Department of Homeland Security
 

Homeland Security Grant Program 


Funds Awarded for Project Shield 


OIG-12-19 December 2011
 
Office of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

   DEC    21 2011

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 responsibilities to promote economy, 

efficiency, and effectiveness within the Department. 

This report addresses the effectiveness of Urban Areas Security Initiative Grant funds 

awarded to the Illinois Emergency Management Agency for Project Shield in Cook 

County, Illinois. It is based on interviews with employees and officials of relevant 

agencies, direct observations, and a review of applicable documents. 

The recommendations herein have been developed to the best knowledge available to our 

office, and have been discussed in draft with those responsible for implementation. We 

trust 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. 

Anne L. Richards 

Assistant Inspector General for Audits 
Executive Summary ........................................................................................................... 1
 

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

Results of Audit ................................................................................................................. 4
 

Planning ....................................................................................................................... 4
 

Equipment Functionality ........................................................................................ 4
 

Equipment Location and Integration ..................................................................... 5
 

Management ................................................................................................................. 5
 

Project Goals and Objectives ................................................................................. 6
 

Compliance With Regulations and Requirements ................................................. 7
 

Conclusion ................................................................................................................... 8
 

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

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

Appendices 

Appendix A: 

Appendix B: 

Appendix C: 

Appendix D: 

Appendix E: 

Purpose, Scope, and Methodology...................................................... 14
 

Management Comments to the Draft Report ..................................... 15
 

Evaluation of County Board President’s Vehicle .............................. 19
 

Major Contributors to this Report ...................................................... 20
 

Report Distribution ............................................................................ 21
 

Abbreviations 

DHS 

FEMA 

FY 

OIG 

UASI 

Department of Homeland Security
 

Federal Emergency Management Agency
 

fiscal year
 

Office of Inspector General
 

Urban Areas Security Initiative
 

Table of Contents/Abbreviations 
 

 

 

OIG
 

Department of Homeland Security 

Office of Inspector General 

Executive Summary 

In response to requests from Representative Mike Quigley and 

Senator Mark Steven Kirk, we audited the Urban Areas Security 

Initiative grant funds provided by the Federal Emergency 

Management Agency (FEMA) to the Illinois Emergency 

Management Agency for Project Shield. The project was for 

interoperable communication equipment in Cook County, Illinois. 

The purpose of the review was to determine if the funds were spent 

efficiently and effectively. 

Project Shield was intended to enable first responders to capture 

and share ongoing video and data from the wireless-equipped first 

responder vehicles or base station monitors in 128 municipalities 

within Cook County. Between fiscal years 2003 and 2009, Cook 

County was reimbursed approximately $45 million in federal funds 

for the installation and maintenance of Project Shield equipment. 

Urban Areas Security Initiative grant funds for Project Shield were 

not spent efficiently or effectively. The Urban Area Working 

Group and Cook County did not adequately plan or manage the 

project to ensure that the equipment worked properly; the system 

could be operated in an emergency situation; and the costs were 

reasonable, allowable, and allocable. This occurred in part because 

FEMA did not adequately ensure that the State of Illinois 

effectively monitored Cook County’s expenditures of Project 

Shield grant funds. As a result, the project was not implemented 

effectively, and millions of tax dollars may have been wasted on 

equipment that does not perform as intended. 

To improve the selection and oversight processes for the Urban 

Areas Security Initiative grant program, we recommend that FEMA 

discontinue future Project Shield funds until the grantee validates 

effective use of the equipment and ensures that the costs were 

reasonable, allowable, and allocable. We also recommend that the 

agency establish a review process for new technology projects and 

ensure that grantees perform proper oversight of subgrantees. 

FEMA concurred with the recommendations. Written comments 

to the draft report are incorporated as appropriate and included in 

their entirety in appendix B. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 1 
 

Background 

FEMA administers the Urban Areas Security Initiative (UASI) 

grants program, which provides financial assistance to states to 

address the unique planning, equipment, training, and exercise 

needs of high-risk urban areas. These grants also assist in building 

capacity to prevent, respond to, and recover from threats or acts of 

terrorism and other disasters. 

In letters to the Department of Homeland Security (DHS) Inspector 

General, Representative Mike Quigley and Senator Mark Steven 

Kirk1 expressed concerns about the appropriateness of Homeland 

Security grant funds for Project Shield in Cook County, Illinois. 

Funding for Project Shield was provided by UASI grant funds 

awarded to the Illinois Emergency Management Agency in fiscal 

years (FYs) 2003 through 2009. 

The intention of Project Shield was to enhance interoperable 

communications by installing wireless capability for first 

responders to access text, image, and video information in a fast, 

highly secure, and efficient manner. By installing mobile wireless 

video and data systems in first responder vehicles and fixed cameras 

at high-risk sites within Cook County, the system would provide 

high-speed connectivity among first responders, command vehicles, 

and supporting agencies to permit the strategic deployment of first 

responders during emergencies. This concept was first tested at the 

U.S. Open Golf Tournament held in Cook County in June 2003. 

In October 2004, the Cook County Board of Commissioners 

decided to install Project Shield equipment in 128 municipalities. 

Municipalities generally were to receive two vehicle video 

systems, a hot spot (site that offers wireless Internet over a local 

area network), and a tower camera. The equipment was primarily 

provided to police departments, but also was distributed to some 

fire and emergency management personnel. The installation was 

scheduled to be rolled out in phases. The Phase 1 contract was 

awarded in October 2004 for $12.8 million to establish systems in 

27 municipalities. In November 2005, the county awarded the 

Phase 2 contract for $11.3 million to establish systems for an 

additional 20 municipalities. 

Installations on Phase 1 began in March 2005 and continued 

through June 2006. Shortly after the vehicle video systems were 

1 At the time of the request, Mr. Kirk served in the U.S. House of Representatives. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 2 
installed, the municipalities started to experience equipment 

problems. As a result, the vehicle installations were stopped while 

an acceptable solution for the equipment problem was sought. 

In 2007, the county decided to terminate the Phase 1 and 2 

contractor, which had already received $23 million. In May 2008, 

the county awarded a Phase 3 contract to a new contractor for 

$10.9 million. The scope of work included new installations at 

some municipalities as well as repairs to existing equipment in 

other municipalities. 

According to Cook County officials, as of April 5, 2011, Project 

Shield equipment has been installed in 87 of 128 municipalities, of 

which 71 have vehicle video systems. Municipalities were still 

experiencing equipment problems and training issues. 

Between FYs 2003 and 2009, Cook County received more than 

$112 million in UASI funds, and dedicated more than half of those 

funds to Project Shield. To date, Cook County has expended more 

than $45 million on the project. Table 1 provides an annual 

breakdown of Cook County grant awards and expenditures for 

Project Shield. 

Table 1. UASI Grant Awards to Cook County, FYs 2003–2009 

Fiscal 

Year 

Total UASI Award 

for Cook County 

UASI Funding 

for Project Shield 

UASI Funds 

Expended on 

Project Shield 

2003 $12,848,927 $12,399,292 $12,496,924 

2004 $16,110,715 $11,303,495 $9,730,379 

2005 $22,465,000 $15,836,810 $13,867,261 

2006 $13,065,000 $5,210,254 $3,609,212 

2007 $16,548,000 $3,000,000 $2,367,876 

2008 $15,904,525 $5,331,425 $3,567,144 

2009 $15,225,309 $5,622,756 $0 

Total $112,167,476 $58,704,032 $45,638,796 

Source: Office of Inspector General (OIG) Analysis of FEMA Grant 

Files and State of Illinois Project Shield Expenditures. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 3 
 

 

Results of Audit
 

UASI grant funds for Project Shield were not spent efficiently or effectively. The 

Urban Area Working Group and Cook County did not adequately plan or manage 

the project to ensure that the equipment worked properly; the system could be 

operated in an emergency situation; and the costs were reasonable, allowable, and 

allocable. This occurred in part because FEMA did not ensure that the State of 

Illinois effectively monitored Cook County’s expenditures of UASI grant funds for 

Project Shield. As a result, Project Shield was not implemented effectively, and 

millions of tax dollars may have been wasted on equipment that does not perform 

as intended. 

We also addressed a concern regarding the retrofitting of the vehicle used by the 

President of the Cook County Board of Commissioners with Project Shield 

equipment. This issue is discussed in appendix C. 

Planning 

Comprehensive project planning can reduce the potential for problems 

with the functionality, location, and integration of existing equipment. 

However, minimal planning occurred prior to implementation of Project 

Shield. The equipment failed during extreme hot and cold temperatures, 

was not always targeted at the most critical infrastructure, and at times 

prevented first responders from accessing critical databases needed to 

perform their jobs. These problems added to the cost and time to complete 

the project and reduced the project benefits. 

Equipment Functionality 

Cook County did not ensure that the concept of the project was 

adequately tested before awarding an initial $12.8 million contract 

and subsequent contracts for approximately $23 million for the 

project. This project used a combination of technologies to 

provide secure, wireless, and seamless video communication. 

Although the concept was tested at the U.S. Open Golf Tournament 

in Cook County in June 2003, the conditions at this test site were 

not indicative of the actual conditions expected for Project Shield 

in terms of weather, location, and integration with existing 

equipment. 

The temperatures during the trial period were far different than the 

extreme hot and cold temperatures experienced annually in Cook 

County. For example, during the first encounter with seasonal 

temperature changes, the hardware did not perform within the 

required parameters. The temperature fluctuations caused 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 4 
 

 

equipment failures that were not predictable, resulting in delays as 

the problems had to be investigated and resolved. 

Equipment Location and Integration 

Equipment at the municipalities was not always effectively 

located, and in some situations the Project Shield software would 

not integrate with existing communications equipment. Cameras 

were often mounted on police communication towers because of 

distance limitations, the costs for hardwiring, and reception 

problems. These cameras often targeted police parking lots, 

streets, and intersections with questionable homeland security 

benefits. Fixed cameras were also installed in police station 

lobbies, which sometimes duplicated existing capabilities. 

The county learned during the implementation phase that the 

software on the Project Shield wireless computers was not 

compatible with municipalities’ central dispatch systems. This 

resulted in some police officers being unable to access critical 

databases from their vehicles for such items as criminal records, 

warrants, license plates, and vehicle registrations. 

When asked about the lack of planning, county officials informed 

us that the project was initiated at a time when funds were not 

available to conduct planning. Funds were targeted to projects 

ready for implementation. However, Federal Acquisition 

Regulation Subpart 34.005-3 states that whenever practical, 

contracts to be performed during the concept exploration phase 

shall be for relatively short periods, at planned dollar levels. The 

county should have used short-term contracts to refine the 

proposed concept and to reduce the technical uncertainties. 

Management 

Project Shield funds were not always used appropriately in achieving the 

project’s goals and objectives, and Cook County was not always in 

compliance with federal regulations, agency administrative requirements, 

and relevant Office of Management and Budget circulars. Because of 

ineffective subgrantee monitoring, FEMA and the State lacked assurances 

that Cook County personnel could use the equipment during an emergency, 

and that the expenditures for the project were allowable, allocable, and 

reasonable. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 5 
 

Project Goals and Objectives 

The intent of the project was to transmit video from both mobile 

and fixed cameras during an emergency to decision makers so they 

could strategically deploy first responders. However, the county 

was unable to provide assurances that the municipalities could 

operate the equipment as intended. During visits to various 

municipalities with Project Shield equipment, first responders 

informed us that the equipment was not working, was removed, or 

could not be properly operated. 

Video was transmitted from fixed cameras throughout the county; 

however, we were unable to obtain adequate assurance that the 

video from the vehicle cameras could be transmitted. Municipalities 

were uncertain whether the mobile equipment could transmit video, 

either because the equipment was deficient or because they could 

not operate it. Cook County officials stated that the equipment was 

never officially tested during a Homeland Security exercise. 

Therefore, the county cannot provide adequate assurance that the 

equipment could be used effectively in an emergency situation. 

Of the 128 municipalities in Cook County, we found that: 

•	 32 never had equipment, 

•	 9 left the program after participating in the project, and 

•	 87 have Project Shield equipment, of which 71 have 

vehicle video systems. 

We visited 15 municipalities, which included 14 police departments 

and 4 fire departments, and found numerous problems, including 

equipment malfunctions, unused equipment, and uncertainty on 

how to operate the equipment. We could not determine the exact 

cause of the equipment problems but noted that many users of the 

Project Shield vehicles did not have the necessary training on the 

equipment. 

The results of our 15 visits identified the following: 

•	 4 of 15 municipalities returned all of their Project Shield 

vehicle equipment, 

•	 10 of 15 municipalities complained about either a lack of 

training or the quality of training provided, 

•	 7 of 11 municipalities with equipment complained about 

current service, and 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 6 
 

•	 4 of 11 municipalities with equipment were unable to or 

unsure how to transmit video from the vehicle to the 

command center. 

Discussions with police personnel revealed that their primary 

interest was to record and obtain video for criminal evidence. 

They were uncertain whether they could transmit live video to a 

monitoring station, allowing an emergency event to be managed 

from a remote location. 

We also analyzed trouble tickets (a reporting tool used to track 

equipment issues) for the last 3 months of calendar year 2010, and 

found that 62 municipalities submitted 122 trouble tickets for 

equipment malfunctions, such as the inability to access database 

records in the vehicle. 

Compliance With Regulations and Requirements 

Cook County did not always comply with procurement, property, 

and record requirements. We found missing records, improper 

procurement practices, unallowable costs, and unaccountable 

inventory items. We were unable to reconcile invoices with the 

contracts and modifications, and we could not verify that all 

incurred costs were reasonable, allowable, and allocable. For 

example: 

•	 The project was initiated in FY 2005 and incurred 

approximately $7 million in maintenance cost for 6 years, 

even though maintenance costs were not allowed for prior 

grant year acquisitions until 2010. 

•	 The county awarded a noncompetitive contract on Phase 2 

for $11.3 million. 

•	 Phase 1 and 2 contracts had 218 change orders, and we 

were unable to obtain documentation for 168 change orders 

with some changes amounting to as much as $413,555. 

•	 The county approved major revisions to the Phase 2 contract 

without evidence of grantee approval. For example, Change 

Order No. 130-2 altered an $11 million contract, reducing 

the line items by more than $6 million and then substituting 

new items totaling $4.3 million, additional maintenance for 

$1.1 million, and a $750,000 contingency fund. 

•	 Sampling of decommissioned equipment from Phases 1 and 

2 revealed that 18% of the items were missing from the 

inventory. Physical inventory reconciliations were not 

performed as required. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 7 
•	 The Phase 3 contract had only one change order, which 

extended the contract 6 months without additional costs. 

However, this contract increased from $10.9 million to 

approximately $23 million, and the contract period was 

extended over 2 years. 

Conclusion 

FEMA, the State of Illinois, the Urban Area Working Group, and 

Cook County did not ensure the effective implementation of 

Project Shield. The lack of planning was evidenced by faulty 

equipment, questionable locations for the equipment, and inability 

to integrate with existing communication equipment. The mobile 

video systems were not adequately tested to ensure that they could 

be operated effectively during an emergency. Project Shield 

expenditures were not adequately authorized, supported, and 

verified. The weaknesses can be attributed to Cook County’s 

inadequate management of the project, as well as the ineffective 

monitoring by FEMA and the State of Illinois. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate: 

Recommendation #1: Develop a review process for new 

technology projects to ensure that they are properly evaluated prior 

to project planning, design, and implementation. 

Recommendation #2: Discontinue funding of Project Shield until 

the grantee can ensure that the mobile equipment can be operated 

effectively. 

Recommendation #3: Determine that Project Shield costs are 

reasonable, allowable, and allocable. 

Recommendation #4: Ensure that the grantee performs adequate 

oversight of UASI projects implemented by subgrantees, including 

compliance with grant regulatory and administrative requirements. 

Management Comments and OIG Analysis 

Management comments to recommendation 1. FEMA 

concurred with the recommendation. FEMA noted that it places 

greater scrutiny on proposals for “proof of concept” projects 

during the application phase, because the nature of some proposed 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 8
 
equipment included in the “proof of concept” projects is often 

untested. FEMA said that the Investment Justification template 

developed in FY 2006 and utilized in all subsequent fiscal years 

requires Homeland Security Grant Program applicants to describe 

the planning activities for proposed projects during the application 

process. 

According to FEMA, in FYs 2008 and 2009 it required all grantees 

to allocate 25% of their State Homeland Security Program and 

UASI grant awards to planning activities. FEMA also said that 

grant guidance in FYs 2010 and 2011 extensively referenced 

planning activities to reinforce the critical need for pre-planning 

associated with technology projects. 

We agree that since this project was initiated, FEMA has revised 

the application process for awarding the UASI grants, and requires 

more evidence to support the Urban Areas’ planning effort. 

Homeland Security Grant Program guidance issued for subsequent 

fiscal years has targeted funding for planning activities. However, 

FEMA still needs to ensure that it has a process in place that will 

enable “proof of concept” projects to undergo an independent 

technical evaluation to determine feasibility prior to project 

planning, design, and implementation. This recommendation 

remains unresolved and open. 

Management comments to recommendation 2. FEMA 

requested that recommendation 2, as presented in the draft report, 

be separated into two distinct recommendations in order to 

effectively address the OIG intent. We agreed and have separated 

the recommendation into recommendations 2 and 3. We have also 

relabeled the prior recommendation 3 as recommendation 4. 

FEMA concurred with the original recommendation 2, and stated 

that it will coordinate with the State and Cook County to establish 

a “current state” action plan and associated timeline that will: 

(1) identify obligated and unobligated balances from Cook 

County’s approved Project Shield activities (FYs 2007 through 

2010), (2) identify existing technology gaps and hardware/software 

issues associated with Project Shield, and (3) identify personnel 

training gaps on existing technology within participating 

jurisdictions. FEMA indicated that during the period of the 

development of this plan, it will require that any new expenditures 

associated with Project Shield be temporarily put on hold and 

payments for existing expenditures comply with Code of Federal 

Regulations Title 44 §13.21 (g) (Withholding payments). 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 9 
FEMA stated that it is confident that this action plan can be 

completed within 90 days from the date of this report. According 

to FEMA, in July 2011 Cook County officials communicated to 

FEMA in writing their intent to cease and desist current Project 

Shield activities, and requested assistance in establishing a path 

forward that addresses generally those elements of the proposed 

action plan above. FEMA stated that it is committed to working 

with the State and Cook County to complete this plan, using it as 

the basis to assess the best project strategy moving forward. 

Cook County officials acknowledged that there were systemic 

issues with project management and the functionality of the 

technology implemented. Cook County did not adequately plan or 

manage the project to ensure that the equipment performed as 

intended or operated under foreseeable conditions. Cook County 

officials also stated that it appears highly unlikely that the installed 

equipment could be used effectively in an emergency situation, and 

as a result, they have elected not to move forward with Project 

Shield. According to Cook County officials, they removed the 

cameras from the vehicles because of a safety issue, and intend to 

conduct a Threat and Hazard Identification and Risk Assessment to 

identify critical infrastructure and locations where enhanced 

security measures would be recommended. Cook County officials 

said that based on this assessment, the fixed cameras would be 

redeployed to the sites warranting this equipment. 

The actions proposed by FEMA and Cook County are responsive 

to the intent of the recommendation and, if properly implemented, 

should ensure the Project Shield equipment that still has value will 

be used effectively. This recommendation is considered resolved 

and open pending FEMA notification and verification that the 

action plan has been completed. 

Management comments to recommendation 3. FEMA 

requested that the new recommendation address proposed costs to 

support Project Shield. However, the intent of our recommendation 

was to ensure that all expended costs for Project Shield be 

reviewed to ensure that they were reasonable, allowable, and 

allocable. 

In its response, FEMA stated that building on the “current state” 

action plan for recommendation 2, it will coordinate with the State 

and Cook County to establish a “future state” action plan and 

associated timeline, which will be the basis of FEMA’s evaluation 

to determine if proposed costs to support Project Shield are 

reasonable, allowable, and allocable. According to FEMA, this 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 10 
 

 

action plan will include: (1) a revised scope of Project Shield 

activities, (2) a revised budget that includes equipment details and 

training needs, (3) a timeline with expected completion dates that 

aligns proposed future costs with the open grant, and (4) reporting 

requirements that communicates the status of project details and 

deadlines from Cook County through the State to FEMA. 

FEMA stated that it will review the action plan details in 

coordination with the grantee and Cook County as a UASI 

subrecipient, and examine any unobligated balances from open 

UASI grants specifically approved for Project Shield activities. 

According to FEMA, this process will conform to the modified 

project scope to meet Cook County’s efforts to ensure that all 

equipment is installed, functioning, and meeting the needs of the 

project. 

Cook County officials stated that they continue to conduct an 

internal audit of previous practices with respect to accounting, 

grant management, and financial transparency. The officials are 

working to address past issues with respect to procurement, 

property, and record requirements to ensure a transparent and 

accountable system that is guided by performance metrics. 

Cook County officials also stated that regarding project costs, a 

sampling of available records indicates that purchases were 

allocable, reasonable, and with proper authority, allowable. They 

also stated that the contracts were competitively bid, multiple 

levels of government performed oversight of the project, and 

efforts were made to correct a variety of issues. 

We disagree with the comments from Cook County officials 

regarding project costs. The Phase 2 contract was never bid 

competitively, and approval from the Board of Commissioners 

does not ensure that the costs were allocable, reasonable, and 

allowable. 

The actions proposed by FEMA are not responsive to the intent of 

the recommendation, which was to determine whether the costs 

incurred to date were reasonable, allocable, and allowable. 

Instead, FEMA requested that the recommendation address 

proposed (future) costs. We disagree with the change, and request 

FEMA to address our original recommendation. This 

recommendation remains unresolved and open. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 11 
Management comments to recommendation 4. FEMA 

concurred with the recommendation. FEMA stated that 

recognizing that the scope of this audit dated back to activities 

funded with FY 2003 preparedness program dollars, it has vastly 

enhanced the guidance development, monitoring, and oversight 

functions of its programs since that time. FEMA stated that the 

same holds true for the State, which initiated a robust subrecipient 

monitoring policy in 2008, which FEMA approved. 

FEMA stated that coordination between FEMA headquarters’ 

programmatic and financial personnel and grant management 

specialists in FEMA Region V enables FEMA to ensure that all 

grantees perform oversight of subrecipient projects. According to 

FEMA, its programmatic and financial monitoring of the state 

measures compliance with federal regulations for subgrants, 

monitoring and reporting program performance, financial 

reporting, retention and access requirements for records, and 

enforcement. 

Also according to FEMA, its existing monitoring processes are 

structured to ensure that all grantees perform adequate oversight of 

subawards, and mechanisms are in place to identify, report, and 

recommend any changes needed in subrecipient monitoring 

protocols at the state level. FEMA also stated that it provides 

technical assistance and training to grant recipients and 

subrecipients on all guiding policies, regulations, and directives 

associated with its federal grant programs. 

State officials informed us that although they are the grantee, 

according to FEMA Homeland Security Grant Program guidance 

they do not have the ability to make changes to the UASI program. 

They claim that the Urban Area Working Group is responsible for 

planning and managing the project, and that the State is only a 

voting member of the Working Group. State officials said they 

have a subgrantee monitoring program and through the program 

were aware of problems with subgrantee equipment inventory 

records. State officials further claimed that they draw down funds 

only after a thorough invoice review, do not have the opportunity 

to manage the project, and are doing all they can legally do 

regarding implementation of the project. State personnel also 

pointed out that FEMA did a monitoring review of the State and 

found no significant problems. 

In addition, Cook County officials stated that they are undertaking 

a complete accounting of all grants, expenditure, accounting, and 

tracking practices, as well as controls. They stated that a 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 12 
comprehensive process-based system will be developed to ensure 

that procedural safeguards are in place to ensure the proper use, 

management, and tracking of grant dollars. 

We acknowledge that the guidance for UASI has changed over the 

past few years and that administrative requirements shifted from 

the State to the Urban Area Working Group. Regardless, the 

deficiencies cited in this report were significant and should have 

been detected by both FEMA and the State during their reviews, 

and corrective actions initiated sooner. We believe that the current 

system of monitoring UASI grants is flawed, and both FEMA and 

the State need to improve the review process and perform better 

oversight of compliance with the grant regulatory and 

administrative requirements. The actions proposed by FEMA and 

the State are not responsive to the intent of the recommendation. 

This recommendation remains unresolved and open. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 13 
 

 

Appendix A 

Purpose, Scope, and Methodology 

The purpose of our review was to determine if the funds for Project 

Shield were spent efficiently and effectively. To address this issue, 

we reviewed applicable federal laws and regulations, as well as 

DHS and FEMA guidance, policies, and procedures. We also: 

•	 Interviewed FEMA and Illinois Emergency Management 

Agency officials concerning the process used to evaluate 

and award the UASI grants to the Illinois Emergency 

Management Agency; 

•	 Reviewed UASI award documents, reimbursed 

expenditures, and monitoring reports from FYs 2003 to 

2010; 

•	 Visited the Department of Homeland Security and 

Emergency Management in Cook County, Illinois, to 

interview county officials, and to obtain and review records 

on Project Shield concerning compliance with the 

applicable administrative requirements and cost principles; 

•	 Interviewed the Cook County contractor responsible for 

Phase 3; 

•	 Judgmentally selected 15 of 128 municipalities for site 

visits and examined Project Shield equipment at these 

locations; and 

•	 Examined property records for Project Shield equipment 

purchased during Phases 1 and 2 of the project. 

We conducted this performance audit between January and June 

2011 pursuant to the Inspector General Act of 1978, as amended, 

and according to generally accepted government auditing 

standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based upon our 

audit objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based upon our 

audit objectives. 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 14
 
Appendix B 

Management Comments to the Draft Report 

SEP ! 4 2011 

MEMORANDUM FOR: Anne L. Richards 

Assistant Inspector General for Audits 

O!Ticc, of IrlsP~<~lQtPcneral 

FROM: r5~JLf'J~~~fi;;;:{h._"", .. """""., 

Din:dm 

Office ofPolic), tmd Progrnm AnaJysis 

SUBJECT: FEMA's Response to OrG Draft Report (Project Number 11~102~ 

AUD~FEMA), Homeland Sccuri(y Grant Pmgram Funds Av.'urded 

for Project Shield 

The federal Emergency Management Agency (FEMA) appreciates the opportunity to review and 

respond to the Of lice of Inspector General (OIG) draft report. The following arc our responses 

to your recommendations t()l' corrective action. 

Recommendation #1: Develop a review process for new technology projects to ensure that they 

arc properly evaluated prior to project ph.mnil1g, design, and implementation, 

FEMA Response: FEMA concurs with the recommendation, however, notes that FFMA phices 

b'T"catcr SLTutiJlY UIl pnJPusals fin "proof of concept" projects during the application phase. This is 

because the nature of some proposed equipment included in the "proof of concept" projects IS 

olhm untested. Further, the Investment Jusbfication template developed in FY 2006 and utilized 

111 all subseqnmt fiscal years under the Horndand Security Grant Program (HSGF), requires 

2tr:;plicants d':s<ribc the planning i>Aiv;tiesfi:.;r propoc,:oJ nrojcct5 during the appli;.:atwl) 

jJrDO,~SS_ SpGC;!i:-D.U;·, 1h0 hwcst:uz'nt Jlnt:iication t(',;11piute vVhiCh applicants arc ,eqlilfcd tf' usc 

~Yh8n pn:p:;t,jng arid submil1ing ihetl appliCa1L)f) the dpp:icant to identify project 

milestones:_ pOlenti,,} ciJ;,11engcs ir, dJi:~ effeC1: V," i)f ill; invcsi.mcn:. itnd fiTthcL 

b(:"\\' th05~~ chlknges \\ill be addr::;scd and lLiLg'ltC(:. Tbs requirement is :'ieee quite otten by 

FEM/\ stn!J during tbe eXHmi:1aiion of state supplemental gmdunce fcqulfGmcnts, \\.-h(.~rcby 

prospective mbrccipicnt:,; ale required by be State Administrative Agency' (Sf-\A) to provide 

~])C:ciik project r1ct,\jJ "~in6uding I:H rdil'cd planning: dctr\'itie; in ;-ulvance (,1' any 'dhn~ljpiem 

"co::<c-ing h,tdIT:g, -Chis iJ':fi::-nn;:lLion is cri j cal if' providing jhc SAA the de-ta:! n;: '-dd ti) report 

OF)grc35 tlJroug.hFE:i\'!/\':i 5;tnltegj' ;mph::rnS1'lLltl(,n 'J)'.XV recent years, 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 15
 
Appendix B 

Management Comments to the Draft Report 

recognlzing the critical jmpoJ'taJlu:: plannillg play:.: in any project ,'I" \vel\ as the (lVenlll need f()J' 

(;,ttcctive planning in support c,f sILtc, local and rcgioHul homeland security activities, FEMA 

r('quircd all grantees to allocate 251~,;) or their State Homeland Security Grant Program (SHSP) 

and Urball Are,;s Security ldtinlive ellA.S!) grant program a\vard to planning acth:ities in FY 

20()S and FV 2009. rinally, though J101 a requirement ill FY 2010 and FY 20{ 1 like 11w prior two 

fiscal years, IISGP guidance references planning activities extL'T1sively to rcinf(Jrcc the critical 

needk:f pre-planning activities associaK'(l \-vith all equipment and technology proje{.'1s. (\s of this 

report, aU F'{ 20C)() and prim HSGP dnd liASl gr:mt Hwnrds have ex.pired and/or are offkially 

dosed t(Jr the State of JllilW1S (based on FEMA records). Based on the details dcscrihed here (lnd 

the speciticity FEMA requires from grantees fix program awards in FY 2007 and t()t"ward, 

FFMA believes YNe have met the intent of this f(."C011lmencation and requests that this 

rcc"'ommendation be resolved and closed. 

Recommendation #2: Diseontinue funding of Project Shield until the grantee can ensure that the 

r;whilc equipment can he opeLlled effectively, and determines thBt the costs are reasonable, 

allowable, and allocable. 

FEI\tA Response: FEMA concurs with the recommendation, and requests that 

Rccommcmlation #2 he separated into two distinct recommendations in order to effectively 

nddress the orG intent. FEMA requests that the modified Rccollllllcndation #2 read as f~)ll(nvs: 

"DiscolllinuefilIlding ofP"oject Shield uilril the grantee can e!Ism'" dUll the mobile equipmcm 

c{ln be opc1'med effective!:I'." [n response to the l11(xiified Recommendation #2, FEMA will 

coordimltc \V]t)] thi: lllinois Erncrgcncy Management Agency (lEMA), serving as the SAA, and 

C'ook County DcptlJiment of Homeland Security and Emergency Milnagement (DHSEM) to 

establish a CUlTcnt state action plan and associated tirneline th2t will: (1) identify both obliga1cd 

and unobligated balances from Cook County's open grants (FY 2007 through FY 2010 U,;\S1), 

dedicated to previously approved Project Shield aClivities; (2) identify existir~g technology gaps 

and hardware/software issues associated with Projt;d Shield equipment that the County has 

already identitied cs needing to be addressed und remedied; and (3) identify personnel training 

gaps on existing technology within those jurisdictions currently pilrtieipating in the Proiect 

Shield initiative. During the period ofthc development of this plan, FEMA \",ill require that any 

new expenditures Dssociatcd lvith Cook Cmmly's Project Shield activity be temporarily put on 

hold and payments t(l!" existing eXjK'nditures cOl1lplywith 44 eFR Pari 13 § 13.21(g) 

(rYilhho/ding pa.vmcrlls), 

FEMA ilw: CO!11pleted 

,is 

is cnnl~dcnj ihi:; action pi; n CHn be ",vithin 9() i1a:ysfrclU ;he date Dfthis 

r';,pcrL ('cok COULt y Li1 rSEM [1<15 ;dread) begun h;,ding this (:ffi::!lt ea:oly .fuly 2Dl1 , 

IJHSE,i\'l ccmmulli(:~lkd in vvritng to FEIvL\ thi;;;r intent to ;,md Jcsi~i em Cdrr':nt Projt'ct 

Shkld actid[y and {c(nested assistance int()yward ,,\'lueL ,lddn,'s5cs g,ollcfaFy 

UtiJSi;: t<cHl cnis of the propnscc cutTen! state Hd.ion pbn FE\J.'\ is (;(,;mnincd to 1'Jerking 

,'lith beth IE~vJA ;~nd I)HSLM tu C01Tlph::k til::, plan, USLlg it dS i.he llib:" io ;L~:,e"'" Ihe lwst 

project stTJ.tcgy mm'ing Lxward, F'EMA bclic'iC:; thjs sati~di s the intent <:>fthe xCOHl:ncndaLon 

and requests thm ths rt'('o111mcnd:Ficn fdnain r('so!ved and O\X11 :JenGmg lmplemenlntio'l of the 

sUlicd U;ITt'cl:ve !K:t!();1S' 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 16
 
Appendix B 

Management Comments to the Draft Report 

FE.\,tA lcqueS!:-' :t Hew n:,:oHHlHciHblion he ,ldded 10 :THeel the ~econd issue \vhkh the eunent 

Rccommend'ltion #2 addresses. This new Recommendation #3 should read as ji:Jlhw,'s: 

"J)c!c," inific that currCIII proposed costs to support Pruit'c: Shield c().',Is arc rca.wrJabic. 

tllioH'ab!e, and ()11ocable" Building on rhe action plUl1 referenced under the Rceommcndation 

#2 response, FEMA vvi!! coordinate .. vitI! lEMA amI Cook County DHSFM to establi<1 a future 

state action plan and associated timclinc which \vill he the bdsis ofFEMA's cyaluation to 

determine if proposed costs to support ProjL'Ct Shield are reasonable, aHowab!e. and allocable. 

'rills action plan \vill include: n) a revised scope ofProjcct Shield activities for Cook Coumy, 

per FEMA's Investment t\'1oditicatiDn request process; (2) a re"vised budgCl that includes 

cqu:pment details and training needs ti:)f Cook County llnd any affected Project Shield partner 

jurisdictions: (3) a timeline 'shlch aligns proposed future costs to the respective open grant nnd 

expected completion daLes: ami (4) per direction from FEMA, set reporting requirements, to 

include projcc~ details and deadlines, that communicates the :;tatus of acti"vity under the fuure 

:lction plan, to be provided by C'ook County through lEMA to FEMA. In coordination with the 

gnmlt:e and COOK Cuunty as il LlASI subrccipient, FEMA wil! revic~\v the fmurc state action plan 

details (1-4 abo\'c) and examine any 1.1!lobligatcd balances frull! opc'uU AS 1 gnn1s (spt.~eiticalJy 

approved Tor ProjL'Ct Shick: acti-vitics) that can SUPlX1Ji ('UlTcnt needs. This process wil! conf(mn 

to the moditled project scope to meet Cook County's effi:1flq to ensure ad equipment is installed, 

functioning and meeTing the intt'nded cc('d of the Project at large. FEMA will provide the 

timc1inc tilT completing this action plan ill thc response to thei'inaJ report, as Ihe timelin(' is 

dependent on the completion of the COITectiyc nctions in the revised Recommendation #2. 

FEMA believes this satistles the intent of the recommendation and requests that tilL" 

recummendation remain resolved and open pending implementation o1'lhe stated corrective 

actions. 

Recommendation #3: Et1SUfC that the grantee performs adequate oversight ofUASI projcct~ 

implemented by subgranlees, i[;duuing r:omplimlce with grant regulatory and administrative 

rn]uircmcnts. 

FEMA Response: FEMA concurs with the recommendation. Ba<;cd on the response to the 

original Recommendation #2, we request that this reco:nmendation be renumbered as 

Recoflllllcmlatinn #4. Ret:Dgnizing that the scope of this alll111 dated hack to activities funded 

with [:y 2003 prcpanxlness program dollars. FEMA has vastly cJlhanccd tbe g1.;idancc 

development, monltc1ring and o;..'crsight functions of its programs sincc that ::ime. Tlis same 

h{)lds true to the StaL: of Illinois SA/\" which initiated a rubust wbrcc::pi('l1t monitori,;g pelisy in 

200i \Nhich FFMA :Jpprm'cd. 

AJ the ii;xle' a] leve:' coDrdjn~tticn bBtviCC;;lF!:· 1\I;/\ ]"k;::d quJrtcrs' progranl1T;[,t1.c Cind tinanc inl 

personnt:': and grant rr.;;,nage'nent specialists in FErv1A ('(eglon V contribue g(catly to the s~(}P : 

(If :UUil.itOl in;; ami L)vcl.si).:,,h1 ;'eli , ilit:..; T1-I1"; provides 'T\Cilnstl", our ng:en.cy :0 CHSl\n; tila! ,:11 

grantees perfofm oversight cd' 3'..lbrccipicnt projects pcr 44 C>FR P;tli J:3 ?l 337 (Sldlwams): 

S 13.40 (Aknitoring alld reporting progmn; pcr!orifJmlcf'); ~ 13.4 J O;tnan('/o! nportiI!g); and 

S 13,42 (Rcl('ntion ond tleLCSS' rcq:li('cmcl!!sjiy I'ec~)ras): ant S j;) A2 {En,(orccn1ent), COlllpli;::nc0 

LI;;~S i~ \Uh'j:1FS is Plcasured during pn.lgrmnn.aric ar,d tin a'1cinl moni~oring (lfthe 5tate 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 17
 
Appendix B 

Management Comments to the Draft Report 

regulations arc cited \',lithin ail ofGPl)'s guidance and appheato!1 kits, indud1l1g the Urb:l.l1 

Areas SeL~Llrity Initiatlvc (UASI) Grant Program, and have been recently standardized I~)[ all of 

GPD'" prepan:dncss grimt program application kits ill FY 20ll. Additional!y, FFivlA GPO starT 

is available dny~to-day and work closely \vith grantees and subrecipjl.'nts in order to provide 

clarifYing guidnnce, insight and explamtion l't;;'garding any of 01..11' pwgrannnatic cr tlnanClal 

n::gulcltions 

FEi\1A' s existing monitonng processes are structured to ensure that all grantees pcri('rrn 

ndequate oversight of the subav/ards issued under the preparedness grant programs. Mechanism.~ 

at' m place -within cunent financ id alld pmgrannnatic lnoTlit()ring tools to identify'" :"epol"t, and 

recommend any changes needed in subrccipicnt monitoring protocols at the statc level ',vhicb arc 

used to review state subrccipicnt activity. FE:\1A \vlll continue to mOlLtm the state's 

suhrecipient monit01ing, as per current monitming protocols, ft)f all future programmatic and 

financ ial r:'lonitoring visits. FEMA hdit'vcs this silLisfies !hf:~ inlent nfthe recommendation and 

requests that this ;"ccommendation be resolved and closed. 

Ag::lin, we thank you t(n the opportunity to review and comment on your draft report which 

contains recommendations aimed at improving the d:licicl1cy of our agency. Should you have 

further questions regarding our response, please do not hC3itatc to call FEMA's Chief Audit 

Liaison, Brad Shetk", at 202-646~! 308. 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 18
 
Appendix C 

Evaluation of County Board President’s Vehicle 

In a letter to the DHS Inspector General, Representative 

Mike Quigley and Senator Mark Steven Kirk expressed concerns 

about the vehicle used by the President of the Cook County Board 

of Commissioners being equipped with Project Shield equipment. 

They were concerned that these funds should be used for 

emergency responders, not for executive transport. 

According to Cook County personnel, Homeland Security funds 

were used to retrofit the vehicle with communication equipment. 

The rationale for installing this equipment was that the President of 

the Cook County Board of Commissioners needed access to 

current information to make real-time decisions during emergency 

events in the county. We found no specific grant guidance that 

would disallow this cost. 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 19 
Appendix D 

Major Contributors to this Report 

Michael Siviy, Director 

Dennis Deely, Audit Manager 

Tricia Benson, Auditor-in-Charge 

LaTrina McCowin, Auditor 

Kevin King, Auditor 

Enrique Leal, Auditor 

Dawn Eliece Pizarro, Referencer 

Homeland Security Grant Program Funds Awarded for Project Shield 

Page 20 
Appendix E 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

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 

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 

Homeland Security Grant Program Funds Awarded for Project Shield
 

Page 21
 
 

 

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