Department of Homeland Security
 

FEMA’s Use of Risk-based Monitoring 

for Grantee Oversight 

OIG-13-40 February 2013
 
 

 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

 Washington, DC 20528 / www.oig.dhs.gov 

FEB 14 2013 

 

MEMORANDUM FOR: David J. Kaufman 

Acting Assistant Administrator 

Grant Programs Directorate 

Federal Emergency Management Agency 

Cara Whitehead 

Acting Director 

Division of Financial Assistance Policy and Oversight 

Department of Homeland Security 

FROM: ards 

spector General for Audits 

Anne L. Rich

Assistant In

SUBJECT: FEMA’sfUsefoffRisk-basedfMonitoringfforfGranteefOversightff

Attached for your action is our final report,fFEMA’sfUsefoffRisk-basedfMonitoringfforf

GranteefOversight.ffWe incorporated the formal comments from the Federal Emergency 

Management Agency’s Office of Policy, Program Analysis and International Affairs in the 

final report. Those formal comments included input from the Department of Homeland 

Security’s Division of Financial Assistance Policy and Oversight. 

The report contains three recommendations aimed at improving financial and 

programmatic monitoring of grantees. Your offices concurred with two of the three 

recommendations and did not concur with one recommendation. As prescribed by the 

Department of Homeland Security Directive 077-01, Follow-Up and Resolution for Office 

of Inspector General Report Recommendations, within 90 days of the date of this 

memorandum, please provide our office with a written response that includes your 

corrective action plan, and target completion date for recommendation 1. Also, please 

include responsible parties and any other supporting documentation necessary to 

inform us about the current status of the recommendation. Until your response is 

received and evaluated, recommendation 1 will be considered open and unresolved. 

Based on information provided in your response to the draft report, we consider 

recommendations 2 and 3 resolved and closed. 
 

                       

                     

                    

             

                               

               

   

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Consistent with our responsibility under the Inspector General Act, we are providing

copies of our report to appropriate congressional committees with oversight and

appropriation responsibility over the Department of Homeland Security. We will post

the report on our website for public dissemination.

Please call me with any questions, or your staff may contact John E. McCoy II, Deputy

Assistant Inspector General for Audits, at (202) 254‐4100.

Attachment

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table of Contents 

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

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

Results of Review ............................................................................................................... 3
 

FY 2012 Financial and Programmatic Monitoring ................................................. 4 

Planned Grants Monitoring for FY 2013 ................................................................ 5
 

Coordination with DHS’ FAPO ................................................................................ 7 

Recommendations ................................................................................................. 8 

Management Comments and OIG Analysis ........................................................... 8 

Appendixes 

Appendix A: Objectives, Scope, and Methodology ........................................... 12 

Appendix B: Management Comments to the Draft Report .............................. 13 

Appendix C: AFGP and TISB Detailed Grant Program Information ................... 16 

Appendix D: FY 2012 Programmatic and Financial Monitoring 

 Key Risk Indicators ........................................................................ 17 

Appendix E: Major Contributors to This Report ................................................ 18 

Appendix F: Report Distribution ........................................................................ 19 

Abbreviations 

AFGP Assistance to Firefighters Grant Program 

AFG Assistance to Firefighters Grants 

DHS Department of Homeland Security 

FAPO Division of Financial Assistance Policy and Oversight 

FEMA Federal Emergency Management Agency

FY fiscal year

GPD Grant Programs Directorate 

OIG Office of Inspector General

TISB Transportation Infrastructure Security Branch

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Executive Summary 

This review was initiated in response to recommendations in the Department of 

Homeland Security (DHS) Office of Inspector General (OIG) report, DHSfFinancialf

AssistanceftofthefAssociationfoffCommunityfOrganizationsfforfReformfNowf(ACORN)fandf

ItsfAffiliatesf(OIG-11-10). In that audit, we determined that the Federal Emergency 

Management Agency (FEMA) did not consider sufficient risk indicators in selecting 

grants to monitor, and we recommended that FEMA incorporate key indicators in its 

risk-based approach to its selection process. 

This review focused on FEMA preparedness grants awarded directly to local fire 

stations, port facilities, and transit systems, called Assistance to Firefighters Grants and 

Transportation Infrastructure Security Branch grants, that totaled $1.2 billion in fiscal 

year 2011. This report conveys concerns we identified during our limited review for 

FEMA to consider prior to implementing its revised monitoring plans. We may revisit 

FEMA’s monitoring of grantees using a risk-based approach once implementation is 

complete. 

In fiscal year 2012, FEMA inconsistently applied risk indicators to determine the level of 

financial and programmatic monitoring a grantee received. Additionally, in selecting 

grantees to monitor, FEMA did not assign risk indicators to all grantees. As a result, 

during fiscal year 2012, FEMA could not ensure that it monitored all grantees with 

increased risk. For fiscal year 2013, FEMA combined programmatic and financial 

monitoring into an integrated plan and revised its risk indicators to better reflect 

grantees’ inherent risk. However, the plan does not ensure that all grantees with 

increased risk will be properly selected for financial monitoring. In addition, FEMA and 

DHS have not coordinated their approaches to grant oversight monitoring, which means 

that FEMA may have to revise its approach should DHS issue a standard risk model. 

We made three recommendations aimed at improving FEMA’s identification and 

application of risk-based indicators to grantee oversight. FEMA concurred with two of 

the recommendations and did not concur with our recommendation to include in 

FEMA’s integrated financial and programmatic monitoring plan for grantees a 

methodology for applying financial monitoring key risk indicators to all grantees, not 

just those selected in a random sample. 

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Department of Homeland Security 

Background 

This review was initiated in response to recommendations in the DHS OIG report, DHSf

FinancialfAssistanceftofthefAssociationfoffCommunityfOrganizationsfforfReformfNowf

(ACORN)fandfItsfAffiliatesf(OIG-11-10). In that report, we determined that FEMA’s 

process for selecting grants to monitor did not consider sufficient indicators of risk. We 

recommended that FEMA “incorporate key factors or indicators, such as the grantees’ 

experience with the program and known concerns about the grantee, in [its] risk-based 

approach to select grantees for inclusion in its monitoring plan.”1

FEMA awards preparedness (nondisaster) grants to plan, organize, equip, train, and 

conduct exercises to build and sustain the capabilities necessary to prevent, protect 

against, mitigate the effects of, respond to, and recover from those threats that pose 

the greatest risk to the security of the Nation. Most preparedness grants are awarded 

to State Administrative Agencies, which in turn award grant funds to subgrantees; 

according to a FEMA official, States also monitor these grants. FEMA also awards grants 

directly to local entities such as fire stations, port facilities, and transit systems. These 

grants are grouped under two broad categories—Assistance to Firefighters Grants 

Program (AFGP) and Transportation Infrastructure Security Branch (TISB) grants. A 

FEMA official reported that FEMA directly monitors both categories of grants, which 

totaled $1.2 billion in fiscal year (FY) 2011. These grants were the subject of our review. 

Appendix C contains detailed program information. Table 1 summarizes the FY 2011 

AFGP and TISB preparedness grants. 

Table 1. FY 2011 AFGP and TISB Grants 

Grant Program Number of Awards Total Funds Awarded

AFGP 3,575 $768,033,052

TISB 251 $435,129,048

Source: DHS OIG prepared table based on FEMA data.

FEMA grants are overseen by its Grant Programs Directorate (GPD). Programmatic and 

financial grant monitoring responsibilities are shared among GPD and FEMA’s 10 

regions. The goals of programmatic and financial monitoring are to ensure that funded 

projects remain consistent with their original proposals, that Federal grant funds are 

spent according to Federal regulations, and that grantees are properly administering 

these funds. Although GPD oversight includes issuing grant monitoring plans, it does 

not have authority over monitoring conducted by the 10 regions. Table 2 shows the 

FY 2012 and FY 2013 financial and programmatic monitoring responsibilities for all AFGP 

and TISB grants. Appendix C contains more details. 

1 DHSfFinancialfAssistanceftofthefAssociationfoffCommunityfOrganizationsfforfReformfNowf(ACORN)fandf

ItsfAffiliates, OIG-11-10, November 2010, page 11.

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Table 2. Monitoring Responsibilities for AFGP and TISB Grant Programs 

Type of Grant 

Financial 

Monitoring 

Responsibility

Programmatic 

Monitoring 

Responsibility

Assistance to Firefighters Grants (AFG) FEMA GPD FEMA Regions

 Fire Prevention and Safety FEMA GPD FEMA GPD

 Staffing for Adequate Fire and Emergency Response FEMA GPD FEMA GPD

 Station Construction Grants FEMA GPD FEMA GPD 

TISB (all grants) FEMA Regions FEMA GPD

Source: DHS OIG prepared table based on FEMA data.

GPD develops annual monitoring plans, which include a standard monitoring approach 

for GPD and the regions. FEMA’s approach to its monitoring plans is evolving. For 

example, FEMA officials said that programmatic monitoring was conducted prior to 

FY 2012; however, FEMA did not regularly publish a plan until FY 2012. FEMA regularly 

published annual financial monitoring plans, but these plans differed each year in the 

method used to select grantees for monitoring. For example, in FY 2010, FEMA used 

subjective selection criteria such as “Responsiveness of Grantee;” the FY 2011 plan used 

more objective criteria such as “Grants that have exceeded the 5-year statutory 

threshold.” The FY 2012 financial monitoring plan reverted to including more subjective 

criteria. 

FEMA personnel monitor grants through formal monitoring activities such as desk 

reviews and site visits. Desk reviews are paper-based reviews of grantee activity that 

FEMA personnel conduct at FEMA offices; site visits involve onsite verification of 

grantee activities. Some FEMA personnel said that they also informally monitor 

throughout the grant life cycle—for example, during new grantee orientation, while 

reviewing quarterly reports, or when providing technical assistance to the grantee.

Results of Review 

In FY 2012, FEMA inconsistently applied risk indicators to determine the level of 

financial and programmatic monitoring a grantee received. Additionally, in selecting 

grantees to monitor, FEMA did not assign risk indicators to all grantees. As a result, 

FEMA could not ensure that it monitored all grantees with increased risk. For FY 2013, 

FEMA combined programmatic and financial monitoring into an integrated plan and 

revised its risk indicators to reflect grantees’ inherent risk better. However, the plan 

does not ensure that all grantees with increased risk will be selected for financial 

monitoring. In addition, FEMA and DHS’ Division of Financial Assistance Policy and 

Oversight (FAPO) have not coordinated their approaches to grant oversight monitoring, 

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Department of Homeland Security 

which means that FEMA may have to revise its approach should DHS issue a standard

risk model. 

FY 2012 Financial and Programmatic Monitoring

FEMA’s FY 2012 financial and programmatic monitoring plans did not ensure that 

it could properly monitor all grantees with increased risk. Although FEMA used 

risk indicators to determine the type of formal monitoring that a grantee should 

receive, the agency’s plans did not specify using risk indicators to select grantees 

that would be subject to such monitoring. Instead, FEMA relied on legislative 

mandates, random sampling, and subjective judgment to select grantees for 

monitoring. 

In FY 2012, FEMA published separate monitoring plans for formal financial and 

programmatic monitoring. Both plans included the same procedures for 

selecting grants to monitor: 

1.	 Select grants that are legislatively mandated for monitoring (e.g., grants 

required to be monitored every 2 years by the Implementingf

Recommendationsfoffthef9/11fCommissionfActfoff2007, as amended (9/11 

Act)).

2.	 Select grants designated by FEMA leadership as special monitoring focus areas. 

3.	 Use a process to select grants from the remaining pool. 

The selection process for the remaining pool of grants varied by grant program 

and type of monitoring. For example, the FiscalfYearf2012fProgrammaticf

MonitoringfPlan suggests that, for TISB grants, FEMA personnel should monitor 

all grants but prioritize high-dollar value grants. According to the plan, Grant 

Management Specialists also have discretionary authority to determine which 

grantees are monitored, and they may add or omit grantees from the random 

sample.2

 Some FEMA personnel said that such discretionary selection of 

grantees with known problems largely factored into deciding which grants FEMA 

programmatically monitored in a given year. 

Rather than applying risk indicators to all grants to determine which ones it will 

monitor financially, FEMA selected a sample of grants to monitor before applying 

risk indicators. In its FiscalfYearf2012fFinancialfMonitoringfPlan, FEMA encouraged 

using random sampling to select grants to include in its financial monitoring 

2

 Grant Management Specialists prepare and administer grants and cooperative agreements, ensure 

compliance with the terms and conditions of the grant award, and make recommendations to resolve 

grantee problems. 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

schedules. According to the plan, the sample should include 10 percent of all 

nondisaster (preparedness) grants, that is, those not already under mandatory or 

focus area financial monitoring. In addition, using professional judgment,

regional personnel may omit grants from the sample under certain conditions, 

for example if a Government Accountability Office or DHS OIG audit is ongoing or 

was conducted within the past 3 years. By selecting grants to monitor before 

applying risk indicators, FEMA may be losing opportunities to identify and 

monitor high-risk grantees. 

FEMA’s programmatic and financial monitoring plans also included risk indicators 

that FEMA personnel should use to determine the type of grantee monitoring. 

These indicators, which are listed in appendix D, are similar for both financial and 

programmatic plans and are all given equal weight. When a grantee is selected 

for monitoring, FEMA personnel rate the grantee on each of these indicators and 

average the score to determine overall risk for the grant, which determines 

whether a grantee receives a site visit, a desk review, or no formal monitoring. 

However, according to the monitoring plans, FEMA personnel do not have to 

apply these risk indicators to every grant. 

Planned Grants Monitoring for FY 2013 

FEMA issued an FY 2013 comprehensive and integrated risk-based monitoring 

plan to enhance its financial and programmatic grant monitoring process. 

However, FEMA needs to ensure that all grantees with increased risk will be 

properly selected for financial monitoring and will be monitored appropriately. 

The integrated process may result in coordination issues, including data residing 

in multiple databases. 

FY 2013 Grant Monitoring Selection Process 

FEMA’s FY 2013 monitoring plan does not include steps to ensure that all grantees

with increased risk are financially monitored. Financial monitoring of AFGP 

grants will be based on a 3 percent random sample of open nonmandatory (non9/11 Act) grants. The FY 2013 plan lists the reason as “...the large number of 

grants within the Headquarters Branches portfolio and the estimated financial 

monitoring workload capacity.”3 Further, the FY 2013 plan permits Grant 

Management Specialists to assess this sample of nonmandatory (non-9/11 Act) 

grants, with the type of monitoring activity left to the specialist’s discretion. The 

specialists are encouraged to select medium- and high-rated grants for 

monitoring, and must justify and document the selection. Additionally, those 

3 FiscalfYearf2013fFEMAfMonitoringfPlan, October 1, 2012, page 13, footnote 10.

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

who monitor grants in the regions are not required to follow the processes listed 

in the FY 2013 monitoring plan. 

In contrast to financial monitoring, all open programmatic grants will receive a 

First Line Review in FY 2013. A score sheet will be completed on each grant to 

assist those monitoring the grant in determining additional monitoring activities. 

The score sheets will be totaled by the Preparedness Grants Division’s Program 

Development Branch and then prioritized from highest risk to lowest risk. The 

Preparedness Grants Division’s Division Director will review the list, provide final 

approval, and allocate monitoring resources. 

Although FEMA created a comprehensive and integrated monitoring plan for 

FY 2013, it does not assign financial risk indicators appropriately to all grantees 

and does not require regional monitors to abide by the monitoring plan processes.

FY 2013 Integrated Monitoring Plan 

The FY 2013 comprehensive and integrated risk-based plan includes TISB, AFGP, 

and other preparedness grants. This approach may create challenges because of 

the characteristics of the TISB and AFGP programs. Table 3 compares the TISB 

and AFGP programs with other preparedness grants. 

Table 3. Comparison of TISB and AFGP Programs With Other Preparedness 

Grants

TISB and AFGP Other preparedness grants 

Awarded to Individual businesses, fire 

departments, transit agencies, etc. State Administrative Agencies

Number of

Awards

Approximately 3,800 total TISB 

and AFGP awards for FY 2011 

Up to 58 grantees (one for each 

State and territory) 

Award Basis Competitive Formulas or threat assessments

Source: DHS OIG prepared table based on FEMA data. 

FEMA’s integrated FY 2013 monitoring plan describes a process for 

programmatic monitoring that includes the development of a prioritization list 

from programmatic score sheets completed on each open grant. According to 

FEMA’s FY 2013 plan, FEMA will conduct a pilot program in FY 2013 that will use 

various weighting methodologies to develop a prioritization protocol suited to 

individual grants programs. 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Coordination of Proposed Monitoring Activities 

The FY 2013 plan provides specific procedural coordination points to promote 

integration of financial and programmatic grant monitoring activities. FEMA 

believes that an integrated monitoring plan will increase communication and 

coordination between those involved in programmatic and financial monitoring 

and improve the grant monitoring process. We are concerned that coordination 

issues will continue under the integrated monitoring plan, including maintaining 

grant information in multiple databases (Assistance to Firefighters Grants (AFG) 

Online System, Non-Disaster Grant Management System, and the Grants 

Management System) instead of one database. 

Some Regional FEMA Fire Program Specialists indicated that they conduct 

programmatic monitoring of AFGP grants and must access different databases to 

review grant purchase requests.4

 However, they are not notified when a grantee 

submits a purchase request to FEMA headquarters for payment. Failure to notify 

the specialist about purchase request submissions increases the risk of improper 

procurements. To improve communication and minimize the need to resolve 

grant procurement issues, FEMA should ensure that its Regional Fire Program 

Specialists are notified when grant purchase requests are submitted for payment. 

Coordination With DHS’ FAPO

DHS’ FAPO and FEMA’s GPD did not communicate regularly to ensure 

consistency and cooperation in monitoring grantees with increased risk. The 

DHS Chief Financial Officer has authority over the financial accountability and 

internal control of DHS funds, including financial assistance awards. FAPO is 

responsible for coordinating with other DHS headquarters offices as necessary to 

implement DHS’ policies regarding financial assistance. 

According to a FAPO official, there are plans to issue a FinancialfAssistancefLinef

offBusiness directive and instruction, which will include a mandate to use a 

standardized DHS risk model for grants. However, GPD and FAPO personnel 

acknowledged that there was little to no communication between the offices 

regarding current FEMA monitoring plans or long-range changes to these plans. 

Without collaboration between FAPO and GPD while developing monitoring 

plans, FEMA may issue new plans that are inconsistent with the DHS risk model 

and need to be revised. 

4

 Fire Program Specialists provide grant monitoring oversight and assist in developing, coordinating, and 

evaluating program plans, policies, and operational procedures. 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Recommendations 

We recommend that the Assistant Administrator of the Grant Programs 

Directorate:

Recommendation #1:

Include in FEMA’s integrated financial and programmatic monitoring plan for 

grantees a methodology for applying financial monitoring key risk indicators to 

all grantees, not just those selected in a random sample. 

Recommendation #2: 

Notify Regional Fire Program Specialists when grantee purchase requests are 

submitted to FEMA for payment. 

We recommend that the Acting Director, Division of Financial Assistance Policy 

and Oversight, and the Assistant Administrator of the Grant Programs Directorate:

Recommendation #3: 

Develop and implement a plan to ensure that there is open and continuing 

communication between the offices as they develop grant monitoring 

procedures, plans, and requirements. 

Management Comments and OIG Analysis 

FEMA and DHS FAPO provided comments on the draft of this report. A copy of 

the response in its entirety is included in appendix B. 

Management Comments to Recommendation #1 

Nonconcur. FEMA replied that its financial monitoring process is conducted at 

the grant level and not the grantee level, and that there are more than 20,000 

open grant awards and limited resources available to assess each award. 

Therefore, FEMA has chosen to assess a sample of grants using 11 key indicators, 

which can further identify any potential issues or concerns that require an 

enhanced level of monitoring.

FEMA said that it conducts quarterly cash analysis activities on all open grants as 

a means of providing financial oversight and monitoring. If the analysis warrants 

a more in-depth review, FEMA conducts site visits or desk reviews on the 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

affected awards. Additionally, all grants required to be monitored by the 9/11 

Act are scheduled for monitoring not less than once every 2 years. Each region 

and headquarters branch receives a data set of these grants to assess; the 

regional data set includes all grants in the annual rotation of States and 

territories as required by the 9/11 Act. GPD also sends headquarters branches a 

data set chosen through random sampling, to include AFG, Station Construction 

Grants, Fire Prevention and Safety, and Staffing for Adequate Fire Emergency 

Response grants. These grants account for a large portion of the 20,000 grants 

that GPD processes each year. Many of these are 1-year reimbursement-only 

grants and are assessed before payment is made. FEMA does not believe that it 

is necessary to assess all of these grants for key risk indicators. 

FEMA also said that the Preparedness Grants Division reviews all headquartersbased preparedness grants to guide the selection of grants for programmatic 

monitoring. Therefore, FEMA believes that it is not cost-effective for some grant 

programs for which monitoring is already required by the 9/11 Act or for the 

large volume of AFG, Station Construction Grants, Fire Prevention and Safety, 

and Staffing for Adequate Fire Emergency Response grants to be assessed for 

key risk indicators. FEMA requests that OIG consider this recommendation 

resolved and closed. 

OIG Analysis 

We do not consider FEMA’s response to be responsive to the recommendation. 

At the exit conference held on October 10, 2012, FEMA officials said that they 

were programmatically applying risk to all new AFGP grants in FY 2013 and that 

all open grants (non-AFGP) will be assessed for risk. Therefore, it is unclear to 

OIG why the same protocols, from a financial perspective, cannot be applied for 

financial risk to the same grant population. It is OIG’s intent, with this 

recommendation, that all new FY 2013 grants be assessed for risk upon award. 

OIG understands the resource constraints of assessing all open grants prior to 

FY 2013. We consider this recommendation open and unresolved until FEMA 

provides evidence that its quarterly cash analysis activities provide adequate 

financial risk-based monitoring in lieu of assessing risk at grant award. 

Management Comments to Recommendation #2 

Concur. FEMA replied that the AFG grants are closely managed through the 

Subject Matter Specialists within the headquarters office. The Regional Fire 

Program Specialists provide support for the technical assistance and some 

monitoring aspects of AFG awards. To that end, the AFG program office has 

expanded access to AFG grant information to the Regional Fire Program 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Specialists to ensure that they can view payment requests by grantees. Given 

the actions already taken, FEMA requests that OIG consider this 

recommendation resolved and closed. 

OIG Analysis 

We consider the actions taken by FEMA to be responsive to the 

recommendation. The recommendation is considered resolved and closed. 

Management Comments to Recommendation #3 

Concur. DHS and FEMA agree that staff communication between DHS’ FAPO and 

FEMA’s GPD can be strengthened and have taken actions to institutionalize

processes requiring such communication. 

According to FEMA, during FY 2012, FEMA GPD led numerous intra-agency Grant 

Program Task Force meetings designed to facilitate the exchange of ideas and 

information to ensure consistent, efficient, and effective financial assistance 

processes across FEMA. This effort resulted in the joint development of a 

comprehensive and integrated risk-based FYf2013fFEMAfMonitoringfPlan, which 

GPD formally approved on September 27, 2012. Task force participants 

contributing to the effort included financial and program management staff from 

throughout FEMA. 

FEMA also said that with open and continuing communication, task force 

participants coordinated the development of a preparedness monitoring plan, 

including new standard processes to better ensure cost-effectiveness and reduce 

the burden that grant recipients sometimes encounter with multiple oversightrelated site visits and desk reviews. The participants also jointly determined 

which grants had the greatest need for monitoring by developing and using a 

new recipient assessment framework. FAPO reviewed the resulting plan and 

confirmed its alignment with Department-wide monitoring protocols and 

approaches being established as a result of the DHS Deputy Secretary’s initiative

to ImprovefthefHealthfoffDHSfFinancialfAssistance. 

As indicated in FEMA’s response, concurrent with FEMA’s effort to develop its 

FY 2013 monitoring plan, FAPO led regularly scheduled monthly Financial 

Assistance Initiative Requirements Work Group meetings to standardize all 

phases of the financial assistance life cycle—preaward, award, postaward, and 

closeout. These meetings incorporated representation from a broad crosssection of all financial assistance awarding entities, including FEMA GPD. As 

such, GPD staff were fully aware of the protocols and templates being developed 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

for each phase of the life cycle and considered them, as appropriate, when 

developing the FY 2013 monitoring plan. 

FEMA’s response further said that as a result of the Deputy Secretary’s initiative, 

DHS Directive 128-01, FinancialfAssistancefLinefoffBusinessfIntegrationfandf

Management, and DHS Instruction 128-01-001, FinancialfAssistancefLinefoff

BusinessfIntegrationfandfManagementfInstruction, were approved and signed by 

the DHS Under Secretary for Management and the DHS Chief Financial Officer on 

October 15, 2012, and October 23, 2012, respectively. This guidance directs the 

creation of two councils that, once formed, will institutionalize opportunities for 

open and continuing communication between those involved in developing 

grant-monitoring procedures, plans, and requirements. 

Given the actions already taken, DHS and FEMA jointly request that OIG consider 

this recommendation resolved and closed. 

OIG Analysis 

We consider the actions taken by DHS and FEMA to be responsive to the 

recommendation. The recommendation is considered resolved and closed. 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix A 

Objectives, Scope, and Methodology 

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

established by the HomelandfSecurityfActfoff2002 (Public Law 107-296) by amendment 

to the InspectorfGeneralfActfoff1978. This is one of a series of audit, inspection, and 

special reports prepared as part of our oversight responsibilities to promote economy, 

efficiency, and effectiveness within the Department. 

This report provides the results of our limited review to determine whether FEMA’s 

grant monitoring plans, including its methodology for identifying and selecting grantees 

for review and the indicators used in the selection process, are adequate to monitor

grantees with increased risk. During our review, FEMA officials said that revised 

monitoring plans were not in place; as a result, we suspended the review. Subsequent 

to completion of fieldwork and prior to issuance of the draft report, FEMA issued its 

FY 2013 integrated risk-based monitoring plan. We are providing the concerns identified 

during our limited review for FEMA to consider before implementing its revised 

monitoring plans. We may revisit FEMA’s monitoring of grantees using a risk-based 

approach once implementation is complete. 

Because FEMA’s GPD intended to revise its risk-based monitoring plans for FY 2013, we 

did not test its FY 2012 monitoring plans. We reviewed the AFGP and TISB grant 

programs (appendix C provides detailed program information). We analyzed FEMA’s 

published programmatic (FY 2012) and financial (FYs 2008–2012) monitoring plans, the 

FY 2013 integrated risk-based monitoring plan, and DHS’ grant oversight guidance in its 

FinancialfManagementfPolicyfManual. We interviewed FAPO personnel, GPD personnel 

who oversee financial and programmatic monitoring, GPD financial monitoring personnel, 

and Region 8 and Region 1 AFGP programmatic and TISB monitoring personnel. 

We conducted this review between May and October 2012 under the authority of the 

InspectorfGeneralfActfoff1978, as amended, and according to the QualityfStandardsfforf

InspectionfandfEvaluation issued by the Council of the Inspectors General on Integrity 

and Efficiency. 

www.oig.dhs.gov 12 OIG-13-40 
 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

Appendix B 

Management Comments to the Draft Report 

U.S. 1)~II >tr Il".nl of 1I(l ",d~nd Seem'il) 

Washington. DC 20472 

8.. ,.... ~ ,~(J> FEMA 

JAN 1 7 1D13 

MEMORANDUM FOR: Anne L Richards 

Assistant Inspector Genera l for Aud its 

Officc of Inspector General 

FROM: 

Assoc

David 

i

J. 

ate 

K

Adm

au fma

im

n 

strator 

~ lor 

Policy. Program Analysis and International Affairs 

SUBJECT: Response 10 OIG Draft Report: FEMA's Use ojRisk-bCJsed MonilOring 

for Granree Over:;iglll (Job Code 12-057-AUD-FEMA) 

Thank you for the opportunity to comment on the draft report. The findings in the report will be used 

to strengthen the effectiveness and efficiency of how we execute and measure our programs. We 

recognize the need to continue to improve the process, including addressing the recommendations 

raised in this report, Our responses 10 the recommendations are as follows: 

O IG Recommcmlution #1: We ret.:Olllmclld that the Assistant Administrator of the Grant Programs 

Dire.:torale inclllde in FEMA's integrated fi nancial and programmatic monitOl'ing plan for grantees a 

methodology for applying financial monitoring key risk indicators to all grantees, not just those 

sclccted in a random sample. 

FEMA Response: Non-concur. Given that the financial monitoring process is conducted at the 

grant level rather than at the grantee level coupled with the fact that there are over 20,000 opcn grant 

awards and limited resources availab le to assess each award, FEMA has chosen to assess a sample of 

grams utilizing t 1 key indicators which can further identify any potential isslles or concerns which 

require an enhanced level or monit orillg. 

fEMA does conduct quarterly eash analysis activities on all opcn grants as a means of providing 

financial ovc rsight and monitoring. If our cash analysis activities warrant a more in-dcpth rcvicw. 

r'EMA conducts site visits or desk revicws all the affected awards. In addition, all grants covered by 

the 9/ 11 Act are scheduled for monitoring not less than once every two years. Each Region and 

Headquarters Branch receives a data set oflhese grants to assess. The Regional data SCI includes all 

grants inl he annual rotation ofstatcs ami tcrrituries. Granl Programs Directnrate (GPO) also sends 

the Headquarters Branches a data set chosen tluough random sampling to include Assistance to 

Fircfightcr Grants (AFG), Station Construction Grunts (SCG). Fire Prevcntion & Safcty (FP&S). and 

Staffing for Adequate Fire Emergency Response (SAFER) grants. These grant programs account for 

a large portion of the 20,000 grants whic h GPD processes each year. Many of these arc one-year 

reimbursement-only grants and are assessed prior 10 payment being made. FEMA does not believe it 

is nCl:t:ssary to assess all of these grants for key risk indicators. 

 

www.oig.dhs.gov 13 OIG-13-40 
 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

In addition, the Preparedness Grants Division reviews all headquarters-based preparedness grants to 

guide the selection of grants for programmatic monitoring. 

Therefore, FEMA believes it is not cost-effective for some grant programs for which monitoring is 

already required by the 9/11 Act or for the large volume of AFG, SeG, FP&S, and SAFER grants to 

be assessed for key risk indicators_ FEMA requests that OIG consider this recommendation resolved 

and closed. 

OIG Recommendation #2: We recommend that the Assistant Administrator of the Grant Programs 

Directorate notify Regional Fire Program Specialists when grantee purchase requests are submitted 

to FEMA for payment 

FEMA Response: Concur. The Assistance to Firefighter Grants are cLosely managed through 

Subject Matter Specialists within the headquarters office. The Regional Fire Program Specialists 

provide support for the technical assistance and some monitoring aspects of AFG awards. To that 

end the AFG program office has expanded access to AFG grant information to the regional Fire 

Program Specialist (FPS) to ensure that they have the ability to view payment requests by grantees. 

Given the actions already taken, FEMA requests that OIG consider this reconunendation resolved 

and closed. 

Recommendation #3: Develop and implement a plan to ensure there is open and continuing 

conununication between the offices as they develop grant monitoring procedures, plans, and 

requirements. 

FEMA Response: Concur. DHS and FEMA agree that staff communication betvveen DHS's Office 

of the Chief Financial Officer Financial Assistance Policy and Oversight (F APO) and FEMA's 

Grant Programs Directorate (GPD) can be strengthened and have taken actions to institutionalize 

processes requiring such communication. 

During FY 2012, FEMA GPD led numerous intra-agency Grant Program Task Force meetings 

designed to facilitate the exchange of ideas and infonnation to ensure consistent, efficient, and 

effective financial assistance processes across FE:MA. This effort resulted in the joint development 

of a comprehensive and integrated risk-based FY 2013 FEMA Monitoring Plan, which the GPD 

fonnaJly approved on September 27. 2012. Task force participants contributing to the effort 

included fmancial and program management staff from throughout FEMA. 

With open and continuing communication, Task Force participants coordinated development of a 

preparedness monitoring plan, including new standard processes to better ensure cost effectiveness 

and reduce the burden grant recipients sometimes encoWlter with multiple oversight·related sitevisits and desk-reviews. The participants of the Task Force also jointly detennined which grants had 

the greatest need for monitoring by developing and using a new recipient assessment framework. 

F APO reviewed the resulting plan and confirmed its alignment with Department-wide monitoring 

protocols and approaches being established as a result of the DHS Deputy Secretary's initiative to 

Improve the Health of DHS Financial Assistance. 

Concurrent with FEMA's effort to develop its FY 2013 monitoring plan, F..AJ>O led regularly 

scheduled monthly Financial Assistance Initiative Requirements Work Group meetings to 

 

www.oig.dhs.gov 14 OIG-13-40 
 OFFICE OF INSPECTOR GENERAL 

 Department of Homeland Security 

standardize all phases of the financial assistance lifecycle _ .. _. pre-award, award, post-award, and 

closeout. These meetings incorporated representation from a broad cross-section of all financial 

assistance awarding entities, including FEMA GPD. As such, GPD staff were fully aware of the 

protocols and templates being developed for each phase of the lifccyc1e and considered them. as 

appropriate, when developing the FY 2013 monitoring plan. 

As a result of this Deputy Secretary's initiative, DHS Directive 128~Ol, Financial Assistance Line of 

Business Integration and Management, and DRS Instruction 128-01-001, Financial Assistance Line 

oj Business Integration and Management insJruction, were approved and signed by the DHS 

Undersecretary for Management and the DHS Chief Financial Officer on October 15, 2012. and 

October 23. 2012. respectively (copies of these documents have been provided to OIG under 

separate cover). This guidance directs the creation of two Councils which, once formed. will 

institutionalize opJXlrtunities for open and continuing communication between those involved in 

developing grant-monitoring procedures, plans. and requirements. 

Given the actions already taken, DHS and FEMA jointly request that 01G consider this 

recommendation resolved and closed. 

Thank you for the work that you and your team did to better inform us throughout this audit. We 

look forward to the final report. Please direct any questions regarding this response to Gary 

McKeon, FEMA's Chief Audit Liaison, at 202-646-1308 

 

www.oig.dhs.gov 15 OIG-13-40 
 

 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix C 

AFGP and TISB Detailed Grant Program Information 

Assistance to Firefighter Grant Programs 

Purpose: To protect the health and safety of the public and firefighting personnel 

against fire and fire-related hazards, and to provide assistance for fire prevention 

programs. 

Grant Programs: 

•	 Assistance to Firefighters Grants – equipment, training, wellness and fitness, 

personnel protective gear, and vehicles 

•	 Fire Prevention and Safety – fire prevention education, smoke alarm installation, 

arson prevention, code enforcement, and firefighter safety research and development 

•	 Staffing for Adequate Emergency Response – hiring and retaining firefighters, and 

recruiting and retaining volunteers 

•	 Station Construction Grants – renovation or construction of fire stations 

Transportation Infrastructure Security Branch Grant Programs 

Purpose: To enhance the security of the Nation’s critical infrastructure, including 

metropolitan passenger rail and transit systems; ports; and intercity bus, freight rail, and 

passenger ferry systems. 

Grant Programs: 

•	 Freight Rail Security Grant Program 

•	 Intercity Bus Security Grant Program 

•	 Intercity Passenger Rail Security (Amtrak) 

•	 Port Security Grant Program

•	 Transit Security Grant Program 

•	 Trucking Security Grant Program 

Source: FEMA. 

www.oig.dhs.gov 16 	 OIG-13-40 
 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix D 

FY 2012 Programmatic and Financial Monitoring Key Risk 

Indicators 

Programmatic Monitoring Key Risk Indicators 

Indicator Guidance 

Cost and Total Support Recipients with high-cost projects or awards 

Complexity Project with multiple objectives

Prior Indication of 

Problems 

Available audit or evaluation findings, recipient requests 

for assistance, or data on the financial stability of the 

organization 

Experience of Recipient New or unstable organization, one receiving Federal grants 

for the first time, or one with inexperienced key personnel 

Time Since Previous Visit Grants must be monitored biannually, but need not be 

monitored each time by means of a site visit 

Agency Priority Predetermined leadership or agency priorities

Financial Monitoring Key Risk Indicators 

Indicator Guidance 

Grant Dollar Value Grant value that represents higher materiality relative to 

the region’s or Award Administration Branch’s portfolio or 

grant program from which it is drawn 

Grantee Responsiveness Timeliness of grantee responses to FEMA requests for 

information 

Administrator’s Priority Grant program identified by FEMA leadership as a priority 

New FEMA Grantee or 

Grantee With New 

Personnel 

Grantees without experience managing FEMA grant 

programs or with turnover in key positions

Number of Grants 

Managed

High volume of grants that may affect grantee 

effectiveness 

Prior Financial Monitoring 

Findings 

Grantees or grants previously identified through cash 

analysis or site visit as requiring additional financial 

monitoring 

Program Type Grant programs that inherently carry a higher risk relative 

to the region’s or Award Administration Branch’s portfolios 

Source: FEMA. 

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 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix E 

Major Contributors to This Report 

Michael Siviy, Director 

Lorinda Couch, Program Analyst 

Thomas Bobrowski, Program Analyst 

Tristan Weir, Program Analyst 

Kelly Herberger, Communications Analyst 

Jeanne Garcia, Independent Referencer

www.oig.dhs.gov 18 OIG-13-40 
 

 OFFICE OF INSPECTOR GENERAL 

Department of Homeland Security 

Appendix F

Report Distribution 

Department of Homeland Security

Secretary 

Deputy Secretary 

Chief of Staff

Deputy Chief of Staff

General Counsel 

Executive Secretary 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs

Assistant Secretary for Office of Legislative Affairs 

Acting Chief Privacy Officer 

Federal Emergency Management Agency

Administrator 

Assistant Administrator, Grant Programs Directorate 

Federal Emergency Management Agency Audit Liaison 

Grant Programs Directorate Audit Liaison 

Office of Management and Budget

Chief, Homeland Security Branch

DHS OIG Budget Examiner

Congress

Congressional Oversight and Appropriations Committees, as appropriate 

www.oig.dhs.gov 19 OIG-13-40 
 

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For additional information, visit our website at: www.oig.dhs.gov, or follow us on Twitter 

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