Department of Homeland Security
 

The State of Ohio’s Management of State Homeland 

Security Program and Urban Areas Security Initiative 

Grants Awarded During Fiscal Years 

2007 through 2009 

OIG-12-17 December 2011
 
Office ofInspector General

U.S. Department of Homeland Security

Washington, DC 20528

Homeland

Security

DEC 1'3 2011

Preface

The Department ofHomeland 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 of1978. 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 Ohio's (State) management of State Homeland Security

Program and Urban Areas Security Initiative grants. We contracted with the independent

public accounting firm Foxx & Company to perform the audit. The contract required that

Foxx & Company perform its audit according to generally accepted government auditing

standards. Foxx & Company's report identifies five reportable conditions where State

management ofthe grant funds could be improved, resulting in 12 recommendations

addressed to the Assistant Administrator, Grant Programs Directorate. Foxx & Company

is responsible for the attached auditor's report dated November 30, 2011, and the

conclusions expressed in the report.

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

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

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

express our appreciation to all ofthose who contributed to the preparation ofthis report.

Anne

~i~ L. Richards

Assistant Inspector General for Audits
November 30, 2011 

Ms. Anne L. Richards 

Assistant Inspector General for Audits 

Office of Inspector General 

U.S. Department of Homeland Security 

245 Murray Drive, S.W. Building 410 

Washington, D.C. 20528 

Dear Ms. Richards: 

Foxx & Company performed an audit of the State of Ohio’s management of the 

Department of Homeland Security’s State Homeland Security Program and Urban Areas 

Security Initiative grants for Fiscal Years 2007 through 2009. The audit was performed 

in accordance with our Task Order No. 09 under TPD-FIG-BPA-07-0007, dated 

September 27, 2010. This report presents the results of the audit and includes 

recommendations to help improve the State’s management of the audited State Homeland 

Security Program and Urban Areas Security Initiative grants. 

Our audit was conducted in accordance with applicable Government Auditing Standards, 

2007 revision. The audit was a performance audit as defined by Chapter 1 of the 

Standards and included a review and report on program activities with a compliance 

element. Although the audit report comments on costs claimed by the State, we did not 

perform a financial audit, the purpose of which would be to render an opinion on the 

State of Ohio’s financial statements or the funds claimed in the Financial Status Reports 

submitted to the Department of Homeland Security. 

We appreciate the opportunity to have conducted this audit. Should you have any 

questions, or if we can be of any further assistance, please call me at (513) 639-8843. 

Sincerely, 

Foxx & Company 

Martin W. O’Neill 

Partner 
 

 

 

 

 

 

 

 

 

 

 

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


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


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


Untimely Release of Grant Funds to Subgrantees ....................................................... 3 


Recommendations ........................................................................................................ 7 


Management Comments and Auditors’ Analysis ........................................................ 7 


Untimely Payments to Subgrantees for Grant Expenditures ........................................ 8
 

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


Management Comments and Auditors’ Analysis ...................................................... 10 


Noncompliance with Procurement Regulations.......................................................... 11 


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


Management Comments and Auditors’ Analysis ........................................................16 


Noncompliance with Property Management Requirements ....................................... 18 


Recommendations ...................................................................................................... 20 


Management Comments and Auditors’ Analysis ...................................................... 21 


Inadequate Monitoring of Subgrantees ...................................................................... 21 


Recommendation ....................................................................................................... 24 


Management Comments and Auditors’ Analysis ...................................................... 24 


Appendices 

Appendix A: Purpose, Scope, and Methodology ..................................................... 25 


Appendix B: Management Comments to the Draft Report ..................................... 30 


Appendix C: Homeland Security Grant Program Background ............................... 40 


Appendix D: Ohio Emergency Management Agency Organization Chart ............. 41 


Appendix E: Report Distribution ............................................................................ 42 


Abbreviations 

DHS Department of Homeland Security
 

FEMA Federal Emergency Management Agency
 

FY fiscal year
 

OIG Office of Inspector General
 

Table of Contents/Abbreviations 

 

 

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, Office of Inspector General, 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 Ohio. 

The objectives of the audit were to determine if the State of Ohio 

distributed and spent State Homeland Security Program and Urban 

Areas Security Initiative grant funds (1) effectively and 

strategically 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 Ohio’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 $112.8 million in State Homeland Security Program 

and Urban Areas Security Initiative grants awarded to Ohio during 

fiscal years 2007 through 2009. 

Overall, the State of Ohio did an efficient and effective job 

administering the program requirements, distributing grant funds, 

and ensuring that all available funds were used. The State of Ohio 

also used an appropriate process for developing a strategy for 

improving preparedness that contained measurable goals and 

objectives. 

However, improvements were needed in the State of Ohio’s 

management of grants to improve the timeliness of releasing funds 

to subgrantees and reimbursing subgrantees for grant funded 

expenditures. Also, the State of Ohio needed to improve 

compliance with federal procurement and property management 

regulations, and enhance subgrantee monitoring. The Federal 

Emergency Management Agency concurred with 11 of 12 

recommendations and concurred with the intent of the remaining 

recommendation that, when 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 Ohio’s Management of State Homeland Security Program and 

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

Page 1
 
 

 

 

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 State of Ohio (State) received $131.6 million in Homeland 

Security Grant Program funds during fiscal years (FY) 2007, 2008, 

and 2009. The funding included $112.8 million in State Homeland 

Security Program and Urban Areas Security Initiative grants. 

Appendix A provides details on the purpose, scope, and 

methodology for this audit, and appendix C provides additional 

background on the Homeland Security Grant Program. 

The Governor of the State of Ohio designated the Ohio Emergency 

Management Agency as the State Administrative Agency, the 

entity responsible for administering the Homeland Security Grant 

Program. The State Administrative Agency is responsible for 

managing the grant programs in accordance with established 

federal guidelines and allocating funds to local, regional, and other 

Ohio government entities. The Ohio Emergency Management 

Agency organization is depicted in appendix D. 

The Ohio Emergency Management Agency awarded Homeland 

Security Grant Program funds to four Urban Areas Security 

Initiative recipients (Cincinnati, Cleveland, Columbus, and 

Toledo), eight law enforcement regions, all 88 Ohio counties, and 

several State agencies. 

Results of Audit 

State Grants Management Practices Were Generally Effective, 

But Required Some Improvements 

Overall, the State did an efficient and effective job administering the 

program requirements, distributing grant funds, and ensuring that all 

available funds were used. The State used an appropriate process for 

developing a strategy for improving preparedness that contained 

measurable goals and objectives that were consistent with Federal 

Emergency Management Agency (FEMA) guidance. The State’s goals 

were developed by panels of experts through assessments of the potential 

threats and Ohio first responders’ existing capabilities. Additionally, the 

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

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

Page 2
 
 

 

 

 

 

State distributed funds based on population and the critical infrastructure 

identified by subgrantees. 

However, improvements were needed to enhance Ohio’s management of 

the grants including: 

Improving the timely release of grant funds to subgrantees, and the 

timely payment of subgrantees for grant-funded expenditures, 

Ensuring compliance with procurement regulations and property 

management requirements, and 

Better monitoring of Urban Areas Security Initiative and State 

Homeland Security Program grants. 

We have made 12 recommendations that will enhance the effectiveness of 

the State’s grants management and overall use of the grant funds to 

improve preparedness and response capabilities. 

Untimely Release of Grant Funds to Subgrantees 

The State Administrative Agency did not release funds to subgrantees in a 

timely manner. This occurred primarily because the State Administrative 

Agency system used to award subgrantee funds was cumbersome and staff 

shortages were encountered. Consequently, subgrantees were delayed in 

purchasing equipment, and organizing and conducting training and 

exercises. 

FEMA’s 2007, 2008, and 2009 Homeland Security Grant Program 

guidance required the State Administrative Agency to make available no 

less than 80% of grant funds to local units of government within 60 days 

(2007) or 45 days (2008, 2009) of the State’s receipt of grant funds. 

FEMA Information Bulletin No. 257, dated July 17, 2007, stated that it is 

important to ensure that funds are obligated and expended in a timely 

manner, within established periods for performance. 

Ohio utilized a multi-step process for approving and notifying subgrantees 

of FYs 2007 through 2009 Urban Areas Security Initiative and State 

Homeland Security Program grant awards, including: 

Calculations of how much to award to each subgrantee,
 

Preparation of a State Purchase Order for the amount of the award
 

to each subgrantee,
 

Preparation and dissemination of detailed grant guidance,
 

Preparation by subgrantees of detailed grant applications that 


included detailed budget estimates for equipment, planning, 


administrative, exercise, and training expenses, 


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

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

Page 3 
 

 

Review and approval of the subgrantee application and proposed 

budgets, and 

Notification of grant award enabling subgrantees to spend grant 

funds. 

Until these steps were completed, subgrantees were not allowed to spend 

grant funds. 

As table 1 shows, the 24 Ohio subgrantees and four State Agencies visited 

waited an average of 8 months (between 3 and 22 months) after the State 

obligated the grant funds to receive their 2007 grant award, with seven 

subgrantees waiting a year or more for the grant award. For 2008, delays 

increased to an average of 10 months (between 6 and 30 months) with 

three subgrantees waiting more than a year and two others waiting more 

than two years. For 2009, delays increased to an average of 11 months 

with three subgrantees waiting more than a year. Four subgrantees did not 

receive 2009 grant awards by May 15, 2011 – 19 months after Ohio 

reported to FEMA that these funds were obligated. 

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

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

Page 4
 
 

Table 1: Ohio Release of Homeland Security Grant Program 

funds to Subgrantees 

Months After Grant Funds Were Obligated 

Subgrantee FY 2007 FY 2008 FY 2009 

1 3 7 7 

2 3 8 15 

3 No award 9 9 

4 4 10 11 

5 3 13 10 

6 9 7 9 

7 3 6 8 

8 3 6 10 

9 3 6 9 

10 3 6 4 

11 3 6 7 

12 4 6 7 

13 4 6 7 

14 13 25 13 

15 12 13 19 * 

16 13 6 19 * 

17 6 9 19 * 

18 12 9 7 

19 6 6 7 

20 5 9 6 

21 16 30 7 

22 5 8 18 

23 19 8 9 

24 22 14 19 * 

State Agencies 

25 7 No award No award 

26 7 No award No award 

27 7 14 18 

28 OEMA – No grant agreements 

Average 8 10 11 

*2009 grant funds were not approved as of May 15, 2011 

For the FY 2008 grants, 10 of the subgrantees visited did not begin to 

spend grant funds until one to 21 months after the delays shown in the 

table above. During the first year of the FY 2008 performance period, 

Ohio introduced an electronic grants management system and required all 

subgrantees to submit their grant budgets for re-approval. Ohio 

Emergency Management Agency officials said that since the grant awards 

were approved before the electronic system was introduced, subgrantees 

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

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

Page 5
 
 

 

 

could have spent 2008 grant funds and received reimbursements during 

the transition to the electronic system. However, 10 of the 28 subgrantees 

visited did not understand this and waited until their budgets were 

approved in the electronic system before spending grant funds. 

According to Ohio Emergency Management Agency staff, part of the 

reason for these delays was that Ohio Emergency Management Agency 

officials must receive and approve detailed descriptions of the equipment 

or services subgrantees plan to acquire. Also, the character and content of 

proposed exercises, training, and anticipated administrative expenses must 

be approved to assure that subgrantees properly expend grant funds. 

According to the State staff, with 88 counties, four Urban Areas Security 

Initiative, eight regional law enforcement subgrantees, and special grants 

to State agencies and special projects, the administrative workload was 

significant. In addition they advised that, during 2009 and 2010, Ohio 

Emergency Management Agency experienced staff turnover and faced 

hiring restrictions that limited the number of grant specialists to 

accomplish the reviews and perform other grant coordination and 

administration matters. Further, they advised that the new electronic 

grants management system was installed, which encountered numerous 

start-up problems when it was put into place in early 2009. Subgrantees 

did not always understand the new system’s data entry rules, resulting in 

rejected entries that required additional work by subgrantees. 

While all of these factors may have contributed to the delays, limited staff 

at the State level was most commonly mentioned by State officials and 

subgrantees visited as the cause for delays. In this regard, we observed 

that Ohio Emergency Management Agency was not using all of the 

permitted administrative allowance to hire staff. We were informed that 

the Department of Public Safety, Ohio Emergency Management Agency’s 

parent organization, would not authorize additional staff or contract 

employees even if the new staff salaries were paid for by the federal grant. 

As a result of these delays, subgrantees had to wait months for the State to 

award the grants before subgrantees could order needed equipment, 

acquire training and exercises, and pay administrative expenses. 

According to subgrantees, these delays resulted in price changes by 

vendors as the time from initial quotation to actual purchase expanded 

and, in turn, added work by the subgrantees to revise approved budgets. 

Eighteen of the 28 grant recipients visited requested an extension to the 

grant performance period established by the Ohio Emergency 

Management Agency because more time was needed to properly complete 

planned procurements and obtain reimbursements. 

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

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

Page 6
 
 

 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Ohio Emergency Management Agency to: 

Recommendation #1: Review the subgrantee application and 

approval process to identify ways to make it more efficient and 

less time consuming. 

Recommendation #2: Provide detailed guidance to the 

subgrantees concerning the process upon implementation. 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendations 1 and 2 and stated that 

the Agency expects the Ohio Emergency Management Agency to 

confirm within 90 days that an assessment of current policies and 

procedures on timely subgrantees awards has been accomplished. 

Also, the Ohio Emergency Management Agency is to develop and 

provide guidance and additional training to subgrantees concerning 

the revised procedures. FEMA requested that recommendations 

1 and 2 be resolved and open pending implementation of the stated 

actions. 

The Ohio Emergency Management Agency also concurred with 

recommendations 1 and 2. Ohio Emergency Management Agency 

officials stated that in years subsequent to the period of this audit 

the State grant staff has initiated more detailed instructions on 

necessary steps to streamline the applications and funds release 

process. The Ohio Emergency Management Agency will continue 

to review and update this guidance and work with subgrantees to 

assure funds are released within a reasonable time-frame. 

If properly implemented, the corrective actions proposed by 

FEMA and the State will resolve the condition identified during 

the audit. The recommendations are considered resolved and will 

remain open until such time that corrective actions have been 

implemented. 

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

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

Page 7
 
 

Untimely Payment to Subgrantees for Grant Expenditures 

The Ohio Emergency Management Agency did not always make 

payments to subgrantees for grant expenditures in a timely manner. Staff 

shortages and a cumbersome process were among the reasons cited for the 

delays. Our review of a sample of 55 subgrantee payment requests 

showed payments were made anywhere from 13 to 89 days after the 

requests were submitted to the State. As a result, local funds were often 

not reimbursed in a timely manner and vendors were not always paid 

timely for goods and services, which tied up working capital that could 

have been used for other purposes or invested until needed. The 

sometimes cumbersome nature of the payment process also contributed to 

subgrantee concerns about grant-related administrative burdens. 

The regulations governing grant management do not specify timeframes in 

which the state must pay subgrantees once the subgrantee submits a 

request for reimbursement. The regulations also do not stipulate 

timeframes in which subgrantees must pay vendors. The general business 

standard for payment is net 30 days. Although variations from this 

standard certainly exist, it provides a reasonable benchmark for assessing 

timeliness. 

For 17 of the 24 subgrantees we visited, officials told us of payment 

delays that could range from several weeks to several months from when a 

subgrantee first submitted a request for payment until the electronic check 

arrived from the State. These subgrantees told us that the payment process 

during the three grant years under review has grown increasingly 

inconsistent and time-consuming. The problems cited included multiple 

revisions of budgets and payment requests, requests for additional detail 

and documentation that some subgrantees thought excessive, and 

sometimes considerable back-and-forth with grant administrators to 

resolve issues. In a few cases, purchases were questioned or rejected 

despite prior approvals. 

We selected a sample of 55 payment requests from 14 of the subgrantees 

visited to assess the time it took for reimbursement from the State. Our 

analysis, depicted in table 2, showed that payments ranged from 13 days to 

89 days, with 22 transactions taking more than 30 days to complete. Of 

those transactions, eight exceeded 50 days, taking an average of 70 days to 

complete. 

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

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

Page 8
 
 

 

 

 

Table 2: Timeliness of Payments to Subgrantees 

Range Number of 

Transactions 

Average 

Days 

Within 30 days 33 22 

31-50 days 14 42 

51-89 days 8 70 

State and local officials pointed to a number of reasons for the payment 

delays, including: 

Turnover and subsequent shortages of Ohio Emergency 

Management Agency grants staff, 

Lack of standardized procedures for reviewing and approving 

reimbursement requests, 

Lack of training among subgrantee and Ohio Emergency 

Management Agency staff regarding understanding of and 

familiarity with items and services being purchased, and 

Ohio Emergency Management Agency’s changeover to a new 

grants management system. 

According to Ohio Emergency Management Agency officials, the agency 

encountered staff shortages during 2009 and 2010. During this time, when 

the FYs 2007 and 2008 grant funds were being spent, Ohio Emergency 

Management Agency relied on two grant administrators to manage the 

grants for 88 Counties, four Urban Areas Security Initiative, eight law 

enforcement regions, and special purpose grants encompassing about 

$85,000,000. In addition, Ohio Emergency Management Agency officials 

noted that the transition process to the new grants management system did 

not always go smoothly and contributed to extending the reimbursement 

process. 

The effect of delays varied depending on the financial arrangements the 

subgrantee had established with the local county. Of 24 subgrantees 

visited, 15 utilized local funds to pay vendors and then sought 

reimbursement from the State to replenish funds. In these cases, the 

subgrantees had the capability to pay vendors promptly. However, local 

taxpayers effectively bore the brunt of the delays as the subgrantee’s 

working capital was diverted to cover grant expenses instead of being 

invested until needed or used for other purposes. Nine other subgrantees 

relied on payment from the state to pay vendors. In these cases, vendors 

bore the burden of the delays, with their working capital and cash flows 

directly affected. At one location, officials cited a consulting contract 

reimbursement that took more than 6 months and caused considerable 

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

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

Page 9 
 

difficulty for the contractor. At another location, local officials told us 

that certain vendors refused to do further business because of the late 

payments. 

These subgrantees told us that another effect of the lengthy payment 

process was the increased workload associated with payments. Combined 

with other grant management requirements, officials said managing the 

grants required increased amounts of time away from day-to-day 

emergency management duties. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Ohio Emergency Management Agency to: 

Recommendation #3: Establish a clear time standard for 

processing payment requests from subgrantees consistent with 

reasonable business practice. 

Recommendation #4: Conduct a comprehensive analysis of the 

subgrantee payment procedures, documentation requirements, and 

automated systems to identify ways to streamline the process while 

still maintaining accountability for compliance with grant 

requirements. 

Recommendation #5: Establish and provide training on the 

revised process for State grant specialists and subgrantee staff. 

Recommendation #6: Consider instituting an Electronic Grant 

Management System users group to identify and resolve future 

process problems. 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendations 3, 4, 5, and 6. FEMA 

agreed to request the Ohio Emergency Management Agency to, 

within 90 days of receipt of this report, establish a time standard 

for processing payment requests consistent with reasonable 

business practice. FEMA will also request the Ohio Emergency 

Management Agency to analyze payment procedures and 

documentation requirements to identify ways to streamline the 

payment process consistent with grant requirements. Furthermore, 

FEMA agreed to request the Ohio Emergency Management 

Agency to develop ways to provide State staff and subgrantees 

training on streamlined payment procedures, and to consider an 

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

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

Page 10
 
 

Electronic Grant Management System user group to assist in 

problem resolution. FEMA requested that recommendations 

3 through 6 be resolved and open pending implementation of the 

stated actions. 

The Ohio Emergency Management Agency also concurred with 

recommendations 3 through 6. Ohio Emergency Management 

Agency officials stated that reasonable internal timeframes for 

making payments to subgrantees consistent with normal business 

practice have been established. The Ohio Emergency Management 

Agency agreed to review the current reimbursement process and 

make improvements consistent with necessary internal controls for 

assuring accurate and proper payments. The Ohio Emergency 

Management Agency’s comments pointed out that not all elements 

of the payment process are within grant staff control, such as 

accuracy and completeness of documents submitted by subgrantees 

and the State’s accounting processes. Nevertheless, the Ohio 

Emergency Management Agency will review its process and look 

for efficiencies. Ohio Emergency Management Agency officials 

stated that they have increased awareness and training on grants 

management and administration in order to enhance the staff’s 

expanding knowledge base. 

With respect to recommendation 6, Ohio Emergency Management 

Agency officials stated that a new Electronic Grant Management 

System has been identified. Ohio Emergency Management 

Agency officials said that it would be reaching out to stakeholders 

at the subgrantee level to review, critique, and make 

recommendations on the new system. 

If properly implemented, the corrective actions proposed by 

FEMA and the State will resolve the condition identified during 

the audit. The recommendations are considered resolved and will 

remain open until such time that corrective actions have been 

implemented. 

Noncompliance with Procurement Regulations 

The Ohio Emergency Management Agency did not ensure that federal 

regulations were followed for procurements of equipment and services 

with Homeland Security Program Grant funds. The Ohio subgrantees 

visited used grant funds to buy brand-specific items non-competitively 

from preferred manufacturers and franchised vendors. As a result, there 

was no assurance that the best price had been obtained for the 

procurements. 

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

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

Page 11
 
The Code of Federal Regulations Title 44 §13.36, Procurement, provides 

uniform administrative requirements for grants and cooperative 

agreements awarded to state and local governments. These regulations 

direct the state and local governments to use their own procurement 

procedures, which reflect applicable state and local laws and regulations, 

provided that the procedures conform to applicable federal procurement 

regulations. Federal procurement regulations direct grantees and 

subgrantees to: 

Acquire equipment and services under full and open competition. 

Ensure that all prequalified lists of persons, firms, or products 

which are used in acquiring goods and services are current and 

include enough qualified sources to ensure maximum open and 

free competition. 

Obtain an adequate number of quotations from qualified sources 

for smaller purchases that do not cost more than $100,000. 

Maintain records sufficient to detail the significant history of the 

procurements including rationale for the procurement, method, 

selection of contractor type and contractor, and basis for the 

contract price.

Conduct cost analyses to assure prices obtained through noncompetitive procurements are fair and reasonable. 

Use non-competitive procurement, procure from a single source or 

when competition is determined inadequate, only when award of a 

contract is infeasible under small purchase procedures, sealed bids, 

or competitive proposals and: 

The item is only available from a single source, or 

Public emergency will not permit a competitive purchase, or 

The awarding agency authorizes noncompetitive proposals, or 

After solicitation of a number of sources, competition is 

determined inadequate. 

For non-competitive procurements that exceed the $100,000 simplified 

acquisition threshold, federal regulations require grantees and subgrantees 

to perform a cost analysis to determine the reasonableness of the proposed 

contract price. According to Code of Federal Regulations Title 44 

§13.36(f), a cost analysis will be necessary when adequate price

competition is lacking, and for sole source procurements. A cost analysis 

would involve a review and analysis of various cost elements included in 

the contractor’s proposed price, including specific elements of costs 

(e.g., overhead and profit). The analysis results could then be used to help 

negotiate a reasonable contract price.

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

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

Page 12 
 

 

 

 

 

In addition, the Department of Homeland Security (DHS), Financial 

Management Guide, dated January 2006, states on Page 41 “All sole 

source procurements in excess of $100,000 must receive prior written 

approval of the awarding agency....Justification must be provided for noncompetitive procurement and should include a description of the program 

and what is being contracted for, an explanation of why it is necessary to 

contract noncompetitively, time constraints and any other pertinent 

information....Sub recipients must obtain approval from the primary 

recipient.” In Ohio’s case it would be the Ohio Emergency Management 

Agency. For non-competitive procurements made by the State, approval 

from FEMA is necessary. FEMA officials said, in commenting on the 

draft report, that the Financial Management Guide was only applicable for 

grants through FY 2007. 

We reviewed all of the large ($100,000 or greater) and some smaller 

procurements at each of the subgrantees visited. These purchases were for 

communications equipment, vehicles, chemical detectors, and a variety of 

other items used by first responders. Of the 85 procurements reviewed, 

only 9 were purchased under full and open competition. The remaining 76 

were purchased non-competitively from a single source, even though other 

sources were available, there was no associated public emergency, and the 

State had not approved non-competitive procurements. Thirty-six of the 

76 non-competitive procurements fell below the federal threshold 

($100,000) for required cost analyses to assure the price obtained noncompetitively was fair and reasonable. Subgrantees did not prepare cost 

or price analyses for any of the procurements. 

Of the 76 non-competitive procurements in our sample, subgrantees 

solicited multiple bids for two of the procurements, but only one bid was 

received and it was accepted. This is specifically identified in federal 

regulation as a situation lacking adequate price competition. 

For example, the Fire Chiefs Association for one county proposed buying 

air monitoring equipment for their Hazmat vehicle and a preferred brand 

of equipment and manufacturer was specifically identified that would also 

be compatible with existing equipment, maintenance, and training 

procedures. Concerned about meeting competition requirements, the 

subgrantee approached its County Prosecutor for a legal opinion and was 

told to compete the purchase. Multiple quotes were solicited but only one 

bid was received. It was accepted and the item was purchased from the 

preferred manufacturer. The subgrantee staff told us this process was 

consistent with the County and Ohio’s bid procedures. However, Code of 

Federal Regulations Part 44 §13.36 requires a cost analysis to be 

performed when there is lack of competition. The subgrantee did not 

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

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

Page 13
 
 

 

perform a cost analysis. Also, we found no evidence of approval of the 

contract by the Ohio Emergency Management Agency. 

Five of the 76 non-competitive procurements in our sample were 

specifically identified as ‘sole source’ by the purchasing agent and local 

procedures were followed to obtain approval. We observed other sources 

for these items, no public emergency was documented, and no approval 

was obtained from the State. For example, Ohio Emergency Management 

Agency purchased new software for $347,963 to help manage its 

emergency operations center during training and emergencies. The 

software was purchased from a supplier preferred by Ohio Emergency 

Management Agency staff and specifically identified as ‘sole source’ in 

the procurement documentation. However, other vendors could have 

provided this software. The Ohio Emergency Management Agency 

received specific approval from the State Controlling Board for this sole 

source purchase as required under State procedures. The Ohio Emergency 

Management Agency did not prepare a cost analysis to demonstrate that 

the purchase price was fair and reasonable as required by Code of Federal 

Regulations Part 44 §13.36 or obtain approval from FEMA. 

Fifty-five purchases we reviewed were procured from suppliers listed in 

Ohio State Term Schedules. The Ohio State Term Schedules are lists, 

prepared and maintained by the Ohio Department of Administrative 

Services, of approved manufacturers with products offered at ‘best prices’ 

and specific terms the State requires. Competition is not part of the 

process for suppliers to be placed on the Term Schedule. 

Under the Ohio Revised Code, State Agencies and cooperating political 

subdivisions may use State Term Schedules to acquire needed items 

without further competition. A subgrantee may look up a particular item it 

wants to purchase on the State Term website, obtain the needed 

information, and buy the item from that manufacturer. No further efforts 

are necessary to meet competition requirements such as open solicitation 

or evaluation of quotations. Ohio Department of Administrative Service 

officials told us that purchases by State Agencies from State Term 

Schedules costing more than $10,000 are reviewed and the agency 

reserves the right to direct the State Agency to compete the purchase. 

Purchasing directly from State Term Schedules may meet Ohio 

competition requirements; however, these purchases do not meet federal 

procurement standards for fair and open competition, particularly for 

purchases in excess of $100,000. Federal regulations require that all 

prequalified lists of persons, firms, or products which are used in 

acquiring good and services are current and include enough qualified 

sources to ensure maximum open and free competition. The items on the 

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

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

Page 14
 
 

 

 

 

State Term website are not necessarily the best value but rather a list of 

suppliers that have qualified their products for the State Term listing, 

similar to the U.S. General Services Administration contracts with various 

vendors. Although vendors are supposed to offer the best price for the list, 

it may not necessarily be the lowest or best value price available for the 

same item that might be offered by other vendors. 

Most of the large purchases we observed were for specific items from a 

single manufacturer or franchised vendor and should have been classified 

as non-competitive purchases. We observed the use of State Term 

Schedule and Contract purchases by nearly every subgrantee visited. 

Although the State Administrative Agency reviewed and approved these 

non-competitive purchases, both when proposed by the subgrantees and 

when they sought reimbursements, the Agency did not provide appropriate 

guidance to subgrantees and their purchasing organizations regarding 

federal requirements. 

Problems with non-competitive procurement in Ohio were also reported 

by the Office of Inspector General (OIG) in an audit report issued in 2008. 

In that report the OIG reported “the State Administrative Agency did not 

ensure that federal procurement regulations were followed for noncompetitive procurements. Agency and subgrantee officials did not 

perform required cost analyses for several non-competitive procurements 

that exceeded $100,000. Also the subgrantees did not notify the Agency 

prior to awarding non-competitive contracts. As a result, the Agency and 

its subgrantees might have paid more for equipment and services than was 

necessary and reasonable.” The report recommended that the Ohio 

Emergency Management Agency highlight, emphasize and transmit to 

applicable state agencies and subgrantees the federal requirement to: 

a) Prepare a cost analysis for non-competitive procurements that are 

expected to exceed $100,000, and 

b) Notify the State Administrative Agency of any such procurement 

and give the State the opportunity to conduct pre-award reviews. 

The report also recommended that the Ohio Emergency Management 

Agency establish and implement procedures to ensure that grant recipients 

follow federal requirements for non-competitive procurements exceeding 

$100,000. 

The Ohio Emergency Management Agency agreed in the future to perform 

cost analyses when high value, sole source contracts, or contracts with 

inadequate competition are awarded. The Ohio Emergency Management 

Agency also said that the grant guidance will highlight and emphasize 

these requirements and require that the subgrantees notify the State 

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

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

Page 15
 
 

 

 

Administrative Agency prior to undertaking high value, sole source 

procurements. The Ohio Emergency Management Agency agreed to 

address these problems. However, because the same problems were 

identified during the current audit, it is clear that the Agency’s efforts have 

not been successful. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Ohio Emergency Management Agency to: 

Recommendation # 7: Develop and provide to all Ohio 

Emergency Agency grant staff and subgrantee grant managers, 

training on State and federal regulations pertaining to competitive 

procurement. 

Recommendation #8: Prepare, publish, and disseminate guidance 

detailing procurement regulations and procedures for acquiring 

equipment and services using FEMA grant funds to all Ohio 

municipal and county purchasing departments that assist 

subgrantees in acquiring equipment or services with Homeland 

Security grant funds. 

Recommendation #9: Complete a review of all grant funded 

purchases using FYs 2007, 2008, and 2009 State Homeland 

Security Program and Urban Areas Security Initiative grant funds 

of $100,000 or more to: (a) Identify those purchases made as sole 

source procurements and verify that sole source procurement was 

justified, (b) Document that the price obtained was fair and 

reasonable, and (c) Limit the allowable costs for all such 

procurements to amounts determined to be fair and reasonable. 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendations 7 and 8 and concurred 

with the intent of recommendation 9. FEMA noted that a 2008 

change in grant regulations from those of the Justice Department 

(Code of Federal Regulations Title 28) to those of the Department 

of Homeland Security (Code of Federal Regulations Title 44) 

limited the Ohio Emergency Management Agency’s obligation to 

review and approve sole source procurements exceeding $100,000 

to only those made prior to 2008. Accordingly, FEMA is 

requesting the Ohio Emergency Management Agency, within 90 

days of receipt of this report, to only review, document, and assess 

the sole source procurements made in 2007. FEMA officials said 

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

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

Page 16
 
 

that they will request the Ohio Emergency Management Agency to 

indicate that procedures are outlined in the Administrative Plan to 

ensure State staff and subgrantees follow federal requirements. 

FEMA will also request that Ohio Emergency Management 

Agency issue guidance to all subgrantees detailing procurement 

regulations and procedures. 

FEMA recommended that recommendations 7 through 9 be 

resolved and open pending implementation of the stated corrective 

actions. 

In written comments the Ohio Emergency Management Agency 

also concurred with recommendations 7 and 8, and agreed to a 

more limited review of future procurements than is included in 

recommendation 9. 

The Ohio Emergency Management Agency requested several 

changes to expand and clarify the report text including: additional 

language from the Code of Federal Regulations Title 44 §13.36; 

clarification on the applicability of the DHS Financial 

Management Guide only to FY 2007 grants; and revision or 

removal of the text regarding Ohio Emergency Management 

Agency’s non-competitive purchase of emergency operations 

software. Ohio Emergency Management Agency advised that the 

software purchase was appropriate since the guidance of Code of 

Federal Regulations Title 44 §13.36 was followed. We revised and 

expanded the report text as requested but we did not change the 

discussion surrounding the Ohio Emergency Management 

Agency’s purchase of emergency operations software. The Ohio 

Emergency Management Agency has overlooked key provisions of 

Code of Federal Regulations Title 44 §13.36 that require state 

procurement procedures to be followed as long as the state 

procedures conform to applicable federal law and standards of the 

regulation. Ohio procurement procedures did not conform to 

federal standards. 

The Ohio Emergency Management Agency also requested that the 

requirement in recommendation 9 to disallow sole source 

procurements that are determined not to be compliant with federal 

regulations only apply to future procurements. During discussions 

with Ohio Emergency Management Agency officials, the officials 

said they wanted to limit the review and recovery to future 

procurements because subgrantees were not fully aware of federal 

requirements and that disallowing the procurements would impose 

a significant financial hardship on some communities. However, 

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

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

Page 17
 
 

 

 

Ohio Emergency Management Agency officials said they will 

make every effort to review all grant funded purchases using FY 

2007, 2008, and 2009 State Homeland Security Program and 

Urban Areas Security Initiative grant funds exceeding $100,000. 

Non-compliant procurements will be held for further review and 

documentation. In addition, the State’s monitoring program is 

being amended to include procurement processes. 

Ohio Emergency Management Agency advised that neither the 

State Agency nor Ohio subgrantees fully understood federal 

procurement regulations particularly those pertaining to the use of 

the State Term Schedule. However, sole source procurements and 

the lack of cost analyses to assure fair and reasonable prices were 

identified as an audit finding previously in the OIG’s 2008 audit 

report. Because Ohio Emergency Management Agency has not 

initiated corrective actions from the previous DHS OIG report, the 

prospect of less oversight of such procurement as proposed by 

FEMA is not responsive to the current DHS OIG report 

recommendations. Accordingly, recommendation 9 remains 

unchanged with the exception of 9c; and FEMA should require 

Ohio Emergency Management Agency to review all of the large 

procurements made with 2007, 2008 and 2009 grant funds to 

assure the procurements are consistent with the fair and open 

competition standards of Code of Federal Regulations Title 44 

§13.36. We have, however, revised recommendation 9c to limit 

the amount to be refunded to FEMA as the amount that exceeds 

what is determined to be fair and reasonable for those 

procurements that were for $100,000 or more where there was a 

lack of competition. 

If properly implemented, the corrective actions proposed by 

FEMA and the State will resolve recommendations 7 and 8. These 

recommendations will remain open until such time that corrective 

actions have been fully implemented. However, as stated above, 

FEMA and Ohio Emergency Management Agency’s proposed 

corrective actions to recommendation 9 do not adequately address 

the recommendation. Accordingly, it will remain unresolved and 

open awaiting a written response that includes a corrective action 

plan and target completion date. 

Noncompliance with Property Management Requirements 

State subgrantees did not always maintain property management records 

in accordance with federal requirements. Federal property management 

requirements were not being followed at the subgrantees visited. As a 

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

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

Page 18
 
 

 

 

 

 

 

 

result, the State did not have reasonable assurance that the assets procured 

with federal funds were adequately safeguarded to prevent loss, damage, 

or theft of the property. Moreover, without sound property management 

controls in place, there is no assurance that the location, condition, and 

availability of essential equipment will be known when there is an 

emergency. 

Code of Federal Regulations Title 44 §13.32(d) Management 

requirements, establishes procedures for managing equipment (including 

replacement equipment), whether acquired in whole or in part with grant 

funds, and includes the following minimum requirements: 

Maintain property records that include a description of the 

property, a serial number or other identification number, the source 

of property, who holds title, the acquisition date, the cost of the 

property, percentage of Federal participation in the cost of the 

property, the location, use and condition of the property, and any 

ultimate disposition data including the date of disposal and sale 

price of the property. 

Maintain a physical inventory of the property and the results 

reconciled with the property records at least once every two years. 

Establish and maintain a control system to ensure adequate 

safeguards to prevent loss, damage, or theft of the property. 

Perform adequate maintenance procedures to keep the property in 

good condition. 

While FEMA guidance for the State Homeland Security Program requires 

grantees and subgrantees to follow federal requirements when managing 

and maintaining property records for equipment purchased with grant 

funds, the subgrantees visited were for the most part not following this 

guidance. At each location, we discussed property management 

procedures, reviewed local policies, and examined specific pieces of 

equipment selected from those purchased using FYs 2007, 2008, and 2009 

grant funds. We observed that: 

19 of 24 subgrantees did not have written policies and procedures, 

21 of 24 subgrantees did not have complete inventory records, 

24 of 24 subgrantees did not have equipment purchased with grant 

funds properly identified, and 

21 of 24 subgrantees were not making periodic inspections of 

equipment purchased with grant funds. 

Generally the subgrantees visited were not aware of the requirements of 

Code of Federal Regulations Title 44 §13.32. While 21 of the subgrantees 

had some type of property management system, our inspections disclosed 

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

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

Page 19
 
 

 

that these records were incomplete or not current. More than half of the 

subgrantees visited (15) did not use a numerical system and associated 

asset tags for tracking equipment specifically purchased with grant funds. 

Also, 24 subgrantees did not properly label equipment as purchased with 

Department of Homeland Security funds. 

Once equipment was distributed to first responder organizations, and 

property responsibility was assumed, the organizations generally did not 

report the status of the equipment to the subgrantee organization. We 

observed only three subgrantees that received status reports from first 

responder organizations throughout the audit period. Accordingly, 

equipment serviceability, operability, loss, or pilferage was not reported to 

the subgrantee. Finally, when equipment was taken out of service and 

disposed of, subgrantees were not notified. 

Despite these problems, our inspections of equipment at all subgrantees 

visited were accomplished with only a few exceptions, including at 13 

subgrantees locations, the subgrantees offered pieces of equipment for our 

review which were not the correct items. The subgrantees could not find 

pieces of equipment requested for inspection because sign out sheets and 

other distribution documentation were not current, not available, or 

identifiable by equipment type and project. 

Similar problems with inventory management were also identified in an 

audit report issued by the Department of Homeland Security, Office of 

Inspector General in 2008, including lack of internal controls over 

equipment management and overall compliance with Code of Federal 

Regulations Title 44 §13.32. In a response to that report, Ohio Emergency 

Management Agency officials concurred with the issues identified and in 

their written comments agreed to address the issues. However, as 

discussed above the subgrantees we visited were not complying with the 

required property management standards. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Ohio Emergency Management Agency to: 

Recommendation #10: Develop and disseminate guidance to all 

subgrantees establishing property management standards that fully 

comply with federal requirements. 

Recommendation #11: Develop policies and procedures 

requiring on-site monitoring of grant recipient compliance with 

property management standards. 

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

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

Page 20
 
 

 

 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendations 10 and 11 and agreed to 

request the Ohio Emergency Management to provide property 

management guidance to all subgrantees, including property 

management materials suitable to identify and track grant funded 

property, within 90 days of receipt of this report. FEMA also said 

that the Ohio Emergency Management will be requested to 

develop monitoring policy and procedures that includes periodic 

on-site visits to verify subgrantee control and accountability 

systems for grant-funded property. 

FEMA recommended that recommendation 10 and 11 be resolved 

and open pending implementation of the stated corrective actions. 

Ohio Emergency Management also concurred with 

recommendations 10 and 11. Ohio Emergency Management 

officials stated that a grant staff specialist is currently preparing a 

guidance and ‘best practice’ template to help subgrantees 

understand and apply property management standards. The Ohio 

Emergency Management monitoring program is being amended to 

include a more detailed review of inventory and property 

management. 

If properly implemented, the corrective actions proposed by 

FEMA and the State will resolve the condition identified during 

the audit. The recommendations are considered resolved and will 

remain open until such time that corrective actions have been 

implemented. 

Inadequate Monitoring of Subgrantees 

The State Administrative Agency did not conduct monitoring visits to 

Urban Areas Security Initiative and State Homeland Security Program 

grant recipients for FYs 2007 through 2009 grant awards. Some oversight 

was accomplished through periodic telephone and e-mail contact with 

subgrantee staff as a part of the review of proposed budgets, processing of 

reimbursement requests, and at semi-annual meetings in the State capitol. 

This type of oversight is valuable but not sufficient to observe local 

administrative practices or to evaluate whether grant funds are being used 

effectively, efficiently, and in compliance with grant requirements and 

associated federal regulations. Also, these contacts do not disclose how 

well subgrantees were meeting preparedness goals and objectives. Our 

discussion with Ohio Emergency Management Agency staff revealed no 

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

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

Page 21
 
 

 

firm plan or policy to provide for regular on-site monitoring visits. In 

order to assure that program goals are being achieved on-site monitoring 

of subgrantees on a regular basis is one of the best methods available to 

states. 

According to Code of Federal Regulations Title 44 §13.40, Monitoring 

and Reporting Performance, grantees are responsible for managing the 

day-to-day operations of grant and subgrant supported activities, and 

ensuring that grant recipients comply with applicable federal requirements 

and achieve program performance goals. This regulation also specifies 

that grantees’ monitoring programs must cover each program, function, or 

activity. 

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

Governments, and Non-profit Organizations, Part 3-M also specifies 

grantee monitoring requirements. Part 3-M states that grantees are 

responsible for monitoring subgrantee use of federal awards through 

reporting, site visits, regular contact, or other means. Grantee monitoring 

should provide reasonable assurance that the subgrantee administers 

federal awards in compliance with laws and regulations, as well as the 

provisions of contracts or grant agreements. Monitoring should assure 

that performance goals are achieved. Although on-site monitoring is not 

required, it does provide the grantee agency a better insight of how the 

subgrantee is performing and complying with program and financial grant 

requirements. 

Our review of FYs 2007 through 2009 Urban Areas Security Initiative and 

State Homeland Security Program grant awards disclosed that the State 

Administrative Agency did not conduct regular on-site monitoring visits to 

grant recipients. For the 24 subgrantees we visited, only two remembered 

Ohio Emergency Management Agency staff participating in an on-site 

monitoring visit. State Officials told us that there was no regular on-site 

monitoring during the entire 3-year term of the FYs 2007, 2008, and 2009 

Homeland Security Grant Program grants. 

In lieu of regular on-site monitoring visits to subgrantees, Ohio 

Emergency Management Agency obtained some oversight through its 

automated Electronic Grants Management System. Subgrantees used this 

system to submit their proposed budgets for purchasing equipment, 

exercises, and training. The subgrantees also used this system to submit 

supporting documents for reimbursement of expended grant funds such as 

invoices and delivery receipts. In addition, subgrantees had periodic 

contact with grant specialists concerning these administrative matters. 

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

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

Page 22
 
 

 

 

The Ohio Emergency Management Agency is responsible for the 

Homeland Security Grant Program and other grants which are allocated to 

subgrantees in 88 counties, 8 law enforcement regions, 4 Urban Areas 

Security Initiative, and several State agencies. According to Ohio 

Emergency Management Agency officials, during the last 3 years, Ohio 

Emergency Management Agency experienced significant staff turnover. 

For more than a year the Agency was not able to fill vacant positions. 

Even after new staff were employed, inexperience and the backlog of 

work prevented, and continues to inhibit, the State’s plans to conduct 

regular monitoring visits to subgrantees. 

In a previous audit of Ohio’s Homeland Security Grant Program 

examining FYs 2002 through 2004, the Office of Inspector General 

reported that Ohio Emergency Management Agency did not have an 

adequate monitoring program. The report recommended that Ohio take 

several steps to remedy this situation. Implementing a program of regular 

on-site monitoring was among these steps. At the time, the State 

Administrative Agency concurred with this recommendation and other 

monitoring-related recommendations. In its written comments to the 

report, the State said they had developed and implemented a 

comprehensive subgrantee monitoring program by July 2006 that included 

a goal to conduct on-site reviews annually of each subgrantee. However, 

an official said that the Ohio Emergency Management Agency had not 

implemented this on-site monitoring program. 

Without regular on-site monitoring of subgrantees, Ohio Emergency 

Management Agency officials were not fully aware of: 

Difficulties that delays and rework associated with late release of 

grant funds caused local officials, 

Problems caused by delays in reimbursing subgrantees for grant 

funded expenditures, 

Procurement practices that did not comply with federal regulations 

used to buy much of the equipment purchased with grant funds, 

Equipment property management practices that did not comply 

with federal regulations used by subgrantee and first responder 

organizations, and 

Subgrantee and first responder organizations progress in achieving 

program goals and objectives to improve preparedness. 

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

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

Page 23
 
 

Recommendation 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Ohio Emergency Management Agency to: 

Recommendation #12: Develop methods to better monitor 

subgrantees, including policies and procedures for on-site 

monitoring of grant recipients on a recurring basis that include 

evaluations of the recipients’ overall management of the grants and 

the achievement of program goals. 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendation 12 and, within 90 days, 

will request the Ohio Emergency Management Agency implement 

a monitoring program using best practices to include periodic onsite visits to oversee subgrantee activities. FEMA requested that 

recommendation 12 be resolved and open pending implementation 

of the stated corrective actions. 

The Ohio Emergency Management Agency acknowledged that onsite monitoring could be improved. The Ohio officials said that 

with full staff and a compliance specialist now in place, monitoring 

of subgrantee to meet the intent of recommendation 12 can be 

accomplished and improvements will be realized in this area. 

If properly implemented, the corrective actions proposed by 

FEMA and the State will resolve the condition identified during 

the audit. The recommendation is considered resolved and will 

remain open until such time that corrective actions have been 

implemented. 

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

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

Page 24
 
 

 

 

 

Appendix A 

Purpose, Scope, and Methodology 

The objective of this audit was to determine whether the State of 

Ohio 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 a local as 

well as a statewide level. 

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 towards 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. 

The Homeland Security Grant Program awards to Ohio for fiscal 

years 2007 through 2009 included the following programs and 

awards: 

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

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

Page 25
 
 

Homeland Security Grant Program 

FYs 2007 through 2009 

Funded Activity FY 2007 FY 2008 FY 2009 Total 

State Homeland 

Security Program $16,830,000 $24,520,000 $23,127,500 $64,477,500 

Urban Areas Security 

Initiative $15,480,000 $16,280,500 $16,590,750 $48,351,250 

Total $32,310,000 $40,800,500 $39,718,250 $112,828,750 

Law Enforcement 

Terrorism Prevention 

Program 

$12,020,000 Not 

Applicable 

Not 

Applicable $12,020,000 

Citizen Corps 

Program $441,938 $439,689 $436,943 $1,318,570 

Metropolitan 

Medical Response 

System Program 

$1,548,871 $1,927,326 $1,927,326 $5,403,523 

Grand Total $46,320,809 $43,167,515 $42,082,519 $131,570,843 

Appendix A 

Purpose, Scope, and Methodology 

Source: Federal Emergency Management Agency 

In accordance with the audit guide, provided by the OIG, the team 

selected all four Urban Areas Security Initiative cities, all eight 

Ohio Regional Law Enforcement organizations, 12 of 88 county 

subgrantees, and four State agencies to perform an in-depth review 

of the key grant management processes. We selected these 

locations based on their high dollar grant award amount as well as 

geographic and demographic factors assuring that urban, suburban, 

rural, and counties with critical infrastructure were included in our 

sample. In addition, we sought input from the State Administrative 

Agency for input on known problems at any particular subgrantee. 

Specifically, we visited the following 4 State agencies and 24 local 

subgrantees: 

State Agencies 

State Administrative Agency, Ohio Emergency 

Management Agency 

Department of Administrative Services, Office of 

Information Technology 

Department of Transportation 

Ohio Office of Homeland Security 

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

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

Page 26
 
 

 

 

 

 

 

Appendix A 

Purpose, Scope, and Methodology 

Urban Areas Security Initiative 

Cincinnati Urban Areas Security Initiative 

Cleveland Urban Areas Security Initiative 

Columbus Urban Areas Security Initiative 

Toledo Urban Areas Security Initiative 

Law Enforcement Regions 

Ohio Law Enforcement Region 1 

Ohio Law Enforcement Region 2 

Ohio Law Enforcement Region 3 

Ohio Law Enforcement Region 4 

Ohio Law Enforcement Region 5 

Ohio Law Enforcement Region 6 

Ohio Law Enforcement Region 7 

Ohio Law Enforcement Region 8 

Ohio Counties 

Butler County
 

Cuyahoga County 


Franklin County
 

Hamilton County
 

Jackson County
 

Lake County
 

Licking County
 

Lucas County
 

Montgomery County 


Summit County
 

Stark County
 

Wood County
 

The 28 grant recipients visited received: 

41% of the 2007 State Homeland Security Program grant 

64% of the 2008 State Homeland Security Program grant 

61% of the 2009 State Homeland Security Program grant 

100% of the 2007, 2008, and 2009 Urban Areas Security 

Initiatives grants 

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

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

Page 27
 
 

 

 

 

Appendix A 

Purpose, Scope, and Methodology 

To determine the effectiveness of Ohio’s grant program as well as 

compliance with requirements, at each location we interviewed 

responsible officials, and reviewed documentation supporting State 

and subgrantee management of the awarded grant funds (including 

expenditures for equipment, training, and exercises). We tested 

property and payment transactions, physically inspected some of 

the equipment procured with the grant funds and analyzed the 

procurement process. In addition, we met with representatives of 

first responder organizations, such as fire, police, sheriff, and 

health organizations, to discuss the grant process and the benefits 

the grant funds have brought to their organization and 

communities. 

We conducted reviews at FEMA headquarters, State of Ohio 

offices, each of the Urban Areas Security Initiative offices, 

regional law enforcement organizations, and county subgrantee 

organizations. At these locations, the audit team conducted 

interviews with key officials directly involved in the management 

and administration of the State of Ohio Homeland Security Grant 

Program. The team reviewed and analyzed data related to grant 

management and associated processes identified by the team and 

discussed with Ohio State Officials at the beginning of the audit. 

These key management processes included: 

Threat, capability, and needs assessment 

 Grant application preparation and submission 

Grant funds allocation 

 Grant expenditure and reporting 


Grant monitoring 


We conducted the audit between November 2010 and May 2011, 

in accordance with Government Auditing Standards as prescribed 

by the Comptroller General of the United States (2007 Revision). 

Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a 

reasonable basis for our findings and conclusions based on our 

audit objectives. 

Although this audit included a review of costs claimed, we did not 

perform a financial audit of those costs. This was a performance 

audit as defined by Chapter 1 of the Standards, and included a 

review and report of program activities with a compliance element. 

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

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

Page 28
 
 

Appendix A 

Purpose, Scope, and Methodology 

Foxx & Company was not engaged to and did not perform a 

financial statement audit, the objective of which would be to 

express an opinion on specified elements, accounts, or items. 

Accordingly, Foxx & Company was neither required to review, nor 

express an opinion on, the costs claimed for the grant programs 

included in the scope of the audit. Had Foxx & Company been 

required to perform additional procedures, or conducted an audit of 

the financial statements in accordance with generally accepted 

auditing standards, other matters might have come to its attention 

that would have been reported. This report relates only to the 

programs specified and does not extend to any financial statements 

of the State of Ohio. 

While the audit was being performed and the report prepared under 

contract, the audit results are being reported by the DHS OIG to 

appropriate FEMA and State of Ohio officials. 

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

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

Page 29
 
 

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 30
 

U.S. [)ep3rlment or Ilomelamj S{'eurit~·

Washington. DC 20472

OCT 13 2011

MEMORANDUM FOR: Anne L. Richards

Assistant Inspector General for Audits

Office of Inspector General

It«d-- &>1.~,. IVr

FROM: David J. Kaufman /

Director

Office of Policy and Program Analysis

SUBJECT: Federal Emergency Management Agency's (FEMA's) Response to

Drall OIG Rcport, Tlte State olOllio's Mallagemellt oiState

/-loll/eland Security Program (SHSP) and Urban Areas Security

Illitiatives (UASI) GranlS AlI'arded during Fiscal Years 2007 {ltrougll

2009

Thank you for the opportunity to comment on your 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, induding addressing the

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

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

Directorate (GPD), require the Ohio Emergency Managcment Agency (OEMA) to review the

subgrantee application and approval process to identify ways to make it more efficient and less time

consuming.

FEMA Response: FEMA concurs with this recommendation.

FEMA will request the OEMA infonn FEMA, within 90 days of receipt of this response via the

!,rrantee notification memo, as to whether or not such an assessment ofthe current policies and

procedures involved with the execution ofsubgrantee awards has occurred and ifany modifications

will be made to expedite expenditures. Ifthe assessment has not yet occurred, FEMA will require

OEMA to complete the assessment within 90 days ofreccipt ofthis rcsponse.

FEMA requests that this recommendation be resolved and opcn pending implementation ofthe

stated corrective actions.

w",w.remn,gov
 

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 31
 

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

Directorate, require the Ohio Emergency Management Agency to provide detailed guidance to the

subgrantees concerning the process upon implementation.

FEMA Response: FEMA concurs with this recommendation.

FEMA will request OEMA provide a detailed process to develop and deliver guidance and

additional training as required to the subgrantees concerning the revised subgrantee application and

approval process, within 90 days ofreceipt ofthis response via the grantee notification memo.

FEMA requests that this recommendation be resolved and open, pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to establish a clear time standard for

processing payment requests consistent with reasonable business practice.

FEMA Response: FEMA concurs with this recommendation.

FEMA will request OEMA establish a standard for processing payment requests consistent with

reasonable business practice, within 90 days ofreceipt ofthis response via the grantee notification

memo.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to conduct a comprehensive analysis

ofthe payment procedures, documentation requirements, and automated systems to identify ways to

streamline the process while still maintaining accountability for compliance with grant requirements.

FEMA Response: FEMA concurs with this recommendation.

FEMA will request OEMA analyze the payment procedures, documentation requirements and

automated grant systems, and subsequently identify ways to streamline these processes while

maintaining grant compliance, within 90 days ofreceipt ofthis response via the grantee notification

memo.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to establish and provide training on

the revised process for State grant specialists and subgrantee staff.

2
 

FEMA Response: FEMA concurs with this recommendation.

FEMA will request OEMA develop a process to provide State staff and subgrantees sufficient

training on streamlined payment procedures, documentation requirements and automated grant

systems, within 90 days ofreceipt ofthis response via the grantee notification memo.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to consider instituting an Electronic

Grant Management System users group to identify and resolve future process problems.

FEMA Response: FEMA concurs with this recommendation.

FEMA will request OEMA report on the development of an Electronic Grant Management System

users group, which will be able to review, identify, and resolve process problems, within 90 days of

receipt ofthis response via the grantee notification memo.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to develop and provide to all Ohio

Emergency Management Agency grant staff and subgrantee grant managers, training on State and

federal regulations pertaining to competitive procurement.

FEMA Response: FEMA concurs with this recommendation.

FEMA will request OEMA indicate that procedures are outlined in the Administrative Plan for

Homeland Security Grants to ensure State staff and subgrantees follow Federal requirements for

competitive procurement within 90 days ofreceipt ofthis response via the grantee notification

memo.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to prepare, publish, and disseminate

guidance detailing procurement regulations and procedures for acquiring equipment and services

using FEMA grant funds to all Ohio municipal and county purchasing departments that assist

subgrantees in acquiring equipment or services with Homeland Security grant funds.

FEMA Response: FEMA concurs with this recommendation.

3

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 32
 
 

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 33
 

FEMA will request OEMA issue guidance to all subgrantees detailing procurement regulations and

procedures for acquiring equipment and services using FEMA grant funds within 90 days ofreceipt

ofthis response via the grantee notification memo.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

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

Directorate, require the Ohio Emergency Management Agency to complete a review of all grant

funded purchases using FYs 2007, 2008, and 2009 State Homeland Security Program and Urban

Areas Security Initiative grant funds exceeding $100,000 to: (a) Identify those made.as sole source

procurements and verify that sole source procurement was justified, (b) Document that the price

obtained was fair and reasonable, and (c) Disallow all procurements that fail to meet these

requirements.

FEMA Response: FEMA concurs with the intent ofthis recommendation. Appendix F ofthe FY

2008 HSGP Guidance states: "Prior to the transition to FEMA, the former Office ofGrants and

Training preparedness programs followed The Department ofJustice's codified regulations, 28 CFR

and the OGO Financial Management Guide. The former Office of Grants and Training is now within

FEMA and all preparedness programs will follow FEMA's codified regulations, 44 CFR." Based on

this language, only those purchases exceeding $100,000 with FY 2007 HSGP funds will be required

to be reviewed. The requirement for FEMA review ofsole source procurements did not apply to FY

2008 and 2009 procurements, so those procurements will not be required to be reviewed.

Within 90 days ofreceipt ofthis response via the grantee notification memo, FEMA will request

OEMA review all grant funded purchases using FY 2007 State Homeland Security Program and

Urbl!ll Areas Security Initiative grant funds exceeding $100,000 to verify that sole source

procurement was justified, the price obtained was fair and reasonable, and determine if any

expenditures failed to meet these requirements.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

OIG Recommendation #10: We recommend that the Assistant Administrator, Grant Programs

Directorate, require the Ohio Emergency Management Agency to develop and disseminate guidance

to all subgrantees establishing property management standards that fully comply with federal

requirements.

FEMA Response: FEMA concurs with this recommendation.

Within 90 days ofreceipt ofthis response via the grantee notification memo, FEMA will request

OEMA provide property management guidance to all subgrantees, to include: property tracking

sheets which provide property, vendor number, grant number, and current location details to its

subgrantees. The tracking sheets will be implemented immediately.

4
 

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 34
 

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

OIG Recommendation #11: We recommend that the Assistant Administrator, Grant Programs

Directorate, require the Ohio Emergency Management Agency to develop policies and procedures

requiring on-site monitoring of grant recipient compliance with property management standards.

FEMA Response: FEMA concurs with this recommendation.

Within 90 days ofreceipt ofthis response via the grantee notification memo, FEMA will request

OEMA develop a policy and procedure to verify the adequacy ofsubgrantee control and

accountability systems ofgrant funded property through on-site monitoring.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

OIG Recommendation #12: We recommend that the Assistant Administrator, Grant Programs

Directorate, require the Ohio Emergency Management Agency to develop methods to better monitor

subgrantees, including policies and procedures for on-site monitoring of grant recipients on a

recurring basis that include evaluations ofthe recipients' overall management ofthe grants and the

achievement of program goals.

FEMA Response: FEMA concurs with this recommendation.

Within 90 days ofreceipt ofthis response, via the grantee notification memo, FEMA will request

OEMA implement a monitoring program using best practices that includes periodic on-site visits to

oversee the activities ofsubgrantees. OEMA will use these on-site visits to evaluate subgrantees'

overall grants management activities.

FEMA requests that this recommendation be resolved and open pending implementation ofthe

stated corrective actions.

We thank you, again, for the opportunity to review and update our comments to your

recommendations contained in your final report. Should you have further questions regarding our

response, please do not hesitate to call FEMA's ChiefAudit Liaison, Brad Shefka, at 202-646-1308.

5
 

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 35
 

-lYJ~ OHIO DEPARTMENT John R. Kasich, Governor

~~~ ~~A~o~~;L~£~p~O~E:Jo~ ---,A;-cdC":m.,.,in.,.,istC":ra"'lioc:-n,----------------T..h"'o~m"'a::..s~p'-'.c";.i~2~an::r~"':s"'J-"iDD~i~=':~=~o:::n~'

Bureau of Motor Vehicles ~;. Executive Director

Emergency Management Agency

Emergency Medical Services Emergency Management Agency

Office of Criminal Justice Services 2855 West Dublin·Granville Road

Ohio Homeland Security Columbus, Ohio 43235-2206

Ohio Investigative Unit (614) 889·7150

Ohio State Highway Patrol www.ema.ohio.gov

October 3, 2011

Foxx & Company

Attention: Bill Moore

700 Goodall Complex

324 West Ninth Street

Cincinnati, Ohio 45202

Dear Mr. Moore:

The Ohio Emergency Management Agency (OEMA) would like to thank you and your team for

providing us feedback from your recent Office ofInspector General Audit ofthe Homeland

Security Grant Program. We would like to take this opportunity to provide comments towards the

audit and recommendations noted in the draft version of the letter discussed at our September 19,

2011 exit conference.

General comments:

The audit took into account grants that were open and active through a period ofsignificant change

in Ohio EMA's administrative processes and stmcture. Included in the these changes was the

implementation ofthe Electronic Grants Management System (EGMS) and significant personnel

changes to include replacement ofthe entire management team and a tum-over of75 percent of

grants management staff in the Preparedness Grants Branch. While we acknowledge that the

implementation and timing ofthese changes contributed to the process delays captured in the scope

ofthe audit, we feel that the net outcome ofthese changes has been an improvement to customer

service and process timeliness that is evident in our day to day operations and will be reflected in

future reviews of grant programs.

Item 1: Untimely Release of Grant Funds to Sub-grantees

Recommendation #1: Review the sub-grantee application and approval process to identify

ways to make it more efficient and less time consuming.

Comment: We concur. Preparedness Grants Branch staffregularly review the time frames

and take appropriate actions to streamline processes. We will continue to take these actions.

RecDmmendation #2: Provide detailed guidance to the sub-grantees concerning the

process upon implementation.

Comment: We concur. Guidance and Grant Agreements for program years beyond the

scope ofthe audit already include more detailed instruction on the necessary steps to

complete the application and access funds. Ohio EMA will review and update this guidance

as necessary to ensure a clear picture is presented to sub-grantees on actions required and

assistance that is available. While Ohio EMA will continue to take these actions, it IllUSt

Mission Statement

"(0 save lives, reduce injuries and economic loss, to administer Ohio's motor vehicle laws and to preserve tile safety

and well being of all citizens with Il1e most cost-effective and service-oriented methods available"
 

Ohio Department of Public Safety

Page 2

also be noted that a sub-grantee has responsibilities in the award/release process that must

be done accurately and timely to ensure that funds are available in the most expeditious

manner. Ohio EMA will work with these sub-grantees to get them to a reasonable timeframe realized by many other sub-grantees ofthese programs.

Item 2: Untimely Payment to Sub-grantees for Grant Expenditures

Recommendation #3: Establish a clear time standard for processing payment requests

consistent with reasonable business practice.

Comment: Ohio EMA strives to process all reimbursements in a manner that would allow

for timely payment of contracts, invoices and other obligations. While not fonnalized in

any procedures, Preparedness Grants Branch management has implemented an expectation

of cash requests processed within five business days ofreceipt in the system. Based on this

expectation, the process then allows for approximately two weeks to draw federal funds,

voucher payments and transfer funds to sub-grantees - allowing approximately one week

for sub-grantees to execute payment within 30 days. Noting that this is a reasonable

timeframe, there are variables beyond Ohio EMA's control in the process that may delay the

overall payment time. Such items include: cash requests that have been submitted without

proper documentation; cash requests submitted for items not contained in an approved

budget; state accounting processes (outside ofDepartment of Public Safety, Ohio EMA) that

may delay the deposit of funds from federal accounts to Ohio EMA. We concur with using a

"standard" that is consistent with reasonable business practices as a benchmark in

improving the timeliness of our payment processing; however, we do not plan to sacrifice

internal controls already in place in order to achieve this "standard." Ohio EMA will review

the current process and look for efficiencies that can be achieved, realizing there will

continue to be circumstances outside of Ohio EMA's control that will limit the ability to

consistently meet the "standard" established.

Recommendation #4: Conduct a comprehensive analysis ofthe payment procedures,

documentation requirements, and automated systems to identify ways to streamline the

process while still maintaining accountability for compliance with grant requirements

Comment: We concur; Preparedness Grants Branch staffregularly review the time frames

and take appropriate actions to streamline processes. We will continue to take these actions.

Recommendation #5: Establish and provide training on the revised process for State grant

specialists and sub-grantee staff.

Comment: Ohio EMA continues to offer refresher training to sub-grantees on the EGMS

system. Additionally, Ohio EMA staff has increased their awareness and training on grants

management and administration. We will continue these efforts to enhance our staffs

expanding knowledge base.

Recommendation #6: Consider instituting an Electronic Grant Management System users

group to identify and resolve future process problems.

Comment: We concur. Ohio EMA noted during tbe SAA interview portion ofthe audit

that it was working on establishment of an EGMS working group. Since the audit has been

conducted, the vendor that provides EGMS has offered a new product to replace the existing

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 36
 
 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 37
 

Ohio Department of Public Safety

Page 3

system. As part ofthe decision making process, Ohio EMA will be reaching out to several

stakeholders at the sub-grantee level to review, critique and make recommendations on the

new system.

Item 3: Noncompliance with Procurement Regulations

As mentioned in the audit exit conference, we're requesting that page 11 ofthe audit report be

updated to include the provision outline in 44 CFR Part 13.36 (d) (4) (i) (D) "After solicitation ofa

number ofsources, competition is detennined to be inadequate." Additionally, Ohio EMA is

requesting that the document (page 11) be revised to reflect the applicability ofthe Department of

Homeland Security (DHS), Financial Management Guide to only the fiscal year 2007 Homeland

Security Grant Program. With the Financial Management Guide reference conected, we further

request that references to "seeking permission" be removed from the report unless relevant to the

Fy2007 grant.

Ohio EMA is requesting that the paragraph on page 12 that details the state's procurement ofEOC

software be amended or removed. We reference 44 CFR Part 13.36 (a) States.

"When procuring propelty and services under a grant, a State will follow the same policies

and procedures it uses for procurements from its no-Federal funds. The State will ensure

that every purchase order or other contract includes any clauses required by Federal statutes

and executive orders and their implementing regulations."

Ohio followed the same procurement procedure that is required for non-federal funds to procure the

EOC software - thus meeting the requirement of 44 CFR. As such, reference to the purchase under

the category of non-compliance with procurement regulations is inconect.

Recommendation # 7: Develop and provide to all Ohio Emergency Agency grant staff and

sub-grantee grant managers, training on State and federal regulations pertaining to

competitive procurement.

Comment: We concur. After the conclusion ofthe audit, Ohio EMA made available to the

Preparedness Grants Branch an individual to fulfill the role of a compliance specialist. The

background of this individual is procurement (grant and non-grant). As such, processes,

procedures and documents are being reviewed and revised to fully reflect the federal

requirements for procurement. An objective ofthis position's work plan includes a

technical support document that can be offered to sub-grantees to facilitate meeting grant

requirements while not slowing the procurement process. Through this process, Ohio EMA

feels confident that staff will receive the necessary training and that it will be made

available to all sub-grantees.

Recommendation #8: Prepare, publish, and disseminate guidance detailing procurement

regulations and procedures for acquiring equipment and services using FEMA grant funds

to all Ohio municipal and county purchasing departments that assist subgrantees in

acquiring equipment or services with Homeland Security grant funds.

Comment: We concur. As mentioned in regards to recommendation number seven, Ohio

EMA has installed a compliance specialist in the preparedness grants branch. An objective

of this position's work plan includes a technical support document that can be offered to

sub-grantees (at all levels) to facilitate meeting grant requirements.

 
 

Ohio Department of Public Safety

Page 4

Recommendation #9: Complete a review of all grant funded purchases usi.ng FYs 2007,

2008, and 2009 State Homeland Security Program and Urban Areas Security Initiative grant

funds exceeding $100,000 to: (a) Identify those made as sole source procurements and

verify that sole source procurement was justified, (b) Document that the price obtained was

fair and reasonable, and (c) Disallow all procurements that fail to meet these requirements.

Comment: Ohio EMA will make efforts to review all future procurements in the FY2008

and FY2009 grant programs as they are still open and active. Any procurement beyond the

simplified acquisition threshold that does not comply with 44 CFR will be held for further

review and documentation. Additionally, the Preparedness Grants branch is amending the

monitoring program to include procurement processes to better ascertain trends in

procurement en·ors.

Item 4: Noncompliance with Property Management Requirements

Recommendation #10: Develop and disseminate guidance to all sub-grantees establishing

property management standards that fully comply with federal requirements.

Comment: We concur. The compliance specialist is currently working on a guidance and

"best practice" template for sub-grantee use. Upon completion, Ohio EMA Preparedness

Grants Branch will make the documents available to sub-grantees along with technical

assistance as needed.

Recommendation # 11: Develop policies and procedures requiring on-site monitoring of

grant recipient compliance with property management standards.

Comment: We concur. The compliance specialist is amending the monitoring program to

include more detailed review ofinventory/property management. Monitoring visits that

occurred since implementing the compliance specialist have been provided with more

detailed feedback and corrective actions on property management. We will continue to take

these actions in our monitoring program.

Item 5: Inadequate Monitoring of Sub-grantees

Recommendation #12: Develop methods to better monitor sub-grantees, including policies

and procedures for on-site monitoring of grant recipients on a recurring basis that include

evaluations ofthe recipients' overall management ofthe grants and the achievement of

program goals.

Comment: Ohio EMA acknowledges that the monitoring program in regards to on-site

monitoring can be improved. However, starting in September, 2006 Ohio instituted a desk

review process that is utilized in grant administration activities ofthe Homeland Security

Grant Program. The desk review process has been implemented for the budget approval and

cash request processing. Any deficiency in the on-site monitoring can be directly attributed

to staffing shortages and turn-over. The process and tools for monitoring have been in place

and need only minor adjustment to captw'e tile recommendations ofthis report. With full

staffing in place and the addition ofa compliance specialist with a focus on the monitoring

program, Ohio EMA is confident iliat improvements will be realized in this area of

improvement.

 

Appendix B 

Management Comments to the Draft Report 

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

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

Page 38
 
 

Ohio Department of Public Safety

Page 5

Again, we would like to thank you for providing us feedback on our grant management and

administration and the opportunity to comment. If you have any questions or concerns, please feel

free to contact Andrew D. Elder, Preparedness Grants Branch Chief at adelder@dps.state.oh.us or

by phone at (614) 889-7178.

Sincerely,

\-;{--yj ~p Nancy Dragani

Executive Director

CC: Aimee Clancy, FEMA GPD

File

Appendix B 

Management Comments to the Draft Report 

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

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

Page 39
 
 

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: 

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: 

Metropolitan Medical Response System 

Citizen Corps Program 

Law Enforcement Terrorism Prevention Program 

(through FY 2007) 

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

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

Page 40
 
 

Appendix D 

Ohio Emergency Management Agency Organization Chart 

Organization as of November 2010 

Source: Ohio Emergency Management Agency 

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

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

Page 41
 
 

 

Appendix E 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Chief of Staff 

Deputy Chief of Staff 

General Counsel 

Executive Secretariat 

Director, GAO/OIG Liaison Office 

Assistant Secretary for Office of Policy 

Assistant Secretary for Office of Public Affairs 

Assistant Secretary for Office of Legislative Affairs 

Federal Emergency Management Agency 

Administrator 

Assistant Administrator, Grant Programs Directorate 

Federal Emergency Management Agency Audit Liaison 

Grant Programs Directorate Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as 

appropriate 

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

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

Page 42
 
 

 

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, or e-mail your request to 

our OIG Office of Public Affairs at DHS-OIG.OfficePublicAffairs@dhs.gov. For 

additional information, visit our OIG website at www.oig.dhs.gov or follow us on Twitter 

@dhsoig. 

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.