Letter Report: 


Maryland State Police Use of DHS Grants
 

Department of Homeland Security 

Office of Inspector General 

OIG-09-04 October 2008 
 

 

Office of Inspector General 

U.S. Department of Homeland Security

Washington, DC 20528 

October 24, 2008 

MEMORANDUM FOR: 	 The Honorable R. David Paulison 

 Administrator 

 Federal Emergency Management Agency 

FROM: 	 Richard L. Skinner 

 Inspector General 

SUBJECT:	 Maryland State Police Use of Department of Homeland 

Security Grants 

As requested by Secretary Chertoff, my office examined the Federal Emergency 

Management Agency (FEMA) preparedness grants awarded to the Maryland State Police 

from FYs 2003 to 2005. The objective of our examination was to determine whether 

Maryland State Police complied with federal regulations and FEMA guidelines in the use 

of these funds. Appendix A provides further details on our objective, scope, and 

methodology. 

Maryland State Police complied with limitations and requirements in the use of FEMA 

preparedness grant awards from FYs 2003 to 2005. During this time, the Maryland 

Emergency Management Agency and other Maryland recipients received approximately 

$161 million in FEMA preparedness grants. Of this amount, the Maryland Emergency 

Management Agency provided approximately $5 million in preparedness grant awards to 

Maryland State Police as a subrecipient. Maryland State Police made no unauthorized 

purchases using these funds and, along with the Maryland Emergency Management 

Agency, provided sufficient documentation to support all itemized expenditures. We are 

making no recommendations in this report. 

We discussed the results of our examination with FEMA officials who concurred and 

provided written comments, which are attached in Appendix B. We also discussed the 

results with the Maryland Emergency Management Agency and Maryland State Police 

and they also concurred. Should you have any questions, please call me, or your staff 

may contact Anne L. Richards, Deputy Assistant Inspector General for Audits, at (202) 

254-4100. 

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Background 

Since 2002, the Department of Homeland Security (DHS) has distributed more than $19 

billion in preparedness grants to enhance the nation’s ability to prevent, prepare for, 

protect against, and respond to natural disasters, acts of terrorism and other man-made 

disasters. The Post-Katrina Emergency Management Reform Act of 2006, Public Law 

109–295, places the responsibility for allocating and managing these grants with FEMA. 

FEMA administers these grants through its Grant Programs Directorate. Initially, DHS 

administered these grants through the Office of Domestic Preparedness, which 

transferred from the Department of Justice to DHS in March 2003. The Office of 

Domestic Preparedness was subsequently consolidated into the Office of State and Local 

Government Coordination and Preparedness. This office became the Office of Grants 

and Training, which subsequently became part of FEMA. 

The Maryland Emergency Management Agency is the administrative agency appointed 

by the governor to administer FEMA preparedness grants. These preparedness grants are 

awarded under FEMA’s Homeland Security Grant Program and Infrastructure Protection 

Activities grants programs. Homeland Security Grant Program awards grants to the State 

of Maryland. The Maryland Emergency Management Agency is responsible for 

managing these grant awards according to established federal guidelines and administers 

subgrants to local, regional, and other state government agencies in Maryland. 

The grant guidelines for the DHS State Homeland Security Grants allowed grant 

recipients to use grant funds for costs directly associated with homeland security 

preparedness activities such as training, salaries, overtime pay, contract services, 

planning, administration, travel, and equipment purchases. The guidelines prohibit the 

use of grant funds for general-use equipment and activities unrelated to homeland 

security including general planning, administrative and personnel costs, expenditures 

prior to the award start date of the grant, and expenses that were otherwise budgeted for 

state or local funds. 

In recent months, there was general concern that the Maryland State Police might have 

inappropriately used DHS grant funds to conduct specific surveillance operations. As a 

result, the Secretary requested that the Office of Inspector General (OIG) review grant 

awards to the Maryland State Police to determine whether grant funds were used 

appropriately. The surveillance in question was funded from FYs 2003 through 2005. 

We examined grant awards for this period. 

Results of Audit 

The Maryland State Police complied with limitations and requirements in the use of 

FEMA preparedness grant awards for FYs 2003 through 2005. The Maryland 

Emergency Management Agency and other Maryland recipients received approximately 

$161 million in preparedness grants from FEMA. The Maryland State Police received 

approximately $5 million from these awards. 

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Files maintained by the Maryland Emergency Management Agency and the Maryland 

State Police showed that the Maryland Emergency Management Agency reviewed and 

approved all grant fund requests from the Maryland State Police and subsequently 

reviewed invoices or purchase receipts. Records also indicated that the Maryland 

Emergency Management Agency effectively controlled grant drawdowns to ensure 

expenditures did not exceed grant awards. Maryland State Police documentation showed 

that the use of funds complied with grant requirements for each grant received. The 

Maryland State Police made no unauthorized purchases using the funds. Maryland State 

Police and the Maryland Emergency Management Agency provided documentation to 

support itemized expenditures. In addition, the State of Maryland General Ledger Report 

for the grants reviewed matched FEMA’s grant totals. 

Source of Maryland State Police Grant Funds 

From FYs 2003 through 2005, FEMA awarded preparedness grant funds to the Maryland 

Emergency Management Agency and other state entities. The Maryland State Police 

received preparedness grant funds as a subrecipient of the Maryland Emergency 

Management Agency. The sources and amounts of the Maryland State Police grant 

awards are shown in Table 1. 

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Table 1: Maryland State Police Homeland Security Grant Awards 

FY 2003 to FY 2005 

Grants Awards 

(Rounded) 

FY 2003 State Homeland Security Grant Program Parts I and 

II: This program provided financial assistance for (1) the purchase 

of specialized equipment to enhance the capability of state and local 

agencies to prevent and respond to incidents of terrorism involving 

the use of chemical, biological, radiological, nuclear, or explosive 

weapons; (2) the protection of critical infrastructure and prevention 

of terrorist incidents; (3) the design, development, conduct, and 

evaluation of chemical, biological, radioactive, nuclear, or explosive 

weapons exercises; (4) the design, development, and conduct of 

state chemical, biological, radioactive, nuclear, or explosive 

weapons training programs; and (5) the update and implementation 

of each State Administrative Agency’s Homeland Security strategy. 

Part II supplemented funding available through FY 2003 for the 

State Homeland Security Grant Program to enhance first responder 

preparedness. State Homeland Security Grant Program Part II funds 

were also available to mitigate the costs of enhanced security at 

critical infrastructure facilities. 

$1,805,158 

FY 2004 Homeland Security Grant Program: This program 

integrated the State Homeland Security Grant Program, the Law 

Enforcement Terrorism Prevention Program, and the Citizen Corps 

Program. Funding from this combined program was to enhance the 

coordination of regional efforts to prevent chemical, biological, 

nuclear, explosive, and cyber attacks. 

$2,680,600 

FY 2005 Homeland Security Grant Program: This program 

integrated the State Homeland Security Program, the Urban Areas 

Security Initiative, the Law Enforcement Terrorism Prevention 

Program, the Citizen Corps Program, the Emergency Management 

Performance Grants, and the Metropolitan Medical Response 

System Program Grants. 

$500,000 

Total $4,985,758 

Controls Over Maryland State Police Grant Funds 

The Maryland Emergency Management Agency had adequate internal controls to ensure 

that grant funds were spent in according to the requisite guidelines. Maryland State 

Police expenditures complied with requirements in the use of FEMA preparedness grants 

from FYs 2003 to 2005. The Maryland State Police did not use DHS State Homeland 

Security Grant funds to conduct surveillance between FYs 2005 and 2006. The Maryland 

Maryland State Police Use of Department of Homeland Security Grants 


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State Police used the award funds to purchase equipment and services allowed under 

FEMA grant guidelines. The FY 2003 funding was used to pay for specialized computer 

and office equipment, personal protective equipment, and nonsurveillance security 

overtime. The Maryland State Police used FY 2004 funds to purchase training and office 

and radio equipment. In FY 2005, grant funding was used to pay for equipment and 

contractor services. 

Table 2 provides a breakdown of the grant funds spent by Maryland State Police by 

expenditure type and award year. 

Table 2: Use of Maryland State Police Homeland Security Grant Expenditures 

FY 2003 to FY 2005 (rounded to the nearest dollar) 

Equipment Labor Contractor 

Services 

Training Total 

2003 State 

Homeland 

Security 

Grant 

Program 

Parts I & II 

$1,671,540 $112,213 $1,060 $1,784,813 

2004 State 

Homeland 

Security 

Grant 

Program 

$2,630,402 $19,672 $550 $2,650,624 

2005 

Homeland 

Security 

Grant 

Program 

$40,059 $459,284 $657 $500,000 

Totals $4,342,001 $112,213 $478,956 $2,267 $4,935,437 

As part of our review, we evaluated the internal controls of the Maryland Emergency 

Management Agency. We reviewed financial transactions, journal entries, the 

memorandum of agreement between the Maryland Emergency Management Agency and 

Maryland State Police, and grant expenditure approvals and supporting documentation 

for expenditures under DHS State Homeland Security Grants given to Maryland State 

Police from FYs 2003 to 2005. We gathered information about the program through 

analysis and document reviews. We researched applicable grant guidelines and 

regulations. 

Grant files maintained by the Maryland Emergency Management Agency and Maryland 

State Police contained itemized supporting documentation for expenses charged to 

FEMA Homeland Security Grant Program awards. These expenditures complied with 

the applicable grant requirements. 

Maryland State Police Use of Department of Homeland Security Grants 


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Given the results of our examination, we are making no recommendations. FEMA 

officials concurred with the results of our examination presented at an exit conference on 

September 18, 2008. The Maryland Emergency Management Agency officials also 

concurred with our results presented at an exit conference on September 25, 2008. 

Maryland State Police Use of Department of Homeland Security Grants 


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Appendix A 

Objective, Scope, and Methodology 

The objective of our examination was to determine whether Maryland State Police 

complied with federal regulations and FEMA guidelines in the use of FEMA 

preparedness grant funds from FYs 2003 to 2005. 

We performed our examination at various locations. We visited FEMA headquarters in 

Washington, D.C., the Maryland Emergency Management Agency in Reisterstown, 

Maryland, and the Maryland State Police in Pikesville, Maryland. Our review included 

all preparedness grants awarded by FEMA to the Maryland State Police for FYs 2003 to 

2005. We examined all expenditures made by the Maryland State Police under FEMA 

preparedness grants to determine whether the expenditures complied with required grant 

provisions. 

In response to our request, FEMA provided a list of all awards given to grantees in the 

State of Maryland for FYs 2003 to 2005. FEMA does not keep records of subgrantees, 

which would include the Maryland State Police. However, the agency referred us to the 

Maryland Emergency Management Agency grant office which does keep those records. 

To determine whether the Maryland State Police used DHS State Homeland Security 

grant funds to conduct surveillance, we reviewed all personnel and labor charges for the 

officers involved in the surveillance of concern. We reviewed timesheets and overtime 

records to determine whether DHS funds were used for salaries and overtime pay. 

We performed our examination from August to September 2008 under the authority of 

the Inspector General Act of 1978, as amended, and according to generally accepted 

government auditing standards. 

Our examination was conducted according to standards established by the American 

Institute of Certified Public Accountants and, accordingly, included examining, on a test 

basis, evidence supporting the Maryland State Police use of FEMA preparedness grant 

funds and performing such other procedures as we considered necessary under the 

circumstances. 

Our examination provides a reasonable basis for our opinion. In our opinion, the activity 

referred to above presents, in all material respects, Maryland State Police compliance 

with FEMA grant provisions from FYs 2003 through 2005 based on provisions set forth 

under FEMA Homeland Security Grant Program guidance. Had we conducted additional 

audit procedures other issues might have come to our attention. 

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Appendix B 

Management Response 

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Appendix C 

Major Contributors to This Report 

Office of Audits 

Joshua Burleigh, Audit Manager 

Stephanie Christian, Auditor in Charge 

Jeffrey Wilson, Auditor 

Rebecca Mogg, Auditor 

Pamela Lokeman, Auditor 

Gary Crownover, Auditor 

Gary Alvino, Referencer 

Emergency Management Oversight Audits 

Helen White, Auditor 

Maryland State Police Use of Department of Homeland Security Grants 


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Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretary 

FEMA Administrator 

Under Secretary, Management 

Assistant Secretary for Policy 

Assistant Secretary for Public Affairs 

Assistant Secretary for Legislative Affairs 

Chief Information Officer 

Chief Information Security Officer 

DHS Audit Liaison 

FEMA Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

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ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General (OIG) at (202) 254-4199, 

fax your request to (202) 254-4305, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

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

misconduct relative to department programs or operations: 

• Call our Hotline at 1-800-323-8603; 

• Fax the complaint directly to us at (202) 254-4292; 

• Email us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

The OIG seeks to protect the identity of each writer and caller.