National Telecommunications and 

Information Administration

Massachusetts Public Safety 

Interoperable Communications Grant 

2007-GS-H7-0036

Audit Report No. OIG-11-003-A 

 October 25, 2010 

FOR PUBLIC RELEASE

Office of Audit and Evaluation 

 

U.S. DEPARTMENT OF COMMERCE

Office of Inspector General




 Enclosure 1

Page 1 of 2 

NOTICE TO AUDITEES

Financial Assistance Audits

1. Audit requirements applicable to a particular financial assistance award may be established 

by law, regulation, policy, or the terms of the recipient's financial assistance agreement with 

the Department of Commerce. 

2. Audit results will be reported to the bureau or office administering the financial assistance 

award and to you (the recipient/auditee), unless the Department’s inspector general 

determines it is in the government's interest to withhold the audit report. 

3. Audit results may lead to adverse consequences for you, including the following actions 

(which are subject to applicable laws and regulations): 

o suspension and/or termination of current awards; 

o referral of identified problems to other federal funding agencies and entities as deemed 

necessary for remedial action; 

o denial of eligibility for future awards; 

o cancellation of authorization for advance payment and substitution of reimbursement 

by check; 

o establishment of special conditions in current or future awards; and, 

o disallowance of costs, which could result in a reduction in the amount of federal 

payments, withholding of payments, offset of amounts due the government 

against amounts due you, or establishment of a debt and appropriate debt 

collection follow-up (including referrals to collection agencies). 

Because of these and other possible consequences, it is important that you take your 

responsibility to respond to audit findings seriously by providing explanations and evidence 

to support your position with respect to the disputed results. 
Enclosure 1 

Page 2 of 2 

4. You have the following opportunities to point out errors (of fact or law) that you believe 

were made in the audit, to explain other disagreements with audit findings and 

recommendations, to present evidence that supports your positions, and to dispute final 

determinations: 

o At any time during the audit, you may bring to the attention of the auditors 

evidence you believe affects the auditors' work. 

o At the completion of the audit on-site, as a matter of courtesy, you will usually be 

given the opportunity to discuss (during an exit conference) the preliminary audit 

findings and to present a clear statement of your position on the significant 

preliminary findings, including possible cost disallowances. 

o When the draft audit report is issued, you will have the opportunity to comment 

and to submit evidence during the 30 days after we transmit the report to you. 

(We will not extend this deadline.) 

o When the final audit report is issued, you will have the opportunity to comment 

and to present evidence during the 30 days after we transmit the report to you. 

(We will not extend this deadline.) 

o When the Department issues its decision (the "Audit Resolution Determination") on 

the audit report's findings and recommendations, you have the right to appeal for 

reconsideration within 30 calendar days after receiving the Determination Letter if 

monies are due the government. (We will not extend this deadline.) The 

Determination Letter will explain the specific appeal procedures. 

o Once you file an appeal or the appeal period has expired, the Department will not 

accept any further submissions concerning your dispute of its decisions. If it is 

determined that you owe money or property to the Department, the Department will 

take appropriate collection action but will not thereafter reconsider the merits of the 

debt. 

There are no other administrative appeals available in the Department. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

CONTENTS

Introduction ......................................................................................................................................1

Findings and Recommendations ......................................................................................................3

I. Investments Appear to Be on Schedule for Completion Before End of Grant ...........3

II. EOPSS Provided Matching Share Details .................................................................3

III. EOPSS Cost Tracking System is Acceptable .............................................................4

IV. EOPSS Generally Complied with Other PSIC Requirements ....................................5

V. Follow-Up on Prior Audit Recommendations ............................................................5

Summary Results of Financial Audit ...............................................................................................6

Appendix A: Objectives, Scope, and Methodology.........................................................................7

Appendix B: Summary of Source and Application of Funds ..........................................................9

Appendix C: Summary of Financial/Compliance Audit ................................................................10

Appendix D: Recipient Response ..................................................................................................12
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 1 

Public Safety Interoperable 

Communications Program 

The Digital Television Transition and Public 

Safety Act of 2005 authorized NTIA, in 

consultation with the Department of 

Homeland Security (DHS), to implement the 

PSIC program─a $1 billion, one-time, 

formula-based matching grant program 

intended to enable public safety agencies to 

establish interoperable emergency 

communications systems using reallocated 

radio spectrum. 

NTIA signed a memorandum of 

understanding with DHS, under which DHS 

oversees and administers the PSIC program. 

The Implementing Recommendations of the 

9/11 Commission Act of 2007 requires the 

Commerce Inspector General to conduct 

financial audits, over 4 years, of a 

representative sample of at least 25 states or 

territories receiving PSIC grants.

INTRODUCTION

On September 30, 2007, the National 

Telecommunications and Information 

Administration (NTIA) awarded a Public 

Safety Interoperable Communications (PSIC) 

grant to the Commonwealth of Massachusetts 

to enhance interoperable emergency 

communications. The grant provided federal 

funding of $21,191,988, of which 

$14,306,260 required nonfederal matching 

contributions. Federal funds provided for 

acquisition and deployment of 

communications equipment, and management 

and administration (M&A) costs, must be 

matched by nonfederal contributions of at 

least 20 percent of the total cost of those 

activities. Statewide planning, planning and 

coordination, and training costs do not require 

matching share. The $14,306,260 provided 

for acquisition, deployment, and M&A 

represents 80 percent of the total cost of those 

activities, leaving a minimum nonfederal 

matching share requirement of $3,576,565. 

The award period runs from October 1, 2007, 

to September 30, 2011. On November 6, 

2009, the President signed Public Law 111-96, which extended the PSIC program beyond its 

original expiration date of September 30, 2010. The new law extended the performance period of 

all PSIC grants through September 30, 2011, and allowed for additional extensions, through 

September 2012, on a case-by-case basis, if approved by the Assistant Secretary for 

Communications and Information. 

The Governor of Massachusetts designated the Massachusetts Executive Office of Public Safety 

and Security (EOPSS) as Massachusetts’s state administrative agency to apply for and administer 

PSIC funds1

. EOPSS prepared an investment justification, as instructed in NTIA’s PSIC 

Program Guidance and Application Kit, describing how the grant funds would be used to 

improve interoperable communications and ensure interoperability with other public safety 

agencies. The investment justification described 10 individual investments (table 1) that would 

achieve meaningful and measurable improvements in interoperability and fill gaps in the 

statewide communications interoperability plan. NTIA approved the investment justification on 

April 4, 2008. 

 

1

 The PSIC program requires the governor of each state or territory to designate a state administrative agency to 

apply for and administer PSIC funds. Administrative agencies are required to pass through no less than 80 percent of 

the total award amount to local or tribal governments or authorized nongovernmental public safety agencies, unless 

the local entity opts, via written agreement, to have the state agency retain and spend the funds on its behalf. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 2 

Table 1. Investment Justification and Funding 

PSIC Investment Justification 

PSIC Funds 

Awarded

Nonfederal 

Match2 Total

1. Governance and Funding $1,640,000 $1,640,000

2. Information Enterprise Implementation 1,200,000 1,200,000

3. Command Consolidation 270,000 270,000

4. Statewide Interoperability Backbone 7,275,000 7,275,000

5. Channel Definition and Command 

 Channel 2,225,000 2.225,000

6. Statewide 700/800 MHz Network 1,000,000 1,000,000

7. Continuity of Government 

 Communications 5,000,000 5,000,000

8. Protocol Initiative 250,000 250,000

9. Innovation Initiative 53,946 53,946

10. Strategic Technology Reserve 1,641,000 1,641,000

Management and Administration 635,760 158,940 794,700

Statewide Plan 1,282 1,282

Nonfederal Match 3,417,625 3,417,625

Total $21,191,988 $3,576,565 $24,768,553

Source: EOPSS investment justification 

States were required to include a prescribed strategic technology reserve in their investment 

justifications. The strategic reserve is designed to pre-position, or secure in advance, 

interoperable communications equipment for immediate deployment in an emergency situation 

or major disaster. Massachusetts’ prescribed strategic reserve amount was $1,641,000 and was 

included as investment 10. 

 

 2 NTIA approved EOPSS’ budget and scope modification request to provide a 20 percent nonfederal match at the 

total grant level, rather than budgeting for matching share at the individual investment level.
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 3 

FINDINGS AND RECOMMENDATIONS

In July 2009, we initiated an audit of costs claimed by EOPSS to determine whether it had 

complied with PSIC grant guidelines and DHS award terms and conditions. The audit covered 

the award period of October 1, 2007, through June 30, 2009, during which time EOPSS claimed 

total costs of $313,943. As stated in appendix A, the objective of our audit was to determine 

whether EOPSS was using its grant funds in accordance with federal requirements. In particular, 

we assessed whether EOPSS (1) is on track to complete its interoperable communications 

investments by September 30, 2011; (2) met the minimum 20 percent match for acquiring and 

deploying interoperable communications equipment, and for M&A costs; (3) claimed reasonable, 

allowable, and allocable costs under the award; and (4) complied with grant terms and 

conditions. The following sections detail our findings with respect to each audit objective. 

I. Investments Appear to Be on Schedule for Completion Before End of Grant 

EOPSS plans to complete the 10 investments funded by the PSIC grant by the grant completion 

date of September 30, 2011. Although legislation extended the grant through September 2011, 

EOPSS advised us at the time of our draft audit report that it had chosen not to extend its time 

line for project completion beyond the date originally contained in its investment justification. 

On May 5, 2010, NTIA approved EOPSS’ budget and scope modification request to reprogram 

$3,775,000 originally budgeted for acquisition and deployment activities under investment 5 to a 

similar purpose under investment 7, and leaving projected completion dates unchanged. 

Our audit found nothing to indicate that any of the investments would not be completed before 

the end of the grant. 

II. EOPSS Provided Matching Share Details 

The Digital Television Transition and Public Safety Act of 2005, Public Law 109-171, Section 

3006; the PSIC Program Guidance and Application Kit; and the special award conditions require 

a minimum 20 percent matching share be contributed from nonfederal sources for those portions 

of the grant project not identified as planning and coordination or training. EOPSS officials 

claimed that the nonfederal matching share for the PSIC grant is in place, in the form of spending 

on expansion of the Massachusetts State Police emergency communication system, funded by a 

state bond appropriation. In its May 2010 budget and scope modification, EOPSS received 

approval to provide a 20 percent nonfederal match at the total investment justification level, 

rather than providing specific matching shares for each individual investment. 

Our draft audit report expressed concerns about EOPSS’ tracking and reporting of nonfederal 

matching share contributions. Specifically, we reported that EOPSS claimed that $3.3 million in 

matching share expenses had been incurred through June 30, 2008, and an additional 

$3.7 million was encumbered for costs incurred through June 30, 2009. However, we could not 

verify that the $7 million of nonfederal expenditures involved allowable costs incurred under the 

PSIC grant. The matching share contributions relate to communications system expansion by the 

Massachusetts State Police, but neither EOPSS nor State Police officials were able to identify 

which expenditures represented the PSIC matching share contributions. Absent documentation to 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 4 

support allowability of EOPSS’ proposed nonfederal matching share, our draft audit report 

recommended that EOPSS return $23,047 in excess federal reimbursements we computed as of 

June 30, 2009. 

In its response to the draft audit report, EOPSS provided details of $3.7 million in specific State 

Police communications expansion costs that will be claimed as PSIC matching share 

contributions. We contacted NTIA’s PSIC Deputy Program Manager, who reviewed the 

proposed State Police expenditures and advised that they appear to be within the scope of the 

PSIC grant. Although less than the $7 million proposed match EOPSS contemplated prior to our 

draft audit report, the State Police match, coupled with an additional $600,000 in proposed 

nonfederal contributions, would be sufficient to meet the minimum matching share requirement 

of the PSIC grant. 

Based on EOPSS’ submission of additional matching share details and the PSIC Deputy Program 

Manager’s statement that the costs appear to be within the scope of the grant, we have withdrawn 

our draft audit report finding that EOPSS received excess federal reimbursements and the 

associated recommendation to return $23,047 to the federal government. EOPSS’ response, 

excluding attachments, is included in appendix D. 

III. EOPSS Cost Tracking System is Acceptable 

Our draft report expressed concerns about EOPSS’ cost tracking at the individual investment 

level. Specifically, we reported that since EOPSS did not account for and track expenditures at 

the individual investment level, we were not able to verify the application of funds on each 

investment. In addition, we reported that EOPSS did not compare its actual expenditure outlays 

with budgeted amounts for each investment. 

In its response to the draft audit report, EOPSS provided a spreadsheet detailing actual and 

budgeted expenditures by investment and subrecipient. EOPSS explained that the 

commonwealth’s accounting system, the Massachusetts Management, Accounting, and 

Reporting System (MMARS), does not allow obligations or expenditures in excess of the 

approved award amount. Also, EOPSS responded that it reconciles award expenditures on a 

weekly basis through MMARS. 

Based on EOPSS’ submission of a documented expenditure tracking system and explanation of 

its expenditure monitoring activities, we have withdrawn our draft audit report finding that 

EOPSS was not adequately tracking PSIC project costs and budget performance, as well as the 

associated recommendation to provide evidence of its cost and budget tracking systems to the 

federal government. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 5 

IV. EOPSS Generally Complied with Other PSIC Requirements 

We found EOPSS was generally in compliance with PSIC grant requirements. Specifically, we 

noted EOPSS (1) submitted six of seven3 periodic financial status reports on time, (2) did not 

retain advances of federal funds for more than the 30 days permitted under PSIC policy, and 

(3) received written agreements to expend PSIC funds on behalf of the local public safety 

agencies represented by the commonwealth’s four regional homeland security advisory councils 

and the Boston Area Security Initiative. 

V. Follow-Up on Prior Audit Recommendations 

As part of our audit, we reviewed the results of the commonwealth’s OMB Circular No. A-133 

audit for the year ended June 30, 2008. The audit report did not contain findings related to 

administration of the PSIC grant. 

 

3

 The one report submitted late was only 9 days past its deadline. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 6 

SUMMARY RESULTS OF FINANCIAL AUDIT

The results of our interim cost audit for the period October 1, 2007, through June 30, 2009, 

(detailed in appendix C) are summarized as follows: 

Costs Claimed $313,943 

Less: Questioned Costs 77(a)

Costs Accepted $313,866 

Accepted Costs Not Subject to Match $198,631 

Accepted Costs Subject to Match $115,235 

Federal Share Ratio x 80% 92,188

Federal Funds Earned 290,819 

Federal Funds Disbursed 313,943

Excess Disbursements $23,124(b)

Notes:

(a) EOPSS claimed unallowable supply costs. This amount should be deducted from a future 

cost claim. 

(b) Although EOPSS’ cost claims through June 30, 2009, did not include nonfederal matching 

share contributions, EOPSS provided documentation in its response to the draft audit report 

that illustrates its plan to provide adequate matching share contributions during the grant 

period. The recommendation to return excess disbursements of $23,047 has been removed, as 

discussed in section II of this report. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 7 

APPENDIX A: OBJECTIVES, SCOPE, AND METHODOLOGY

The objective of our audit was to determine whether the Massachusetts Executive Office of 

Public Safety and Security (EOPSS) was using its grant funds in accordance with federal 

requirements. In particular, we assessed whether EOPSS (1) is on track to complete its 

interoperable communications investments by September 30, 2011; (2) met the minimum 

20 percent match for acquiring and deploying interoperable communications equipment, and for 

M&A costs; (3) claimed reasonable and allowable costs under the award; and (4) complied with 

grant terms and conditions. 

The audit scope included a review of costs claimed during the award period of October 1, 2007, 

through June 30, 2009. We conducted our fieldwork in July 2009, at EOPSS’ office in Boston, 

Massachusetts, and at the Massachusetts Emergency Management Agency, Massachusetts State 

Police headquarters, and the Offices of the United Way of Tri-County, all located in 

Framingham, Massachusetts. 

To meet our objectives, we did the following: 

• reviewed investment documentation and discussed each investment with agency officials; 

• analyzed source documents related to the minimum 20 percent match for acquiring and 

deploying interoperable communications equipment and for M&A of the grant; 

• traced costs claimed to source documentation; 

• interviewed EOPSS officials and reviewed the commonwealth's OMB Circular A-133 

audit report for the year ending June 30, 2008; and 

• reviewed pertinent laws, regulations, and guidance (listed below) against EOPSS’ PSIC 

activities and internal controls. 

We evaluated EOPSS’ compliance with federal laws and regulations applicable to the PSIC 

grant, including the following: 

• Section 3006 of the Digital Television Transition and Public Safety Act of 2005, Public 

Law 109-171 

• Call Home Act of 2006, Public Law 109-459 

• Implementing Recommendations of the 9/11 Commission Act of 2007, Public Law 110-

53 

• Public Safety Interoperable Communications Grants, Public Law 111-96 

• 15 Code of Federal Regulations, Part 24, Uniform Administrative Requirements for 

Grants and Agreements to State and Local Governments 

• PSIC Program Guidance and Application Kit, August 16, 2007 

• National Preparedness Directorate Information Bulletin #268 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 8 

• NTIA PSIC Grant Program Allowable Cost Matrix 

• NTIA PSIC Grant Program Frequently Asked Questions 

• OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments

• OMB Circular A-133, Compliance Supplement, CFDA 11.555 

• Special Award Conditions 

• Department of Commerce Financial Assistance Standard Terms and Conditions

• DHS, Office of Grant Operations, Financial Management Guide 

We verified the validity and reliability of the computer-processed data supplied by EOPSS by the 

direct testing of data against supporting documentation. Based on our tests, we concluded the 

computerized data were reliable for use in meeting our objectives. 

We analyzed nonstatistical samples of EOPSS, the Massachusetts State Police, and subrecipient 

transactions, generally focusing on the highest dollar value transactions and line items. Since we 

did not attempt to extrapolate findings from sample analyses to all transactions, we believe our 

sampling methodology represented a reasonable basis for the conclusions and recommendations 

included in our report. 

We obtained an understanding of the management controls of EOPSS by interviewing EOPSS 

officials, as well as examining policies and procedures, EOPSS’ most recent single audit report, 

and written assertions from EOPSS officials. Our report contains recommendations to address 

EOPSS’ reporting of matching share and tracking project costs on each investment. 

We conducted this performance audit in accordance with 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 on our audit objectives. We believe that the evidence obtained provides a reasonable basis 

for our findings and conclusions based on our audit objectives. 

We performed this audit under the authority of Implementing Recommendations of the 9/11 

Commission Act of 2007; the Inspector General Act of 1978, as amended; and Department 

Organization Order 10-13, August 31, 2006. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 9 

APPENDIX B: SUMMARY OF SOURCE AND APPLICATION OF FUNDS

THE MASSACHUSETTS EXECUTIVE OFFICE 

OF PUBLIC SAFETY AND SECURITY 

PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS 

GRANT NO. 2007-GS-H7-0036 

OCTOBER 1, 2007, THROUGH JUNE 30, 2009 

 Approved Receipts & 

 Budget Expenses

 (a) (b) 

SOURCE OF FUNDS:

Federal $21,191,988 $313,943 

Nonfederal 3,576,565 0

Total $24,768,553 $313,943

APPLICATION OF FUNDS: 

Investment 1 $ 1,640,000 $ 0 

Investment 2 1,200,000 0 

Investment 3 270,000 0 

Investment 4 7,275,000 0 

Investment 5 2,225,000 0 

Investment 6 1,000,000 0 

Investment 7 5,000,000 0 

Investment 8 250,000 0 

Investment 9 53,946 0 

Investment 10 1,641,000 0 

Statewide Planning 1,282 0 

M&A Costs 794,700(c) 110,902 

Unspecified 0 203,041(d) 

Nonfederal Match 3,417,625(e) 0(f) 

Total $24,768,553 $313,943

Notes:

(a) The approved budgeted costs are for the period of October 1, 2007, through September 30, 

2011, based on the approved investment justification. 

(b) The receipts and expenses are for the period of October 1, 2007, through June 30, 2009. 

(c) M&A costs include $635,760 of federal funds and $158,940 of nonfederal match. 

(d) Costs were not tracked and recorded by investment. 

(e) In the modification, EOPSS is approved to provide a 20 percent nonfederal match at the 

total investment justification level rather than on each individual investment level. 

(f) EOPSS did not track and report nonfederal matching share. 
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 10 

APPENDIX C: SUMMARY OF FINANCIAL/COMPLIANCE AUDIT

THE MASSACHUSETTS EXECUTIVE OFFICE 

OF PUBLIC SAFETY AND SECURITY 

PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS 

GRANT NO. 2007-GS-H7-0036 

OCTOBER 1, 2007, THROUGH JUNE 30, 2009

 Results of Audit

 Approved Costs Costs Costs 

Description Budget Claimed Questioned Accepted

 (a) 

Investment 1 $ 1,640,000 $ 0 $ 0 $ 0 

Investment 2 1,200,000 0 0 0 

Investment 3 270,000 0 0 0 

Investment 4 7,275,000 0 0 0 

Investment 5 2,225,000 0 0 0 

Investment 6 1,000,000 0 0 0 

Investment 7 5,000,000 0 0 0 

Investment 8 250,000 0 0 0 

Investment 9 53,946 0 0 0 

Investment 10 1,641,000 0 0 0 

Statewide Planning 1,282 0 0 0 

M&A Costs 794,700 (b) 110,902 0 110,902 

Unspecified 0 203,041 77 (c) 202,964 

Nonfederal Match 3,417,625 0 0 0 

Total $24,768,553 $313,943 $77 $313,866

Costs Claimed $313,943 

Less: Questioned Costs 77

Costs Accepted $313,866 

Accepted Costs Not Subject to Match $198,631 

Accepted Costs Subject to Match $115,235 

Federal Share Ratio x 80% 92,188

Federal Funds Earned 290,819 

Federal Funds Disbursed 313,943

Excess Disbursements $23,124(d)

Notes:

(a) The approved budgeted costs are for the period of October 1, 2007, through September 30, 

2011, based on the approved investment justification. EOPSS will provide a 20 percent 

nonfederal match at the total investment level, rather than on each individual investment. 

(b) M&A costs include $635,760 of federal funds and $158,940 of non-federal match. 

(c) EOPSS claimed unallowable supply costs. This amount should be deducted from a future 

cost claim.
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 11 

(d) The recommendation to return excess disbursements of $23,047 has been removed, as 

discussed in section II of this report.
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 12 

APPENDIX D: RECIPIENT RESPONSE
U.S. Department of Commerce Final Report OIG-11-003-A 

Office of Inspector General October 25, 2010

 13 

(DEN-19727)