PORT SECURITY 

GRANT PROGRAM

Risk Model, Grant 

Management, and 

Effectiveness 

Measures Could Be 

Strengthened

Report to Congressional Requesters

November 2011

GAO-12-47

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-47, a report to 

Congressional Requesters

November 2011

PORT SECURITY GRANT PROGRAM

Risk Model, Grant Management, and Effectiveness 

Measures Could Be Strengthened

Why GAO Did This Study

From fiscal years 2006 through 2010, 

the Department of Homeland Security 

(DHS) has awarded nearly $1.7 billion 

dollars to port areas through its Port 

Security Grant Program (PSGP) to 

protect critical maritime infrastructure 

and the public from terrorist attacks. 

The Federal Emergency Management 

Agency (FEMA)––a DHS component 

agency––is the agency responsible for 

distributing grant funds. GAO was 

asked to evaluate the extent to which 

DHS has (1) allocated PSGP funds in 

accordance with risk; (2) encountered 

challenges in administering the grant 

program and what actions, if any, DHS 

has taken to overcome these 

challenges; and (3) evaluated the 

effectiveness of the PSGP. To address 

these objectives, GAO reviewed the 

PSGP risk model, funding allocation 

methodology, grant distribution data, 

and program documents, such as 

PSGP guidance. Additionally, GAO 

interviewed DHS and port officials 

about grant processes, funding 

distribution, and program challenges, 

among other things.

What GAO Recommends

GAO recommends that DHS 

strengthen its methodology for

measuring vulnerability in ports by 

accounting for how past security 

investments reduce vulnerability and 

by using the most precise data 

available. GAO also recommends that 

DHS evaluate the cost-share waiver 

review process and take steps to 

expedite the process where 

appropriate and develop a plan with 

milestones for implementing 

performance measures for the PSGP. 

DHS concurred with GAO’s 

recommendations. 

What GAO Found

In 2010 and 2011, PSGP allocations were based largely on port risk and determined 

through a combination of a risk analysis model and DHS implementation decisions. 

DHS uses a risk analysis model to allocate PSGP funding to port areas that includes 

all three elements of risk—threat, vulnerability, and consequence—and DHS made 

modifications to enhance the model’s vulnerability element for fiscal year 2011. For 

example, DHS modified the vulnerability equation to recognize that different ports can 

have different vulnerability levels. However, the vulnerability equation is not 

responsive to changes in port security—such as the implementation of PSGP-funded 

security projects. Additionally, the vulnerability equation does not utilize the most 

precise data available in all cases. DHS addressed prior GAO recommendations for 

strengthening the vulnerability element of grant risk models, but the PSGP model’s 

vulnerability measure could be further strengthened by incorporating the results of 

past security investments and by refining other data inputs. 

FEMA has faced several challenges in distributing PSGP grant funds, and FEMA has 

implemented specific steps to overcome these challenges. Only about one-quarter of 

awarded grant funding has been drawn down by grantees, and an additional onequarter remains unavailable (see table below). Funding is unavailable—meaning that 

grantees cannot begin using the funds to work on projects—for two main reasons: 

federal requirements have not been met (such as environmental reviews), or the port 

area has not yet identified projects to fund with the grant monies. Several challenges 

contributed to funds being unavailable. For example, DHS was slow to review costshare waiver requests—requests from grantees to forego the cost-share requirement. 

Without a more expedited waiver review process, grant applicants that cannot afford 

the cost-share may not apply for important security projects. Other challenges 

included managing multiple open grant rounds, complying with program 

requirements, and using an antiquated grants management system. FEMA has taken 

steps to address these challenges. For example FEMA and DHS have, among other 

things, increased staffing levels, introduced project submission time frames, 

implemented new procedures for environmental reviews, and implemented phase 

one of a new grants management system. However, it is too soon to determine how 

successful these efforts will be in improving the distribution of grant funds. 

FEMA is developing performance measures to assess its administration of the PSGP 

but it has not implemented measures to assess PSGP grant effectiveness. Although 

FEMA has taken initial steps to develop measures to assess the effectiveness of its 

grant programs, it does not have a plan and related milestones for implementing 

measures specifically for the PSGP. Without such a plan, it may be difficult for FEMA 

to effectively manage the process of implementing measures to assess whether the 

PSGP is achieving its stated purpose of strengthening critical maritime infrastructure 

against risks associated with potential terrorist attacks.

Financial Status of PSGP Awarded Funds, Fiscal Year 2006 through 2010

Total funds awarded

Funds drawn down 

by grantees

Funds available to 

grantees to 

implement projects

Funds unavailable to 

grantees to 

implement projects

$1,676,068,946 $394,880,416 (23.6%) $873,430,493 (52.1%) $407,758,036 (24.3%)

Source: GAO analysis of FEMA data as of September 2011. View GAO-12-47. For more information, 

contact David C. Maurer, (202) 512-9627, 

MaurerD@gao.gov or Stephen L. Caldwell, 

(202) 512-9610, CaldwellS@gao.gov. 
Page i GAO-12-47 Port Security Grant Program

Letter 1 

Background 5

DHS Allocated PSGP Funds Based Largely on Risk, but the Risk 

Model Can Be Further Strengthened 15

Most Grant Funding Is Available, but $400 Million Is Unavailable 

Due to Various Challenges—Which FEMA Has Begun to Address 23

FEMA Is Developing Measures to Assess PSGP Administration but 

Does Not Have Measures to Assess Effectiveness 39

Conclusions 41

Recommendations for Executive Action 42

Agency Comments and Our Evaluation 43

Appendix I Port Security Grant Program (PSGP) Allocations to Funding Groups, 

by Year 47

Appendix II PSGP Risk Analysis Model, Fiscal Year 2011 48

Appendix III Financial Status of PSGP Awarded Funds, Fiscal Years 2006 through 

2010 49

Appendix IV Cost-Share Waiver Approval Process 50

Appendix V FEMA’s Internal Performance Measures 51

Appendix VI Comments from the Department of Homeland Security 53

Appendix VII GAO Contact and Staff Acknowledgments 56

Contents
Page ii GAO-12-47 Port Security Grant Program

Tables

Table 1: Port Security Grant Program Funding 8

Table 2: Comparison of Allocation to Risk, by PSGP Funding 

Group, Fiscal Year 2011 16

Table 3: Effects of Funding Floor on Fiscal Year 2011 Allocations 

to Port Areas 18

Table 4: Data Components in Vulnerability Index of Fiscal Year 

2011 PSGP Risk Model 20

Table 5: Draw Down Rates by Group, Fiscal Years 2006 through 

2010 24

Table 6: PSGP Funding Awarded and Unavailable, by Groups, 

Fiscal Years 2006 through 2010 26

Table 7: Changing Cost-Share Requirements in the PSGP, Fiscal 

Years 2006 through 2011 30

Table 8: Unused Group I Funding from Cost-Share Years, Fiscal 

Years 2007 Supplemental through 2010 32

Table 9: Key DHS Actions Taken to Improve EHP Review Process 

Since Fiscal Year 2009 38

Table 10: Percent of Total PSGP Funding Directed at Each Funding 

Group, Fiscal Years 2007 through 2011 47

Table 11: Financial Status of PSGP Awarded Funds, by Funding 

Group, Fiscal Years 2006 through 2010 49

Table 12: Details on FEMA’s Performance Measures to Assess Its 

Administrative Performance 51

Figures

Figure 1: Sample Port Area Showing Eligible PSGP Recipients and 

Projects, and Key Port Stakeholders Involved in the Grant 

Process 6

Figure 2: Location of Group I and Group II Port Areas 9

Figure 3: Overview of the PSGP Grant Process for Fiscal Years 

2007 Supplemental through 2011 11

Figure 4: Status of Awarded Grant Funding, Fiscal Years 2006

through 2010 24

Figure 5: Comparison of PRMP Approval Dates for 11 Port Areas in 

Our Review to PSGP Grant Milestone Dates 29

Figure 6: Fiscal Year 2011 PSGP Risk Model 48

Figure 7: Review Process for Port Security Grant Program CostShare Waiver Requests 50
Page iii GAO-12-47 Port Security Grant Program

Abbreviations

AMSC Area Maritime Security Committee

AMSP Area Maritime Security Plan

ARRA American Recovery and Reinvestment Act

COTP Captain of the Port

DHS Department of Homeland Security

DOT Department of Transportation

EHP Environmental and Historical Preservation

FEMA Federal Emergency Management Agency

GPD Grant Programs Directorate

HIV High-Interest Vessel Program

HSGP Homeland Security Grant Program

HSIN Homeland Security Information Network

MSRAM Maritime Security Risk Analysis Model

MTSA Maritime Transportation Security Act

ND Grants Non Disaster Grants System

NIPP National Infrastructure Protection Plan

NPAD National Preparedness Assessment Division

NRP National Review Panel

OIG Office of Inspector General

PEA Programmatic Environmental Assessment

PRMP Portwide Risk Mitigation Plan

PSGP Port Security Grant Program

TSA Transportation Security Administration

TSGP Transit Security Grant Program

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Page 1 GAO-12-47 Port Security Grant Program

United States Government Accountability Office

Washington, DC 20548

November 17, 2011

Congressional Requesters

Since the terrorist attacks of September 11, 2001, the nation’s ports have 

been viewed as potential targets of attack for many reasons. According to 

the Department of Homeland Security (DHS), ports, waterways, and 

vessels are part of an economic engine handling more than $700 billion in 

merchandise annually, and an attack on this system could have a 

widespread impact on global shipping, international trade, and the global 

economy.1

To strengthen the security of the nation’s ports against risks associated 

with potential terrorist attacks, DHS administers the Port Security Grant 

Program (PSGP) through its component agency, the Federal Emergency 

Management Agency (FEMA). The Coast Guard provides subject matter 

expertise to FEMA on the maritime industry to inform grant award 

decisions. The PSGP is to provide funding to the nation’s highest risk port 

areas

Additionally, ports often are not only gateways for the 

movement of goods, but also industrial hubs and close to population 

centers, presenting additional opportunities for terrorists intending to harm 

U.S. interests. They are also potential conduits for weapons prepared 

elsewhere and concealed in cargo designed to move quickly to many 

locations beyond the ports themselves. Further, cruise ships, tankers, and 

cargo ships present potentially desirable terrorist targets given the 

potential for loss of life, environmental damage, or disruption of 

commerce. Balancing security concerns with the need to facilitate the free 

flow of people and commerce remains an ongoing challenge for the public 

and private sectors alike.

2

 

1 Department of Homeland Security, Small Vessel Security Strategy (Washington, D.C.: 

April 2008). 

to support increased portwide risk management; to enhance 

domain awareness; to train and exercise; to expand port recovery and 

resiliency capabilities; and to further capabilities to prevent, detect, 

2 To promote a regional approach to port security, DHS aggregates individual ports into 

“port areas” for grant funding purposes. Decisions about how to group individual ports into 

port areas are made based on the recommendations of the Coast Guard and consider 

such factors as geographic proximity, shared risk, and common waterways. For fiscal year 

2011, there were a total of 145 specifically identified critical ports that were aggregated 

into 90 discrete port funding areas. 

 
 

Page 2 GAO-12-47 Port Security Grant Program

respond to, and recover from attacks involving improvised explosive 

devices and other nonconventional weapons. Since the program’s 

inception in fiscal year 2002, the federal government has provided almost 

$2.5 billion in PSGP funding to state, local, and private entities to 

increase portwide risk management, enhance domain awareness, and 

improve recovery and resiliency through the development of security 

plans, the purchase of security equipment, and the provision of security 

training to employees. 

You requested that we evaluate the PSGP, including DHS’s methodology 

for determining risk, funding levels for U.S. ports, and the management of 

the program. Our report addresses the extent to which DHS: 

1. has allocated PSGP funds in accordance with risk; 

2. has encountered challenges in administering the PSGP and what 

actions, if any, it has taken to overcome these challenges; and 

3. has evaluated the effectiveness of the PSGP.

To assess the extent to which PSGP funds were allocated based on risk, 

we analyzed DHS documents, including those related to the grant model 

DHS uses to evaluate port risk and allocate grant money, PSGP 

guidance, and PSGP priorities. Our review of the PSGP risk analysis 

model focused on the fiscal year 2011 model, the most recent available. 

To provide a basis for examining DHS’s efforts to carry out risk 

management principles, we compared the PSGP risk analysis model to 

DHS’s overall risk management approach as identified in the National 

Infrastructure Protection Plan (NIPP), which it issued in June 2006 and 

updated in January 2009.3

 

3 DHS, National Infrastructure Protection Plan, Partnering to Enhance Protection and 

Resiliency (Washington, D.C.: January 2009). In accordance with the Homeland Security 

Act and in response to HSPD-7, DHS issued the first National Infrastructure Protection 

Plan (NIPP) in June 2006, and later updated the plan in 2009. The NIPP provides the 

overarching approach for integrating the nation’s critical infrastructure and key resource 

protection initiatives in a single effort. For more information on the NIPP, see GAO, Critical 

Infrastructure Protection: Update to National Infrastructure Protection Plan Includes 

Increased Emphasis on Risk Management and Resilience, 

We also reviewed the steps that FEMA took to 

ensure the reliability of the risk model by interviewing officials responsible 

for managing the model as well as reviewing DHS’s documentation on the 

model. We determined that the model’s inputs and results were 

sufficiently reliable for our purposes. 

GAO-10-296 (Washington, 

D.C.: Mar. 5, 2010). 
 

Page 3 GAO-12-47 Port Security Grant Program

To determine whether DHS has encountered challenges in administering 

the PSGP and what actions, if any, it has taken to overcome these 

challenges, we reviewed PSGP guidance, applicable laws, financial data 

for the program as a whole for fiscal years 2006 through 2010, and 

project data from FEMA for all seven Group I port areas—the highest risk 

port areas that receive the most grant funding.4

 

4 In the fiscal year 2007 supplemental grant round, there were eight port areas within 

Group I. 

To verify the reliability of 

the project funding amounts for Group I port areas as provided by FEMA, 

we compared them to the total funding provided to each region and found 

that these amounts aligned. We did not include project-level data for 

Group II port areas due to data reliability concerns. Additionally, we did 

not include project-level data for Group III and the All Other Port Areas 

Group because these groups receive a small share of available grant 

funding and follow a different type of funding model. For the purposes of 

our report, we concluded that FEMA’s financial data for the program as a 

whole and FEMA’s project data for Group I port areas were sufficiently 

reliable. We also gathered information from FEMA on the environmental 

and historical preservation (EHP) review process—a key grant 

requirement—to determine the length of time needed to complete this 

required review. However, FEMA was unable to provide complete data on 

the EHP process, so we were unable to comment on the length of time 

spent completing this requirement. Additionally, we conducted site visits 

at, or held teleconferences with, a total of 11 port areas, including all 7 

Group I port areas and 4 selected Group II port areas. For these 

meetings, we interviewed and collected documents from PSGP fiduciary 

agents—entities that serve as the principal point of contact with FEMA for 

the application, management, and administration of Group I and II grant 

awards. In some cases, we also interviewed and collected documents 

from U.S. Coast Guard officials, who provide subject matter expertise for 

the maritime industry in their port areas. We used specific criteria to 

select these port areas, including levels of grant funding, stakeholder 

recommendations, and geographic diversity. While the information we 

obtained from these 11 port areas cannot be generalized to all port areas, 

it provides comprehensive coverage of Group I port areas. Additionally, it 

enhanced our understanding of the types of projects initiated using PSGP 

funds, the amount of funds allocated, awarded, and distributed for these 

port areas, and the challenges faced. Due to significant changes in PSGP 

management in the fiscal year 2007 supplemental funding round—
 

Page 4 GAO-12-47 Port Security Grant Program

including the introduction of the fiduciary agent model in Group I and II 

port areas—our review of program management issues focused on fiscal 

years 2007 supplemental through 2011.5 However, to ensure a complete 

analysis of PSGP grant funds that are currently available for use, our 

discussion of the amount of PSGP funding distributed and on-hold 

includes fiscal years 2006 through 2010.6

To determine the extent to which DHS has evaluated the effectiveness of 

the PSGP, we analyzed available or in-progress performance data and 

measures related to the grant program. To determine what performance 

measurement data had been collected or what measures FEMA might 

use to understand the progress of the PSGP, we interviewed grant 

officials from FEMA’s Grant Programs Directorate (GPD) and FEMA’s 

National Preparedness Directorate. 

We conducted this performance audit from October 2010 through 

November 2011 in accordance with generally accepted government 

auditing standards.7

 

5 FEMA implemented key changes to the grant program in the fiscal year 2007 and 2007 

supplemental grant rounds to promote enhanced regional collaboration. For instance, in 

fiscal year 2007, FEMA introduced a tiered structure to the grant program whereby each 

port area was placed into a funding group based on risk. FEMA allocated port areas in the 

highest risk funding group a specific amount of grant funding and grant projects were 

determined using a regional decision-making process. In the supplemental 2007 grant 

round, FEMA also transitioned the second highest risk funding group to this collaborative 

process. The remaining funding groups retained the competitive structure and competed 

for funding within their funding Group. FEMA made two additional changes in the 2007 

supplemental funding round to promote regional collaboration. First, FEMA required all 

Group I and II port areas to select a fiduciary agent to coordinate the grant process in the 

port area. Second, FEMA required all Group I and II port areas to develop a Portwide Risk 

Mitigation Plan.

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 

6 Grant funds may be expended for up to 5 years after the end of the fiscal year in which 

they are awarded. As a result, all fiscal year 2005 grants were closed as of September 30, 

2010; however, some fiscal year 2006 grant awards were still available for use by grant 

applicants during the period of our review. We do not have data on the amount of PSGP 

funding distributed and on-hold for fiscal year 2011, as this grant round was in its initial 

stages during the period of our review. 

7 This work was done in conjunction with a broader review of other homeland security 

grant programs. We plan to issue that broader report early next year. 
 

Page 5 GAO-12-47 Port Security Grant Program

objectives. We believe the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives.

The United States has approximately 360 commercial sea and river ports. 

While no two ports in the United States are exactly alike, many share 

certain characteristics that make them vulnerable to terrorist attacks: they 

are sprawling, easily accessible by water and land, close to crowded 

metropolitan areas, and interwoven with complex transportation networks 

designed to move cargo and commerce as quickly as possible (see fig 1). 

They contain not only terminals where goods bound for import or export 

are unloaded or loaded onto vessels, but also other facilities critical to the 

nation’s economy, such as refineries, factories, and power plants. To 

reduce the opportunity for terrorists to exploit port vulnerabilities, port 

stakeholders are taking mitigation steps. For example, port stakeholders 

have installed fences, hired security guards, and purchased cameras to 

reduce the potential for unauthorized entry and help prevent 

vulnerabilities from being exploited. 

Background 

Overview of U.S. Port 

Security 
 

Page 6 GAO-12-47 Port Security Grant Program

Figure 1: Sample Port Area Showing Eligible PSGP Recipients and Projects, and Key Port Stakeholders Involved in the Grant 

Process
 

Page 7 GAO-12-47 Port Security Grant Program

To help defray some of the costs of implementing security at ports around 

the United States, the PSGP was established in January 2002 when the 

Transportation Security Administration (TSA) was appropriated $93.3 

million to award grants to critical national seaports.8 In November 2002, 

the Maritime Transportation Security Act (MTSA), which codified the 

program, was enacted.9 Since the supplemental appropriations act for 

fiscal year 2002, the appropriations acts have provided annual 

appropriations for the PSGP. FEMA is responsible for designing and 

operating the administrative mechanisms needed to implement and 

manage the grant program.10 The Coast Guard—which is generally the 

lead federal agency for port security—provides subject matter expertise 

for the maritime industry and participates in project award decisions. 

From fiscal year 2002 through fiscal year 2011, nearly $2.5 billion has 

been allocated to the PSGP, as shown in table 1. 

 

8 Department of Defense and Emergency Supplemental Appropriations for Recovery from 

and Response to Terrorist Attacks on the United States, 2002, Pub. L. No. 107-117, 115 

Stat. 2230, 2327 (2002).

9 Pub. L. No. 107-295, § 102(a), 116 Stat. 2064, 2068-84 (2002) (codified as amended at 

46 U.S.C. § 70107).

10 Responsibility for administering the PSGP has changed numerous times since its 

inception in 2002. When first established, TSA managed the PSGP in partnership with the 

Maritime Administration and the Coast Guard. In March 2003, TSA was transferred from 

the Department of Transportation to the Department of Homeland Security under the 

Homeland Security Act; however, TSA continued to operate the program. In March 2004, 

the Secretary of Homeland Security established the Office of State and Local Government 

Coordination and Preparedness (OSLGCP), and for fiscal year 2005, OSLGCP was 

appropriated funding for the PSGP. In October 2005, the Secretary of Homeland Security 

created the Preparedness Directorate, and within that directorate, the Office of Grants and 

Training (OGT). Thus, for fiscal years 2006 and 2007, OGT administered the program. In 

April 2007, under the Post-Katrina Emergency Management Reform Act, many of the 

functions and authorities of the Preparedness Directorate were transferred to FEMA, and 

since that time, FEMA has administered the PSGP.

Grant Funding for Port 

Security 
 

Page 8 GAO-12-47 Port Security Grant Program

Table 1: Port Security Grant Program Funding

Fiscal Year

a

2002 2003 2004 2005 2006 2007 2007S 2008 c 2009 ARRA 2010 d 2011 Total

Funding

($ millions) 93 244 179 b 141 168 201 110 389 389 150 288 235 2,495

Source: FEMA’s annual PSGP grant guidance 

a

Target funding amounts as presented in FEMA’s annual grant guidance. Total appropriation for the 

program is higher than funding in the table because FEMA receives a percentage of the allocation for 

management and administration of the program. This table has not been adjusted for inflation. 

b

This figure includes $169 million in PSGP funding and $75 million in additional funding for port 

security under the Urban Area Security Initiative—another DHS grant program that provides funding 

for building and sustaining national preparedness capabilities.

c

Funding level pursuant to the fiscal year 2007 supplemental appropriation. 

d

Funding level pursuant to appropriations in the American Recovery and Reinvestment Act (ARRA). 

Pub. L. No. 111-5, 123 Stat. 145, 164 (2009). 

In recent years, we, the Congress, the President, the Secretary of 

Homeland Security, and others have endorsed risk management as a 

way to direct finite resources to areas that are most at risk of terrorist 

attack. Risk management is a continuous process that includes the 

assessment of threats, vulnerabilities, and consequences to determine 

what actions should be taken to reduce one or more of these elements of 

risk. One way in which DHS has applied risk management principles to 

the PSGP is through the use of a risk model to assess the relative risk 

posed to ports throughout the nation and to help determine PSGP 

eligibility and funding levels. The PSGP risk methodology is similar to the 

methodology used to determine funding eligibility for other DHS state and 

local grant programs. The model consists of three variables: threat (the 

relative likelihood of an attack occurring), vulnerability (the relative 

exposure to an attack), and consequence (the relative expected impact of 

an attack). Data for each of these variables are collected from offices and 

components throughout DHS, as well as from other data sources, and 

then, using the model, each port is ranked against one another and 

assigned a relative risk score. At the recommendation of the Coast 

Guard, DHS considers some ports as a single cluster—known as a port 

area—due to geographic proximity, shared risk, and a common waterway. 

Based on risk, each port area is placed into one of three funding groups—

Group I, Group II, or Group III.11

 

11 More information about the PSGP groups will be discussed later in the report. 

Ports not identified in Group I, II, or III are 

Risk Management 

Practices Associated with 

the PSGP
 

Page 9 GAO-12-47 Port Security Grant Program

eligible to apply for funding as part of the “All Other Port Areas” Group.12

Figure 2: Location of Group I and Group II Port Areas

Figure 2 below shows the location of port areas for groups I and II—the 

two highest risk groups that receive the bulk of grant funding. 

a

 

a 

 

12 There are not a set number of port areas within the All Other Port Areas Group and it 

can vary from year to year. 

Icons connected by dotted lines indicate a single port area. 
 

Page 10 GAO-12-47 Port Security Grant Program

To promote a regional approach to risk management in the highest risk 

port areas, FEMA required—beginning with the fiscal year 2007 

supplemental guidance—that all Group I and II port areas—the highest 

risk port areas—develop and implement a Portwide Risk Mitigation Plan 

(PRMP). The primary goal of a PRMP is to provide a port area with a 

mechanism for considering its entire port system strategically as a whole, 

and to identify and execute a series of actions designed to effectively 

mitigate risks to the system’s maritime critical infrastructure.

DHS creates PSGP grant guidance annually which provides the funding 

amounts for each group, eligible applicants, and the application materials 

for funding under the program. As shown in figure 3, there are three 

stages of the PSGP grant cycle: allocation, award, and distribution.

Overview of PSGP Grant 

Cycle 
 

Page 11 GAO-12-47 Port Security Grant Program

Figure 3: Overview of the PSGP Grant Process for Fiscal Years 2007 Supplemental through 2011a 

a

Ports in the All Other Port Areas Group are not part of the risk model but follow the same process as 

Group III for award and distribution. 
 

Page 12 GAO-12-47 Port Security Grant Program

Each port area’s allocation is driven by the results of the PSGP risk 

analysis model. However, the allocation process varies among groups as 

described below. 

• Groups I and II: The risk model determines the port areas at high risk 

of a terrorist attack and DHS places them in either Group I (highest 

risk group) or Group II (next highest risk group). In fiscal year 2011, 

there were 7 port areas in Group I and 48 port areas in Group II. Each 

port area in these groups is allocated a specific amount of funding 

based on its risk score. 

• Group III: Group III ports represent the next risk grouping of port 

areas based on the risk model scores. For fiscal year 2011, there 

were 35 port areas in Group III. However, unlike Groups I and II, 

these port areas do not receive a specific allocation based on risk. 

Instead, DHS allocates a set amount of funding to Group III as a 

whole and port areas within Group III compete against each other for 

this funding based on risk and project effectiveness. 

• All Other Port Areas: Port areas not evaluated using the risk model, 

but which operate under an Area Maritime Security Plan (AMSP),

13

After DHS announces the allocation amounts for all of the groups through 

the release of the grant guidance, applicants must apply for funding––

either through the fiduciary agent or directly to FEMA––within 45 days of 

the release of the grant guidance. Applicants are entities within a port 

area—such as port authorities, facility operators, and state and local 

are eligible to compete for funding with the All Other Port Areas 

Group––in a manner similar to Group III, but without using risk scores 

as a factor in project selection. 

 

13 Area Maritime Security Plans (AMSP) are a Maritime Transportation Security Act 

(MTSA) requirement and include among other things, operational and physical security 

measures in place at the port under different security levels, details of the security incident 

command and response structure, procedures for responding to security threats including 

provisions for maintaining operations in the port, and procedures to facilitate the recovery 

of the marine transportation system after a security incident. See 46 U.S.C. § 70103(b). A 

Coast Guard Navigation and Vessel Inspection Circular––the Coast Guard’s detailed 

guidance about the enforcement or compliance with federal marine safety regulations and 

Coast Guard marine safety programs––provided a common template for AMSPs and 

specified the responsibilities of port stakeholders under them. As of October 2011, 43 

AMSPs were in place. Plans were first required in 2004 and, as required, were updated by 

2009.

Allocation Process

Award Process
 

Page 13 GAO-12-47 Port Security Grant Program

government agencies—that provide port security services. During the 

award process, DHS and the U.S. Department of Transportation (DOT) 

evaluate the port areas’ projects and determine which projects to fund. 

Before the projects reach DHS and DOT for review they are vetted 

locally. The local evaluation process––known as field-level review––for 

Groups I and II differs from that of Group III and All Other Port Areas 

Group as described below.

• Groups I and II: Beginning with the fiscal year 2007 supplemental 

guidance, port areas in Groups I and II received a single direct 

funding allocation based on risk.14 Once the allocation is made, 

stakeholders in the port area then undergo a collaborative process to 

determine the projects to fund with the grant allocation. To help 

manage the new direct allocation process, DHS introduced the use of 

fiduciary agents to help manage the PSGP at the local level and 

ensure that all port partners were incorporated into the planning and 

grant allocation processes. For Group I and II port areas, FEMA 

awards the port area allocation to each port area’s selected fiduciary 

agent. According to the grant guidance, while the fiduciary agent acts 

as the principal point of contact with FEMA for application, 

management, and administration of the Group I and II grant awards, 

the fiduciary agent is not the sole decision maker regarding the use of 

the PSGP grants. Instead, a field-level review process is conducted 

by the applicable Coast Guard Captain of the Port (COTP) in 

coordination with DOT, the Maritime Administration, and appropriate 

personnel from the Area Maritime Security Committee (AMSC) 

including federal, state, and local agencies.15

 

14 Prior to fiscal year 2007, the PSGP did not include funding groups. Rather, all port 

areas competed for one pool of grant funding. In fiscal year 2007, DHS introduced the 

group concept, and provided port areas in Group I with a single direct allocation based on 

risk. In the fiscal year 2007 supplemental grant round, DHS chose to also provide port 

areas in Group II with a single direct allocation based on risk. Since fiscal year 2007 

supplemental, each port area in Groups I and II has received a single direct allocation. 

At the completion of the 

15 Port security and commerce functions within ports reside with the Coast Guard Captain 

of the Port (COTP), whose responsibilities are summarized at 33 C.F.R. § 1.01-30. An 

AMSC serves as a forum for port stakeholders, facilitating the dissemination of information

through regularly scheduled meetings, issuance of electronic bulletins, and sharing key 

documents. MTSA provided the Coast Guard with the authority to create AMSCs—

composed of federal, state, local, and industry members—that help to develop the AMSP 

for the port. As of October 2011, the Coast Guard had organized 43 AMSCs. Each has 

flexibility to assemble and operate in a way that reflects the needs of its port area, 

resulting in variations in the number of participants, the types of state and local 

organizations involved, and the way in which information is shared.
 

Page 14 GAO-12-47 Port Security Grant Program

field-level review process, the COTP—through the fiduciary agent—

submits to FEMA a prioritized list of projects for funding ranked from 

highest to lowest in terms of their contributions to risk reduction and 

cost effectiveness. Once the COTP submits this information, DHS 

begins its national review process for Group I and II port areas.

• Group III and All Other Port Areas: Unlike Groups I and II, grant

projects in Group III and the All Other Port Areas Group are 

determined through a competitive process. Port entities in these two 

groups submit their project proposals directly to DHS for review. DHS 

reviews the projects for eligibility, and approved projects are grouped 

by port area and sent to the corresponding COTP for further review. 

At this point, the process mirrors the Group I and II process. 

Before grant awards are finalized, project proposals undergo a national 

review process conducted by the National Review Panel (NRP), a group 

of subject matter experts from DHS and DOT. During the national review 

process, the NRP reviews all submitted projects for eligibility, and makes 

a final funding recommendation to the Secretary of Homeland Security. 

PSGP funds cannot be distributed to grantees to begin projects until DHS 

ensures the grantee’s compliance with federal grant management 

requirements. FEMA’s GPD is responsible for ensuring that all grant 

projects adhere to federal grant requirements, including all EHP 

requirements. For example, the National Environmental Policy Act 

requires DHS to analyze the possible environmental impacts of each 

project funded by a DHS grant.16 In addition to federal requirements, DHS 

also directs all applicants to provide detailed budgets for the requested 

funds at the time of application. Until FEMA is satisfied that all 

requirements have been met, no grant funding can be distributed to begin 

projects—rather the grant funding is considered “unavailable.” Once 

FEMA makes funds available to grantees, port entities must complete the 

grant project within the designated 3-year performance period.17

 

16 Pub. L. No. 91-190, 83 Stat. 852 (1970). 

For 

17 PSGP funds are appropriated on an annual basis and must be awarded by the end of 

the fiscal year in which they are appropriated. FEMA has set a 3-year performance period 

for PSGP grants, meaning that all grant projects must be completed within 3 years. 

However, FEMA has the authority to extend the 3-year performance period by up to 2 

years, giving grantees up to 5 years in total to complete the grant project. After 5 years, 

the money must be returned to the Treasury under federal appropriations law. 

Distribution Process
 

Page 15 GAO-12-47 Port Security Grant Program

example, for fiscal year 2009 projects, the performance period began on 

June 1, 2009. During this grant period, the City of Houston received 

approval for the second phase of a radio system project. By the time the 

project cleared local and federal review and funds were made available it 

was March 16, 2011––leaving the city about 14 months to implement the 

project before the performance period end date of May 31, 2012. 

For fiscal years 2010 and 2011, DHS allocations of PSGP funds were 

based on DHS’s risk model and implementation decisions, and were 

made largely in accordance with risk. For example, we found that 

allocations to port areas were highly positively correlated to port risk, as 

calculated by the risk model.18 In addition to the risk scores of the port 

areas, DHS made two implementation decisions when finalizing grant 

allocations for fiscal year 2011. First, DHS opted to direct the majority of 

available funding to the highest risk port areas. Second, DHS chose to 

limit fluctuations in grant funding from year to year to any given port 

area.19

 

18 When considering individual port areas, the correlation coefficients between a port 

area’s calculated risk and allocation were 0.97 in fiscal year 2011 and 0.93 in fiscal year 

2010. We did not complete these calculations for years prior to fiscal year 2010. The 

correlation coefficient measures the direction of and strength of association between two 

variables, where the strength of association refers to how the scores on one variable are 

distributed with respect to the scores on the other variable. The statistic ranges between 

-1 and 1, with the strength of association between two variables increasing the further the 

statistic is from zero. A positive correlation coefficient indicates that the two correlated 

variables move in the same direction. In contrast, a negative correlation coefficient 

indicates that as one variable increases, the second variable decreases. A correlation 

coefficient of 0 indicates that there is no relationship between the two variables. 

Overall, as shown in table 2 below, DHS directed 60 percent of 

available grant funding to the 7 Group I port areas in fiscal year 2011, 

19 DHS also made these two implementation decisions when finalizing grant allocations 

for fiscal year 2010. 

DHS Allocated PSGP 

Funds Based Largely 

on Risk, but the Risk 

Model Can Be Further 

Strengthened 

PSGP Allocations Were 

Largely Based on Port Risk 

and DHS Implementation 

Decisions
 

Page 16 GAO-12-47 Port Security Grant Program

which represented about 54 percent of the total risk for port areas, 

according to the model’s determination of risk.20

Table 2: Comparison of Allocation to Risk, by PSGP Funding Group, Fiscal Year 201121

Port areas in 

funding group

Fiscal year 2011 group 

allocation (millions) 

Percent of total grant 

funding allocated to 

group

Percent of total risk 

represented by group as 

determined by the risk model

Group I 7 $141.0 60.0 54.4

Group II 48 $70.5 30.0 42.1

Group III 35 $11.8 5.0 3.5

All other port areas N/A a $11.8 5.0 N/A

Source: GAO analysis based on FEMA grant guidance and PSGP risk model. 

a These port areas are not included in the PSGP risk model. The All Other Port Areas Group is open 

to ports not included in a Group I, II, or III port area but which operate under an applicable AMSP.

After DHS determined the percentage of total funding it would direct to 

each group, it then provided each port area within Groups I and II with a 

designated allocation based on the results of the risk model. For example, 

in fiscal year 2011, the average allocation to a Group I port area was 

about $20 million, with allocations ranging from about $12 million for the 

Delaware Bay port area to about $30 million for the New York-New 

Jersey port area. The average allocation to a Group II port area was 

about $1.5 million, with allocations ranging from $1 million, received by 21 

Group II port areas, to $3.5 million for the Chicago/Lake Michigan port 

area. In contrast to Groups I and II, port areas in Group III or the All Other 

Port Areas Group do not receive a designated allocation. Instead, port 

areas in Group III and the All Other Port Areas Group compete within 

 

20 For each grant cycle since fiscal year 2007 when the group funding structure was 

introduced, DHS determined what portion of the overall PSGP funding to direct towards 

each funding group. The allocation to Group I has ranged from 54 to 60 percent, the 

allocation to Group II from 20 to 36 percent, the allocation to Group III from 4 to 15 

percent, and the allocation to the All Other Port Areas Group from 4 to 5 percent. In fiscal 

year 2008 and 2009, as well as for the American Recovery and Reinvestment Act, eligible 

ferry systems also received a designated portion of the overall grant allocation. For 

additional information, see app I. 

21 In fiscal year 2010, Group I was allocated 60 percent of grant funding and accounted 

for 43.5 percent of the risk. Group II was allocated 30 percent of grant funding and 

accounted for 53 percent of the risk. Group III was allocated 5 percent of grant funding 

and accounted for the remaining 3.5 percent of the risk.
 

Page 17 GAO-12-47 Port Security Grant Program

their group for a portion of the group’s total funding—which was about 

$11.8 million for each group in fiscal year 2011.

In addition to directing the majority of available grant money to the highest 

risk port areas, DHS also opted to provide stability in the funding levels of 

Group I and II port areas through another implementation decision. To 

achieve this stability, DHS utilized funding “floors” in the fiscal year 2011 

risk model, which limited how much a port area allocation could decrease 

from year to year, despite changes in risk identified by the model.22

In the fiscal year 2011 model, DHS set the funding floor for Group I port 

areas at 25 percent—meaning that the port area’s funding level could not 

decrease by more than 25 percent from its fiscal year 2010 allocation 

regardless of how much its risk profile changed. Similarly, for fiscal year 

2011, DHS set the funding floor for Group II port areas at 50 percent—

meaning that the port area’s allocation could not decrease by more than 

50 percent from its fiscal year 2010 allocation regardless of changes in 

risk. According to FEMA data, if the floors had not been used in fiscal 

year 2011, the allocations to 3 Group I port areas would have fallen by 

more than 25 percent and the allocations to 8 Group II port areas would 

have fallen by more than 50 percent. However, due to the use of funding 

floors, these 11 port areas collectively received fiscal year 2011 

allocations that were about $11.6 million—or about 26 percent—higher 

than their risk profiles would have indicated. See table 3 below. 

A 

senior FEMA official reported that floors were used in the fiscal year 2011 

PSGP risk model to mitigate wide fluctuations in funding so that port 

areas could better plan for long-term security improvements. This official 

also noted that floors have been used in the PSGP risk model since fiscal 

year 2008 and were also used in the fiscal year 2011 Homeland Security 

Grant Program (HSGP) risk model.

 

22 DHS has also used “ceilings” in past years to limit how much a port area’s allocation 

could increase from year to year, despite changes in risk. However, DHS did not utilize 

ceilings in the fiscal year 2011 PSGP risk model. 
 

Page 18 GAO-12-47 Port Security Grant Program

Table 3: Effects of Funding Floor on Fiscal Year 2011 Allocations to Port Areas

Group

a

Port area

Effect of funding floors on port area allocations

Additional allocation received beyond 

what risk model would have indicated

Percent increase in allocation over what 

risk model would have indicated

I Port A $361,997 2.5

I Port B $7,308,096 74.5

I Port C $2,325,071 24.1

II Port D $248,751 13.4

II Port E $198,318 14.4

II Port F $271,472 20.3

II Port G $107,997 8.2

II Port H $124,059 9.7

II Port I $102,390 10.2

II Port J $128,750 12.9

II Port K $416,831 41.7

Total 11 port areas $11,593,732 26.1

Source: DHS. 

a

Funding floors limit how much a port area’s allocation can decrease from year to year, regardless of 

changes in risk identified by the model. This table shows the 11 port areas that received a higher 

PSGP allocation in fiscal year 2011 than their risk profiles would have indicated as a result of the 

inclusion of funding floors. 

In fiscal year 2011, DHS modified how port vulnerability—the relative 

exposure to an attack—is calculated in the PSGP risk model, but 

additional changes could improve how vulnerability is measured in the 

model. Prior to fiscal year 2011, the PSGP risk model held vulnerability 

constant, rather than accounting for differences across ports. We have 

reported on the value of measuring vulnerability in risk analysis models in 

two prior reports.23

 

23 GAO, Homeland Security: DHS Risk-Based Grant Methodology Is Reasonable, But 

Current Version’s Measure of Vulnerability is Limited, 

In June 2008, we reported that DHS chose to hold 

vulnerability constant and consider all states and urban areas equally 

vulnerable in the HSGP risk analysis model, which reduced the value of 

GAO-08-852 (Washington, D.C.: 

June 27, 2008). GAO, Transit Security Grant Program: DHS Allocates Grants Based on 

Risk, but Its Risk Methodology, Management Controls, and Grant Oversight Can Be 

Strengthened, GAO-09-491 (Washington, D.C.: June 8, 2009). 

DHS Revised the 

Vulnerability Index of the 

PSGP Risk Model but 

Additional Changes Could 

Further Strengthen the 

Measure
 

Page 19 GAO-12-47 Port Security Grant Program

the model in estimating risk.24 In June 2009, we reported that DHS also 

chose to consider all transit agencies equally vulnerable in its Transit 

Security Grant Program (TSGP) risk analysis model.25 Regarding both 

models—which are similar in structure to the PSGP risk model—we 

recommended that DHS formulate a method to measure vulnerability in a 

manner that captures variations across jurisdictions, and apply this 

vulnerability measure in future iterations of the grant allocation model. To 

respond to these recommendations and other external feedback 

regarding the grant programs, and to produce a more complete risk 

picture, DHS modified the vulnerability index in the fiscal year 2011 PSGP 

model such that vulnerability is no longer held constant.26 Instead, the 

new vulnerability index recognizes that different ports can have different 

vulnerability levels. In the fiscal year 2011 PSGP model, port vulnerability 

is assessed using four data components thought to influence a port’s 

vulnerability to attack, as shown below in table 4. The fiscal year 2011 

PSGP risk model is provided in full in appendix II. 

 

24 The Homeland Security Grant Program (HSGP)—which is comprised of five 

interconnected grant programs including the State Homeland Security Program and the 

Urban Area Security Initiative—provides a primary funding mechanism for building and 

sustaining national preparedness capabilities. These grant programs fund a range of 

preparedness activities, including planning, organization, equipment purchase, training, 

exercises, and management and administration. For more information on the Homeland 

Security Grant Program, see GAO-08-852. 

25 The Transit Security Grant Program (TSGP) is one of five grant programs that 

constitute the DHS focus on transportation infrastructure security activities. The TSGP 

provides funds to owners and operators of transit systems to protect critical surface 

transportation infrastructure and the traveling public from acts of terrorism and to increase 

the resilience of transit infrastructure. 

26 DHS officials reported that the decision to incorporate a vulnerability component in the 

fiscal year 2011 risk model was primarily based on feedback in the following three reports: 

(1) GAO-08-852; (2) National Academies “Review of the Department of Homeland 

Security’s Approach to Risk Analysis” (Washington, D.C.: 2010); and (3) Homeland 

Security Studies and Analysis Institute’s “FEMA GPD Risk Integration and Cost to 

Capability Analysis Final Report” (Arlington, Va: November 2010). Additionally, DHS 

officials reported that FEMA made this modification as part of a process of continual 

improvements to the formula. 
 

Page 20 GAO-12-47 Port Security Grant Program

Table 4: Data Components in Vulnerability Index of Fiscal Year 2011 PSGP Risk 

Model

Data Element Definition

Ferry Passengers The average daily ferry ridership for any ferry lines that began 

or ended in a port during the 2008 calendar year. 

Cruise Ship 

Passengers

The annual number of cruise ship passengers that embarked 

on a cruise ship from that port during the 2009 calendar year. 

Foreign Vessel Calls The number of foreign-flagged vessels that arrived in a U.S. 

port during the 2010 calendar year with a foreign port as their 

last port of call. 

HAZMAT Population The volume of hazardous materials that transited through a 

port during the 2008 and 2009 calendar years multiplied by the 

population in a 5-mile radius around that port.

Source: DHS.

Although FEMA has taken the first step towards improving how port 

vulnerability is measured in the PSGP risk model, further improvements 

are needed to ensure that the vulnerability score for a specific port is 

responsive to changes in security that may occur in that port—such as 

the implementation of new security measures. The fiscal year 2011 

vulnerability index does not provide a mechanism to account for how new 

security measures—such as the installation of cameras or the provision of 

additional training to security officials —affect a port’s vulnerability, even if 

those security measures were funded using PSGP grant dollars. This 

limitation is due to the fact that the data elements within the vulnerability 

index are counts of activities, which recognize the number of activities 

that may occur—such as how many ferry passengers board a ferry—but 

do not account for the protective actions taken to secure them. For 

example, if a port installed security cameras throughout a ferry system to 

monitor vessel or ferry passenger activity, one would expect to reduce the 

ferry system’s vulnerability to attack. However, because the “ferry 

passenger” data element within the model’s vulnerability index is simply a 

count of passengers utilizing the ferry system and is not a reflection of the 

security measures in place to protect the ferry system, the new camera 

system would not reduce the port’s vulnerability score as calculated by 

the risk model. Thus, with this type of measure, in this example, a port 

could only reduce its vulnerability score by reducing the number of 

passengers utilizing the ferry system. The model’s robustness is thereby 

limited because activity counts do not reflect improvements made to port 

security. 

It is important to note that some security improvements may be captured 

by the inclusion of the Coast Guard’s Maritime Security Risk Analysis 
 

Page 21 GAO-12-47 Port Security Grant Program

Model (MSRAM) results in the PSGP risk model.27

The National Infrastructure Protection Plan states that when measuring 

vulnerability, one should describe all protective measures in place and 

how they reduce vulnerability. FEMA officials reported that capturing data 

on all security improvements would be challenging due to the need to 

collect and validate data for all ports included in the PSGP risk model. 

However, FEMA officials acknowledged the importance of incorporating 

completed security projects as part of the vulnerability component of the 

risk model and stated that FEMA will continue to refine its vulnerability 

assessments. Without accounting for the reductions in vulnerability 

achieved through new security measures implemented in a port, including 

those funded through the PSGP, the robustness of the risk model may be 

limited and not accurately reflect the relative risk of port areas throughout 

the nation. Instead, the risk model would likely continue to recognize the 

same ports as the highest risk, regardless of the security improvements 

made in those ports. In addition, by not accounting for security 

improvements resulting from PSGP grants, the security benefits of the

PSGP are also not recognized. Incorporating completed security projects 

into the vulnerability component of the risk model could help increase its 

The MSRAM data—

which are updated annually—provide information to the model on the 

percentage of national high-risk assets that reside within each port.

However, MSRAM does not account for all types of security 

improvements because it is an asset-based model that assesses 

improvements to individual port assets such as a ferry terminal or a 

chemical plant. As such, MSRAM is not designed, for example, to 

evaluate security projects that may affect multiple assets in a port.

 

27 MSRAM data are captured in the Consequence index of the PSGP risk model. The 

Coast Guard uses MSRAM to assess maritime security risk, which it defines as the 

product of threat, vulnerability, and consequence. The MSRAM risk formula produces a 

risk index number (RIN) for each maritime target, such as a shipping terminal or 

passenger ferry, that allows Coast Guard officials at the local, regional, and national levels 

to compare and rank critical infrastructure for the purpose of informing security decisions. 

To calculate a RIN for each maritime target, the Coast Guard depends upon local port 

security partners to provide information on a target’s vulnerability and the estimated 

consequences of a successful attack. Threat information in MSRAM is provided by the 

Coast Guard Intelligence Coordination Center and represents intelligence community 

assessments of the intent, capability, and geographic preference of terrorist organizations 

to attack maritime targets. For more information on MSRAM, see GAO, Coast Guard: 

Security Risk Model Meets DHS Criteria, but More Training Could Enhance Its Use for 

Managing Programs and Operations, GAO-12-14 (Washington, D.C.: Nov. 17, 2011). 
 

Page 22 GAO-12-47 Port Security Grant Program

robustness and more accurately direct allocations to the highest risk port 

areas.

While FEMA officials reported that developing an improved vulnerability 

index that incorporates the effect of security improvements would be a 

challenging process, there are interim measures that FEMA could take to 

ensure that the most precise data available are being used to populate 

the existing vulnerability index. FEMA made some progress in this regard 

by modifying how the HAZMAT Population data component was 

calculated in the fiscal year 2011 model.28

In the fiscal year 2011 model, the foreign vessel calls component 

provides a count of foreign-flagged vessels arriving in U.S. ports that 

have a foreign port as their last port of call. However, this measure does 

not account for the variation in risk profiles of these vessels—as not all 

foreign vessels are considered to be of equal risk, according to the Coast 

Guard. Because the Coast Guard does not view all vessels to be of equal 

risk, it has developed a procedure to identify and target for boarding those 

vessels that it deems to pose a high relative security risk to a port. This 

program—called the High-Interest Vessel (HIV) Program—collects data 

that classify arriving vessels according to risk, using multiple factors to 

establish the vessel’s risk profile.

Rather than measuring only 

hazardous materials imports, as was done in the fiscal year 2010 and 

prior models, the modified measure also accounts for the transit of 

hazardous materials through a port where the port is not their final 

destination, providing added precision to the model. However, there are 

more precise data available that FEMA is not currently utilizing for at least 

one additional data component within the vulnerability index—foreign 

vessel calls. 

29

 

28 The HAZMAT Population data component was part of the consequence index in the 

fiscal year 2010 model. It was moved to the vulnerability index in the fiscal year 2011 

model. 

According to a Coast Guard HIV 

program official, HIV data would provide a better indicator of the risk 

posed by vessels arriving from foreign ports than a vessel count would 

provide. He also reported that the Coast Guard already maintains these 

vessel data and they could be analyzed to determine areas with higher 

29 The Coast Guard established its High-Interest Vessel (HIV) Program to address 

increased U.S. maritime security requirements in the aftermath of the terrorist events of 

September 11, 2001. The program targets HIVs, or those that might pose high relative 

security risks to U.S. ports. 
 

Page 23 GAO-12-47 Port Security Grant Program

frequencies of high-risk vessel arrivals, although it would require the 

Coast Guard to extract data from multiple sources to conduct a port-byport analysis. The National Infrastructure Protection Plan states that DHS 

is responsible for using the best available information to conduct risk 

analysis and risk management activities. FEMA officials reported that they 

considered using HIV data in fiscal year 2011 but determined that due to 

time constraints, it would be more straightforward to use a count of 

foreign-flagged vessels during the first iteration of the vulnerability index. 

However, FEMA officials reported that they will continue to research 

additional data elements for inclusion in future year risk models. Using 

data from the HIV Program—which the Coast Guard already collects—in 

future iterations of the risk model could position FEMA to better capture 

the vulnerability of port areas posed by vessels arriving from foreign ports 

and thereby improve the precision of allocations to high-risk port areas.

FEMA awarded nearly $1.7 billion in port security grants in fiscal years 

2006 through 2010. As shown in figure 4 below, grantees have “drawn 

down” about one-quarter of funds—or about $395 million.30 Further, about 

half of the funds are “available” to grantees to begin work on projects.31

However, about one-quarter of funds are “unavailable” to grantees.32 

 

30 The term “draw down” indicates that the grant recipient has incurred an expense related 

to their approved grant project and has sought reimbursement for this expense. Once the 

grantee has been reimbursed, the grant funds are considered drawn down. Before draw 

down can occur, FEMA has to approve the use of grant funds for a specific project, the 

grantee has to comply with all postaward requirements for that grant project, and FEMA 

has to distribute the funds to the grantee.

31 The term “available funds” indicates that FEMA has given the grantee approval to 

spend money on an approved grant project. In order for funds to be available, FEMA has 

to approve the use of grant funds for a specific project and the grantee has to comply with 

all postaward requirements for that grant project.

32 The term “unavailable funds” indicates that FEMA has not given the grantee approval to 

spend money on a grant project.

Most Grant Funding Is 

Available, but $400 

Million Is Unavailable 

Due to Various 

Challenges—Which 

FEMA Has Begun to 

Address 
 

Page 24 GAO-12-47 Port Security Grant Program

Figure 4: Status of Awarded Grant Funding, Fiscal Years 2006 through 2010

As shown in table 5 below, FEMA awarded nearly $1.7 billion in port 

security grants in fiscal years 2006 through 2010; however, less than 24 

percent—or about $395,000 million—had been drawn down as of

September 2011. 

Table 5: Draw Down Rates by Group, Fiscal Years 2006 through 2010a

Total PSGP funding awarded

Amount of funding drawn 

down by grantees

Percent of awarded funds 

drawn down

Group I $920,508,263 $160,476,245 17.4

Group II $531,998,959 $109,788,562 20.6

Group III $143,003,552 $80,702,875 56.4

All other port areas $80,558,172 $43,912,734 54.5

Total $1,676,068,946 $394,880,416 23.6

Source: GAO analysis of FEMA data as of September 2011.

a

Although draw down rates are often cited as a measure of progress in 

improving port security, FEMA officials stated that draw down rates are 

For a complete summary of the financial status of PSGP funds, see app III.

Grantees Have Drawn 

Down About One-Quarter 

of Awarded PSGP Grant 

Funds 
 

Page 25 GAO-12-47 Port Security Grant Program

not an accurate reflection of progress made in improving port security 

because grantees do not always draw down their funds promptly. Thus, 

even though progress may be underway in improving port security, until 

the grantee draws down their funds, this progress is not evident. FEMA 

officials reported that grantees may not draw down their grant funds right 

away for two main reasons. First, as a reimbursement grant program, 

grantees are not eligible to draw down awarded PSGP funds until they 

have incurred a cost. FEMA officials reported that costs for PSGP grants 

are often not incurred until late in the grant performance period. For 

example, grantees may choose to wait until project completion before 

paying contractors to ensure that the project is completed according to 

the terms of the contract. Thus, the draw down of grant funds would occur 

late in the performance period, after project completion. Second, grantees 

may choose not to draw down funds immediately after incurring a cost. 

Instead, the grantee might choose to wait until the end of the performance 

period to draw down funds or choose to draw down funds at select points 

throughout the year. Often, according to FEMA officials, this delay is due 

to the parameters of local accounting systems or the need to seek 

approval from local government entities before requesting 

reimbursement. As a result of these two factors, grantees have likely 

made more progress towards implementing grant projects to improve port 

security than is reflected in the draw down numbers, according to FEMA 

officials. 

To encourage grantees to draw down funds more promptly, FEMA’s GPD 

released an information bulletin in January 2011 requesting that 

whenever possible, grantees draw down funds no less than on a quarterly 

basis. According to the information bulletin, more frequent draw downs 

would provide a more accurate representation of FEMA grant fund 

usage.33 According to FEMA data on monthly draw down rates over time, 

there was an initial increase in draw down rates for some grant years 

after the information bulletin was released, but draw down rates have 

since leveled off. 

 

33 FEMA Grants Program Directorate Information Bulletin No. 352 – Timeliness of Grantee 

Draw Downs (Jan. 18, 2011). 
 

Page 26 GAO-12-47 Port Security Grant Program

Of the nearly $1.7 billion in port security grants that FEMA awarded to 

port areas in fiscal years 2006 through 2010, more than $400 million—or 

about 24 percent—remained unavailable to grantees as of September 

2011, as shown in table 6 below. Grantees cannot use unavailable funds 

to begin work on security projects.

Table 6: PSGP Funding Awarded and Unavailable, by Groups, Fiscal Years 2006 through 2010 a 

Total PSGP funding awarded Unavailable funds

Percent of awarded funding 

that is unavailable

Group I $920,508,263 $242,252,671 26.3

Group II $531,998,959 $144,090,543 27.1

Group III $143,003,552 $13,943,075 9.8

All other port areas $80,558,172 $7,471,747 9.3

Total $1,676,068,946 $407,758,036 24.3

Source: GAO analysis of FEMA data as of September 2011.

a

There are two types of unavailable funds—funds that are “unused” and 

funds that are “on-hold.” Unused funds—which exist only in Group I and II 

port areas—are funds which the port area has been awarded but has not 

yet used for specific projects.

For a complete summary of the financial status of PSGP funds, see app III.

34 For example, as shown in table 6 above, 

approximately $242 million in grant funding awarded to Group 1 port 

areas was unavailable as of September 2011. Of this, about $116 

million—or 48 percent—was unavailable because the funds have not 

been used for specific projects. 35

 

34 Port areas in Groups I and II receive a designated allocation from which approved 

projects are funded. In contrast, grant awards for port areas in Group III or the “All Other 

Port Areas” group are made on a competitive basis and as such, specific projects are 

identified at the time of award. As a result, all funding awarded to Group III and “All Other 

Port Areas” Group is immediately linked to specific projects as a result of the competitive 

award process and thus, cannot remain unused. 

The second type of unavailable funds—

on-hold funds—exist in all four funding groups, and result when FEMA 

has approved the use of grant funding for a specific grant project, but 

compliance with postaward requirements—such as environmental and 

35 We are unable to report on the portion of Group II grant funds that are unavailable 

because they remain unused, due to concerns about data reliability. 

One-Quarter of Awarded 

PSGP Grant Funding Is 

Unavailable to Grantees 

Due to Various Challenges
 

Page 27 GAO-12-47 Port Security Grant Program

budgetary reviews—has not been completed.36

Development and Approval of Risk Mitigation Plans Contributed to 

Delays in Using Funds

Until these postaward 

requirements are met, these grant funds remain “on-hold.” Each type of 

unavailable funding—unused and on-hold—results from a different set of 

challenges, as discussed below. 

One challenge that PSGP program officials reported contributed to delays 

in using awarded grant funds was the implementation of the Port-Wide 

Risk Mitigation Plan (PRMP) requirement. This PRMP requirement was 

announced in August 2007 for the fiscal year 2007 supplemental grant 

round and was part of a broader FEMA effort to shift the grant program 

from supporting asset-specific projects—such as fences around a 

facility—that benefited just one facility, to supporting more regional, 

portwide projects—such as interoperable communication systems—that 

would benefit an entire port area. This new requirement caused delays 

because port areas were not eligible to submit specific projects to FEMA 

for approval until their PRMP was approved, and many PRMP 

submissions and approvals were delayed. The fiscal year 2007 

supplemental grant guidance included a time line and specific 

deliverables to guide port areas in the plan development and approval 

process.37

 

36 Each project must fulfill certain postaward requirements—such as environmental and 

budgetary reviews—before FEMA can release the hold and distribute the grant funds to 

the grantee. We will discuss these requirements later in this report. 

Based on this time line, all port area PRMPs should have been 

finalized by May 2008. However, only 3 of the 11 port areas we 

interviewed had an approved plan in place by this time. Plans for the 

remaining 8 port areas were approved between July 2008 and September 

2009. In June 2011, a senior FEMA official told us that FEMA did not hold 

stakeholders to the time lines for plan development because the time

lines were unreasonably aggressive for some port areas. Another senior 

FEMA official stated that FEMA did not want to rush the plan 

development process because that could have been detrimental to the 

quality of the plans. Due to the delayed plan submissions, FEMA faced 

challenges in approving draft plans. For example, the senior FEMA official 

37 Among the requirements stipulated in the grant guidance, port areas were required to 

submit to FEMA a concept of operations for their plan within 30 days of their award date. 

Following approval of the concept of operations, port areas had an additional 90 days to 

submit a draft plan for review.

Three Challenges Contributed 

to Unused Grant Funds
 

Page 28 GAO-12-47 Port Security Grant Program

reported that it was difficult to convene the review panel to approve plans 

on a sporadic basis. Thus, rather than hold weekly or biweekly meetings 

to discuss one or two plans, which would pose a burden on their federal 

partners on the review panel, FEMA instead held review panel meetings 

every 2 months. As a result, the official reported that it took longer than 

expected to approve risk mitigation plans which then delayed the 

submission of grant projects from port areas. Until a port area’s PRMP 

was approved, it was not eligible to submit projects to FEMA for approval. 

As a result, the delays associated with PRMP approval contributed to 

delays in the use of grant funds. For example, the PRMP for the 

Columbia-Snake River System was not approved until September 2009, 

meaning that the port area could not submit projects to FEMA for 

approval for more than 2 years after the fiscal year 2007 supplemental 

grant guidance was released, creating delays in the use of grant funds in 

this port area.

Managing Multiple Open Grant Rounds—with Varying Cost-Share 

Requirements—Posed a Challenge to Using Grant Funds

Fiduciary agents and FEMA officials reported that the initial delays 

resulting from delays in PRMP approval were exacerbated by the fact that 

multiple grant rounds—beginning with the fiscal year 2007 supplemental 

grant round when the PRMP requirement was announced—were 

underway by the time port area PRMPs were approved and that these 

grant rounds had varying cost-share requirements. In the case of all 11 

port areas in our review, multiple grant rounds had been announced—

through the release of grant guidance—before the port area’s PRMP was 

approved, as shown in figure 5. 
 

Page 29 GAO-12-47 Port Security Grant Program

Figure 5: Comparison of PRMP Approval Dates for 11 Port Areas in Our Review to PSGP Grant Milestone Dates

For example, both the fiscal year 2007 supplemental and the fiscal year 

2008 grant rounds had been announced—in August 2007 and February 

2008 respectively—before the first PRMPs—for the New York-New 

Jersey port area and the New Orleans port areas—were approved in April 

2008. In some cases, additional grant rounds were announced before 

port area PRMPs were approved. For example, as shown in figure 5, four 

grant rounds (fiscal year 2007 supplemental, fiscal year 2008, fiscal year 

2009, and ARRA) were announced before the Columbia-Snake River Port 

Area’s PRMP was approved in September 2009. 

With multiple grant rounds open, applicants could choose under which 

grant year to apply for funding. Fiduciary agents and FEMA officials 

reported that the cost-share requirement was a significant factor in 

applicant decisions regarding under which grant year to apply for 

funding.38

 

38 According to the statute, federal funds for any eligible project under the PSGP shall not 

exceed 75 percent of the total cost of such project. See 46 U.S.C. § 70107(c)(1). The 

cost-share is required by federal law and ports can only be exempted through waiver 

requests to the Secretary of Homeland Security, as discussed on page 33. 

 
 

Page 30 GAO-12-47 Port Security Grant Program

As shown in table 7 below, the PSGP has traditionally required a costmatch, but this requirement has been modified or waived in numerous 

grant rounds as a result of legislative action.

Table 7: Changing Cost-Share Requirements in the PSGP, Fiscal Years 2006 

through 2011

Grant round

Cost-share requirements

Public-sector applicants

a

Private-sector applicants

Fiscal year 2006 25 percent cash match 50 percent cash match

Fiscal year 2007 25 percent cash match 50 percent cash match

Fiscal year 2007S 25 percent cash match b 50 percent cash match

Fiscal year 2008 25 percent cash match 50 percent cash match

Fiscal year 2009 25 percent cash or in-kind 

match

50 percent cash or in-kind 

match

Fiscal year 2009 

ARRA

Match waived Match waived

Fiscal year 2010 Match waived Match waived

Fiscal year 2011 Match waived Match waived

Source: PSGP grant guidance, fiscal years 2006 through 2011. 

a

Values in this table represent the minimum contribution required. For fiscal years 2006 through 2009, 

the required match was waived for projects with a total cost less than $25,000.

b

The match requirement was waived for funds used to support the development of the Portwide Risk 

Mitigation Plan.

Fiduciary agents in 8 of 11 port areas in our review reported a lessened 

demand for grant funds in grant years where there was a cost-share 

requirement, particularly for fiscal years 2008 and 2009. Fiduciary agents 

cited a variety of challenges with the cost-share requirement, including: 

(1) applicants were aware of long delays in the distribution of grant funds 

and faced difficulty preserving the cost-share obligation in their entity’s 

budget while pending receipt of awarded grant funds, (2) facility owners 

who were compliant with security requirements under MTSA were 

hesitant to invest their own money for additional security projects beyond 

the requirements, and (3) applicants were unable to afford the cost-share 

requirement due to the economic downturn. For example, one fiduciary 

agent reported that while she generally supports a cost-share 

requirement because it ensures stakeholder buy-in, the cost-share 

requirement has been challenging due to the poor economic environment. 

As a result of the cost-share, this fiduciary agent reported conducting 

three distinct rounds of project solicitations in the fiscal year 2008 grant 

round in order to generate enough demand to spend the port area’s entire 

allocation. We reported in October 2010 that a cost-share requirement is 
 

Page 31 GAO-12-47 Port Security Grant Program

a key factor for effective federal grants because it ensures that federal 

grants supplement—rather than substitute for— stakeholder spending. 

We further reported that a cost-share requirement is reasonable given 

that grant benefits can be highly localized.39

As a result of the inconsistent cost-share requirement, several fiduciary 

agents told us that applicants were more likely to request funding under 

the grant rounds with the most lenient cost-share requirement or delay 

project submission while waiting to learn whether or not the next round of 

grants would include the cost-share requirement. This uncertainty about 

the cost-share requirement created a disincentive for grant applicants to 

request funding during cost-share years. For example, the fiduciary agent 

in one port area told us that the port area received project proposals 

totaling twice the port area’s total allocation for fiscal year 2011. Thus, 

projects had to be denied for fiscal year 2011 funding during the fieldlevel review, even though more than $9 million in fiscal year 2008 and 

2009 grant money remained unused. As shown in table 8 below, a 

greater portion of money from cost-share years remains unused as 

compared to money from non-cost-share years, even though cost-share 

grant years preceded the non-cost-share grant year. For example, about 

22 percent of grant funding awarded to Group 1 port areas during costshare years remains unused, as compared to less than 4 percent during 

fiscal year 2010, when the cost-share requirement was waived.40 

 

39 GAO, Maritime Security: Responses to Questions for the Record, GAO-11-140R

(Washington, D.C.: Oct. 22, 2010). 

40 Grant years requiring a cost-share—fiscal years 2007 supplemental, 2008, and 2009—

are older than is the fiscal year 2010 grant round. For example, the fiscal year 2010 PSGP 

was announced in December 2009 whereas the fiscal year 2009 grant round was 

announced in November 2008. Despite the fiscal year 2010 round being announced more 

than 1 year later than the fiscal year 2009 grant round, more funding has been used in the 

more recent grant round. Additionally, the cost-share is required by federal law and 

applicants can only be exempted from it through a waiver. 
 

Page 32 GAO-12-47 Port Security Grant Program

Table 8: Unused Group I Funding from Cost-Share Years, Fiscal Years 2007 

Supplemental through 2010a

Group I award 

(millions)

Unused 

funds

Percent of award 

unused 

Cost-share requirement in place

Fiscal year 2007 supplemental $66.0 $10.3 15.6

Fiscal year 2008 $220.8 $47.2 21.4

Fiscal year 2009 $217.8 $52.2 24.0

Total $504.6 $109.7 21.8

Cost-share requirement waived

Fiscal year 2010 $173.1 $6.1 3.5

Total $173.1 $6.1 3.5

Source: GAO analysis of FEMA data as of September 2011.

a

While a cost-share requirement was in place prior to the fiscal year 2007 supplemental grant round, 

funding can only remain unused for specific projects under the fiduciary agent model, where port 

areas are given a designated allocation. As a result, we have excluded fiscal year 2006, fiscal year 

2007, and the ARRA grant rounds from this analysis. This analysis also excludes fiscal year 2011—in 

which the cost-share requirement was waived—because it fell outside the scope of this report due to 

the timing of the grant cycle.

Waiver Process Exacerbated the Effects of the Cost Sharing; 

Further Efforts Could Improve the Process

Fiduciary agents reported that the lengthy cost-share waiver process—

used by applicants seeking an exemption from the required cost-share—

further exacerbated the impact of the cost-share requirement under the 

PSGP. Grant applicants unable to meet the cost-share requirement are 

eligible to apply for a waiver. The waiver approval process requires 22 

steps—which include approval by leadership within FEMA’s GPD, 

approval by FEMA’s Administrator, and finally, approval by the Secretary 

of Homeland Security.41 According to statute, the Secretary can grant a 

waiver of the cost-share requirement if she determines that a proposed 

project is meritorious but cannot be undertaken without additional federal 

support.42

 

41 The 22-step waiver process is outlined in app. IV. 

However, 5 of the 11 fiduciary agents we interviewed told us 

42 The Secretary may approve PSGP grants with a matching requirement other than the 

25 percent outlined in the statute if the Secretary determines that a proposed project 

merits support and cannot be undertaken without a higher rate of federal support. See 46 

USC § 70107(c)(2)(B). 
 

Page 33 GAO-12-47 Port Security Grant Program

that they had concerns with the cost-waiver request process—including 

with the length of time required for a decision. For example, one fiduciary 

agent—who oversaw a cost-waiver application that took about 7 months 

to be approved—told us that the cost-waiver request process was timeconsuming and confusing. According to FEMA officials, an unknown 

portion of this 7-month approval process was spent ensuring that the 

fiduciary agent had submitted all of the required documentation and thus, 

the actual approval time once the request was finalized was less than 7 

months. 

The cost-share requirement was waived for all applicants under the 

ARRA, fiscal year 2010, and fiscal year 2011 grant cycles. However, 

grant applicants may continue to submit cost-share waiver requests for 

new projects to be funded under the fiscal year 2007 supplemental, fiscal 

year 2008, and fiscal year 2009 grant cycles—which were cost-share 

years—if money in their port area remains unused from those years. As 

shown earlier in table 8, about $110 million in PSGP funds awarded to 

Group I port areas from fiscal year 2007 through 2009—years in which 

the cost-share was required—remains unused. As port areas solicit 

projects for these unused funds, some applicants may submit cost-share 

waiver requests as well. For example, one fiduciary agent from a Group 1 

port area reported that her port area recently completed the field-review 

process to identify projects to fund using their unused fiscal year 2009 

grant monies. As a result, the port area submitted 10 projects to FEMA for 

approval in October 2011, of which 8 projects include a cost-share waiver 

request. 

Although FEMA has taken steps to improve the cost-waiver process, it 

continues to be lengthy and additional efforts may help expedite these 

reviews. In July 2009, FEMA issued an information bulletin to clarify the 

process that grantees should follow when submitting cost-share waiver 

requests.43 Since the issuance of this information bulletin, FEMA has 

received a total of 31 cost-share waiver requests—of which, 22 were 

approved.44

 

43 FEMA Information Bulletin 322, Port Security Grant Program Cost-Share Requirement 

Clarification and Waiver Process for FY 2007 Supplemental through FY 2009 Grant 

Awards (July 15, 2009). 

In November 2009, following a Fiduciary Agent Workshop, 

44 Of the 31 waiver requests submitted in accordance with the July 2009 information 

bulletin, 22 were approved, 1 was denied, and 2 were withdrawn by the grantee. An 

additional 6 waiver requests were pending a decision at the time of this report. 
 

Page 34 GAO-12-47 Port Security Grant Program

FEMA released written responses to questions posed at the workshop. In 

this document, FEMA stated that a decision on a waiver request could be 

expected approximately 30 days after all documentation was provided to 

FEMA in accordance with the process outlined in the July 2009 

information bulletin. However, according to FEMA records, for cost-share 

waivers reviewed since December 2009 DHS took—on average—126 

days to approve a request once all of the required information had been 

received. Approval time lines ranged between 55 days and 268 days for 

these waiver requests. Of the 126 days, on average, it took 74 days from 

the date requests were considered complete to achieve approval by 

GPD’s leadership. It took an additional 52 days, on average, to complete 

the remaining 11 steps of the waiver process—including approval at the 

Administrator of FEMA level and the Secretary of Homeland Security 

level. According to DHS, due diligence requires both component and 

department level clearances, including secretarial clearance, in order to 

responsibly award funding. This process ensures that PSGP projects 

meet program goals and objectives. However, FEMA records show that 

no approval recommendations from GPD leadership were overturned as 

a result of the additional 52 days, on average, of required review. Further, 

only 1 of the 31 waiver requests submitted since the July 2009 

information bulletin was issued has been denied—and it was denied at 

the GPD level. 

Standards for Internal Control in the Federal Government state that 

“pertinent information should be identified, captured, and distributed in a 

form and time frame that permits people to perform their duties 

efficiently.”45

 

45 Standards for Internal Control in the Federal Government, 

FEMA officials told us that FEMA has taken internal actions 

to improve the review process such as meeting with other key offices 

involved in the waiver process in the spring of 2011 to discuss and 

standardize information requirements for the waiver package. FEMA 

officials reported that they believe that this effort has helped improve 

some aspects of the process, but further action may be required to 

streamline the process. Additionally, fiduciary agents remain wary of the 

cost-waiver request process. For example, one fiduciary agent told us 

that its field review team—including the COTP—would be unlikely to 

recommend a project for funding if that project relies on a cost-share

waiver. Another fiduciary agent told us that there is little interest in the 

GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 
 

Page 35 GAO-12-47 Port Security Grant Program

fiscal year 2009 funds due in part to the lengthy waiver review process. 

Without a more efficient review process, certain grant applicants that 

cannot fund the cost-match requirement may not receive grant funds to 

implement their projects, or may not even apply for funds. Evaluating the 

waiver review process could help to ensure that the process is completed 

in a timely manner. 

In addition to funding that is unavailable because it is unused, some 

funding is also unavailable because it is on-hold due to delays in 

achieving compliance with postaward requirements and challenges with 

FEMA’s grant management system. After FEMA approves the use of 

grant funds for a specific project, stakeholders reported that additional 

delays in making funds available resulted from compliance with 

postaward requirements. FEMA cannot make grant funds available to 

grantees to begin work on approved projects until all postaward 

requirements, including budgetary and environmental reviews, are met. 

One cause of delay was inefficiency in the reviews conducted pursuant to 

the National Environmental Policy Act, which requires a review of the 

impacts of proposed actions as well as reasonable alternatives to those 

actions.46

Fiduciary agents we interviewed in 5 of 11 port areas reported that slow 

EHP reviews caused delays.

Grantees submit Environmental and Historical Preservation 

(EHP) information to the Grant Program Directorate––Environmental and 

Historical Preservation (GPD-EHP) office for review. If the project does 

not require a detailed EHP analysis, it can be reviewed and approved by 

a GPD analyst. However, projects that require a more detailed analysis 

are reviewed either by the GPD-EHP team or passed to a FEMA regional 

environmental officer depending on the scope of the review. 

47

 

46 Pub. L. No. 91-190, 83 Stat. 852 (1970). 

During a July 2009 FEMA-sponsored 

stakeholder conference, participating port areas stated that the EHP 

submission and review process associated with the PSGP was causing 

delays, which increased project costs and limited what grantees could 

accomplish with grant funds. The group requested the establishment of a 

more structured postaward time line, including deadlines for EHP reviews, 

so that grantees would be better able to plan their projects. A senior 

FEMA official reported that delays in EHP reviews were due to the fact 

47 Due to concerns about data reliability, we are unable to provide information on the 

average length of time required to achieve compliance with EHP requirements.

Compliance with Postaward 

Requirements and an 

Antiquated Data Management 

System Contributed to On-Hold 

Grant Funds 
 

Page 36 GAO-12-47 Port Security Grant Program

that prior to 2008, GPD had not historically conducted EHP reviews on 

preparedness projects and thus, had no established program for doing 

so. This official further reported that creating an “EHP Team” within GPD 

with the assistance of subject matter specialists via technical support 

contract and standardizing the format for project submittals has helped 

expedite EHP reviews.

According to FEMA officials, the delays caused by inefficient review 

processes have been amplified by FEMA’s reliance on an antiquated data 

management system. As we reported in our June 2009 report on the 

Transit Security Grant Program, FEMA did not have a mechanism for 

systematically collecting data on the status of individual grant projects 

through the review process.48 For example, although FEMA has systems 

to track the financial information related to its grants programs, these 

systems did not allow FEMA to track the status of grant reviews, such as 

EHP reviews. According to FEMA, the data management system used to 

manage the Transit Security Grant Program is also used to manage the 

PSGP and no changes have been made to the system since our 2009 

report. As such, GPD officials reported that each PSGP program analyst 

maintained separate spreadsheets that tracked the grants for which they 

were responsible. Using numerous data systems and spreadsheets 

resulted in inefficiencies and, in some cases, lost data, as program 

analysts had to search across systems for information or were reliant on 

systems––such as the Homeland Security Information Network––that lost 

application information.49 The overall result was a data system that did 

not provide information in a timely manner and that could not be used 

effectively to manage the grant lifecycle. 

DHS and FEMA have taken a number of steps to address unavailable 

balances. To ensure that grant awards were used for specific projects in a 

timely manner, FEMA implemented project submission deadlines 

beginning in fiscal year 2010. Prior to this, FEMA did not have deadlines 

for submitting projects which resulted in money being unused for projects 

 

48 GAO-09-491. 

49 In November 2009, FEMA moved to the Homeland Security Information Network 

(HSIN)–– an information-sharing and collaboration system operated by DHS––to receive 

investment justifications, detailed budgets, and field review forms. In May 2011, FEMA 

ceased using HSIN for the submission of grant documents. 

DHS and FEMA Have 

Taken Steps to Address 

Unavailable Balances
 

Page 37 GAO-12-47 Port Security Grant Program

and therefore unavailable until the port area could identify enough 

projects to fund––a process that, in some cases, took years to complete. 

Starting in fiscal year 2010, port areas had 45 days from the initial 

fiduciary agent application deadline to submit specific project proposals. 

In fiscal year 2011, FEMA took an additional step to shorten application 

time frames by requiring all Group I and II port areas to submit specific 

project proposals at the time of the fiduciary agent’s application. 

According to FEMA officials, this change will ensure that grant money 

allocated in the future will be immediately used, which will expedite the 

grant distribution process. 

DHS has also taken a number of steps to address the delays in the EHP 

review process that contributed to funds being on-hold. See table 9 for a 

list of key DHS actions:
 

Page 38 GAO-12-47 Port Security Grant Program

Table 9: Key DHS Actions Taken to Improve EHP Review Process Since Fiscal Year 2009

Action Taken Date Result

Increased GPD staffing 

levels

Fiscal years 2009 

through 2011

The number of staff working on the PSGP within FEMA GPD has increased every year 

since fiscal year 2008. For example, in fiscal year 2008, there was a total of 8 staff 

working on the PSGP. As of fiscal year 2011, there were 11 staff working on the PSGP, 

including two supervisors. According to FEMA officials, this additional staff better 

enables GPD to track the progress of grant applications through the EHP review 

process and follow-up on challenges more effectively. 

Developed 

Programmatic 

Environmental 

Assessment (PEA)

July 2010 The PEA divides grant-funded projects into seven categoriesa and defines those 

actions that have no environmental impacts,b

Revised EHP screening 

form 

as well as those that require case-bycase consideration to determine the appropriate level of analysis needed to assess 

environmental impacts. The implementation of the PEA allowed FEMA to tailor the 

EHP review based on project category, thereby shortening or eliminating reviews of 

projects with no environmental impact.

February 2011 The revised screening form is designed to streamline information and to be easy to 

understand. FEMA officials reported that this revised form should result in fewer 

mistakes in the grantee’s original submissions, which will expedite review time frames.

Changed time frames for 

submitting EHP 

information

May 2011 FEMA began requiring grant applicants to submit EHP paperwork when they submit 

their project’s investment justification for approval. FEMA officials stated that they hope 

to begin the EHP review while the project is undergoing programmatic review in order 

to expedite the EHP process. 

Developed EHP review 

time frames 

June 2011 GPD-EHP developed time frames under which projects going through the EHP process 

will be evaluated. According to FEMA officials, the initial review will take 15-25 days. If 

the project is excluded from further review, the process ends and EHP is complete. 

Projects that need additional review are sent to the regions. If the regional review finds 

no adverse impacts, the process will be 2-3 months. If adverse impacts are determined 

the time frame will be 3-12 months.

Source: GAO.

a The PEA divides grant-funded projects into seven categories: planning, management and 

administration, training, exercises, purchase of mobile and portable equipment, modification of 

existing structures and facilities, and new construction. 

b

As a result of these changes, some fiduciary agents reported 

improvement in the EHP review process; however, these views could not 

be verified using FEMA data. Specifically, 5 of 11 fiduciary agents 

reported that the EHP review process has improved. For example, 1 

fiduciary agent believed that the EHP process has improved primarily 

because of FEMA’s categorization of projects according to the amount of 

expected impact they would create. However, due to data reliability 

issues with FEMA’s EHP data––there were too many missing EHP dates 

for an accurate analysis––we were not able to confirm whether the EHP 

process was improving. Because of limitations with FEMA’s existing grant 

management system, all EHP data are managed on separate 

spreadsheets maintained by program analysts and these spreadsheets 

The following project types have been determined to have no environmental impacts: planning, 

management and administration, classroom-based training, table top and functional exercises, and 

mobile and portable equipment. 
 

Page 39 GAO-12-47 Port Security Grant Program

have varying levels of completeness. FEMA officials acknowledged the 

limitations with their data, including the omission of key dates in the EHP 

review process, such as the date when the EHP information was 

submitted for review or the date when the project’s EHP review was 

approved. However, FEMA officials noted that the evolution of the Non 

Disaster Grants (ND Grants) system, which is discussed below, may 

allow for better tracking of EHP submissions and approvals in the future. 

To address challenges exacerbated by the antiquated data management 

system used to manage the PSGP, DHS took the first step towards 

consolidating its data management system in fiscal year 2011 by 

implementing the first of two planned phases of the ND Grants system. 

According to FEMA, the ND Grants system is intended to consolidate 

FEMA’s disparate data systems and improve the ability of FEMA grant 

managers to track grants through the review and approval process. In 

February 2011, FEMA anticipated that the ND Grants system would be 

fully completed by the end of fiscal year 2014. Given the early stages of 

this process, it is too early to assess the extent to which the ND Grants 

system will alleviate data management challenges. 

In July 2011, during the course of our review, FEMA finalized eight 

performance measures designed to track how well FEMA GPD 

administers and manages the PSGP. According to FEMA documents, 

these measures include the percent of: (1) grant funds released to 

grantees within 300 days, (2) grant awards programmatically monitored 

annually, (3) grant funds programmatically monitored annually, (4) grant 

awards financially monitored annually, (5) grant funds financially 

monitored annually, (6) corrective actions completed within the fiscal year 

issued, (7) preparedness grant awards processed within 150 days, and 

(8) grant closeouts completed within 120 days from the end of the period 

of performance. According to FEMA officials, data collection for these 

eight measures will begin in the fiscal year 2012 grant cycle and the 2012 

baseline data will be used to develop targets for each measure beginning 

with the fiscal year 2013 grant cycle. For more information on these 

measures, see appendix V. In addition to these eight measures, FEMA 

officials reported that four additional measures are under development. 

By implementing these internal measures, FEMA officials should be 

better positioned to determine whether the changes they have made in 

recent months are sufficient to better ensure more efficient grant 

administration going forward or whether additional actions are required. 

However, since targets for the eight measures will not be established until 

at least fiscal year 2013, and the four additional measures remain under 

FEMA Is Developing 

Measures to Assess 

PSGP Administration 

but Does Not Have 

Measures to Assess 

Effectiveness 
 

Page 40 GAO-12-47 Port Security Grant Program

development, it is too early to know how effective they will be in helping 

FEMA to assess its performance and improve its grant management. 

FEMA has not evaluated the effectiveness of this program in 

strengthening critical maritime infrastructure against risks associated with 

potential terrorist attacks because it has not implemented measures to 

track progress toward achieving program goals. In 2006, the Department 

of Homeland Security’s Office of Inspector General reported that as the 

PSGP continues to evolve, an important challenge DHS should undertake 

is the measurement of its impact.50

In December 2010, FEMA transferred responsibility for developing 

performance measures from GPD to FEMA’s National Preparedness 

Directorate, specifically the National Preparedness Assessment Division 

(NPAD).

The Inspector General also reported 

that DHS has raised the overall bar of preparedness through the port 

security grants but it is not clear that DHS knows how much actual risk 

reduction has been achieved. Four years later, in January 2010, FEMA 

formed a task force to develop draft performance measures for the 

PSGP. This task force conceptualized 11 potential measures of 

effectiveness for the PSGP; however, baseline data needed to implement 

the measures did not exist for all 11 draft measures. According to FEMA 

documentation, baseline data existed for 2 of the 11 measures, additional 

data collection would be needed to populate 3 measures, and 6 

measures would require further refinement or coordination with federal 

partners.

51

 

50 Department of Homeland Security Office of Inspector General, Follow Up Review of the 

Port Security Grant Program, OIG 06-24 (Washington, D.C.: February 2006).

FEMA officials report that this change was made to consolidate 

the development of effectiveness measures within the directorate 

containing assessment experts. However, this may have contributed to 

delays in developing performance measures because the staff at NPAD, 

including the new Director, who began in March 2011, needed time to 

familiarize themselves with the grant program and draft measures. In July 

2011, a senior NPAD official told us that the division was briefed on the 

51 According to FEMA, the National Preparedness Directorate (NPD) strives to achieve a 

nation prepared through a comprehensive cycle of planning, organizing and equipping, 

training, exercising, evaluating, and improvement planning. The National Preparedness 

Assessment Division (NPAD) is a component within NPD, which is responsible for leading 

the nation’s efforts to enhance preparedness to prevent, protect from, respond to, and 

recover from disasters, natural and man-made. 
 

Page 41 GAO-12-47 Port Security Grant Program

draft measures developed by the GPD task force, but they were 

considering developing different measures as well. In October 2011, the 

same official told us that the division had developed a number of 

prospective performance measures for the PSGP, but that FEMA was still 

reviewing the draft measures. As a result, the official told us that it has not 

been determined whether the performance measures will be included in 

the fiscal year 2012 guidance. Additionally, FEMA did not have a plan in 

place, with milestones, to ensure the implementation of such measures. 

According to best practices for project management, the development of 

a project management plan—which defines how the project is executed, 

monitored and controlled, and closed—is a key element of project 

management.52 Best practices for project management also call for

milestone dates, among other factors, in carrying out a project 

successfully. As a result, FEMA’s progress toward implementing 

measures to assess whether the program is achieving its stated purpose 

remains unclear. 

Port areas have unique characteristics—they are centers of commerce, 

hubs of transportation, and often close to major population centers. These 

characteristics result in specific vulnerabilities that must be addressed to 

avoid the human or economic losses that would result from a terrorist 

attack. The Port Security Grant Program (PSGP)—administered by FEMA 

and supported with subject matter expertise from the Coast Guard—is 

one tool DHS uses to protect critical maritime infrastructure from these 

risks. Risk management has been endorsed by the federal government to 

help direct finite resources to areas of greatest risk and grant programs 

have provided substantial resources toward this effort. We found that 

PSGP allocations were highly correlated to risk for the grant years we 

examined and DHS has taken steps to strengthen the PSGP risk 

allocation model by improving the quality and precision of the data inputs. 

However, additional efforts—such as accounting for how new security 

measures affect port vulnerability and using the most precise data 

available in the risk model—could further strengthen the model and build 

upon the progress made. While the allocation process has been riskbased, FEMA has faced significant challenges administering the grant 

program. For example, FEMA awarded nearly $1.7 billion in port security 

grants for fiscal years 2006 through 2010; however, draw down levels for 

 

52 Project Management Institute, The Standard for Program Management © (2006). 

Conclusions 
 

Page 42 GAO-12-47 Port Security Grant Program

the PSGP are low—with about one-quarter of fiscal year 2006 through 

2010 grant monies drawn down as of September 2011. While FEMA may 

not consider draw down levels to be an accurate measure of progress 

made in improving port security, this measure has become the de facto 

yardstick for assessing progress in securing our ports because no other 

measures exist. Additionally, about a quarter of the awarded funding 

remains unavailable due to delays in using grant funds, challenges with 

the cost-match and associated waiver process, and challenges that 

grantees have had complying with postaward requirements. As a result, 

about $400 million in awarded grant funding remains unavailable to 

grantees for port security projects. 

FEMA has taken steps to improve the availability of funds and has 

developed internal performance measures to begin evaluating its 

administration of the grant program. However, FEMA has not evaluated 

the effectiveness of the program because it does not have measures to 

track progress towards achieving program goals. To establish a more 

accurate measurement of grant effectiveness, FEMA should expedite its 

efforts to implement performance measures for the PSGP. Initial steps 

have been taken to develop performance measures for the PSGP, but the 

time frame for implementing them is unclear. Without a plan, there is little 

assurance that these measures will be implemented in a timely way to 

assess the program’s effectiveness in ensuring that critical port 

infrastructure is protected. 

We are making four recommendations to help strengthen the 

implementation and oversight of the PSGP. To strengthen DHS’s 

methodology for measuring vulnerability in ports, and to improve the 

precision of grant allocations to high-risk port areas, we recommend that 

the Secretary of Homeland Security direct the FEMA Administrator to:

• Develop a vulnerability index that accounts for how security 

improvements affect port vulnerability, and incorporate these changes 

into future iterations of the PSGP risk model. 

• Coordinate with the Coast Guard to determine the most precise data 

available to populate the data elements within the vulnerability index 

and to utilize these data as an interim measure, until a revised 

vulnerability index is developed. 

To ensure that waiver requests—including those submitted under 

previous cost-share years in which money remains unassigned and those 

Recommendations for 

Executive Action
 

Page 43 GAO-12-47 Port Security Grant Program

that may be submitted in future grant rounds if a cost-share requirement 

is applied—are evaluated promptly, we recommend that the FEMA 

Administrator—in conjunction with the Office of the Secretary of 

Homeland Security—evaluate the waiver review process to identify 

sources of delay and take measures to expedite the process. 

To strengthen the administration, oversight, and internal controls of the 

PSGP, and to streamline processes, we recommend that the Secretary of 

Homeland Security direct the FEMA Administrator to develop—in 

collaboration with the Coast Guard—time frames and related milestones 

for implementing performance measures to monitor the effectiveness of 

the PSGP.

We provided a draft of this report to DHS for review and comment. DHS 

provided written comments on November 14, 2011, which are reproduced 

in full in appendix VI. DHS concurred with the findings and 

recommendations in the report, and stated that FEMA is taking actions to 

implement our recommendations. 

DHS concurred with our first recommendation that it develop a 

vulnerability index that accounts for how security improvements affect 

port vulnerability, and incorporate these changes into future iterations of 

the PSGP risk model. DHS stated that although incorporating the effects 

of completed security projects on vulnerability is complex, the inclusion of 

this type of metric remains a key goal of the PSGP risk methodology and 

is revisited annually. However, DHS did not provide details regarding its 

plan to implement this recommendation. 

DHS concurred with our second recommendation that FEMA coordinate 

with the Coast Guard to determine the most precise data available to 

populate the data elements within the vulnerability index and to utilize this 

data as an interim measure until a revised vulnerability index is 

developed. Specifically, DHS stated that FEMA will continue to coordinate 

with subject matter experts, including the Coast Guard, to determine the 

best data available for use in the vulnerability index. Further, DHS stated 

that FEMA and the Coast Guard will continue discussions regarding data 

elements to be used in future grant years, and that these meetings will 

focus on what data elements are currently available for use as an interim 

measure while additional enhancements to the vulnerability component 

are developed. Such action should address the intent of this

recommendation. 

Agency Comments 

and Our Evaluation 
 

Page 44 GAO-12-47 Port Security Grant Program

DHS concurred with our third recommendation that FEMA evaluate the 

cost-share waiver request process in conjunction with the Office of the 

Secretary of Homeland Security to identify sources of delay and take 

measures to expedite the process. Specifically, it reported that FEMA and 

DHS are exploring the best solution to reduce delays and expedite the 

cost-share waiver request evaluation process and will work to implement 

appropriate process improvements as they are identified. Such action, 

when implemented, should address the intent of this recommendation.

Finally, DHS concurred with the fourth recommendation that it develop 

time frames and related milestones for implementing performance 

measures to monitor the effectiveness of the PSGP. Specifically, DHS 

stated that FEMA’s Grant Programs Directorate (GPD) is in the process 

of developing external measures to determine how effective grantees are 

in managing and administering the grants and that these external 

measures will be completed by January 1, 2012. DHS also stated that 

specific measures to monitor the performance of the PSGP are being 

developed within FEMA. Further, DHS stated that FEMA is also 

developing performance objectives for core capabilities, as required by 

Presidential Policy Directive 8 and the new National Preparedness Goal, 

and will be reviewing all prevention and protection measures, including 

those for PSGP. Finally, DHS stated that FEMA’s National Preparedness 

Directorate will work with GPD and the Coast Guard in fiscal year 2012 to 

develop some specific measures towards building and sustaining 

capabilities. These efforts, as described above, are important steps 

towards implementing this recommendation. 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretary of 

Homeland Security, appropriate congressional committees and other 

interested parties. In addition, this report will be available at no charge on 

the GAO website at http://www.gao.gov. If you or your staff have any 

further questions about this report, please contact David C. Maurer at 

(202) 512-9627 or MaurerD@gao.gov or Stephen L. Caldwell at (202) 
 

Page 45 GAO-12-47 Port Security Grant Program

512-9610 or CaldwellS@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last 

page. Key contributors are listed in appendix VII. 

David C. Maurer

Director

Homeland Security and Justice Issues 

Stephen L. Caldwell 

Director 

Homeland Security and Justice Issues
 

Page 46 GAO-12-47 Port Security Grant Program

List of Requesters 

The Honorable Peter King

Chairman

Committee on Homeland Security

House of Representatives

The Honorable John D Rockefeller IV

Chairman

Committee on Commerce, Science and Transportation

United States Senate

The Honorable Joseph Lieberman

Chairman

The Honorable Susan Collins

Ranking Member

Homeland Security and Governmental Affairs Committee

United States Senate

The Honorable Candice Miller

Chairwoman

Subcommittee on Border and Maritime Security 

Committee on Homeland Security 

House of Representatives

The Honorable Gus Bilirakis

Chairman

Subcommittee on Emergency Preparedness, Response, and 

Communications

Committee on Homeland Security

House of Representatives
Appendix I: Port Security Grant Program 

(PSGP) Allocations to Funding Groups, by 

Year

Page 47 GAO-12-47 Port Security Grant Program

This appendix provides information on the percentage of total PSGP 

grant funding directed at each funding group since fiscal year 2007, the 

first year in which Department of Homeland Security (DHS) categorized 

port areas into funding groups. Table 10 shows that the percentage of 

funding directed at Group I port areas and all other port areas has been 

relatively stable over time, whereas this percentage has changed more 

drastically for Group II and Group III port areas. As discussed in the 

report, DHS allocations to individual port areas were made largely in 

accordance with risk, and were based on DHS’s risk analysis and 

implementation decisions. DHS’s decision to direct the majority of PSGP 

funding to the highest risk port areas—as shown in table 10—was one 

such implementation decision. The second decision involved the use of 

funding “floors” to limit fluctuations in individual port area funding from 

year to year. 

Table 10: Percent of Total PSGP Funding Directed at Each Funding Group, Fiscal Years 2007 through 2011a

Group I Group II Group III All Other Port Areas Ferry

Fiscal year 2007 60.0 20.0 15.0 5.0 N/A

Fiscal year 2007S 60.0 20.0 15.0 5.0 N/A

Fiscal year 2008 54.2 34.5 4.9 4.9 1.4

Fiscal year 2009 54.2 36.0 4.5 3.9 1.3

Fiscal year 2009 ARRA 54.3 36.0 4.4 4.0 1.3

Fiscal year 2010 60.0 30.0 5.0 5.0 N/A

Fiscal year 2011 60.0 30.0 5.0 5.0 N/A

Source: FEMA.

a

Total funding may not equate to 100 percent due to rounding.

Appendix I: Port Security Grant Program 

(PSGP) Allocations to Funding Groups, by 

Year
Appendix II: PSGP Risk Analysis Model, Fiscal 

Year 2011

Page 48 GAO-12-47 Port Security Grant Program

This appendix provides information on the fiscal year 2011 PSGP risk 

model, which DHS uses to assess the relative risk posed to ports 

throughout the nation and to help determine PSGP eligibility and funding 

levels. As discussed in the report, DHS modified how port vulnerability—

the relative exposure to an attack—was calculated in the PSGP risk 

model in fiscal year 2011. Rather than holding vulnerability constant, as 

was done in fiscal year 2010, DHS chose to modify the vulnerability index 

in fiscal year 2011 to recognize that different ports can have different 

vulnerability levels. The current vulnerability component—as shown in 

figure 6—considers how port vulnerability is affected by ferry and cruise 

ship ridership, foreign vessel calls, and hazardous material transits. 

However, as discussed in the report, further improvements are needed to 

ensure that the vulnerability score for a specific port is responsive to 

changes in security that may occur in that port—such as the 

implementation of new security measures—and that the vulnerability 

index is populated using the most precise data available. 

Figure 6: Fiscal Year 2011 PSGP Risk Model

Appendix II: PSGP Risk Analysis Model, 

Fiscal Year 2011 
Appendix III: Financial Status of PSGP 

Awarded Funds, Fiscal Years 2006 through 

2010

Page 49 GAO-12-47 Port Security Grant Program

This appendix provides information on the financial status of PSGP funds

awarded during fiscal years 2006 through 2010. As discussed in the 

report, DHS awarded nearly $1.7 billion in grant funds to port areas 

throughout the nation for fiscal years 2006 through 2010. As shown in 

table 11, grantees have drawn down about 24 percent—or about $395 

million—of this funding, as of September 2011. An additional 52 percent 

of the awarded funding—about $873 million—is available to grantees. 

About one-quarter of awarded grant funding—or about $408 million—is 

unavailable, meaning that port areas have not identified specific projects 

to fund with these monies or compliance with postaward requirements is 

pending. 

Table 11: Financial Status of PSGP Awarded Funds, by Funding Group, Fiscal Years 2006 through 2010 

 Total PSGP funding awarded Funding drawn down Available funding Unavailable funding

Group I

$920,508,263

$160,476,245 

(17.4%)

$517,779,347 

(56.2%)

$242,252,671 

(26.3%)

Group II

$531,998,959

$109,788,562 

(20.6%)

$278,119,853

(52.3%)

$144,090,543

(27.1%)

Group III

$143,003,552

$80,702,875 

(56.4%)

$48,357,602 

(33.8%)

$13,943,075 

(9.8%)

All Other Port Areas

$80,558,172

a $43,912,734 

(54.5%)

$29,173,691 

(36.2%)

$7,471,747 

(9.3%)

Total

$1,676,068,946

$394,880,416 

(23.6%)

$873,430,493 

(52.1%)

$407,758,036 

(24.3%)

Source: GAO analysis of FEMA data as of September 2011.

a

This row also includes the designated ferry allocations in applicable years. 

Appendix III: Financial Status of PSGP 

Awarded Funds, Fiscal Years 2006 through 

2010
Appendix IV: PSGP Cost-Share Waiver 

Approval Process

Page 50 GAO-12-47 Port Security Grant Program

This appendix contains information on the review and approval process 

for PSGP cost-share waivers, which grantees can request from DHS if 

they are unable to meet the cost-share requirement. As discussed in the 

report and shown in figure 7 below, the waiver approval process requires 

22 steps—which include approval by leadership within FEMA’s Grants 

Program Directorate (GPD), approval by FEMA’s Administrator, and 

finally, approval by the Secretary of Homeland Security. In November 

2009, FEMA told fiduciary agents that a decision on a waiver request 

could be expected within 30 days. However, under the review process 

outlined in figure 7, DHS took—on average—126 days to approve a costshare waiver once all of the required information had been received. 

Evaluating the waiver review process could help ensure that the process 

is completed in a timely manner. 

Figure 7: Review Process for Port Security Grant Program Cost-Share Waiver Requests

Appendix IV: PSGP Cost-Share Waiver 

Approval Process
Appendix V: FEMA’s Internal Performance 

Measures

Page 51 GAO-12-47 Port Security Grant Program

This appendix provides descriptive information on the suite of internal 

performance measures that FEMA developed to track how well it 

administers and manages the PSGP. As discussed in the report, data 

collection for these measures—which were finalized in July 2011—will 

begin in the fiscal year 2012 grant cycle and the 2012 baseline data will 

be used to develop targets for each measure beginning in the fiscal year 

2013 grant cycle. However, as discussed in the report, it is too early to 

know how effective these measures will be in helping FEMA to assess its 

performance and improve its grant management. 

Table 12: Details on FEMA’s Performance Measures to Assess Its Administrative Performance

Internal measure Description/Purpose

Percent of grant funds released to grantees 

within 300 days

The timely release of preparedness grant funds impacts grantees' ability to fund, 

implement, and complete grant projects. This measure evaluates the percent of 

preparedness grant funds released to grantees within 300 days from the grant award 

date. Data for this measure will be used to assess GPD's efficiency in releasing 

preparedness grant funds and assisting grantees in meeting award conditions. These 

efforts also ensure that FEMA releases funds to the grantees in a timely manner to 

support project implementation within programs' specified period of performance.

Percent of grant awards programmatically 

monitored annually

GPD conducts programmatic monitoring each year to verify that preparedness grant 

programs and/or projects are executed in a manner consistent with grantees' stated 

implementation plans and according to applicable rules and regulations. Programmatic 

monitoring also highlights progress toward investments and the goals and objectives of 

State, Urban Area, Tribal, and other homeland security grantees. These measures 

evaluate the percentage of all open grant awards and the percentage of available grant 

funds programmatically monitored each year. Data from these measures are used to 

support GPD's efforts to ensure compliance with the regulations or guidance governing 

preparedness grant awards, as well as to proactively assess any impediments to 

project implementation and completion. This information also enables GPD to assess 

monitoring activities and implement an annual monitoring plan that balances the volume 

of grant awards with levels of grant funding.

Percent of total grant funds programmatically 

monitored annually

Percent of grant awards financially monitored 

annually

GPD conducts financial monitoring each year to collect, analyze, and verify information 

on the business functions and grant administration practices of grantees. Financial 

monitoring also supports the identification of exceptions and potential issues related to 

grantees’ management and administration of preparedness grant funding, which may 

require immediate investigation, resolution, further scrutiny, or the inclusion of FEMA’s 

Office of the Inspector General (OIG). These measures evaluate the percentage of all 

open preparedness grant awards and the percentage of available grant funds 

financially monitored every 2 years, as required by statute. Data from this measure are 

used to support GPD's efforts to ensure compliance with the regulations or guidance 

governing preparedness grant awards, as well as to proactively assess any 

impediments to project implementation and completion. This information also enables 

GPD to assess the breadth of grant funding monitored every other year and to 

implement an annual monitoring plan that balances the volume of grants with the use of 

grant funding.

Percent of total grant funds financially 

monitored annually

Appendix V: FEMA’s Internal Performance 

Measures 
Appendix V: FEMA’s Internal Performance 

Measures

Page 52 GAO-12-47 Port Security Grant Program

Internal measure Description/Purpose

Percent of corrective actions completed 

within the fiscal year issued

GPD currently tracks corrective actions issued by FEMA Regional staff as a result of 

financial monitoring visits during which problems of noncompliance are discovered and 

documented. While the 10 FEMA Regions are responsible for issuing, tracking, and 

resolving corrective actions, GPD monitors progress toward the resolution of corrective 

actions through regional financial monitoring activities. This measure evaluates the 

percent of corrective actions completed within the fiscal year issued. Data for this 

measure will be used to coordinate with FEMA Regions to track and monitor the timely 

resolution of corrective actions. These efforts also support the mitigation of 

noncompliant activities by grantees to reduce or eliminate impediments to project 

completion.

Percent of preparedness grant awards 

processed within 150 days

Traditionally, GPD is appropriated annual preparedness grant funding that must be 

awarded prior to the end of the fiscal year (i.e., September 30 of each year). This 

measure evaluates GPD's effectiveness in the processing of grant awards for relevant 

preparedness programs. The data for this measure will be analyzed to assess the 

amount of time GPD expends to make and process preparedness grant awards. This 

analysis will enable GPD to monitor, identify, and mitigate any issues in the processing 

of preparedness grant awards to achieve and sustain internal grants management and 

administrative efficiencies. 

Percent of grant closeouts completed within 

120 days from the end of the period of 

performance

FEMA regulations require GPD to close out grant awards after grantees have 

completed all administrative activities and related work. This measure evaluates the 

percent of preparedness grant close-outs processed within 120 days of receiving notice 

by grantees to assess GPD's efficiency in closing preparedness grant awards. Data for 

this measure will be used to monitor and, if possible, improve GPD's grant close-out 

process. These efforts also ensure that GPD complies with its mission to appropriately 

administer and manage all federal grant awards from appropriation to closeout.

Source: GAO analysis of FEMA information.
Appendix VI: Comments from the Department 

of Homeland Security

Page 53 GAO-12-47 Port Security Grant Program

Appendix VI: Comments from the 

Department of Homeland Security 
Appendix VI: Comments from the Department 

of Homeland Security

Page 54 GAO-12-47 Port Security Grant Program
Appendix VI: Comments from the Department 

of Homeland Security

Page 55 GAO-12-47 Port Security Grant Program
Appendix VII: GAO Contact and Staff 

Acknowledgments

Page 56 GAO-12-47 Port Security Grant Program

David C. Maurer, (202) 512-9627 or Maurerd@gao.gov 

Stephen L. Caldwell, (202) 512-9610 or Caldwells@gao.gov

 

In addition to the contacts above, Dawn Hoff, Assistant Director, and Dan 

Klabunde, Analyst-in-Charge, managed this assignment. Chuck Bausell, 

David Lutter, Sophia Payind, and Katy Trenholme made significant 

contributions to this report. Charlotte Gamble, Adam Hoffman, and Grant 

Sutton provided assistance with interviews. David Alexander assisted with 

design, methodology, and data analysis. Tracey King provided legal 

assistance. Jessica Orr provided assistance with report development and

Robert Robinson provided graphic support.

Appendix VII: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(440915) 
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