Department of Homeland Security 


The State of Minnesota’s Management of 


State Homeland Security Program and 


Urban Areas Security Initiative Grants 


Awarded During Fiscal Years 

2007 through 2009 

OIG-12-14 November 2011 

Office Office ofInspector Inspector General General 

U.S. U.S. Department Department of of Homeland Homeland Security Security 

Washington, Washington, DCDC 20528 20528 

Homeland Homeland 

Security Security 

NOV NOV 2 99 201' 201' 

Preface Preface 

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

established established byby the the Homeland Homeland Security Security Act Act 0/2002 0/2002 (Public (Public Law Law 107-296) 107-296) byby amendment amendment 

toto the the Inspector Inspector General General Act Act 0/1978. 0/1978. This This isis one one of of aa series series of of audit, audit, inspection, inspection, and and 

special special reports reports prepared prepared asas part part of of our our oversight oversight responsibilities responsibilities toto promote promote economy, economy, 

efficiency, efficiency, and and effectiveness effectiveness within within the the Department. Department. 

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

Program Program and and Urban Urban Areas Areas Security Security Initiatives Initiatives grants grants awarded awarded during during fiscal fiscal years years 2007 2007 

through through 2009. 2009. We We contracted contracted with with the the independent independent public public accounting accounting firm firm Foxx Foxx && 

Company Company toto perform perform the the audit. audit. The The contract contract required required that that Foxx Foxx && Company Company perform perform itsits 

audit audit according according toto generally generally accepted accepted government government auditing auditing standards. standards. Foxx Foxx && 

Company's Company's report report identifies identifies seven seven reportable reportable conditions conditions where where the the State State of of Minnesota's Minnesota's 

management management of of the the grant grant funds funds could could bebe improved, improved, resulting resulting inin 1515 recommendations recommendations 

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

isis responsible responsible for for the the attached attached auditor's auditor's report report dated dated October October 25,2011, 25,2011, and and the the 

conclusions conclusions expressed expressed inin the the report. report. 

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

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

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

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

Anne Anne L. L. Richards-\(\( Richards-\(\( r~-I2..QQ Assistant Assistant Inspector Inspector General General for for Audits Audits 
October 25, 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 Minnesota’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. TPD-FIG-BPA-07-0007, Order No. 10 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 Minnesota’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
 


State Strategy Updates ............................................................................................... 3
 


Recommendations ....................................................................................................... 8
 


Management Comments and Auditors’ Analysis ....................................................... 8
 


Monitoring of Subgrantees ......................................................................................... 9
 


Recommendations ..................................................................................................... 11
 


Management Comments and Auditors’ Analysis ..................................................... 12
 


Property Management Controls and Accountability.................................................. 13
 


Recommendations ..................................................................................................... 15
 


Management Comments and Auditors’ Analysis ..................................................... 15
 


Grant Expenditure Reviews ...................................................................................... 16
 


Recommendations ..................................................................................................... 17
 


Management Comments and Auditors’ Analysis ..................................................... 17
 


Financial Status and Progress Reporting ................................................................... 17
 


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


Management Comments and Auditors’ Analysis ..................................................... 20
 


Fusion Center Sustainability ..................................................................................... 21
 


Recommendation ...................................................................................................... 22
 


Management Comments and Auditors’ Analysis ..................................................... 23
 


Internal Controls Over Financial Operations ............................................................ 24
 


Recommendations ..................................................................................................... 26
 


Management Comments and Auditors’ Analysis ..................................................... 26
 


Appendices 

Appendix A: Purpose, Scope, and Methodology .................................................... 28
 


Appendix B: Management Comments to the Draft Report .................................... 33
 


Appendix C: Homeland Security Grant Program Background .............................. 45
 


Appendix D: Minnesota State Administrative Agency Organization Chart .......... 46
 


Appendix E: Report Distribution ........................................................................... 47
 


Table of Contents/Abbreviations 

Abbreviations 

DHS Department of Homeland Security
 


FEMA Federal Emergency Management Agency
 


FY fiscal year
 


OIG Office of Inspector General
 

 

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 Minnesota. 

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

Minnesota distributed and spent State Homeland Security Program 

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

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

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

funds enhanced the State of Minnesota’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 $54.7 million in State Homeland Security 

Program and Urban Areas Security Initiative grants awarded to the 

State of Minnesota during fiscal years 2007 through 2009. 

Generally, the State of Minnesota did an efficient and effective job 

of administering program requirements in accordance with grant 

guidance and regulations. The State of Minnesota’s plans linked 

funding to all-hazard capabilities and to goals that were established 

based on risk assessments. However, we identified seven areas for 

improving grants management: state strategy updates, subgrantee 

monitoring, property management, grant expenditure reviews, 

financial status and progress reporting, fusion center sustainability, 

and internal controls over financial operations. 

Our 15 recommendations call for the Federal Emergency 

Management Agency to initiate improvements which, if 

implemented, should help strengthen program management, 

performance, and oversight. Written comments to the draft report 

are incorporated as appropriate and included in their entirety in 

appendix B. 

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

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


Page 1 

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Background 

The Homeland Security Grant Program provides federal funding to 

help state and local agencies enhance capabilities to prevent, 

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

major disasters, and other emergencies. 

The State of Minnesota (State) received $62 million in Homeland 

Security Grant Program funds over the course of fiscal years (FYs) 

2007, 2008, and 2009. This included $54.7 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 background 

on the Homeland Security Grant Program. 

The Governor of the State of Minnesota designated the Department 

of Public Safety’s Division of Homeland Security and Emergency 

Management as the State Administrative Agency, the entity 

responsible to administer 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 Minnesota 

government agencies. The State Administrative Agency 

organization is depicted in appendix D. 

Within Minnesota, the State Administrative Agency subawarded 

Homeland Security Grant Program funds to 50 subgrantees 

throughout the State over the 3-year period. 

Results of Audit 

State Grants Management Practices Were Generally Effective, 

But Require Some Improvements 

Generally, the State did an efficient and effective job of administering 

program requirements in accordance with grant guidance and regulations. 

The State’s plans linked funding to all-hazard capabilities and to goals that 

were established based on risk assessments. However, improvements 

were needed to enhance Minnesota’s management of the grants, including: 

State strategy updates, 

Monitoring of subgrantees, 

Property management controls and accountability, 

Grant expenditure reviews, 

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

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


Page 2 

 

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Financial status and progress reporting, 

Fusion center sustainability, and 

Internal controls over financial operations. 

Our 15 recommendations call for the Federal Emergency Management 

Agency (FEMA) to initiate improvements which, if implemented, should 

help strengthen program management, performance, and oversight. These 

improvements will enhance the effectiveness of the State’s overall use of 

the grant funds to improve preparedness and response capabilities. 

State Strategy Updates 

The State of Minnesota’s Homeland Security Strategy (Strategy) was not 

up to date. The Strategy was last updated January 18, 2008, and addressed 

the four mission areas and seven1 national priorities as required. However, 

the Strategy was limited in its effectiveness because: 

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The Strategy referred to a comprehensive risk, capabilities, and 

needs assessment completed in October 2003. The Strategy stated 

an “updated assessment will be accomplished during calendar year 

2006 with guidance from the Office for Domestic Preparedness,” 

but an updated assessment was not performed; 

The Strategy lacked measurable goals and objectives; and 

The process to collect and report performance data in the Strategy 

required updating and refinement. 

As a result, the State’s strategy was not based on current capabilities and 

needs, did not have measurable goals and objectives, and did not permit 

the State to use measured progress toward goals and objectives when 

making funding and management decisions. Accordingly, the State did 

not have a basis to evaluate the effect of grant expenditures on its 

preparedness and response capabilities. 

FEMA’s State and Urban Area Homeland Security Strategy, Guidance on 

Aligning Strategies with the National Preparedness Goal (Strategy 

Guidance), dated July 22, 2005, states that the primary determinants of an 

overall successful strategy are the quality of the goals and performance 

against those goals. The Strategy Guidance stated that the State 

Administrative Agency and Urban Area Working Group should assess the 

strategy’s objectives to determine whether the measures are meaningful, 

that the measurement methodology is sound, and the measures can be 

verified with reliable data. 

1 This number was increased to eight for the FY 2010 and later grants. 

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

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


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Specific, detailed, particular and focused – helping to identify what 

is to be achieved and accomplished; 

Measurable – quantifiable, providing a standard for comparison, 

and identifying a specific achievable result; 

Achievable – the objective is not beyond a State, region, 
 

jurisdiction or locality’s ability;
 

Results-oriented – identifies a specific outcome; and 

Time-limited – a target date exists to identify when the objective 

will be achieved. 

 

The Strategy Guidance also stated that objectives should be: 

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The Strategy Guidance added that objectives, which have corresponding 

implementation steps, should be guided by solution areas – Planning, 

Organization, Equipment, Training, and Exercises – that support 

achievement of the goal and reduce shortfalls in capabilities. 

Implementation steps provide a road map to the accomplishment of the 

goals and objectives. Once an objective has been established, 

implementation steps should be constructed that will provide guidance to 

the State or Urban Area on how the objective will be achieved. 

With respect to updating state strategies, the Strategy Guidance recognized 

the value of each state having an ongoing process of review and 

refinement as new lessons are learned, new priorities are realized, and new 

homeland security guidance is issued. The Strategy Guidance stated that 

updated State and Urban Area Homeland Security Strategies will then 

provide a context for performing the strategic exercise of asking “How are 

we organized?” and “How are we managing our homeland security 

programs?” 

Strategy Needs to be Updated With a Comprehensive Risk, 

Capabilities, and Needs Assessment 

The State had not updated its risk, capabilities, and needs 

assessments since 2003. Although the state strategy was updated 

in January 2008, the strategy was not complete because the State 

Administrative Agency did not update the needs assessment in 

2006 as intended. As a result, the State strategy and justifications 

for FEMA Homeland Security Grant funds for FYs 2007, 2008, 

and 2009 were based upon outdated strategy and assessments that 

did not consider such factors as new risks, needs assessments, and 

capability improvements achieved with previous years’ grant 

monies. 

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

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

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The 2003 State Strategy was developed from a comprehensive risk, 

capabilities, and needs assessment completed by designated state 

jurisdictions. It was based on the National Response Plan and 

integrated with the Minnesota National Incident Management 

System. The assessment was completed in October 2003 with 

guidance from FEMA. The results of the assessment helped to 

identify gaps between the current and desired level of equipment, 

training, and exercises at the local and state levels. 

The 2003 State Strategy stated that an updated assessment would 

be accomplished during calendar year 2006 with guidance from 

FEMA. However, state officials said that the updated assessment 

was never completed. Instead, the State relied on the input from 

23 working groups consisting of subject matter experts that came 

together each year during the grant process to review potential 

projects for homeland security funding. These working groups 

reviewed and scored proposed projects and made 

recommendations to the State’s Senior Advisory Council. The 

Council reviewed and approved projects which became the 

investment justifications submitted by the State as part of its yearly 

application to FEMA for grant funds. 

While the members of the Senior Advisory Council represent all 

first responder disciplines, as well as the state officials responsible 

for the administration of federal preparedness grants, the activities 

of the working group were not used to update the State’s strategy 

because the group was not tasked to do this. Without an updated 

State strategy there was no assurance that the projects for which 

FEMA funding was being requested would lead to the most 

effective result for improving the State’s capabilities. 

Strategy Lacks Measurable Goals and Objectives 

The State Strategy contained 14 broad based goals which 

supported the 4 national mission areas and 7 national priorities. 

The Strategy also had 74 objectives with a total of 340 

implementation steps to support the 14 broad based goals. 

However, the objectives and implementation steps were not 

specific, measurable or results oriented. To illustrate, 148 of the 

340 implementation steps had no specific dates for completing the 

implementation step or how often the step would be performed. 

Other time frames cited in the Strategy were for years prior to the 

effective date of the Strategy and reflected status conditions that 

likewise were years old. The following are examples of 

shortcomings found in the Strategy: 

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

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

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Table 1: Shortcomings in State Strategy 

Goal Objective Shortcoming 

To develop and enhance the 

planning and analysis 

capabilities at all levels of 

government within the state 

of Minnesota to prevent, 

respond to, and recover from 

terrorism, major disaster, and 

other emergencies. 

The State of Minnesota will 

develop a statewide plan for 

the evacuation of citizens in 

preparation for or in response 

to terrorism, a major disaster, 

or other emergencies. 

The objective and 

corresponding implementation 

steps do not include: 

Time frames for completion 

of the objective. 

The State of Minnesota will 

enhance a regional capacity 

to prevent, prepare for, 

respond to, recover from, and 

mitigate a Chemical, 

Biological, Radiological, 

Nuclear Event. 

Based on best practices, 

establish baseline for 

equipment and training for 

regional Emergency 

Operations Centers. 

Encourage development of 

Emergency Operations 

Centers that promote multiagency communications and 

collaboration during an event. 

The objective and 

corresponding implementation 

steps do not include: 

Specific or measurable 

anguage; 

Time frames for completion 

of the objective. 

The State of Minnesota, in 

cooperation with law 

enforcement agencies 

throughout the state, will 

develop and maintain an 

efficient and expeditious 

sharing of information and 

intelligence that could 

prevent possible terrorist 

attacks. 

Enhance Minnesota’s ability 

to prevent and detect terrorism 

events. 

The objective and 

corresponding implementation 

steps do not include: 

Specific or measurable 

language; 

Current or specific 

timeframes for completion of 

the objective. 

Implement a strategy for Critical Infrastructure Security The objective and 

homeland cyber-security and Management Phases - To corresponding implementation 

directed toward the safeguard maintain the level of security steps do not include: 

and protection of sensitive across the critical ecific or measurable 

and private information and infrastructure over time. nguage; 

the continuity of the State of Activities will shift from urrent or specific 

Minnesota’s extended critical design, build, and statewide meframes for completion of 

infrastructure and operations. project coordination to 

ongoing support and program 

facilitation. 

the objective. 

Enhance the direct and Enhance mutual aid capacity The objective and 

immediate response in Minnesota. corresponding implementation 

capability of both local and steps do not include: 

state response agencies. Specific or measurable 

language; 

Current timeframes for 

completion of the objective. 

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

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


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In other instances, the Strategy included steps with no completion 

date. For example, one objective stated: 

“Create and maintain CriMNet, a statewide framework of 

people, processes, data standards, and technology focused on 

providing accurate and comprehensive data to the criminal 

justice community to prevent terrorist attacks.” 

An implementation step for this objective states: 

“Ensure compliance with data privacy laws and court rules of 

access, about 15% complete.” 

The status does not reflect what date the 15% was achieved or was 

projected to be achieved. 

In addition to steps included in the revised January 2008 strategy 

that did not have completion dates, some steps referred to dates 

that had passed. Seventeen of the 340 implementation steps had 

completion dates in 2004. However, there was no status reflected 

to show whether the steps had been completed or whether the 

information has not been collected to update the status. 

Process to Collect and Analyze Performance Data Needs 

Improvement 

The goals and objectives in the Strategy did not include 

performance measures that enabled the State to track progress 

made in achieving the goals. In addition, the State did not have an 

adequate process to collect, measure, and analyze performance 

data related to the accomplishment of the goals and objectives 

outlined in the Strategy. 

The State relied on the activities of working groups to informally 

update the training, exercise, and equipment needs for their 

disciplines in local jurisdictions. While the working groups were 

charged by the State Administrative Agency with the responsibility 

to review all potential projects for inclusion into the investment 

justifications, the working groups did not participate in updating 

the plan or assessing progress toward meeting goals and objectives. 

According to the 2009 grant application guidance furnished to 

subgrantees by the State Administrative Agency, quarterly 

progress reports containing a summary of actual accomplishments 

of the grant projects in a narrative format were required. These 

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

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

Page 7 
 

 

progress reports were due 30 days after the end of each calendar 

year quarter. However, our review of selected progress reports 

showed that the reports were not prepared or lacked sufficient data 

to track progress, and were generally not sufficient to track 

progress in accomplishing goals and objectives. State 

Administrative Agency officials attributed the lack of progress 

reporting to the need for metrics to measure accomplishments. 

The State Administrative Agency officials said that the lack of 

metrics was partially due to a lack of guidance from FEMA. 

Without measurable goals and objectives, performance 

measurements, and a mechanism to collect objective, resultsoriented data from local jurisdictions and first responders, the State 

did not have a basis to evaluate the effect of grant expenditures on 

its preparedness and response capabilities. Also, the State was 

unable to determine progress toward goals and objectives when 

making funding and management decisions. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

Recommendation #1: Formalize a policy and document 

procedures for periodically updating the State Strategy based upon 

current risk, capabilities, and needs assessments. 

Recommendation #2: Incorporate goals and objectives in the 

updated State Strategies that are specific, measurable, achievable, 

results-oriented, and time-limited. 

Recommendation #3: Develop performance measures and collect 

and analyze performance data from subgrantees to measure 

progress towards achieving goals and objectives. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with recommendation 2 and with the 

intent of recommendations 1 and 3. The officials concurred with 

the intent to increase accountability in meeting the goals and 

objectives of the State Homeland Security Strategy for 

recommendations 1 and 3 and will work to continue to strengthen 

the language of the guidance provided to the States. FEMA 

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

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

Page 8 
 

officials also said they would recommend that the State develop 

performance measures and collect and analyze performance data 

from subgrantees to measure progress towards achieving goals and 

objectives. However, FEMA stated that it cannot legally require 

the State to take the actions included in recommendations 1 and 3 

at this time. 

In regard to recommendation 2, FEMA officials said that FEMA 

had approved Minnesota’s revised Homeland Security Strategy of 

June 2011. It is FEMA’s opinion that Minnesota’s revised goals 

and objectives meet the federal requirements and will serve the 

state well in its homeland security efforts going forward. FEMA 

will also strengthen the language in the guidance regarding 

progress measurement. FEMA concluded that recommendation 2 

had been addressed and requested that the recommendation be 

closed. However, because the State is proposing to update its 

strategy in response to the recommendation, the recommendation 

will remain open. 

State of Minnesota officials also agreed with recommendations 1 

through 3. The officials said they will update the State’s strategy 

to include a policy statement adopting a 2-year planning cycle for 

reviewing and revising the strategy. The officials said the strategy 

update will include goals and objectives that are specific, 

measurable, achievable, results-oriented, and time-limited. Key 

performance measures and indicators will also be developed. The 

State estimated that the strategy update will be completed by 

December 31, 2011. 

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. 

Monitoring of Subgrantees 

The Minnesota State Administrative Agency did not adequately monitor 

subgrantee activities for the FY 2007, 2008, and 2009 Department of 

Homeland Security (DHS) grants. The State Administrative Agency 

conducted only limited monitoring and did not have subgrantee program 

performance monitoring policies and procedures in place until 

December 31, 2009. As a result, the State did not have adequate 

information to assess whether or not the subgrantees were efficiently and 

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

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


Page 9 
effectively using grant funds to accomplish program objectives, or that the 

grants were managed in accordance with federal requirements. 

Code of Federal Regulations Title 44 §13.40, Monitoring and reporting 

program performance, establishes requirements for monitoring grant 

program performance. The regulations require grantees to (1) provide 

day-to-day management of all grants and subgrant supported activities and 

(2) assure that subgrantees comply with applicable federal requirements 

and achieve program performance goals. The regulations also specify that 

the grantees’ monitoring programs cover each function, program, or 

activity, and require subgrantees to adhere to the same performance 

monitoring and reporting standards as required of grantees. 

Office of Management and Budget Circular A-133, Part 3-M, Subrecipient 

Monitoring, also includes grantee monitoring requirements. Part 3-M 

states that grantees are responsible for monitoring subgrantees’ use of 

federal awards through reporting, site visits, regular contact, or other 

means to provide reasonable assurance that the subgrantees administer 

federal awards in compliance with laws, regulations, and the provisions of 

contracts or grant agreements, and that performance goals are achieved. 

The State Administrative Agency developed a protocol for monitoring 

subgrantees, which went into effect on December 31, 2009. This protocol 

established that on-site visits to subgrantees would be conducted for 

subgrantees selected by State Administrative Agency Program and Grants 

staff. However, the protocol did not identify how the subgrantees would 

be selected, how many subgrantees would be visited each year, or when 

these visits would commence. 

State Administrative Agency officials said that the subgrantee monitoring 

consisted of document reviews conducted during the quarterly financial 

status report reviews, interactions with subgrantee representatives during 

periodic working group meetings, and occasional subgrantee visits or 

telephone calls. However, an official from only one of the 22 subgrantees 

we visited said that State Administrative Agency officials had made an onsite visit. Also, the State Administrative Agency did not prepare a written 

report to document the visit. Subgrantee and State Administrative Agency 

officials agreed that program performance monitoring needed to be 

improved. In this regard, we believe the development of a checklist for 

use by monitors during evaluations of subgrantee program performance 

would help to ensure consistency in the scope and methodology of the 

program evaluations from subgrantee to subgrantee. 

A FEMA Region V site monitoring visit to the State Administrative 

Agency held July 19, 2010 through July 23, 2010 found that the office was 

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

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

Page 10 
 

“slow in implementing the subgrantee monitoring program” and 

recommended that the State Administrative Agency “Energize and fully 

implement their subgrantee monitoring program.” A State Administrative 

Agency official said that the lack of staffing and financial resources has 

limited the ability to effectively monitor subgrantee program performance. 

At the time of our audit, the Grants Program section had four staff 

members who were responsible for reviewing reimbursement requests 

from subgrantees for Homeland Security Grant Program funds. Also, an 

additional State Administrative Agency staff member was responsible for 

overseeing the Urban Areas Security Initiative activities. The Urban 

Areas Security Initiative point of contact, who has been in the position for 

the past 3 years, said that she has not had time to make on-site visits to the 

respective Urban Areas Security Initiative subgrantees. 

During the week of March 28, 2011, the State Administrative Agency 

hired an individual to conduct on-site monitoring visits. The creation of 

this position was an important accomplishment in the State’s efforts to 

comply with federal monitoring requirements. However, the majority of 

the grant expenditures for FY 2007 had already been made and 

expenditures for the FYs 2008 and 2009 were well underway by 

March 2011. With the number of subgrantees across the State, we 

question whether one individual can adequately provide sufficient 

coverage of all grant award recipients state-wide. 

Implementing a subgrantee monitoring program that includes periodic 

on-site visits would provide the State Administrative Agency with 

first-hand knowledge of subgrantees’ use of State Homeland Security 

Program and Urban Areas Security Initiative grant funds, and whether the 

subgrantees were accomplishing program objectives. On-site visits would 

also provide the State Administrative Agency with reasonable assurance 

that the subgrantees were managing the FY 2007 through 2009 funds in 

accordance with federal requirements. For example, the issues we noted 

on inadequate property management controls could have been discovered 

and resolved had the State Administrative Agency performed subgrantee 

on-site monitoring visits. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

Recommendation #4: Establish a policy and monitoring 

procedures that include the frequency of on-site visits, 

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

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

Page 11 
methodology for selecting subgrantees to visit, and a protocol for 

reviewing financial and performance related activities during the 

visits. 

Recommendation #5: Develop a checklist for evaluating 

subgrantee compliance with federal grant requirements. 

Recommendation #6: Identify criteria and methodology for 

assessing subgrantee efficiency and effectiveness in accomplishing 

grant program objectives during monitoring visits. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with recommendations 4 and 5, and 

with the intent of recommendation 6. With regard to 

recommendations 4 and 5, FEMA officials recently recommended 

that the State establish a more cohesive plan aggressively requiring 

timely on-site visits. FEMA added that it monitors all states to 

ensure compliance with grant guidance and all Federal regulations 

and legislation. FEMA is requiring the State to submit the 

monitoring plan to the FEMA Program Analyst within 90 days of 

the receipt of the final report. FEMA is also requiring the State to 

submit to FEMA documentation describing the method by which 

subgrantees are informed about their obligations to comply with a 

subrecipient grant award. FEMA requested that recommendations 

4 and 5 be resolved and open pending implementation of the stated 

corrective action. 

For recommendation 6, FEMA officials said they concurred with 

the intent of the recommendation but cannot legally require the 

State to structure its monitoring activities to achieve a particular 

outcome. However, FEMA will request the State Administrative 

Agency to review and make improvements to its current 

subgrantee monitoring program within 180 days. FEMA requested 

that this action be closed. 

State of Minnesota officials agreed with recommendations 4 

through 6. The officials said a document was being developed that 

will provide guidance for the monitoring process. The document 

will include: 

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A policy and process for determining the frequency and 

recipients of on-site visits, and 

A checklist that will be used to ensure that subgrantees are 

in compliance with federal requirements. 

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

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

Page 12 
The officials also said that a process was being established for 

measuring efficiency and effectiveness of subgrantees. The 

process will include a comparison of projected timelines and 

activity to date, goals to outcomes, and open dialogue with 

subgrantee representatives. Once developed, the process will be 

included in the monitoring policy and procedure document. The 

estimated completion date for completion of the new policies, 

procedures, and the checklist is December 1, 2011. 

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. 

Property Management Controls and Accountability 

The Minnesota State Administrative Agency did not enforce the 

requirement that subgrantees establish and maintain effective control and 

accountability systems to: 

�	 

�	 

Safeguard property procured with Homeland Security Grant 

Program funds, or 

Provide assurances that the property was used solely for authorized 

purposes. 

As a result, the State Administrative Agency and subgrantees did not have 

reasonable assurance that property purchased with federal grant funds was 

being used as intended and adequately safeguarded to prevent loss, 

damage, or theft. 

Code of Federal Regulations Title 44 §13.3, Definitions, defines 

equipment as tangible, non-expendable, personal property having a useful 

life of more than 1 year and an acquisition cost of $5,000 or more per unit. 

Code of Federal Regulations Title 44 §13.32, Equipment, requires that 

property records be maintained that include the property’s cost, 

description, identification number, location, use, condition and ultimate 

disposition. Equipment and supplies are considered personal property. 

Code of Federal Regulations Title 44 §13.32(d)(2), also requires that: 

�	 

�	 

A control system be developed to ensure adequate safeguards to 

prevent loss, damage, or theft of equipment and other personal 

property procured with federal funds, and 

A physical inventory of the property be taken and the results 

reconciled with the property records at least once every 2 years. 

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In addition, Code of Federal Regulations Title 44 §13.20, Standards for 

financial management systems, requires that effective control and 

accountability be maintained for all personal property procured with 

federal funds. Sensitive equipment that is portable such as lap-top 

computers and handheld radios should be safeguarded even though the 

cost of the equipment might be less than the $5,000. 

Grantees and subgrantees must adequately safeguard all such property and 

must assure that it is used solely for authorized purposes. The federal 

regulations covering property management controls are included by 

reference in the State Grant Agreements provided to all subgrantees along 

with the grant award. 

The State Administrative Agency did not have written procedures to 

ensure that the property management accountability requirements were 

being enforced and the required 2-year inventory reconciliations were 

being conducted. State Administrative Agency officials told us that 

property management control requirements are provided as a part of the 

accompanying subgrant award documentation. However, the State 

Administrative Agency stated that follow up activities with subgrantees to 

ensure that property management standards were being adhered to were 

not performed. Of the 22 subgrantees we visited, only 8 had property 

management records that complied with federal property management 

requirements. The remaining subgrantees had various shortcomings, 

which included the following examples: 

Table 2: Property Management Shortcomings Noted 

# of 

Subgrantees Description of Example 

13 Property management records did not contain all the required 

data elements required by Code of Federal Regulations Title 44 

§13.32 (e.g., ownership, location, disposal, or serial numbers). 

3 Required 2-year inventory reconciliations were not performed. 

1 Property management records were not maintained for items 

purchased (e.g., $390,000 of radios that were purchased over a 

year ago) Auditor’s note: We did verify the existence of the 

radios at the subgrantee. 

1 Equipment inventory files maintained informally (i.e., in large 

envelope). 

1 Unable to locate an item purchased with grant funds (i.e., a 

7 kilowatt electric generator that cost about $20,200). 

Subsequent to our field work, the subgrantee located the 

generator. 

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The lack of written policies and procedures, no follow up with subgrantees 

to verify that assets were recorded and protected, and inadequate staffing 

and funding contributed to the noncompliance with federal property 

management requirements. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

Recommendation #7: Establish procedures to ensure that 

subgrantees are complying with property management 

requirements. 

Recommendation #8: Direct subgrantees to establish and 

maintain property management records in accordance with federal 

requirements for equipment purchased with federal funds, 

inventory all property purchased with grant funds to meet the 

federal 2-year reconciliation requirement. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with recommendations 7 and 8. The 

officials stated that the State Administrative Agency is required to 

provide a plan for managing grant funded property and equipment 

to their FEMA Grant Program Directorate Program Analyst within 

90 days of the receipt of the final report. FEMA requested that 

these recommendations be considered resolved but open pending 

implementation of the stated corrective action. 

State of Minnesota officials agreed with recommendations 7 and 8. 

The officials said a document was being developed that will 

include a set of procedures to ensure subgrantees comply with 

property management requirements. Once completed, these 

procedures will be included in the monitoring and policy document 

that is being developed (see Management Comments for 

recommendations 4 through 6 above). The officials said that the 

Grant Staff will share federal property management requirements 

with all subgrantees. The estimated completion date is 

December 1, 2011. 

If properly implemented, the actions identified in FEMA and the 

State’s responses will resolve the condition identified during the 

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audit. The recommendations are considered resolved and will 

remain open until such time that the State has implemented the 

corrective action. 

Grant Expenditure Reviews 

The Minnesota State Administrative Agency did not have written policies 

and procedures to guide its financial review section in examining 

subgrantees requests for reimbursement. In addition, documentation was 

not always available to support approvals of subgrantee reimbursement 

requests. As a result, the State Administrative Agency could not ensure 

that its reviews of reimbursement requests provided consistent validations 

that grant expenditure were allowable, allocable, authorized, and in 

accordance with grant requirements. 

Code of Federal Regulations Title 44 §13.20, Standards for financial 

management systems and the Department of Homeland Security Financial 

Guide require that grantees and subgrantees maintain an accounting 

system together with adequate internal controls to assure grant 

expenditures are allowable, allocable, authorized, and consistent with 

federal, State, and grant requirements. Documentation of procedures is an 

important internal control technique to ensure consistency in the outcomes 

of the process. 

Minnesota State Administrative Agency officials said that to be approved, 

reimbursement requests must include supporting invoices and related 

documents that authenticated the transaction. However, we found two 

instances where approved reimbursement requests did not include invoices 

for: (1) a $392,000 purchase of handheld digital portable radios, and 

(2) a $64,000 purchase of a wireless X-ray system. While invoices were 

subsequently obtained from the subgrantees, reimbursements should not 

have been approved by the State Administrative Agency without the 

appropriate documentation to support the purchase and receipt of the 

equipment items. 

State Administrative Agency officials stated they have not taken the time 

to generate written policies and procedures. Without written policies and 

procedures, the State of Minnesota was not providing sufficient 

management oversight to ensure that grant funds were spent in compliance 

with federal regulations. In addition, by paying requests for 

reimbursements without supporting documentation, the State could not 

ensure that its reviews of reimbursement requests provided consistent 

validation that grant expenditure were allowable, allocable, and authorized 

in accordance with grant requirements. 

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Recommendations
 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

Recommendation #9: Prepare written policies and procedures for 

the review and approval of subgrantee reimbursement requests. 

Recommendation #10: Implement the written policies and 

procedures and ensure that subgrantee reimbursement requests are 

supported by appropriate documentation. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with recommendations 9 and 10. The 

officials stated that the State Administrative Agency is required to 

provide supplemental subgrantee grant guidance describing how 

subgrantee reimbursement requests are processed, evaluated, and 

approved to their FEMA Grants Program Directorate Program 

Analyst within 90 days of the receipt of the response to the final 

report. FEMA requested that recommendation 9 be closed, and 

that recommendation 10 be considered resolved and open pending 

implementation of the stated corrective action. 

State of Minnesota officials agreed with recommendations 9 and 

10. The officials said that draft policies and procedures for 

subgrantee reimbursement requests have been prepared and will be 

finalized by November 16, 2011. 

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. 

Financial Status and Progress Reporting 

Subgrantees did not submit the State’s required quarterly financial status 

reports in a timely manner. In addition, the subgrantees did not always 

submit State required quarterly progress reports. As a result, the State did 

not know the current status of subgrantees’ financial activities, the 

subgrantees progress in improving preparedness and response capabilities, 

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or any problems being experienced that could delay subgrantee 

improvement projects. 

Code of Federal Regulations Title 44 §13.20, Standards for financial 

management systems, and the Department of Homeland Security Financial 

Guide, require that all grantees maintain records which permit preparation 

of reports and adequately identify the source and application of funds 

provided for financially assisted activities. These records must contain 

information pertaining to grants or subawards and authorizations, 

obligations, unobligated balances, assets, liabilities, outlays or 

expenditures, or income. The records must be sufficient to permit 

preparation of reports required by these regulations and the statutes 

authorizing the grants. 

The Minnesota State Administrative Agency required that subgrantees 

submit a financial report along with copies of itemized invoices for actual 

costs incurred at least quarterly, but not more than monthly, and within 

30 days of the period covered by the invoice. These quarterly financial 

reports are designed to provide the State with financial information about 

the activities (expenditures and unliquidated obligations) as reflected in 

the subgrantees’ official accounting records. 

In addition to the financial reports, the State Administrative Agency 

required subgrantees to submit quarterly progress reports. The progress 

report includes a section to identify any problems that may be causing, or 

would cause, the project to be delayed. 

The State Administrative Agency relied on the financial and progress 

information provided by the subgrantees to generate the statewide 

financial status documents and make a determination of the progress being 

made by the subgrantees in using grant funds. However, as shown in the 

following table, five financial status reports exceeded the quarterly 

requirement, with one report covering 28 months. 

Table 3: Range of Months for Filing Financial Status Reports 

Subgrantee Award Amount Reported Period # of 

Months 

Subgrantee #1 FY 2008 $150,000 09/01/08 to 12/31/10 28 

Subgrantee #2 FY 2007 $1,692,000 10/01/08 to 06/30/10 21 

Subgrantee #3 FY 2007 $31,415 09/01/08 to 12/03/09 15 

Subgrantee #4 FY 2007 $434,500 07/01/10 to 12/31/10 6 

Subgrantee #5 FY 2009 $53,050 07/12/10 to 01/07/11 5 

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In addition, 5 of the 22 subgrantees did not submit progress reports from 

October 1, 2007 through June 30, 2010. For example, one subgrantee 

received $1.69 million of grant funds in FY 2007 and had spent 

$1.687 million by June 30, 2010 while not providing the State 

Administrative Agency any progress reports. Another subgrantee received 

grant funds of $590,934 in FY 2007, expended all the grant funds by June 

30, 2010, but never submitted a progress report for the entire grant 

performance period. 

Subgrantee progress reports are a key factor in monitoring subgrantee 

accomplishments. State Administrative Agency officials agreed that, in 

the absence of on-site subgrantee monitoring, the progress reports were 

important sources for the State to obtain the subgrantees’ views on the 

progress being made to enhance preparedness and response capabilities. 

In addition, the State Administrative Agency told us that during Calendar 

Year 2010, it started a process of not approving financial reimbursement 

payments until such time that the Progress Reports were submitted and 

entered into the State Administrative Agency’s automated grants 

management system. The State Administrative Agency believed this 

process would speed up the submission of the financial reports by the 

subgrantees. 

Also, State Administrative Agency’s automated grants management 

system could not generate reports to track the submission of required 

financial status and progress reports. The State Administrative Agency 

officials said that more attention is now being given to subgrantee 

submissions of financial status and progress reports. In addition, the 

officials said that a new automated grants management system was being 

developed that would include the ability to produce reports and track 

subgrantee reporting. 

Subgrantee non-compliance with the State Administrative Agency’s 

quarterly reporting requirements resulted in the State not receiving timely 

information on the subgrantees’ financial activities. Without progress 

reporting, coupled with insufficient subgrantee monitoring, the State 

Administrative Agency was not aware of the subgrantees’ progress being 

made to improve preparedness and response capabilities. In addition, the 

State Administrative Agency was not aware of any problems being 

experienced by the subgrantees that could delay improvement projects. 

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Recommendations
 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

Recommendation #11: Develop and implement procedures to 

ensure that subgrantees submit financial status and progress reports 

in a timely manner. 

Recommendation #12: For those subgrantees that did not submit 

financial status reports, develop a mechanism to identify 

noncompliance and take appropriate action to ensure financial 

status reports are submitted. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with recommendations 11 and 12. The 

officials stated that the State Administrative Agency will be 

required to develop subgrantee financial and progress reporting 

processes that ensure timely submissions of the required reports 

within 90 days of the receipt of the final report. Within 180 days, 

the State will be required to submit documentation describing the 

State’s subgrantee financial reporting procedures. FEMA 

requested that these two recommendations be resolved and open 

pending implementation of the stated corrective actions. 

State of Minnesota officials also agreed with recommendations 11 

and 12. The officials said that the State has incorporated quarterly 

progress and financial status reports into their new on-line grant 

management system. E-mail notices will be sent to subgrantees 

when quarterly reports are due. The system will generate 

exception reports for those subgrantees who do not file their 

quarterly reports, and notices will be sent out accordingly. 

If properly implemented, the actions identified in FEMA and the 

State’s responses 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. 

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Fusion Center Sustainability 

The Minnesota State Administrative Agency does not have a viable 

sustainment plan for its fusion center to ensure continuity of operations 

during funding shortfalls. The State Legislature failed to provide funding 

for the fusion center for the State FY 2009 budget year. Also, the State 

Administrative Agency did not have a commitment of funding from State 

sources for future years because of the State of Minnesota’s financial 

condition. Without continued federal grant funding, the capability may be 

lost and sustaining long term activities of the fusion center may not be 

possible. 

The DHS Grant Program Guidance and Application Kits, as well as the 

Investment Justification Reference Guides for FYs 2007, 2008, and 2009, 

state that grant proposals must clearly describe the long term approach to 

sustaining the capabilities created or enhanced by the investment or why 

the investment will not be sustained beyond the period of performance of 

the grant award. This information would be used by FEMA to evaluate 

the anticipated effectiveness of the proposed investments. The Investment 

Justification Reference Guide added that the proposal should describe 

plans for maintaining the capabilities of the investment, including any 

additional sources of funding to be used, if necessary, and future plans for 

sustaining the investment, if any. 

The State of Minnesota has one fusion center, which focuses on sharing 

information and threat analysis in real time with appropriate stakeholders. 

The fusion center provides weekly bulletins on state, regional, national, 

and international terrorist and criminal activity. The fusion center 

provides access to DHS advisories and information bulletins, FBI threat 

analysis documents, and trend analysis to appropriate agencies on a secure 

network. 

Using FY 2008 Homeland Security Grant Program funds, the State 

Administrative Agency awarded the Fusion Center $352,000 for the grant 

period September 1, 2008 through August 31, 2011. These funds were to 

be used for operation costs and supervision. Funded items included the 

Director’s salary, training, and other related costs to maintain and manage 

the fusion center. Using FY 2009 Homeland Security Grant Program 

funds, the State Administrative Agency awarded the fusion center an 

additional $282,000 to provide for the continuance of operations and 

staffing for the grant period September 1, 2009 through March 31, 2012. 

The fusion center Investment Justifications for FY 2008 and 2009 

included concerns about the sustainment of the fusion center’s capabilities 

in the long run should Homeland Security funding be discontinued or 

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severely reduced. Both the FY 2008 and 2009 Investment Justifications 

stated that federal funding continued to be the primary source of 

sustainability for the fusion center. According to the Investment 

Justifications, the growth of the fusion center and its services was valuable 

in the State’s efforts to prevent terrorism. The FY 2008 Investment 

Justification stated that it was incumbent on the State of Minnesota to 

recognize that it has a responsibility to continue to provide information 

and intelligence sharing to protect its citizens. 

The Department of Public Safety, the parent organization of the State 

Administrative Agency, requested funding from the State Legislature in 

2009 to sustain the cost of management staff and intelligence analysts 

following the FY 2008 Homeland Security Grant Program funding period. 

Although the Department included budget funding provisions for the 

fusion center, the State Legislature did not provide any funds to the 

Department that year for the fusion center. The FY 2009 Investment 

Justification added that due to the current status of the State’s fiscal 

problems, there was no defined plan for seeking funding from the State. 

Therefore, the fusion center would need to rely on DHS grant funding for 

sustainability. 

At the conclusion of our field work, the State Administrative Agency had 

not been able to obtain a commitment from the State legislature to fund 

fusion center operations should federal grant funding end or be 

significantly reduced. In addition, State Administrative Agency officials 

said that funding from other fusion center stakeholders that include local 

law enforcement agencies whose own budgets are constrained, would not 

be sufficient to sustain operations. 

Without a plan for sustaining the activities of the fusion center that are 

currently funded with Homeland Security Grant Program funds, the 

capabilities of the fusion center could be significantly impacted if federal 

funding decreases or is eliminated completely. Most significantly, the 

fusion center’s ability to help develop and maintain information sharing 

and intelligence to law enforcement agencies, including information that 

could prevent possible terrorist attacks, could be lost. 

Recommendation 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

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Recommendation #13: Develop a viable sustainability plan 

identifying the most important capabilities of the fusion center and 

sources of funding to maintain those capabilities in future years. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with the intent of recommendation 13. 

FEMA acknowledged that developing a sustainment plan would be 

both prudent and valuable to the State and the local jurisdictions 

which have benefited from these grants. However, the officials 

stated that FEMA cannot legally require this recommended action 

and the State of Minnesota is not in violation of Federal 

regulations or grant requirements. According to FEMA, imposing 

this requirement on Minnesota is unreasonable and inequitable, 

since sustainment plans are not a requirement of all grant 

recipients. The issue of long-term sustainment of initiatives is a 

cross-cutting issue that should be discussed at the highest levels of 

DHS, as requiring a State or Urban Area to complete such a task 

has broad policy implications for the Homeland Security Grant 

Program. 

Due to budget constraints at the federal and state levels, this 

unfunded mandate to create such a plan would place undue burden 

on the State. However, FEMA officials said that they will 

recommend that the State examine ways to sustain State Fusion 

Center Operations utilizing the Homeland Security Grant Program 

investment justification process within 90-days of the receipt of the 

final report. 

State of Minnesota officials agreed with recommendation 13. The 

officials said the State is assessing community needs and 

capabilities along with the future scope of the Minnesota Joint 

Analysis Center (Fusion Center). Conversations with DHS and 

public safety officials are occurring and recommendations will be 

provided to the State Governor and Legislature. These 

recommendations will be forwarded to the Governor by December 

2011 and the 2012 legislative session starts January 24, 2012. 

A viable sustainability plan is predicated upon the Governor and 

Legislature approval. 

The corrective actions proposed by FEMA and the State represent 

a good beginning to resolving the condition identified during the 

audit. The recommendation is considered resolved and will remain 

open until the Governor approves a sustainability plan that 

identifies ways to sustain State Fusion Center Operations. 

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Internal Controls over Financial Operations 

The State Administrative Agency has not fully documented internal 

controls or performed risk assessments of the homeland security program. 

The State’s Office of Legislative Audit reported in March 20092

, and 

again in March 20103, that the Department of Public Safety had not 

documented its risk assessment for internal controls over (1) compliance 

with federal single audit requirements, (2) its monitoring process that 

assesses the quality of internal controls over compliance with federal 

single audit requirements, and (3) the quality of internal control 

performance over time. The 2009 Report also stated that the Department 

of Public Safety had an increased likelihood of a control deficiency if it 

did not clearly communicate to all staff its risk, control activity, and 

monitoring policies and procedures. 

Code of Federal Regulations Title 2 Part 225 Cost Principles for State, 

Local and Tribal Governments states that as a fundamental premise 

“Government units are responsible for the efficient and effective 

administration of Federal awards through the application of sound 

management practices.” This Section also states “Governmental units 

assume responsibility for administering funds in a manner consistent with 

underlying agreements, program objectives, and the terms and conditions 

of the Federal award.” 

Minnesota’s Department of Finance Policy 0102-01, details that each State 

department head, such as the Commissioner of the Department of Public 

Safety, has the responsibility to identify, analyze, and manage business 

risks that impact a department’s ability to maintain financial strength and 

the overall quality of its products and government services. This policy 

also requires communication of the internal control policies and 

procedures that, at a minimum, should include mechanisms for monitoring 

results and reporting significant control deficiencies to individuals 

responsible for the process or activity involved, including executive 

management and those individuals in a position to take corrective action. 

The State’s Office of Legislative Audit reported in March 2009, that the 

Department of Public Safety needed to develop a comprehensive internal 

financial control structure to identify deficiencies, assess the degree of risk 

of these deficiencies, design control procedures to address significant 

risks, and monitor whether controls were working as designed and 

effectively reducing the risks to an acceptable low level. The report 

2 The State’s Office of Legislative Audit Report No. 09-11, dated March 26, 2009, “Department of Public
 


Safety Federal Compliance Audit Year Ended June 30, 2008,” 


3 The State’s Office of Legislative Audit Report No. 10-04, dated March 4, 2010; “Department of Public
 


Safety Federal Compliance Audit Year Ended June 30, 2009.” 
 

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concluded that the Department of Public Safety would continue to have 

noncompliance and weaknesses in internal controls over compliance until 

it operates within a comprehensive internal control structure. The report 

recommended that the Department of Public Safety should “...frequently 

review and clearly document its risks, control activities, and internal 

control monitoring functions for its key business processes.” In March 

2010, the Office of Legislative Audit again reported the same finding and 

conclusion with a similar recommendation as in the prior year report. 

Another audit by the Office of Legislative Audit had also demonstrated 

the need for this recommendation, in part, through its identification of 

issues with the Department of Public Safety’s administration of homeland 

security funds. Specifically, Office of Legislative Audit reported4 in 

March 2008, that the Department of Public Safety had: 

�	 

�	 

�	 

�	 

Erroneously included expenditures in the Homeland Security Grant 

Program; 

Insufficient evidence to support some purchases; 

Did not properly obligate funds to its subgrantees for the 

Homeland Security Grant Program; and 

Did not adequately safeguard fixed assets purchased with federal 

program funds (inventory system did not contain required 

information). 

During our audit, we also found internal control weaknesses over financial 

operations. For example, as reported in an earlier finding, we found 

insufficient evidence at the time reimbursements were approved to support 

$456,000 of homeland security purchases. The supporting documentation 

was found only as a result of auditor inquiry. The need for: 

�	 

�	 

�	 

an updated strategy, 

adequate monitoring, and 

a sustainability plan for the fusion center, 

are additional examples of financial-related internal control weaknesses. 

State Administrative Agency officials stated that the Department of Public 

Safety had not recently analyzed risks or internal controls in their 

administration of Homeland Security Grant Program funds received 

during the period covered in the scope of our audit. 

The State Administrative Agency has not successfully implemented the 

Office of Legislative Audit’s report recommendation. The Department of 

4 Office of Legislative Audit’s Report No. 08-08, dated March 20, 2008, on “The Department of Public 

Safety Federal Program Compliance Year Ended June 30, 2007” 

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Public Safety’s February 25, 2010 response to the Office of Legislative 

Audit’s recommendation stated that the Department of Public Safety had 

created an internal audit unit to perform a risk review of the department’s 

activities and will formally document its risk control activities and internal 

control monitoring functions for federal program requirements once the 

unit is staffed. However, the State Administrative Agency did not 

accomplish either of these tasks because the internal audit unit has not 

been staffed. 

Accordingly, there is an increased risk that the deficiencies identified in 

the audits of the Office of Legislative Audit, and the issues identified 

during our audit, will not be fully addressed and could persist. As a result, 

until the weaknesses in internal controls over financial operations are 

corrected, the State Administrative Agency will continue to be in noncompliance with requirements for efficient and effective administration of 

federal awards through the application of sound management practices. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Minnesota Department of Public Safety 

and its Division of Homeland Security and Emergency 

Management to: 

Recommendation #14: Implement Office of Legislative Audit’s 

recommendation that the Department of Public Safety documents 

its risks, control activities, and internal control monitoring 

functions for federal program requirements. 

Recommendation #15: Establish a process that documents 

significant control deficiencies and risks that are periodically 

identified, as well as the corrective actions taken to address the 

deficiencies. 

Management Comments and Auditors’ Analysis 

FEMA officials concurred with recommendations 14 and 15. The 

officials stated that FEMA has requested the State Administrative 

Agency to devise a timeline for developing risk management 

processes and a risk management plan that will help document 

needed internal controls that will reduce risk. The State will be 

required to submit a timeline to FEMA within 90 days of the 

receipt of the response to the final report. FEMA requested that 

these recommendations be resolved and open pending 

implementation of the stated corrective actions. 

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State of Minnesota officials also agreed with recommendations 14 

and 15. The officials said the Department of Public Safety has 

created an Internal Audit Unit and an Internal Audit Director 

position. The positions will be filled as soon as possible. The 

Department of Public Safety will formally document its risks, 

control activities, and internal control monitoring functions for 

federal program requirements once the Internal Audit Unit is 

staffed. The officials said an updated department-wide internal 

control policy was approved on May 6, 2010. The Internal Audit 

Director will work closely with the Minnesota Management and 

Budget Agency and become an active member of the State Internal 

Audit Committee to gain knowledge and develop expertise in 

internal controls. The estimated completion date is December 1, 

2011. 

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. 

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Appendix A 

Purpose, Scope, and Methodology 

The objective of this audit was to determine whether the State 

distributed and spent State Homeland Security Program and Urban 

Areas Security Initiative grant funds strategically, effectively, and 

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

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

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

respond to all hazards on 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 purchases, training, 

exercises, and management and administration costs. Because of 

the interrelationship of these grant programs, all were considered 

when evaluating the planning cycle and the effectiveness of the 

overall grant program. However, only State Homeland Security 

Program and Urban Areas Security Initiative funding, and 

equipment and programs supported by the grant funding, were 

reviewed for compliance. 

In 2006, separate Minneapolis and St. Paul Urban Areas Security 

Initiatives were merged into a single Urban Areas Security 

Initiative, which was named the Twin Cities Urban Areas Security 

Initiative. The separate working groups, comprised of the 

metropolitan communities and first responders, were joined 

together to form the Twin Cities Urban Areas Security Initiative 

working group. The current Twin Cities Urban Areas Security 

Initiative is made up of 12 members, with only 7 being voting 

members. All 12 members are part of the working group that 

identifies specific needs for the Urban Areas Security Initiative. 

These needs are prioritized and carried forward into each year’s 

Investment Justifications and grant applications. 

The Urban Areas Security Initiative working group decided that 

grant funds awarded will be divided according to the by-laws 

developed and accepted by all of the Urban Areas Security 

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

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


Page 28 

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Appendix A 

Purpose, Scope, and Methodology 

Initiative members. These by-laws identify specific percentages of 

disposition of the grant awards among the Urban Areas Security 

Initiative members, which are made upon receipt of the Urban 

Areas Security Initiative grant award from DHS. A State 

Administrative Agency staff member is the point of contact for the 

Twin Cities Urban Areas Security Initiative, and this individual 

maintains all the financial records of grant awards, grant 

expenditures, grant revisions, grant expenditure changes, and is an 

ad hoc member of the Urban Areas Security Initiative. This State 

Administrative Agency staff member was the audit team’s primary 

source of information for the Twin Cities Urban Areas Security 

Initiative. 

In accordance with the audit guide, provided by the DHS Office of 

Inspector General (OIG), Foxx & Company auditors conducted 

audit work at the State Administrative Agency and visited 22 

subgrantees including the Twin Cities Urban Areas Security 

Initiative. The 22 sites visited received 86.6% of the overall 3-year 

grant awards, with expenditures representing 50.2% of the dollar 

value expended. The awards for State Homeland Security Program 

and Urban Areas Security Initiative funds for FYs 2007 through 

2009 for the grant recipients visited represented the following 

percentage of the awards for these years respectively: 

91% of the 2007 State Homeland Security Program grant 

98% of the 2007 Urban Areas Security Initiative grant 

88% of the 2008 State Homeland Security Program grant 

90% of the 2008 Urban Areas Security Initiative grant 

66% of the 2009 State Homeland Security Program grant 

98% of the 2009 Urban Areas Security Initiative grant 

The subgrantees visited include: 

State Agencies 

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Department of Agriculture 

Department of Health 

Department of Military Affairs 

Department of Public Safety – Bureau of Criminal Activity 

Department of Public Safety – Homeland Security and 

Emergency Management 

Office of Enterprise Technology 

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

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


Page 29 

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Appendix A 

Purpose, Scope, and Methodology 

Urban Areas Security Initiative Subgrantees 

City of Bloomington 

City of Minneapolis 

City of St. Paul 

Dakota County 

Hennepin County 

Ramsey County 

Washington County 

Regions 

Region 1 --	 Olmsted County 

Region 2 --	 St. Louis County 

Region 3 --	 Northwest Regional Development Council 

Region 4 -- West Central Emergency Management 

Services 

Region 5 --	 Murray County 

Region 6 --	 Anoka County 

First Responders 

City of St. Cloud 

Kanabec County 

Metropolitan Emergencies Service Board 

The Homeland Security Grant Program awards to Minnesota for 

fiscal years 2007 through 2009 included the following programs 

and awards: 

Homeland Security Grant Program 

FYs 2007 through 2009 

Funded Activity FY 2007 FY 2008 FY 2009 Total 

State Homeland 

Security Program $6,580,000 $12,260,000 $10,985,500 $29,825,500 

Urban Areas 

Security Initiative $8,460,000 $8,206,000 $8,248,100 $24,914,100 

Total $15,040,000 $20,466,000 $19,233,600 $54,739,600 

Law Enforcement 

Terrorism 

Prevention Program $4,690,000 

Not 

Applicable 

Not 

Applicable $4,690,000 

Citizen Corps 

Program $258,136 $259,052 $257,808 $774,996 

Metropolitan 

Medical Response 

System Program $516,290 $642,442 $642,442 $1,801,174 

Grand Total $20,504,426 $21,367,494 $20,133,850 $62,005,770 

Source: Federal Emergency Management Agency 

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

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


Page 30
 

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Appendix A 

Purpose, Scope, and Methodology 

At each location, we interviewed responsible officials, reviewed 

documentation supporting State and subgrantee management of the 

awarded grant funds (including expenditures for equipment, 

training, and exercises), and physically inspected some of the 

equipment procured with the grant funds. 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 Minnesota 

offices, the State Administrative Agency point of contact for the 

Urban Areas Security Initiative, 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 Minnesota Homeland Security Grant Program. The team 

reviewed and analyzed data related to grant management and 

associated processes identified by the team and discussed with 

Minnesota 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; and 

Grant monitoring. 

We conducted the audit between December 2010 and May 2011, in 

accordance with Government Auditing Standards as prescribed by 

the Comptroller General of the United States (Yellow Book-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. 

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. 

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

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


Page 31 

Appendix A 

Purpose, Scope, and Methodology 

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 their 

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 Minnesota. 

While the audit was being performed and the report prepared under 

contract, the audit results are being reported by the DHS Office of 

Inspector General to appropriate Federal Emergency Management 

Agency and State of Minnesota officials. 

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

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


Page 32 

OCT 7 2011

\11 "lOR '\:'\0\'\1 FOR: Anne L, Richards

i\:-;sistant inspec10r (jcncrai j~)r Audits

Office (J-cncral

FRO"l: David J. Kaufman

Direct()!"

Orticc of Policy and Pn}gram :-\naly~is

SLBJECl: Clunmcnts to 01(; Drah Repurt, The Swte of Afinncsota

J!anagement o(S'tO!C !/()melond Security Program (SHSP) and

Crban ,/fl"cc/s ~)'ccurily Initiurh'cs (LASl) (;nulls ilH'arded during

/;-is('o! Years 2007 through 2009

Thank you for the {lpportunity 1(1 cOlllllK'nt Oil the dr:.lft report The findings in the report will he

ust:J to strengthen the effectiveness and efficiency of how we eXCeLlte and measure our

programs. We rccognJ7C the 111,.'CJ to cuntinuc to impro"l,'c the proCl.'~S, including i.lddrc."sing the

recommendations raised in this rcpOl1. Our responses to the rccommcndallons arc as foIlO\\'s:

OIG Recommendation #1: We recommend that the ,\ssist<lnt AdministwtoL Gr~Ult Programs

Directorate, require the \linneS\lta Department of Puhlic S,lfcty (111\1 its Division ufFlomcland

Sc<.:urity and Emergency \Lmat,'.cmcnt tIl formalize;l pohcy imel document procedures 11'r

penodical1y updating the State StratcfIv based upon current risk, Glpahilitrcs, and ncexIs

PrcPJ.fcdnt'';,'' Dlrcdoratc i,."PDt

guid,mce r~-.::gafding ! [',mclw:d Sen;rit)" Slnltegy

Appendix B 

Management Comments to the Draft Report 

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

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


Page 33 

application cycle. this n~w guidance will be rdeascd by the end of the YC:lr lOll tor till.: FY 20ll

HSGP applicaticm cycle. FEMA will require the State to fonna1izc a policy and document

pnx:t.'durcs for updating the State 5trah.'gy in cmnpJiiU1ce with rc\-is\,.'J guiddincs dc"clo[1l.:d by

NPD.

FEMA will continue to strengthen the language ofthe guidance in regards to this

rccnmmendatinll and request:' Ihal this recommendation he rcsoJycd and Ilpcn pending

implementation tlf the stated C(HTectivc action.

DIG Recommendation #2: \Ve recommend that the Assistant AdministrJtor, Grant Pwgrams

Directorate, require the Minnesota Department of Public Safety and its Division of Homeland

Security and Em,,:rgcl1cy Man<tg.clllcnt 10 incorporate goals and objectives in the updated State

Strategies that arc specitic, mCJsurablc. achievable. results-oriented, and time·limitcd.

FEMA Response: FEMA concurs wilh the rcconunendation. FEMA approved the stale's HSS

revision ofJunc 2011. Jt is FE\1A's opinion that these revised goals and objectives ure specific.

measureablc, achievable, results-oriented and time limited, and will serve the state well in its

homeland security efforts going f'()f\v;Jrd. Based on the resuhmitted HSS, FF.MA concludes that

this recommendation has sufficiently been addressed and requests that the. action be closed.

OIG Recommendation #.~: Vv't: recommend that the Assistant Administrator, Grant Programs

Directorate, require the Minne:-:ota Department of Pubhe Safety and its Division of HOlllcland

Security and Emergency lvlanagcment to develop p(''ftormance measures and collect and an.alyze

perfonnanee data from sub b'Tantccs to measure progress towards achieving goals and objectives.

FEMAResponse: FE1>-tA concurs with the intent ofthis recommcndatitm, specifically with the

intent to increase account~lbilily in meeting the goals and ohjectives of the SHSS. Although

FEMA supports the OIG's recommendation to regularly update the State Strategy, FEMA cannot

legally r('(Juire the rec.ommelllil.:d action at this time. fEMA NPD i~ rcsponsihle t()r the !-ISS

guidance, and is revising the guidance and content ofthe HSS which is anticipal<xi for release by

thl~ end of the year 2011 for the FY 2012 HSGP Jpplication cycle.

FE\1A will rCC<lmmend that th~ state develop perfollnance measures and collect and analy-Le

performance duta trom subgrantccs to IllCaSlln.: progress low~u'ds achieving. goals. FEMA will

continue t('l strengthen the language ofthe guidance In regards. to this rec.onunendation <lnd

n:"!llcsls that thl' w:.;tion be r~o!\'(.xI and open pendJll~ impkm.;nta!11'1l uflh(.: .statl'(.l ..:orn:;.:Uvc

action.

OIG Recomrncudutioo #4: W.; reconunend that thl: AssistJ...t"Jt Administrator, Grant Prcgrams

Directorai;:;_ reqlHrC the 'vlinne~(lta D..~partnl(·n1 ofPuh!ic Safety and its Dt\'isi(lll llfHcllHdand

Security and Emergency Management to establish a policy and mwntoring procedures I.hat

inClude the frequency of,')n-sil{: visi.t~. methNlolog:. for sekcting l'-uhgranices to '. jetit. and a

proiucoJ fix revie\nng Jioanciul d.nd pertoml<U1cc rdated aCli\.'ities during the Visits.

..-E:\1A R('spons(.': rEV1.-\ CO:h..UfS w!th thIS r~comm(,Hdatioa. Fl:vIA rCCt)gJ1ll.C.'-t the \"alue 01

hm.-ing dO....'UIDented processes for conducting husln(;'ss activities tD reduce the ri~k offailure and

2

Appendix B 

Management Comments to the Draft Report 

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

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


Page 34 

the State has devdopcd rolicics and procedures for managing sub grantee's program

pcrfcmnance, and fiscal compliance requirements. FEMA has recently recommended the State to

establish a more cohesi\'e plan that is aggressively used requiring timely on-site \'isits. \Vithin

90 days ofthe receipt of the response to the final report via the grantee notification, the SAA is

required tn ~ubmit this plan tn their tirD Program Analyst. FE\IA request> that this

rel:ommendation be resolved and open pending implementation ofthe stated corrective action,

OIG Recommendation #5: "'il' recommend that the Assistant Adll1inistrator, (irant PWhrrams

Directorate, require the Minnesota Department of Public Safety and its Di visi()J1 of Homeland

SecUlity and Emergency Management to develop a r.:hecklist for c'"aluating subgrantee

c(lmpliance with fedt.'fal grant requirements"

FE1\'1A Response: FEMA concurs with this recommendation. The Code of Federal Rq,rulatiolls

(eFR) Title 44, Section 13, provides dctailed instructIOns gnmt rer.:ipients must fnllow v,."hen

implementing Federal grant funding, Each state is monitored by FEMA to ensure compliance

\vith grant guidance and all Federal regulations and legislation. Grantees mList comply with all

Federal requirements per their acceptance ofthe applicable grant ten11s and conditions, also

known as special conditions of the grant lCl\vard. \Vithin 90 days of the receipt of the response to

the final report via the grantee notification, the SAA -will be required to submit to FEMA

documentation describing the method by which subgrantecs arc infonned about their obligatic'lJls

to l.:omply with a subrecipient b'rant award. FEMA requests that this recommendation he

resolved and open pending implementation ofthe stated corrective action.

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

Directorate. require the \1inncsota Department of Public Safety and its Division ofFlomcland

Security and Emergency ManagemL,'Ilt to identify criteria and methodology for assessing sub

grantee efficiency and cflccti,·cncss in accomplishing grant program objectives during

monitoring visits.

FEMA Response: FEMA eonr.:urs with the intent of this recommendation. Although FEMA

supports the intent ofthc OIG's recommendation to enhance the State's ability to measure

progress while it conducts on sitl: monitoring visits, FEMA cannot require the State to structure

its monitoring activities to achieve a particular outcome. However, in keeping with the

recommendation, FEMA wilL within ISO days of the receipt of the respollse to the tinal report

via the grantee notificatIon letter, request the SAA to review and make improvements to its

current subgrantee momtonng program F[\1.\ rccol11r:ncnd~ thi:- action be closed

OIG Rn:omrncndation #7: \\c rccon u'er;d the AS<'Ltnt ,'\dmlnistr:'itnr" (;nmt Pn'u.r;Jn!~,

Dn-.:ctoratc, reqUire the Deuartmcnt ofPvhlic S,j;{;tyits ufI-Iomcland

;\ccuritv ;!nd I'r1h:r2enn :\hl1'1;j~'_:c1ncn\ 1::: est:d,1ish f11 )ccdurc~ nut 5ub,':Janiec\

complying vvith propcn:c" managcll1Cnt fequln;.'ments

FE\IA Rl".ponS(·: FE\L\ C()nl:urs with this reconnnendulillll. The Code ufFedcralRcgulatwlls

(eFR) Titie 44 ~! 3,32 (d), AfoJwg;c!r!t:nt requirement,', staks the minimum requirements i()r

m;""'gll1g egulp1rl"·'H ,U ['U,m ; utds. t'iidt slat;' IS

ml'11.ltmcd hy FE\!!A rcquin.;rnenrs

Appendix B 

Management Comments to the Draft Report 

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

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


Page 35 

within 44 CFR. Grantees must comply with these standards in accurdancc WIth the applicable

grant temlS, conditions and assurances. \Vit11in 90 days of the receipt offhc response to the final

rqx)rt via the grantee notIfication, the SA/\ is required to provide a plan It)r managing grant

funded pftlperty and equipment to their GPD Program Analyst FEMA requests that tbis

recommendation he resoh·cd and open pending impJcmcntati(m of the stated com:ctivc action.

OIG Recommendation #8:\\'c recommend that the Assist:.mt Administrator. Grant Programs

Directorate, require the Minnesota Department of Public Safety and its Division of Homcland

Security and Emergency Management to direct subgrantees to establish and maintain property

management records in al.:cordance with federal requirements for equipment purchased with

federal funds, inventory all pwpcl1y purchased with grant funds, and periodically inspect

equipment to meet the federal 2-ycar reconciliation rcquirl.:ment.

FE:\tA Response: FEMA concurs with this recommendution. The eFR Title 44 § 13,J2 (d).

Management requirements, states the minimum requirements for managing equipment and

replacement equipment purchased \vith grant funds. Each state is monitored by' FEMA to ensure

compliance with the property manag(''111cnt requirements cited \vithin 44 CFR. Grantees must

comply ,,,,ith these standards in accordance with thc applicable gr::ll1t te1111."_ conditions and

assurances. Within 90 days ofthe receipt ofthe response to the tinal report via the grantee

notification, the SAA is required to provide a plan for managing grant funded property and

equipment to their GPD Probrram Analyst. FEMA requests that this recommendation be resolved

and open pending implementation of the stated corrective action.

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

Directorate_ require the Minnesota DcpaJ1ment of Public Safety and its Division of Homdand

Security and Emergency Management to prepare written policies and procedure~ for the review

and approval of sub grantee reimbursement requests.

FEMA Response: FEMA concurs with thi,<; rCCOmlllt11dmion. FE\1A acknowledges the need

for consistency in revie\',,' of all grant funded local, regional and state projects. V/ithin 90 days of

the receipt ofthe response to the tinal report via the grantee notifil'ation letter, the SAA will be

required to provide suppkmental subgrantec grant guidancc describing how subgrantee

reimbursement requests are processed and approved FEMA requests that this recommendation

be closed.

OIGRccolIUllcndutioIl # 10: We recommend that the ,-\s:;,i\t~lnt AdrninistnltoL Crrant PmgranJ:';

Directorate, r(~quirc the :\iinnesota Departmi;~nt of Public Safety and Division ,jf Homeland

S~x:urit)- .mel FmcrgerK} \'lnrugt:rncnt irnp1cmcnt ,\-'Tinen ;md pruccdurcC' dnd

ensure subgra.ntee rcimhuI~;emenl requests arc :;,upportcd by arpwpnate documentatIon.

l"E:\L\ Rt'spons('; FE\lA con,~'.urs tv:th thls C;;C0111lnt:ndauun. FE\rLi\ ackno\vk-dges the need

f(11" consi::;tcne-y in review of all rrrants hmded. region;:! and stateprc'1ects. FEMA c'onC.UfS

\\'ith the intent of the n:nll!unendation as a be:'t practice \"11h the ullJerstanding lhat the :;,tate lS

already compliant \virh!ts H.-1wrting requirements cited within theFET\-1.A grant program

gU1\LHICf p;\ckag('s. V/;lh1ll Ur th~,: t'c(:~';pt II,) tIlc f: IW) ICpiJrl th('

grwltec l:K'\V subgrall(r;c

Appendix B 

Management Comments to the Draft Report 

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

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


Page 36 

reimbursement n:qLlCst~ Jrc evaluated and pro~esscd to their GPD Program Analyst. FEMA

requests that thj,~ recommendation be resolved and open pending irnplcmcntatinll of the stated

C01Tcctivc acli(Jl1.

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

Directorate, require the Minnesota Dl1'artmcnt of Public Safety and its Division ofHomcland

Security and Emergen(y Management to den.-Iop and implement procedures to L'11SUrC tll.at

suhgrantL'Cs subm.it financial status and progr~ss reports in a timely manner.

FEMA Response: FEMA concurs with this recommendation. FEMA acknowledges that the

State Administr.:ltive Agency (SAA) for the State of\ttinncsota must ensure that sub grantees

submit financIal ~Uld progress reports ill a timdy manner. Within 90 days of the receipt ofthe:

response to the final report via the grantee nfltification. the SAA will be required to de-:c1op sub

grantee tlnancial and prugr~s reportmg processes to ensure that tundy submissions of the

reports occur. FEMA requests lhat this recommendation be resolved and open pending

impleme1ltation ofthe stated cOITccti\-e actions.

Recommendation #12: For those subgrantccs thM did nol submit financial status reports,

develop a mechanism to identify non-compliance and take appropriate action to ensure tinanciaJ

status reports are submitted.

FEMA Response: FEMA concurs with the OTG rccommt.'11dation. Within 180 days of the

receipt of the .rcs~X)llSC to the final report via the grantee notificatioll 1ctt<.."(, rhe SAA will be

required to submit documentation desl,.Tibing the State's subgrantee financial reporting

procedurl,.'S. FEMA requests thaI this rccomlllcmhltion be resolved and open pending

implementation (If the stated corrective actions.

OIG Recommendation #13: \Ve recommend that the Assistant Administrator, Grant Programs

Directorate. require the Minnesota Department of Public Safety and it~ Division of Homeland

Security and Emergency Management to develop a viable sustainability plan identif)'ing the most

important capabilities flfthe fusion center and sources of funding 10 maintain thllse capabilities

in future years

.FE'\lA Response: fE\I1\ c-om.:urs with the intent of the recommendation. Whih: FEMA

acknowledges that developing a sustainment plan would be both prudent <Hld valuable to the

StalL' and the loc,tl Jun')dlcti~)Jl~ which h::l\f~ bl'nd"iHcd from tllt:s\: graJlt funds, we also

acknO\v1edge thal there is no requircrn~:nt 'f()r Ihem tn do so FEMA canont legary require the

rcc'.)mmt;~ndcd 'h.:t\(ln,

MitlJ1cwtJ i<; 11<'( ir, vi0bi iflO qf rC1:,'-ulJn()n~ 111" grunt rcquir('rr;cnt~ by 110t h~1vlng ;] -"u~t<!i:rrn('n1

plan. bnpt)sillg this requirement on Miul1CSOtillS unrcasonubie and mequll..thle, :S1llce su:<talwllellt

pIJ~" are n~--,t a requirement of a11 g:rant recirlcnts. Till.' issue '..1flf'ng-tenn :-;lJslainment of

initiatives IS a cross-cutting issue that should he disl..:ussed aT. the highest 1~\"eJs of DHS, as

requiring a State (Jr Urball. ArcJ to complete such a !..Jsk r..as hroad policy implications for the

H<.mlCland Secunl)- Grdnt Progum. Due to nudget Cf)nstraints 31. tIlt' fooeral anu s~ate levds, thIS

unfunded mandat~ to create such a pIa11 would place undue burden on the State.

Appendix B 

Management Comments to the Draft Report 

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

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


Page 37 

FEMA suggests the following corrective action:

\Vitbin 90 days ofthe receipt of the final report, PGD will recommend that the SAA examine

ways to sustain State Fusion CI.-'f1tcr opl."fations utilizing the HSGP investment justification

process. FEMA believes this satisfies me inlt:nt ofthe recommendation and requests that this

recommendation he resolved <lnd c1osi..xL

OIG Recommendation #14: We rewmmend that the Assistant Administrator, Grant Programs

Directorate, require the Minnesota Department of Public Safety and its Di\;sion of Hom(;,'land

Security and Emergency Management to implement Office of Legislative Audit's

recommendation that the Depanmcnt of Publil'. Safety document its risks, control activities, and

internal control monito.ring ti..mctions for federal program requirements.

FEMA Response: FEMA concurs with this recotlll1lendation. FEMA recognizes the value of

having processes in place t('l reduce risk dllring the conduct of daily business activities. FEMA

requests that the SAA devise a timelinc for developing risk management processes. W,ititin 90

days ofthe receipt ofthe. response to the tinal report via the grantee notification Ietter~ the SAA

is required to submit to FEMA n thneline the SAA ,,,,ill follow to develop a risk management

plan that supports the internal cOlltrols and monitoring functions of the State. FEMA requests

that this recommendation be rc~olved and open pending implcmt."J1tation of the stated corrective

aCTIon.

OIG Recommendation #15: We recommend that the Assistant Administrator, Grant Programs

Directorate. require the Minnesottl Department ofPuhlic Safety and its Division of Homeland

Security and Emergency Management to establish a process that docwnellts signiticant control

deficiencies and risks 1hal arc periodically identified, as well as the corrt'(:tive .. actions taken to

address the dc.ficiencics.

F.EMA Response: fEM!\ concurs with this recommendation. FEMA recognizes the value of

having documented processes for conducting busincss activities to reduce risk. FEMA will

request that the SAA dcvdop a (imcline to generate a risk management plan that wilJ belp

dcx.llment needed internal controls that will reduce risk. Within 90 days ofthe receipt ofthe

response to the tinal report via the grantee notification letwT. the SAA will be required to submit

a tirneline to FEMA. FEMA requests that this recommendation be resolved and open IX--nding

impidlicnlation ofthe :'lJlcd .,;crrccti'\'c ~ction.

\Yc thank YO\l f(lr the opportunity to rt;:view <1:11 update om commt..11~ to your rt~commendatjons

contained in your draft report. Should you have further questions rc:gardiug our respollit; pIe-else

do not hesitate to call fE\1A'!' ChiefAudit Liaison. Brad Shetka. Jl 202~6.ffi..lJ08.

6

Appendix B 

Management Comments to the Draft Report 

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

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


Page 38 

MINNESOTA DEPARTMENT OF PUBLIC SAFETY

Homeland Security and Emergency Management

444 Cedar Street· Suile 223· Saint Paul, Minnesota 55101-6223

Phone: 651-201-7400' Fax: 651-296-0459' rry: 651-282-6555

11Up:ilhsem.dps.mn,go\

Date 09-13-11 Alcohol

and Gambling

Enforcement Martin W. O'Neilt

Bureau of Foxx & Company Criminal 700 Goodall Complex Apprehension 324 West Ninth Street

Driver Cincinnati, OB 45202 and Vehicle

Services

Emergency Dear Mr. O'Neill: Communication

Networks

We were provided a copyofthe draft audit repclli oftl1o Homeland Security Program and Homeland Urban Area Security Initiative Grants f()J' Fiscal Years 2007 through 2009. Thank yOll t()f Security and the

Emergency opportunity to go over the recommendations at the exit conference. It win be very helpful to Management our managcmcnt of Homeland Security Grants in the future. This is ollr written response to

Minnesota the recommendations presented in the draft report. State Patrol

Office of Recommendalions Communications

Office of We [Foxx & Company] recommend that the Assistant Administrator. Grant Programs

Justice Programs Directorate, require the Minnesota Department of Public Safety and its Division ofHomeland

Security and Emcrgt'llcy Management Office of to:

Pipeline Safely

Recommendation #1:· rormalize a policy and document procedures for periodically updating Office of

Traffic Safety the State Strategy based upon cmrcnt risk, capabilities, ~l1ld nccdsasscssmcnts.

Stale Fire

Marsha! Miltlle.\·ofa Response #1:

MN HSEM will amcnd its currcntstate homeland security strategy (dated June 2011) to

include a policy statement in Section I adopting a two-year planning cycle for reviewing and

revising the strategy. After validating the organization's mission, vision, and values. wc will

conduct a thorough situational analysis that looks at strengths, weaknesses, opportunities, and

challenges/threats. We will usc the Threat and Hazan.lldcntification and Risk Assessment

(THIRA) methodology to help us understand the risks we face, facilitate effOits to identify

capability and resource gaps, [OCllS capability improvements, ;Uld drive actions to manage

those risks.

Estimated Completion Date

December 31. 2011

Appendix B 

Management Comments to the Draft Report 

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

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


Page 39 

Recommendation #2: Incorporate goals and objectives in the updated State Striltegies that are specific,

measurable, achievable, results-oriented, and time-limited.

Minnesota Response #2:

As part of the st.rategic plan update described in response to recommendation # I. HSEM will develop

specific, measurable, achievable. result-oriented. and time-limited (SMART) goals to close our

capability gaps and achieve our strategic cnd state(s). Nested under each of those strategic goals, will

be SMART objectives that must be achieved in order to accomplish those higher goals. After that, we

will develop action plans/implementation steps necessary to achieve the SUpPol1ing objectives. The

action plans are critical to deploying the strategic plan.

Estimated Completion Date

December 31,2011

Recommemlation #3: Develop performance meflsures and conect and analyze performance data from

sub grantees to measure progress towards achieving goals and objectives.

Minnesota Response #3:

The final step in the strategic plan update process will be the development of key perfOlmance

measures and indicators. These measurements \\'ill focus on the accomplishment of actions plans,

effectiveness of process improvement initiatives, and satisfaction of key success factors in order to

track our progress towards achieving our strategic goals and objectives. This data will be collected,

validated, distributed, presented, and reviewed on a qUaJterly basis. We will develop a consistent

performance measurement scorecard to regularly distribute the metrics to alI stakeholders. Analysis of

pcrtonnance measures will drive adjustments to opemtiol1s and future strateRY changes.

Estimated Completion Date

December 31.20 J 1

RccommcmlatiOiI #4: Establish a policy and monitoring procedures that include the frequency of onsite visits, methodology for selecting sub grantees to visit, and a protocol for reviewing financial and

perfonnance related activities during the visits.

Minne.fottl Response #4:

The department created a Grant JVlonitor position, which was filled in the spring of2011, The Grant

Monitor is currently working all cstabli:,;1Jing a policy and set of procedures to guide the m()J1itoring

process, Once established, they will be incorporated into a written document that will provide

guidelines for the monitoring of all state administered Homeland Security Grant Program grants. This

document witl include a policy and process for deicnniningthe frequency and recipients of on-site

visits, and a protocol for reviewing financial and perfi:)Onance related activities during the visits,

Estimated Completion Date

December 1. 2011

Recommendation #5: Develop a checklist for evaluating sub grantee compliance with federal grant

requirements.

2

Appendix B 

Management Comments to the Draft Report 

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

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


Page 40 

Minnesota Response #.'i:

The Grant Monitor is cunently working on developing a checklist that will be used to ensure that subgnliltees arc administering their Homeland Sc<:urity Grant Program grants in a<:con.lan<:t:: \vith all ft:dcml

requirements. This checklist will be thowugh and detailed, and allow f<lr the state's monitoring to be

consistent and dear. Once completed, it will be induded as an attachment to the monitoring policy and

procedure document.

Estimatcd Complt;tion12atl;.

December 1, 2011

Recommendation #6: Identify criteria and methodology for assessing sub grantee efiiciencyand

effectiveness in accomplishing grant program objectives during monitoring visits.

Minnesota Response #6:

The Granl Monitor is ClllTcntly working on estabUshing a clear process for measuring eHlciency and

effectiveness ofsub-grantecs. It is expected that this process will include a thorough comparison of

projected timelincs and activity to date; goals to outcomes, and open dialogue with sub-grantee grant

program representatives, Once completed, this criteria and methodology will be included in the

monitoring policy and procedure document.

I::!>Hmi!-.t~_Q._l:::.9J!U~Jction Date

December 1, 2011

Recommendation #7: Establish procedures to ensure that sub grantees are complying ","ith property

management requirements.

Minne.fOta Response #7:

The Grant Monitor is currently working on fonnulating a set of procedures to ensure that sub-grantees

are in compliance with property management requirements. Once completed, it will be included in the

monitoring policy and procedure document and used to measure the compliance ofsub·grantecs as a

part ofthe monitoring process.

Ji.'i.timat!,iJLCQ!!ll21~tionDate

December J, 201 1

Recommendation #8: Direct sub grantees to establish and maintain property management records in

accordance \vith federal requirements for equipment purchased with fedcral funds. inventory all

property purchased with grant funds, and periodically inspect equipment to meet the federal2·ycar

reconciliation requirement.

Minnesota Response #8:

The Grant Monitor is currently working on fonnulating a set of procedures to ensure that sub-grantees

are in compliance with property management requirements. Once completed, it will be included in the

monitoring policy and procedure document and used to measure the compliance ofsub"grantees as a

part ofthe monitoring process. Additionally, Grant: Staff will share federal property management

requirements, including the development of propelty management records and completion of property

inventories and equipment inspections, Vi,ith all subwgrantees.

3

Appendix B 

Management Comments to the Draft Report 

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

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


Page 41 

Estimated Completion Date

December 1,201 J

Rl'commendatiol1 #9: Prepare written p(1Jicies and procedures for the review and approval ofsub

grantee rcimbmsement requests.

ftfinllesola Re.~7)01Ue #9:

Draft policy and procedure have becn prepared and will be finaH7ed within 60 days.

J~stimated Completion Date

November 16.2011

Recommendation #10: Implement the \vritten policies and procedures and ensure that sub grantee

reimbursement requests are 5upporred by appropriate documentation.

AJinnesola Respon."e #10:

Draft policy and procedure have been prepared and will be finalized within 60 days.

.Estimated Completion Date

November 16,2011

Recommendation #11: Develop and implement procednres to ensure that sub grantees submlt financial

status and progress reports in a timely manner.

Minnesota Response #1 J:

HSEM has instituted quarterly progress reports and quarterly financial status reports in its on~lil1e grant

management system, DPS E-Grallts. Each sub-grantee receives a e-mail notice that qum1erly reports

are due. If a sub-grantee does not file a quarterly progress repmt, then he/she is unable to file a

quatierly financial status fepott to receive reimbursement tor expenditures. After the due datc, the grant

manager will produce a report from E-Grants that will indicate which sllb-grantees have not filed

progress rcports and the grant manager will again generate an e-mailnotificatiOil that the progrc~s

report and financial status report arc pasto-due. Sub-grantees arc expected to submit financial status

repOits 011 a qUalterly basis even if no expenditures were incurred in a particular quarter.

Estimated Completion [)ate

Completed

Recommelldatiol1 #12: For those sub grantees that did not submit financial status reports, withhold

payment for expcnditures until final status report~ are submitted.

Minnesota Response #12:

l-ISEM has instituted qUUlterly progress reports and qUa11crly financial status reports in its on-line grant

management system, DPS E-Grants. Each sub-grantee rcceives a e-mail notice that quarterly reports

are due. If a sub-grantee does 110t file a quarterly progress repori, then he/she is unable to file a

quarterly financial status report to receive reimbursement for expenditures. After the due date, the grant

manager will produce a rCpOt1 from E~Grants that wilJ indicate which sub-grantees have not filed

progress repOlts and the grant manager will again generatc an c-mail notification that the progress

repOlt and financial status report are past-due. Sub-grantees are expected to submit financial status

fCPOlis on a quarterly basis even if no expcndit{lre~ were incun-ed in a partieul'lr qum1er.

4

Appendix B 

Management Comments to the Draft Report 

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

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


Page 42 

Estimated Complelio.nJ2nJ~

Completed

Reconunetulation #13: Develop a viable sustainahility phm identifying the most important capabilities

ofthe fusion center and sources offunding to maintain those capabilities in future years.

Miunesota Response #13:

The state of Minnesota is in the process of assessing the needs ofthe communities and assessing the

capabilities and future scope oftile Minnesota Joint Analysis Center (MNJAC). We are entering into

conversations with the Deputy Under,secrdmy for Tntelligcllcc and Analysis ofthe Depm1ment of

Homeland Security (DHS) and a number of public safety officials to provide information regarding the

DHS perspective as well as funding and future considerations. \\le hope to use this meeting as a

springboard toward a larger discussion on what the future Minnesota Fusion Center should encompass.

From these conversations" the Department ofPublil: Safely whicll is the parent organization of

Homeland Security and Emergency Management (the SAA) will develop a recommendation for the

Governor/Legislature. This will be the hasis for a MNJAC susiainability plan.

The stakeholder meeting will be conducted in October 20 11. The recommendation will be fonvarded to

the Governor's office by December, 2011. The 2012 legislative session begins January 24, 2012.

Recommendation #14: Implement Office of Legislative Audit's recommendation that the Department

of Public Safety document its risks, control activities, and internal control monitoring functions for

federal program re.quirClllents.

Jrfinnesota Resplmse #.14:

The depm1ment has created an Internal Audit Unit and an Internal Auditor Director position, Our

agency has attempted to filt the position several times, without SllCCCSS. The depm1ment is in the

process ofreviewing a new set of applications and plans on tilling this position as soon as possible. In

addition, the Department ofPublic Safety leadership met with the Internal Control and Accountability

Director and an Internal Control Specialist from the Minnesota t\"1anagcment and Budget Agenc.y

(t\'lMB) on February 16.2011. The purpose oftlle meeting was to review risk assessment training

infonnation compiled by ~IIMB to assist DPS with future internal control devclopnlent and

implementation. The department will more formally document its risks. control activities, and internal

control monitoring functions for Jederal program requirements once the Internal Audit Unit is staffed.

An updated Department \Vide Internal Controls policy was approved on 516/2010.

Estimated completion Dat«

November 1, 2011

Recommendation #15: Establish a process that documents significant control deficiencies and risks

that are periodically identified, as weB as the correctivc actions taken to address the deficiencies.

Minlle,sol" Response #15:

The department is in the process oftrying to fill the Internal Audit Director position. Once this is

accomplished, the Intemal Audit Director will work with the DPS Alldit Committee, and he resrlOn",ihlc

for estahlishing a process to document, monitor and create corrective action plans for significant control

deficiencies.

5

Appendix B 

Management Comments to the Draft Report 

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

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


Page 43 

Also, the Intel'l1al Audit Director will work closely with Minnesota Management and Budget (MMB),

and become an active member ohlle state Internal Audit Committee to gain knowledge and develop

expertise in internal controls.

Estimated c~oI]lliJetion"p..J!t~

December 1, 2011

Ifyon have any further questions or concerns plea.'ie feel free to contact Jon Hnspek @ 651-201 w7454.

Sincerely,

,,I ,...

-)/ II (~ i>yt':V LL {UJl

Kris!Eide

Director

Homeland Security & Emergency Management

6

Appendix B 

Management Comments to the Draft Report 

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

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


Page 44 

 

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 Minnesota’s Management of State Homeland Security Program and 
 

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


Page 45 

Director 

HSEM 

(Executive Management 

Strategic Direction) 

Deputy Director 

(Daily Operations) 

Administration and 

Grants Branch Director 

Recovery, Mitigation 

Branch Director 

Response and Homeland 

Security Branch Director 

Preparedness 

Branch Director 

Preparedness 

Branch Director 

Budget Financial 
 

Management
 


Office
 


Management
 


Grants Admin 
 

Support
 


Purchasing
 


Contracts
 


Homeland Security 
 

Fusion Center 
 

Liaison Infrastructure 
 

Protection
 


Operations State 
 

Response Assets 
 

State Emergency 
 

Operations Center 
 

Logistics
 


Disaster Programs 
 

Public Assistance 
 

Individual
 


Assistance
 


Recovery
 


Coordination
 


Hazard Mitigation
 


Grant Programs All-Hazards Regional 

Urban Area 

Security Initiative 

Planning 

Radiological 

Emergency 

Preparedness 

Continuity of 

Coordinators 

Emergency 

Planning and 

Community 

Right-of-Way Act 

Operations 

School Safety 

Source: Minnesota Division of Homeland Security and Emergency Management 

Appendix D 

Minnesota State Administrative Agency Organization 

Minnesota Homeland Security and Emergency Management 

2011 

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

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


Page 46 

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 Minnesota’s Management of State Homeland Security Program and 
 

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


Page 47
 

 

 

ADDITIONAL INFORMATION AND COPIES 

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

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

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

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

OIG HOTLINE 

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

or noncriminal misconduct relative to Department of Homeland Security programs and 

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• 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.