Testimony 

Before the Subcommittee on Emergency 

Preparedness, Science, and Technology, 

Committee on Homeland Security, House 

of Representatives

United States Government Accountability Office

GAO

For Release on Delivery 

Expected at 2:00 p.m. EDT 

Tuesday, April 12, 2005 HOMELAND SECURITY

Management of First 

Responder Grant Programs 

and Efforts to Improve 

Accountability Continue to 

Evolve 

Statement of William O. Jenkins, Jr., Director 

Homeland Security and Justice 

GAO-05-530T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-530T .

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact William O. 

Jenkins, Jr., at (202) 512-8777 or 

jenkinswo@gao.gov. 

Highlights of GAO-05-530T, a testimony to 

the Subcommittee on Emergency 

Preparedness, Science, and Technology, 

Committee on Homeland Security, House 

of Representatives 

April 12, 2005 

HOMELAND SECURITY

Management of First Responder Grant 

Programs and Efforts to Improve 

Accountability Continue to Evolve 

Federal first responder grants are a means of achieving an important goal—

enhancing the ability of first responders to prevent, prepare for, respond to, 

and recover from terrorist and other incidents with well-planned, wellcoordinated efforts that involve a variety of first responders from multiple 

jurisdictions. ODP has led federal efforts to develop these capabilities in 

part through its management of federal first responder grants. 

ODP has modified grant award procedures for states and localities. ODP 

developed procedures and guidelines for awarding the State Homeland 

Security Grant Program and the Urban Areas Security Initiative grants to 

states, and for determining how states and localities could expend funds and 

seek reimbursement for first responder equipment or services they 

purchased. As part of this process, ODP gave states some flexibility by 

allowing them to determine how grant funds were to be managed and 

distributed within their states and whether purchases would be made locally 

or at the state level. 

Congress, ODP, states, and localities have acted to expedite grant awards 

by setting time limits for the grant application, award, and distribution 

processes and by instituting other procedures. Nevertheless, the ability 

of states and localities to spend grant funds expeditiously was 

complicated by the need to fulfill state and local legal and procurement 

requirements, which in some cases added months to the purchasing 

process. Some states have modified their procurement practices, and 

ODP is identifying best practices to aid in the effort, but challenges 

remain. 

ODP has taken steps to improve accountability in the state preparedness 

planning process, in part by requiring states to update homeland security 

strategies. In tandem with this effort, ODP revised its grant-reporting 

method, moving away from requiring states, localities, and urban areas to 

submit itemized lists of first responder equipment they plan to purchase 

towards a more results-based approach, whereby grant managers at all levels 

must demonstrate how grant expenditures are linked to larger projects that 

support goals in state homeland security strategies. As part of a broader 

effort to meet mandates contained in Homeland Security Presidential 

Directive 8, addressing national preparedness goals for all hazards, ODP has 

taken steps to ensure more assessments of first responder needs are 

conducted on a national basis. Finally, ODP recently issued interim national 

preparedness goals that reflect the department’s progress in developing 

readiness targets, priorities, standards for preparedness assessments and 

strategies, and a system for assessing the nation’s overall level of 

preparedness. However, DHS’s task of finalizing these goals and translating 

them into capabilities that are meaningful and readily transferable to the 

wide variety of local jurisdictions around the nation is still not complete. 

In fiscal years 2002 through 2005, 

the Office for Domestic 

Preparedness (ODP) within the 

Department of Homeland Security 

managed first responder grants 

totaling approximately $10.5 

billion. The bulk of this funding has 

been for statewide grants through 

the State Homeland Security Grant 

Program and urban area grants 

through the Urban Areas Security 

Initiative. 

This testimony provides 

information on the history and 

evolution of these two grant 

programs, particularly with respect 

to ODP grant award procedures; 

timelines for awarding and 

transferring grant funds; and 

accountability for effective use of 

grant funds. 

What GAO Recommends

In prior reports on issues related to 

federal funding and oversight of 

grants for first responders, GAO 

has made recommendations for 

strengthening federal leadership, 

cooperation, and planning efforts. 

These include developing a 

coordinated strategic plan for use 

of first responder funds in the 

National Capital Region and 

monitor the plan’s implementation 

and using grant guidance to 

encourage the development of 

statewide plans for interoperable 

communications. The National 

Capital Region and DHS agreed 

with these recommendations and 

are working to implement them. 
Page 1 GAO-05-530T 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss federal funding for first 

responders. The events of September 11, 2001, highlighted the critical role 

of the nation’s first responders in preventing, preparing for, responding to, 

and recovering from the effects of a terrorist attack. In fiscal years 2002 

through 2005, the Office for Domestic Preparedness (ODP) within the 

Department of Homeland Security (DHS)1

 managed first responder grants 

totaling approximately $10.5 billion. The bulk of this funding has been for 

the State Homeland Security Grant Program2 (statewide) and the Urban 

Areas Security Initiative (urban area) grants. Although the grant programs 

have evolved over time, this money has generally been available for 

planning, equipment, exercises, training, and administrative costs. The 

grants have also generally been targeted at preventing, preparing for, 

responding to, and recovering from terrorist events. 

The amount of federal funding for ODP grant programs has increased 

significantly since September 11. Accompanying this increase has been a 

discussion at the federal, state, and local levels of the most appropriate 

means of allocating these funds, developing plans that set priorities for 

their use, and assessing the effective use of the funds. Several factors 

could affect how these things are done in the future. For example, recent 

congressional proposals have addressed the most appropriate means to 

allocate grant funds to states. In addition, the issuance of Homeland 

Security Presidential Directive 8 (HSPD-8) in December 2003—calling for, 

among other things, a new national preparedness goal and performance 

measure that pertained to “all hazards”—placed first responder grant 

programs, including those managed by ODP, into a broader context that is 

to consider the nation’s readiness to respond to all major events, including 

natural disasters as well as acts of terrorism. 

We are currently conducting a review of DHS’s implementation of HSPD-8 

and expect to issue our report in the summer of 2005, looking at how DHS 

is working with state and local governments and first responders to 

implement it. 

 1

Grants funds for domestic preparedness programs for state and local governments are also 

provided by other DHS components and other agencies, including the Departments of 

Justice and Health and Human Services. 

2

In fiscal year 2002, the grant program was called the State Domestic Preparedness 

Program. 
Page 2 GAO-05-530T 

My statement today provides information on the history and evolution of 

the two largest grant programs, particularly with respect to ODP grant 

award procedures; timelines for awarding and transferring grant funds; 

and accountability for effective use of grant funds. My comments are 

based on our report3

 on the management of first responder grant programs 

as well as updated information on DHS’s progress since the report’s 

issuance in addressing its challenges. 

Federal first responder grants are a means of achieving an important 

goal—enhancing the ability—through equipment, skills, and training--of 

first responders to prevent, prepare for, respond to, and recover from 

terrorist and other incidents with well-planned, well-coordinated efforts 

that involve police, fire, emergency medical, public health, and other 

personnel from multiple jurisdictions. As we noted in our May 2004 report 

on the management of first responder funds in the National Capital 

Region, effectively managing first responder grant funds requires the 

ability to measure progress and provide accountability for the use of 

public funds. This includes developing and implementing strategies, 

establishing baselines, developing and implementing performance goals 

and data quality standards, collecting reliable data, analyzing the data, 

assessing the results, and taking action based on the results. This strategic 

approach to homeland security includes identifying threats and managing 

risks, aligning resources to address them, and assessing progress in 

preparing for those threats and risks. 

ODP has modified grant award procedures for states and localities. ODP 

developed procedures and guidelines for awarding statewide and urban 

area grants to states, and for determining how states and localities could 

expend funds and seek reimbursement for first responder equipment or 

 3

See GAO, Homeland Security: Management of First Responder Grant Programs Has 

Improved, but Challenges Remain, GAO-05-121, (Washington, D.C.: Feb. 2, 2005). As part 

of the review, we visited five selected states: Arizona, California, Florida, Missouri, and 

Pennsylvania. We conducted our work from November 2003 through November 2004 in 

accordance with generally accepted government auditing standards. See also GAO, 

Emergency Preparedness: Federal Funds for First Responders, GAO-04-788T, 

(Washington, D.C.: May13, 2004); GAO, Homeland Security: Management of First 

Responder Grants in the National Capital Region Reflects the Need for Coordinated 

Planning and Performance Goals, GAO-04-443, (Washington, D.C.: May 28, 2004); and 

GAO, Homeland Security: Federal Leadership and Intergovernmental Cooperation 

Required to Achieve First Responder Interoperable Communications, GAO-04-740

(Washington, D.C.: July 20, 2004). 

Summary 
Page 3 GAO-05-530T 

services they purchased. As part of this process, ODP gave states some 

flexibility by allowing them to determine how grant funds were to be 

managed and distributed within their states and whether purchases would 

be made locally or at the state level. 

Congress, ODP, states, and localities have acted to expedite grant awards 

by setting time limits for the grant application, award, and distribution 

processes and by instituting other procedures. ODP also took steps to 

expedite the transfer of funds from states to local jurisdictions, allowing 

states, for example, to transfer grant funds to localities before all required 

documentation had been submitted to ODP. Nevertheless, the ability of 

states and localities to spend grant funds expeditiously was complicated 

by the need to fulfill state and local legal and procurement requirements, 

which in some cases added months to the purchasing process. Some states 

have modified their procurement practices, and ODP is identifying best 

practices to aid in the effort, but challenges remain. 

ODP has taken steps to improve accountability in the state preparedness 

planning process. For example, in fiscal year 2003, ODP required states to 

update homeland security strategies. These strategies are intended to 

guide state and local jurisdictions in targeting grant funds. In tandem with 

this effort, ODP revised its grant-reporting method, moving away from 

requiring states, localities, and urban areas to submit itemized lists of first 

responder equipment they plan to purchase toward a more results-based 

approach, whereby grant managers at all levels must demonstrate how 

grant expenditures are linked to larger projects that support goals in the 

states’ homeland security strategies. In addition, as part of a broader effort 

to meet mandates contained in HSPD-8, ODP has begun drafting national 

preparedness standards that are intended to ensure more assessments of 

first responder needs on a national basis. DHS recently issued a document 

entitled “Interim National Preparedness Goal”, which reflects the 

department’s progress in developing readiness targets, priorities, 

standards for preparedness assessments and strategies, and a system for 

assessing the nation’s overall level of preparedness. 

In our prior work, we have recommended that expenditures in the 

National Capital Region and state and local expenditures for interoperable 

communications be guided by a strategic plan that identifies priorities, and 

that fund expenditures be monitored to ensure that they are targeted in 

compliance with the goals and priorities identified in the plan. The 

National Capital Region’s Senior Policy Group and DHS generally agreed 

with these respective recommendations. The Senior Policy Group, in 

conjunction with representatives from the jurisdictions in the National 
Page 4 GAO-05-530T 

Capital Region, has been working to develop a regionwide plan for the use 

of first responder funds. On November 1, 2004, DHS’s SAFECOM program 

issued its methodology to assist states in developing statewide 

interoperable communications plans that could be used to guide future 

expenditures. 

The task of enhancing first responder capabilities across the nation is a 

complex and daunting one. ODP must continue to work with state, local, 

and tribal governments, and the private sector to finish the tasks it has 

begun. At the same time, state, local, and tribal governments, and the 

private sector must recognize that the process is iterative, will include 

periodic adjustments and refinements, and that risks are not equally 

distributed across the nation. 

The Department of Justice established the ODP in 1998 within the Office 

of Justice Programs to assist state and local first responders in acquiring 

specialized training and equipment needed to respond to and manage 

terrorist incidents involving weapons of mass destruction. ODP, which 

was transferred to DHS upon its creation in March 2003, has been a 

principal source of domestic preparedness grant funds. These grants are a 

means of achieving an important goal—enhancing the ability of first 

responders to prevent, prepare for, respond to, and recover from terrorist 

incidents with well-planned and well-coordinated efforts that involve 

police, fire, emergency medical, public health, and other personnel from 

multiple jurisdictions. In March 2004, the Secretary of Homeland Security 

consolidated ODP with the Office of State and Local Government 

Coordination to form the Office of State and Local Government 

Coordination and Preparedness (SLGCP). In addition, other preparedness 

grant programs from agencies within DHS were also transferred to SLGCP. 

SLGCP, which reports directly to the Secretary, was created to provide a 

one-stop shop for the numerous federal preparedness initiatives applicable 

to state and local first responders. Within SLGCP, ODP continues to have 

program management and monitoring responsibilities for the domestic 

preparedness grants. 

From fiscal year 2002 through fiscal year 2005, the amount of domestic 

preparedness grants awarded by ODP increased from about $436 million 

to about $3.3 billion. The scope of ODP’s grant programs expanded as 

well, from funding only first responder advanced equipment, exercises, 

and administrative activities in fiscal year 2002 to funding a range of 

preparedness planning activities, exercises, training, equipment purchases, 

and related program management and administrative costs in fiscal year 

2005. During fiscal years 2002 through 2005, the State Homeland Security 

Background 

Status of Grant Funding 

and Allocation 
Page 5 GAO-05-530T 

Grant Program and Urban Areas Security Initiative program accounted for 

about 69 percent of total ODP grant funds. Table 1 shows the amounts 

provided for the domestic preparedness grant programs. 

Table 1: ODP Grant Program Funding for Fiscal Years 2002 through 2005 

Dollars in thousands 

Grant program 2002 2003 2004 2005 Total

Percent of

total funding

State Homeland Security Grant 

Program 

$315,700 $2,066,295 $1,675,058 $1,062,285 $5,119,338 48.9

Urban Areas Security Initiative a 596,351 671,017 854,657 2,122,025 20.3

Subtotal 315, 700 2,662,646 2,346,075 1,916,942 7,241,363 69.2

Other Grants 119,979b 388,081c1,349,491d1,361,637e 3,219,188 30.8

Total $435,679 $3,050,727 $3,695,566 $3,278,579 $10,460,551 100.0

Source: ODP. 

a

Not funded in this year. 

b

Includes the following five grant programs: Law Enforcement Enhancement Program, New York 

Equipment Replacement Program, National Domestic Preparedness Consortium, Homeland Defense 

Equipment Reuse Program Pilot Project Support Grant, and Domestic Preparedness Training and 

Technical Assistance Program–St. Petersburg College. 

c

Includes the following 15 grant programs: Urban Areas Security Initiative Port Security Grant 

Program, Urban Areas Security Initiative Transit Security Grant Program, Urban Areas Security 

Initiative Pilot Projects, Urban Areas Security Initiative Radiological Defense System, 

Counterterrorism Institute Grant Program, TOPOFF II, Washington Metropolitan Area Transit 

Authority, Airborne Imaging in Support of Emergency Operations, Testing and Evaluation of 

Emergency Response Equipment, Terrorism Early Alert and Strategic Planning System, Homeland 

Defense Equipment Reuse Program, Northern Virginia Emergency Response Coalition Grant 

Program, Domestic Preparedness Equipment Training and Technical Assistance Program, National 

Domestic Preparedness Consortium and Multistate Anti-Terrorism Information Exchange Project. 

d

Includes the following seven grant programs: Assistance to Firefighters Grant, Citizen Corps 

Program, Competitive Training Grants Program, Information Technology and Evaluation Program, 

Law Enforcement Terrorism Prevention Program, Operation Safe Commerce–Phase III, and Urban 

Areas Security Initiative Transit Security Program. 

e

Includes the following eight grant programs: Assistance to Firefighters Grant, Buffer Zone Protection 

Program, Citizen Corps Program, Competitive Training Grants Program, Emergency Management 

Performance Grants, Law Enforcement Terrorism Prevention Program, Metropolitan Medical 

Response System, and Operation Safe Commerce–Phase III. 

For fiscal years 2002 through 2005, ODP awarded approximately $2.1 

billion in urban area grant funds to selected urban areas identified by DHS. 

The amount of individual urban area grants is determined through a 

combination of factors, including current threat estimates, an assessment 

of each area’s critical assets, and population density. For the same period, 

ODP awarded approximately $5.1 billion in statewide grant funds to states 
Page 6 GAO-05-530T 

to enhance domestic preparedness. Under its current funding formula,4

approximately 40 percent of statewide grant funds are shared equally 

among states, while the remaining amount is distributed according to state 

population.5

Several congressional proposals have been advanced to alter the statewide 

funding formula to base it more directly on risk considerations. One 

proposal would largely maintain the portion of funds shared equally by the 

states but would base the distribution of the remaining funds on a riskbased formula similar to the one currently used for urban area grants. 

Another proposal from the House Homeland Security Committee would 

reduce the minimum amount of funding shared equally by states to 

approximately 14 percent of total funding and establish a board to allocate 

the remaining funds through an evaluation of threat, vulnerability, and the 

potential consequences of a terrorist attack. 

GAO supports a risk-based approach to homeland security. Adoption of a 

risk management framework can aid in assessing risk by determining 

which vulnerabilities should be addressed in what ways within available 

resources. Assessing risk for specific assets or locations is defined by two 

conditions: (1) probability or likelihood, quantitative or qualitative, that an 

adverse event would occur, and (2) consequences, the damage resulting 

from the event, should it occur. Because it is unlikely that sufficient 

resources will be available to address all risks, it becomes necessary to 

prioritize both risks and the actions taken to reduce those risks, taking 

cost into consideration. For example, which actions will have the greatest 

net potential benefit in reducing one or more risks? 

Over time, ODP has modified its grant application processes and 

procedures for awarding grants to states, governing how states distribute 

funds to local jurisdictions, and facilitating reimbursements for states and 

localities. To obtain funding, state and urban area grantees must submit 

applications to ODP and have them approved. In fiscal year 2004, ODP 

began to streamline the application process. According to ODP, based on 

 4

The current formula provides each state, the District of Columbia, and the Commonwealth 

of Puerto Rico 0.75 percent and each territory 0.25 percent of the total grant funds. The 

remaining grant funds are allocated to states and territories on a population-share basis. 

5

The funding formula was also used in fiscal years 2004 and 2005 for two other grant 

programs managed by ODP: the Law Enforcement Terrorism Prevention Program and 

Citizen Corps Program. 

ODP Grant Award 

Procedures 
Page 7 GAO-05-530T 

feedback from the grantees, and to continue to improve the grant 

programs, it combined three grant programs into a single grant application 

solicitation. In fiscal year 2005, the number of combined programs 

increased to six. ODP stated that the consolidation was done to streamline 

the grant application process and better coordinate federal, state, and 

local grant funding distribution and operations. 

For the statewide grant programs, ODP has allowed the states flexibility in 

deciding how the grant programs are structured and implemented in their 

states. In general, states are allowed to determine such things as the 

following: 

• the formula for distributing grant funds to local jurisdictional units; 

• the definition of what constitutes a local jurisdiction eligible to receive 

funds, such as a multicounty area; 

• the organization or agency that would be designated to manage the 

grant program; and 

• whether the state or local jurisdictions would purchase grant-funded 

items for the local jurisdictions. 

Urban area grantees, for the most part, have had flexibilities similar to 

those of the states and could, in coordination with members of the Urban 

Area Working Group, designate contiguous jurisdictions to receive grant 

funds. For the first round of the urban area grants in fiscal year 2003, the 

grants were made directly to the seven urban areas identified as 

recipients.6

 Starting with the second round of urban area grants in 2003, 

grants were made to states, which then subgranted the funds to the 

designated urban areas, but retained responsibility for administering the 

grant program. The core city and county/counties work with the state 

administrative agency to define the geographic borders of the urban area 

and coordinate with the Urban Area Working Group. 

Once the grant funds are awarded to the states and then subgranted to the 

local jurisdictions or urban areas, certain legal and procurement 

requirements have to be met, such as a city council’s approval to accept 

grant awards. Once these requirements are satisfied, states, local 

jurisdictions, and urban areas can then obligate their funds for first 

 6

The seven urban area recipients were Los Angeles and San Francisco, California; Chicago, 

Illinois; New York City, New York; Houston, Texas; Seattle, Washington; and the National 

Capital Region. Since then, urban area recipients have grown to include 50 recipients in 27 

states and the National Capital Region in fiscal year 2005. 
Page 8 GAO-05-530T 

responder equipment, exercises, training, and services. Generally, when a 

local jurisdiction or urban area directly incurs an expenditure, it submits 

related procurement documents, such as invoices, to the state. The state 

then draws down the funds from the Justice Department’s Office of Justice 

Programs.7

 According to this office, funds from the U.S. Treasury are 

usually deposited with the states’ financial institution within 48 hours. The 

states, in turn, provide the funds to the local jurisdiction or urban area. 

Since the first announcement of the dramatic increase in first responder 

grants after the terrorist attacks of September 11, 2001, the speed with 

which the funding reached localities has been a matter of concern and 

some criticism. Congress, state and local officials, and others expressed 

concerns about the time ODP was taking to award grant funds to states 

and for states to transfer grant funds to local jurisdictions. Beginning in 

fiscal year 2003, ODP, at congressional direction, demonstrated significant 

progress in expediting grant awards to states. For the fiscal year 2002 

statewide grants, ODP was not required to award funds to states within a 

specific time frame. During fiscal year 2002, ODP took 123 days to make 

the statewide grant application available to states and, on average, about 

21 days to approve states’ applications after receipt. For the second round 

of fiscal year 2003 statewide grants, however, the appropriations act 

required that ODP make the grant application available to states within 15 

days of enactment of the appropriation and approve or disapprove states’ 

applications within 15 days of receipt. According to ODP data, ODP made 

the grant application for this round of grants available to states within the 

required deadline and awarded over 90 percent of the grants within 14 

days of receiving the applications. The appropriations act also mandated 

that states submit grant applications within 30 days of the grant 

announcement. According to ODP data, all states met the statutory 30-day 

mandate; in fact, the average number of days from grant announcement to 

application submission declined from about 81 days in fiscal year 2002 to 

about 23 days for the second round of fiscal year 2003 statewide grants. 

The transfer of funds from states to local jurisdictions has also received 

attention from Congress and ODP. To expedite the transfer of grant funds 

from the states to local jurisdictions, ODP program guidelines and 

 7

The Comptroller’s Office within the Office of Justice Programs continues to act as 

financial manager for DHS first responder grant programs. DHS plans to establish its own 

Office of Grant Operations within ODP during fiscal year 2005. 

Timelines Established 

for Awarding and 

Transferring Grant 

Funds 
Page 9 GAO-05-530T 

subsequent appropriations acts imposed additional deadlines on states. 

For the fiscal year 2002 statewide grants, there were no mandatory 

deadlines or dates by which states should transfer grant funds to localities. 

One of the states we visited, for example, took 91 days to transfer these 

grant funds to a local jurisdiction while another state we visited took 305 

days. Beginning with the first round of fiscal year 2003 statewide grants, 

ODP required in its program guidelines that states transfer grant funds to 

local jurisdictions within 45 days of the grant award date. Congress 

subsequently included this requirement in the appropriations act for the 

second round of fiscal year 2003 statewide grant funds. To ensure 

compliance, ODP required states to submit a certification form indicating 

that all awarded grant funds had been transferred within the required 45-

day period. States that were unable to meet the 45-day period had to 

explain the reasons for not transferring the funds and indicate when the 

funds would be transferred. According to ODP, for the first and second 

rounds of the fiscal year 2003 grants, respectively, 33 and 31 states 

certified that the required 45-day period had been met.8

To further assist states in expediting the transfer of grant funds to local 

jurisdictions, ODP also modified its requirements for documentation to be 

submitted as part of the grant application process for fiscal years 2002 and 

2003. In fiscal year 2002, ODP required states to submit and have approved 

by ODP budget detail worksheets and program narratives indicating how 

the grant funds would be used for equipment, exercises, and 

administration. If a state failed to submit the required documentation, ODP 

would award the grant funds, with the special condition that the state 

could not transfer, expend, or draw down any grant funds until the 

required documentation was submitted and approved. In fiscal year 2002, 

ODP imposed special conditions on 37 states for failure to submit the 

required documentation and removed the condition only after the states 

submitted the documentation. The time required to remove the special 

conditions ranged from about 1 month to 21 months. For example, in one 

state we reviewed, ODP awarded the fiscal year 2002 statewide grant 

funds and notified the state of the special conditions on September 13, 

 8

For the second round of fiscal year 2003 statewide grants, states had to certify that they 

had met the statutory requirement to transfer 80 percent of the awarded funds for first 

responder preparedness and 50 percent of the awarded funds for critical infrastructure 

protection to local jurisdictions within the required 45-day period. According to ODP, 

letters were distributed to states that had not submitted the certification form or were not 

certified, followed by a series of phone calls to collect the pertinent information. 
Page 10 GAO-05-530T 

2002; the special conditions were removed about 6 months later on March 

18, 2003, after the state had met those conditions. 

In fiscal year 2003, however, ODP allowed states to move forward more 

quickly, by permitting them to transfer grant funds to local jurisdictions 

before all required grant documents had been submitted. If a state failed to 

submit the required documentation for the first round of fiscal year 2003 

statewide grants, ODP awarded the grant funds and allowed the state to 

transfer the funds to local jurisdictions. While the state and local 

jurisdictions could not expend—and the state could not draw down—the 

grant funds until the required documentation was submitted and 

approved, they could plan their expenditures and begin state and locally 

required procedures, such as obtaining approval of the state legislature or 

city council to use the funds. Later that fiscal year, ODP further relaxed 

this requirement and allowed the states to transfer, expend, and draw 

down grant funds immediately after ODP awarded the grant funds. The 

states only had to submit all documentation along with their biannual 

progress reports. 

Despite congressional and ODP efforts to expedite the award of grant 

funds to states and the transfer of those funds to localities, some states 

and local jurisdictions could not expend the grant funds to purchase 

equipment or services until other, nonfederal requirements were met. 

Some state and local officials’ ability to spend grant funds was 

complicated by the need to meet various state and local legal and 

procurement requirements and approval processes, which could add 

months to the process of purchasing equipment after grant funds had been 

awarded. For example, in one state we visited, the legislature must 

approve how the grant funds will be expended. If the state legislature is 

not in session when the grant funds are awarded, it could take as long as 4 

months to obtain state approval to spend the funds. 

Some states, in conjunction with DHS, have modified their procurement 

practices to expedite the procurement of equipment and services. Officials 

in two of the five states we visited told us they established centralized 

purchasing systems that allow equipment and services to be purchased by 

the state on behalf of local jurisdictions, freeing them from some local 

legal and procurement requirements. In addition, the DHS’s Homeland 

Security Advisory Council Task Force reported that several states 

developed statewide procurement contracts that allow local jurisdictions 

to buy equipment and services using a prenegotiated state contract. DHS 

has also offered options for equipment procurement, through agreements 

with the U.S. Department of Defense’s Defense Logistics Agency and the 
Page 11 GAO-05-530T 

Marine Corps Systems Command, to allow state and local jurisdictions to 

purchase equipment directly from their prime vendors. These agreements 

provide an alternative to state and local procurement processes and, 

according to DHS, often result in a more rapid product delivery at a lower 

cost. 

Congress has also taken steps to address a problem that some states and 

localities cited concerning a federal law, the Cash Management 

Improvement Act (CMIA), that provides for reimbursement to states and 

localities only after they have incurred an obligation, such as a purchase 

order, to pay for goods and services. Until fiscal year 2005, after 

submitting the appropriate documentation, states and localities could 

receive federal funds to pay for these goods and services several days 

before the payment was due so that they did not have to use their own 

funds for payment. However, according to DHS’s Homeland Security 

Advisory Council Task Force report, many municipalities and counties had 

difficulty participating in this process either because they did not receive 

their federal funds before payment had to be made or their local 

governments required funds to be on hand before commencing the 

procurement process.9

 Officials in one city we visited said that, to solve 

the latter problem, the city had to set up a new emergency operations 

account with its own funds. The task force recommended that for fiscal 

year 2005, ODP homeland security grants be exempt from a provision of 

CMIA to allow funds to be provided to states and municipalities up to 120 

days in advance of expenditures. In response, the fiscal year 2005 DHS 

appropriations legislation10 included a provision that exempts formulabased grants (e.g., the State Homeland Security Grant Program grants) and 

discretionary grants, including the Urban Areas Security Initiative and 

other ODP grants, from the CMIA’s requirement that an agency schedule 

the transfer of funds to a state so as to minimize the time elapsing between 

the transfer of funds from the U.S. Treasury and the state’s disbursement 

of the funds for program purposes. ODP’s fiscal year 2005 program 

guidelines informed grantees and subgrantees that they are allowed to 

draw down funds up to 120 days prior to expenditure. 

In addition, DHS efforts are under way to identify and disseminate best 

practices, including how states and localities manage legal and 

 9

U.S. Department of Homeland Security, The Homeland Security Advisory Council, A 

Report from the Task Force on State and Local Homeland Security Funding (June 2004). 

10Pub. L. No. 108-334, §521, 118 Stat. 1298, 1319 (2004). 
Page 12 GAO-05-530T 

procurement issues that affect grant distribution. DHS’s Homeland 

Security Advisory Council Task Force reported that some jurisdictions 

have been “very innovative” in developing mechanisms to support the 

procurement and delivery of emergency-response-related equipment. The 

task force recommended that, among other things, DHS should, in 

coordination with state, county, and other governments, identify, compile, 

and disseminate best practices to help states address grant management 

issues. ODP has responded by establishing a new Homeland Security 

Preparedness Technical Assistance Program service to enhance the grant 

management capabilities of state administrative agencies and by surveying 

states to identify their technical needs and best practices they have 

developed related to managing and accounting for ODP grants, including 

the procurement of equipment and services at the state and local levels. 

This information is to serve as a foundation for the development of a 

tailored, on-site assistance program for states to ensure that identified best 

practices are implemented and critical grant management needs and 

problems are addressed. According to ODP, the technical assistance 

service was made operational in December 2004, however, the final 

compendium of best grants management practices will not be formally 

released until May 2005. 

Despite efforts to streamline local procurement practices, some challenges 

remain at the state and local levels. An ODP requirement that is based on 

language in the appropriations act could delay procurements, particularly 

in states that have a centralized purchasing system. Specifically, beginning 

with the fiscal year 2004 grant cycle, states were required by law to pass 

through no less than 80 percent of total grant funding to local jurisdictions 

within 60 days of the award. In order for states to retain grant funds 

beyond the 60-day limit, ODP requires states and local jurisdictions to sign 

a memorandum of understanding (MOU) indicating that states may 

retain—at the local jurisdiction’s request—some or all funds in order to 

make purchases on a local jurisdiction’s behalf. The MOU must specify the 

amount of funds to be retained by the state. This requirement may pose 

problems for some states. A state official in one state we visited said that, 

while the state’s centralized purchasing system had worked well in prior 

years, the state has discontinued using it because of the MOU requirement, 

since establishing MOUs with every locality might take years. The state 

transferred the fiscal year 2004 grant funds to local jurisdictions so they 

can make their own purchases. In another state, officials expressed 

concern that this requirement would negatively affect their ability to 

maintain homeland security training provided to local jurisdictions at state 

colleges that had been previously funded from local jurisdictions’ grant 

funds. In the fiscal year 2005 grant program guidelines, states were 
Page 13 GAO-05-530T 

encouraged, but not required, to submit their MOUs to ODP for review by 

DHS’s Office of General Counsel to ensure compliance. 

In distributing federal funds to states to assist first responders in 

preventing, preparing for, and responding to terrorist threats, the federal 

government has required states to develop strategies to address their 

homeland security needs as a condition for receiving funding. The details 

of this federal requirement have also evolved over time. 

Before the events of September 11, 2001, ODP required states to develop 

homeland security strategies that would provide a roadmap of where each 

state should target grant funds. To assist the states in developing these 

strategies, state agencies and local jurisdictions were directed to conduct 

needs assessments on the basis of their own threat and vulnerability 

assessments. The needs assessments were to include related equipment, 

training, exercise, technical assistance, and research and development 

needs. In addition, state and local officials were to identify current and 

required capabilities of first responders to help determine gaps in 

capabilities. 

In fiscal year 2003, ODP directed the states to update their homeland 

security strategies to better reflect post-September 11 realities and to 

identify progress on the priorities originally outlined in the initial 

strategies.11 As required by statute, completion and approval of these 

updated strategies were a condition for awarding fiscal year 2004 grant 

funds. 

ODP has also revised its approach on how states and localities report on 

grant spending and use. ODP took steps to shift the emphasis away from 

reporting on specific items purchased and toward results-based reporting 

on the impact of states’ expenditures on preparedness. ODP maintains an 

authorized equipment list that includes such diverse items as personal 

protection suits for dealing with hazardous materials and contamination, 

bomb response vehicles, and medical supplies. This information is in turn 

listed on the budget worksheets that localities submitted to states for their 

review. Until the fiscal year 2004 grant cycle, states were required to 

submit itemized budget detail worksheets that itemized each item to be 

 11In fiscal year 2003, the urban area grantees were required to prepare and obtain approval 

of their urban area strategies. 

Accountability for 

Effective Use of 

Grant Funds 
Page 14 GAO-05-530T 

purchased under first responder grants. ODP found, however, that, while 

the worksheets reflected the number and cost of specific items that states 

and localities planned to purchase, neither states nor ODP had a reporting 

mechanism to specifically assess how well these purchases would, in the 

aggregate, meet preparedness planning needs or priorities, or the goals 

and objectives contained in state or urban area homeland security 

strategies. Accordingly, ODP revised its approach for fiscal year 2004 and 

required that states, instead of submitting budget detail worksheets to 

ODP, submit new “Initial Strategy Implementation Plans” (ISIP). These 

ISIPs are intended to show how planned grant expenditures for all funds 

received are linked to one or more larger projects, which in turn support 

specific goals and objectives in either a state or urban area homeland 

security strategy. In addition to the ISIPs, ODP now requires the states to 

submit biannual strategy implementation reports showing how the actual 

expenditure of grant funds at both the state and local levels was linked by 

projects to the goals and objectives in the state and urban area strategy. 

Reports by GAO and DHS’s Office of Inspector General, as well as by the 

House Homeland Security Committee, have identified the need for clear 

national guidance in defining the appropriate level of preparedness and 

setting priorities to achieve it. The lack of such guidance has in the past 

been identified as hindering state and local efforts to prioritize their needs 

and plan how best to allocate their homeland security funding. We have 

reported that national preparedness standards that can be used to assess 

existing first responder capacities, identify gaps in those capacities, and 

measure progress in achieving specific performance goals are essential to 

effectively managing federal first responder grant funds as well as to the 

ability to measure progress and provide accountability for the use of 

public funds. 

ODP has responded to the calls for national preparedness standards and 

specifically to HSPD-8 that required DHS to develop a new national 

preparedness goal and performance measures, standards for preparedness 

assessments and strategies, and a system for assessing the nation’s overall 

preparedness. In order to develop performance standards that will allow 

ODP to measure the nation’s success in achieving this goal, ODP is using a 

capabilities-based planning approach—one that defines the capabilities 

required by states and local jurisdictions to respond effectively to likely 

threats. These capability requirements are to establish the minimum levels 

of capability required to provide a reasonable assurance of success against 

a standardized set of 15 scenarios for threats and hazards of national 

significance. The scenarios include such potential emergencies as a 

biological, nuclear or cyber attack, two natural disasters, and a flu 
Page 15 GAO-05-530T 

pandemic. The objective is to develop the minimum number of credible, 

high-consequence scenarios needed to identify a broad range of 

prevention and response requirements. 

As part of the HSPD-8 implementation process, in January 2005, ODP 

issued a list of capability requirements12 in keeping with a requirement of 

the fiscal year 2005 DHS appropriations act.13 To help define the 

capabilities that jurisdictions should set as targets, ODP first defined the 

essential tasks that need to be performed from the incident scene to the 

national level for major events illustrated by the 15 scenarios. It then 

developed a Target Capabilities List that identifies 36 areas in which 

responding agencies are expected to be proficient in order to perform 

these critical tasks. ODP further plans to develop performance measures, 

on the basis of the target capability standards that define the minimal 

acceptable proficiency required in performing the tasks outlined in the 

task list. According to ODP’s plan, the measures will allow the 

development of a rating methodology that incorporates preparedness 

resources and information about overall performance into a summary 

report that represents a jurisdiction’s or agency’s ability to perform 

essential prevention, response, or recovery tasks. The office acknowledges 

that this schedule may result in a product that requires future incremental 

refinements but has concluded that this is preferable to spending years 

attempting to develop a “perfect” process. 

On March 31, 2005, DHS issued a document entitled “Interim National 

Preparedness Goal” that reflects the department’s progress in developing 

readiness targets, priorities, standards for preparedness assessments and 

strategies, and a system for assessing the nation’s overall level of 

preparedness. The document also states that National Preparedness 

Guidance will follow within 2 weeks. This guidance is to include, in DHS’ 

words, “detailed instructions on how communities can use the Goal and a 

description of how the Goal will generally be used in the future to allocate 

Federal preparedness assistance.” DHS expects to issue a Final Goal and 

an updated target capabilities list on October 1, 2005. Over the next several 

months, ODP plans to work with its stakeholders to identify the levels of 

 12U.S. Department of Homeland Security, Office of State and Local Government 

Coordination and Preparedness, Target Capabilities List: Version 1.0 (January 2005). 

13The act required ODP to provide state and local jurisdictions with nationally accepted 

first responder preparedness levels no later than January 31, 2005. 
Page 16 GAO-05-530T 

capabilities that various types of jurisdictions should possess in order for 

the Nation to reach the desired state of national preparedness. 

In May 2004, we reported on the use of first responder grant monies in the 

National Capital Region, which includes the District of Columbia and 

specified surrounding jurisdictions in the states of Maryland and Virginia.14 

We found that the grant monies were not being spent in accordance with a 

regional plan for their use. To ensure that emergency preparedness grants 

and associated funds were managed in a way that maximizes their 

effectiveness, we recommended that the Secretary of Homeland Security 

work with NCR jurisdictions to develop a coordinated strategic plan to 

establish goals and priorities for the use of funds, monitor the plan’s 

implementation to ensure that funds are used in a way that are not 

unnecessarily duplicative, and evaluate the effectiveness of expenditures 

in addressing gaps in preparedness. DHS and the Senior Policy Group of 

the National Capital Region generally agreed with our recommendations 

and have been working to implement them. 

In our report on interoperable communications for first responders, we 

found that federal assistance programs to state and local government did 

not fully support regional planning for communications interoperability. 

We also found that federal grants that support interoperability had 

inconsistent requirements to tie funding to interoperable communications 

plans. In addition, uncoordinated federal and state level grant reviews 

limited the government’s ability to ensure that federal funds were used to 

effectively support improved regional and statewide communications 

systems. We recommended that DHS grant guidance encourage states to 

establish a single statewide body responsible for interoperable 

communications that would prepare a single comprehensive statewide 

interoperability plan for federal, state, and local communications systems 

in all frequency bands. We also recommended that at the appropriate time, 

that DHS grant guidance should require that federal grant funding for 

interoperable communications equipment should be approved only upon 

certification by the statewide body that such grant applications were in 

conformance with the statewide interoperability plan. In its comments on 

our draft report, DHS did not address the second recommendation. 

However, on November 1, 2004, the SAFECOM office with DHS Office of 

 14Included are the District of Columbia, Montgomery and Prince George’s Counties in 

Maryland; Arlington, Fairfax, Loudoun, and Prince William Counties and the City of 

Alexandria in Virginia; and all cities and other unites of government within the geographic 

areas of such district, counties, and city. Our work focused on the eight largest 

jurisdictions. 

Prior GAO 

Recommendations 

with Regard to First 

Responder Grants 
Page 17 GAO-05-530T 

Interoperability and Compatibility issued its methodology for developing a 

statewide interoperability communications plan. 

In summary, Mr. Chairman, since the tragic events of September 11, 2001, 

the federal government has dramatically increased the resources and 

attention it has devoted to national preparedness and the capabilities of 

first responders. The grant programs managed by ODP have expanded 

rapidly in their scope and funding levels. Over the 3-1⁄2 years since the 

terrorist attacks, Congress, ODP, states, and local governments 

encountered obstacles, some of them frustrating and unexpected, in 

delivering grant funds to their ultimate recipients in a timely manner and 

ensuring they are used most effectively. All levels of government have 

attempted to address these obstacles and succeeded in resolving or 

ameliorating many of them. Some of the changes made are relatively new; 

thus, it is still too early to determine if they will have the desired outcome. 

ODP’s focus has changed over time from examining and approving, for 

example, specific items of equipment proposed for purchase under first 

responder grants to defining the capabilities that states and local 

jurisdictions need to attain—that is, establishing performance standards. 

Such a results-based orientation could prove to be the most practical and 

effective grants management approach at the federal level to help ensure 

accountability and effectiveness of results. DHS must also continue to 

ensure that an effective system for monitoring and accounting for limited 

federal funds intended for enhancing the nation’s ability to respond to 

terrorist attacks or natural disasters exists at the state and local level. 

DHS’s task of defining a national preparedness goal and translating that 

definition into capabilities that are meaningful and readily transferable to 

the wide variety of local jurisdictions around the nation is still not 

complete. As the department has acknowledged, the process will 

necessarily be iterative. As we have stressed before, during this process 

DHS must continue to listen and respond constructively to the concerns of 

states, local jurisdictions, and other interested parties. Such collaboration 

will be essential to ensuring that the nation’s emergency response 

capabilities are appropriately identified, assessed, and strengthened. At 

the same time, state, local, and tribal governments, and the private sector 

must recognize that the process is iterative, will include periodic 

adjustments and refinements, and that risks are not equally distributed 

across the nation. 

As we have noted previously, it is important that the quest for speed in 

distributing and using federal first responder grants does not hamper the 

planning and accountability needed to ensure that the funds are spent on 

Concluding 

Observations 
Page 18 GAO-05-530T 

the basis of a comprehensive, well-coordinated plan to provide first 

responders with the equipment, skills, and training needed to be able to 

respond quickly and effectively to a range of emergencies, including, 

where appropriate, major natural disasters and terrorist attacks. 

The challenges we noted in developing effective interoperable 

communications for first responders are applicable to developing effective 

first responder capabilities for major emergencies, regardless of cause. A 

fundamental challenge has been limited regional and statewide planning, 

coordination, and cooperation. No one level of government can 

successfully address the challenges of developing needed first responder 

capabilities alone. The federal government can play a leadership role in 

developing requirements and providing support for state, regional, and 

local governments to: assess first responder capabilities; identify gaps in 

meeting those capabilities; develop coordinated plans and priorities for 

closing those gaps; and assess success in developing and maintaining the 

needed capabilities. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 

any questions that you or other members of the subcommittee may have. 

For further information on this testimony, please contact William O. 

Jenkins, Jr., at (202) 512-8777. Individuals making key contributions to this 

testimony included Amy Bernstein, David Brown, Frances Cook, James 

Cook, Christopher Keisling, Katrina Moss, Sandra Tasic, John Vocino, and 

Robert White. 

Contact Information 

(440409) 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To 

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER