Testimony

Before the Subcommittee on Government Efficiency,

Financial Management, and Intergovernmental

Relations, Committee on Government Reform, House

of Representatives

United States General Accounting Office

GAO

For Release on Delivery

Expected at 10:00 am PST, on

Tuesday, April 2, 2002 COMBATING TERRORISM

Intergovernmental

Cooperation in the

Development of a National

Strategy to Enhance State

and Local Preparedness

Statement of Patricia A. Dalton

Director, Strategic Issues

GAO-02-550T
Page 1 GAO-02-550T

Mr. Chairman and Members of the Subcommittee:

I appreciate the opportunity to be here in San Francisco to discuss issues

critical to successful federal leadership of, assistance to, and partnerships

with state and local governments in the area of preparedness for terrorist

events. As you know, Mr. Chairman, federal, state, and local governments

have a shared responsibility in preparing for catastrophic terrorist attacks.

But the initial responsibility falls upon local governments and their

organizations—such as police, fire departments, emergency medical

personnel, and public health agencies—which will almost invariably be the

first responders to such an occurrence. For its part, the federal

government historically has principally provided leadership, training, and

funding assistance. In the aftermath of the September 11th attacks, for

instance, about one-quarter of the $40 billion Emergency Response Fund

was dedicated to homeland security, including funds to enhance state and

local government preparedness.

Because the national security threat is diffuse and the challenge is highly

intergovernmental, national policymakers must formulate strategies with a

firm understanding of the interests, capacity, and challenges facing those

governments in addressing these issues. My comments today are based on

a body of GAO’s work on terrorism and emergency preparedness and

policy options for the design of federal assistance,1

 as well as on our

review of many other studies.2

 In addition, we draw on ongoing work for

this subcommittee; pursuant to your request we have begun a review to

examine the preparedness issues confronting state and local governments

in a series of case studies. We will examine the state and local perspective

on these issues and thereby help the Congress and the executive branch to

better design and target programs and strategies.

In my testimony, I reiterate GAO’s call, expressed in numerous reports and

testimonies over the past years, for development of a national strategy that

will improve national preparedness and enhance partnerships between

federal, state, and local governments to guard against terrorist attacks.

The creation of the Office of Homeland Security under the leadership of

 1

 See attached listing of related GAO products.

2

 These studies include the Advisory Panel to Assess Domestic Response Capabilities for

Terrorism Involving Weapons of Mass Destruction, Third Annual Report (Arlington, VA:

RAND, Dec. 15, 2001) and the United States Commission on National Security/21st Century,

Road Map for Security: Imperative for Change, February 15, 2001.
Page 2 GAO-02-550T

Tom Ridge is an important and potentially significant first step. We

recognize that the President, in his proposed 2003 budget, has announced

that the Office of Homeland Security will propose such a plan later this

year. As it comes together, we believe that key aspects of this strategy

should include:

• A definition and clarification of the appropriate roles and responsibilities

of federal, state, and local entities. Our previous work has found

fragmentation and overlap among federal assistance programs. Over 40

federal entities have roles in combating terrorism, and past federal efforts

have resulted in a lack of accountability, a lack of a cohesive effort, and

duplication of programs. As state and local officials have noted, this

situation has led to confusion, making it difficult to identify available

federal preparedness resources and effectively partner with the federal

government.

• The establishment of goals and performance measures to guide the

nation’s preparedness efforts. The Congress has long recognized the need

to objectively assess the results of federal programs. For the nation’s

preparedness programs, however, outcomes of where the nation should be

in terms of domestic preparedness have yet to be defined. Given the recent

and proposed increases in preparedness funding as well as the need for

real and meaningful improvements in preparedness, establishing clear

goals and performance measures is critical to ensuring both a successful

and a fiscally responsible effort.

• A careful choice of the most appropriate tools of government to best

implement the national strategy and achieve national goals. The choice

and design of policy tools, such as grants, regulations, and partnerships,

can enhance the government’s capacity to (1) target areas of highest risk

to better ensure that scarce federal resources address the most pressing

needs, (2) promote shared responsibilities by all parties, and (3) track and

assess progress toward achieving national goals.

Since the attacks of September 11th, we have seen the nation unite and

better coordinate preparedness efforts among federal, state, and local

agencies, as well as among private businesses, community groups, and

individual citizens. Our challenge now is to build upon this initial response

to further improve our preparedness in a sustainable way that creates both

short- and long-term benefits. We applaud the subcommittee’s interest in

addressing this issue now and urge that it continue its efforts to oversee

the efficiency and effectiveness of these key intergovernmental

relationships to define and best achieve the necessary level of national

preparedness.
Page 3 GAO-02-550T

Because of such emergencies as natural disasters, hazardous material

spills, and riots, all levels of government have had some experience in

preparing for different types of disasters and emergencies. Preparing for

all potential hazards is commonly referred to as the “all-hazards”

approach. While terrorism is a component within an all-hazards approach,

terrorist attacks potentially impose a new level of fiscal, economic, and

social dislocation within this nation’s boundaries. Given the specialized

resources that are necessary to address a chemical or biological attack,

the range of governmental services that could be affected, and the vital

role played by private entities in preparing for and mitigating risks, state

and local resources alone will likely be insufficient to meet the terrorist

threat.

Some of these specific challenges can be seen in the area of bioterrorism.

For example, a biological agent released covertly might not be recognized

for a week or more because symptoms may only appear several days after

the initial exposure and may be misdiagnosed at first. In addition, some

biological agents, such as smallpox, are communicable and can spread to

others who were not initially exposed. These characteristics require

responses that are unique to bioterrorism, including health surveillance,

epidemiologic investigation, laboratory identification of biological agents,

and distribution of antibiotics or vaccines to large segments of the

population to prevent the spread of an infectious disease. The resources

necessary to undertake these responses are generally beyond state and

local capabilities and would require assistance from and close

coordination with the federal government.

National preparedness is a complex mission that involves a broad range of

functions performed throughout government, including national defense,

law enforcement, transportation, food safety and public health,

information technology, and emergency management, to mention only a

few. While only the federal government is empowered to wage war and

regulate interstate commerce, state and local governments have

historically assumed primary responsibility for managing emergencies

through police, firefighters, and emergency medical personnel.

The federal government’s role in responding to major disasters is generally

defined in the Stafford Act,3

 which requires a finding that the disaster is so

 3 The Robert T. Stafford Disaster Relief and Emergency Assistance Act, (P.L. 93-288) as

amended establishes the process for states to request a presidential disaster declaration.

Background
Page 4 GAO-02-550T

severe as to be beyond the capacity of state and local governments to

respond effectively before major disaster or emergency assistance from

the federal government is warranted. Once a disaster is declared, the

federal government—through the Federal Emergency Management Agency

(FEMA)—may reimburse state and local governments for between 75 and

100 percent of eligible costs, including response and recovery activities.

There has been an increasing emphasis over the past decade on

preparedness for terrorist events. After the nerve gas attack in the Tokyo

subway system on March 20, 1995, and the Oklahoma City bombing on

April 19, 1995, the United States initiated a new effort to combat terrorism.

In June 1995, Presidential Decision Directive 39 was issued, enumerating

responsibilities for federal agencies in combating terrorism, including

domestic terrorism. Recognizing the vulnerability of the United States to

various forms of terrorism, the Congress passed the Defense Against

Weapons of Mass Destruction Act of 1996 (also known as the Nunn-LugarDomenici program) to train and equip state and local emergency services

personnel who would likely be the first responders to a domestic terrorist

event. Other federal agencies, including those in the Department of

Justice, Department of Energy, FEMA, and Environmental Protection

Agency, have also developed programs to assist state and local

governments in preparing for terrorist events.

The attacks of September 11, 2001, as well as the subsequent attempts to

contaminate Americans with anthrax, dramatically exposed the nation’s

vulnerabilities to domestic terrorism and prompted numerous legislative

proposals to further strengthen our preparedness and response. During

the first session of the 107th Congress, several bills were introduced with

provisions relating to state and local preparedness. For instance, the

Preparedness Against Domestic Terrorism Act of 2001, which you

cosponsored, Mr. Chairman, proposes the establishment of a Council on

Domestic Preparedness to enhance the capabilities of state and local

emergency preparedness and response.

The funding for homeland security increased substantially after the

attacks. According to documents supporting the president’s fiscal year

2003 budget request, about $19.5 billion in federal funding for homeland

security was enacted in fiscal year 2002.4

 The Congress added to this

 4 “Securing the Homeland, Strengthening the Nation.” For the complete document, see

the Web site: http://www.whitehouse.gov/homeland/homeland_security_book.html.
Page 5 GAO-02-550T

amount by passing an emergency supplemental appropriation of $40

billion dollars.5

 According to the budget request documents, about onequarter of that amount, nearly $9.8 billion, was dedicated to strengthening

our defenses at home, resulting in an increase in total federal funding on

homeland security of about 50 percent, to $29.3 billion. Table 1 compares

fiscal year 2002 funding for homeland security by major categories with

the president’s proposal for fiscal year 2003.

Table 1: Homeland Security by Major Funding Categories for Fiscal Year 2002 and Proposed for Fiscal Year 2003

Dollars in millions

Major funding category FY2002 enacted

Emergency

supplemental

FY2002

total

The president’s

FY2003 budget

request

Supporting first responders $291 $651 $942 $3,500

Defending against biological terrorism 1,408 3,730 5,138 5,898

Securing America’s borders 8,752 1,194 9,946 10,615

Using 21st century technology for homeland

security 155 75 230 722

Aviation security 1,543 1,035 2,578 4,800

DOD homeland security 4,201 689 4,890 6,815

Other non-DOD homeland security 3,186 2,384 5,570 5,352

Total $19,536 $9,758 $29,294 $37,702

Source: FY 2003 president’s budget document, “Securing the Homeland, Strengthening the Nation.”

We have tracked and analyzed federal programs to combat terrorism for

many years and have repeatedly called for the development of a national

strategy for preparedness. We have not been alone in this message; for

instance, national commissions, such as the Gilmore Commission, and

other national associations, such as the National Emergency Management

Association and the National Governors Association, have advocated the

establishment of a national preparedness strategy. The attorney general’s

Five-Year Interagency Counterterrorism Crime and Technology Plan,

issued in December 1998, represents one attempt to develop a national

strategy on combating terrorism. This plan entailed a substantial

interagency effort and could potentially serve as a basis for a national

preparedness strategy. However, we found it lacking in two critical

elements necessary for an effective strategy: (1) measurable outcomes and

 5

2001 Emergency Supplemental Appropriations Act for Recovery from and Response to

Terrorist Attacks on the United States, (P.L. 107-38).

A National Strategy Is

Needed to Guide Our

Preparedness Efforts
Page 6 GAO-02-550T

(2) identification of state and local government roles in responding to a

terrorist attack.6

In October 2001, the president established the Office of Homeland Security

as a focal point with a mission to develop and coordinate the

implementation of a comprehensive national strategy to secure the United

States from terrorist threats or attacks. While this action represents a

potentially significant step, the role and effectiveness of the Office of

Homeland Security in setting priorities, interacting with agencies on

program development and implementation, and developing and enforcing

overall federal policy in terrorism-related activities is in the formative

stages of being fully established.

The emphasis needs to be on a national rather than a purely federal

strategy. We have long advocated the involvement of state, local, and

private-sector stakeholders in a collaborative effort to arrive at national

goals. The success of a national preparedness strategy relies on the ability

of all levels of government and the private sector to communicate and

cooperate effectively with one another. To develop this essential national

strategy, the federal role needs to be considered in relation to other levels

of government, the goals and objectives for preparedness, and the most

appropriate tools to assist and enable other levels of government and the

private sector to achieve these goals.7

Although the federal government appears monolithic to many, in the area

of terrorism prevention and response, it has been anything but. More than

40 federal entities have a role in combating and responding to terrorism,

and more than 20 federal entities in bioterrorism alone. One of the areas

that the Office of Homeland Security will be reviewing is the coordination

among federal agencies and programs.

Concerns about coordination and fragmentation in federal preparedness

efforts are well founded. Our past work, conducted prior to the creation of

 6

 See U.S. General Accounting Office, Combating Terrorism: Linking Threats to Strategies

and Resources, GAO/T-NSIAD-00-218 (Washington, D.C.: July 26, 2000).

7

 Another important aspect of enhancing state and local preparedness is risk management.

Risk management is an important tool for prioritizing limited resources in the face of

uncertain threats. For more information on risk management, see U.S. General Accounting

Office, Homeland Security: Risk Management Can Help Us Defend Against Terrorism,

GAO-02-208T (Washington, D.C.: October 31, 2001).

Roles and Missions of

Federal, State, and Local

Entities Need to Be

Clarified
Page 7 GAO-02-550T

the Office of Homeland Security, has shown coordination and

fragmentation problems stemming largely from a lack of accountability

within the federal government for terrorism-related programs and

activities. There had been no single leader in charge of the many terrorismrelated functions conducted by different federal departments and

agencies. In fact, several agencies had been assigned leadership and

coordination functions, including the Department of Justice, the Federal

Bureau of Investigation, FEMA, and the Office of Management and Budget.

We previously reported that officials from a number of agencies that

combat terrorism believe that the coordination roles of these various

agencies are not always clear. The recent Gilmore Commission report

expressed similar concerns, concluding that the current coordination

structure does not provide the discipline necessary among the federal

agencies involved.

In the past, the absence of a central focal point resulted in two major

problems. The first of these is a lack of a cohesive effort from within the

federal government. For example, the Department of Agriculture, the Food

and Drug Administration, and the Department of Transportation have been

overlooked in bioterrorism-related policy and planning, even though these

organizations would play key roles in response to terrorist acts. In this

regard, the Department of Agriculture has been given key responsibilities

to carry out in the event that terrorists were to target the nation’s food

supply, but the agency was not consulted in the development of the federal

policy assigning it that role. Similarly, the Food and Drug Administration

was involved with issues associated with the National Pharmaceutical

Stockpile, but it was not involved in the selection of all items procured for

the stockpile. Further, the Department of Transportation has responsibility

for delivering supplies under the Federal Response Plan, but it was not

brought into the planning process and consequently did not learn the

extent of its responsibilities until its involvement in subsequent exercises.

Second, the lack of leadership has resulted in the federal government’s

development of programs to assist state and local governments that were

similar and potentially duplicative. After the terrorist attack on the federal

building in Oklahoma City, the federal government created additional

programs that were not well coordinated. For example, FEMA, the

Department of Justice, the Centers for Disease Control and Prevention,

and the Department of Health and Human Services all offer separate

assistance to state and local governments in planning for emergencies.

Additionally, a number of these agencies also condition receipt of funds on

completion of distinct but overlapping plans. Although the many federal

assistance programs vary somewhat in their target audiences, the potential
Page 8 GAO-02-550T

redundancy of these federal efforts warrants scrutiny. In this regard, we

recommended in September 2001 that the president work with the

Congress to consolidate some of the activities of the Department of

Justice’s Office for State and Local Domestic Preparedness Support under

FEMA.8

State and local response organizations believe that federal programs

designed to improve preparedness are not well synchronized or organized.

They have repeatedly asked for a one-stop “clearinghouse” for federal

assistance. As state and local officials have noted, the multiplicity of

programs can lead to confusion at the state and local levels and can

expend precious federal resources unnecessarily or make it difficult for

them to identify available federal preparedness resources. As the Gilmore

Commission report notes, state and local officials have voiced frustration

about their attempts to obtain federal funds and have argued that the

application process is burdensome and inconsistent among federal

agencies.

Although the federal government can assign roles to federal agencies

under a national preparedness strategy, it will also need to reach

consensus with other levels of government and with the private sector

about their respective roles. Clearly defining the appropriate roles of

government may be difficult because, depending upon the type of incident

and the phase of a given event, the specific roles of local, state, and federal

governments and of the private sector may not be separate and distinct.

A new warning system, the Homeland Security Advisory System, is

intended to tailor notification of the appropriate level of vigilance,

preparedness, and readiness in a series of graduated threat conditions.

The Office of Homeland Security announced the new warning system on

March 12, 2002. The new warning system includes five levels of alert for

assessing the threat of possible terrorist attacks: low, guarded, elevated,

high, and severe. These levels are also represented by five corresponding

colors: green, blue, yellow, orange, and red. When the announcement was

made, the nation stood in the yellow condition, in elevated risk. The

warning can be upgraded for the entire country or for specific regions and

economic sectors, such as the nuclear industry.

 8

 U.S. General Accounting Office, Combating Terrorism: Selected Challenges and Related

Recommendations, GAO-01-822 (Washington, D.C.: September 20, 2001).
Page 9 GAO-02-550T

The system is intended to address a problem with the previous blanket

warning system that was used. After September 11th, the federal

government issued four general warnings about possible terrorist attacks,

directing federal and local law enforcement agencies to place themselves

on the “highest alert.” However, government and law enforcement

officials, particularly at the state and local levels, complained that general

warnings were too vague and a drain on resources. To obtain views on

the new warning system from all levels of government, law enforcement,

and the public, the United States Attorney General, who will be

responsible for the system, provided a 45-day comment period from the

announcement of the new system on March 12th. This provides an

opportunity for state and local governments as well as the private sector to

comment on the usefulness of the new warning system, and the

appropriateness of the five threat conditions with associated suggested

protective measures.

Numerous discussions have been held about the need to enhance the

nation’s preparedness, but national preparedness goals and measurable

performance indicators have not yet been developed. These are critical

components for assessing program results. In addition, the capability of

state and local governments to respond to catastrophic terrorist attacks is

uncertain.

At the federal level, measuring results for federal programs has been a

longstanding objective of the Congress. The Congress enacted the

Government Performance and Results Act of 1993 (commonly referred to

as the Results Act). The legislation was designed to have agencies focus on

the performance and results of their programs rather than on program

resources and activities, as they had done in the past. Thus, the Results

Act became the primary legislative framework through which agencies are

required to set strategic and annual goals, measure performance, and

report on the degree to which goals are met. The outcome-oriented

principles of the Results Act include (1) establishing general goals and

quantifiable, measurable, outcome-oriented performance goals and related

measures, (2) developing strategies for achieving the goals, including

strategies for overcoming or mitigating major impediments, (3) ensuring

that goals at lower organizational levels align with and support general

goals, and (4) identifying the resources that will be required to achieve the

goals.

A former assistant professor of public policy at the Kennedy School of

Government, now the senior director for policy and plans with the Office

Performance and

Accountability Measures

Need to Be Included in

National Strategy
Page 10 GAO-02-550T

of Homeland Security, noted in a December 2000 paper that a

preparedness program lacking broad but measurable objectives is

unsustainable.9

 This is because it deprives policymakers of the information

they need to make rational resource allocations, and program managers

are prevented from measuring progress. He recommended that the

government develop a new statistical index of preparedness,10

incorporating a range of different variables, such as quantitative measures

for special equipment, training programs, and medicines, as well as

professional subjective assessments of the quality of local response

capabilities, infrastructure, plans, readiness, and performance in exercises.

Therefore, he advocated that the index should go well beyond the current

rudimentary milestones of program implementation, such as the amount of

training and equipment provided to individual cities. The index should

strive to capture indicators of how well a particular city or region could

actually respond to a serious terrorist event. This type of index, according

to this expert, would then allow the government to measure the

preparedness of different parts of the country in a consistent and

comparable way, providing a reasonable baseline against which to

measure progress.

In October 2001, FEMA’s director recognized that assessments of state and

local capabilities have to be viewed in terms of the level of preparedness

being sought and what measurement should be used for preparedness. The

director noted that the federal government should not provide funding

without assessing what the funds will accomplish. Moreover, the

president’s fiscal year 2003 budget request for $3.5 billion through FEMA

for first responders—local police, firefighters, and emergency medical

professionals—provides that these funds be accompanied by a process for

evaluating the effort to build response capabilities, in order to validate that

effort and direct future resources.

FEMA has developed an assessment tool that could be used in developing

performance and accountability measures for a national strategy. To

 9

 Richard A. Falkenrath, The Problems of Preparedness: Challenges Facing the U. S.

Domestic Preparedness Program (Cambridge, Mass: John F. Kennedy School of

Government, Harvard University, December 2000).

10It was recommended that this index be classified so as to avoid calling attention to the

country’s most vulnerable areas.
Page 11 GAO-02-550T

ensure that states are adequately prepared for a terrorist attack, FEMA

was directed by the Senate Committee on Appropriations to assess states’

response capabilities. In response, FEMA developed a self-assessment

tool—the Capability Assessment for Readiness (CAR)—that focuses on 13

key emergency management functions, including hazard identification and

risk assessment, hazard mitigation, and resource management. However,

these key emergency management functions do not specifically address

public health issues. In its fiscal year 2001 CAR report, FEMA concluded

that states were only marginally capable of responding to a terrorist event

involving a weapon of mass destruction. Moreover, the president’s fiscal

year 2003 budget proposal acknowledges that our capabilities for

responding to a terrorist attack vary widely across the country. Many areas

have little or no capability to respond to a terrorist attack that uses

weapons of mass destruction. The budget proposal further adds that even

the best prepared states and localities do not possess adequate resources

to respond to the full range of terrorist threats we face.

Proposed standards have been developed for state and local emergency

management programs by a consortium of emergency managers from all

levels of government and are currently being pilot tested through the

Emergency Management Accreditation Program at the state and local

levels. Its purpose is to establish minimum acceptable performance

criteria by which emergency managers can assess and enhance current

programs to mitigate, prepare for, respond to, and recover from disasters

and emergencies. For example, one such standard is the requirement that

(1) the program must develop the capability to direct, control, and

coordinate response and recovery operations, (2) that an incident

management system must be utilized, and (3) that organizational roles and

responsibilities shall be identified in the emergency operational plans.

Although FEMA has experience in working with others in the development

of assessment tools, it has had difficulty in measuring program

performance. As the president’s fiscal year 2003 budget request

acknowledges, FEMA generally performs well in delivering resources to

stricken communities and disaster victims quickly. The agency performs

less well in its oversight role of ensuring the effective use of such

assistance. Further, the agency has not been effective in linking resources

to performance information. FEMA’s Office of Inspector General has

found that FEMA did not have an ability to measure state disaster risks

and performance capability, and it concluded that the agency needed to

determine how to measure state and local preparedness programs.
Page 12 GAO-02-550T

Since September 11th, many state and local governments have faced

declining revenues and increased security costs. A survey of about 400

cities conducted by the National League of Cities reported that since

September 11th, one in three American cities saw their local economies,

municipal revenues, and public confidence decline while public-safety

spending is up. Further, the National Governors Association estimates

fiscal year 2002 state budget shortfalls of between $40 billion and $50

billion, making it increasingly difficult for the states to take on expensive,

new homeland security initiatives without federal assistance. State and

local revenue shortfalls coupled with increasing demands on resources

make it more critical that federal programs be designed carefully to match

the priorities and needs of all partners—federal, state, local, and private.

Our previous work on federal programs suggests that the choice and

design of policy tools have important consequences for performance and

accountability. Governments have at their disposal a variety of policy

instruments, such as grants, regulations, tax incentives, and regional

coordination and partnerships, that they can use to motivate or mandate

other levels of government and private-sector entities to take actions to

address security concerns.

The design of federal policy will play a vital role in determining success

and ensuring that scarce federal dollars are used to achieve critical

national goals. Key to the national effort will be determining the

appropriate level of funding so that policies and tools can be designed and

targeted to elicit a prompt, adequate, and sustainable response while also

protecting against federal funds being used to substitute for spending that

would have occurred anyway.

The federal government often uses grants to state and local governments

as a means of delivering federal programs. Categorical grants typically

permit funds to be used only for specific, narrowly defined purposes.

Block grants typically can be used by state and local governments to

support a range of activities aimed at achieving a broad national purpose

and to provide a great deal of discretion to state and local officials. Either

type of grant can be designed to (1) target the funds to states and localities

with the greatest need, (2) discourage the replacement of state and local

funds with federal funds, commonly referred to as “supplantation,” with a

maintenance-of-effort requirement that recipients maintain their level of

previous funding, and (3) strike a balance between accountability and

flexibility. More specifically:

Appropriate Tools Need to

Be Selected for Designing

Assistance

Grants
Page 13 GAO-02-550T

• Targeting: The formula for the distribution of any new grant could be

based on several considerations, including the state or local government’s

capacity to respond to a disaster. This capacity depends on several factors,

the most important of which perhaps is the underlying strength of the

state’s tax base and whether that base is expanding or is in decline. In an

August 2001 report on disaster assistance, we recommended that the

director of FEMA consider replacing the per-capita measure of state

capability with a more sensitive measure, such as the amount of a state’s

total taxable resources, to assess the capabilities of state and local

governments to respond to a disaster.11 Other key considerations include

the level of need and the costs of preparedness.

• Maintenance-of-effort: In our earlier work, we found that substitution is to

be expected in any grant and, on average, every additional federal grant

dollar results in about 60 cents of supplantion.12 We found that

supplantation is particularly likely for block grants supporting areas with

prior state and local involvement. Our recent work on the Temporary

Assistance to Needy Families block grant found that a strong maintenanceof-effort provision limits states’ ability to supplant.13 Recipients can be

penalized for not meeting a maintenance-of-effort requirement.

• Balance accountability and flexibility: Experience with block grants shows

that such programs are sustainable if they are accompanied by sufficient

information and accountability for national outcomes to enable them to

compete for funding in the congressional appropriations process.

Accountability can be established for measured results and outcomes that

permit greater flexibility in how funds are used while at the same time

ensuring some national oversight.

Grants previously have been used for enhancing preparedness and recent

proposals direct new funding to local governments. In recent discussions,

local officials expressed their view that federal grants would be more

effective if local officials were allowed more flexibility in the use of funds.

They have suggested that some funding should be allocated directly to

local governments. They have expressed a preference for block grants,

 11 U.S. General Accounting Office, Disaster Assistance: Improvement Needed in Disaster

Declaration Criteria and Eligibility Assurance Procedures, GAO-01-837 (Washington,

D.C.: August 31, 2001).

12 U.S. General Accounting Office, Federal Grants: Design Improvements Could Help

Federal Resources Go Further, GAO-AIMD-97-7 (Washington, D.C.: December 18, 1996).

13 U.S. General Accounting Office, Welfare Reform: Challenges in Maintaining a FederalState Fiscal Partnership, GAO-01-828 (Washington, D.C.: August 10, 2001).
Page 14 GAO-02-550T

which would distribute funds directly to local governments for a variety of

security-related expenses.

Recent funding proposals, such as the $3.5 billion block grant for first

responders contained in the president’s fiscal year 2003 budget, have

included some of these provisions. This matching grant would be

administered by FEMA, with 25 percent being distributed to the states

based on population. The remainder would go to states for pass-through to

local jurisdictions, also on a population basis, but states would be given

the discretion to determine the boundaries of substate areas for such a

pass-through—that is, a state could pass through the funds to a

metropolitan area or to individual local governments within such an area.

Although the state and local jurisdictions would have discretion to tailor

the assistance to meet local needs, it is anticipated that more than onethird of the funds would be used to improve communications; an

additional one-third would be used to equip state and local first

responders, and the remainder would be used for training, planning,

technical assistance, and administration.

Federal, state, and local governments share authority for setting standards

through regulations in several areas, including infrastructure and

programs vital to preparedness (for example, transportation systems,

water systems, public health). In designing regulations, key considerations

include how to provide federal protections, guarantees, or benefits while

preserving an appropriate balance between federal and state and local

authorities and between the public and private sectors (for example, for

chemical and nuclear facilities). In designing a regulatory approach, the

challenges include determining who will set the standards and who will

implement or enforce them. Five models of shared regulatory authority

are:

• fixed federal standards that preempt all state regulatory action in the

subject area covered;

• federal minimum standards that preempt less stringent state laws but

permit states to establish standards that are more stringent than the

federal;

• inclusion of federal regulatory provisions not established through

preemption in grants or other forms of assistance that states may choose

to accept;

• cooperative programs in which voluntary national standards are

formulated by federal and state officials working together; and

• widespread state adoption of voluntary standards formulated by quasiofficial entities.

Regulations
Page 15 GAO-02-550T

Any one of these shared regulatory approaches could be used in designing

standards for preparedness. The first two of these mechanisms involve

federal preemption. The other three represent alternatives to preemption.

Each mechanism offers different advantages and limitations that reflect

some of the key considerations in the federal-state balance.

To the extent that private entities will be called upon to improve security

over dangerous materials or to protect vital assets, the federal government

can use tax incentives to encourage and enforce their activities. Tax

incentives are the result of special exclusions, exemptions, deductions,

credits, deferrals, or tax rates in the federal tax laws. Unlike grants, tax

incentives do not generally permit the same degree of federal oversight

and targeting, and they are generally available by formula to all potential

beneficiaries who satisfy congressionally established criteria.

Promoting partnerships between critical actors (including different levels

of government and the private sector) facilitates the maximizing of

resources and also supports coordination on a regional level. Partnerships

could encompass federal, state, and local governments working together

to share information, develop communications technology, and provide

mutual aid. The federal government may be able to offer state and local

governments assistance in certain areas, such as risk management and

intelligence sharing. In turn, state and local governments have much to

offer in terms of knowledge of local vulnerabilities and resources, such as

local law enforcement personnel, available to respond to threats and

emergencies in their communities.

The importance of readily available urban search and rescue was

highlighted in the Loma Prieta earthquake in October 1989 that collapsed

the Cypress section of the Nimitz Freeway in Oakland and structures in

San Francisco and Santa Cruz. In late 1989, the Governor’s Office of

Emergency Services developed a proposal to enhance urban search and

rescue capabilities in California, and the cornerstone of this proposal was

the development of multidiscipline urban search and rescue task forces to

be deployed in the event of large-scale disasters. A parallel effort was

undertaken by FEMA at that time to upgrade urban search and rescue

efforts nationwide. FEMA’s national urban search and rescue response

teams provide a framework for structuring local emergency personnel into

integrated disaster response task forces. FEMA has 28 urban search and

rescue teams, with 8 of those teams positioned in California. Twenty of

FEMA’s 28 teams were deployed to New York in the aftermath of the

Tax Incentives

Intergovernmental Partnerships

and Regional Coordination
Page 16 GAO-02-550T

tragedy, and five teams were deployed to Washington to help in search and

rescue efforts at the Pentagon.

Since the events of September 11th, a task force of mayors and police

chiefs has called for a new protocol governing how local law enforcement

agencies can assist federal agencies, particularly the FBI, given the

information needed to do so. As the United States Conference of Mayors

noted, a close working partnership of local and federal law enforcement

agencies, which includes the sharing of intelligence, will expand and

strengthen the nation’s overall ability to prevent and respond to domestic

terrorism. The USA Patriot Act provides for greater sharing of intelligence

among federal agencies. An expansion of this act has been proposed

(S.1615, H.R. 3285) that would provide for information sharing among

federal, state, and local law enforcement agencies. In addition, the

Intergovernmental Law Enforcement Information Sharing Act of 2001

(H.R. 3483), which you sponsored Mr. Chairman, addresses a number of

information-sharing needs. For instance, this proposed legislation

provides that the United States Attorney General expeditiously grant

security clearances to governors who apply for them, and state and local

officials who participate in federal counterterrorism working groups or

regional terrorism task forces.

Local officials have emphasized the importance of regional coordination.

Regional resources, such as equipment and expertise, are essential

because of proximity, which allows for quick deployment, and experience

in working within the region. Large-scale or labor-intensive incidents

quickly deplete a given locality’s supply of trained responders. Some cities

have spread training and equipment to neighboring municipal areas so that

their mutual aid partners can help. These partnerships afford economies of

scale across a region. In events that require a quick response, such as a

chemical attack, regional agreements take on greater importance because

many local officials do not think that federal and state resources can arrive

in sufficient time to help.

Mutual aid agreements provide a structure for assistance and for sharing

resources among jurisdictions in response to an emergency. Because

individual jurisdictions may not have all the resources they need to

respond to all types of emergencies, these agreements allow for resources

to be deployed quickly within a region. The terms of mutual aid

agreements vary for different services and different localities. These

agreements may provide for the state to share services, personnel,

supplies, and equipment with counties, towns, and municipalities within

the state, with neighboring states, or, in the case of states bordering
Page 17 GAO-02-550T

Canada, with jurisdictions in another country. Some of the agreements

also provide for cooperative planning, training, and exercises in

preparation for emergencies. Some of these agreements involve private

companies and local military bases, as well as local government entities.

Such agreements were in place for the three sites that were involved on

September 11th

— New York City, the Pentagon, and a rural area of

Pennsylvania—and provide examples of some of the benefits of mutual aid

agreements and of coordination within a region.

With regard to regional planning and coordination, there may be federal

programs that could provide models for funding proposals. In the 1962

Federal-Aid Highway Act, the federal government established a

comprehensive cooperative process for transportation planning. This

model of regional planning continues today under the Transportation

Equity Act for the 21st century (TEA-21, originally ISTEA) program. This

model emphasizes the role of state and local officials in developing a plan

to meet regional transportation needs. Metropolitan Planning

Organizations (MPOs) coordinate the regional planning process and adopt

a plan, which is then approved by the state.

Mr. Chairman, in conclusion, as increasing demands are placed on budgets

at all levels of government, it will be necessary to make sound choices to

maintain fiscal stability. All levels of government and the private sector

will have to communicate and cooperate effectively with each other across

a broad range of issues to develop a national strategy to better target

available resources to address the urgent national preparedness needs.

Involving all levels of government and the private sector in developing key

aspects of a national strategy that I have discussed today—a definition and

clarification of the appropriate roles and responsibilities, an establishment

of goals and performance measures, and a selection of appropriate tools—

is essential to the successful formulation of the national preparedness

strategy and ultimately to preparing and defending our nation from

terrorist attacks.

This completes my prepared statement. I would be pleased to respond to

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

For further information about this testimony, please contact me at (202)

512-6737, Paul Posner at (202) 512-9573, or JayEtta Hecker at (202) 512-

2834. Other key contributors to this testimony include Jack Burriesci,

Contacts and

Acknowledgments
Page 18 GAO-02-550T

Matthew Ebert, Colin J. Fallon, Thomas James, Kristen Sullivan Massey,

Yvonne Pufahl, Jack Schulze, and Amelia Shachoy.
Page 19 GAO-02-550T

Homeland Security: Challenges and Strategies in Addressing Short- and

Long-Term National Needs. GAO-02-160T. Washington, D.C.: November

7, 2001.

Homeland Security: A Risk Management Approach Can Guide

Preparedness Efforts. GAO-02-208T. Washington, D.C.: October 31,

2001.

Homeland Security: Need to Consider VA’s Role in Strengthening Federal

Preparedness. GAO-02-145T. Washington, D.C.: October 15, 2001.

Homeland Security: Key Elements of a Risk Management Approach.

GAO-02-150T. Washington, D.C.: October 12, 2001.

Homeland Security: A Framework for Addressing the Nation’s Issues.

GAO-01-1158T. Washington, D.C.: September 21, 2001.

Combating Terrorism: Considerations for Investing Resources in

Chemical and Biological Preparedness. GAO-01-162T. Washington, D.C.:

October 17, 2001.

Combating Terrorism: Selected Challenges and Related

Recommendations. GAO-01-822. Washington, D.C.: September 20, 2001.

Combating Terrorism: Actions Needed to Improve DOD’s Antiterrorism

Program Implementation and Management. GAO-01-909. Washington,

D.C.: September 19, 2001.

Combating Terrorism: Comments on H.R. 525 to Create a President’s

Council on Domestic Preparedness. GAO-01-555T. Washington, D.C.:

May 9, 2001.

Combating Terrorism: Observations on Options to Improve the Federal

Response. GAO-01-660T. Washington, D.C.: April 24, 2001.

Combating Terrorism: Comments on Counterterrorism Leadership and

National Strategy. GAO-01-556T. Washington, D.C.: March 27, 2001.

Combating Terrorism: FEMA Continues to Make Progress in

Coordinating Preparedness and Response. GAO-01-15. Washington,

D.C.: March 20, 2001.

Related GAO Products

Homeland Security

Combating Terrorism
Page 20 GAO-02-550T

Combating Terrorism: Federal Response Teams Provide Varied

Capabilities; Opportunities Remain to Improve Coordination. GAO-01-

14. Washington, D.C.: November 30, 2000.

Combating Terrorism: Need to Eliminate Duplicate Federal Weapons of

Mass Destruction Training. GAO/NSIAD-00-64. Washington, D.C.:

March 21, 2000.

Combating Terrorism: Observations on the Threat of Chemical and

Biological Terrorism. GAO/T-NSIAD-00-50. Washington, D.C.: October

20, 1999.

Combating Terrorism: Need for Comprehensive Threat and Risk

Assessments of Chemical and Biological Attack. GAO/NSIAD-99-163.

Washington, D.C.: September 7, 1999.

Combating Terrorism: Observations on Growth in Federal Programs.

GAO/T-NSIAD-99-181. Washington, D.C.: June 9, 1999.

Combating Terrorism: Analysis of Potential Emergency Response

Equipment and Sustainment Costs. GAO-NSIAD-99-151. Washington,

D.C.: June 9, 1999.

Combating Terrorism: Use of National Guard Response Teams Is

Unclear. GAO/NSIAD-99-110. Washington, D.C.: May 21, 1999.

Combating Terrorism: Observations on Federal Spending to Combat

Terrorism. GAO/T-NSIAD/GGD-99-107. Washington, D.C.: March 11,

1999.

Combating Terrorism: Opportunities to Improve Domestic Preparedness

Program Focus and Efficiency. GAO-NSIAD-99-3. Washington, D.C.:

November 12, 1998.

Combating Terrorism: Observations on the Nunn-Lugar-Domenici

Domestic Preparedness Program. GAO/T-NSIAD-99-16. Washington,

D.C.: October 2, 1998.

Combating Terrorism: Threat and Risk Assessments Can Help Prioritize

and Target Program Investments. GAO/NSIAD-98-74. Washington, D.C.:

April 9, 1998.
Page 21 GAO-02-550T

Combating Terrorism: Spending on Governmentwide Programs

Requires Better Management and Coordination. GAO/NSIAD-98-39.

Washington, D.C.: December 1, 1997.

Bioterrorism: The Centers for Disease Control and Prevention’s Role in

Public Health Protection. GAO-02-235T. Washington, D.C.: November 15,

2001.

Bioterrorism: Review of Public Health and Medical Preparedness. GAO02-149T. Washington, D.C.: October 10, 2001.

Bioterrorism: Public Health and Medical Preparedness. GAO-02-141T.

Washington, D.C.: October 10, 2001.

Bioterrorism: Coordination and Preparedness. GAO-02-129T.

Washington, D.C.: October 5, 2001.

Bioterrorism: Federal Research and Preparedness Activities. GAO-01-

915. Washington, D.C.: September 28, 2001.

Chemical and Biological Defense: Improved Risk Assessments and

Inventory Management Are Needed. GAO-01-667. Washington, D.C.:

September 28, 2001.

West Nile Virus Outbreak: Lessons for Public Health Preparedness.

GAO/HEHS-00-180. Washington, D.C.: September 11, 2000.

Need for Comprehensive Threat and Risk Assessments of Chemical and

Biological Attacks. GAO/NSIAD-99-163. Washington, D.C.: September 7,

1999.

Chemical and Biological Defense: Program Planning and Evaluation

Should Follow Results Act Framework. GAO/NSIAD-99-159. Washington,

D.C.: August 16, 1999.

Combating Terrorism: Observations on Biological Terrorism and Public

Health Initiatives. GAO/T-NSIAD-99-112. Washington, D.C.: March 16,

1999.

Public Health
Page 22 GAO-02-550T

Disaster Assistance: Improvement Needed in Disaster Declaration

Criteria and Eligibility Assurance Procedures. GAO-01-837.

Washington, D.C.: August 31, 2001.

Federal Emergency Management Agency: Status of Achieving Key

Outcomes and Addressing Major Management Challenges. GAO-01-832.

Washington, D.C.: July 9, 2001.

FEMA and Army Must Be Proactive in Preparing States for

Emergencies. GAO-01-850. Washington, D.C.: August 13, 2001.

Results-Oriented Budget Practices in Federal Agencies. GAO-01-1084SP.

Washington, D.C.: August 2001.

Managing for Results: Federal Managers’ Views on Key Management

Issues Vary Widely across Agencies. GAO-01-0592. Washington, D.C.:

May 2001.

Determining Performance and Accountability Challenges and High

Risks. GAO-01-159SP. Washington, D.C.: November 2000.

Managing for Results: Using the Results Act to Address Mission

Fragmentation and Program Overlap. GAO/AIMD-97-156. Washington,

D.C.: August 29, 1997.

Government Restructuring: Identifying Potential Duplication in Federal

Missions and Approaches. GAO/T-AIMD-95-161. Washington, D.C.: June

7, 1995.

Government Reorganization: Issues and Principals. GAO/T-GGD/AIMD95-166. Washington, D.C.: May 17, 1995.

Grant Programs: Design Features Shape Flexibility, Accountability, and

Performance Information. GAO/GGD-98-137. Washington, D.C.: June

22, 1998.

Federal Grants: Design Improvements Could Help Federal Resources Go

Further. GAO/AIMD-97-7. Washington, D.C.: December 18, 1996.

Block Grants: Issues in Designing Accountability Provisions.

GAO/AIMD-95-226. Washington, D.C.: September 1, 1995.

Disaster Assistance

Budget and Management

Grant Design

(450117)