FOR OFFICIAL USE ONLY 

DRAFT

Follow Up Review 

of the 

Port Security Grant Program 

DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

Office of Inspections and Special Reviews

February 2006

(REVISED) 

OIG-06-24 
Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was established by 

the Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector General 

Act of 1978. This is one of a series of audit, inspection, and special reports prepared as part of our 

oversight responsibility to promote economy, effectiveness, and efficiency within the department. 

This report assesses the actions DHS has taken to strengthen the administration and effectiveness of 

the port security grant program since our previous report on the program. It is based on interviews 

with employees and officials of relevant agencies and institutions, direct observations, and a review 

of applicable documents. 

The recommendations have been developed to the best knowledge available to the OIG, and have 

been discussed in draft with those responsible for implementation. It is our hope that this report will 

result in more effective, efficient, and economical operations. We express our appreciation to all of 

those who contributed to the preparation of this report. 

 

Richard L. Skinner 

Inspector General 
Contents 

Follow Up Review of the Port Security Grant Program 

Executive Summary.............................................................................................................................. 1 

Background........................................................................................................................................... 2 

Results of Review ................................................................................................................................. 4 

The Port Security Grant Program is More Strategic 

(Prior Report Recommendation Nos. 1, 12) .......................................................................... 4 

The Office of Infrastructure Protection Fills Necessary Role 

(Prior Report Recommendation No. 2).................................................................................. 6 

Improved Evaluation and Selection Process Reduces, but does not Eliminate, 

Concerns about Funding Unworthy Projects 

(Prior Report Recommendation Nos. 3 – 5) .......................................................................... 6 

Field Reviewers Scored Projects Differently 

(Prior Report Recommendation Nos. 6 – 8) ........................................................................ 14 

Private Sector Policy Should Address Prudence of Funding Certain Projects 

(Prior Report Recommendation No. 9)................................................................................ 16 

Balance of Unspent Funds is Declining 

(Prior Report Recommendation Nos. 10, 11) ...................................................................... 17 

Recommendations............................................................................................................................... 18 

Management Comments and OIG Analysis ....................................................................................... 19 

Appendices 

 Appendix A: Purpose, Scope, and Methodology .......................................................................22 

 Appendix B: Management Response to Draft ...........................................................................24 

 Appendix C: Recommendations from OIG Report #OIG-10-05...............................................28 

 Appendix D: Major Contributors to This Report.......................................................................30 

 Appendix E: Report Distribution...............................................................................................31 
Contents 

Follow Up Review of the Port Security Grant Program 

Abbreviations 

 AMSP Area Maritime Security Plan 

 COTP Captain of the Port 

 ERB Executive Review Board 

 GMS Grants Management System 

 IA Office of Intelligence and Analysis 

 IAIP Information Analysis and Infrastructure Protection Directorate 

 IP Office of Infrastructure Protection 

 MTSA Maritime Transportation Security Act of 2002 

 NRP National Review Panel 

 ODP Office of Domestic Preparedness 

 OGT Office of Grants and Training 

 OIG Office of Inspector General 

 SLGCP Office of State and Local Government Coordination and Preparedness 

 USCG United States Coast Guard 
Follow Up Review of the Port Security Grant Program 

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Executive Summary 

In October 2005, Congress directed the Inspector General to review the steps 

DHS has taken to comply with recommendations contained in the Inspector 

General's January 2005 report, Review of the Port Security Grant Program

(OIG-05-10).1 In that report, our office made 12 recommendations to DHS to 

address issues involving the strategic direction of the program, the evaluation 

and selection of grant awards, funding private sector projects, the status of 

funds, and the dichotomy between two approaches DHS used to fund projects 

in the second round. Because five recommendations were fundamental to the 

effectiveness of the program, we strongly encouraged DHS to implement our 

recommendations before proceeding with the next round of port security 

grants.2

DHS implemented our recommendations in time to improve the 

administration and effectiveness of the fifth and most recent round of port 

security grants, which totaled $142 million for 132 projects. DHS reshaped 

the program to make it more strategic and more risk-based by: (1) directing 

funds to the nation’s 66 highest risk ports using a risk-based formula and 

tiering process; (2) modifying the eligibility criteria; (3) instituting a new 

funding allocation model; and, (4) implementing a complex scoring 

methodology to process and rank the results of the field and national reviews 

as well as relative risk reduction data with more precision. The Office of 

Infrastructure Protection (IP) became actively involved in the program 

through its development of the risk-based formula, thereby filling an 

important and much needed role. Grantees reduced the outstanding balance of 

unspent funds from the first three rounds by more than $190 million since our 

last report. 

Despite these positive developments, DHS has not entirely eliminated the 

issues that led to our recommendations. The revised selection and evaluation 

process ranks all of the projects, but does not include a minimum score 

threshold to differentiate unworthy projects from worthy ones. What the 

actual scores imply about the merits of projects, especially the funded 

projects, is discounted. We identified 20 projects that reviewers determined 

did not meet national security priorities but were funded nonetheless. The 

program also skipped over higher ranked projects to fund projects that it could 

fully fund. In addition, a handful of awarded projects reflected incomplete 

 

1

 H.R. Rep. No. 241, 109th Cong., 1st Sess., at 40 (2005). 

2

 Recommendations 1, 3-4, 6, and 9. 
Follow Up Review of the Port Security Grant Program 

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scores or data. Field reviewers’ perceptions about projects, as reflected in 

their scores and rankings, suggest that they still have widely varying opinions 

about how well projects are satisfying program criteria. Finally, although 

DHS clarified its policy on funding private sector projects, this policy falls 

short of addressing the prudence of funding certain projects. 

We closed the 12 recommendations in our first report based upon evidence 

provided by DHS showing satisfactory corrective actions. In this review, we 

note that DHS continues to address the issues that we raised. However, our 

work on the present report suggests that there are additional actions that DHS 

should take to improve the administration and effectiveness of the port 

security program. 

We are recommending that the Under Secretary for Preparedness: 

1. Establish a minimum score threshold under the new selection and 

evaluation process that projects must meet. Funding in the top three tiers 

not used as a result of implementing this minimum threshold should be 

reallocated to a lower tier; 

2. Modify the Grants Management System (GMS) or the National Review 

Panel (NRP) internal database to require NRP members to enter a reason 

for adjusting a field review score; 

3. Seek more consistent scoring by field reviewers; 

4. Conduct a “pre-audit” of proposed grant award decisions; and, 

5. Require private sector applicants to demonstrate how a federal grant 

would enhance their own security investments as a condition to receiving 

a grant. 

Background 

The purpose of the port security grant program is to reduce the vulnerability 

of American ports to potential terrorist attacks by enhancing facility and 

operational security. To date, the program has awarded over $700 million in 

five rounds of grants. During our first review of the program, conducted 

between December 2003 and May 2004, we reviewed the design and goals of 

the program; potential duplication with other programs; the roles and 

responsibilities of participating agencies; and, the grant evaluation and 

selection process used during the second and third rounds of grants. The 

fourth round of grants began on September 13, 2004, after we concluded our 

fieldwork. 
Follow Up Review of the Port Security Grant Program 

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On January 28, 2005, our office issued its report, Review of the Port Security 

Grant Program, OIG-05-10. The report contained 12 recommendations to 

improve the design, management and oversight of the program (see 

Appendix B). DHS agreed with 11 of the 12 recommendations, and advised 

that it intended to use a new risk-based formula to award the FY 2005 port 

security grants.3

 On May 17, 2005 the Inspector General testified before 

Congress on the status of DHS’ efforts to address our recommendations.4

We continued to study how DHS modified this program, particularly the 

criteria that it would use to make grant award decisions, and whether those 

modifications would satisfy our recommendations. On July 1, 2005, based on 

DHS’ action plan in implementing the recommendations, documentation 

pertaining to the revised grant application review process, and information 

obtained during discussions with program officials, we determined that DHS’ 

Office of State and Local Government Coordination and Preparedness 

(SLGCP) had sufficiently responded to all 12 of the recommendations in our 

report.5

 SLGCP’s Office of Domestic Preparedness (ODP), which later 

became the Office of Grants and Training (OGT), assumed administrative 

responsibility for the program beginning with round five.6

On July 14, 2005, Senator Kerry introduced legislation to require the OIG to 

issue a report to the Homeland Security Committees of the House and the 

Senate on steps SLGCP has taken to comply with the recommendations 

contained in our report.7 Anticipating the enactment of the Homeland 

Security Appropriations Act of 2006, the OIG initiated a review of DHS’ 

corrective actions and changes to the program on September 6, 2005.8

 

 

3

 On May 12, 2005, DHS announced the availability of $142 million for round five of the port security grant program. 

Actual grant awards totaled $141,969,968. An additional $3,887,661was awarded specifically for ferry security through 

the Transit Security Grant Program. 

4 Hearing on Port Security Before the Senate Comm. on Commerce, Science, and Transportation, 109th Cong., 1st Sess. 

(2005) (statement of Richard L. Skinner, Acting Inspector General, Office of Inspector General, Dept. of Homeland 

Security). 

5

 On July 13, 2005, Secretary Chertoff reorganized DHS. As part of that reorganization, SLGCP was divided. The 

Office of State and Local Government Coordination was realigned under the Assistant Secretary for Congressional and 

Intergovernmental Affairs. The Office of Domestic Preparedness was renamed the Office of Grants and Training, which 

is led by an Assistant Secretary who reports to the Under Secretary for Preparedness. 6

 The Transportation Security Administration, along with the Maritime Administration and the U.S. Coast Guard 

(USCG) managed the first four rounds of the Port Security Grant Program. Responsibility for the program was 

transferred to SLGCP prior to round five. SLGCP carried out the OIG’s previous recommendations. 7

 Amendment No. 1162 to H.R. 2360, 109th Cong., 1st Sess., at 40 (2005), DHS Appropriations for FY 2006. 8

 H.R. Rep. No. 241, 109th Cong., 1st Sess., at 40 (2005). The report directed the Inspector General to “review the steps 

the Department has taken to comply with recommendations contained in the Inspector General’s report on port security 
Follow Up Review of the Port Security Grant Program 

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Results of Review 

The Port Security Grant Program is More Strategic (Prior Report 

Recommendation Nos. 1, 12) 

Previously, we reported that the Port Security Grant Program’s strategic 

effectiveness was hindered by attempts to reconcile three competing 

requirements or approaches: the competitive program mandated by Congress 

through its appropriations; the Maritime Transportation Security Act’s

(MTSA) grant authority (which was not funded through appropriations) and 

risk-based decision-making. These competitive approaches were clouding 

the direction of the program. We recommended that SLGCP determine to 

what extent the program should incorporate MTSA requirements; and, seek 

clarification on the legislative intent for the program (sector-specific vs. 

larger infrastructure protection initiatives) as well as construct a unified 

program (policy, purpose, process, and eligibility) to comply with that intent. 

We subsequently closed these recommendations based on SLGCP’s plan to 

redesign the program using a risk-based prioritization strategy that retained 

competition, included MTSA requirements where possible, and incorporated 

more risk data into its grant decision-making. 

During the period covered by our first review and for the grants covered by 

this follow up review, Congress had not funded the MTSA port security 

grant program.9

 Nevertheless, because applicants must be MTSA-regulated 

entities, OGT expanded authorized program expenditures to include MTSAcompliant security measures such as canine explosive detection programs, 

which would otherwise not have been funded. OGT did not incorporate 

MTSA features such as its 25 percent cash match requirement. Program 

officials reported receiving little feedback from Congress on the direction of 

round five. OGT redesigned the program by intertwining a “fair and 

equitable” process of evaluating grant applications with a funding allocation 

model that captures the essential elements of risk: vulnerability, 

 grants (OIG-05-10) [and submit a report] to the House and Senate Committees on Appropriations; the Senate Committee 

on Commerce, Science, and Transportation; the Senate Committee on Homeland Security and Government Affairs; and 

the House Committee on Homeland Security no later than February 10, 2006.” Congress passed the DHS 

Appropriations Act of 2006 on October 18, 2005. Pub. L. No. 109-90, 119 Stat. 2064 (2005). 9

 On October 18, 2005, for the first time, Congress did fund the MTSA. The changes that action may have on future port 

security grants were not within the scope of this review. 
Follow Up Review of the Port Security Grant Program 

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consequence, and threat.10 OGT’s objectives under the new approach were 

twofold: (1) allocate grant dollars roughly in proportion with the overall risk 

environment at the eligible port areas; and (2) select projects for funding that 

presented the best risk reduction potential against high-priority threats. The 

intent was to raise the overall bar of preparedness for the national priority 

threats across all eligible port areas, while still targeting dollars to the highpriority risk environments.11 

The new prioritization strategy included: (1) using a complex risk algorithm 

to identify 66 ports from a list of 129 ports across the country; (2) dividing 

the 66 ports into risk tiers; (3) allocating funds to each tier; (4) revising the 

evaluation criteria; and (5) employing a complex scoring methodology to 

optimize the selection of projects within tiers. Program officials considered 

three options before deciding how to allocate funds. We studied these 

changes, particularly, the underlying data in the risk formula used to identify 

and rank the 66 ports, and the program’s new model for allocating funds to 

the ports. Program officials synchronized funding allocations with the 

results of the risk formula. These are major enhancements that substantially 

improve the strategic effectiveness of the program. 

Program officials advised that DHS is considering whether to expand the 

number of eligible ports to 118. This contradicts the strategic direction OGT 

established in round five. However, if the new risk formula, scoring 

methodology, and number of tiers remain intact, extending eligibility to 52 

additional ports should not affect the program’s strategic focus because of its 

competitive nature. Furthermore, these new ports would have to compete 

against the 41 existing Tier IV port areas. In round five, OGT only funded 

projects from half of the 66 ports. 

As the program continues to evolve, an important challenge that DHS should 

undertake is the measurement of its impact. Because DHS has awarded over 

$700 million in five rounds of grants, it has “raised the overall bar of 

preparedness,” but it is not clear that DHS knows how much actual risk 

reduction has been achieved. Data contained in area maritime security 

plans, facility security plans, and port-wide vulnerability assessments may 

serve as valuable measuring sticks in this evaluation. 

 

10 Public Law 108-334, 118 Stat. 1298 (2004), DHS Appropriations Act of 2005, stipulated that “$150,000,000 shall be 

for port security grants, which shall be distributed under the same terms and conditions as provided for under Public Law 

107-117, 115 Stat. 2230 (2002),” which called for a fair and equitable program. 

11 FY 2005 Port Security Grant Program Risk Tier Strategy, guidance from OGT. 
Follow Up Review of the Port Security Grant Program 

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The Office of Infrastructure Protection Fills Necessary Role (Prior Report 

Recommendation No. 2) 

We reported that the program did not have the benefit of critical infrastructure 

protection information developed by DHS’ former Information Analysis and 

Infrastructure Protection Directorate (IAIP).12 Therefore, port security grants 

were awarded without basic data about national port security priorities. We 

recommended that SLGCP incorporate critical infrastructure and key asset 

data from IAIP into the evaluation of proposed port security projects. Among 

the changes to consider were adding an IAIP official to the Executive Review 

Board (ERB); using the IAIP national asset database to identify critical 

facilities in need of mitigation with a view toward soliciting proposals from 

these facilities; and, collaborating with IAIP in an outreach program to 

improve the quality of vulnerability assessments and proposals. 

Subsequently, we closed this recommendation after confirming that SLGCP 

was seeking IAIP’s assistance in the evaluation process and in the 

development of a standardized risk assessment methodology for prioritizing 

critical infrastructure and key asset information. 

OGT’s program officials are leveraging expertise within the Office of 

Infrastructure Protection (IP). IP made a significant contribution to the 

redesign of the program by creating the risk-based formula for identifying and 

ranking the eligible ports. The formula introduced consequence, vulnerability, 

and threat information that reviewers in previous rounds did not have. 

Program officials are planning to include more critical infrastructure data in 

the future. IP analysts also participated on the National Review Panel (NRP). 

IP’s increased participation is one of the program’s key developments, and a 

good example for other infrastructure grant programs to emulate. 

Improved Evaluation and Selection Process Reduces, but does not Eliminate, 

Concerns about Funding Unworthy Projects (Prior Report Recommendation 

Nos. 3 – 5) 

In rounds two and three, grant award decisions were made with the intent to 

expend all available funding and spread funds to as many applicants as 

possible. DHS funded projects that received lower scores from its 

 

12 At the time, IAIP consisted of two main offices, the Office of Information Analysis (IA) and the Office of 

Infrastructure Protection (IP). When DHS reorganized in 2005, IA became the Office of Intelligence and Analysis. IP, 

which retained its name, was moved to the Preparedness Directorate. The Assistant Secretary for Infrastructure 

Protection leads IP. 
Follow Up Review of the Port Security Grant Program 

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evaluators, raising questions about the merits of those projects. We 

recommended that SLGCP consider changing the weighting of the 

evaluation criteria, with greater emphasis placed on the criteria that reduce 

critical vulnerabilities; cease the practice of funding projects that do not 

meet the definition of a Priority I project, consider implementing a scoring 

threshold that ensures that projects not meeting that threshold are not 

funded; and, consider seeking a change in appropriations language to have 

these grant funds designated as “no-year monies” to reduce the pressure to 

fund lower ranked projects; and, require reviewers to document their 

decisions in the Grants Management System (GMS), particularly when they 

are inconsistent with recommendations from a lower level of review.13 

Subsequently, we closed these recommendations because program officials 

were planning to implement new criteria, incorporate a weighted approach in 

evaluating projects, apply risk-based weightings in the selection of ports, and 

abandon the “Priority I” designation. SLGCP concurred that reviewer 

comments should be mandatory when there is disagreement between any of 

the review levels. SLGCP said this would be a requirement in GMS as part 

of the FY 2005 evaluation process. SLGCP was in the process of 

developing enhanced field- and national-level review guidance. 

In round five, OGT incorporated several substantive changes into the 

application evaluation, selection, and award process. These changes 

included creating risk tiers for strategic ports, revising eligibility criteria, and 

implementing a new project scoring system. 

First, OGT abandoned the Priority I, II, and III designations in favor of a 

new methodology. For the first time, OGT identified, ranked, and tiered 

ports based on risk, and addressed the need to target critical vulnerabilities 

with greater transparency and less confusion. The tiers, which were 

established using IP’s data and analysis, grouped eligible ports into four 

categories according to the greatest security risks. OGT allocated more 

funds to the nation’s highest risk ports (see Table 1). In round five, entities 

within the respective tiers competed against each other for port security 

grants. 

 

13 Prior to round five, reviewers divided projects into Priority I, Priority II, or Priority III projects. Priority I projects 

were ranked the highest and funded. Priority II projects were acceptable, but the proposed approach did not have enough 

information and they were not funded. Priority III projects were considered weak projects and not funded. 
Follow Up Review of the Port Security Grant Program 

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Table 1: Round Five Funding Allocation to Tiers 

Tier # of Ports Total Amount for 

Tier 

Average Amount 

per Port* 

Tier I 2 $41,944,674 $20,972,337 

Tier II 3 $20,747,921 $6,915,973 

Tier III 20 $62,260,946 $3,113,047 

Tier IV 41 $17,016,426 $415,034 

*This column reflects how much each port would have received if there was no 

competition and the funds were divided evenly amongst ports in each tier. 

Second, OGT revised the project evaluation criteria, assigning extra weight 

to projects that reduced three critical vulnerabilities constituting the greatest 

threats to port security: improvised explosive devices (IEDs) delivered via 

small craft, underwater, and in vehicles on ferries. OGT condensed the six 

criteria used to evaluate projects in earlier rounds to four by eliminating the 

criteria measuring the “extent of actions taken thus far” and whether “the 

approach is comprehensive and detailed,” and clarifying the remaining 

criteria. Reviewers scored projects using a scale of one (lowest) to five 

(highest) for responsiveness (see Table 2). 

Table 2: Field Review Scoring System 

Criterion Score 

Risk reduction potential (national priority threat) 20 pts* 

Prevention / detection of underwater IED attacks (10 pts) 

Prevention / detection of IED attacks by small craft (10 pts) 

Prevention / detection of vehicle borne IEDS on ferries (10 pts) 

Consistency with Area Maritime Security Plan 5 pts 

Applicability to local security priorities 5 pts 

Potential risk reduction for least cost (cost effectiveness) 5 pts 

Total possible score 35 points 

*The NRP subsequently awarded points for either a combination of underwater and small 

craft attacks or vehicle borne IEDs, but not both. 

The most critical criterion measured a project’s risk reduction potential (the 

national priority threat) and accounted for a total possible score of 20 points, 

or 57 percent of the field review score. The remaining criteria, comprising 

15 points, measured local security priorities and cost. By weighting the 

score in this manner, the program showed a preference for projects that 

supported the national security priority. 

Third, once the field and national reviews had scored and ranked the 

projects, program officials passed the individual ratings through an 
Follow Up Review of the Port Security Grant Program 

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extremely complex scoring system.14 The system calculated a preliminary 

project score (PPS) by weighing the four criteria according to the following 

formula: 

(2 x Criterion 1) + (4 x Criterion 2) + (4 x Criterion 3) + (4 x Criterion 4) 

Then the scoring system combined multiple calculations to produce a final 

project score and ranking for every project. The final project score consisted 

mostly of the PPS, but also included the priority score adjustment (the 

project ranking relative to the Captain of the Port’s (COTP) top-ranked 

project in each port), and the IP priority adjustments (the project’s port 

ranking relative to the top-ranked port in each tier). 

Program administrators should modify the new scoring system to better 

distinguish worthy from unworthy projects

The sophisticated, and improved, scoring methodology used to rank all of 

the projects during the evaluation and selection process should include a 

minimum scoring threshold in order to distinguish worthy from unworthy 

projects. The absence of a minimum scoring threshold and the practice of 

funding “down the list” until funds are exhausted resulted in the program 

funding projects that provided no national threat priority reduction or were 

ranked below other projects. This raises concerns as to whether the scoring 

system gave enough weight to the risk reduction criterion. A greater 

concern, however, is that the process did not truly identify worthy projects 

because the program did not establish a minimum standard that applicants 

must meet in order to be eligible for funding. As we stated in our first 

report, projects not meeting such a threshold should not be funded. 

Program administrators ranked the projects but did not identify a score 

within each tier that worthy projects had to attain to receive funding. OGT 

funded projects as they were ranked until the tier’s designated funds were 

exhausted (grant funds were not designated as “no-year monies.”) OGT also 

made it a policy in round five to only fund projects in their entirety. 

Consequently, OGT skipped over higher ranked projects in order to find 

projects with costs that did not exceed the remaining funds. 

The new scoring system reduces the weight given to the national priority 

threat criterion from 57 percent of all four criteria constituting the risk 

 

14 OGT contracted with Digital Sandbox, an enterprise risk management software company, to develop the new project 

scoring and ranking system. 
Follow Up Review of the Port Security Grant Program 

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reduction potential point total to 40 percent of the four criteria when 

calculating the PPS. Diminishing the weight of the first criterion increases 

the likelihood that a project receiving zero points could accumulate enough 

points from the three remaining criteria, along with the COTP priority score 

and IP’s port risk score, to bolster its ranking and receive funding. Of the 

132 awarded projects, reviewers rated 20 projects “not applicable” or nonresponsive to any subcategory of the national priority threat.15 In some 

cases, these projects with a score of zero for all three elements making up 

the national priority threat reduction criterion received total scores as low as 

seven or eight out of the possible 35 points. These projects received funding 

totaling $29.3 million, more than 20 percent of the awarded grant funds. 

Examples of awarded projects that received no points for national priority threat 

reduction 

Grant Recipient A, project #2, access control, grant: $65,000, score: 8. 

The applicant proposed installation of card readers on critical buildings and upgrades 

to the current access control system software to accommodate the “current proximity 

card ID system.” The project scored zeros for all aspects of the national priority 

threat, and twos and a four for the local security priorities. The field review team 

provided little explanation for its scoring of this project, simply stating that the project 

had a “limited impact in addressing AMSP priorities,” and was “limited in addressing 

other priorities,” but that it “offer[ed] significant cost benefit.” Nonetheless, the field 

recommended full funding. The NRP agreed with field comments, increased the 

project’s rank by two, and did not elaborate. The project’s low responsiveness to 

almost all criteria, in particular the heavily weighted national priority threat leads us to 

question whether the scoring system is effective. 

Grant Recipient B, project #3, secondary gates, grant: $326,500, score: 12. 

The applicant proposed installation of crash-proof gates and crash barriers at all 

secondary gates to deter vehicle and pedestrian attacks. The applicant stated that the 

gates are not necessarily open at all times, but are used frequently. The field review 

team stated that this project would not have any impact on the national priority threat. 

The project scored well on local security priorities and on cost benefit. The NRP 

agreed with the field’s assessment, and increased the project’s rank by one, stating that 

the project moved up in rank “ due to denial of [another] application.” The project 

was funded with a relatively low overall score, and again raises concerns as to why it 

received funding, given that it scored zeros in all aspects of the first and most critical 

criterion. 

 

15 Ninety-five percent of the projects that scored zero for the national priority threat fell into the top two risk tiers. None 

of the awarded projects in the lowest risk tier scored zeros for responsiveness to every component of the national priority 

threat. In other words, the funded projects in the lower risk tiers scored, on average, higher than those in the top tiers. 
Follow Up Review of the Port Security Grant Program 

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As a result of the grant decision-making policies noted above, these and 

other lower ranked projects were funded. A minimum threshold would 

reduce the chances of funding lower ranked or questionable projects. In 

round five, applicants proposed a total of 543 projects. All 543 projects 

were ranked based on their scores. Due to ties, the lowest ranked project 

was the 465th project. The program funded 132 projects. Within each tier, 

the funded projects contained a variety of scores, tier rankings, and overall 

rankings. 

Table 3: Highlighted Scores by Tier 

Tier Average 

Score 

Highest

Score 

“Cutline” 

Score* 

Lowest 

Score 

Overall Rank of 

Lowest Score** 

I 64.09 116.16 56.63 50.05 249th

II 96.25 140.59 91.55 50.03 374th

III 103.59 125.94 93.63 77.24 184th

IV 102.46 121.7 100.02 81.52 205th

* This is the score of the last project funded in order of its rank. 

**Overall rank refers to a project’s rank across all tiers, which does not necessarily 

correspond with a project’s rank within a tier. 

As a result of skipping projects, many lower ranked projects were funded: 

• In Tier I, the top 36 projects were funded (projects ranked 35th and 36th

were ranked 259th overall), as was the 47th ranked project (249th overall) in 

that tier. Tier I projects had a far lower average score than in the other 

three tiers, despite the added weight given to those projects for belonging 

to applicants located in the top tier. For example, 31 Tier I projects scored 

lower than the average score for Tier II projects. The overall quality or 

benefits of Tier I projects did not match that of projects in less critical 

tiers, yet the program allocated the largest portion of funds ($42 million) 

to this tier. 

• In Tier II, the top 14 projects were funded, but the next seven funded 

projects were ranked 16th, 18th, 19th, 27th (230th overall), 29th (277th

overall), 36th (348th overall), and 38th (374th overall). The last project had 

a “preliminary score” of 28, or one of the lowest scores given by 

reviewers. A “preliminary score weights the four criteria and is one of the 

key parts of the project’s total score. 

• In Tier III, the top 48 projects were funded, as was the 50th and 76th ranked 

projects in that tier. A total of 25 projects were skipped to reach the 76th
Follow Up Review of the Port Security Grant Program 

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ranked project, including the 56th (70th overall), 58th (66th overall), and 61 

(86th overall). 

• In Tier IV, 24 projects were funded, including the top 17 in that tier. 

Among the funded projects were the 31st (164th overall) and 50th (205th

overall) while several higher ranked projects such as the 48th, 72nd, 73rd, 

and 79th were not. This tier’s 18th ranked project was ranked 48th overall, 

but despite the applicant’s 10 percent match, there was not enough funding 

allocated to this tier to fund the requested grant of $7.9 million. 

The range of “cutline” scores—56.63 (Tier I) to 100.02 (Tier IV)—is another 

disparity that could be eliminated by implementing a scoring threshold. 

With respect to the 20 projects identified above, program officials stated that 

it was possible and appropriate for a project with a low score in the national 

threat priority reduction criterion to score highly enough in the three 

remaining criteria to end up with a high preliminary project score. They also 

pointed out that most of these projects were in high risk port areas, meaning 

they received a high port risk score, and this helped those projects rise above 

their tier’s funding cut line. Officials acknowledged that the lower ranked 

and funded projects that we identified were the result of skipping projects 

until a project was found that requested an amount less than the remaining 

dollars in the tier. 

GMS revealed some anomalies for awarded projects in the form of 

incomplete scores or errors in reporting data.16 In most cases, the 

discrepancies indicated a disconnection between the information provided by 

the field review team and the information as assessed by the national review 

team. 

Examples of inconsistencies in the project evaluation and selection process 

Grant Recipient C, project #3, security lighting with solar battery back-up, grant 

$136,000, field review score: 8.

The applicant proposed introducing security lighting on a bridge where there was 

previously no lighting. Field reviewers stated that this project was “not applicable” to 

and “d[id] not address” the national priority threat. They gave the project zeros for all 

aspects of this criterion, and a total score of nine. In its database and on the final 

spreadsheet, the NRP listed the field review scores as five, five, and zero for the first 

criterion. The panel did not provide any additional comments or explanation for 

 

16 DHS contracted the administration of the Grants Management System with Booz Allen Hamilton, a global strategy 

and technology consulting firm. 
Follow Up Review of the Port Security Grant Program 

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changing these scores. The discrepancies in reported scores and the lack of 

explanation for amending them, particularly because this project was funded despite 

low scores, raises concerns about the integrity of the process. 

Grant Recipient D, project #2, portable generators, grant $3,110, field review score 

15. 

The field review team stated that this portable generator system was intended to power 

the lighting system proposed in a separate project (#1) from the same applicant, and 

that it “should not be approved unless project #1 is also approved.” The project 

received average to moderate scores for most criteria. The NRP agreed with the 

field’s assessment and did not elaborate. Project #1 was rejected, but against the field 

review team’s recommendation, project #2 was awarded. The NRP did not explain 

why it did not heed the field’s recommendation. The fact that portable generators 

were funded, even though the lighting system they would power was not funded, also 

raises concerns about the process. 

Grant Recipient E, project #1, interoperability expansion central dispatch, requested 

but not granted $2,044,240, field review score 25. 

The field review gave this project a high rank and score, and described in detail how it 

would address national and local security priorities, stating that “The layered security 

provided by implementing communication interoperability systems dramatically 

reduces the risk for all these critical infrastructures and enables all local law 

enforcement, as well as Federal and industrial agencies to respond to any potential 

threats or breaches of security.” National reviewers appeared to concur with this 

assessment, and even increased the project’s rank. Given the project’s high rank and 

score, particularly with regard to the weighted national security priorities, it is unclear 

why this project was not funded. 

Program officials were reviewing the project anomalies, but did not respond 

in time for the issuance of our draft report. We anticipate that their 

explanations will show that these are not systemic problems, but they 

nonetheless highlight internal control weaknesses that need to be corrected 

in the evaluation process. 

Documentation of reviewers’ evaluation and decision-making in round five 

improved, containing more detail than in rounds two and three. Field and 

national reviewers also demonstrated greater consistency in their 

assessments and took more care to justify their decisions. Unlike in earlier 

rounds, there were fewer instances of the NRP upgrading or downgrading 

the field review’s scores without providing any justification. For example, 

in one application for floating protective barriers, the national review 

downgraded the project scores for national priority threat reduction noting, 

“Criteria 1.2 – Prevention [changed from] 5 to 4 – provides good physical 
Follow Up Review of the Port Security Grant Program 

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and visual deterrent, but would not [prevent] larger craft. Detection 

[changed from] 5 to 2 – does not provide any communication that attack is 

imminent.” In this and other examples, the NRP presented its reasoning for 

altering scores. 

However, in some cases reviewer justifications for the rank and score 

assigned to applications still lacked detail. Field reviewers provided sparse 

comments and little insight as to how a project would address critical 

security needs, stating only that they did or did not “recommend funding.” 

NRP members depend on the USCG’s local knowledge and expertise to 

make informed evaluations and funding decisions, and thus the lack of 

explanations from the field could affect their decision-making. Similarly, 

while NRP comments were more evident than in previous rounds, they 

remained thin in cases of non-funded projects. For example, NRP 

explanations for why projects that seemed worthy of funding were not 

funded frequently state, “not funded” or “fell below tier line,” which are not 

informative evaluations. This was not entirely unexpected, given that they 

thought projects falling below the tier line would not be funded. 

Overall, the project evaluation and selection process employed in round five 

demonstrated marked improvement. OGT set forth specific national 

priorities and implemented a risk-based prioritization system. However, the 

practice of funding projects that were not scored as responsive to program 

priorities in order to expend all available funds is a concern. The practice of 

funding projects that reviewers score as marginal continues to be an issue for 

the program. As OGT develops program guidance for round six, it should 

reconsider adopting a minimum score that separates worthy from unworthy 

projects. 

Field Reviewers Scored Projects Differently (Prior Report Recommendation 

Nos. 6 – 8) 

In rounds two and three, headquarters and field reviewers did not always 

share a common understanding of program objectives or eligibility criteria. 

We recommended that SLGCP develop parameters that define applicant 

eligibility under the “nationally important economic port or terminal,” 

“responsible for movement of a high number of passengers,” and 

“responsible for the movement of hazardous cargo” criteria; communicate 

information to field reviewers to educate them on eligibility and improve 

dissemination of “lessons learned” at all levels of review; and evaluate 

timeframes for reviewing applications with an emphasis on providing more 
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time for review in the field and by the Executive Review Board (ERB). We 

closed those recommendations because SLGCP was (1) working with IAIP 

and USCG to develop clearly defined parameters for port eligibility, (2) 

developing enhanced guidance on eligibility guidelines using lessons learned 

from previous rounds, and (3) developing a more efficient process for 

vetting projects, which included eliminating one level of review (the ERB). 

In round five, OGT evaluated the nation’s 129 largest volume ports using a 

risk-based formula that analyzed a port’s consequence, vulnerability, and 

threat.17 Based on this evaluation, the program identified 66 eligible port 

areas. OGT identified eligible applicants as: (1) owners/operators of 

federally regulated public or private ports, terminals, U.S. inspected 

passenger vessels, or ferries; (2) port authorities, and/or State and local 

agencies that provide layered security protection to federally regulated 

entities; and (3) consortia composed of local stakeholder groups representing 

federally regulated ports, terminals, U.S. inspected passenger vessels, or 

ferries.18 Program administrators communicated eligibility requirements to 

the field review teams, improving field-level knowledge of application 

prerequisites.19 The newly-instituted eligibility requirements eliminated the 

previous confusion resulting from poorly defined eligibility criteria, such as 

whether an applicant represented a nationally critical port. 

Subjectivity remains inherent in this process, which relies heavily upon the 

judgment of the field reviewers. As a result, disparities existed between 

project scores submitted by field review teams in various ports, suggesting 

that they are not assessing projects equally. For example, the Houston port 

area project scores ranged from 9 (lowest) to 30 (highest). In the same port 

risk tier, the New York/New Jersey port area project scores ranged from a 

low of 3 to a high of 17. This disparity in project scores for like-port areas 

(in terms of risk) raises concerns about the basis for field review scores and 

how reviewers are judging projects against the criteria. The accompanying 

explanations for reviewer scores in the field evaluation sheets were 

straightforward and did not provide any information that could explain the 

differences. We did not conduct a project-by-project analysis to determine 

whether the reviewers were using similar approaches to scoring. 

 

17 Program Highlights: FY 2005 Port Security Grant Program. For the purposes of this formula, “consequence” 

considered “people, economic, national security, and port-specific special considerations (hazardous materials, oil).” 

“Vulnerability” considered “the distance from open water, number of port calls, and presence of tankers.” “Threat” 

included credible threats and incidents, less credible threats and incidents, and vessels of interest information. 18 Program Highlights: FY 2005 Port Security Grant Program. 

19 Port Security Grants – Round 5 Program Guidance Document (For U.S. Coast Guard Field Evaluators/Reviewers) 
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The revised evaluation and selection process saved time. The elimination of 

the ERB removed a layer of review and improved timeframes from previous 

rounds. On the other hand, these modifications did not ensure that reviewers 

would include necessary commentary and justifications for 

recommendations on the applications. Program administrators should 

continue to enhance the standardization of field review scoring methodology 

and take steps to ensure that field and national reviewers will provide 

detailed explanations in the future. Finally, program administrators should 

implement an internal quality assurance review, or “pre-audit” – possibly by 

a grants administrator not directly involved in the program – to help prevent 

project anomalies in the future and ensure the program’s credibility. 

Private Sector Policy Should Address Prudence of Funding Certain Projects 

(Prior Report Recommendation No. 9) 

Another dilemma confronting the program related to the circumstances 

under which private entities might obtain grant funding. DHS did not have a 

formal policy to govern financial assistance to private entities, including 

those that own and operate high-risk port facilities. Many grants to private 

companies were for basic security measures that should have been 

considered as normal costs of doing business, and some were within their 

financial means. We recommended that SLGCP clarify its policy on funding 

private sector projects. In the absence of such policy, and if funding private 

sector projects is continued, we recommended that SLGCP: (a) examine 

private sector projects to preclude the funding of cost of business expenses; 

(b) develop financial eligibility criteria, including an income test or costbenefit analysis; and (c) consider giving greater preference to projects that 

are submitted jointly by private and public entities. 

We closed this recommendation because SLGCP said it would implement 

two significant changes. First, it announced that it would require a 50 

percent cash match, thereby securing a greater commitment from companies 

while also demonstrating a willingness to help pay for costs to comply with 

MTSA. Second, it rendered Fortune 500 companies ineligible in round four. 

As a result, grant awards to private companies in that round totaled $6.3 

million, the lowest amount of any round. 

OGT implemented this policy in round five. Private companies proposed 

fewer projects than public entities, and received $8.2 million. However, the 

presence of a matching requirement does not fully address the question of 
Follow Up Review of the Port Security Grant Program 

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whether DHS will consider the prudence of funding certain private sector 

projects. The program restored eligibility for Fortune 500 companies in round 

five, placing less emphasis again on the company’s financial condition. 

Round five contained far fewer questionable grants like the ones we 

previously reported, but the program has not ceased this practice altogether. 

For example, a Fortune 500 refinery received a port security grant in round 

five totaling almost $1 million for fencing and surveillance upgrades at a 

refinery located in a major port. It did put up the same amount in matching 

funds. This company recently reported 3rd quarter net income in excess of 

$1.2 billion. We remained concerned about the absence of more specific 

guidance on security measures proposed by private companies that are capable 

of paying for them, and what measures they should pay for. 

Also, there is the question of how well the project matches program criteria. 

The program is supposed to identify projects that address national port 

security priorities and provide security enhancements that are most likely to 

help sustain overall port operations. Private sector projects can score poorly 

against these criteria but well enough on the local security priority criteria to 

receive funding. In the case above, the risk factor of the port where the 

project was located helped the project’s overall ranking during the 

evaluation process. Of the 20 projects that received zeros in the national 

threat priority criteria, 12 were private sector projects. They received 

enough points in other criteria to receive funding totaling $4.2 million. 

Should DHS elect not to reconsider using financial criteria, it should at least 

require companies and public entities to demonstrate how their own security 

investments would be leveraged by a federal grant. 

Balance of Unspent Funds is Declining (Prior Report Recommendation 

Nos. 10, 11) 

As of September 30, 2004, grant recipients had spent only a small portion of 

their awards. Of the $515 million awarded between June 2002 and 

December 2003, including the $75 million provided in DHS’ Urban Area 

Security Initiative, grant recipients had expended only $107 million, or 

21 percent. We determined that many of the recipients were simply not 

prepared to put their grant funds to use and DHS did not have sufficient 

resources to monitor the progress—or lack thereof—of individual projects. 

We recommended that SLGCP accelerate the acquisition of more information 

from applicants about the scope of their projects and ensure that the program 

has sufficient operational expertise to administer the program after the award 
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is made. We subsequently closed these recommendations because of ongoing 

efforts to update the guidance for applicants, and planned creation of the 

Transportation Infrastructure Security Division within SLGCP. 

Our recommendations were designed to address factors contributing to slow 

spending. Round five will be the first round to fully benefit from DHS’ 

actions. SLGCP issued the FY2005 Port Security Program Guidelines and 

Application Kit, which contained specific directions for applicants including 

information required in the project narrative, individual project plan, and 

detailed budgets. Compared to our observations of rounds two and three, 

round five reviewers noted far fewer concerns in GMS about the scope and 

cost of projects. Of the 43 project files we reviewed in depth, none revealed 

that the applicant provided insufficient information about scope and cost. 

Program officials extended project periods to 30 months in round five, 

because several entities received awards in more than one round. 

Administrators should monitor entities that receive multiple grants or have not 

drawn down any funds. A total of 20 round two projects totaling $13.7 

million and 32 round three projects totaling $35.8 million have not drawn 

down any of their funds. To that end, six TSA personnel were transferred to 

OGT to help staff its Transportation Infrastructure Security Division and 

oversee the program. Despite these projects, the balance of unspent funds has 

declined since our first report, even when taking into consideration round 

four. At the time of our report, the balance of unspent funds for the first three 

rounds was $347.4 million. Today, the balance is $179.5 million, or $222.3 

million including round four. 

Recommendations 

DHS has worked to address the issues we raised in our January 2005 report. 

However, our follow up review suggests that there are additional actions that 

DHS should take to continue to improve the administration and effectiveness 

of the program. Accordingly, we recommend that the Under Secretary for 

Preparedness: 

1. Establish a minimum threshold under the new selection and evaluation 

process that projects must meet to become eligible for funding. Funding 

in the top three tiers not used as a result of implementing a minimum 

threshold should be reallocated to a lower tier. 
Follow Up Review of the Port Security Grant Program 

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2. Modify the Grants Management System (GMS) to require National 

Review Panel (NRP) members to enter a reason for adjusting a field 

review score. 

3. Seek more consistent scoring by field reviewers. 

4. Conduct a “pre-audit” of proposed grant award decisions. 

5. As a condition of receiving a grant, require private sector applicants to 

demonstrate how a federal grant would enhance their own security 

investments. 

Management Comments and OIG Analysis 

We issued our draft report on January 6, 2006. Below is a summary of DHS’ 

response to our recommendations, and our analysis of the response. A copy 

of DHS’ response in its entirety is recorded in Appendix B. 

Recommendation 1: Establish a minimum threshold under the new 

selection and evaluation process that projects must meet to become 

eligible for funding. Funding in the top three tiers not used as a result of 

implementing a minimum threshold should be reallocated to a lower tier. 

DHS is still considering whether to implement a minimum score threshold for 

projects to receive funding. DHS stated that the program must take into 

account that even if a project in a lower risk tier receives a high score, this 

must be balanced against the fact that a project in a higher risk tier receiving a 

lower individual score may still achieve greater overall risk reduction. 

Finally, DHS believes that the lack of responsiveness to the national priority 

threat was a result of some ports’ poor understanding of the national priority 

threat requirement and its impact on application rank, and stated that enhanced 

guidance in round six will better explain this emphasis. 

Since DHS is still considering whether to implement a threshold, we consider 

the recommendation unresolved and open. In round five, the program 

improved the process of allocating funds based on risk, and we agree that 

enhanced guidance may improve responsiveness of project applications to the 

national priority threat. However, improving guidance and emphasizing the 

national priority threat does not fully address the problem of lower-scored 

projects receiving awards. We believe that comparing project scores across 
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tiers is fair and prudent, as relative port risk scores are already accounted for 

in the formula that generates a project’s individual final score. We will await 

additional information from OGT regarding how it intends to ensure that low 

scoring projects do not continue to receive funding. 

Recommendation 1 – Unresolved – Open 

Recommendation 2: Modify the Grants Management System (GMS) to 

require National Review Panel (NRP) members to enter a reason for 

adjusting a field review score. 

DHS agreed that in round five the review process did not fully document NRP 

comments and justifications for award decisions, and stated that OGT will 

allow panel members to denote this information in OGT’s portal. DHS stated 

that OGT would additionally enable reviewers to access the project 

applications prior to convening the NRP, so that panelists may more 

completely represent their perspectives. 

We recognize that OGT is poised to make the NRP’s responsibility to 

document its decisions even more transparent in round six. However, we feel 

that OGT’s proposed actions fall short of requiring that NRP members 

provide the reasons for their decisions. Allowing panelists the ability to 

capture their notes in the portal does not ensure that they will do so 

sufficiently to record the justifications for granting or denying awards. The 

relevant fields for such comments already existed in the round five review 

process, yet in some cases NRP members still did not utilize these fields to 

provide details on the reasons for their decisions. DHS should require 

panelists to provide justifications for its award decisions and demonstrate that 

the system enforces this requirement. 

Recommendation 2 – Unresolved – Open 

Recommendation 3: Seek more consistent scoring by field reviewers. 

DHS agreed that it is necessary to ensure more consistency in the field review. 

DHS stated that OGT is revising round six program guidance to enhance the 

consistency of the field review scoring process with additional examples, 

templates, and guidance. This effort will be augmented by teleconferences 

during the review period to focus on requirements and expectations. 
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We concur that improved program guidance and direction to field reviewers 

will encourage consistency in the process. We request that OGT provide us 

with the Field Review Guidance for round six in order to satisfy our 

expectation that the revisions promote improved consistency across the field 

review. 

Recommendation 3 – Resolved – Open 

Recommendation 4: Conduct a “pre-audit” of proposed grant award 

decisions. 

DHS recognized that the manual process of administering the program 

requires improvement. DHS stated that OGT is exploring information 

technology enhancements to automate the NRP and field review scoring 

processes, and the process used to generate the final list of projects to be 

funded. DHS advised that these changes would increase accuracy of the 

reported data through the review process, and enable OGT to analyze and 

convey program data to senior officials. 

We concur that, if implemented at each level of the review, automation of the 

scoring and data transfer systems as described by DHS will reduce the 

likelihood of, and opportunity for, errors. We look forward to the execution 

of these technological enhancements, and ask that OGT share them with us 

once they have been implemented. 

Recommendation 4 – Resolved – Open 

Recommendation 5: As a condition of receiving a grant, require private 

sector applicants to demonstrate how a federal grant would enhance their 

own security investments. 

DHS stated that in round six the program will require all applicants to exhibit 

the impact of conducting or not conducting the proposed project, based on risk 

data relative to the targeted security measure. DHS stated that this 

demonstration of project merit will enable the program to award projects with 

the greatest opportunity for risk reduction and measure the impact of an award 

in terms of buy down of risk. 

While we agree that all applicants should be required to discuss the 

opportunity costs of their proposed projects, DHS’ response does not indicate 

whether private sector applications will undergo greater scrutiny. Instituting 
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this opportunity cost requirement, which calls upon applicants to demonstrate 

project merit, might address part of our concern about the prudence of funding 

certain private sector projects, but more information is needed. We request 

that OGT clarify what information it will seek regarding opportunity costs, 

how the cost data will account for other company security measures, and how 

those investments would be leveraged by receiving the grant. 

Recommendation 5 – Unresolved – Open 
Appendix A 

Purpose, Scope, and Methodology

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Page 23 

In October 2005, Congress directed the Inspector General to review the steps 

DHS took to comply with the 12 recommendations contained in the OIG’s 

January 2005 report, Review of the Port Security Grant Program (OIG-05-

10). In response, our office examined the effect of DHS’ implementation of 

the recommendations in preparation for round five of the program. Because 

of the timing of our first review, we did not include round four in it or in our 

follow up review. 

In order to assess the changes DHS made for round five, our office revisited 

the Port Security Grant Program’s strategic goals and objectives and how the 

grants served to protect national critical infrastructure. We reviewed 

numerous documents including: 

• The FY2005 Port Security Grant Program Resource Binder. 

• The port risk formula, which led to the selection of the 66 eligible 

ports and tiering methodology. 

• The funding distribution model that determined the allocation of funds 

to each tier. 

• Changes to the eligibility criteria. 

• The Grant Application Kit. 

• Guidance for field and national reviewers. 

• Field review score sheets for the majority of the applications. 

• Each port area’s list of ranked projects. 

• The final scoring system, which incorporated IP data and priority 

adjustments to produce the final project ranks. 

• Current reports on the status of funds for the first four rounds. 

Additionally, we scrutinized the quantified results of all funded and nonfunded projects. We reviewed 43 projects in greater detail by examining 

documents submitted by the applicants, specific comments by field and 

national reviewers, and tracking project scores through the scoring system. 

We carried out a significant portion of our project review by viewing 

electronic files in OGT’s Grants Management System, the National Review 

Panel’s internal database, and via OGT’s intranet portal at OGT headquarters 

in Washington, DC. 

We discussed the redesign, management, and oversight of the program with 

officials from the Office of Grants and Training, the Office of Infrastructure 

Protection, and the U.S. Coast Guard. We assessed the coordination between 

the OGT’s program administrators and IP. We also met with a representative 
Appendix A 

Purpose, Scope, and Methodology

Follow Up Review of the Port Security Grant Program 

Page 24 

from Digital Sandbox, the contractor who developed the new scoring and 

ranking system. 

We conducted our review between September 2005 and December 2005 under 

the authority of the Inspector General Act of 1978, as amended, and according 

to the Quality Standards for Inspections issued by the President’s Council on 

Integrity and Efficiency. 
Appendix B 

Management Response to Draft 

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Appendix B 

Management Response to Draft 

Follow Up Review of the Port Security Grant Program 

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Appendix B 

Management Response to Draft 

Follow Up Review of the Port Security Grant Program 

Page 27 
Appendix B 

Management Response to Draft 

Follow Up Review of the Port Security Grant Program 

Page 28 
Appendix C 

Recommendations from OIG Report #OIG-10-05 

Follow Up Review of the Port Security Grant Program 

Page 29 

We recommended that the Executive Director, Office of State and Local 

Government Coordination and Preparedness: 

Recommendation #1: Determine to what extent the program should 

incorporate MTSA requirements. 

Recommendation #2: Incorporate critical infrastructure and key asset data 

from IAIP into the evaluation of proposed port security projects. Among the 

changes to consider: 

• The addition of an IAIP official on the Executive Review Board; 

• Use of the IAIP national asset database to identify critical facilities in 

need of mitigation with a view toward soliciting proposals from these 

facilities; and 

• Collaborating with IAIP in an outreach program to improve the 

quality of vulnerability assessments and proposals. 

Recommendation #3: Consider changing the weighting of the evaluation 

criteria, with greater emphasis placed on the criteria that reduce critical 

vulnerabilities. 

Recommendation #4: Cease the practice of funding projects that do not meet 

the definition of a Priority I project. Consider implementing a scoring 

threshold that ensures that projects not meeting that threshold are not funded. 

Consider seeking a change in appropriations language to have these grant 

funds designated as “no-year monies” to reduce the impetus to fund doubtful 

projects.

Recommendation #5: Require reviewers to document their decisions in the 

grants management system, particularly when they are inconsistent with 

recommendations from a lower level of review. 

Recommendation #6: Develop parameters that define applicant eligibility 

under the “nationally important economic port or terminal,” “responsible for 

movement of a high number of passengers,” and “responsible for the 

movement of hazardous cargo” criteria. 

Recommendation #7: Communicate information to field reviewers to educate 

them on eligibility. Improve dissemination of “lessons learned” at all levels of 

review. 
Appendix C 

Recommendations from OIG Report #OIG-10-05 

Follow Up Review of the Port Security Grant Program 

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Recommendation #8: Evaluate timeframes for reviewing applications with 

an emphasis on providing more time for review in the field by the ERB. 

Recommendation #9: Clarify department policy on funding private sector 

projects. In the absence of such policy, and if funding private sector projects is 

continued: (1) examine private sector projects to preclude the funding of cost 

of business expenses; (2) develop financial eligibility criteria, including an 

income test or cost-benefit analysis; and (3) consider giving greater preference 

to projects that are submitted jointly by private and public entities. 

Recommendation #10: Accelerate the acquisition of more information from 

applicants about the scope of their projects. 

Recommendation #11: Ensure that the program has sufficient operational 

expertise to administer the program after the award is made. 

Recommendation #12: Seek clarification on the legislative intent for the 

program (sector-specific vs. larger infrastructure protection initiatives) and 

construct a unified program (policy, purpose, process, and eligibility) to 

comply with that intent. 
Appendix D 

Major Contributors to This Report 

Follow Up Review of the Port Security Grant Program 

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William J. McCarron, Chief Inspector 

Razili K. Datta, Inspector 
Appendix E 

Report Distribution 

Follow Up Review of the Port Security Grant Program 

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Department of Homeland Security

Secretary 

Deputy Secretary 

General Counsel 

Chief of Staff 

Assistant Secretary, Policy 

Executive Secretariat 

Under Secretary, Preparedness 

Assistant Secretary, Office of Grants and Training 

Audit Liaison, Office of Grants and Training 

DHS OIG Liaison 

Audit Liaison, Preparedness 

DHS Public Affairs 

Assistant Secretary, Office of Legislative Affairs 

Office of Management and Budget

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress

House Committee on Appropriations 

Senate Committee on Appropriations 

Senate Committee on Commerce, Science, and Transportation 

Senate Committee on Homeland Security and Government Affairs 

House Committee on Homeland Security 
Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General 

(OIG) at (202) 254-4100, fax your request to (202) 254-4285, or visit the OIG 

web site at www.dhs.gov.

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind 

of criminal or noncriminal misconduct relative to department programs or 

operations, call the OIG Hotline at 1-800-323-8603; write to Department of 

Homeland Security, Washington, DC 20528, Attn: Office of Inspector 

General, Investigations Division – Hotline. The OIG seeks to protect the 

identity of each writer and caller.