Department of Homeland Security 

The State of Colorado’s Management of 

State Homeland Security Program and 

Urban Areas Security Initiative Grants 

Awarded During Fiscal Years 

2007 through 2009 

OIG-12-04 November 2011 
Offce of Inspector General

U.S. Department of Homeland Security

Washington, DC 20528

Homeland

Security

NDV7- 2011

Preface

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

established by the Homeland Security Act of2002 (Public Law 107-296) by amendment

to the Inspector General Act of 1978. This is one of a series of audit, inspection, and

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

efficiency, and effectiveness within the Department.

This report addresses the State of Colorado's management of State Homeland Security

Program and Urban Areas Security Initiatives grants. It is based on interviews with

employees and officials of relevant agencies and institutions, direct observations and

inspections, and a review of applicable documents.

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

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

trust this report wil result in more effective, efficient, and economical operations. We

express our appreciation to all of those who contributed to the preparation of this report.

Anne L. Richards

Assistant Inspector General for Audits

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


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


Results of Audit ................................................................................................................. 2 


State Strategic Planning Is Aligned With National Guidance ..................................... 2 


State Guidance to Subgrantees Needs Improvement ................................................... 3 


Recommendations ........................................................................................................ 6 


Management Comments and OIG Analysis ................................................................ 6 


State and FEMA Monitoring Efforts Need Improvement ........................................... 7 


Recommendations ...................................................................................................... 10 


Management Comments and OIG Analysis .............................................................. 10 


Performance and Preparedness Levels Are Unknown ............................................... 11 


Recommendations ...................................................................................................... 13 


Management Comments and OIG Analysis .............................................................. 13 


Cash Flow Problems Could Impact Program Effectiveness ...................................... 15 


Recommendations ...................................................................................................... 16 


Management Comments and OIG Analysis .............................................................. 16 


Appendices 

Appendix A: Purpose, Scope, and Methodology ..................................................... 18 


Appendix B: Management Comments to the Draft Report ..................................... 21 


Appendix C: Homeland Security Grant Program Background ............................... 31 


Appendix D: Colorado’s Nine All-Hazards Regions .............................................. 32 


Appendix E: Major Contributors to this Report ...................................................... 33 


Appendix F: Report Distribution ............................................................................ 34 


Table of Contents/Abbreviations 


Abbreviations 

CFR Code of Federal Regulations 


DHS Department of Homeland Security 


OIG Office of Inspector General 


OMB Office of Management and Budget 


FEMA Federal Emergency Management Agency
 

FY fiscal year 

OIG
 

Department of Homeland Security 

Office of Inspector General 

Executive Summary 

Public Law 110-53, Implementing Recommendations of the 9/11 

Commission Act of 2007, requires the Department of Homeland 

Security (DHS), Office of Inspector General (OIG), to audit 

individual states’ management of State Homeland Security 

Program and Urban Areas Security Initiative grants. This report 

responds to the reporting requirement for the State of Colorado. 

The objectives of the audit were to determine whether the State of 

Colorado distributed and spent State Homeland Security Program 

and Urban Areas Security Initiative grant funds (1) effectively and 

efficiently and (2) in compliance with applicable federal laws and 

regulations. We were to also address the extent to which grant funds 

enhanced the State of Colorado’s ability to prevent, prepare for, 

protect against, and respond to natural disasters, acts of terrorism, 

and other man-made disasters. The audit included a review of 

approximately $52 million in State Homeland Security Program and 

Urban Areas Security Initiative grants awarded to the State of 

Colorado during fiscal years 2007 through 2009. 

Generally, the State of Colorado did an effective job of developing 

its Homeland Security Strategic Plan, distributing grant funds, and 

ensuring that all of the available funds were being used. The State 

of Colorado used reasonable methods to assess threats, 

vulnerabilities, capabilities, and needs, and allocated funds 

accordingly. The State of Colorado complied with cash 

management and status reporting requirements, and generally spent 

funds in accordance with grant requirements and state-established 

priorities. 

However, we identified four areas for improvement: guidance to 

subgrantees, monitoring of grant activities, performance and 

preparedness measurement, and responses to subgrantee cash flow 

problems. Our 10 recommendations call for the Federal 

Emergency Management Agency to initiate improvements which, 

if implemented, should help strengthen program management, 

performance, and oversight. Written comments to the draft report 

are incorporated as appropriate and included in their entirety in 

appendix B. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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Background 

The Homeland Security Grant Program provides federal funding to 

help state and local agencies enhance capabilities to prevent, 

protect against, respond to, and recover from terrorist attacks, 

major disasters, and other emergencies. 

The Colorado Department of Local Affairs – Division of 

Emergency Management administered Colorado’s Homeland 

Security Grant Program for 2007 and part of 2008. In February 

2008, the Governor of Colorado created the Governor’s Office of 

Homeland Security by Executive Order as a stand-alone entity to 

administer the Homeland Security Grant Program. The office was 

established and State Administration Agency authority transferred 

partly in response to an OIG report issued in 20071

 that identified 

an ineffective organizational structure to administer the program. 

Appendices A and C contain additional information on the 

purpose, scope, and methodology of this audit and of the 

Homeland Security Grant Program. 

The State of Colorado (State) received $59,796,443 in Homeland 

Security Grant Program funds from fiscal years (FYs) 2007 to 

2009. This included $51,752,550 in State Homeland Security 

Program and Urban Areas Security Initiative grants that were 

subawarded to the State’s nine All-Hazards Regions and one 

Urban Areas Security Initiative. Appendix D illustrates the State’s 

All-Hazards Regions. 

Results of Audit 

State Strategic Planning Is Aligned With National Guidance 

The State’s strategic planning process followed the Guidance on Aligning 

Strategies with the National Preparedness Goal, the National Strategy for 

Homeland Security, and National Preparedness Guidelines. The State 

addressed the 15 prescribed national planning scenarios as well as 7 stateidentified regional planning scenarios in its strategic plan. It also 

addressed the 4 mission areas and aligned its planning with the 8 current 

National Priorities. The State adopted capabilities-based planning 

processes as established by the National Preparedness Guidelines. 

In 2007, the State rewrote its Homeland Security State Strategy to align 

with the National Strategy for Homeland Security and National 

1 Audit of the State of Colorado Homeland Security Grant Program (OIG-08-16), December 2007. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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Preparedness Guidelines. Its current plan is in effect for the period 2008 

through 2013. At the time the plan was prepared, the federal government 

was emphasizing capabilities-based planning that was designed to enable 

states to make informed decisions in determining priorities and to make 

efficient use of resources to address prioritized needs. The State strategy 

incorporated capabilities-based planning to address the wide range of 

threats and hazards realistically faced by the State’s first responders and 

communities. A collaborative effort involving all levels of state and local 

governments outlined the direction for the State’s prevention, protection, 

response, and recovery efforts. 

The State facilitated and reviewed annual assessments at the state agency 

and regional levels to determine local risks, needs, and capabilities. 

According to State officials, as part of a multi-stage process, regional 

boards collected information from constituent jurisdictions to identify the 

greatest threats based on probability and consequence from a combined set 

of the 15 national and 7 state planning scenarios. Through this process, 

the State was able to determine realistic risks, needs, and capabilities at the 

local level. 

State Guidance to Subgrantees Needs Improvement 

The State’s guidance to subgrantees did not provide sufficient grant 

administration information or program support, including mentoring, 

training, and regular interaction. We reviewed the State’s written 

guidance, compared it with subgrantee activities, and identified areas for 

improvement in state grant guidance and program support. Documented 

guidance with detailed, functional procedures, as well as consistent 

interactive engagement with all subgrantees, may improve program 

management and performance. 

The State’s Grant Guidance Does Not Provide Subgrantees 

With Adequate Grant Administration Information 

The State’s written guidance did not adequately detail its 

expectations, methodologies, or functional administration 

requirements. The guidance did not sufficiently explain grant 

administration activities and processes unique to the State. With 

the exception of activities such as grant reimbursement requests 

and modification procedures, the guidance largely restated federal 

guidance or referred subgrantees back to original federal 

requirements. As a result, subgrantees did not have meaningful 

instructions to fully implement adequate grant administration 

procedures, including internal control activities. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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We compared subgrantee activities that we observed during our 

site visits with the State’s grant guidance. We identified two 

particular internal control activities not covered in the State’s 

guidance: policies and procedures, and segregation of duties. 

These two controls were either nonexistent or inadequate at several 

of the subgrantees we visited. The Government Accountability 

Office Standards for Internal Controls in the Federal Government 

states that policies and procedures should be used to ensure 

compliance with federal requirements. The standards also state 

that segregation of duties minimizes the risk of fraud and errors by 

ensuring that no one individual has control over two or more 

phases of a transaction or operation. 

Policies and Procedures 

Well-documented policies and procedures help provide continuity 

and consistency in managing and administering the grant, especially 

when grant administration is a collateral duty. The State’s grant 

guidance did not include requirements for subgrantees to implement 

policies and procedures unique to grant administration. 

Of the 12 subgrantees we visited, 4 did not have documented 

policies and procedures that specifically outlined processes for 

managing and administrating the grant. Without grant-specific 

policies and procedures, grant management and administration 

could be adversely impacted when key grant staff leave or are 

away for an extended period, and subgrantees cannot ensure 

continuity, consistency, or compliance with federal grant 

requirements. 

For example, during our review, we identified seven subgrantees 

that did not have a process to confirm that vendors were in good 

standing prior to contracting with them. Office of Management 

and Budget (OMB) guidance for federal agencies on the 

government-wide debarment and suspension system for 

nonprocurement programs and activities, found at Title 2 of the 

Code of Federal Regulations (CFR) Part 180, as adopted and 

supplemented by DHS in 2 CFR Part 3000, forbids excluded 

persons or entities from participating in federal agencies’ 

nonprocurement grants and contracts of assistance, among other 

covered transactions. Federal Acquisition Regulation Subpart 9.4 

also prescribes policies and procedures forbidding contracting or 

subcontracting with debarred or suspended entities. Prior to the 

State’s September 2009 Grant Management Guide, however, the 

State’s grant guidance did not mention that subgrantees must 

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Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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determine whether recipients are excluded or disqualified from 

participating in a transaction prior to awarding a contract. 

Confirming a vendor’s status with the federal government is a 

process that should be documented in subgrantee policies and 

procedures. 

Segregation of Duties 

The State’s guidance did not address requirements to ensure 

segregation of duties, nor did it suggest methods to accomplish it. 

Certain subgrantees did not ensure that grant-related goods and 

services were initiated, approved, and received by different staff 

members. We identified a grant coordinator at the subgrantee level 

who was responsible for multiple tasks in the procurement process. 

As another example, one regional coordinator was responsible for 

initiating purchases, receiving products, and approving transactions 

for payment. State guidance should specifically address 

segregation of duties at the subgrantee level to mitigate the risk of 

fraud and errors. 

The State’s Program Support Needs Improvement 

The State did not provide sufficient program support, such as 

training, mentoring, and proactively engaging subgrantees, as part 

of its day-to-day management oversight. A Federal Emergency 

Management Agency (FEMA) regulation, at 44 CFR Part 13.40(a), 

requires that grantees manage the day-to-day operations of grant 

and subgrant support activities. 

A State official responsible for grant administration said that 

unless subgrantees contact grant managers with problems, the 

assumption is that there are no issues and that subgrantees 

understand grant requirements and administration processes. 

Improved program support, including more active engagement, 

mentoring, and training, would better enable subgrantees to fully 

comply with grant requirements. 

One subgrantee grant coordinator said that the State’s grant 

application process was cumbersome and that he would like to see 

more timely and knowledgeable feedback from the State; one said 

that guidance was not always clear; and another said that guidance 

seems to be continually changing. One subgrantee said that it 

would welcome more interaction and mentoring from the State on 

grant administration activities. Two subgrantee officials expressed 

a desire for more feedback on the quality of grant applications. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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Regional grant coordinators also expressed a desire for more 

timely and knowledgeable feedback from the State. One 

subgrantee reported little interaction with the State, including not 

receiving invitations to attend workshops or other events. State 

officials indicated that they do not proactively mentor subgrantees 

to improve financial, procurement, or programmatic internal 

controls ensuring compliance with guidance, laws, and regulations. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, direct the Governor’s Office of Homeland Security to: 

Recommendation #1: Revise State guidance to provide grant 

implementation expectations, methods, and administration 

activities that are in line with state and federal requirements. 

Recommendation #2: Improve its program support, including 

continual and proactive mentoring, training, and engagement of 

subgrantee grant administration staff. 

Management Comments and OIG Analysis 

FEMA concurred with recommendations 1 and 2. FEMA 

acknowledged the efforts of the Colorado State Administrative 

Agency to provide grant implementation and administrative 

direction to the local jurisdictions through the State’s 2009 Grant 

Management Guide. FEMA also acknowledged that additional 

guidance for subgrantees is necessary. FEMA stated that within 

90 days of receipt of the final report, the Governor’s Office of 

Homeland Security is required to submit a plan for revising, 

updating, and expanding the State’s grant management guidance. 

In addition, a plan for enhancing the program support, training, and 

engagement services offered to subgrantees within the state will be 

required. 

The Governor’s Office of Homeland Security stated that it has 

already taken steps to improve its guidance by including additional 

details that better define state requirements and expectations. 

Information regarding policies and procedures and segregation of 

duties has been included to better summarize subgrantee 

expectations. In addition, a more aggressive subgrantee training 

curriculum has been adopted and the fiscal year 2011 grant 

guidance and application process were revised to provide clearer 

direction for the subgrantees. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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The actions proposed by FEMA and the Governor’s Office of 

Homeland Security meet the intent of the recommendations. If 

properly implemented, the actions identified in the responses 

should address the conditions indentified during the audit. These 

recommendations are considered resolved and open, pending final 

implementation of the proposed corrective actions. 

State and FEMA Monitoring Efforts Need Improvement 

On-site monitoring of subgrantees by the State was not done in a timely 

manner, and the FEMA monitoring reports did not accurately portray 

subgrantee compliance with grant requirements. In addition, FEMA’s 

monitoring reports did not include opportunities to improve grantee 

administrative and operational efficiencies. 

The State’s Monitoring Efforts 

The State Administrative Agency was not timely in its on-site 

monitoring of subgrantees and performed only limited on-site visits. 

An OIG audit report from December 2007 recommended that the 

State take effective action to improve subgrantee monitoring site 

visits. The State has submitted evidence of conducting recent 

subgrantee monitoring visits and has established a grant monitoring 

schedule; however, few monitoring visits have been completed 

since the December 2007 report was issued. During the past twoand-a-half years, the State issued monitoring reports for six of the 

nine All-Hazards regions and four state agencies. 

The Director of the State Administrative Agency is aware of the 

lack of timeliness of on-site monitoring visits, and said the agency 

had difficulty meeting its grant monitoring schedule because of 

staffing shortages. The Director anticipates being on schedule by 

the end of 2011. 

Monitoring assesses the quality of program performance over time 

and ensures that grant activities comply with federal regulations. 

A FEMA regulation, at 44 CFR Part 13.40(a), requires the grantee 

to monitor grant- and subgrant-supported activities to ensure 

compliance with applicable federal requirements and achievement 

of performance goals. Grantee monitoring must include each 

program, function, or activity. 

A proactive approach to on-site monitoring and oversight of 

subgrantees can help identify problems such as misunderstanding 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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of, or noncompliance with, the terms, conditions, and regulations 

of the grant. Early detection and correction of deficiencies found 

during monitoring visits can reduce the time, effort, and cost of 

corrective actions. For example, we identified the following 

deficiencies during our site visits, some of which were also noted 

in the state monitoring reports that we reviewed: 

Insufficient or nonexistent policies and procedures (see 

earlier section, The State’s Grant Guidance Does Not 

Provide Adequate Grant Administration Information for 

Subgrantees); 

Insufficient equipment and inventory management 

practices; and 

Lack of oversight over subrecipients by pass-through 

entities. 

Equipment and Inventory Management 

Inventory management practices at several of the sites we visited 

had some level of weakness that could have affected the accuracy 

and integrity of the inventory purchased with grant funds. 

Although subgrantees generally maintained some type of 

equipment list, many did not do physical inventories every 2 years 

as required, or had other weaknesses. For example, at one 

subgrantee location, equipment purchased with grant funds was not 

properly marked with DHS tags, items were not entered on the 

inventory control sheet, and follow-up was not conducted to 

validate the subrecipients received equipment. Another subgrantee 

had difficulty providing an equipment list that correlated to our FY 

2007–2009 grant review period. At another location, listed 

property was assigned to individuals who did not have custody of 

the property. One subgrantee did not maintain any kind of 

equipment list. 

A FEMA regulation, at 44 CFR Part 13.32(d), requires, among other 

things, the development of a control system to ensure adequate 

safeguards to prevent loss, damage, or theft of equipment. The 

regulation also states that a physical inventory of equipment must be 

taken and reconciled with property records at least once every 2 

years. 

Pass-through Entity Oversight 

One subgrantee we visited did not monitor funds that were passed 

through to subrecipients, as required. A subrecipient is an entity 

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Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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that expends federal awards received from a pass-through entity to 

carry out a federal program. During our fieldwork, a subgrantee 

we reviewed passed grant funds to other jurisdictions and did not 

fulfill obligations to monitor the activities of the subrecipients. 

Office of Management and Budget Circular A-133, Audits of 

States, Local Governments, and Non-Profit Organizations, 

requires pass-through entities to monitor subrecipient activities to 

ensure that federal awards are used for authorized purposes in 

compliance with laws, regulations, provisions of contracts, or grant 

agreements, and that performance goals are achieved. 

The deficiencies noted during our site visits are examples of issues 

that, if not discovered timely through on-site monitoring and 

mitigated through corrective actions, can become larger problems. 

Early identification of issues through on-site monitoring can 

improve compliance with policies and procedures, reduce 

equipment loss or misuse, and preclude potential waste or abuse of 

pass-through funds. 

FEMA’s Monitoring Reports 

We reviewed FEMA monitoring reports to determine how FEMA 

reviews state and subgrantee management of the grant process and 

how improvements related to administrative or operational 

efficiency are communicated. 

FEMA conducted on-site strategic and financial monitoring, as 

well as desk-based reviews. FEMA’s strategic monitoring reports 

described the State’s progress toward achieving target capabilities. 

Financial reports described expenditure status and high-level 

controls. Neither the strategic nor the financial monitoring reports 

we reviewed identified programmatic deficiencies or made 

recommendations to improve the State’s program or operational 

efficiency and effectiveness. Further, FEMA’s monitoring reports 

did not discuss results related to FEMA’s training and exercise 

requirements. 

FEMA’s monitoring reports did not capture areas of deficiency 

that we identified during our review. For example, FEMA’s 2009 

Financial Monitoring Site Report documented acceptable 

compliance results. However, FEMA did not identify the 

following deficiencies: 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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Insufficient or nonexistent subgrantee policies and 

procedures; 

State and subgrantee failure to conduct the required 2-year 

physical equipment inventory; 

Deficient state and subgrantee inventory management 

systems; and 

Subgrantee failure to vet vendors against the federal 

debarred and suspended parties list. 

The Implementing Recommendations of the 9/11 Commission Act 

of 2007 (9/11 Commission Act) mandates the frequency of 

monitoring activities for preparedness grants. The 9/11 

Commission Act requires FEMA to conduct a programmatic 

(strategic) and financial review of all grants awarded to states, 

territories, and urban areas at least once every 2 years. FEMA’s 

monitoring activities were supposed to serve as a method by which 

to assist the grantee with the grant process and provide guidance to 

improve grantee administrative and operational efficiencies. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate: 

Recommendation #3: Direct the State to perform on-site 

monitoring of subgrantees on a more timely and routine basis. 

Recommendation #4: Evaluate and improve FEMA-prepared 

monitoring reports to ensure accurate and thorough assessments of 

grant administration practices, requirements, and efficiency. 

Management Comments and OIG Analysis 

FEMA concurred with recommendation 3. FEMA stated that 

within 90 days of receipt of the final report, the Governor’s Office 

of Homeland Security is required to submit a plan for monitoring 

its subgrantees on a timely and routine basis. 

The Governor’s Office of Homeland Security stated that it has 

performed at least one on-site monitoring visit to each of 

Colorado’s nine all-hazards regions and the Denver Urban Areas 

Security Initiative during the 2009-2010 calendar years and 

identified areas of improvement for each of the subgrantees. The 

office said that it has already developed a monitoring schedule that 

will allow each region to receive at least one on-site financial and 

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Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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physical monitoring visit per 18 months, together with the 

quarterly desktop financial monitoring. 

FEMA concurred with the intent of recommendation 4. FEMA 

agreed with the recommendation to the extent that the State can 

and should improve the monitoring practices, processes, and 

procedures to be more holistic and provide more details to clearly 

articulate compliance or non-compliance, programmatic 

efficiencies and effectiveness, and overall program progress 

towards completion. FEMA stated that since it only monitors the 

grant recipient, not the state’s subrecipients (except Urban Areas 

Security Initiatives), this effort must be aligned with the state and 

its fiduciary and programmatic responsibilities for upholding the 

terms, conditions, and use of FEMA grant funds. FEMA said that 

future program evaluations and monitoring, through a monitoring 

tool that FEMA and the states can use cooperatively, will be 

instituted in an upcoming software upgrade to a FEMA grants 

system to be completed within the next year, i.e., before September 

30, 2012. 

The actions proposed by FEMA and the actions the Governor’s 

Office of Homeland Security stated it has already undertaken meet 

the intent of the recommendations. If properly implemented, the 

actions identified in the responses should address the conditions 

indentified during the audit. These recommendations are 

considered resolved and open, pending final implementation of the 

proposed corrective actions. 

Performance and Preparedness Levels Are Unknown 

Neither FEMA nor the State has an adequate performance measurement 

system to evaluate operational effectiveness and grant funds 

administration. The tools used to measure program performance and 

preparedness are either inadequate and unreliable, or not tracked and 

managed. Therefore, neither the State nor FEMA can determine whether 

grant funds were used effectively to improve preparedness. 

The Government Performance and Results Act of 1993, as amended, 

requires the head of each federal agency to make available an annual 

performance plan covering each program activity set forth in the budget of 

such agency.2

 Such plan shall include, among other things: 

2 31 U.S.C. 1115(b). 

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Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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Establishing performance goals to define the level of performance 

to be achieved by a program activity; 

Expressing such goals in an objective, quantifiable, and 

measurable form; and 

Describing the operational processes; skills and technology; and 

the human capital, information, or other resources required to meet 

the performance goals. 

The Homeland Security Grant Program is a coordinated effort to 

strengthen homeland security preparedness. Without an adequate 

measurement system to collect data on its individual grantees to report on 

program or operational performance, FEMA cannot report on whether the 

program is being run effectively and efficiently. 

FEMA does require Homeland Security Grant Program applicants to tie 

grant proposals to the National Preparedness Guidelines. These proposals 

must outline measurable outcomes that will be tracked and accomplished 

during implementation. Although FEMA requires that grantees report on 

progress made toward achieving the identified outcomes for each 

investment, the State did not track or manage its progress. In addition, 

neither subgrantees nor the State measured the effectiveness of training 

programs or exercises. 

Each of the State’s All-Hazards regions and state agencies is required to 

contribute to a Target Capabilities Assessment. The assessment is a 

performance measurement plan that tracks historical scores and current 

targets. Regions and state agencies align the measurement plan with the 

target capabilities documented in their Homeland Security strategic plans 

and then determine targets (desired levels) for each dimension of 

performance within each target capability. 

The subgrantees’ methods of contributing data to the assessments differed. 

Several subgrantees we interviewed described different approaches to 

implementing their assessment tool, as well as various methods of 

determining gaps between needs and capabilities. Benchmark vs. actual, 

weighting, and brainstorming were among the methods subgrantees used. 

The use of various approaches to develop the capabilities assessment tool 

and the subjective manner in which capabilities are measured would seem 

to limit the usefulness of the assessment. 

In addition to the inconsistent approaches used in preparing the target 

capability assessment, FEMA’s State Preparedness Reports in 2007, 2008, 

and 2009 were inconsistent because they used different formats and 

measures, which made trend analyses relative to specific elements 

virtually impossible. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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The 2007 State Preparedness Report focused on the State’s 

progress toward achieving eight national priorities, such as 

implementing the National Incident Management System and 

National Response Framework. 

The 2008 report focused on the individual capabilities included 

within each national priority, such as setting capability targets for 

mass prophylaxis plans and coordination. 

The 2009 report focused on metric targets within capability 

measures, such as the time in which immediate dispatch information 

is provided to primary first responders during regular operations. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate: 

Recommendation #5: Work with the National Preparedness 

Directorate to standardize the State’s Preparedness Report format 

to ensure that the State can track and measure its preparedness 

progress and identify work yet to be done to meet goals and 

objectives. 

Recommendation #6: Develop, and incorporate into guidance, a 

comprehensive performance measurement system including 

specific, measurable, and outcome-based program and operational 

performance measures, including training and exercise 

effectiveness, to accurately capture the program’s overall 

performance. 

Recommendation #7: Direct the State to ensure that the Target 

Capability Assessment tool is valid, accurate, complete, and useful. 

Recommendation #8: Direct the State to implement and manage 

specific milestones for achieving progress toward desired Target 

Capability levels and State and subgrantee investment goals. 

Management Comments and OIG Analysis 

FEMA concurred with the intent of recommendations 5 and 6. 

FEMA stated that its National Preparedness Directorate has 

developed an improved and sustainable methodology for assessing 

capabilities that will enable states to track and measure their 

preparedness progress over time using goals and objectives that are 

tied to their specific threats and hazards. This new framework and 

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Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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methodology will be used for the calendar year 2011 data call, with 

results to be included in the 2012 National Preparedness Report. 

FEMA said that the National Preparedness Directorate, the FEMA 

entity responsible for developing guidance regarding the 

Homeland Security Strategy process and preparedness 

performance measurement systems, is revising the guidance for 

Homeland Security Strategy content. It is anticipated that the new 

guidance will be released by the end of 2011. 

FEMA stated that it has also made progress on generating viable 

grant metrics that have been included in the 2011 grant guidance. 

The National Academy of Public Administration will offer three to 

seven effectiveness measures by September 2011. In addition, 

FEMA said it has been developing effectiveness measures for 

grant programs that do not have adequate existing measures. 

FEMA concurred with recommendations 7 and 8. Within 90 days 

of receipt of the final report, FEMA will recommend that the 

Governor’s Office of Homeland Security submit a plan for 

ensuring the accuracy, completeness, and consistency of 

information collected as part of the Target Capability Assessment 

process. 

FEMA anticipates that the National Preparedness Directorate will 

release new guidance by the end of 2011 for the FY 2012 

Homeland Security Grant Program application cycle. The 

Governor’s Office of Homeland Security will therefore be required 

to update the state’s security strategy to comply with the revised 

guidelines. 

The Governor’s Office of Homeland Security concurred with 

recommendations 7 and 8, with comment. While it agreed that the 

Target Capability Assessment tool should be a valid, accurate, 

complete and useful tool, it did not agree with the assertion in the 

report that, “neither the State nor FEMA can determine whether 

grant funds were used effectively to improve preparedness.” 

According to the Governor’s Office of Homeland Security, there 

are a number of systems in place to ensure that grant funds are 

being used effectively and that preparedness is improving. 

The Governor’s Office of Homeland Security noted that Colorado 

has used Homeland Security Grant funds to invest in intelligence 

and information dissemination capabilities which helped lead to 

the arrest of an individual related to terrorism, and to purchase 

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Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

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equipment, training, and exercises that have been utilized by first 

responders to manage many disasters ranging from flooding to 

tornados to wildfires. Despite the challenges to measure 

preparedness, the Governor’s Office of Homeland Security said it 

will continue to work closely with FEMA to assist in developing 

tools to assess and measure preparedness in order to maintain a 

coordinated effort that strengthens homeland security 

preparedness. 

The actions proposed by both FEMA and the Governor’s Office of 

Homeland Security meet the intent of the recommendations. If 

properly implemented, the actions identified in the responses 

should address the conditions indentified during the audit. These 

recommendations are considered resolved and open, pending final 

implementation of the proposed corrective actions. 

Cash Flow Problems Could Impact Program Effectiveness 

Local governments face declining revenue and cash flow problems that 

force them to delay acquisition of grant-related equipment due to the lack 

of funds to pay for these purchases in advance of receiving grant 

reimbursement. According to State officials, subgrantees typically submit 

spending plans with grant applications that detail specific purchases and 

expenditures that would be made to address prioritized capability gaps. 

After the subgrantee makes purchases with its own funds, reimbursement 

requests are forwarded to the State and grant funds are subsequently 

disbursed to the subgrantee. 

During our review, we noted two regions that had to delay making 

purchases for up to a year until they could be locally funded, possibly 

increasing the risk that they would not be prepared to respond to an 

emergency. In addition, these regions neighbor each other and represent a 

sizable geographic area in southeastern Colorado that has had to delay 

purchases intended to close capability gaps. Although FEMA guidance 

includes the option to draw down funds 120 days prior to expenses being 

incurred and paid, the State discourages advanced drawdowns and prefers 

to operate the grant programs on a post-pay reimbursement basis. 

Advanced drawdowns may help to ensure that regions with cash flow 

issues can fulfill the intent of the program by making funds available in 

advance to acquire equipment necessary to respond to catastrophic or 

terrorist events. 

Although the State advanced funds to one subgrantee, it did not adequately 

monitor the transaction to ensure that the funds were properly spent. In 

this case, it took the State a year to realize the subgrantee had not spent the 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 15
 
 

funds as expected, which resulted in the subgrantee being assessed an 

interest penalty for violating the Cash Management Improvement Act of 

1990, as amended (Cash Management Improvement Act). Rather than 

identify the cause of the monitoring problem and take corrective action, 

State officials opted to reinforce the preference for using the post-pay 

reimbursement process. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate: 

Recommendation #9: Direct the State to strengthen monitoring 

controls over advanced drawdowns to mitigate the risk of violating 

the Cash Management Improvement Act. 

Recommendation #10: After Recommendation #9 has been 

implemented, direct the State to implement a method to identify 

subgrantees faced with economic challenges and encourage them 

to exercise the option of requesting advanced drawdowns when 

necessary and appropriate. 

Management Comments and OIG Analysis 

FEMA concurred with the intent of recommendations 9 and 10. 

FEMA agreed that the Governor’s Office of Homeland Security 

should enhance the monitoring practices used to provide 

subgrantee oversight, and stated the issues regarding the advance 

drawdown of grant funds will be addressed by the Governor’s 

Office of Homeland Security response to recommendations 1, 2, 

and 3, which is due within 90 days of receipt of the final report. 

The Governor’s Office of Homeland Security stated it has 

implemented more frequent and stringent quarterly financial 

monitoring, which has allowed for a more consistent review of 

subgrantee cash handling practices to ensure compliance with the 

Cash Management Improvement Act. The Governor’s Office of 

Homeland Security said it has also rewritten grant guidance to 

more clearly address the eligibility of cash advances for 

subgrantees, and have reinforced the State’s rules concerning cash 

advance requests benefiting subgrantees faced with economic 

challenges. 

The actions proposed by both FEMA and the Governor’s Office of 

Homeland Security meet the intent of the recommendations. If 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009 

Page 16 
properly implemented, the actions identified in the responses 

should address the conditions indentified during the audit. These 

recommendations are considered resolved and open, pending final 

implementation of the proposed corrective actions. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009 

Page 17 
Appendix A 

Purpose, Scope, and Methodology 

The objective of this audit was to determine whether the State 

distributed and spent State Homeland Security Program and Urban 

Areas Security Initiative grant funds strategically, effectively, and 

in compliance with laws, regulations, and guidance. The goal of 

this audit is to identify problems and solutions in order to assist 

FEMA and the State to improve the Nation’s ability to prevent and 

respond to all hazards on both local and statewide levels. 

The scope of this audit included the plans developed by the State to 

improve preparedness and all-hazards response, the goals set 

within those plans, the measurement of progress toward the goals, 

and the assessments of performance improvement that result from 

this activity. Further, the scope included the assessment of these 

activities within the context of risk to determine if the State’s plans 

produced strategic performance improvements related to the 

highest areas of risk rather than merely producing improvements in 

a broader sense. 

Together, the entire Homeland Security Grant Program and its five 

interrelated grant programs fund a range of preparedness activities, 

including planning, organization, equipment purchase, training, 

exercises, and management and administration costs. Because of 

the interrelationship of these grant programs, all were considered 

when evaluating the planning cycle and the effectiveness of the 

overall grant program. However, only State Homeland Security 

Program and Urban Areas Security Initiative funding, and 

equipment and programs supported by the grant funding, were 

reviewed for compliance. 

In accordance with the audit guide, auditors visited the regional 

coordinators and regional fiscal agents in five of the State’s nine 

All-Hazards regions and six of the state agencies that have been 

awarded funding from FYs 2007 to 2009. We also visited three 

Urban Areas Security Initiative jurisdictions. Auditors selected at 

least two specific first responder sites in each region to visit and 

test grant assets. We visited 33 sites, including the State 

Administrative Agency, 12 subgrantees (Urban Areas Security 

Initiative Headquarters, five regional offices, and six state agency 

offices), 19 regional and Urban Areas Security Initiative first 

responders, and one remote laboratory. 

The State of Colorado’s Management of State Homeland Security Program and
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 18
 
Appendix A 

Purpose, Scope, and Methodology 

State Administrative Agency 

State of Colorado Governor’s Office of Homeland Security 

Regions 

North Central Region and local first responders 

Northeast Region and local first responders 

South Central Region and local first responders 

South Region and local first responders 

Southeast Region and local first responders 

State Agencies 

Department of Agriculture and laboratory 

Department of Corrections 

Department of Local Affairs – Division of Emergency 

Management 

Department of Military and Veteran’s Affairs 

Department of Public Safety
 

University of Colorado – Boulder 


Urban Areas Security Initiative 

Urban Areas Security Initiative Headquarters (Denver) 

City of Aurora – Stations 9 and 10 

Cunningham Fire Department 

South Metro Fire Department (Parker), Stations 33 and 34 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 19
 
Appendix A 

Purpose, Scope, and Methodology 

The scope of the audit included the following: 

Homeland Security Grant Program 

FYs 2007 through 2009 

Funded Activity FY 2007 FY 2008 FY 2009 Total 

State Homeland 

Security Program $6,430,000 $11,880,000 $10,925,000 $29,235,000 

Urban Areas 

Security Initiative $7,850,000 $7,614,500 $7,053,050 $22,517,550 

Total $14,280,000 $19,494,500 $17,978,050 $51,752,550 

Law Enforcement 

Terrorism 

Prevention Program 

$4,600,000 Not 

Applicable 

Not 

Applicable $4,600,000 

Citizen Corps 

Program $244,560 $249,368 $248,204 $742,132 

Metropolitan 

Medical Response 

System Program 

$774,435 $963,663 $963,663 $2,701,761 

Grand Total $19,898,995 $20,707,531 $19,189,917 $59,796,443 

Source: Federal Emergency Management Agency. 

We reviewed a judgmental sample of the State’s administrative 

expenditures representing at least 50% of the dollar value expended 

for all grant years to determine the allowability of the expenditure. 

We also used an internal control questionnaire and reviewed a 

judgmental sample of subgrantee expenditures for each applicable 

grant year. We tested for appropriateness and allowability of 

expenditures and judgmentally chose specific expenditure assets to 

observe at the local sites. We developed a tracking tool to document 

the transactions chosen for review; results of review; tracking status, 

function, and condition of equipment; and details related to training 

and exercises to ensure that requirements had been met. 

We conducted this performance audit between September 2010 

and March 2011 pursuant to the Inspector General Act of 1978, as 

amended, and according to generally accepted government 

auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to 

provide a reasonable basis for our findings and conclusions based 

upon our audit objectives. We believe that the evidence obtained 

provides a reasonable basis for our findings and conclusions based 

upon our audit objectives. 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 20
 
Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 21
 

U.S. l)t'partmeut of Homcland Se-curity

Washington, DC 20472

FEMA

SEP f 4 1011

MEMORANDUM FOR: Anne L. Richards

Assistant Inspector General for Audits

Office ofInspector General

FROM: David J. Kaufman

Director

Office ofPolicy and Program Analysis

SUBJECT: Comments to OIG Draft Report, The State o/Colorado 's

Management a/State Homeland Security Program and Urban

Areas &curity Initiative Grams AI1'"arded During Fiscal Years

,200? through 2009

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

used to strengthen the effectiveness and efficiency of how we execute and measure our

programs. We recognize the need to continue to improve the process, including addressing the

recommendations raised in this report. Our responses to the recommendations are as follows:

Recommendation #1: We recommend that the Assistant Administrator, Grant Programs

Directorate, dircct the Governor's Office of Homeland Security to revise State guida.n<.~e to

provide gr<l11t implementation expectations, methods, and administration activities that arc in line

with state and federal rcquirements.

FEMAResponse: FEMA concurs with this recommendation.

In 2009, The Colorado Governor's Office of Homeland Secwily (GOHS) stated that it "works

with representatives from the State's nine All Hazards Emergency l'vlanagement Regions and

other partnl;rs to strengthen and streamline the grants administration process," by relc~asing a

Grant Managcment Guide tor usc by the State. This document incorporate.d "by refercnce the

provisions ofOl\·1B circulars and government-wide common rules applicable to grants" and was

 
Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 22
 

a significant contribution to the fc>rmal guidance provided by the GOI·IS to its subrecipients.

FEMA acknowledges the efforts of the Colorado State Administrative Agency (SAA) to provide

grant implementation and administrative direction to those local jurisc!'ictions receiving

Homeland Security grant funds.

However, FEMA concurs with the recommendation that additional guidance for subgrantees is

necessary. Therefore, within 90 days of receipt of the final report via the grantee noti lication,

FEMA will require the GOHS to submit a plan lor revising, updating, and expunding the State's

grant management guidance. FEMA requests that this recommendation be resolved and open

pending implementation of the stated corrective action.

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

Directorate, direct the Governor's Office of Homeland Security to improve its progrmn support,

including continual and proactive mentoring, training, and engagement ofsubgrantee grant

<ldministration stafr

FEMA Response: FEMA concurs with this recommendation.

Within 90 Days ofreceipt of the tinal report via the grantee notitication, FEI\tl/\. will require the

GOBS to submit a plan lor enhancing the program support, training, and engagement services

offered to subgrantees within the State. FEI\tlA requests that this recommendation be resolved

~U1d open pending implementation of the stated eOlTcctive <lction.

Recommendation #3: We recommend that the Assistant Administrator, Grant Programs

Directorate, direct the State to pertonn on-site monitoring ofsubgrantees on a more timely and

routine basis.

FEMA Response: FEMA concurs with this recommendation.

Within 90 days ofreceipt ofthe final report via the grantee notification, FEMA will require the

GOBS to submit a pIan tor monitoring its subgrantces on a timely and routine basis. FEMA

requests that this recommcndation be resolved and open pending implementation ofthe stated

corrective action.

Recommendation #4: We recommend that the Assistant Administrator, Grant Programs

Directorate, evaluate and improve FEMA-prepared monitoring reports to ensure accurate and

thorough assessments of grant administmtion practices, requirements, and efticiency.

FEj"IA. Response: FEMA concurs with the intent ofthis recommendation.

FEMA agrees with the recommendation to the extent that the GPD can and should improve the

monitoring practices, processes and procedures to be more holistic and provide more details to

clearly articulate compliance/non-compliance, programmatic efficiencies and effectiveness and

overall program progress towards completion. However, since FEMA. only monitors the grant

recipient. not the State's subrecipimts, except UASIs, this effort must be aligned with the Stat~~

and their fiduciary and progrmnrnatic responsibilities for upholding the terms, <xmditions and usc

2

 
Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 23
 

of FEMA grant li.mds. FEMA and GPD reevaluate this process annually and strive to improve

the mon.itoring process and reporting year over year. Future program evalu.ations and monitoring

is evolving to a more robust monitOIing tool for States and FEMA to use cooperatively,

collaboratively and more frequently, whereby increasing constancy of monitoring results and

accurately documenting project level accomplishments. This will be i.nst.ituted in a coming

sotlware upgrade currently proposed in the next year (based on available nlllding) through the

program module ofthe current ND Grants System. FEII,1..A requests that this recommendation be

resolved and open pending implementation ofthe stated corrective action.

Recommendation #5: We recommend that the Assistant Administrator, Grant Programs

Directorate, work with the National Preparedness Directorate to standardize the State's

Preparedness Report format to ensure that the State can track and measure its preparedness

progress and identiry work yet to be done to meet goals and objectives.

FEMA Response: FEMA concurs with the intent of this recommendation.

FEMA agrees with the intent ofthe recommendation for the National Preparedness Directorate

(NPD) to standardize the format of the State Preparedness Reports FEMA NPD has developed

an improved and sustainable methodology for assessing capabilities that will enable states to

track and measure their preparedness progress over time using goals and objectives that are tied

to their specitic threats and hazards. This was accomplished in partnership with state and local

jurisdictions. This new framework ,md methodology will be used tt)r the calendar year 20 II data

call, with results to be included in the 2012 National Preparedness RepOli.

FEMA requests that this recommendation be resolved and open pending implementation of the

stated corrective action.

Recommendation #6: We recommend that the Assistant Administrator, Grant Programs

Directorate, develop and incorporate into guidance, a comprehensive performance measurement

system including specific, measurable, and outcome-based program and operational performance

measures, including training and exercise effectiveness, to accurately capture the program's

overall perfonnance.

FEMA Response: FEMA concurs with the intent ofthis recommendation.

NPD is the FEMA entity responsible fell' developing guidance reg'lrding the Homeland Security

Strategy (HSS) process and prepare.dness perfi:mmmce measurem.cnt syst.ems. NPD is revising

the guidance for HSS content. It is anticipated that, in preparation for the FY 2012 Homeland

Security Grant Program (HSGP) application cycle, this new guidance will be released by the end

ofthe year 20 I!.

FEMA has also made steady progress on generating viable grant metrics. To date, we have

developed measures and metrics that have been included in the 2011 grant guidance. The

National.Academy QfPublic Administration will offer 3-7 effectiveness measures by September

20 II. Additionally, we have been deVeloping effectiveness measures for any grant programs that

do not have adequate existing measures.

3

 
With its partners/stakeholders, NPD is the FEMA entity responsible tClr developing the National

Preparedness Goal and de.scription ofthe National Preparedness System required by the

Presidell1ial Policy Directive!PPD-8: National Preparedness. The National Preparedness Goal

\ViII identify the core capabilities and performance objectives for National Preparedness with

respect to prevention, protection, response, recovery and mitigation. The National Preparedness

System will provide the description of a methodical approach which li.nks together programs and

requirements into a comprehensive system, driving rational decision-making and allowing for a

direct and defensible assessment of progress against clearly detined objectives. 111e system will

also describe the guidance for resources, equipment, national training ancl exercise programs.

The National Preparedness Goal is due by September 25, 2011 and the National Preparedness

System is due by November 24,2011.

FEMA requests that this recommendation be resolved and open pending implementation of the

stated corrective action.

Recommendation #7: We recommend that the Assistant Administrator, Grant Programs

Directorate, direct the State to ensure that the Target Capability Assessment tool is valid,

accurate, complete, and useful.

FEMA Response: FEMA concurs with this reconunendatiOll.

Within 90 Days ofreceipt of the final report via the grantee notification, FEMA will recommend

the GOH.S submit a plan for ensuring the accuracy, completeness, and consistency of

information collected as part of the Target Capability Assessment process. FEMA requests that

this recommeildation be resolved and open pending implementation ofthe stated corrective

actions.

Recommendation #8: We recommend that the Assistant Administrator, Grant Programs

Directorate, direct the State to implement and manage specific milestones for achieving progress

toward desired Target Capability levels and State and subgrantee investment goals.

FEMA Response: FEMA concurs with this recommendation.

All 56 States and Territories have developed a HSS. This docum.cntis the primary mechanism

tor State and Territorial govemments to identify the homeland security goals t()r their respective

communities. NPD is the FEMA entity responsible for developing guidance on homeland

security strategies and preparedness perfomlance measurement system.;;. As stated in response to

recommendation 6, it is anticipated that NPD will release new guidance by the end ofthe year

2011 fill' the FY 2012 HSC;P application cyde. FEMA will require the OOI1S to update the

State's security strategy in compliance with revised guidelines developed by NPD.

FEl'vIA believes this satisfi.es the intent ofthe recommendation and requests that this

recommendation remai.n resolved and open pending revision ofColorado's HSS.

4

 

Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 24
 
Recommendation #9: We recommend that the Assistant Administrator, Grant Programs

Directorate, direct the State to strengthen monitoring controls over advanced drawdowns to

mitigate the risk of violating the Cash lvf(.l1/agemeni Improvement Act.

Recommendation #10: \Ve recommend thai the Assistant Administrator, Grant Programs

Directorate, alter Recommendation:#9 has been implemented, direct the State to implement a

method to identify subgrantees faced with economic challenges and encourage them to cxerc.ise

the option of requesting advanccd drawdowns when necessary and appropriate.

FEMA Response to Recommendations 9 & 10: FEMA concurs with the intent ofthese

recolllmendations.

FEMA concurs with the recommendations that the GOBS should enhance the monitoring

practices used to providc oversight ti)r subgrantees receiving homeland security grant funds.

However, it is FEMA's position that the specific issues regarding the advance drawdown of

grant funds will be addressed by thc GOHS response to recommendations #1 (updated grant

guidance), #2 (cnhanced program support and training), and #3 (monitoring sub-grantee

activities).

Within 90 Days of receipt ofthe final rcport via the grantee notification, FEMA will require the

GOHS to submit a plan tor: I) revising, updating, and expanding the State's grant managemcnt

guidance; 2) enhancing the program support:, training, and engagement services offercd to sub-

!,'rantces within thc Statc; and 3) monitoring its sub-grantees on a timely and routine basis.

FEMA requcsts that these recommcndations be resolved and open pending implementation ofthe

stated conective action.

Again, we thank you for the opportunity to review and comment on your draft repol1 which

contains recommendations aimed at improving the efficiency of our agency. Should you have

fUI1her questions rcgarding our response, please do not hesitate to call FEMA's Chief Audit

Liaison, Brad Sheth, at 202-646-1308.

5

 

Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 25
 
Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 26
 

STATE OF COLORADO

GOVERNOR'S OFFICE OF HOMELAND SECURITY

9195 East Mineral Avenue, #234

Centennial, Colomdo 80112

Phone (720) 852-6602

Fax (720) 852-6768

www.colorado.gov/homelandsecurity

John Hickenlooper

Governor

August 17,2011

Larry D. Trujillo

Director, Office of

Ms. Anne L. Richards Homeland Security

Assistant Inspector General for Audits

Office ofInspector General

U.S. Department of Homeland Security

245 Murray Drive, SW, Building 41 0

Washington, DC 20528

Re: Response to OIG DRAFT REPORT: The State of Colorado's Management of State

Homeland Security Program and Urban Areas Security Initiative Grants Awarded

During Fiscal Years 2007 through 2009" OIG Project No. 10-169-AUD-FEMA

Dear Ms. Richards:

The Colorado Governor's Orfice of Homeland Security (GOHS) has received and reviewed the

above-rererenced draft report. The findings in this report will be used to strengthen the

effectiveness and efficiency of how our office will execute and measure the homeland security

program. We recognize the need to continuously improve the process, including addressing the

recommendations raised in this report.

Thank you for the opportunity to respond to this report and to work with the Office of the

Lnspector General during this engagement. We appreciate the report's recognition that the State

did an effective job of developing its Homeland Secwity Strategic Plan, distributing grant funds,

and ensuring that all of the available funds were being used. The report also recognizes that the

State used reasonable methods to assess threats, vulnerabilities, capabilities, and needs, allocated

funds accordingly, complied with cash management and status reporting requirements, and

generally spent funds in accordance with grant requirements and state-established priorities.

Response To Recommendations

Recommendation #1: Revise State guidance to provide grant implementation expectations,

methods. and administration activities that are in line with state and federal requirements.

Response: GOHS concurs with this recommendation and has taken steps to improve its guidance

by including additional details that better define state requirements and expectations. Although

State guidance has consistently addressed federal requirements. additional information regarding

Colorado ',\' Communities Working Togetherfor a Safer Tomorrow

 
 

Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 27
 

policies and procedures and segregation of duties has been included to better summarize sub

grantee expectations.

Status: Fully Implemeuted

Recommendation #2: Improve its program support, including continual and proactive

mentoring, training, and engagement ofsub-grantee grant administration staff.

Response: GOBS concurs with this recommendation and has taken steps to provide additional

mentoring and training to sub grantees. Annual trainings and routine site visits had occurred

during the 2007-2009 fiscal years; however, since 2010 and based. on this recommendation,

GOHS has now adopted a more aggressive sub grantee training curriculum to address the needs

of experienced and new fiscal agents, project managers, and coordinators. These trainings are

now available multiple times a year, and have been customized to address the wide-range of

experience levels that exists amongst the sub grantees. The fiscal year 2011 grant guidance and

application process were revised to provide clearer direction and to reduce some ofthe burden

placed on the sub grantees. Furthermore, draft grant applications were accepted and reviewed by

GOHS staff and feedback was provided to sub grantees. GOHS has increased its engagement

with sub grantees in order to improve overall program support.

Status: Fully Implemeuted

Recommendation #3: Direct the State to perform on-site monitoring ofsub-grantees on a more

timely and routine basis.

Response: GOHS concurs with this recommendation with comments and recognizes the benefits

of on-site monitoring as the preferred method ofmonitoring. Although FEMA regulations

require monitoring to occur, unfortunately they do not specify a specific method or a specific

frequency at which they must occur. GOHS perfonned at least one on-site monitoring visit to

each of Colorado's nine all-hazards regions and the Denver UASI during the 2009-2010 calendar

years and identified areas of improvement for each of the sub grantees. Corrective actions were

implemented and subsequent grant management trainings highlighted findings that were

commonly identified during the monitoring visits. GOHS also conducts quarterly monitoring by

reviewing sub grantee financial and progress reports. Recognizing the need to continuously

improve, GOHS has developed a monitoring schedule that will allow each region to receive at

least one on-site financial and physical monitoring visit per 18 months, together with the

quarterly desktop financial monitoring. This monitoring schedule also allows for additional site

visits be perfonned if deemed necessary. Given the recent significant Congressional cuts to the

Homeland Security Grant Program, we recognize that this is aggressive monitoring schedule

may require revisions in subsequent fiscal years.

Status: Fully lmplementcd

Page 2 of5
Recommendation #4: Evaluate and improve FEMA-prepared monitoring reports to ensure

accurate and thorough assessments of grant administration practices, requirements, and

efficiency.

Response: This recommendation is directed at FEMA, and therefore, Colorado will defer to

FEMA for a response to this recommendation.

Status: Awaiting FEMA Guidance

Recommendation #5: Work with the National Preparedness Directorate to standardize the

State's Preparedness Report format to ensure that the State can track and measure its

preparedness progress and identify work yet to be done to meet goals and objectives.

Response: GOHS concurs with this recommendation, and Colorado will continue to work with

the National Preparedness Directorate to develop standardized reporting tools to help measure

preparedness progress understanding that the development and standardization ofthese tools is

ultimately up to FEMA to publish.

Status: Awaiting FEMA Guidance

Recommendation #6: Develop, and incorporate into guidance, a comprehensive performance

measurement system including specific, measurable, and outcome-based program and

operational perfonnance measures, including training and exercise effectiveness, to accurately

capture the program's overall performance.

Response: This recommendation is directed at FEMA, and therefore, Colorado will defer to

FEMA for a response to this recommendation.

Status: Awaiting FEMA Guidance

Recommendation #7: Direct the State to ensure that the Target Capability Assessment tool is

valid, accurate. complete, and useful.

Response: GOHS concurs, but with comments on this recommendation. GOHS agrees that the

Target Capability Assessment tool should be a valid, accurate. complete and useful tool;

however, GOHS does not agree with the assertion in the report that "neither the State nor FEMA

can detennine whether grant funds were used effectively to improve preparedness." Although

numerical measurement of improvements in preparedness is something that all levels of

government across the entire nation are struggling to capture, there are a number ofsystems in

place to ensure that grant funds are being used effectively and that preparedness is improving.

The State of Colorado's Target Capability Assessment tool has been used on an annual basis

since 2006 to ensure that grant funds are being used effectively by better understanding the

capability strengths, weaknesses and needs of our local and State stakeholders. As part of a

Page 3 of5

 

Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 28
 
Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 29
 

multi-stage process, all-hazards regions identify their greatest threats and hazards, based upon

the probability (likelihood of occurrence in that region) and the consequence (estimate of losses

expected) from a set of both national and state planning scenarios. The determination ofthe

priority regional threats directs the focus of enhancement of target capabilities primarily Jjnked

to mitigating those threats. These assessments have given the all-hazards regions a measure of

their current level of capability and the ability to project where that capability needs to be in

order to achieve a pre-determined level of preparedness based upon the level of risk that they are

willing to accept. These tools provide a baseline upon which Regional Homeland Security

Strategies are developed and used as a mechanism by which regions can prioritize their most

pressing needs and map out a plan for addressing those needs. The Regional Homeland Security

Strategies are a key component used to justify requests through regional applications for

homeland security grant funding. Projects must tie directly back to the goals and objectives

indicated in the strategies, providing a simple check that funding requests are contributing to

accomplishing the long-range goals established by regional subject matter experts.

Improvements in preparedness have been demonstrated both locally and nationwide through a

number of real-world events. Homeland Security Grant funds have been utilized in Colorado to

invest in intelligence and information dissemination capabilities to support the Colorado

Information Analysis Center which, in conjunction with the FBI Denver Office, arrested

Najibullah Zazi on charges oflying in a matter involving terrorism. Homeland Security Grant

funds have also been used to purchase equipment, trainings and exercises that have been utilized

by first responders to manage many disasters ranging from flooding to tornados to wildfires

saving countless l.ives and property.

Despite the challenges at all levels of government to measure preparedness, Colorado will

continue to work closely with FEMA to assist in developing tools to assess and measure

preparedness in order to maintain a coordinated effort that strengthens homeland security

preparedness.

Status: Awaiting FEMA Guidance

Recommendation #8: Direct the State to implement and manage specific milestones for

achieving progress toward desired Target Capability levels and State and sub-grantee investment

goals.

Response: See response to Recommendation #7

Recommendation #9: Direct the State to strengthen monitoring controls over advanced

drawdowns to mitigate the risk of violating the Cash Management Improvement Act.

Response: GOHS concurs with this recommendation and has implemented more frequent and

stringent quarterly financial monitoring which has allowed for a more consistent review ofsub

grantee cash handling practices to ensure compliance with the Cash Management Improvement

Act.

Page 4 0/5

 
Status: Fully Implemented

Recommendation #10: After Recommendation #9 has been implemented, direct the State to

implement a method to identify sub-grantees faced with economic challenges and encourage

them to exercise the option of requesting advanced drawdowl1s when necessary and appropriate.

Response: GOHS concurs with this recommendation and in the months following the Slate of

Colorado's exit interview with the DHS Office of Inspector General, GOHS has rewritten grant

guidance to more clearly address the eligibility of cash advances for sub grantees. Also, in

subsequent fiscal agent trainings, meetings, and regional board meeting GOHS staff have

reinforced the State's rules on, and acceptance of. cash advance requests to benefit sub grantees

faced with economic challenges. These changes have already resulted in a significant increase in

the number ofsub grantees requesting and receivi.flg advanced drawdowns.

Status: Fully Implemented

Thank you again for the opportunity to comment on this report. We appreciate the hard work

and cooperative attitude that the audit team exhibited, and look forward to instituting positive

changes in the program as a direct result of these recommendations. Please be advised that at

this time we do not have concerns with publicly releasing the information contained in the report

and look forward to working with you to finalize this audit.

Respectfully,

LARRY D. TR lLLO

Director, Governor's Office ofHomelan

larry.d.truj illo@state.co.us

Page 5 0/5

Appendix B 

Management Comments to the Draft Report 

The State of Colorado’s Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 30
 
Appendix C 

Homeland Security Grant Program Background 

The Homeland Security Grant Program provides federal funding to 

help state and local agencies enhance their capabilities to prevent, 

protect against, respond to, and recover from terrorist attacks, 

major disasters, and other emergencies. The Homeland Security 

Grant Program encompasses several interrelated federal grant 

programs that together fund a range of preparedness activities, 

including planning, organization, equipment purchase, training, 

and exercises, as well as management and administration costs. 

Programs include the following: 

State Homeland Security Program provides financial 

assistance directly to each of the states and territories to 

prevent, respond to, and recover from acts of terrorism and 

other catastrophic events. The program supports the 

implementation of the State Homeland Security Strategy to 

address the identified planning, equipment, training, and 

exercise needs. 

Urban Areas Security Initiative provides financial 

assistance to address the unique planning, equipment, 

training, and exercise needs of high-risk urban areas, and to 

assist in building an enhanced and sustainable capacity to 

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

terrorism and other disasters. Allowable costs for the urban 

areas are consistent with the State Homeland Security 

Program. Funding is expended based on the Urban Area 

Homeland Security Strategies. 

In addition, the Homeland Security Grant Program includes other 

interrelated grant programs with similar purposes. Depending on 

the fiscal year, these include the following: 

Metropolitan Medical Response System 

Citizen Corps Program 

Law Enforcement Terrorism Prevention Program 

(through FY 2007) 

The State of Colorado’s Management of State Homeland Security Program and
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 31
 
Appendix D 

Colorado’s Nine All-Hazards Regions 

Map provided by the State of Colorado 

The State of Colorado’s Management of State Homeland Security Program and
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 32
 
Appendix E 

Major Contributors to this Report 

Michael Siviy, Director 

Patrick Tobo, Audit Manager 

Jacqueline Bear, Auditor-In-Charge 

Katrina Bynes, Auditor 

Gary Crownover, Program Analyst 

Anne M. Mattingly, Program Analyst 

James Diaz, Program Analyst 

Shawn Cosman, Referencer 

The State of Colorado’s Management of State Homeland Security Program and
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 33
 
Appendix F 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Federal Emergency Management Agency 

Administrator 

Assistant Administrator, Grant Programs Directorate 

Federal Emergency Management Agency Audit Liaison 

Grant Programs Directorate Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

The State of Colorado’s Management of State Homeland Security Program and
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2007 through 2009
 

Page 34
 
 

 

ADDITIONAL INFORMATION AND COPIES 

To obtain additional copies of this report, please call the Office of Inspector General 

(OIG) at (202)254-4100, fax your request to (202)254-4305, e-mail your request to our 

OIG Office of Public Affairs at DHS-OIG.OfficePublicAffairs@dhs.gov, or visit our OIG 

websites at www.dhs.gov/oig or www.oig.dhs.gov. 

OIG HOTLINE 

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

or noncriminal misconduct relative to Department of Homeland Security programs and 

operations: 

• Call our Hotline at 1-800-323-8603 

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

• E-mail us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigation - Hotline, 

245 Murray Drive SW, Building 410 

Washington, DC 20528 

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