Chemical Weapons: Army's Emergency Preparedness Program Has Financial
Management Weaknesses (Letter Report, 03/15/95, GAO/NSIAD-95-94).

GAO reviewed ho the Army's Chemical Stockpile Emergency Preparedness
Program funds--about $281 million appropriated in fiscal years 1988 to
1994--were spent.  GAO has previously reported on problems that the Army
has experienced in improving the emergency preparedness capabilities of
local communities and the ineffectiveness of its management approach.
GAO (1) identifies the purposes for which the funds were allocated, (2)
determines how funds were spent by states and communities associated
with four chemical weapons storage sites, and (3) examines elements of
the program's financial reporting and internal control systems.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-94
     TITLE:  Chemical Weapons: Army's Emergency Preparedness Program Has 
             Financial Management Weaknesses
      DATE:  03/15/95
   SUBJECT:  Appropriated funds
             Internal controls
             Army facilities
             Financial management
             Emergency preparedness
             Federal funds
             Funds management
             Allotment
             Weapons
             Chemical warfare
IDENTIFIER:  Army Chemical Stockpile Emergency Preparedness Program
             Army Security Assistance Automation Program
             Alabama
             Arkansas
             Colorado
             Illinois
             Indiana
             Kentucky
             Maryland
             Oregon
             Utah
             Washington
             
**************************************************************************
* This file contains an ASCII representation of the text of a GAO        *
* report.  Delineations within the text indicating chapter titles,       *
* headings, and bullets are preserved.  Major divisions and subdivisions *
* of the text, such as Chapters, Sections, and Appendixes, are           *
* identified by double and single lines.  The numbers on the right end   *
* of these lines indicate the position of each of the subsections in the *
* document outline.  These numbers do NOT correspond with the page       *
* numbers of the printed product.                                        *
*                                                                        *
* No attempt has been made to display graphic images, although figure    *
* captions are reproduced. Tables are included, but may not resemble     *
* those in the printed version.                                          *
*                                                                        *
* A printed copy of this report may be obtained from the GAO Document    *
* Distribution Facility by calling (202) 512-6000, by faxing your        *
* request to (301) 258-4066, or by writing to P.O. Box 6015,             *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time.                                    *
**************************************************************************


Cover
================================================================ COVER


Report to Congressional Requesters

March 1995

CHEMICAL WEAPONS - ARMY'S
EMERGENCY PREPAREDNESS PROGRAM HAS
FINANCIAL MANAGEMENT WEAKNESSES

GAO/NSIAD-95-94

Chemical Weapons


Abbreviations
=============================================================== ABBREV

  CSEPP - Chemical Stockpile Emergency Preparedness Program
  FEMA - Federal Emergency Management Agency

Letter
=============================================================== LETTER


B-258694

March 15, 1995

The Honorable William F.  Clinger, Jr.
Chairman
The Honorable Cardiss Collins
Ranking Minority Member
Committee on Government Reform and Oversight
House of Representatives

The Honorable Floyd D.  Spence
Chairman
The Honorable Ronald V.  Dellums
Ranking Minority Member
Committee on National Security
House of Representatives

As requested, we reviewed how the Army's Chemical Stockpile Emergency
Preparedness Program (CSEPP) funds--about $281 million appropriated
in fiscal years 1988 to 1994--were spent.  We have previously
reported problems the Army experienced in improving the emergency
preparedness capabilities of local communities and the
ineffectiveness of its management approach.\1 The objectives of our
current review are to (1) identify the purposes for which funds were
allocated, (2) determine how funds were spent by states and counties
associated with four chemical weapons storage sites, and (3) examine
elements of CSEPP's financial reporting and internal control systems. 


--------------------
\1 See a list of related GAO products on page 24. 


   BACKGROUND
------------------------------------------------------------ Letter :1

CSEPP was established in 1988 to improve emergency response
capabilities in communities near the eight sites in the continental
United States where chemical weapons are stored.  (Appendix I
identifies the locations of these sites.) Under a memorandum of
understanding, the Army shares management of CSEPP with the Federal
Emergency Management Agency (FEMA).  State and local officials, in
accordance with state laws, have primary responsibility for
developing and implementing emergency response programs for
communities in the event of an emergency involving chemical agents. 
(Appendix II lists the states and counties participating in CSEPP.)

Through fiscal year 1994, CSEPP funds were allocated through the
Assistant Secretary of the Army for Installations, Logistics, and the
Environment to Army commands and contractors and to FEMA.  Funds for
counties flowed through FEMA regions, to the states, and then to
counties.  The funds provided to the states are covered by the
Uniform Administrative Requirements for Grants and Cooperative
Agreements to State and Local Governments (44 C.F.R., parts 13 and
14).  These accounting requirements, however, do not provide adequate
information for program management. 

In 1993 and 1994, we reported that program officials were hampered by
inadequate financial information and that CSEPP's financial
management and organization needed improvements to ensure that
communities could effectively respond to a chemical emergency.\2 We
recommended that the Secretary of the Army establish a single point
of accountability for the program.  In October 1994, the Army began
operating a consolidated office, including Army and FEMA staff,
within its Chemical and Biological Defense Command.  Officials said
that the office is intended to operate as a focal point for CSEPP
activities by improving communication and creating an environment for
teamwork.  The office includes teams dedicated to functional areas,
such as training or automation, and teams responsible for integrating
activities at each CSEPP site and advocating site-specific needs. 
The Army's preliminary estimate is that CSEPP will cost $900 million. 


--------------------
\2 Chemical Weapons Storage:  Communities Are Not Prepared to Respond
to Emergencies (GAO/T-NSIAD-93-18, July 16, 1993) and Chemical Weapon
Stockpile:  Army's Emergency Preparedness Program Has Been Slow to
Achieve Results (GAO/NSIAD-94-91, Feb.  22, 1994). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Because of weaknesses in CSEPP's financial management reporting and
internal control systems, Army and FEMA officials lack accurate
financial information to identify how funds are spent or to ensure
program goals are achieved.  However, by analyzing why funds were
allocated and visiting four states participating in the program, we
developed a general picture of expenditures.  More than $145 million
(52 percent) was allocated to states and counties, $127 million (45
percent) was allocated to the Army and FEMA, and almost $8.9 million
(3 percent) is unallocated.\3 More than $67 million (24 percent) of
all program funds appropriated in fiscal years 1989 to 1994 remained
unexpended. 

The states' allocations for major program categories were (1) $35.1
million for communications, (2) $28.4 million for alert and
notification, (3) $18.3 million for salaries and benefits, (4) $15.8
million for automation, and (5) $12.7 million for emergency
operations centers.  The amounts allocated to the 10 states vary,
ranging from $2.4 million for Illinois to $30.7 million for Alabama. 
In general, funds were used for priority items and other critical
CSEPP objectives, but not all items are operational or have been
purchased.  For example, final automation systems and tone-alert
radios have not been purchased.\4

Although program managers have previously recognized the need to
improve CSEPP's financial management, they could not provide us
complete and accurate financial data.  Adequate internal controls to
ensure assets are safeguarded and program goals are efficiently and
effectively achieved do not exist; leaving the program susceptible to
fraud, waste, and abuse. 


--------------------
\3 Allocation is the distribution of budget or obligational authority
from the Army to its commands or FEMA and FEMA's distribution of
budget or obligational authority to states or counties.  The Army
calls these distributions of funds "obligations" and FEMA often calls
them "awards."

\4 A tone-alert radio is an indoor emergency warning device that
provides both an alert signal and verbal information. 


   STATES AND COUNTIES HAVE
   RECEIVED MORE THAN HALF THE
   PROGRAM FUNDS
------------------------------------------------------------ Letter :3

Because of inadequate financial data and internal controls, Army and
FEMA officials could not provide reliable information on actual
expenditures.  However, based on our analysis of the $281 million
appropriated for CSEPP, we determined that approximately $145 million
(52 percent) was allocated to states and counties, $127 million (45
percent) was allocated to Army and FEMA organizations, and almost
$8.9 million (3 percent) remains unallocated.\5 Nearly half of all
CSEPP allocations went for automation, communication, and salaries
and benefits.  Table 1 lists funding levels for major CSEPP entities. 



                           Table 1
           
            Funds Allocated to CSEPP Entities for
                  Fiscal Years 1988 to 1994

                    (Dollars in thousands)

                                                      Percen
CSEPP entity                                   Total       t
--------------------------------------------  ------  ------
States and counties\a                         $145,1      52
                                                  52
Army commands and organizations               73,793      26
Army contracts with Argonne and               21,505       8
 Oak Ridge National Laboratories
FEMA headquarters and regions                 13,843       5
FEMA contracts                                17,718       6
Unallocated                                    8,887       3
============================================================
Total                                         $280,8     100
                                                  98
------------------------------------------------------------
Note:  The Army and FEMA were working to reconcile their allocation
data, which do not agree.  For example, some of the Army's totals in
this table do not agree with FEMA's totals in subsequent tables. 

\a Two cities also received CSEPP funds. 

Source:  Department of the Army. 

The Army allocated funds to various commands for such purposes as
improving emergency operations centers at installations where
chemical weapons are stored, purchasing automation equipment, and
paying salaries.  Other Army allocations were for contractor support
activities, including the development and procurement of CSEPP
automation systems for military installations and communities.  FEMA
used program funds for salaries and benefits for headquarters and
regional staff, and for contractor support for exercises, automation,
and training. 

The amount allocated to the 10 states varied, ranging from $2.4
million for Illinois to $30.7 million for Alabama, as shown in table
2. 



                           Table 2
           
             Funds Allocated to States for Fiscal
                      Years 1989 to 1994

                    (Dollars in thousands)

                                                      Percen
State                                          Total       t
--------------------------------------------  ------  ------
Alabama                                       $30,68      21
                                                   0
Arkansas                                      15,400      11
Colorado                                       9,462       7
Illinois                                       2,386       2
Indiana                                       11,345       8
Kentucky                                      14,018      10
Maryland                                      13,001       9
Oregon                                        18,647      13
Utah                                          18,319      13
Washington                                    11,891       8
============================================================
Total\a                                       $145,1     100
                                                  49
------------------------------------------------------------
Note:  The Army and FEMA were working to reconcile their allocation
data, which do not agree.  FEMA and state funding began in fiscal
year 1989. 

\a Percents do not total 100 due to rounding. 

Source:  FEMA. 

Funds were specifically allocated for such items as emergency
operations centers, alert and notification sirens, computer
equipment, training, and salaries and benefits.  Funding levels, as
allocated to the states by category, are shown in table 3. 



                           Table 3
           
            Funds Allocated to States by Category

                    (Dollars in thousands)

                                                      Percen
Category                                       Total       t
--------------------------------------------  ------  ------
Administration                                $5,392       4
Alert and notification                        28,449      20
Automation                                    15,785      11
Communications                                35,129      24
Emergency operations centers                  12,719       9
Salaries and benefits                         18,300      13
Travel                                         3,121       2
============================================================
Subtotal                                      $118,8
                                                  95
Other\a                                       26,254      18
============================================================
Total\b                                       $145,1     100
                                                  49
------------------------------------------------------------
\a The "other" category includes items such as public affairs,
contracts, exercises, and training. 

\b Percents do not total 100 due to rounding. 

Source:  FEMA. 


--------------------
\5 Many of the numbers in this report are rounded for ease of
presentation. 


   ALLOCATIONS AT FOUR STORAGE
   SITES GENERALLY REFLECT
   PRIORITIES
------------------------------------------------------------ Letter :4

Because of weaknesses in CSEPP's financial management and reporting,
Army and FEMA officials were unable to provide us a complete picture
of how program funds were spent.  However, by visiting four CSEPP
sites and four of the five states associated with them, we developed
a general picture of expenditures.  In general, the funds were used
for priority items and other critical CSEPP objectives, but not all
items are operational or have been purchased.  For example, final
automation systems and tone-alert radios have not been purchased. 


      FUNDING PRIORITIES
---------------------------------------------------------- Letter :4.1

In 1992, CSEPP officials issued a set of priorities to guide program
expenditures.  In 1993, officials supplemented the priorities with
benchmarks intended to (1) guide states and local communities in
their preparedness activities, (2) ensure equitable distribution of
funds among states, and (3) result in functional equivalency.  For
example, two top priorities are alert and notification capabilities
and emergency operations centers. 



      STATE AND COUNTY
      EXPENDITURES
---------------------------------------------------------- Letter :4.2

We collected expenditure data from states and counties associated
with four CSEPP sites and from the Army and FEMA.  (Appendix III
describes these expenditures by locality.) Because these entities do
not use the same accounting systems, the data on expenditures are not
comparable. 

In general, CSEPP funds were used for emergency response systems and
other critical items, but not all critical items have been purchased. 
For example, the counties in Oregon and Washington did not have
CSEPP-funded alert and notification sirens as of December 1994. 
Oregon is using $7 million to procure communication equipment and
sirens, but this equipment is not expected to be operational until
after March 1995.  In addition, not every site has radio
communication capabilities in its emergency operations centers, and
none has protective gear ensembles or final automation systems. 
Table 4 shows the status of some critical items.  According to FEMA
officials, interim or substitute capabilities for critical items
exist in some locations. 



                           Table 4
           
            Availability of CSEPP-Funded Critical
                 Items for Four Storage Sites


          Anniston  Pine
          ,         Bluff,    Tooele,
Item      Alabama   Arkansas  Utah      Oregon    Washington
--------  --------  --------  --------  --------  ----------
CSEPP-    Yes       Yes       Yes       Partial\  Partial\a
equipped                                a
emergenc
y
operatio
n
centers

Protecti  No        No        No        No        No
ve gear
ensemble
s

Emergenc  Yes       Yes       Yes       Yes       Yes
y
operatio
ns plans

Final     No        No        No        No        No
automati
on
systems\
b

Alert
and
notifica
tion

Sirens    Yes       Yes       Yes       No        No

Tone-     No        No        No        No        No
alert
radios
------------------------------------------------------------
\a Morrow County, Oregon, has a CSEPP-funded center; Umatilla County,
Oregon, has a limited operational center but plans to construct a new
center with program funds; and Benton County, Washington, has built a
center with non-CSEPP funds. 

\b The Automation Program was approved in 1994.  According to FEMA
officials, the system has not undergone a government acceptance test. 

Program funds were allocated to some state emergency management
organizations to procure large items, such as communication systems,
for all CSEPP entities in the state.  Funds were also allocated to
salaries and benefits for state and local personnel, such as
emergency response directors, automation analysts, trainers, and
public information officers. 


   FINANCIAL DATA AND INTERNAL
   CONTROLS ARE NOT ADEQUATE
------------------------------------------------------------ Letter :5

Controls over CSEPP funds are inadequate.  Army and FEMA officials
lack accurate financial information to identify how funds are spent
and to ensure program goals are achieved.  In testimony presented in
July 1993, we suggested that the Army establish strict controls over
the accountability of program funds.  Army officials subsequently
stated that they are working to improve CSEPP's financial management
and internal controls.  However, our review revealed that little
improvement has been made.  Specifically, we found that (1) CSEPP
expenditure data are limited and allocation data are discrepant; (2)
FEMA's reports to the Army have been incomplete, inconsistent, and
untimely; (3) the Army and several states are maintaining large
unexpended balances of funds; and (4) some states have reprogrammed
funds without the knowledge of federal officials. 


      EXPENDITURE DATA ARE LIMITED
---------------------------------------------------------- Letter :5.1

CSEPP expenditure financial data at the federal level are limited. 
Neither FEMA nor the Army has data comparing program expenditures by
states and counties to specified allocations or program priorities. 
Data at FEMA headquarters and regions consist primarily of quarterly
financial status reports that track aggregated expenditures and
reports that identify states' withdrawals from the federal treasury,
but not how the funds were spent.  The Army does not maintain
centralized expenditure data for the entire program, or for funds
allocated to or spent by Army commands or contractors.  Army commands
also do not maintain comparable expenditure data. 

FEMA's guidance on CSEPP requires states and jurisdictions to
maintain detailed financial records on allocations and expenditures. 
However, agency officials believe the Office of Management and Budget
Circular A-102 prevents them from requiring states to report how
funds are spent.  In September 1994, Army officials requested that
FEMA obtain an Office of Management and Budget exception to the
requirements of circular A-102.  FEMA officials told us that they
have not requested an exception but will survey the states to satisfy
the Army's needs. 


      ALLOCATION DATA ARE NOT
      ACCURATE OR CONSISTENT
---------------------------------------------------------- Letter :5.2

CSEPP allocation data are not accurate or consistent.  In February
1994, we reported that, although FEMA had administered 65 percent of
allocated program funds, it could not accurately account for how
funds were spent.  Instead, its managers could provide only the
amounts originally allocated for a particular purpose. 

However, we found discrepancies in allocation data at all management
levels--between Army and FEMA headquarters, FEMA headquarters and its
regions, FEMA regions and the states, and states and counties.  In
addition, data from Army headquarters and different commands do not
agree.  Army officials were unaware of the discrepancies in their
data or FEMA's data until we mentioned them. 

Army and FEMA officials are working to correct the discrepancies. 
For example, the Argonne National Laboratory has created a database
to track allocation data for the Army.  In addition, FEMA has several
efforts underway to improve its financial data and reports, and
officials said they began investigating ways in September 1994 to
improve communication across program and financial organizations. 
The agency plans to implement a new system by October 1995. 


      FEMA REPORTS ARE INCOMPLETE,
      INCONSISTENT, AND UNTIMELY
---------------------------------------------------------- Letter :5.3

During 1994, FEMA's programmatic and financial reports to the Army
were incomplete, inconsistent, and untimely.  FEMA officials told us
that this was because they had not enforced their own reporting
requirements for states.  In 1993, the FEMA Inspector General and we
reported that the agency's financial reports on CSEPP were not
adequate.  The Inspector General reported that financial reports did
not (1) include information required to monitor the program's
progress, (2) identify how funds were used to accomplish program
goals, and (3) compare expenditures to program activities.  In July
1993, we testified that program officials had inadequate information
on the status of funds. 

Although FEMA officials said that they are improving the agency's
financial reporting, little progress has been made, and weaknesses in
reporting continue.  For example, its 1994 third-quarter report
contained financial information from only 3 of the 10 states.  The
formats and the amount and type of detail in FEMA regions' and
states' reports varied greatly, making comparisons and analysis
difficult.  In addition, state reports contained limited expenditure
data and were in different formats.  Also, the agency does not
provide the reports to the Army in a timely manner.  For example, the
1994 third-quarter report was not provided until September 16, 1994. 
According to FEMA officials, they are dependent upon the cooperation
and compliance by the states to meet these requirements. 


      TWENTY-FOUR PERCENT OF CSEPP
      FUNDS ARE NOT EXPENDED
---------------------------------------------------------- Letter :5.4

At the end of fiscal year 1994, states and the Army held more than
$67 million in unexpended funds, or 24 percent of all funds
appropriated to the program.  States had a balance of more than $58
million in program funds allocated to them in fiscal years 1989 to
1994 but not yet expended.  Various factors contribute to the
balances such as delays in getting program funds to the states or
premature allocation of funds.  In addition, it is statutory in some
states that they have the funds before they begin the procurement
process.  The Army also held almost $9 million in prior-year funds
that was not allocated to Army commands or FEMA.  Army officials
were, for the most part, unaware of the funds' existence until we
mentioned them. 

We reviewed FEMA's financial reports showing expenditure data by
state for fiscal years 1989 to 1994.  As of October 31, 1994, states
had more than $58 million in program funds allocated to them but not
spent.  Almost half of the unexpended balance comes from fiscal year
1994 allocations.  Table 5 shows unexpended funds by state. 



                           Table 5
           
                  Unexpended Funds by State

                    (Dollars in thousands)

                                                      Percen
State                                         Amount       t
--------------------------------------------  ------  ------
Alabama                                       $17,86      31
                                                   0
Arkansas                                       3,173       5
Colorado                                       2,134       4
Illinois                                         759       1
Indiana                                        4,269       7
Kentucky                                       4,393       8
Maryland                                       7,814      13
Oregon                                         7,241      12
Utah                                           3,800       7
Washington                                     6,827      12
============================================================
Total                                         $58,27     100
                                                   0
------------------------------------------------------------
Note:  Funds were allocated in fiscal years 1989 to 1994.  According
to FEMA officials, the majority of these unexpended funds are in the
procurement process at the state level. 

Source:  FEMA. 

We asked FEMA officials to identify allocated but not obligated funds
by state.\6 Because their regional offices provided incomplete data
for only eight states, we cannot report the total obligated but not
spent.  However, individual examples from several states include the
following: 

  In Kentucky's $4.4 million unexpended balance, $3.4 million is
     obligated for a contract signed in July 1994 to produce
     tone-alert radios. 

  In Oregon's unexpended balance, $1.7 million is obligated for a
     microwave communication system and another $1.7 million is
     obligated for an emergency operation and information center for
     Umatilla County. 

  In Washington's unexpended balance, $2.4 million is obligated for a
     communication system. 

Factors contributing to the unexpended balances are delays in
providing funds to the states and premature allocation of funds.  For
example, in fiscal years 1992 and 1993, funds were not allocated to
some states and counties until the second or third quarters of the
fiscal years because of delays at various levels in the process. 
This reduced the time available for states and counties to obligate
the funds and accomplish tasks before the end of the fiscal year. 

Part of the unexpended balances results from carried-over funding for
tone-alert radios.  For example, almost $5.2 million of the funds
were provided to Alabama in fiscal year 1993 for tone-alert radios
and not spent because the state and county had not finished studying
where to place the radios.  In July 1994, FEMA officials estimated
the radio study would be completed during the fourth quarter of
fiscal year 1995, 2 years after the funds were released to the state. 
As of December 1994, the study had not started.  In addition, the
policy on the type of radio to use changed, which contributed to the
delay.  FEMA and Alabama officials told us that the funds may have
been prematurely allocated. 

The Army has expressed its concern to FEMA over these unexpended
funds.  In July 1994, the Army asked the agency to (1) enforce its
requirement that states identify unexpended funds in a timely manner
and (2) reallocate them for critical unmet needs.  Despite these
measures, more than $67 million (24 percent) of program funds
appropriated since 1989 remain unexpended. 


--------------------
\6 Obligated funds are funds designated for orders placed, contracts
awarded, services rendered, or other similar transactions. 


      STATES HAVE REALLOCATED
      FUNDS
---------------------------------------------------------- Letter :5.5

Without FEMA headquarters' approval or knowledge, at least two states
reprogrammed funds from their allocated purposes.  In Arkansas,
$325,000 originally allocated for decontamination equipment and
almost $88,000 in unobligated funds were reprogrammed to construct
CSEPP state office space.  The redistribution did not comply with
FEMA policy that the state obtain prior written approval from agency
headquarters.  In Washington, almost $100,000 in fiscal year 1990
procurement funds originally allocated for telecommunication
equipment was reprogrammed to design a new emergency operations
center for the state.  In this case, Washington received approval
from its FEMA regional office.  Until we brought these cases to their
attention, Army and FEMA officials at the national level were not
aware of them. 


   CHANGES AT FEMA COULD ADVERSELY
   AFFECT ALREADY LIMITED
   FINANCIAL CONTROLS
------------------------------------------------------------ Letter :6

FEMA is changing the process it uses to budget and distribute CSEPP
funds to states.  These changes could adversely affect already
limited controls over CSEPP funding and raise concerns regarding the
appropriateness of FEMA continuing to administer CSEPP funds.  In
fiscal year 1995, one of FEMA's priorities is to reform the
comprehensive cooperative agreement process, beginning by eliminating
program-designated funding and replacing it with functionally
designated funding across all programs.  Under this proposed process,
CSEPP funds may lose their identity if funds for many programs are
awarded to the states by functional categories.  If CSEPP is
included, it will further reduce program managers' already limited
ability to relate expenditures to specific program objectives. 
Agency officials do not expect CSEPP to be included in the new
combined funding process and said that a decision on the program's
status under the new process is expected by March 1995. 


   RECOMMENDATIONS
------------------------------------------------------------ Letter :7

We recommend that the Secretary of the Army (1) consolidate financial
as well as programmatic functions at the new joint CSEPP office in
the Chemical and Biological Defense Command and (2) strengthen the
new office's procedures for financial reporting and accountability,
including requiring regions, states, and counties to report financial
data consistent with the format used to award allocations. 

We recommend that the Director of FEMA remove CSEPP from the agency's
comprehensive cooperative agreements umbrella and administer the
program separately, not commingled with other agency programs. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :8

We developed information for this report by reviewing documents and
interviewing officials from the Army and FEMA and from four states
and numerous counties associated with Anniston, Alabama; Pine Bluff,
Arkansas; Tooele, Utah; and Umatilla, Oregon, installations.  Because
of weaknesses in CSEPP's financial management and reporting, we were
unable to develop a complete picture of the purposes for which
program funds were expended.  However, through visits to the storage
sites, states, and counties, we were able to document and analyze a
portion of the $94.9 million allocated to five states.  In some
cases, because expenditure data were not available, we obtained and
used allocation data.  (Appendix IV lists the organizations and sites
we contacted.) We did not verify the financial data provided to us by
the various entities and did not assess whether the expenditures
enhanced community preparedness. 

We performed our work between October 1993 and December 1994 in
accordance with generally accepted government auditing standards.  As
requested, we did not obtain official agency comments on a draft of
this report.  However, we discussed our findings with Army and FEMA
officials and have included their views where appropriate. 


---------------------------------------------------------- Letter :8.1

Unless you publicly announce this report's contents earlier, we plan
no further distribution until 30 days from its issue date.  At that
time, we will send copies to the Chairmen of the Senate Committee on
Armed Services and the Senate and House Committees on Appropriations,
the Secretary of Defense, the Director of FEMA, the Director of the
Office of Management and Budget, and other interested parties.  We
will make copies available to others upon request. 

Please contact me at (202) 512-8412 if you or your staff have any
questions.  Major contributors to this report are listed in appendix
V. 

Donna M.  Heivilin
Director, Defense Management
 and NASA Issues


STORAGE LOCATIONS IN THE
CONTINENTAL UNITED STATES
=========================================================== Appendix I



   (See figure in printed
   edition.)


STATES AND COUNTIES PARTICIPATING
IN CSEPP
========================================================== Appendix II

State                          County
-----------------------------  -----------------------------
Alabama                        Calhoun
                               Clay
                               Cleburne
                               Etowah
                               St. Clair
                               Talladega

Arkansas                       Arkansas
                               Cleveland
                               Dallas
                               Grant
                               Jefferson
                               Lincoln
                               Lonoke
                               Prairie
                               Pulaski
                               Saline

Colorado                       Pueblo

Illinois                       Edgar
                               Vermillion

Indiana                        Fountain
                               Parke
                               Vermillion

Kentucky                       Clark
                               Estill
                               Fayette
                               Garrard
                               Jackson
                               Madison
                               Powell
                               Rockcastle

Maryland                       Harford
                               Baltimore
                               Kent

Oregon                         Gilliam
                               Morrow
                               Umatilla

Utah                           Salt Lake
                               Tooele
                               Utah

Washington                     Benton
------------------------------------------------------------

STATE AND COUNTY ALLOCATIONS AND
EXPENDITURES ASSOCIATED WITH FOUR
CSEPP SITES
========================================================= Appendix III


   ANNISTON ARMY DEPOT, ANNISTON,
   ALABAMA
------------------------------------------------------- Appendix III:1

Of the $31 million allocated to Alabama, over $7.8 million (25
percent) went to Alabama's Emergency Management Agency and other
state offices.  The state received $4.2 million for automation and
$3.5 million for salaries and benefits.  Ten million dollars were
allocated for a communication system.  Officials estimate that a
contract for communication equipment will be let by July 1995 and
that the equipment will be manufactured and installed in 1996 or
1997. 

Alabama allocated more than $21.6 million (70 percent) to six
counties.  Almost $17 million was allocated to Calhoun County, one of
two counties in Anniston Army Depot's immediate response zone.  The
county received about $1.5 million to construct and equip an
emergency operations center and $1 million to test 43 alert and
notification sirens for Calhoun and Talladega counties and the depot. 
Talladega County, the other immediate response county, received $3
million to operate an emergency operations center, procure an
800-megahertz communication system and an automation system, and pay
salaries and benefits.  Another $2 million was allocated to four
counties in the protective action zone for such items as automation,
office furniture, travel, and salaries and benefits. 


   PINE BLUFF ARSENAL, PINE BLUFF,
   ARKANSAS
------------------------------------------------------- Appendix III:2

Arkansas was allocated over $15 million, of which $10.7 million went
to the state Office of Emergency Services and other state-level units
such as the Department of Health.  More than $700,000 was allocated
to the Office of Emergency Services for computer hardware, software,
licenses, and spare parts.  In addition, more than $476,000 was
allocated for contracts to support planning, training, and technical
aspects of the program, and more than $400,000 was used for state
office space.  Much of Arkansas's funding went to items that
benefited local communities' preparedness.  For example, $1.2 million
was allocated to purchase 58 voice-message sirens for Jefferson and
Grant Counties and the Pine Bluff Arsenal.  Likewise, almost $4
million was allocated to purchase an 800-megahertz communication
system.  Of this amount, more than $3 million was used to purchase
about 500 radios. 

Jefferson and Grant Counties, the two counties in the Pine Bluff
Arsenal's immediate response zone, received $2.4 million and $400,000
in program funding, respectively.  Both counties have completed their
emergency operations centers; Jefferson County's emergency operations
center cost $1.2 million, and Grant County's center cost $239,000. 


   TOOELE ARMY DEPOT, TOOELE, UTAH
------------------------------------------------------- Appendix III:3

Of the $18.3 million allocated to Utah in fiscal years 1989 to 1994,
$10 million (55 percent) was allocated to its Office of Comprehensive
Emergency Management and the Departments of Health and of
Environmental Health.  These funds were used for such items as
communication systems, automation equipment, training and exercises,
as well as for salaries and benefits.  The state designated about
$507,000 for construction of a command post. 

Of the $18.3 million allocated to Utah, $7.2 million (39 percent) was
allocated to Tooele County, the immediate response zone county for
Tooele Army Depot.  More than $6 million was allocated to the county
in fiscal years 1993 and 1994.  The county constructed an emergency
operations center for about $345,000, and installed 37 alert and
notification sirens for $2 million.  During fiscal years 1989 and
1993, the county used about $255,000 for automation, $105,000 for
communication, and $499,000 for salaries and benefits.  More than
$2.6 million was allocated through the county in fiscal years 1993
and 1994 for 24-hour and other emergency capabilities at the Tooele
Valley Regional Medical Center. 


   UMATILLA DEPOT ACTIVITY,
   UMATILLA, OREGON AND WASHINGTON
------------------------------------------------------- Appendix III:4

Oregon and Washington, the states associated with the Umatilla
storage site, were allocated $30.5 million in program funding. 
Oregon was allocated $18.6 million, and Washington was allocated
almost $12 million. 

Of the funds allocated to Oregon, $11.6 million (62 percent) went to
Oregon's Office of Emergency Management.  Umatilla and Morrow
Counties, the two immediate response zone counties, were allocated
$4.7 million and $1.2 million in program funding, respectively. 
These amounts do not include $162,000 jointly allocated in fiscal
year 1992 to Umatilla and Morrow Counties.  Umatilla County did not
receive funding for its emergency operations center until fiscal year
1994, and construction had not started as of December 1994.  Morrow
County has constructed an emergency operations center for $345,000. 

Nine million dollars (75 percent) of Washington's program funds were
allocated to the state's Departments of Emergency Management,
Agriculture, and Ecology.  The money was allocated for such items as
communication systems, automation, and salaries and benefits.  Benton
County, Washington, received $2.3 million, which included $1.7
million in fiscal year 1993 for 22 sirens.  The sirens are expected
to be operational in November 1995. 


SITES AND AGENCIES INCLUDED IN OUR
REVIEW
========================================================== Appendix IV

Entities that we contacted or visited during our review included the
following: 

  Assistant Secretary of the Army for Installations, Logistics, and
     the Environment, Washington, D.C.;

  U.S.  Army Nuclear and Chemical Agency, Springfield, Virginia;

  the Army Materiel Command, Alexandria, Virginia;

  U.S.  Chemical and Biological Defense Command, Aberdeen Proving
     Ground, Maryland;

  Federal Emergency Management Agency:  Washington, D.C.; Region IV,
     Atlanta, Georgia; Region VI, Denton, Texas; Region VIII, Denver,
     Colorado; and Region X, Bothell, Washington;

  Anniston, Pine Bluff, Tooele, and Umatilla installations;

  states and counties near the Anniston, Pine Bluff, Tooele, and
     Umatilla installations;

  Oak Ridge National Laboratory, Oak Ridge, Tennessee; and

  Argonne National Laboratory, Argonne, Illinois. 


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

David R.  Warren, Associate Director
Thomas J.  Howard, Assistant Director

DENVER FIELD OFFICE

Suzanne Macfarlane, Evaluator-in-Charge
Cynthia L.  Richards, Senior Evaluator
Julia A.  Dubois, Senior Evaluator

RELATED GAO PRODUCTS

Chemical Weapons:  Obstacles to the Army's Plan to Destroy Obsolete
U.S.  Stockpile (GAO/NSIAD-90-155, May 24, 1990). 

Chemical Weapons:  Stockpile Destruction Delayed at the Army's
Prototype Disposal Facility (GAO/NSIAD-90-222, July 30, 1990). 

Chemical Weapons:  Stockpile Destruction Cost Growth and Schedule
Slippages Are Likely to Continue (GAO/NSIAD-92-18, Nov.  20, 1991). 

Chemical Weapons Destruction:  Issues Affecting Program Cost,
Schedule, and Performance (GAO/NSIAD-93-50, Jan.  21, 1993). 

Chemical Weapons Storage:  Communities Are Not Prepared to Respond to
Emergencies (GAO/T-NSIAD-94-91, July 16, 1993). 

Chemical Weapon Stockpile:  Army's Emergency Preparedness Program Has
Been Slow to Achieve Results (GAO/NSIAD-94-91, Feb.  28, 1994). 

Chemical Weapons Destruction:  Advantages and Disadvantages of
Alternatives to Incineration (GAO/NSIAD-94-123, Mar.  18, 1994). 

Chemical Weapons:  Stability of the U.S.  Stockpile (GAO/NSIAD-95-67,
Dec.  22, 1994). 

Chemical Stockpile Disposal Program Review (GAO/NSIAD-95-66R, Jan. 
12, 1995). 

