streamline the application process. According to ODP, based on
4The current formula provides each state, the District of Columbia, and
the Commonwealth of Puerto Rico 0.75 percent and each territory 0.25
percent of the total grant funds. The remaining grant funds are allocated
to states and territories on a population-share basis.
5The funding formula was also used in fiscal years 2004 and 2005 for two
other grant programs managed by ODP: the Law Enforcement Terrorism
Prevention Program and Citizen Corps Program.
ODP Grant Award Procedures
feedback from the grantees, and to continue to improve the grant programs,
it combined three grant programs into a single grant application
solicitation. In fiscal year 2005, the number of combined programs
increased to six. ODP stated that the consolidation was done to streamline
the grant application process and better coordinate federal, state, and
local grant funding distribution and operations.
For the statewide grant programs, ODP has allowed the states flexibility
in deciding how the grant programs are structured and implemented in their
states. In general, states are 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.
Urban area 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, designate contiguous jurisdictions to receive grant
funds. For the first round of the urban area grants in fiscal year 2003,
the grants were made directly to the seven urban areas identified as
recipients.6 Starting with the second round of urban area grants in 2003,
grants were made to states, which then subgranted the funds to the
designated urban areas, but retained responsibility for administering the
grant program. The core city and county/counties work with the state
administrative agency to define the geographic borders of the urban area
and coordinate with the Urban Area Working Group.
Once the grant funds are awarded to the states and then subgranted to the
local jurisdictions or urban areas, certain legal and procurement
requirements have to be met, such as a city council's approval to accept
grant awards. Once these requirements are satisfied, states, local
jurisdictions, and urban areas can then obligate their funds for first
6The seven urban area recipients were Los Angeles and San Francisco,
California; Chicago, Illinois; New York City, New York; Houston, Texas;
Seattle, Washington; and the National Capital Region. Since then, urban
area recipients have grown to include 50 recipients in 27 states and the
National Capital Region in fiscal year 2005.
Timelines Established for Awarding and Transferring Grant Funds
responder equipment, exercises, training, and services. Generally, when a
local jurisdiction or urban area directly incurs an expenditure, it
submits related procurement documents, such as invoices, to the state. The
state then draws down the funds from the Justice Department's Office of
Justice Programs.7 According to this office, funds from the U.S. Treasury
are usually deposited with the states' financial institution within 48
hours. The states, in turn, provide the funds to the local jurisdiction or
urban area.
Since the first announcement of the dramatic increase in first responder
grants after the terrorist attacks of September 11, 2001, the speed with
which the funding reached localities has been a matter of concern and some
criticism. Congress, state and local officials, and others expressed
concerns about the time ODP was taking to award grant funds to states and
for states to transfer grant funds to local jurisdictions. Beginning in
fiscal year 2003, ODP, at congressional direction, demonstrated
significant progress in expediting grant awards to states. For the fiscal
year 2002 statewide grants, ODP was not required to award funds to states
within a specific time frame. During fiscal year 2002, ODP took 123 days
to make the statewide grant application available to states and, on
average, about 21 days to approve states' applications after receipt. For
the second round of fiscal year 2003 statewide grants, however, the
appropriations act 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, ODP made the grant application for this round of grants
available to states within the required deadline and awarded over 90
percent of the grants within 14 days of receiving the applications. The
appropriations act also mandated that states submit grant applications
within 30 days of the grant announcement. According to ODP data, all
states met the statutory 30-day mandate; in fact, the average number of
days from grant announcement to application submission declined from about
81 days in fiscal year 2002 to about 23 days for the second round of
fiscal year 2003 statewide grants.
The transfer of funds from states to local jurisdictions has also received
attention from Congress and ODP. To expedite the transfer of grant funds
from the states to local jurisdictions, ODP program guidelines and
7The Comptroller's Office within the Office of Justice Programs continues
to act as financial manager for DHS first responder grant programs. DHS
plans to establish its own Office of Grant Operations within ODP during
fiscal year 2005.
subsequent appropriations acts imposed additional deadlines on states. For
the fiscal year 2002 statewide grants, there were no 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 these grant
funds to a local jurisdiction while another state we visited took 305
days. Beginning with the first round of fiscal year 2003 statewide grants,
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 act for the
second round of fiscal year 2003 statewide 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
45day period. 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 the first and second
rounds of the fiscal year 2003 grants, respectively, 33 and 31 states
certified that the required 45-day period had been met.8
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 and have
approved by ODP budget detail worksheets and program narratives indicating
how the grant funds would be used for equipment, exercises, and
administration. 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 the fiscal year 2002 statewide grant funds
and notified the state of the special conditions on September 13,
8For the second round of fiscal year 2003 statewide grants, 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. According to ODP, 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.
2002; the special conditions were removed about 6 months later on March
18, 2003, after the state had met those conditions.
In fiscal year 2003, however, 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 the first round of fiscal year
2003 statewide grants, 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. Later that fiscal year, ODP further relaxed this
requirement and allowed the states to transfer, expend, and draw down
grant funds immediately after ODP awarded the grant funds. The states only
had to submit all documentation along with their biannual progress
reports.
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 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 as long as 4 months to obtain state approval to
spend the funds.
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. 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. DHS
has also offered options for 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. These agreements
provide an alternative to state and local procurement processes and,
according to DHS, often result in a more rapid product delivery at a lower
cost.
Congress has also taken steps to address a problem that some states and
localities cited concerning a federal law, the Cash Management Improvement
Act (CMIA), that provides for 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
report, 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.9 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 a provision of CMIA to allow funds to be provided to states
and municipalities up to 120 days in advance of expenditures. In response,
the fiscal year 2005 DHS appropriations legislation10 included a provision
that exempts formulabased grants (e.g., the State Homeland Security Grant
Program grants) and discretionary grants, including the Urban Areas
Security Initiative and other ODP grants, from the CMIA's requirement that
an agency schedule the transfer of funds to a state so as to minimize the
time elapsing between the transfer of funds from the U.S. Treasury and the
state's disbursement of the funds for program purposes. ODP's fiscal year
2005 program guidelines informed grantees and subgrantees that they are
allowed to draw down funds up to 120 days prior to expenditure.
In addition, DHS efforts are under way to identify and disseminate best
practices, including how states and localities manage legal and
9U.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).
10Pub. L. No. 108-334, S:521, 118 Stat. 1298, 1319 (2004).
procurement issues that affect grant distribution. DHS's Homeland Security
Advisory Council Task Force reported that some jurisdictions have been
"very innovative" in developing mechanisms to support the procurement and
delivery of emergency-response-related 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. ODP has
responded by establishing a new Homeland Security Preparedness Technical
Assistance Program service to enhance the grant management capabilities of
state administrative agencies and by surveying states to identify their
technical needs and best practices they have developed related to managing
and accounting for ODP grants, including the procurement of equipment and
services at the state and local levels. This information is to serve as a
foundation for the development of a tailored, on-site assistance program
for states to ensure that identified best practices are implemented and
critical grant management needs and problems are addressed. According to
ODP, the technical assistance service was made operational in December
2004, however, the final compendium of best grants management practices
will not be formally released until May 2005.
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 act could delay procurements, particularly
in states that have a centralized purchasing system. Specifically,
beginning with the fiscal year 2004 grant cycle, states were required by
law 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. This requirement
may pose problems for some states. 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 the fiscal year 2005 grant program
guidelines, states were
Accountability for Effective Use of Grant Funds
encouraged, but not required, to submit their MOUs to ODP for review by
DHS's Office of General Counsel to ensure compliance.
In distributing federal funds to states to assist first responders in
preventing, preparing for, and responding to terrorist threats, the
federal government has required states to develop strategies to address
their homeland security needs as a condition for receiving funding. The
details of this federal requirement have also evolved over time.
Before the events of September 11, 2001, ODP required states to develop
homeland security strategies that would provide a roadmap of where each
state should target grant funds. 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.
In fiscal year 2003, ODP directed the states 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.11 As required by statute, completion and approval of these
updated strategies were a condition for awarding fiscal year 2004 grant
funds.
ODP has also revised its approach on how states and localities report on
grant spending and use. 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 an
authorized equipment list that includes 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 the budget worksheets that localities submitted to states for
their review. Until the fiscal year 2004 grant cycle, states were required
to submit itemized budget detail worksheets that itemized each item to be
11In fiscal year 2003, the urban area grantees were required to prepare
and obtain approval of their urban area strategies.
purchased under first responder grants. ODP found, however, that, while
the 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. Accordingly, ODP revised its approach for fiscal year 2004 and
required that states, instead of submitting budget detail worksheets to
ODP, 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. 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.
Reports by GAO and DHS's Office of Inspector General, as well as by the
House Homeland Security Committee, have identified the need for clear
national guidance in defining the appropriate level of preparedness and
setting priorities to achieve it. The lack of such guidance has in the
past been identified as hindering state and local efforts to prioritize
their needs and plan how best to allocate their homeland security funding.
We have reported that national preparedness standards that can be used to
assess existing first responder capacities, identify gaps in those
capacities, and measure progress in achieving specific performance goals
are essential to effectively managing federal first responder grant funds
as well as to the ability to measure progress and provide accountability
for the use of public funds.
ODP has responded to the calls for national preparedness standards and
specifically to HSPD-8 that required DHS to develop a new national
preparedness goal and performance measures, standards for preparedness
assessments and strategies, and a system for assessing the nation's
overall preparedness. 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. The scenarios include
such potential emergencies as a biological, nuclear or cyber attack, two
natural disasters, and a flu
pandemic. The objective is to develop the minimum number of credible,
high-consequence scenarios needed to identify a broad range of prevention
and response requirements.
As part of the HSPD-8 implementation process, in January 2005, ODP issued
a list of capability requirements12 in keeping with a requirement of the
fiscal year 2005 DHS appropriations act.13 To help define the capabilities
that jurisdictions should set as targets, ODP first defined the essential
tasks that need to be performed from the incident scene to the national
level for major events illustrated by the 15 scenarios. It then developed
a Target Capabilities List that identifies 36 areas in which responding
agencies are expected to be proficient in order to perform these critical
tasks. 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.
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.
On March 31, 2005, DHS issued a document entitled "Interim National
Preparedness Goal" that reflects the department's progress in developing
readiness targets, priorities, standards for preparedness assessments and
strategies, and a system for assessing the nation's overall level of
preparedness. The document also states that National Preparedness Guidance
will follow within 2 weeks. This guidance is to include, in DHS' words,
"detailed instructions on how communities can use the Goal and a
description of how the Goal will generally be used in the future to
allocate Federal preparedness assistance." DHS expects to issue a Final
Goal and an updated target capabilities list on October 1, 2005. Over the
next several months, ODP plans to work with its stakeholders to identify
the levels of
12U.S. Department of Homeland Security, Office of State and Local
Government Coordination and Preparedness, Target Capabilities List:
Version 1.0 (January 2005).
13The act required ODP to provide state and local jurisdictions with
nationally accepted first responder preparedness levels no later than
January 31, 2005.
Prior GAO Recommendations with Regard to First Responder Grants
capabilities that various types of jurisdictions should possess in order
for the Nation to reach the desired state of national preparedness.
In May 2004, we reported on the use of first responder grant monies in the
National Capital Region, which includes the District of Columbia and
specified surrounding jurisdictions in the states of Maryland and
Virginia.14 We found that the grant monies were not being spent in
accordance with a regional plan for their use. To ensure that emergency
preparedness grants and associated funds were managed in a way that
maximizes their effectiveness, we recommended that the Secretary of
Homeland Security work with NCR jurisdictions to develop a coordinated
strategic plan to establish goals and priorities for the use of funds,
monitor the plan's implementation to ensure that funds are used in a way
that are not unnecessarily duplicative, and evaluate the effectiveness of
expenditures in addressing gaps in preparedness. DHS and the Senior Policy
Group of the National Capital Region generally agreed with our
recommendations and have been working to implement them.
In our report on interoperable communications for first responders, we
found that federal assistance programs to state and local government did
not fully support regional planning for communications interoperability.
We also found that federal grants that support interoperability had
inconsistent requirements to tie funding to interoperable communications
plans. In addition, uncoordinated federal and state level grant reviews
limited the government's ability to ensure that federal funds were used to
effectively support improved regional and statewide communications
systems. We recommended that DHS grant guidance encourage states to
establish a single statewide body responsible for interoperable
communications that would prepare a single comprehensive statewide
interoperability plan for federal, state, and local communications systems
in all frequency bands. We also recommended that at the appropriate time,
that DHS grant guidance should require that federal grant funding for
interoperable communications equipment should be approved only upon
certification by the statewide body that such grant applications were in
conformance with the statewide interoperability plan. In its comments on
our draft report, DHS did not address the second recommendation. However,
on November 1, 2004, the SAFECOM office with DHS Office of
14Included are the District of Columbia, Montgomery and Prince George's
Counties in Maryland; Arlington, Fairfax, Loudoun, and Prince William
Counties and the City of Alexandria in Virginia; and all cities and other
unites of government within the geographic areas of such district,
counties, and city. Our work focused on the eight largest jurisdictions.
Concluding Observations
Interoperability and Compatibility issued its methodology for developing a
statewide interoperability communications plan.
In summary, Mr. Chairman, since the tragic events of September 11, 2001,
the federal government has dramatically increased the resources and
attention it has devoted to national preparedness and the capabilities of
first responders. The grant programs managed by ODP have expanded rapidly
in their scope and funding levels. Over the 3- 1/2 years since the
terrorist attacks, Congress, ODP, states, and local governments
encountered obstacles, some of them frustrating and unexpected, in
delivering grant funds to their ultimate recipients in a timely manner and
ensuring they are used most effectively. All levels of government have
attempted to address these obstacles and succeeded in resolving or
ameliorating many of them. Some of the changes made are relatively new;
thus, it is still too early to determine if they will have the desired
outcome.
ODP's focus has changed over time from examining and approving, for
example, specific items of equipment proposed for purchase under first
responder grants to defining the capabilities that states and local
jurisdictions need to attain-that is, establishing performance standards.
Such a results-based orientation could prove to be the most practical and
effective grants management approach at the federal level to help ensure
accountability and effectiveness of results. DHS must also continue to
ensure that an effective system for monitoring and accounting for limited
federal funds intended for enhancing the nation's ability to respond to
terrorist attacks or natural disasters exists at the state and local
level.
DHS's task of defining a national preparedness goal and translating that
definition into capabilities that are meaningful and readily transferable
to the wide variety of local jurisdictions around the nation is still not
complete. As the department has acknowledged, the process will necessarily
be iterative. As we have stressed before, during this process DHS must
continue to listen and respond constructively to the concerns of states,
local jurisdictions, and other interested parties. Such collaboration will
be essential to ensuring that the nation's emergency response capabilities
are appropriately identified, assessed, and strengthened. At the same
time, state, local, and tribal governments, and the private sector must
recognize that the process is iterative, will include periodic adjustments
and refinements, and that risks are not equally distributed across the
nation.
As we have noted previously, it is important that the quest for speed in
distributing and using federal first responder grants does not hamper the
planning and accountability needed to ensure that the funds are spent on
the basis of a comprehensive, well-coordinated plan to provide first
responders with the equipment, skills, and training needed to be able to
respond quickly and effectively to a range of emergencies, including,
where appropriate, major natural disasters and terrorist attacks.
The challenges we noted in developing effective interoperable
communications for first responders are applicable to developing effective
first responder capabilities for major emergencies, regardless of cause. A
fundamental challenge has been limited regional and statewide planning,
coordination, and cooperation. No one level of government can successfully
address the challenges of developing needed first responder capabilities
alone. The federal government can play a leadership role in developing
requirements and providing support for state, regional, and local
governments to: assess first responder capabilities; identify gaps in
meeting those capabilities; develop coordinated plans and priorities for
closing those gaps; and assess success in developing and maintaining the
needed capabilities.
Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions that you or other members of the subcommittee may have.
Contact Information For further information on this testimony, please
contact William O. Jenkins, Jr., at (202) 512-8777. Individuals making key
contributions to this testimony included Amy Bernstein, David Brown,
Frances Cook, James Cook, Christopher Keisling, Katrina Moss, Sandra
Tasic, John Vocino, and Robert White.
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