Homeland Security: DHS Improved its Risk-Based Grant Programs'	 
Allocation and Management Methods, But Measuring Programs' Impact
on National Capabilities Remains a Challenge (11-MAR-08,	 
GAO-08-488T).							 
                                                                 
Since 2002, the Department of Homeland Security (DHS) has	 
distributed over $19 billion in homeland security grants to	 
enhance the nation's preparedness and response capabilities. The 
Federal Emergency Management Agency (FEMA) is responsible for all
preparedness efforts including allocating and managing these	 
grants. This testimony examines (1) the process and methods to	 
allocate homeland security grants to state and local governments,
(2) how DHS communicates with states and localities in making	 
grant allocation decisions, (3) what challenges affect the	 
expeditious spending of DHS grant funds by states and localities;
and (4) the extent that DHS measured program outcomes as part of 
its efforts to monitor the expenditure of grant dollars. GAO's	 
testimony is based on products issued from April 2005 through	 
July 2007 on DHS's grant management system, and on GAO's ongoing 
mandated work related to FEMA's risk-based grant distribution	 
processes for fiscal years 2007 and 2008. To conduct this work,  
GAO reviewed relevant documents on FEMA's risk analysis model and
interviewed agency officials.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-488T					        
    ACCNO:   A81271						        
  TITLE:     Homeland Security: DHS Improved its Risk-Based Grant     
Programs' Allocation and Management Methods, But Measuring	 
Programs' Impact on National Capabilities Remains a Challenge	 
     DATE:   03/11/2008 
  SUBJECT:   Allocation (Government accounting) 		 
	     Budget obligations 				 
	     Budgeting						 
	     Data integrity					 
	     Emergency preparedness programs			 
	     Emergency response funds				 
	     Federal grants					 
	     Federal/state relations				 
	     Financial analysis 				 
	     Financial management				 
	     Funds management					 
	     Grant administration				 
	     Grant monitoring					 
	     Grants to local governments			 
	     Grants to states					 
	     Homeland security					 
	     Policy evaluation					 
	     Program management 				 
	     Reporting requirements				 
	     Risk assessment					 
	     Risk management					 
	     Program goals or objectives			 

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GAO-08-488T

   

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Testimony Before the Subcommittee on Homeland Security, Committee on 
Appropriations, House of Representatives: 

United States Government Accountability Office:
GAO: 

For Release on Delivery Expected at 2:00 p.m. EDT: 

Tuesday, March 11, 2008: 

Homeland Security: 

DHS Improved its Risk-Based Grant Programs' Allocation and Management 
Methods, But Measuring Programs' Impact on National Capabilities 
Remains a Challenge: 

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

GAO-08-488T: 

GAO Highlights: 

Highlights of GAO-08-488T, a testimony before the Subcommittee on 
Homeland Security, Committee on Appropriations, House of 
Representatives. 

Why GAO Did This Study: 

Since 2002, the Department of Homeland Security (DHS) has distributed 
over $19 billion in homeland security grants to enhance the nationï¿½s 
preparedness and response capabilities. The Federal Emergency 
Management Agency (FEMA) is responsible for all preparedness efforts 
including allocating and managing these grants. This testimony examines 
(1) the process and methods to allocate homeland security grants to 
state and local governments, (2) how DHS communicates with states and 
localities in making grant allocation decisions, (3) what challenges 
affect the expeditious spending of DHS grant funds by states and 
localities; and (4) the extent that DHS measured program outcomes as 
part of its efforts to monitor the expenditure of grant dollars. GAOï¿½s 
testimony is based on products issued from April 2005 through July 2007 
on DHSï¿½s grant management system, and on GAOï¿½s ongoing mandated work 
related to FEMAï¿½s risk-based grant distribution processes for fiscal 
years 2007 and 2008. To conduct this work, GAO reviewed relevant 
documents on FEMAï¿½s risk analysis model and interviewed agency 
officials.
 
What GAO Found: 

DHS uses an evolving risk-based methodology to identify the urban areas 
eligible for homeland security grants and the amount of funds states 
and urban areas receive. DHS designed the methodology to measure the 
relative risk of a given state or urban area using a risk analysis 
model that defined Risk as the product of Threat times Vulnerability 
and Consequences (R = T * (V & C)). Given the uncertainties inherent in 
risk assessment, the methodology uses a combination of empirical data 
(e.g., population, asset location) and policy judgment (e.g., the 
nature of the threat for specific areas and the weights to be assigned 
to specific variables in the model such as critical infrastructure, 
population, and population density). 

According to FEMA officials and GAOï¿½s review of homeland security grant 
assistance documents, FEMA communicates with its state and local 
stakeholders by (1) providing individual threat assessments that DHS is 
using for its risk analysis model to each state and urban area, (2) 
validating the nonpublic national infrastructure data that are also 
part of the risk analysis model, (3) reviewing statesï¿½ and urban areasï¿½ 
draft investment proposals that are later submitted and rated during 
DHSï¿½s effectiveness assessment process, (4) providing technical 
assistance as states and urban areas prepare grant applications, and 
(5) holding post-award conferences to solicit stakeholder feedback. 

In April 2005, GAO reported that the ability of states and localities 
to spend grant funds expeditiously was complicated by the need to 
fulfill legal and procurement requirements, which in some cases added 
months to the purchasing process. GAO also reported a variety of steps 
that had been taken by states, DHS, and the Congress to streamline the 
expenditure of grant funds. However, GAO was unable to examine trends 
in obligations and expenditures for grant programs across fiscal years 
because the budget data FEMA provided did not specify grant 
expenditures by fiscal year and reporting categories were not 
consistent across fiscal years. 

Although DHS has taken some steps to establish goals, gather 
information, and measure progress, its monitoring of homeland security 
grant expenditures does not provide a means to measure the achievement 
of desired program outcomes. FEMAï¿½s current efforts do not provide 
information on the effectiveness of those funds in improving the 
nationï¿½s capabilities or reducing risk. DHS leadership has identified 
this issue as a high priority, and is trying to develop a more 
quantitative approach to accomplish the goal of using this information 
for the more strategic purpose of monitoring the achievement of program 
goals, according to FEMA officials. 

What GAO Recommends: 

GAO has made recommendations to DHS in prior reports to measure 
emergency response capabilities and improve grant allocation decisions. 
DHS generally concurred with these recommendations and is making 
progress implementing them. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-488T]. For more information, contact 
William O. Jenkins, Jr. at (202) 512-8777 or [email protected]. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

Thank you for the opportunity to discuss the allocation and use of 
federal grants to enhance the nation's preparedness for and response to 
major and catastrophic disasters. The goal of disaster preparedness and 
response is easy to state but difficult to achieve and can be stated as 
follows: 

To prevent where possible, prepare for, mitigate, and respond to 
disasters of any size or cause with well-planned, well-coordinated, and 
effective actions that minimize the loss of life and property and set 
the stage for a quick recovery. 

Achieving this goal for major and catastrophic disasters is a difficult 
task. It takes hard work, attention to details, and effective pre-and 
post-disaster coordination and cooperation among different levels of 
government, nongovernmental organizations, and the private sector. 
Individuals can also contribute to success through such things as 
knowing evacuation routes, complying with evacuation orders, and having 
a family and individual disaster preparation plan and supplies. 

Homeland security grants are the federal government's primary tool for 
enhancing state, local, and tribal governments' emergency preparedness 
and response capabilities. Since 2002, the Department of Homeland 
Security (DHS) has distributed over $19 billion in federal funding for 
planning, equipment, and training to enhance the nation's capabilities 
to respond to terrorist attacks and, to a lesser extent, natural and 
accidental disasters.[Footnote 1] The Post-Katrina Emergency 
Management Reform Act places responsibility for allocating and managing 
DHS grants with the Federal Emergency Management Agency 
(FEMA).[Footnote 2] Prior to the act, the organization within DHS 
principally responsible for administering such grants had no 
operational responsibilities for disaster response. The act also 
includes provisions to strengthen FEMA's organizational capacity to 
coordinate with states and localities in preparing for and responding 
to major and catastrophic disasters regardless of cause by 
consolidating federal emergency preparedness and response 
responsibilities and authorities within FEMA. Now that FEMA has the 
consolidated responsibilities and associated authorities for national 
emergency preparedness, the agency has a unique opportunity to evaluate 
how it can most effectively target the grants by viewing the grant 
programs collectively, rather than only in terms of the individual 
programs' objectives. 

My statement describes GAO's past work as well as ongoing work on DHS's 
grant management system, specifically, the grant management efforts 
that are now the responsibility of FEMA and addresses the following 
questions: 

(1) What methods does DHS use to allocate homeland security grants to 
state and local governments? 

(2) How does DHS communicate with states and localities in making 
federal grant allocation decisions? 

(3) What are the challenges that affect the expeditious spending of DHS 
grant funds by states and localities? 

(4) To what extent does DHS measure program outcomes as part of its 
efforts to monitor the expenditure of grant dollars? 

My comments are based on GAO's historical body of work on DHS grants 
management, including prior reviews of DHS's (1) risk management 
efforts,[Footnote 3] (2) methodology for allocating Urban Area Security 
Initiative (UASI) grants for fiscal years 2006 and 2007,[Footnote 4] 
(3) processes for managing their state homeland security[Footnote 5] 
and transportation sector-specific grants,[Footnote 6] and (4) 
preparedness for disasters, including FEMA's reorganization based on 
the Post-Katrina Reform Act.[Footnote 7] In addition, my comments are 
based on our ongoing mandated work examining the risk-based grant 
distribution processes used by FEMA to distribute the fiscal year 2008 
Homeland Security Grant Program (HSGP). This program includes the UASI 
grants as well as the State Homeland Security Program (SHSP) which 
provides funding for state, local, and tribal governments. For our 
ongoing work, we analyzed DHS documents including the fiscal years 2007 
and 2008 risk analysis models, grant guidance, and presentations, and 
interviewed DHS officials about the HSGP grant determination process in 
fiscal year 2007 as well as any changes to the fiscal year 2008 
process. We conducted this work according to generally accepted 
government auditing standards. Those standards require that we plan and 
perform the audit to obtain sufficient, appropriate evidence to provide 
a reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a reasonable 
basis for our findings and conclusions based on our audit objectives. 

Summary: 

For fiscal years 2005 through 2008, DHS has used an evolving risk-based 
methodology to identify the urban areas eligible for HSGP grants and 
the amount of funds states and urban areas receive.[Footnote 8] DHS 
designed the methodology to measure the relative risk of a given state 
or urban area using a risk analysis model based on information about 
each state and urban area. Initially, this relative risk measurement 
relied primarily on information related to population and population 
density, but the data DHS included in the model and how DHS used those 
data to measure relative risk have evolved with each year's risk 
assessment. Since fiscal year 2006, DHS has adopted a more 
sophisticated risk-based grant allocation approach to (1) determine 
both states and urban areas' potential risk relative to other areas 
that includes empirical analytical methods and policy judgments, and 
(2) assess and score the effectiveness of the proposed investments 
submitted by the eligible applicants and determine the final amount of 
funds awarded. For the HSGP allocation process in fiscal year 2007, DHS 
defined Risk as the product of Threat times Vulnerability and 
Consequences (R= T* (V & C)).[Footnote 9] Our ongoing work has shown 
that DHS has defined risk in the same manner for fiscal year 2008. 

According to FEMA officials and HSGP grant assistance documents, FEMA 
communicates with its state and local stakeholders by (1) providing to 
each state and urban area the individual threat assessments DHS is 
using for its risk analysis model, (2) validating the nonpublic 
national infrastructure data that are also part of the risk analysis 
model, (3) reviewing states' and urban areas' draft investment 
proposals that are later submitted and rated during DHS's effectiveness 
assessment process, (4) providing technical assistance as states and 
urban areas prepare grant applications, and (5) holding post-award 
conferences to solicit stakeholder feedback. 

We reported in April 2005 that the ability of states and localities to 
spend grant funds expeditiously was complicated by the need to fulfill 
these state and local legal and procurement requirements, which in some 
cases added months to the purchasing process. For example, once grant 
funds are awarded to the states and then subgranted to the local 
jurisdictions or urban areas, certain legal and procurement 
requirements may have to be met, such as a city council's approval to 
accept grant awards. Or, if the state legislature must approve how the 
grant funds will be expended and 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. We also reported a variety of steps that had been 
taken by states, DHS, and the Congress to streamline the expenditure of 
grant funds such as some states establishing centralized purchasing 
systems and the Congress passing a provision that exempted some 
homeland security grant programs from requirements in the Cash 
Management Improvement Act so that grantees could receive grant funds 
in advance of the time that funds were needed to liquidate obligations 
(e.g., pay for goods and services received). DHS has obligated about 
$20 billion in grants for emergency preparedness and response from 
fiscal years 2002 through 2007, about $7 billion was unexpended as of 
January 2008. Because of inconsistencies in DHS's reporting of grant 
expenditures over time, we are unable to analyze expenditure trends by 
grant and fiscal year to determine if funds are now being spent more 
quickly. 

DHS has taken steps to establish goals, gather information, and measure 
progress, yet its monitoring of grant expenditures does not provide a 
means to measure the achievement of desired program outcomes to 
strengthen the nation's homeland security capabilities. We still know 
little about how states have used federal funds to build their 
capabilities or reduce risks. This is because neither FEMA nor its 
predecessor for grant management (from fiscal years 2003 through 2007) 
has yet developed a system to compile grant information in a manner 
that allows for effective analysis of the obligation, expenditure, and 
use of homeland security grants funds. For example, FEMA officials said 
that they currently rely on the grant monitoring process to assess the 
extent that states and urban areas are building capabilities. However, 
these efforts do not provide information on how states and localities 
finance their efforts in this area, how federal funds have been used, 
the extent to which federal funds supplement or supplant ongoing state 
and local expenditures, and the effectiveness of those funds in 
improving the nation's capabilities or reducing risk. According to FEMA 
officials, DHS leadership has identified this issue as a high priority, 
and is trying to come up with a more quantitative approach to 
accomplish the goal of using this information for the more strategic 
purpose of monitoring the achievement of program goals. 

Background: 

Risk management has been endorsed by the Congress, the President, and 
Secretary of DHS as a way to direct finite resources to those areas 
that are most at risk of terrorist attack under conditions of 
uncertainty. The purpose of risk management is not to eliminate all 
risks, as that is an impossible task. Rather, given limited resources, 
risk management is a structured means of making informed trade-offs and 
choices about how to use available resources effectively and monitoring 
the effect of those choices. Thus, risk management is a continuous 
process that includes the assessment of threats, vulnerabilities, and 
consequences to determine what actions should be taken to reduce or 
eliminate one or more of these elements of risk. Risk management 
includes a feedback loop that continually incorporates new information, 
such as changing threats or the effect of actions taken to reduce or 
eliminate identified threats, vulnerabilities, and/or consequences. 
Because we have imperfect information for assessing risks, there is a 
degree of uncertainty in the information used for risk assessments 
(e.g., what the threats are and how likely they are to be realized). As 
a result, it is inevitable that assumptions and policy judgments must 
be used in risk analysis and management. It is important that key 
decision makers understand the basis for those assumptions and policy 
judgments and their effect on the results of the risk analysis and the 
resource decisions based on that analysis. 

Since fiscal year 2006, DHS has applied a three-step process which 
incorporates analyses of risk and effectiveness, to select eligible 
urban areas and allocate UASI and SHSP funds (see fig. 1): 

1. Implementation of a risk analysis model to calculate scores for 
states and urban areas, defining relative Risk, as the product of 
Threat, Vulnerability, and Consequences. 

2. Implementation of an effectiveness assessment, including a peer 
review process, to assess and score the effectiveness of the proposed 
investments submitted by the eligible applicants. 

3. Calculation of a final allocation of funds based on states' and 
urban areas' risk scores as adjusted by their effectiveness scores. 

Figure 1: Overview of the Grant Allocation Methodology for UASI and 
SHSP: 

[See PDF for image] 

This figure is an illustration of the Overview of the Grant Allocation 
Methodology for UASI and SHSP. The following information is depicted: 

UASI: 
Phase 1: Risk Analysis; 
Risk estimator: R = T x (V&C) [Relative risk estimate]; 
Relative risk is presented as a graph. Where relative risk drops and a 
cutoff point of about 42 urban areas is established, the result is a 
risk score. 

Phase 2: Effectiveness assessment: 
Peer review of Investment Justifications: yields an Effectiveness 
score. 

Phase 3: Final allocation: 
Effectiveness/risk matrix: Left axis is risk score; right axis is 
effectiveness score. As both score increase, allocations increase. 

SGSG: 
Phase 1: Risk Analysis; 
Risk estimator: R = T x (V&C) [Relative risk estimate]; 
Relative risk is presented as a graph. Where relative risk drops versus 
the number of states and territories, the result is a risk score. 
 
Phase 2: Effectiveness assessment: 
Peer review of Investment Justifications: yields an Effectiveness 
score. 

Phase 3: Final allocation: 
Effectiveness/risk matrix: Left axis is risk score; right axis is 
effectiveness score. As both score increase, allocations increase. 
There is a statutory minimum of .375%[A]. 

[A] The statutory minimum of 0.375 percent of the total funds 
appropriated for SHSP and UASI is for fiscal year 2008. In fiscal years 
2006 and 2007, the statutory per state minimum equaled 0.75 percent of 
funds appropriated for SHSP only. 

Source: GAO analysis of DHS documents and information provided in 
interviews. 

[End of figure] 

As a result of the Post-Katrina Emergency Reform Act, FEMA is now 
responsible for the nation's homeland security preparedness effort to 
define what needs to be done, where, and by whom (roles and 
responsibilities); how it should be done; and how well it should be 
done--that is, according to what standards. This is a complex but 
critically important responsibility. The principal national documents 
designed to address each of these are, respectively, the National 
Response Framework (and its associated annexes), the National Incident 
Management System, and the National Preparedness Guidelines. To develop 
preparedness goals and determine the tasks and capabilities needed by 
first responders on a nationwide basis, DHS used an approach known as 
capabilities-based planning to develop the national Target Capabilities 
List. The list includes specific goals, requirements, and metrics for 
36 capabilities needed at the local, state, or federal level to prepare 
for, respond to, and recover from natural or man-made disasters. DHS 
defined these capabilities generically and expressed them in terms of 
desired operational outcomes and essential characteristics, rather than 
dictating specific, quantifiable responsibilities to the various 
jurisdictions. Because no single jurisdiction or agency would be 
expected to perform every task, possession of a target capability could 
involve enhancing and maintaining local resources, ensuring access to 
regional and federal resources, or some combination of the two. The 
original list has since been refined, and FEMA released the most recent 
version of the list, with 37 capabilities, in September 2007. 

The Implementing Recommendations of the 9/11 Commission Act (9/11 Act) 
of 2007 further defined FEMA's role and coordination processes for 
working with states and urban areas in awarding homeland security 
grants.[Footnote 10] For example, the 9/11 Act requires FEMA to provide 
eligible metropolitan areas with the opportunity to submit relevant 
information prior to FEMA's initial assessment of the relative threat, 
vulnerability, and consequences each area faces from acts of terrorism. 
This opportunity is to allow potential grantees to correct any 
erroneous or incomplete information that will be the basis of FEMA's 
initial assessment.[Footnote 11] 

DHS Has Used an Evolving Risk-Based Methodology to Allocate Federal 
Grant Funds: 

DHS has used an evolving risk-based methodology to identify the states 
and urban areas eligible for HSGP grants and the amount of funds they 
receive. For example, the fiscal year 2005 risk analysis model largely 
relied on measures of population and population density to determine 
the relative risk of potential grant recipients. The fiscal year 2006 
process introduced assessments of threat, vulnerability and 
consequences of a terrorist attack in assessing risk. The fiscal year 
2006 risk analysis model estimated relative risk from two perspectives-
-asset-based and geographic--then combined the assessments, assigning 
twice as much weight to geographic as asset-based risk. In DHS's view, 
asset-based and geographic risks are complementary and provide a 
"micro-and macro-" perspective of risk, respectively. In calculating 
these relative risk scores and addressing the uncertainties in 
estimating relative risk, policy and analytic judgments were required. 
For example, according to DHS officials, DHS made the judgment to 
assign geographic risk a weight of 1.0 and asset-based risk a weight of 
0.5, since a potential loss of lives within an area would contribute to 
how geographic risk is assessed. Some of the factors used in the fiscal 
year 2006 risk analysis model included: the number of specific types of 
reports or events, such as reports of suspicious incidents; the number 
of visitors a state or urban area received from countries of interest; 
and population. In addition to modifications to DHS's risk analysis 
model, DHS adopted an effectiveness assessment for fiscal year 2006 to 
determine the anticipated effectiveness of the various risk mitigation 
investments urban areas proposed, which affected the final amount of 
funds awarded to eligible areas. 

The risk analysis method for fiscal year 2007--which is largely 
unchanged for fiscal year 2008, according to our ongoing work--was 
changed substantially from the fiscal year 2006 process, and further 
exemplifies the continuing evolution in DHS's approach to its risk 
methodology for grant allocation.[Footnote 12] Given the uncertainties 
inherent in risk assessment, the methodology uses a combination of 
empirical data (e.g., population, asset location) and policy judgment 
(e.g., the nature of the threat for specific areas and the weights to 
be assigned to specific variables in the model such as critical 
infrastructure, and population and population density). According to 
DHS officials, the fiscal year 2007 risk analysis model integrates the 
separate analyses for asset-based and geographic-based risk used in 
fiscal year 2006, and includes more sensitivity analysis in determining 
what the final results of its risk analysis should be.[Footnote 13] DHS 
officials said the primary goal was to make the process more 
transparent and more easily understood, focusing on key variables and 
incorporating comments from a variety of stakeholders regarding the 
fiscal year 2006 process. Figure 2 provides an overview of the factors 
included in the risk analysis model for fiscal year 2007 and, according 
to our ongoing work, for fiscal year 2008 and their relative weights. 
The maximum relative risk score possible for a given area was 100. The 
Threat Index accounted for 20 percent of the total risk score; 
Vulnerability and Consequences accounted for 80 percent. For the 
purposes of the model, DHS considered all areas of the nation equally 
vulnerable to attack and assigned every state and urban area a 
vulnerability score of 1.0. Thus, as a practical matter, the final risk 
score for fiscal years 2007 and 2008 is determined by the threat and 
consequences scores. 

Figure 2: DHS's Model Used in Determining Relative Risk Scores: 

[See PDF for image] 

This figure is an illustration of DHS's Model Used in Determining 
Relative Risk Scores. The following information is provided: 

Risk = Threat Index (T) x Vulnerability and Consequence Index (V&C = 
[P+E+I+N]): 

Threat Index (T): 
Data: On-going plot lines, credible reporting, relevant investigations 
to create threat tiers; 
Source: DHS Chief Intelligence Officer, intelligence community data. 

Vulnerability and Consequence Index: 
* Population Index (P): 
Data: Total population (nighttime, commuter, visitor, military 
dependent) and population density (constrained to 50 percent impact); 
Source: Census, LandScan, Smith Travel, and DOD.
* Economic Index (E): 
Data: Gross Metropolitan Product (UASI)/percent GDP (state analysis); 
Source: Global Insight/Department of Commerce, Bureau of Economic 
Statistics. 
* National Infrastructure Index (I): 
Data: # Tier 1 Assets (x3) plus # Tier 2 assets; 
Source: DHS/OIP, SSAs, States. 
* National Security Index (N): 
Data: Presence of Military Bases (yes/no) plus # DIB plus # 
International border crossings; 
Source: DOD, DHS/CBP. 

Risk Scores: 
Population index: 40%; 
Economic index: 20%; 
Threat index: 20%; 
National Infrastructure index: 15%; 
National Security index: 5%. 

Source: DHS. 

Note: "On-going plot lines" reflects DHS analysis of threat information 
having a nexus with international terrorism or its affiliates. "DHS/
OIP" stands for DHS's Office of Infrastructure Protection, "SSAs" 
stands for Sector-Specific Federal Agencies, "DHS/CBP" stands for the 
DHS's Customs and Border Protection, and "DIB" stands for "defense 
industrial base." 

[End of figure] 

Threat: The Threat Index accounted for 20 percent of the total risk 
score, which was calculated by the intelligence community by assessing 
threat information for multiple years (generally, from 9/11 forward) 
for all candidate urban areas and categorizing urban areas into one of 
four tiers. Tier I included those at highest threat, relative to the 
other areas, and tier IV included those at lowest threat relative to 
the others. DHS's Office of Intelligence and Analysis performed this 
review and provided these threat assessments and corresponding threat 
values for each urban area. In contrast, for the 2006 grant cycle, DHS 
used total counts of threats and suspicious incidents and incorporated 
these into its model. The final threat assessments are approved by the 
intelligence community--the Federal Bureau of Investigation, Central 
Intelligence Agency, National Counter-Terrorism Center, and the Defense 
Intelligence Agency--along with the DHS Under Secretary for 
Intelligence & Analysis and the Secretary of DHS, according to DHS 
officials. 

Vulnerability and Consequences: Vulnerability and Consequences 
accounted for 80 percent of the total risk score and were represented 
by the following four indexes: 

* Population Index (40 percent): This variable included nighttime 
population and military dependent populations for states and urban 
areas, based upon U.S. Census Bureau and Department of Defense inputs. 
In addition, for urban areas, population density, commuters, and 
visitors were also factored into this variable, using data from private 
entities. 

* Economic Index (20 percent): This variable considered the economic 
value of the goods and services produced in either a state or an urban 
area. For states, this index was calculated using U.S. Department of 
Commerce data on their percentage contribution to Gross Domestic 
Product. For UASI urban areas, a parallel calculation of Gross 
Metropolitan Product was incorporated. 

* National Infrastructure Index (15 percent): This variable focused on 
over 2,000 Tier I and Tier II critical infrastructure/key resource 
assets that were identified by DHS's Office of Infrastructure 
Protection. Tier I assets or systems are those that if attacked could 
trigger major national or regional impacts similar to those experienced 
during Hurricane Katrina or 9/11. Tier II assets are other highly 
consequential assets with potential national or regional impacts if 
attacked. 

* National Security Index (5 percent): This variable considered the 
presence of three key national security factors: whether military bases 
are present in the state or urban area; how many critical defense 
industrial base facilities are located in the state or urban area; and 
the total number of people traversing international borders. 
Information on these inputs comes from the Department of Defense and 
DHS. 

To assess vulnerability and consequences, DHS specifically wanted to 
capture key land and sea ports of entry into the United States and the 
location of defense industrial base facilities and nationally critical 
infrastructure facilities.[Footnote 14] For fiscal year 2007 and, 
according to our ongoing work, for fiscal year 2008, DHS considered 
most areas of the country equally vulnerable to a terrorist attack, 
given freedom of movement within the nation; and focused on the 
seriousness of the consequences of a successful terrorist attack. 
Nationwide more than 2,000 critical infrastructure assets were included 
in the risk model and selected on the basis of analysis by DHS 
infrastructure protection analysts, sector-specific federal agencies, 
and the states. According to DHS, these critical infrastructure assets 
were grouped into two tiers: Tier 1 assets encompassed those that if 
attacked could cause major national or regional impacts similar to 
those from Hurricane Katrina or 9/11, while Tier 2 assets were those 
with potential national or regional impacts if attacked. On the basis 
of DHS's Office of Infrastructure Protection analysis, Tier I assets 
were weighted using an average value three times as great as Tier II 
assets. According to DHS officials, defense industrial base assets were 
included in the national security index and all other assets in the 
national infrastructure index. 

Effectiveness Assessment Used to Adjust Risk Scores: 

Since fiscal year 2006, DHS has also implemented an Effectiveness 
Assessment to assess and score the effectiveness of the proposed 
investments submitted by grant applicants in addition to determining 
relative risk using the risk analysis model. This effectiveness 
assessment process has remained largely unchanged since it was first 
introduced by DHS. To assess the anticipated effectiveness of the 
various risk mitigation investments that states and urban areas 
proposed, DHS required states and urban areas to submit investment 
justifications as part of their grant application. The investment 
justifications included up to 15 "investments" or proposed solutions to 
address homeland security needs, which were identified by the states 
and urban areas through their strategic planning process. DHS used 
subject-matter experts as peer reviewers to assess these investment 
justifications. The criteria reviewers used to score the investment 
justifications included the following categories: relevance to the 
National Preparedness Guidance and to state and local homeland security 
plans, anticipated impact, sustainability, regionalism, and the 
implementation of each proposed investment. Reviewers on each panel 
assigned scores for these investment justifications, which according to 
DHS officials were averaged to determine a final effectiveness score 
for each state and urban area applicant. DHS then used these 
effectiveness assessment scores to calculate the final allocation of 
funds to states and urban areas. 

DHS Has a Variety of Mechanisms in Place to Communicate with States and 
Localities about Grant Allocation Decisions: 

According to DHS officials and HSGP grant assistance documents we 
reviewed, DHS communicates with its state and local stakeholders by: 
(1) providing to each state and urban area the individual threat 
assessments that DHS is using to calculate the risk analysis model's 
Threat Index; (2) validating the nonpublic, critical infrastructure 
assets that comprise the risk analysis model's National Infrastructure 
Index; (3) providing midpoint reviews of states' and urban areas' draft 
investment justification proposals that are later reviewed during DHS's 
effectiveness assessment process; (4) providing technical assistance as 
states and urban areas prepare the documentation for their grant 
applications; and (5) convening conferences to solicit stakeholder 
feedback. 

DHS provides threat assessments for state and urban areas. DHS's Office 
of Intelligence and Analysis (I&A) officials said they develop and 
provide threat assessments to the states' and urban areas' grant 
applicants prior to the grant application process for their review. 
State and urban area strategic planning and grant planning officials 
use this information to develop their grant investment justifications, 
according to DHS officials. I&A officials said they provide secret and 
nonsecret versions of the information so that state or urban area 
officials who do not have the appropriate clearances required to view 
the secret version of their threat assessments will still have access 
to some of the threat information. They said they are working with 
local law enforcement agencies on a way to address such clearance 
issues. 

DHS validates the nonpublic, critical infrastructure assets used in the 
risk analysis model. DHS officials also said that the agency uses a 
collaborative, multistep process to create a list of national critical 
infrastructure assets for use in the National Infrastructure Index, one 
of the four indices that comprise the Vulnerability and Consequences 
component of the risk analysis model. According to DHS officials, they 
use a step-by-step process to identify the nation's Tier 1 and Tier 2 
critical infrastructure assets. First, DHS's Office of Infrastructure 
Protection (OIP) works with sector-specific agencies to develop 
criteria used to determine which assets should be placed in a threat 
tier. Second, private-sector companies vet the criteria through sector-
specific councils that review the criteria and provide feedback to DHS 
OIP. Third, the infrastructure office finalizes the criteria list and 
provides the list to the sector-specific agencies and asks states to 
nominate assets within their jurisdictions that match the criteria. 
Finally, the infrastructure office and the sector-specific agencies 
review nominated assets to decide which assets comprise the final Tier 
1/Tier 2 list. In 2007, DHS began to allow sector-specific agencies to 
resubmit for reconsideration assets that are not initially selected for 
the list to ensure the consideration of potential critical 
infrastructure assets in future years. 

Enacted in August 2007, the 9/11 Act required DHS to provide eligible 
metropolitan areas with the opportunity to submit information that they 
believe to be relevant to the determination of the threat, 
vulnerability, and consequences they face from acts of terrorism, prior 
to FEMA conducting each initial assessment, so that any erroneous or 
incomplete information can be corrected.[Footnote 15] According to FEMA 
officials, DHS implemented this provision mainly through the outreach 
and communication efforts described above. 

DHS provides midpoint reviews of states' and urban areas' investment 
proposals. FEMA officials said that, for the fiscal year 2007 
effectiveness assessment process, DHS offered a midpoint technical 
review of states' and urban areas' draft 2007 Investment Justifications 
prior to the formal submission of these proposals to FEMA's peer review 
process. DHS officials said that they performed an after-action 
analysis of this effort and found states and urban areas that made use 
of the midpoint reviews had effectiveness scores that on average were 6 
percent higher than those for states and urban areas that did not take 
advantage of this DHS service. 

DHS provides technical assistance as states and urban areas prepare 
investment documentation. DHS also provides Program Management 
Technical Assistance, and Investment Planning Technical Assistance 
workshops to assist states and urban areas. For example, the Program 
Management Technical Assistance service is designed to help the State 
Administrative Agency with day-to-day program management in planning, 
managing, and evaluating state programs in the context of the National 
Preparedness Guidance, according to DHS. They said Program Management 
Technical Assistance helps state administrators use DHS's Program 
Management Handbook to manage programs that span agencies, 
jurisdictions, and disciplines, including the private sector. DHS also 
offers guidance on how to enhance existing state and urban area 
Homeland Security Strategies and Enhancement Plans. 

DHS convenes conferences to solicit stakeholder feedback. Finally, DHS 
has convened conferences in an effort to solicit stakeholder feedback 
after the fiscal years 2006 and 2007 grants were awarded. In July 2006, 
DHS convened a Homeland Security Grant Program After-Action conference 
to gather feedback on the UASI grant award process. DHS also assembled 
working groups to discuss and assess homeland security planning, the 
HSGP guidance and application, the risk assessment, and the 
effectiveness assessment. DHS officials told us that the conference 
provided a feedback loop intended to bolster stakeholder support and 
promote transparency. The state and local partners who participated in 
the working groups at the conference developed 32 recommendations to 
improve the HSGP process. For example, one of the risk assessment 
working group's recommendations was that DHS should provide detailed 
briefings to state and local partners on the core components of the 
risk methodology used in the fiscal year 2006 process as one step to 
improve the transparency of the risk analysis process. DHS also 
convened a similar after-action conference in early August 2007 to 
solicit stakeholder feedback on the fiscal year 2007 HSGP and hosted 
three regional conferences in the fall of 2007 to foster collaboration 
among regional partners and seek additional feedback. 

Prior DHS Efforts Improved the Timeliness of Transferring Grant Funds 
to States and Localities: 

From fiscal years 2002 through 2007, DHS obligated about $19.6 billion 
in grants, the purpose of which was to strengthen the capabilities of 
state, local, and tribal governments and others to prepare for and 
respond to major disasters of any type or cause. About $7 billion of 
this total was unexpended as of January 2008. As might be expected, the 
more recent the fiscal year, the higher the unexpended balance (see 
fig. 3). For example, the Homeland Security and UASI grant awards are 
announced in May or June of each year--or about 3 to 4 months before 
the end of the fiscal year. The awards for fiscal year 2007 were 
announced in May 2007. Thus, one would expect large unexpended balances 
for the most recent fiscal year because the grant recipients would have 
had only a few months to use their funds prior to the end of the fiscal 
year. 

Figure 3: Percent of Obligated DHS Grant Funds for Fiscal Years 2002 
through 2007 That Were Unexpended as of January 2008: 

[See PDF for image] 

This figure is a stacked bar graph depicting the percent of Obligated 
DHS Grant Funds for fiscal years 2002 through 2007 that were unexpended 
as of January 2008. The following data is depicted: 

Fiscal year: 2002; 
Total obligated: $904,896,644; 
Total unexpended balance: $8,778,762; 
Percentage of obligated funds remaining unexpended: 0.97%. 

Fiscal year: 2003; 
Total obligated: $4,212,657,367; 
Total unexpended balance: $134,507,771; 
Percentage of obligated funds remaining unexpended: 3.19%. 

Fiscal year: 2004; 
Total obligated: $4,115,804,654; 
Total unexpended balance: $231,166,967; 
Percentage of obligated funds remaining unexpended: 5.62%. 

Fiscal year: 2005; 
Total obligated: $3,613,950,575; 
Total unexpended balance: $964,860,220; 
Percentage of obligated funds remaining unexpended: 26.70%. 

Fiscal year: 2006; 
Total obligated: $2,870,988,081; 
Total unexpended balance: $1,961,627,924; 
Percentage of obligated funds remaining unexpended: 68.33%. 

Fiscal year: 2007; 
Total obligated: $3,847,052,100; 
Total unexpended balance: $3,731,808,088; 
Percentage of obligated funds remaining unexpended: 97.00%. 

Source: FEMA, as of January, 2008. 

[End of figure] 

In 2005, we reported on DHS's efforts to distribute grants and found 
that the Congress, DHS, states, and localities had acted to expedite 
grant awards and distribution by setting time limits for the grant 
application, award, and distribution processes and by instituting other 
procedures.[Footnote 16] We concluded that 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. We also 
reported that some states had modified their procurement practices and 
DHS was identifying best practices to aid in the effort, but challenges 
remained, such as continuing legal and procurement requirements that 
slowed the process. For example, once the grant funds are awarded to 
the states and then subgranted to the local jurisdictions or urban 
areas, certain legal and procurement requirements may have to be met, 
such as a city council's approval to accept grant awards. Or, if the 
state legislature must approve how the grant funds will be expended and 
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.[Footnote 
17] We reported a variety of steps that had been taken by states, DHS, 
and the Congress to streamline the expenditure of grant funds. For 
example: 

* Some states, in conjunction with DHS, had modified their procurement 
practices to expedite the procurement of equipment and services by 
establishing 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. 
Several states had developed statewide procurement contracts that allow 
local jurisdictions to buy equipment and services using a prenegotiated 
state contract. 

* DHS had enhanced equipment procurement options 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. 

* The fiscal year 2005 DHS appropriations legislation included a 
provision that exempted formula-based grants (e.g., the State Homeland 
Security Grant Program grants) and discretionary grants, including the 
Urban Areas Security Initiative and other grants, from requirements in 
the Cash Management Improvement Act that provide for reimbursement to 
states and localities only after they have incurred an obligation, such 
as a purchase order, to pay for goods and services. Subsequent DHS 
guidance allowed states and localities to draw down funds up to 120 
days prior to expenditure. 

We do not know the extent to which the actions that states and 
localities have taken to address the obstacles that affected their 
ability to use funds expeditiously (but effectively) have succeeded. We 
were unable to examine trends in expended and unexpended obligations 
for individual grants across fiscal years due to limitations in the 
budget data provided by FEMA for this hearing. For example, we were 
unable to track HSGP funding data across multiple fiscal years, such as 
the amount of fiscal year 2005 funds that were expended in fiscal years 
2005, 2006, and 2007. In addition, we found that reporting categories 
were not consistent across fiscal years. Grant program data were 
collapsed in one fiscal year and compiled differently in another year. 
According to one DHS official, while the consolidation of all DHS grant 
programs into FEMA provides FEMA with an opportunity to standardize and 
enhance its management of grant allocation and distribution, this 
administrative transition has also resulted in some reorganization of 
accounting functions, and institutionalizing the maintenance of grant 
funding data is still being addressed at this time. Whatever the cause, 
the inconsistency in reporting on grant expenditures across fiscal 
years could hinder FEMA's ability to provide the Congress with 
information on trends in expenditures over time for specific grants. As 
part of our ongoing work in reviewing DHS grant allocation and 
management efforts, we plan to determine whether the data FEMA 
maintains on grant expenditures across fiscal years allows FEMA to 
analyze trends in grant obligations and expenditures. 

DHS Does Not Yet Have a Means to Measure Program Outcomes to Further 
the Nation's Homeland Security Preparedness Goals: 

While DHS has distributed over $19 billion in federal emergency 
preparedness funding to states, localities, and territories since 
fiscal year 2002, and taken steps to gather information, establish 
goals and measures, and measure progress, we still know little about 
how states have used federal funds to build their capabilities or 
reduce risks. Nor do we know how effective this national investment has 
been because DHS's monitoring of homeland security grant expenditures 
does not provide a means to measure the achievement of desired program 
outcomes to strengthen the nation's homeland security capabilities. In 
March 2007, we testified before this Committee that a comprehensive and 
in-depth oversight agenda requires assessing state and local 
capabilities and the use of federal grants in building and sustaining 
those capabilities. However, all levels of government are still 
struggling to define and act on the answers to basic--but hardly 
simple--questions about emergency preparedness and response: What is 
important (that is, what are our priorities)? How do we know what is 
important (e.g., risk assessments, performance standards)? How do we 
measure, attain, and sustain success? On what basis do we make 
necessary trade-offs, given finite resources? DHS has limited 
information on which to base the answers to these questions. 

We have identified the need for such capabilities-based assessment and 
reporting of the effectiveness of federal grant investments in several 
DHS grant programs. For example, in our review of cargo tanker 
emergency response in December 2007, we recommended that the Secretary 
of Homeland Security work with federal, state, and local stakeholders 
to develop explicit performance measures for emergency response 
capabilities and use them in risk-based analyses to set priorities for 
DHS grant programs in acquiring needed response resources.[Footnote 18] 
DHS responded that it was taking the recommendation under advisement 
and was exploring approaches to address our recommendation. Similarly, 
in our review of DHS's efforts to improve interoperable communications 
in April 2007, we reported that no process has been established for 
ensuring that states' grant requests are consistent with their 
statewide plans and long-term objectives for improving 
interoperability.[Footnote 19] We recommended that DHS assess how 
states' grant requests support their statewide communications plans and 
include the assessment as a factor in making DHS grant allocation 
decisions. Although DHS did not comment on this recommendation at the 
time, in August 2007 DHS officials told us they were working to ensure 
that all grant funding is tied to statewide interoperable 
communications plans.[Footnote 20] 

In a May 2007 testimony, we noted that more immediate congressional 
attention might focus on evaluating the construction and effectiveness 
of the National Preparedness System, which is mandated under the Post-
Katrina Reform Act. DHS has taken steps to develop and issue key 
components of the system, including a national domestic all-hazards 
preparedness goal and readiness metrics and standards for preparedness 
in the form of target capabilities.[Footnote 21] Specifically, in 
September 2007, DHS issued a goal for national preparedness, now 
referred to as the National Preparedness Guidelines. According to DHS, 
the guidelines establish "a vision for national preparedness and 
provide a systematic approach for prioritizing preparedness efforts 
across the Nation," and generally define a goal for the National 
Preparedness system. The guidelines are based on a capability-based 
planning process that identified target capabilities that are to be 
then used to establish measures for preparedness. 

According to DHS officials, one way DHS is attempting to monitor the 
development of emergency preparedness capabilities is through the 
Effectiveness Assessment described above, that began as part of DHS's 
fiscal year 2006 HSPG grant guidance. According to program 
requirements, eligible recipients must provide an "investment 
justification" with their grant application that links their 
investments to the initiatives outlined in their state's Program and 
Capability Enhancement Plan. DHS officials have said that they cannot 
yet assess how effective the actual investments from grant funds are in 
enhancing preparedness and mitigating risk because they do not yet have 
the metrics to do so and there is insufficient historical information 
from the grant monitoring process to assess the extent to which states 
and urban areas are building capabilities. 

The Post-Katrina Reform Act established a requirement to create another 
source of information on state capabilities. The act calls for an 
annual preparedness report from all states by January 4, 2008, and 
annually thereafter, but FEMA has extended the deadline for this 
requirement.[Footnote 22] In December 2007, FEMA extended the State 
Preparedness Report deadline from January 4 to March 31, 2008 and 
requested that each state administrative agency submit a brief letter 
providing a status update on its State Preparedness Report by early 
this year. The state reports are to include assessments of: 

* State compliance with the national preparedness system, the National 
Response Framework, the National Incident Management System, and other 
related plans and strategies. 

* Current capability levels and a description of target capability 
levels. 

* Resource needs to meet the preparedness priorities established in 
conjunction with the Target Capabilities List, including (1) an 
estimate of the amount of expenditure required to attain the 
preparedness priorities, and (2) the extent to which the use of federal 
assistance during the preceding fiscal year achieved the preparedness 
priorities. 

Beginning in October 2007, DHS is also responsible for an annual 
federal preparedness report that is to include, among other things, an 
assessment of the extent to which the use of federal assistance during 
the preceding fiscal year achieved the preparedness priorities 
established under the act. 

Since 2005, DHS has produced an Annual Report on Preparedness Funding, 
which includes data on the obligation, expenditure status, and use of 
funds for all major federal preparedness grants--including non-DHS 
grants--awarded to states, localities, and other nonfederal entities. 
According to DHS, this effort is designed to provide decision makers 
with critical preparedness funding information as they determine how to 
best allocate resources to achieve target levels of capability to 
prevent, prepare, respond to, and recover from major events, especially 
terrorism. However, the report notes the information is of limited 
usefulness because federal departments and agencies interpret and 
define the terms obligation, expenditure status, and use of funds 
differently. The report provides a national-level summary of the use of 
grant funds such as equipment or training, rather than an assessment of 
state capability enhancements provided as a result of federal grant 
funding. According to DHS, subsequent reports may provide more detailed 
analysis and findings, as consistent procedures and definitions are 
implemented across grant programs and departments. 

Conclusions: 

The task of enhancing first responder capabilities across the nation is 
a complex and daunting one. DHS must continue to support FEMA's efforts 
to work with state, local, and tribal governments, and the private 
sector on the tasks it has begun. At the same time, these stakeholders 
must recognize that the process is iterative, will include periodic 
adjustments and refinements, and that risks are not equally distributed 
across the nation. As the principal federal agency now responsible for 
preparedness and response, FEMA has a unique opportunity to evaluate 
how it can most effectively target and integrate grants with its other 
efforts to enhance the nation's all-hazard disaster preparedness and 
response system. This can best be done by viewing these grants 
collectively, rather than individually. It is also important that FEMA 
and grant recipients be able to assess and report on how the grants 
have been used to enhance emergency preparedness and response 
capabilities and reduce risk. 

We look forward to working constructively with this Committee, FEMA, 
and DHS in the future to continue to build a national emergency 
preparedness system that we all want and our nation deserves. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 
any questions that you or other members of the Subcommittees may have 
at this time. 

Contacts and Staff Acknowledgments: 

For further information about this statement, please contact William O. 
Jenkins Jr., Director, Homeland Security and Justice Issues, on (202) 
512-8777 or [email protected]. 

In addition to the contact named above, the following individuals from 
GAO's Homeland Security and Justice Team also made major contributors 
to this testimony: Chris Keisling, Assistant Director; John Vocino, 
Analyst-in-Charge; Michael Blinde, Analyst; and Linda Miller, 
Communications Analyst. 

[End of section] 

Related GAO Products: 

Department of Homeland Security: Progress Report on Implementation of 
Mission and Management Functions. GAO-07-454. Washington, D.C.: August 
17, 2007. 

Homeland Security: Observations on DHS and FEMA Efforts to Prepare for 
and Respond to Major and Catastrophic Disasters and Address Related 
Recommendations and Legislation. GAO-07-1142T. Washington, D.C.: July 
31, 2007. 

Homeland Security: Observations on DHS and FEMA Efforts to Prepare for 
and Respond to Major and Catastrophic Disasters and Address Related 
Recommendations and Legislation, GAO-07-835T Washington, D.C.: May 15, 
2007. 

Homeland Security: Observations on DHS and FEMA Efforts to Prepare for 
and Respond to Major and Catastrophic Disasters and Address Related 
Recommendations and Legislation. GAO-07-835T. Washington, D.C.: May 15, 
2007. 

First Responders: Much Work Remains to Improve Communications 
Interoperability, GAO-07-301 Washington, D.C.: Apr. 2, 2007. 

Homeland Security: Preparing for and Responding to Disasters. GAO-07-
395T. Washington, D.C.: March 9, 2007. 

Passenger Rail Security: Federal Strategy and Enhanced Coordination 
Needed to Prioritize and Guide Security Efforts. GAO-07-583T. 
Washington, D.C.: March 7, 2007. 

Homeland Security: Applying Risk Management Principles to Guide Federal 
Investments. GAO-07-386T. Washington, D.C.: February 7, 2007. 

Homeland Security Grants: Observations on Process DHS Used to Allocate 
Funds to Selected Urban Areas. GAO-07-381R. Washington, D.C.: February 
7, 2007. 

Homeland Security First Responder Grants: Cash Management Improvement 
Act Exemption and Cash Advance Funding Require Additional DHS 
Oversight. GAO-07-68. Washington, D.C.: December 22, 2006. 

Emergency Preparedness and Response: Some Issues and Challenges 
Associated with Major Emergency Incidents. GAO-06-467T. Washington, 
D.C.: February 23, 2006. 

Homeland Security: Managing First Responder Grants to Enhance Emergency 
Preparedness in the National Capital Region. GAO-05-889T. Washington, 
D.C.: July 14, 2005. 

Homeland Security: DHS' Efforts to Enhance First Responders' All-
Hazards Capabilities Continue to Evolve. GAO-05-652. Washington, D.C.: 
July 11, 2005. 

Homeland Security: Management of First Responder Grant Programs and 
Efforts to Improve Accountability Continue to Evolve. GAO-05-530T . 
Washington, D.C.: April 12, 2005. 

Homeland Security: Management of First Responder Grant Programs Has 
Improved, but Challenges Remain. GAO-05-121. Washington, D.C.: February 
2, 2005. 

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: 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. 

[End of section] 

Footnotes: 

[1] This figure includes such DHS grant programs as the Homeland 
Security Grant Program (HSGP), Infrastructure Protection Programs, and 
the Emergency Management Performance Grants. 

[2] The Post-Katrina Emergency Management Reform Act of 2006 was 
enacted as Title VI of the Department of Homeland Security 
Appropriations Act, 2007, Pub. L. No. 109-295, 120 Stat. 1355, 1394 
(2006). 

[3] GAO, Homeland Security: Applying Risk Management Principles to 
Guide Federal Investments, GAO-07-386T (Washington, D.C.: Feb. 7, 
2007). 

[4] GAO, Homeland Security Grants: Observations on Process DHS Used to 
Allocate Funds to Selected Urban Areas, GAO-07-381R (Washington, D.C.: 
Feb. 7, 2007); and Homeland Security Assistance for Nonprofits: 
Department of Homeland Security Delegated Selection of Nonprofits to 
Selected States and States Used a Variety of Approaches to Determine 
Awards, GAO-06-663R (Washington, D.C.: May 22, 2006). 

[5] GAO, Homeland Security: Management of First Responder Grant 
Programs Has Improved, but Challenges Remain, GAO-05-121 (Washington, 
D.C.: Feb. 2, 2005); and Homeland Security: Management of First 
Responder Grant Programs and Efforts to Improve Accountability Continue 
to Evolve, GAO-05-530T (Washington, D.C.: Apr. 12, 2005). 

[6] GAO, Passenger Rail Security: Federal Strategy and Enhanced 
Coordination Needed to Prioritize and Guide Security Effort, 
GAO-07-583T (Washington, D.C.: Mar. 7, 2007). 

[7] GAO, Homeland Security: Preparing for and Responding to Disasters, 
GAO-07-395T (Washington, D.C.: Mar. 9, 2007); Homeland Security: 
Observations on DHS and FEMA Efforts to Prepare for and Respond to 
Major and Catastrophic Disasters and Address Related Recommendations 
and Legislation, GAO-07-835T (Washington, D.C.: May 15, 2007); and 
Homeland Security: Observations on DHS and FEMA Efforts to Prepare for 
and Respond to Major and Catastrophic Disasters and Address Related 
Recommendations and Legislation, GAO-07-1142T (Washington, D.C.: July 
31, 2007). 

[8] All states receive a statutorily specified minimum under the State 
Homeland Security Grant program. 

[9] For this formula, DHS defined Threat as international threat of 
terrorism to locations and critical assets in the United States, 
Vulnerability as the susceptibility of an area to successful attack, 
and Consequences as the personal, physical, and economic consequences 
to an area of a successful attack. 

[10] Pub. L. No. 110-53, tit. I, 121 Stat. 266, 271-94. 

[11] 6 U.S.C. ï¿½ 604(b)(2)(B). 

[12] Fiscal year 2008 is the first year that FEMA has had 
responsibility for the risk assessment and grant allocations for these 
grants. 

[13] Sensitivity analysis can help gauge what effects key sources of 
uncertainty have on outcomes, which provides decision makers with 
additional data on alternative risk estimates and funding allocations 
resulting from analyses of varying data, judgments, and assumptions. 

[14] Ports of entry are government-designated locations where DHS 
inspects persons and goods to determine whether they may be lawfully 
admitted into the country. 

[15] 6 U.S.C. ï¿½ 604(b)(2)(B). 

[16] GAO, Homeland Security: Management of First Responder Grant 
Programs Has Improved, but Challenges Remain, GAO-05-121, (Washington, 
D.C.: Feb. 2, 2005). 

[17] Once these requirements are satisfied, states, local 
jurisdictions, and urban areas can then obligate their funds for first 
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. 

[18] GAO, Maritime Security: Federal Efforts Needed to Address 
Challenges in Preventing and Responding to Terrorist Attacks on Energy 
Commodity Tankers, GAO-08-141 (Washington, D.C.: Dec. 10, 2007). 

[19] GAO, First Responders: Much Work Remains to Improve Communications 
Interoperability, GAO-07-301 (Washington, D.C.: Apr. 2, 2007). 

[20] GAO, Department of Homeland Security: Progress Report on 
Implementation of Mission and Management Functions, GAO-07-454 
(Washington, D.C.: Aug. 17, 2007). 

[21] GAO, Homeland Security: Observations on DHS and FEMA Efforts to 
Prepare for and Respond to Major and Catastrophic Disasters and Address 
Related Recommendations and Legislation, GAO-07-835T (Washington, 
D.C.: May 15, 2007). 

[22] In December 2007, FEMA extended the State Preparedness Report 
deadline from January 4, to March 31, 2008, and required each state 
administrative agency to submit a brief letter providing a status 
update on its State Preparedness Report by January, 2008. 

[End of section] 

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