Testimony Before the Subcommittee on 

Economic Development, Public Building 

and Emergency Management, House 

Committee on Transportation and 

Infrastructure

United States General Accounting Office 

GAO

For Release on Delivery 

Expected at 12:00 p.m. EDT 

Thursday, May 13, 2004 EMERGENCY 

PREPAREDNESS 

Federal Funds for First 

Responders 

Statement of William O. Jenkins, Jr., Director 

Homeland Security and Justice Issues 

GAO-04-788T 
www.gao.gov/cgi-bin/getrpt?GAO-04-788T. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Wiiliam O. 

Jenkins, Jr. at (202) 512-8777 or 

jenkinswo@gao.gov. 

Highlights of GAO-04-788T, a report to 

Subcommittee on Economic Development, 

Public Buildings, and Emergency 

Management, House Committee on 

Transportation and Infrastructure 

May 13, 2004

EMERGENCY PREPAREDNESS

Federal Funds for First Responders 

The reports of the Department of Homeland Security Office of Inspector 

General (OIG) and the House Select Committee on Homeland Security 

examined the distribution of funds to states and localities. Both reports 

found that although there have been delays in getting federal first-responder 

funds to local governments and first-responder agencies, the grant 

management requirements, procedures, and processes of the Office for 

Domestic Preparedness (ODP) were not the principal cause. According to 

the OIG’s report, in fiscal years 2002 and 2003, ODP reduced the time 

required to provide on-line grant application guidance to states, process 

grant applications, and make grant awards. For example, for fiscal year 2002 

grants, it took 292 days, on average, from the time the grant legislation was 

enacted to the awarding of grants to states. For fiscal year 2003 grants, the 

total cycle was reduced to 77 days, on average. 

According to the reports, most states met deadlines for subgranting firstresponder funds to local jurisdictions. The fiscal year 2003 State Homeland 

Security Grant Programs and Urban Area Security Initiative required states 

to transfer 80 percent of first-responder grant funds to local jurisdictions 

within 45 days of the funds being awarded by ODP. Most states met that 

deadline by counting funds as transferred when states agreed to allocate a 

specific amount of the grant to a local jurisdiction, the OIG’s report found. 

The House Select Committee staff concurred. And in the three states GAO 

examined, states certified they had allocated funds to local jurisdictions 

within the 45-day period. 

Delays in allocating grant funds to first responder agencies are frequently 

due to local legal and procedural requirements, the OIG’s report found. State 

and local governments sometimes delayed delivery of fiscal year 2002 grant 

funds, for example, because governing and political bodies within the states 

and local jurisdictions had to approve and accept the grant funds. GAO’s 

work indicated a similar finding. In one state GAO reviewed, roughly four 

months elapsed from the date the city was notified that grant funds were 

available to the date when the city council voted to accept the funds. 

Both reports GAO reviewed found that state and local procurement 

processes have, in some cases, been affected by delays resulting from 

specific procurement requirements. While some states purchase firstresponder equipment centrally for all jurisdictions, in some instances, those 

purchases are made locally and procurement may be delayed by competitive 

bidding rules, among other things. 

It is important to note that those who manage homeland security grants to 

states and local governments must balance two sometimes competing goals: 

(1) getting funds to states and localities expeditiously and (2) assuring that 

there is appropriate planning and accountability for the effective use of the 

funds.

The terrorist attacks of September 11,

2001, highlighted the critical role first 

responders play at the state and local 

level when a disaster or emergency 

strikes. In fiscal years 2002 and 2003, 

Congress appropriated approximately

$13.9 billion for domestic 

preparedness. A large portion of 

these funds were for the nation’s first 

responders to enhance their ability to 

address future emergencies, 

including potential terrorist attacks. 

These funds are primarily to assist 

with planning, equipment purchases, 

training and exercises, and 

administrative costs. They are 

available to first responders mainly 

through the State Homeland Security 

Grant Programs and Urban Area 

Security Initiative grants. Both 

programs are administered through 

the Department of Homeland 

Security’s Office for Domestic 

Preparedness. 

In this testimony, GAO addressed the 

need to balance expeditious 

distribution of first responder funds 

to states and localities with 

accountability for effective use of 

those funds and summarized major 

findings related to funding 

distribution delays and delays 

involving funds received by local 

governments, as presented in reports 

issued by the Department of 

Homeland Security Office of 

Inspector General and the House 

Select Committee on Homeland 

Security. The testimony incorporated 

supporting evidence on firstresponder funding issues based on 

ongoing GAO work in selected states. 
Page 1 GAO-04-788T 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss federal funding for first 

responders. The events of September 11, 2001, spotlighted the critical role 

that the nation’s first responders play in responding to and mitigating the 

effects of a terrorist attack. In fiscal years 2002 and 2003, Congress 

appropriated nearly $13.9 billion for domestic preparedness programs. The 

largest sources of federal funds for first responders were the State 

Homeland Security Grant Programs (in fiscal year 2002 called the State 

Domestic Preparedness Program), distributed to states1

 using a formula 

that provides each state a base amount plus additional funds based on 

population, and the Urban Area Security Initiative Grants, distributed to 

selected urban areas based on such factors as population density, critical 

infrastructure, and potential threats. These monies were generally 

available for planning, equipment, exercises, training, and administrative 

costs. 

My statement provides: 

• A brief discussion of some basic issues associated with using first 

responder funds effectively. 

• The major findings reported recently by the Department of Homeland 

Security (DHS) Office of Inspector General2

 (OIG) and the House 

Select Committee on Homeland Security3

 (House Select Committee) on 

the reasons for delays in distributing first responder funds to local 

governments and delays in using those funds once received. 

• Some examples from our work in three states that support the findings 

in these two reports. Our work to date has provided no information 

that would contradict the major findings of these two reports. 

GAO is currently conducting several reviews related to first responder 

grants. One of these reviews, to be published within the next few weeks, 

addresses issues of coordinated planning and the use of federal grant 

 1

Funds are also distributed to the District of Columbia, Puerto Rico, and the four 

territories. 

2

Department of Homeland Security: Office of Inspector General, An Audit of Distributing 

and Spending “First Responder” Grant Funds, OIG-04-15 (Washington, D.C.: Mar. 2004). 

3

House Select Committee On Homeland Security, An Analysis of First Responder Grant 

Funding, (Washington, D.C.: April 2004). 

Scope and 

Methodology 
Page 2 GAO-04-788T 

funds for first responders in the National Capitol Region, which 

encompasses the District of Columbia and 11 surrounding jurisdictions. 

Another effort is focused on intergovernmental efforts to manage fiscal 

year 2002 and 2003 grants administered by the Office for Domestic 

Preparedness (ODP) within the Department of Homeland Security (DHS). 

Because much of our work in this area is ongoing and our findings remain 

preliminary, my testimony today will focus principally on the major 

findings of the reports on preparedness funding issued by the DHS OIG 

and the House Select Committee, supplemented by some examples from 

our work in four selected locations in three states. Our analysis focused on 

three ODP grant programs: the State Domestic Preparedness Grant 

Program of fiscal year 2002, with $315,440,000 in appropriations, and the 

fiscal year 2003 State Homeland Security Grant Programs, Parts I and II, 

with appropriations of $566,295,000 and $1,500,000,000, respectively. The 

purpose of this work was to document the flow of selected fiscal year 2002 

and 2003 grant monies from ODP to local governments and the time 

required to complete each step in the process. In doing this work, we met 

with state and local officials in each state and obtained and reviewed 

federal, state, and local documentation. We did this work between 

December 2003 and February 2004 in accordance with generally accepted 

government auditing standards. 

In recent months, the Conference of Mayors, members of Congress, and 

others have expressed understandable concerns about delays in the 

process by which congressional appropriations for first responders reach 

the local fire fighter, police officer, or other first responder. The reports by 

DHS OIG and the House Select Committee examined the distribution of 

homeland security grant funding to states and local governments to 

understand what obstacles—if any—prevent the expeditious flow of grant 

funding from the federal government to state and local governments. 

In March 2003, ODP was moved from the Department of Justice to the 

DHS. In fiscal years 2002 and 2003, ODP managed about $3.5 billion under 

16 separate grant programs. Generally, states and local grant recipients 

could use these funds for some combination of training, new equipment, 

exercise planning and execution, general planning efforts, and 

administration. The largest of these grants were the State Homeland 

Security Grant Programs and the Urban Area Security Initiative grants. In 

both grant programs, states may retain 20 percent of total state grant 

funding but must distribute the remaining 80 percent to local governments 

within the state. 

Background 
Page 3 GAO-04-788T 

Before discussing some of the issues that have been raised about the 

distribution of federal grant funds to first responders, I would like briefly 

to discuss some basic issues associated with using those funds effectively. 

A key goal of first responder funding should be developing and 

maintaining the capacity and ability of first responders to respond 

effectively to and mitigate incidents that require the coordinated actions of 

first responders. These incidents encompass a wide range of possibilities, 

including daily auto accidents, truck spills, and fires; major natural 

disasters such as floods, hurricanes, and earthquakes; or a terrorist attack 

that involves thousands of injuries. Effectively responding to such 

incidents requires well-planned, well-coordinated efforts by all 

participants. Major events, such as natural disasters or terrorist attacks, 

may require the coordinated response of first responders from multiple 

jurisdictions within a region, throughout a state or among states. Thus, it 

follows that developing a coordinated plan for such events should 

generally involve participants from the multiple jurisdictions that would be 

involved in responding to the event. However, a major challenge in 

administering first responder grants is balancing two goals: (1) minimizing 

the time it takes to distribute grant funds to state and local first 

responders and (2) ensuring appropriate planning and accountability for 

effective use of the funds. 

In fiscal years 2002 and 2003, at least 16 federal grants were available for 

first responders, each with somewhat different requirements. Previously, 

we have noted that substantial problems occur when state and local 

governments attempt to identify, obtain, and use the fragmented grants-inaid system to meet their needs.4

 Such a proliferation of programs leads to 

administrative complexities that can confuse state and local grant 

recipients. Congress is aware of the challenges facing grantees and is 

considering several bills that would restructure first responder grants. 

 4

See U.S. General Accounting Office, Homeland Security: Reforming Federal Grants to 

Better Meet Outstanding Needs, GAO-03-1146T (Washington, D.C.: Sept. 3, 2003). 

Issues Associated 

With Using First 

Responder Funds 

Effectively 
Page 4 GAO-04-788T 

Much of the concern about delays in distributing federal grant funds to 

local first responders has involved the State Homeland Security grants 

which are distributed to states on the basis of a formula. Each state 

received 0.75 percent of the total grant appropriation, with the remaining 

funds distributed according to state population. 

There are a number of sequential steps common to the distribution of ODP 

State Homeland Security Grants from ODP to the states and from the 

states to local governments. They include the following: 

1. Congress appropriates funds. 

2. ODP issues grant guidance to states. 

3. State submits application, including spending plans, to ODP. 

4. ODP makes award to states noting any special conditions that must 

be cleared before the funds can be used. 

5. State meets and ODP lifts special conditions, if applicable. 

6. State subgrants at least 80 percent of its funds to local 

governments. 

7. Local governments purchase equipment directly or through the 

state. 

8. Local governments submit receipts to the state for reimbursement. 

9. State draws down grant funds to reimburse local governments. 

The total time required to complete these steps is dependent upon ODP 

requirements and state and local laws, requirements, regulations, and 

procedures. Generally, the DHS OIG report and the report of the House 

Select Committee on Homeland Security found similar causes of delays in 

getting funds to local governments and first responder agencies. These 

included delays in completing state and local planning requirements and 

budgets; legal requirements for the procedures to be used by local 

governments in accepting state grant allocations; the need to establish 

procedures for the use of the funds, such as authority to buy equipment 

and receive reimbursement later; and procurement requirements, such as 

bidding procedures. Generally, neither the IG report nor the House Select 

Basic Steps in 

Distributing State 

Homeland Security 

Grant Funds 
Page 5 GAO-04-788T 

Committee report found that the delays were principally due to ODP’s 

grant management procedures and processes. 

Both the DHS OIG report and the House Select Committee report found 

that ODP’s grant applicant process was not a major factor in delaying the 

distribution of funds to states. The DHS OIG found that in fiscal years 2002 

and 2003, ODP reduced the time it took to make on-line grant application 

guidance and applications available to states, process grant applications, 

and award the grants to states after applications were submitted. The DHS 

OIG found that the total number of days from grant legislation enacted to 

award of grants to states declined from on average 292 days for fiscal year 

2002 grants to on average 77 days for fiscal year 2003 grants. For the three 

states we examined, we found that the time between the enactment of the 

appropriation and ODP’s award of the grant to these states declined from 8 

months in fiscal year 2002 to 3 months for fiscal year 2003 State Homeland 

Security Grant Program, Part I, and 2 months for fiscal year 2003 State 

Homeland Security Grant Program, Part II. 

One factor that did delay the states’ ability to use ODP grant funds was the 

imposition of special conditions. In fiscal years 2002 and 2003, ODP 

imposed special conditions for the state homeland security formula grants 

if the state had failed to adequately complete one of the requirements of 

the grant application. For example, in fiscal years 2002 and 2003, to 

receive funding states had to submit detailed budget worksheets to 

identify how grant funds would be used for equipment, training, and 

exercises. To accelerate the grant distribution process, ODP would award 

funds to states that had not completed the budget detail worksheets, with 

the special condition that states and locals would be essentially unable to 

use the funds until the required budgets were submitted and approved. 

Thus, the time it took to lift the special conditions was largely dependent 

upon the time it took state and local governments to submit the required 

documentation. States could not begin to draw down on the grant funds 

until the special conditions were met. In one state we reviewed, ODP 

notified the state of the special conditions on May 28, 2003, and the 

conditions were removed on August 6, 2003, after the state had met those 

conditions. In another state, ODP notified the state of the special 

conditions on September 13, 2002, and the conditions were removed on 

March 18, 2003. 

ODP imposed special conditions on both the fiscal year 2002 State 

Domestic Preparedness Grant Program and the fiscal year 2003 State 

ODP Grant Awards to 

the States 
Page 6 GAO-04-788T 

Homeland Security Grant Program, Part I, but not on the State Homeland 

Security Grant Program, Part II. 

After ODP makes its initial award, the state must subgrant at least 80 

percent of its grant award to local units of government. In fiscal year 2003, 

the states had to certify to ODP within 45 days that they had made these 

subgrants.5

 The subgrant entities and procedures can vary with each state, 

making it hard to generalize about this phase of the distribution process. 

In our work, we found that some states subgranted the funds to the county 

level, while another subgranted to regional task forces composed of 

several counties. Subgrantees also varied in their procedures to distribute 

funds to local governments. Some subgrantees managed the grant process 

themselves, while others chose to pass funds further down, to a county or 

city within the jurisdictional area. 

As reported by the DHS OIG, Congress adopted appropriation language for 

the fiscal year 2003 State Homeland Security Grant, Part II, that required 

states to transfer 80 percent of first responder grant funds to local 

jurisdictions within 45 days of the funds being awarded by ODP. This 

requirement was included in the appropriation bill to ensure that states 

pass funds down to local jurisdictions quickly, and ODP incorporated this 

requirement into its grant application guidance. However, according to the 

DHS OIG report, this action had a limited effect because most states met 

the 45-day deadline by counting funds as transferred when the states 

agreed to allocate a specific amount of the grant to a local jurisdiction, 

even if the state had not determined how the funds would be spent or 

when contracts for goods and services would be let. Additionally, many 

states and local jurisdictions delayed spending of prior year grant funds in 

order to meet the fiscal year 2003 requirement. The House Select 

Committee staff also reported that nearly all states met this 45-day 

requirement with respect to 2003 funding as of February 2004, but noted 

that this may not reflect the actual availability of funds for expenditures by 

local jurisdictions. The committee report cited the example of Seattle, 

Washington. While it had been awarded $30 million in May 2003, Seattle 

received authorization to spend these funds only shortly before the April 

2004 release of the committee’s report. In the three states we examined, 

 5

For fiscal year 2004 grants, states were allowed 60 days. 

State Awards to Local 

Governments 

Most States Met Deadline 

for Subgranting Funds But 

Some Local Jurisdictions 

Were Not Prepared to 

Spend Funds 
Page 7 GAO-04-788T 

we also found that states had certified they had allocated funds to local 

jurisdictions within the required 45-day period. 

According to the DHS OIG, state and local governments were sometimes 

responsible for delaying the delivery of fiscal year 2002 grant funds to first 

responders because various governing and political bodies within the 

states and local jurisdictions had to approve and accept the grant funds. 

Six out of the 10 states included in the DHS OIG’s sample reported that 

their own state’s review and approval process was one of the top three 

reasons that the funds had not been spent by the time the report was 

published. For example, one of three states for which data were available 

took 22 days to accept ODP’s award and 51 days to award a subgrant to 

one of its local jurisdictions; the local jurisdiction did not accept the grant 

for another 92 days. Another state took 25 days to accept ODP’s grant 

award and up to 161 days to award the funds to its local jurisdictions. 

Local jurisdictions then took up to 50 days to accept the awards. 

Our work showed similar results. One city was notified on July 17, 2003 

that grant funds were available for use, but the city council did not vote to 

accept the funds until November 7, 2003. 

The House Select Committee reported that, in over half of the states they 

reviewed, local jurisdictions had not submitted detailed spending plans to 

the states prior to the time the states had transferred grant funds to them. 

Specifically, they found that often times, even though a reasonable 

estimate of the available award amount was available months earlier, 

many local jurisdictions waited to initiate their planning efforts until they 

were officially notified of their grant awards. Because ODP imposed 

special conditions in some grant years, these local jurisdictions, therefore, 

could not begin to draw down funds until they provided the detailed 

budget documentation, outlining how the funds would be spent, as 

required by ODP. 

For the fiscal year 2002 statewide homeland security grants, local 

jurisdictions and state agencies were required to prepare, submit, and 

receive approval of detailed budget work sheets that specifically 

accounted for all grant funds provided. This specific detailing of items 

included not only individual equipment items traditionally accounted for 

as long-term capital equipment, but also all other items ordinarily recorded 

in accounting records as consumable items, such as disposable plastic 

gloves, that usually need not be accounted for individually. Preparing this 

Various Local Legal and 

Procedural Requirements 

Took Time 
Page 8 GAO-04-788T 

detailed budget information took time on the part of local jurisdictions to 

prepare and for the states and ODP to review and approve. 

Since the first round of fiscal year 2003 state homeland security grants, 

ODP has not linked the submission and approval of detailed budget 

information to the release of grant funds. ODP required the submission 

and approval of the same detailed budget worksheets for the fiscal year 

2003 statewide grants, but did not condition the release of funds on their 

submission and approval. For the fiscal year 2004 grants, ODP still 

requires the submission of detailed budget work sheets by local 

jurisdictions to the state, but not to ODP, for its approval. 

The DHS OIG also found that there were numerous reasons for delays in 

spending grant funds. Some were unavoidable and others they found to be 

remediable. In general, the DHS OIG found identifying the highest priority 

for spending grant funds to be a difficult task. Most states the DHS OIG 

visited were not satisfied with the needs analysis that they had done prior 

to September 11, 2001. Some states took the time to update their homeland 

security strategies, and one state delayed fiscal year 2002 grant spending 

until it had completed a new strategy using ODP’s fiscal year 2003 needs 

assessment tool. The DHS OIG also found little consistency in how the 

states manage the grant process. The states used various methods for 

identifying and prioritizing needs and allocating grant funds. States may 

rely on the work of regional task forces, statewide committees, county 

governments, mutual aid groups, or local fire and police organizations to 

identify and prioritize grant spending. 

Both the DHS OIG report and House Select Committee report noted that 

state and local procurements have, in some cases, been affected by delays 

resulting from specific procurement requirements. Some states purchase 

equipment centrally for all jurisdictions, while others sub-grant funds to 

local jurisdictions that make their own purchases. In these latter instances, 

local procurement regulations can affect the issuance of equipment 

purchase orders. The House Select Committee report discussed how state 

and local procurement processes and regulations could slow the 

expenditure of grant funds. For example, in Kentucky, an effort was taken 

to organize bidding processes for localities and to provide them with preapproved equipment and services lists. However, state and local laws 

require competitive bidding for any purchases above $20,000, a 

requirement that can delay actual procurements. Moreover, if bids had 

been requested for a proposal and those bid specifications were not met, 

then the bidding process must start over again. As Kentucky’s Emergency 

Managing Director explained, “There is a process and procedure that must 
Page 9 GAO-04-788T 

be gone through before localities can actually spend the funds, and the 

state has not identified funds that are exempt from these local rules of 

procedure that are in place.” 

In one of the jurisdictions for which we obtained documentation, we also 

found that procurement regulations may require that funds be available 

prior to the issuance of equipment purchase orders. This requirement 

took from June 18, 2003 to September 4, 2003 before purchase orders 

could be issued. In the individual jurisdictions in the three states for which 

we obtained documentation we also found that some apparent delays in 

obligating grant funds resulted from the time normally required by local 

jurisdictions to purchase and contract for items, to prepare requests for 

proposals, evaluate them once received, and have purchase orders 

approved by legal departments and governing councils and boards. In one 

case, the time between the city controller’s release of funds to the 

issuance of the first purchase order was about 3 months, from September 

4, 2003, to December 15, 2003. 

The reports by the DHS OIG and by the Select Committee, as well as the 

preliminary work we have undertaken, support the conclusion that local 

first responders may not have anticipated the natural delays that should 

have been expected in the complex process of distributing dramatically 

increased funding through multiple governmental levels while maintaining 

procedures to ensure proper standards of accountability at each level. The 

evidence available suggests that the process is becoming more efficient 

and that all levels of government are discovering and institutionalizing 

ways to streamline the grant distribution system. These increased 

efficiencies, however, will not continue to occur unless federal, state, and 

local government each continue to examine their processes for ways to 

expedite funding for the equipment and training needed by the nation’s 

first responders. At the same time, it is important that the quest for speed 

in distributing funds does not hamper the planning and accountability 

needed to ensure that the funds are spent on the basis of a comprehensive, 

well-coordinated plan to provide first responders with the equipment, 

skills, and training needed to be able to respond quickly and effectively to 

a range of emergencies, including, where appropriate, major natural 

disasters and terrorist attacks. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 

any questions that you or other members of the subcommittee may have. 

Conclusion 

(440325) 
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