Department of Homeland Security 

Office of Inspector General 

The State of Texas’ Management of State 
 
 

Homeland Security Program and Urban 
 
 

Areas Security Initiative Grants 
 
 

Awarded During Fiscal Years 
 
 

2006 through 2008 
 
 

OIG-11-44 February 2011 
Office ofInspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

Homeland 

Security 

FEB 11 2011 

Preface 

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

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

to the Inspector General Act of1978. This is one of a series of audit, inspection, and 

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

efficiency, and effectiveness within the department. 

The attached report presents the results ofthe audit ofthe State ofTexas' management of 

State Homeland Security Program and Urban Areas Security Initiative grants awarded 

during Fiscal Years 2006 through 2008. We contracted with the independent public 

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

& Company perform its audit according to generally accepted government auditing 

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

management of the grant funds could be improved, resulting in 14 recommendations 

addressed to the Assistant Administrator, Grant Programs Directorate, Federal 

Emergency Management Agency. Foxx & ~ompany also identified two best practices 

that should be considered for use by other jurisdictions. Foxx & Company is responsible 

for the attached auditor's report dated January 26, 2011, and the conclusions expressed in 

the report. 

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

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

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

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

~i~ Anne L. Richards 

Assistant Inspector General for Audits 
 

January 26, 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 Texas’ management of the 

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

Security Initiative grants for Fiscal Years 2006 through 2008. The audit was performed 

in accordance with our Task Order No. TPD-FIG-BPA-07-0007-0004 dated 

September 29, 2009. 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 Texas’ 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 
Table of Contents/Abbreviations 

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

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

Results of Audit ................................................................................................................ 7
 
 

Setting Goals and Objectives and Measuring Improvements ............................... 7 
 
 

Recommendations ................................................................................................. 9 
 
 

Management Comments and Auditors’ Analysis ................................................. 9 
 
 

Monitoring Subgrantee Activities ....................................................................... 10 
 
 

Recommendation ................................................................................................ 14 
 
 

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

Timely Expenditure of Grant Funds ................................................................... 16 
 
 

Recommendation ................................................................................................ 18 
 
 

Management Comments and Auditors’ Analysis ............................................... 18 
 
 

Statewide Strategy for Special Response Teams ................................................ 19 
 
 

Recommendations ............................................................................................... 21 
 
 

Management Comments and Auditors’ Analysis ............................................... 22 
 
 

State Agency Project Selection and Tracking ..................................................... 23 
 
 

Recommendations ............................................................................................... 25 
 
 

Management Comments and Auditors’ Analysis ............................................... 25 
 
 

Councils of Government Allocations .................................................................. 26 
 
 

Recommendation ................................................................................................ 27 
 
 

Management Comments and Auditors’ Analysis ............................................... 28 
 
 

Inventory Control Requirements ......................................................................... 28 
 
 

Recommendations ............................................................................................... 30 
 
 

Management Comments and Auditors’ Analysis ............................................... 30 
 
 

Two Texas Subgrantees Developed Systems That May Be Best Practices ........ 31 
 
 

Appendices 

Appendix A: Purpose, Scope, and Methodology............................................... 32 
 
 

Appendix B: FEMA Management Comments to the Draft Report ................... 35 
 
 

Appendix C: State of Texas Management Comments to the Draft Report ....... 41 
 
 

Appendix D. 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 

Foxx & Company completed an audit of the State of Texas’ 

Management of State Homeland Security Program and Urban 

Areas Security Initiative grants awarded during Fiscal Years 2006 

through 2008. The audit objectives were to determine whether the 

State distributed and spent Homeland Security Grant Program 

funds strategically, effectively, and in compliance with federal 

laws, regulations, and guidance. The audit included a review of 

approximately $291 million in State Homeland Security Program 

and Urban Areas Security Initiative grants awarded to the State of 

Texas. 

Generally, the State did an efficient and effective job of 

administering program requirements in accordance with grant 

guidance, regulations, and laws. The State’s plans linked funding 

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

on risk assessments. We identified two best practices that should 

be considered for sharing with other jurisdictions. 

However, some improvements are needed in the State’s 

establishment of measurable goals and objectives, monitoring 

subgrantee activities, timeliness of expenditures, overseeing 

special response teams, reviewing and approving State Agency 

projects, allocating funds by Councils of Government, and 

complying with inventory requirements. 

Our 14 recommendations call for the Federal Emergency 

Management Agency to require the State of Texas to initiate 

improvements which, if implemented, should help strengthen 

program management, performance, and oversight. Federal 

Emergency Management Agency officials and Texas State 

officials concurred with all of the recommendations. These 

officials’ written comments are included in the report as 

Appendix B and Appendix C, respectively. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 1
 
 

 

Background 

The Homeland Security Grant Program is a federal assistance grant 

program administered by the U.S. Department of Homeland 

Security (DHS) Grant Programs Directorate within the Federal 

Emergency Management Agency (FEMA). The current Grant 

Programs Directorate, hereafter referred to as FEMA, began with 

the Office of Domestic Preparedness, which was transferred from 

the Department of Justice to DHS in March 2003. The Office of 

Domestic Preparedness was subsequently consolidated into the 

Office of State and Local Government Coordination and 

Preparedness which, in part, became the Office of Grants and 

Training, and which subsequently became part of FEMA. 

Although the grant program was transferred to DHS, applicable 

Department of Justice grant regulations and legacy systems still 

were used as needed to administer the program. For example, 

through Fiscal Year (FY) 2008 the Office of Justice Programs’ 

Grants Management System was used to receive grantee 

applications and to administer the award and reporting processes. 

Also, prior to the transfer, the State Administrative Agency entered 

payment data into the Office of Justice Programs’ Phone Activated 

Paperless Request System, which was a drawdown payment 

system for grant funds. That payment system was replaced in 

April 2007 by FEMA’s Payment and Reporting System, which 

allows grantees to make payment requests and complete and 

transmit their quarterly Financial Status Reports online. 

Homeland Security Grant Program 

The Homeland Security Grant Program provides federal funding to 

help state and local agencies enhance their capabilities to prevent, 

deter, 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. 

Depending on the fiscal year, the program included some or all of 

the following programs: 

•	 State Homeland Security Program supports the 

implementation of State Homeland Security Strategies to 

address the identified planning, organization, equipment, 

training, and exercise needs to prevent, protect against, respond 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 2
 
 

to, and recover from acts of terrorism and other catastrophic 

events. 

•	 Urban Areas Security Initiative Program funds address the 

unique planning, organization, equipment, training, and 

exercise needs of high-threat, high-density Urban Areas, and 

assists them in building an enhanced and sustainable capacity 

to prevent, protect against, respond to, and recover from acts of 

terrorism. 

•	 Law Enforcement Terrorism Prevention Program provides 

resources to law enforcement and public safety communities 

(working with their private partners) to support critical 

terrorism prevention activities, including: establishing / 

enhancing fusion centers and collaborating with non-law 

enforcement partners, other government agencies, and the 

private sector. 

•	 Citizen Corps Program mission is to bring community and 

government leaders together to coordinate the involvement of 

community members in emergency preparedness, planning, 

mitigation, response, and recovery. 

•	 Metropolitan Medical Response System Program funds 

support designated jurisdictions to further enhance and sustain 

a regionally integrated, systematic mass casualty incident 

preparedness program that enables a response during the first 

crucial hours of an incident. The program prepares 

jurisdictions for response to all-hazards mass casualty 

incidents, including chemical, biological, radiological, nuclear, 

and explosive terrorism, epidemic disease outbreaks, natural 

disasters, and large-scale hazardous material incidents. 

State Administrative Agency 

The governors of each state appoint a State Administrative Agency 

to administer the Homeland Security Grant Program. The State 

Administrative Agency is responsible for managing the grant 

programs in accordance with established federal guidelines. The 

State Administrative Agency is also responsible for allocating 

funds to local, regional, and other state government agencies. 

In January 2004, the Texas Seventy-eighth Legislature created the 

Governor’s Office of Homeland Security. This office coordinates 

the Homeland Security Council and prepares the Texas Homeland 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 3
 
Security Strategic Plan. The Homeland Security Council has 

responsibility for statewide planning, coordination, and 

communication for homeland security preparedness. It is the 

decision making body for the Texas Strategic Plan. 

The Governor’s Office, through the State Director of Homeland 

Security, directs policy for the Homeland Security Grant Program 

in Texas. The Department of Public Safety is the State 

Administrative Agency appointed by the governor in 2005 to 

manage and monitor Homeland Security Grant Program funds for 

state and local entities. 

The Texas Division of Emergency Management, which is under 

the Texas Department of Public Safety, makes recommendations 

regarding the distribution of federal homeland security funds, 

administers applications for local and state entities applying for 

federal homeland security-related grant funds, audits and tracks 

homeland security funds, and coordinates implementation of the 

State’s Homeland Security Strategic Plan. The State 

Administrative Agency administers the Homeland Security Grant 

Program for the Texas Division of Emergency Management. The 

Texas Department of Public Safety’s organizational structure is 

included as Appendix D. 

The State of Texas has 254 counties, 1,205 cities, and 3 Native 

American tribes. When the first homeland security grant program 

began, the Governor’s Office considered it infeasible for the State 

Administrative Agency to be knowledgeable of the needs of more 

than 1,400 jurisdictions, and to manage homeland security grants 

for such a large number of jurisdictions. The Governor’s Office 

mandated that homeland security needs be evaluated and grants 

awarded on a regional basis using the existing structure of 24 state 

Councils of Government planning regions, which were already 

charged with carrying out a wide variety of regional programs. 

The Councils of Government are governed by representatives of 

cities and counties in each region. 

Proposed homeland security projects developed by cities, counties, 

and other eligible entities, and proposed regional projects, were 

submitted to Councils of Government planning regions for review, 

evaluation, and ranking. Each region had a committee primarily 

comprised of emergency responders and local officials to 

accomplish these tasks. Project proposals approved at the regional 

level were provided to the State Administrative Agency, where the 

projects were aggregated by emergency function. That 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 4
 
information was used to develop individual initiatives and related 

investment justifications to be funded by homeland security grants. 

Texas State agency subgrantees were to follow a different process, 

which called for submitting project proposals to the State 

homeland security staff for review. Proposed projects could be 

approved for full or partial funding by the Director and/or 

Assistant Director of Homeland Security. State agencies were 

required to meet all Federal grant requirements. 

The State of Texas also had five Urban Areas Security Initiative 

areas: Austin, Arlington-Dallas-Fort Worth, El Paso, Houston, and 

San Antonio. Each Urban Areas Security Initiative jurisdiction 

had groups for planning, strategy development, identifying needs, 

and preparing investment justifications. 

Grant Funding 

FEMA awarded the State of Texas approximately $354 million in 

Homeland Security Grant Program funds during FYs 2006 through 

2008. As part of this program, the State received $291 million in 

State Homeland Security Program and Urban Areas Security 

Initiative grants. During that timeframe, the State Administrative 

Agency awarded funds to the following subgrantees which 

included counties, cities, State agencies, urban areas, and a Native 

American tribe: 

•	 2006: 233 subgrantees comprised of 24 Councils of 

Government, 103 counties, 100 cities, 1 State agency, 

1 Native American tribe, 1 airport, and 3 urban areas; 

•	 2007: 182 subgrantees comprised of 24 Councils of 

Government, 80 counties, 66 cities, 6 State agencies, 

1 Native American tribe, 1 organization, and 4 urban areas; and 

•	 2008: 233 subgrantees comprised of 24 Councils of 

Government, 94 counties, 99 cities, 9 State agencies, 1 Native 

American tribe, 1 airport, and 5 urban areas. 

Table 1 displays a breakdown of the State Homeland Security 

Program and Urban Areas Security Initiative grant funds by year. 

Some urban areas did not receive grant funds during each of the 

fiscal years. 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 5
 
 

Table 1 

Homeland Security Grant Program Awards 

FYs 2006 through 2008 

Funded 

Activity FY 2006 FY 2007 FY 2008 Total 

State 

Homeland 

Security 

Program 

$26,140,000 $34,400,000 $65,440,000 $125,980,000 

Urban Areas 

Security 

Initiative 

$34,960,000 $58,540,000 $71,857,000 $165,357,000 

Law 

Enforcement 

Terrorism 

Prevention 

Program 

$24,740,000 $24,560,000 Not 

Applicable $49,300,000 

Citizen 

Corps 

Program 

$1,020,000 $773,000 $798,000 $2,591,000 

Metropolitan 

Medical 

Response 

System 

Program 

$3,020,000 $3,356,000 $4,176,000 $10,552,000 

Total $89,880,000 $121,629,000 $142,271,000 $353,780,000 

Foxx & Company completed an audit of the State of Texas’ 

management of DHS’ State Homeland Security Program and 

Urban Areas Security Initiative grants awarded during FYs 2006 

through 2008. The objectives of the audit were to determine 

whether the State distributed and spent Homeland Security Grant 

Program funds strategically, effectively, and in compliance with 

federal laws, regulations, and guidance. Nine researchable 

questions provided by the DHS Office of Inspector General (OIG) 

established the framework for the audit. The researchable 

questions were related to the State Administrative Agency’s 

planning, management, and evaluations of grant activities. 

Appendix A provides additional details on the Purpose, Scope, and 

Methodology of this audit, including the nine researchable 

questions. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 6
 
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 laws, grant guidance and 

regulations. The State’s plans linked funding to all-hazard capabilities and 

to goals that were established based on risk assessments. We identified 

two best practices that should be considered for sharing with other states. 

However, improvements were needed to enhance Texas’ management of 

the grants including: 

• Setting goals and objectives and measuring improvements, 

• Monitoring of subgrantee activities, 

• Timeliness of grant fund expenditures, 

• Statewide strategy for special response teams, 

• Review and approval process for State Agency projects, 

• Allocation of grant funds by Councils of Government, and 

• Compliance with federal inventory requirements. 

We have provided 14 recommendations, which if implemented, should 

enhance the effectiveness of the State’s grants management and overall 

use of grant funds to improve preparedness and response capabilities. 

Setting Goals and Objectives and Measuring Improvements 

The State’s strategic plan did not contain adequately defined goals and 

objectives to use in measuring performance. As a result, the State did not 

have an adequate basis for measuring improvements in the State’s 

preparedness and response capabilities. 

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

program performance, requires that grantees monitor grant and subgrant 

supported activities to assure that program goals are being achieved. 

Department of Homeland Security State and Urban Area Homeland 

Security Strategy Guidance on Aligning Strategies with the National 

Preparedness Goal, dated July 22, 2005, states that an objective sets a 

tangible and measurable target level of performance over time against 

which actual achievement can be compared, including a goal expressed as 

a quantitative standard, value or rate. Therefore, an objective should be: 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 7
 
 

•	 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 goals and objectives in the State’s Strategic Plan were not consistent 

with federal requirements. The State’s goals and objectives were broadbased and did not provide for tracking and impartially measuring the 

impact of funds expended for equipment, training, and exercises. For 

example, one of the State’s objectives was to reduce vulnerability to manmade and natural threats to the agriculture industry. Examples of two 

priority actions that are not measurable for this objective were: 

(1) amplify statewide pest, pesticide, agricultural disease, and food 

contamination monitoring capabilities, and (2) ensure sufficient 

laboratories and specialized facilities are available to analyze pest and 

disease samples. 

State officials said that measurable goals and objectives as part of the 

State’s strategic planning process are difficult to develop. Without 

adequate measurable goals and objectives, the State did not have a 

sufficient basis to evaluate the effect of grant expenditures on its 

preparedness and response capabilities. Also, the State was unable to 

adequately determine progress toward goals and objectives in future 

funding and management decisions. 

Because the State did not have a performance measurement mechanism to 

identify improved capabilities, it periodically performed surveys 

requesting jurisdictions to rate their progress toward achieving Department 

of Homeland Security’s target capabilities. However, the survey 

information received is technically flawed because these surveys were 

based on the subjective judgment of local jurisdiction officials. To further 

exacerbate the quality of the survey information, jurisdiction officials said 

that they did not want to report “no progress” on a capability because it 

would appear they were doing nothing, or that the capability was “fully 

achieved.” The officials were concerned that they would not receive 

additional funding for “fully achieved” capabilities. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 8
 
 
Recommendations: 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Director of the Texas Department of Public 

Safety to: 

Recommendation #1: Develop strategic goals and objectives 

applicable to jurisdictions and first responder capabilities that are 

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

Recommendation #2: Incorporate the goals and objectives into a 

statewide system for measuring first responder, local jurisdiction, 

Councils of Government, Urban Area, and State agency progress 

toward achieving the goals and objectives. 

Recommendation #3: Include the progress achieved during the 

decision making process for preparing applications and 

determining allocations of future grant funds. 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendation #1. FEMA said that the 

State’s revised Homeland Security Strategy, approved in January 

2010, has goals and objectives that are specific, measurable, 

achievable, results-oriented, and time limited. Based on the 

revised strategy, FEMA concluded that the recommendation had 

been sufficiently addressed. 

With respect to recommendation #2, FEMA said that while it may 

not legally “require” the grantee to use (or create) a “statewide 

system,” it encourages grantees to measure the progress of their 

capabilities as part of the State Homeland Security Grant Program 

and the Urban Areas Security Initiatives awards. 

FEMA concurred with the third recommendation. FEMA said it 

recognizes that the State is making an effort to achieve this 

recommendation already, and is satisfied with the State’s progress 

as demonstrated through the 2009 and 2010 fiscal year grant 

processes. 

The State concurred with the findings and recommendations. The 

State said it is waiting for FEMA's response to Congressman 

Cuellar's HR 398 -- the Redundancy Elimination & Enhanced 

Performance for Preparedness Act, recently signed into law by the 

President, and it looks forward to incorporating the resulting 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 9
 
proposed measures within a reasonable timeframe into its future 

homeland security planning and grants management processes. 

The State said that in the meantime, Texas will rely on: 

•	 The outcome goals inherent in the 37 capabilities of the Target 

Capabilities List, 

•	 The Texas risk-based assessment framework currently being 

developed, and 

•	 The homeland security goals, objectives, priority actions, 

milestones, and measures already established in the Texas 

Homeland Security Strategic Plan for 2010-2015, the Texas 

Department of Public Safety Strategic Plan for 2010-2015, and 

investment justifications of the Councils of Government, Urban 

Areas Security Initiatives, and State agencies. 

The State said that the items cited above, along with the results 

reflected in reports of the State’s on-site monitors and various 

after-action reviews, will assist with future grant funding decisions. 

The FEMA and State responses include positive steps for 

implementing the recommendations. Within 90 days, the Assistant 

Administrator, Grant Programs Directorate, needs to outline 

specific corrective actions with supporting documentation for 

implementation of the recommendations, and a plan to ensure that 

the State’s implementation of its proposed corrective actions 

proceed as intended. 

Monitoring Subgrantee Activities 

The State did not monitor the subgrantees’ performance to ensure that the 

subgrantees were adequately performing their responsibilities toward 

enhancing terrorism prevention, response, recovery, and mitigation 

capabilities. The State’s monitoring of subgrantees did not focus on 

program performance, but instead, focused primarily on financial and 

fiscal compliance-type issues. The State generally had reasonable 

assurance that fiscal and compliance requirements were met. However, 

the monitoring did not evaluate whether the State’s capability to prevent, 

respond to, recover from, and mitigate the effects of terrorist attacks and 

other catastrophic events was being enhanced. The monitoring did not 

provide specific assurance that subgrantees (i.e., State agencies, regional 

Councils of Government, Urban Areas Security Initiative recipients, and 

local jurisdictions) were adequately performing their responsibilities 

toward enhancing terrorism prevention, response, recovery, and mitigation 

capabilities. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 10
 
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 grant 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 must cover each program, function, 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, Compliance 

Supplement, Part 3-M states that grantees are responsible for monitoring 

subgrantee use of federal awards through reporting, site visits, regular 

contact, or other means. Grantee monitoring should provide reasonable 

assurance that the subgrantee administers federal awards in compliance 

with laws and regulations, as well as the provisions of contracts or grant 

agreements. Monitoring should also identify whether performance goals 

are achieved. 

Current Monitoring Activities 

The State’s monitoring activity was not designed to monitor 

subgrantee performance of their responsibilities toward enhancing 

terrorism prevention, response, recovery, and mitigation 

capabilities. The State’s major subgrantee monitoring activities 

included (1) tracking grant-funded projects and activities via a 

comprehensive automated system called the “State Preparedness 

Assessment and Reporting Service” and (2) making site visits to 

selected subgrantees. Neither of these activities was designed to 

monitor subgrantee program performance. 

Under the State’s automated assessment and reporting system, 

subgrantees must enter and update information on each funded 

project from its beginning through its completion or termination. 

The project data tracked with this system consisted of basic 

financial data only, i.e., the amount of grant funds allocated to the 

project, the amount expended to date, and the balance remaining 

unspent. 

The State’s on-site monitoring program lacks effective subgrantee 

performance monitoring because the State has not dedicated the 

necessary resources to monitor the subgrantees’ performance. The 

State Compliance and Audit Section (within the State 

Administrative Agency) is responsible for monitoring visits to 

regional Councils of Government, Urban Areas Security Initiative 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 11
 
areas, and local subgrantees (counties, cities, villages, and others). 

The Compliance and Audit Section had a staff of five monitors. 

During the 4-year period from 2006–2009, the staff visited 245 

sites or an average of 61 subgrantees a year. The guidelines for 

these visits focused on numerous compliance and fiscal issues and 

put little or no emphasis on program performance issues. 

Each subgrantee was responsible for taking certain actions to plan 

or implement grant-funded projects that are designed to enhance 

prevention of, response to, recovery from, or mitigating the results 

of, terrorist attacks or other catastrophic events. The performance 

responsibilities of the Councils of Government, Urban Areas 

Security Initiatives, and local subgrantee were included in annual 

implementation plans, investment justifications, project 

descriptions, or award agreements. For example, the 24 regional 

Councils of Government were allocated a total of about 

$23 million from the FY 2006 through FY 2008 State Homeland 

Security Program for planning and related services. The 24 

Councils were also allocated another $21 million for specific 

capability enhancement projects. The planning funds were to pay 

for various tasks described in the State’s standard statements of 

work expected of each regional Council of Government. The tasks 

included 7 regional planning tasks, 10 local planning assistance 

tasks, 9 grant support planning tasks, 3 exercise planning tasks, 

and 4 reporting tasks. 

The State required each Council of Government to prepare annual 

implementation plans detailing what each Council was to do and 

milestones for completion of the work. Although performance 

requirements were specifically defined by the State, it did not 

require the Councils to document or regularly report on whether 

and how these requirements were performed. As indicated above, 

neither the automated project tracking system nor the on-site 

subgrantee monitoring program were designed to cover 

subgrantees’ performance of expected program or project 

activities. 

Similar situations existed for the Urban Areas and the other 

subgrantees. As a result, the State did not have an adequate basis 

for knowing whether or how well subgrantees were performing 

assigned tasks related to enhancing prevention, response, recovery, 

and mitigation capabilities. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 12
 
Identified Performance Issues 

During our visits we observed several conditions that could have 

been identified through routine performance tracking or on-site 

monitoring of subgrantee performance. If these types of issues 

were identified during monitoring visits, the State would have been 

in a better position to evaluate the problems and to determine the 

appropriate actions to address the issues. 

•	 The State had invested more than $10 million in the 

development of seven fusion centers. However, the State had 

not developed systematic state-wide guidance on assessing the 

performance of the centers. Fusion center and local officials 

said that little guidance had been provided by the State on the 

expectations for the Centers. The officials said that they were 

left on their own and were still developing performance goals 

for assessing Centers effectiveness. 

•	 Councils of Government differed in how they related to 

subgrantees. For example, one Council was closely engaged 

with the activities of subgrantees and special response teams, 

while another Council was not familiar with such critical 

matters as what special response teams were located in the 

region. Also, the latter Council’s implementation plans called 

for designing and applying a process for reviewing the 

eligibility of potential subgrantees in the region. When asked 

whether these tasks had been done, a Council official told us 

that both had been done, but neither had been documented. 

•	 A first responder trailer purchased by a regional Council of 

Government in 2006 for $250,000 was of questionable use 

within the Council’s region because of the trailer’s unusually 

large size and design. At the time of our visit, we were 

informed that the trailer had been parked since its purchase, 

with very little use. When we notified the State Administrative 

Agency of this situation, the Agency immediately investigated 

the matter and began efforts to find use for the trailer at another 

location. 

•	 A special response team had to use bolt cutters to cut pad-locks 

to open the doors on two first responder trailers because keys 

to the locks were not available. Upon opening the trailer doors, 

we discovered that two relatively new mobile generators had 

flat tires and would have been difficult to move in the event of 

an emergency. 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 13
 
•	 In another city, a consultant’s report in March 2009 said that 

the city’s Special Weapons and Tactics team’s body armor had 

been expired since 2003. Efforts to fund replacement body 

armor were still under way at the time of our visit. 

•	 During our visits to subgrantees, we identified some grantfunded projects that had developed into potential “best 

practices” that could be beneficial if adopted by other 

jurisdictions. (See the best practices section of this report.) 

The State’s tracking and site-monitoring efforts did not identify 

best practices that could be communicated statewide for 

optimum application. 

In 2005, the Texas State Auditor also reported that the State had 

not adequately held regional and local jurisdictions accountable for 

grant funds and for reporting their performance. The report 

recommended, among other things, that the State develop 

subgrantee agreements that hold regional and local jurisdictions 

accountable by clearly defining expectations and developing and 

including detailed performance measures in the agreements. In the 

response to the audit report, the State Administrative Agency (then 

the Texas Engineering Extension Service) agreed with the 

recommendation and said that it would develop and include 

detailed performance measures in all subgrantee agreements for the 

2004 grant years and beyond. At the time of our review, the State 

still had not developed or applied performance measures that 

would hold regional and local subgrantees accountable for their 

performance. 

The State Administrative Agency Director told us that the Agency 

will be looking for ways to improve its monitoring of subgrantees 

by including program performance issues in its routine monitoring 

efforts and its on-site monitoring program. The Director said that 

high staff turnover and absence of expertise had impeded the 

Agency’s efforts to improve subgrantee monitoring, which has 

contributed to the above issues. 

Recommendation 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Director of the Texas Department of Public 

Safety to: 

Recommendation #4: Develop and implement a process for 

expanding the scope of monitoring to include: 

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a.	 assessments of key program performance and progress 

issues, and 

b.	 the identification of potential best practices that may 

warrant communications to other subgrantees. 

Management Comments and Auditors’ Analysis 

The draft report commented on by FEMA contained two 

recommendations for our findings on monitoring of subgrantees. 

While expressing concurrence with the two recommendations 

(formerly recommendations #4 and #5 in the draft report), FEMA 

suggested that they be combined into one recommendation to 

avoid duplication and redundancy. We agreed with FEMA’s 

suggestion and revised the recommendations accordingly before 

finalizing this report. The revised recommendation is essentially 

the same as the two in the draft report. 

Additionally, FEMA said that its FY 2010 monitoring visit showed 

that Texas had established a process to identify and document best 

practices discovered through monitoring their subrecipients. 

FEMA also said that it is satisfied with the state’s progress in this 

regard and is confident that the State will be able to provide greater 

focus and resources in its monitoring protocols, and assess 

progress and performance achieved under currently open grants. 

The State concurred with the finding and recommendation. 

Officials explained that while performance checks of Urban Areas 

Security Initiative grants are conducted every two years by DHS 

and Texas State monitors, Texas is taking additional steps to 

enhance the performance improvement process by assigning: 

•	 A senior homeland security planner to each of the six 

Department of Public Safety regions (which include 24 

Councils of Government and 5 Urban Areas Security 

Initiatives), 

•	 Two homeland security planners for the 34 State agencies, 

and 

•	 A State Lead for each of the 37 items on the Target 

Capabilities List, aligning those items and leads with 

already existing homeland security-related councils and 

committees. 

The State expects that the actions above will provide the 

leadership, oversight, and assistance required to periodically assess 

and improve performance state-wide. In addition, the State said 

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that the State Administrative Agency has been realigned under the 

Office of Homeland Security and will form the basis for a 

reorganized and expanded homeland security directorate to assist 

in enhancing the homeland security posture of the State while 

serving as a model for the nation in collaborative grants 

management and faithful stewardship of taxpayer resources. 

The State said it will establish performance standards and include 

the standards in subgrantee agreements for subsequent monitoring. 

State monitors will then expand the scope of on-site monitoring to 

include programmatic issues. The State also said that its monitors 

began sharing best practices among jurisdictions in July of 2010. 

The State said that the Urban Areas Security Initiatives programs 

already identify and share best practices through the quarterly 

meetings hosted by the State Administrative Agency and through 

the Texas Urban Areas Security Initiatives Peer-to-Peer Planning 

Network. 

The FEMA and State comments are responsive to our 

recommendations. If properly implemented, the actions identified 

in the responses should address the conditions identified during the 

audit. Within 90 days, the Assistant Administrator, Grant 

Programs Directorate, needs to provide corrective actions for the 

recommendations and a plan to ensure the State’s implementation 

of its proposed corrective actions proceeds as intended. 

Timely Expenditure of Grant Funds 

The State obligated grant funds to subgrantees in accordance with federal 

requirements but subgrantees did not always initiate projects in a timely 

manner. As a result, funds were not expended within the original 3-year 

performance period of the grants. Consequently, first responders were less 

likely to be timely equipped, trained, and prepared as possible. 

Additionally, other priority homeland security initiatives were not 

completed as timely as possible. 

FEMA Information Bulletin No. 257 dated July 17, 2007, addressed the 

condition that there were many requests by grantees for extending the 

grant performance periods for FY 2002, 2003, and 2004 grants. The 

bulletin recognized that there were problems in making timely 

procurements but that it was important to ensure that funds were obligated 

and expended in a timely manner, within established periods for 

performance. In addition, FEMA’s Program Guidance for the FY 2008 

Homeland Security Grant Program stated that FEMA strongly encouraged 

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the timely obligation of funds from local units of government to other 

subgrantees. 

The State’s grant expenditure report showed that 60% of the FY 2007 

grant funds awarded to subgrantees had not been drawn down as of 

September 30, 2009. The following table shows the undrawn amount of 

Homeland Security Grant Program funds for each of the 3 grant years 

included in our audit, based on data in the State’s expenditure reports. 

Table 2 

Texas Homeland Security Grant Program 

Awards and Draw Downs 

As of September 30, 2009 

($ millions) 

Grant 

Year 

Date of 

Award to 

the State 

Total 

Awarded 

Total 

Draw Downs 

Undrawn 

Balance 

Percentage 

Undrawn 

2006 06/30/06 $ 89.9 $ 80.1 $ 9.8 11% 

2007 08/13/07 $ 121.6 $ 48.8 $ 72.9 60% 

2008 09/05/08 $ 142.3 $ 17.2 $ 125.1 88% 

The State had previously advised all potential subgrantees in 2007 grant 

guidance that the State needed the help of subgrantees’ staff to ensure that 

the tasks needed to carry out grant requirements (deciding what to buy, 

ordering, receiving, and submitting invoices for payment) were executed 

expeditiously. The 2007 grant guidance included a timeline that showed 

(1) when all grant funds were to be allocated towards projects, 

(2) deadlines for cities, counties, and regions to order equipment or 

otherwise commit funds to training and exercises, and (3) established a 

deadline for grantees to submit invoices to the State for reimbursement. 

The guidance stated that subgrantees needed to make every effort to 

accomplish tasks before deadlines approached since the State did not plan 

to issue any grant extensions. 

State officials said that the large percentage of 2007 funds that remained 

unexpended as of September 30, 2009, indicated that some jurisdictions 

were still not sufficiently aggressive in starting and finishing projects, 

which could lead to requests for extensions in the grant performance 

period. The State noted in the 2007 grant guidance that it had to extend 

the period of performance for FY 2005 homeland security grants until 

October 31, 2007 for these reasons. In the 2007 grant guidance, the State 

also advised subgrantees that the lead time for the procurement of buildto-order-equipment, such as hazardous response vehicles, specialized fire 

equipment, and customized electronics, was long. 

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During our fieldwork, State Administrative Agency staff provided 

documentation to show they were receiving reports from the regional 

planning commissions and Councils of Government on the status of 

subgrantee projects which could be used to monitor subgrantee project 

progress. The State Administrative Agency Director said that she was 

considering establishing specific timeframes for grant recipients to initiate 

and complete certain projects. If projects were not initiated timely, the 

funds may be reallocated to other projects. However, this possible action 

had not been formalized into official procedures. 

Delays in expenditures of grant funds can impede State and subgrantees’ 

opportunities to enhance preparedness and response capabilities. Such 

delays also lead to extensions in the grant performance time period and 

delays in officially closing the grant. Accounting and reporting 

requirements continue as long as the grant remains open, which burdens 

both staff and tracking systems. 

Recommendation 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Director of the Texas Department of Public 

Safety to: 

Recommendation #5: Develop and implement procedures, with 

appropriate controls (such as deadlines), to ensure that subgrantee 

funds are drawn down in a timely manner. 

Management Comments and Auditors’ Analysis 

FEMA concurred with the recommendation (formerly 

recommendation #6 in the draft report). FEMA said that Texas has 

met all applicable grant program requirements concerning drawdowns, and there were no outstanding compliance issues. FEMA 

believed it was in the State’s best interest to identify and 

implement strategies that ensure its subrecipients’ funds are drawn 

down on a regular basis to facilitate accurate reporting and 100% 

of grant draw-down upon the grant’s expiration. 

The State also concurred with the finding and recommendation. 

The State said that, to maximize the productivity of grant funds, 

Texas will revise the timeline for grant expenditures, narrowing the 

window for subgrantee expenditures to give the State an 

opportunity to identify and reallocate unspent funds. The 

reallocations would be, in accordance with the State homeland 

security strategic plan, to other high-priority gaps and unmet needs 

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throughout the State. The State said these changes will soon be 

incorporated into a State-wide guide. 

The comments by FEMA and the State are responsive to the 

recommendation. If properly implemented, the actions identified 

in the State’s response should address the conditions identified 

during the audit. Within 90 days, the Assistant Administrator, 

Grant Programs Directorate, needs to outline the corrective actions 

for the recommendation and a plan to ensure the State’s corrective 

actions proceed as intended. 

Statewide Strategy for Special Response Teams 

The State had not established a statewide strategy concerning the optimum 

numbers, types, and locations of special response teams needed in the 

State. Also, the State had not established requirements or provided 

guidance and direction to existing or potential special response teams 

concerning standardization of equipment, training, exercises, and 

capability revalidation needs. As a result, the special response teams did 

not benefit from an overall statewide strategy to ensure that the teams 

were properly equipped, trained, exercised, validated, and interoperable. 

The State of Texas relies on special response teams in cities and counties 

throughout the State to be ready to respond to terrorist attacks and other 

catastrophic events. Teams were established to specialize in hazardous 

materials, search and rescue, special weapons and tactics, improvised 

explosive devices (bombs), and other emergencies. Within these 

categories, individual teams can vary, depending on their equipment, 

training, and capabilities. For example, Hazardous Materials Entry Teams 

are Type I, II, or III, depending on whether the Teams are staffed, 

equipped, and trained to meet or exceed minimum capabilities defined by 

FEMA for each type. 

An overall assessment of the State’s special response teams’ capabilities 

would require establishing a policy defining the States’ goals and 

objectives as to the desired special response team types, numbers, 

locations, and capabilities, and analyzing the locations and established 

capabilities of existing special response teams across the State. While not 

required by FEMA, the State’s strategic plan did not include a strategy 

concerning the optimum numbers, types, and locations of special response 

teams needed in the State. Also, the State’s Preparedness Reports did not 

provide an overall assessment of the State’s special response team 

preparedness and response capabilities. 

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The continued readiness of a special response team involves vigilance to 

ensure that the team is properly equipped, fully trained and exercised, and 

periodically revalidated as being capable of carrying out its role. 

Standardization of equipment and training among teams aspiring to 

develop and maintain like capabilities is beneficial because 

standardization provides interoperability among the teams, promotes 

economies in procurement, and facilitates oversight and assessment of 

how team leaders ensure that their teams are properly equipped, trained, 

exercised, and revalidated. 

The State Administrative Agency recognized that the identification and 

correction of a team’s deficiencies during exercises and revalidation 

reviews were vital to attaining and maintaining capabilities at the desired 

level. In this regard, the State Administrative Agency told us that reviews 

were performed of special response teams that verified training of first 

responders. However, the State had not provided guidance and direction 

on how special response team leaders were to ensure, on a current basis, 

that teams were ready to respond with the appropriate equipment, training, 

exercise experience, and revalidation credentials vital to effective 

response. 

We visited several special response teams in Texas, which included 

hazardous materials teams, urban area rescue teams, strategic weapons and 

tactics teams, crisis management teams, and bomb squads. We had 

discussions with each team on how the team ensured that they were 

adequately equipped, trained, exercised, and revalidated. All of the teams 

seemed highly motivated and dedicated toward that objective. The 

following observations indicate areas that need improvement: 

•	 Except for bomb squads, the teams we visited did not have 

standardized listings of the minimum items of equipment and 

training needed to perform their respective team missions. The 

decisions on equipment and training were made team-by-team 

using general guidance from recognized organizations and 

associations. The State did not provide standards or guidance on 

the minimum equipment and training needs. As a result, the State 

did not ensure that special response teams were as interoperable as 

would be the case if all of the teams were similarly equipped and 

trained. 

•	 One Special Weapons and Tactics team leader said that when his 

department decided to form the team, there was no ready means for 

finding out what specific items of equipment the team needed. He 

explained that he and his team members learned about equipment 

by attending various training sessions. 

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•	 Although the teams maintained data on various events related to 

training class scheduling and attendance, only one of the teams had 

assembled such data into an overall matrix or similar document 

showing whether or not each member had attended each 

mandatory or highly-recommended training course. 

•	 Needed improvements identified during exercises, and actions 

taken to affect the improvements, were also not readily visible in 

team records. 

•	 The State had not established a process for independent subject 

matter experts to periodically assess the readiness of special 

response teams, or validate teams’ capabilities. 

According to State and regional officials, the State staff did not have 

sufficient subject matter expertise and was reluctant to assert control over 

regional, city, and local officials. In this regard, the State’s FY 2008 

Investment Justification for Public Safety and Response stated that grant 

management and administration oversight would be provided by each 

subgrantee. Each subgrantee had dedicated project and financial 

management personnel who would oversee the use of grant funds. The 

State Administrative Agency was to serve in a review and approval 

capacity only. 

Without an overall strategy on the optimum numbers, types, and locations 

of special response teams needed, the State cannot ensure that efforts to 

enhance its response capability are given appropriate priority and 

direction. The absence of statewide standards on special response team 

equipment, training, exercises, and validation requirements decreases the 

prospect of teams working smoothly and effectively together in the event 

of a major terrorist attack requiring massive response. As a result, the 

special response teams did not benefit from an overall statewide strategy 

to ensure that the teams were properly equipped, trained, exercised, and 

validated. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, direct the Texas Director of Public Safety to employ 

appropriate subject matter experts to: 

Recommendation #6: Coordinate regionally in determining the 

numbers, types, and locations of special response teams needed in 

the State in comparison to the numbers, types and locations of 

existing special response teams. 

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Recommendation #7: Provide guidance and direction to special 

response teams concerning standardization of equipment, training, 

exercise, and revalidation needs. 

Recommendation #8: Establish a procedure designed to ensure 

that strategically positioned special response teams are equipped, 

trained, exercised, and validated. 

Management Comments and Auditors’ Analysis 

FEMA concurred with recommendation #6 (formerly 

recommendation #7 in the draft report) to coordinate regionally in 

determining the numbers, types, and locations of special response 

teams needed in the State in comparison to the numbers, types and 

locations of existing special response teams. FEMA said that the 

State will be better positioned to meet its Homeland Security 

Strategy Goal to maximize response capabilities by expanding the 

State’s regional response and mutual aid network, and by 

coordinating with its subrecipients in an effort to more accurately 

determine current resources, needs, and desired end state/outcomes 

relating to special response teams throughout the State of Texas. 

FEMA added that the importance of capabilities and needs 

assessments that address multiple disciplines and agencies is 

evident throughout FEMA’s planning doctrine. 

FEMA did not concur with recommendation #7 (formerly 

recommendation #8 in the draft report) as presented in the draft 

report, to require the State to provide guidance and direction to 

special response teams and use independent subject matter experts 

to assess special response team capabilities and readiness. FEMA 

believed the development of subrecipient policies and procedures 

is a State responsibility. FEMA deferred to the State to identify 

the mechanisms and/or means by which the State will provide 

guidance and direction to the special response teams in the area of 

equipment, training, standardization, and exercise validation. The 

recommendation was changed to delete the use of independent 

subject matter experts to assess capabilities and readiness. 

FEMA concurred with recommendation #8 (formerly 

recommendation #9 in the draft report), which was revised as 

FEMA suggested in discussing a draft of this report. FEMA 

explained that the suggested revision sought to reaffirm the 

responsibilities of State Administrative Agencies to ensure the 

grant program expenditures are made in direct support of state or 

urban area homeland security strategic plans as applicable, and that 

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operational plans, purchases, training, and exercises align to those 

strategies. 

The State concurred with the findings and recommendations. The 

State said that an updated Texas Homeland Security Strategic Plan 

will address this recommendation and designate a State lead to 

oversee how special response teams are established, positioned, 

equipped, trained, exercised, and validated. 

The State said that, in the meantime, State and federal policies and 

procedures are already in place to support the standardization of 

equipment, training, exercises, and revalidation of various special 

response teams. These include (1) the FEMA Resource Typing 

guidance; (2) the National Fire Protection Association’s 472 

Standards for Competence of Responders to Hazardous 

Materials/Weapons of Mass Destruction Incidents, 2008 Edition, 

adopted by the Texas Commission on Fire Protection; (3) the 

National Tactical Officers Association SWAT Standards, 

supplemented by the Texas Tactical Police Officers Association’s 

SWAT Best Practices publication; (4) the National Guidelines for 

Bomb Technicians, regularly updated by the Federal Bureau of 

Investigations; and (5) the National Strategic Plan for U.S. Bomb 

Squads, annually updated by the National Bomb Squad 

Commanders Advisory Board. In addition, the State said that 

annual investment justifications generally reference specific 

changes in guidelines or best practices to justify proposed 

purchases of equipment, training, or exercises. 

The FEMA and State proposed actions are responsive to the 

recommendations. Within 90 days, the Assistant Administrator, 

Grant Programs Directorate, needs to outline the corrective actions 

for the recommendations and a plan to ensure the State’s corrective 

actions proceed as intended. 

State Agency Project Selection and Tracking 

State Agency project proposals were not evaluated with the same scrutiny 

applied to other Homeland Security projects proposed by local 

jurisdictions. Additionally, State Agency projects were not tracked in the 

State’s automated grants management tracking system. As a result, the 

State cannot ensure that the most deserving State Agency projects were 

selected from among all proposed State Agency projects. Also, State 

Administrative Agency officials did not receive the benefits of the State’s 

tracking system for State Agency projects. Accordingly, the State’s ability 

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to ensure that the State Agency projects were being managed in 
 

accordance with federal requirements was diminished. 
 

FEMA guidance has emphasized the importance of tying project funding 

decisions to approved state Homeland Security Strategies, which in turn 

must align with national priorities and target capabilities. Toward this 

end, Texas has developed and implemented processes and procedures to: 

•	 Ensure that projects proposed by subgrantees are reviewed and 

ranked by formal committees or working groups; 

•	 Ensure that the projects are, among other things, in line with the 

State strategy and national priorities; and 

•	 Ensure that the most beneficial projects are selected for funding. 

The State also has a highly automated system, the State Preparedness 

Assessment and Reporting Service, for controlling and tracking the 

financial progress of grant-funded homeland security projects. The 

Assessment and Reporting Service is a customized grant management tool 

that is designed to help grantee staff oversee the financial progress of 

Homeland Security grants. The system has several automatic checks and 

balances to ensure compliance with federal requirements. However, the 

State did not require that State Agency funded projects be tracked in the 

State’s automated system, as required of other subgrantees. The State 

agencies used their own systems for tracking the projects rather than the 

State Preparedness Assessment and Reporting Service system. 

The State designed a formal process for reviewing and approving 

subgrantee State Agency proposed projects, but the process was never 

implemented. The process included providing homeland security 

guidance to the potential State agency subgrantees, notifying the Texas 

Division of Emergency Management Council (made up representatives 

from State Agencies with Homeland Security responsibilities) of the 

guidance, and requesting potential State agency subgrantees to submit (online) investment justifications in alignment with target capabilities and 

with the Texas Homeland Security Strategic Plan. 

Instead of the formal process for selecting State Agency projects, an 

informal process was used. State Agency officials explained that they 

would meet with the Director of the Texas Department of Emergency 

Management to discuss the merits of each project. The State Agency’s 

staff would then submit a project proposal to the Director for review. The 

Director would then discuss the proposed project and funding with the 

State’s Director of Homeland Security. These officials would make the 

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final decision as to which State Agency projects were approved and the 

amount of grant funds awarded for each project. State Agencies whose 

projects were selected for funding would receive a letter advising them of 

the amount of funding. The State Agency would then enter into a 

subrecipient agreement with the Texas Department of Emergency 

Management. 

Texas Department of Emergency Management officials stated that the 

need for some projects was initially identified as a result of a shortfall 

identified either during an exercise or actual response to an emergency 

incident or disaster. At other times, the need for a project was identified 

by local governments, Councils of Government, and State Agencies 

during workshops, conferences, training, and exercises. Once the need for 

the project was determined, discussions among staff were conducted to 

determine the best means to close the gap. Under this less formal process, 

there is an increased risk that important projects proposed by State 

Agencies will not receive proper consideration. 

State officials acknowledged that State Agency projects were not tracked 

in the State Preparedness Assessment and Reporting Service system but 

were tracked separately. However, State officials said that actions had 

been initiated to include State Agency projects in the State Preparedness 

Assessment and Reporting Service system. We believe this is a positive 

first step and should be promptly completed. Including the State Agency 

projects would better ensure that the State Agency projects are subject to 

the same tracking and control as regional and local projects. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Director of Texas Department of Public 

Safety to: 

Recommendation #9: Ensure that State Agency project proposals 

are evaluated using the State’s established review and approval 

process. 

Recommendation #10: Complete the process to enter current and 

future State Agency projects into the State Preparedness 

Assessment and Reporting Service. 

Management Comments and Auditors’ Analysis 

FEMA concurred with both recommendations (formerly 

recommendations #10 and #11 in the draft report). FEMA 

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acknowledged the need for consistency in review of all grantfunded, local, regional, and State projects. FEMA stated that it 

concurs with the intent of the recommendation as a best practice 

with the understanding that the State is already compliant with its 

reporting requirements cited within the FEMA grant program 

guidance packages. 

The State also concurred with the finding and recommendations. 

Prior-year State agency grants are currently being closed out and, 

due to financial tracking requirements, it is not practical to enter 

current State projects into State Preparedness and Reporting 

Service system. All FY 2010 and future State projects will be 

entered into and tracked using that system. The State has opened a 

competitive call for State agency projects, which will be reviewed, 

prioritized and awarded by the Texas Homeland Security Council 

based on the technical capabilities list, risk assessment framework, 

and how well they address the goals and objectives of the State 

Strategic Plan. 

The FEMA and State comments are responsive to the 

recommendations. If properly implemented, the actions identified 

in the State’s response address the conditions identified during the 

audit. Within 90 days, the Assistant Administrator, Grant 

Programs Directorate, needs to outline the corrective actions and a 

plan to ensure the State’s implementation of its proposed 

corrective actions proceed as intended. 

Councils of Government Allocations 

Councils of Government funding allocations to their local jurisdictions 

were not always made using a risk-based methodology. While not 

required by FEMA, risk management is a way to direct finite resources to 

those areas that are most at risk of terrorist attack under conditions of 

uncertainty. Given limited resources, risk management is a structured 

means of making informed tradeoffs and choices about how to use 

available resources, and of monitoring the effect of those choices. 

In three Texas regions, the Councils of Government used factors other 

than risk to allocate funding to their jurisdictions, including dividing 

available funds equally among jurisdictions. For example: 

•	 For FY 2006 funding and prior years, one Council of 

Government’s First Responder Preparedness Committee used a 

percentage to allocate funding. The region’s major city, with a 

population of about 700,000, received 60 % of the funding while 

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the remaining jurisdictions divided the remaining 40 % of the 

funds equally. 

•	 For FYs 2007 and 2008, the Committee divided all funds evenly 

throughout the eligible jurisdictions with the exception of the 

Tribal Nation, which received less funding. The reason given for 

dividing the funding equally was to allow each jurisdiction (i.e., 

county) to build capabilities. No reference was made to risk, 

vulnerability, or consequence in making the equal division, even 

though populations and infrastructures of the seven jurisdictions 

varied significantly. The largest county in the region, which 

included a major city, had an estimated population of 742,000 in 

2008, whereas the next largest county had a population of 9,331 

and the smallest county had 2,275 residents. 

The State Administrative Agency had not developed a risk-based 

methodology for the Councils to use in assessing risks when ranking 

potential projects. Instead, Councils were allowed flexibility in the 

manner in which projects were prioritized and funding allocated. The 

State Administrative Agency also did not examine the methodology of the 

Councils to ensure that fund allocations were risk-based. 

Without a requirement and process for allocating funds to local 

jurisdictions based on risk, there was no assurance that the Homeland 

Security Grant Program fund allocations reflected the appropriate level of 

risk and provided the respective jurisdictions grant funds consistent with 

the level of threat to the jurisdiction. 

State Administrative Agency officials acknowledged that a risk-based 

methodology was not always used with respect to allocating funds to local 

jurisdictions. However, the officials said that starting with FY 2011 

funding they intended to require the use of a risk-based methodology for 

the distribution of all grant funds. 

Recommendation: 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Director of Texas Department of Public 

Safety to: 

Recommendation #11: Ensure that Councils of Government 

consider the benefits of a risk-based methodology when allocating 

grant funds to local jurisdictions. 

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Management Comments and Auditors’ Analysis 

FEMA stated that it may not legally “require” the recommended 

action. However, FEMA supported the spirit and intent of the 

recommendation (formerly recommendation #12 in the draft 

report). FEMA added that it does not mandate that grantees 

administer a specific allocation method in their sub-award process. 

It is therefore up to the State to determine the most effective 

method of allocation, whether to include risk or otherwise, and to 

advise its subrecipients accordingly. 

The State concurred with the recommendation. The State 

explained that this methodology is already under development and 

will be introduced to the subgrantees in December 2010, with 

initial implementation for grant year 2011. In addition, as part of 

their quarterly reporting, subgrantees will be required to 

demonstrate how they use this methodology for allocating 

homeland security funds to local jurisdictions. This methodology 

is based upon the State Preparedness Report being tailored to 

specific needs of urban and rural areas, and is designed to promote 

equity, transparency, and the use of common tools and assessment 

approaches. Although the State Preparedness Report relies on selfreporting, monitoring processes are also being developed to ensure 

accuracy of and compliance with what is being reported. Annual 

reviews central to the allocation of grants funds, based on the 

developed methodology, will be conducted in the first quarter of 

each subsequent calendar year, beginning in calendar year 2012 

(allocations of grant funding from Councils of Government to local 

jurisdictions). 

The comments by FEMA and the State are responsive to the 

recommendation and, if properly implemented, the State’s 

proposed corrective actions should address the conditions 

identified during the audit. Within 90 days the Assistant 

Administrator, Grant Programs Directorate, needs to outline the 

specific corrective actions and provide a plan to ensure the State’s 

implementation of its proposed corrective actions proceed as 

intended. 

Inventory Control Requirements 

State subgrantees did not always maintain inventory records in accordance 

with federal requirements. Eight of the 10 subgrantees we visited were 

not in compliance with property record requirements. As a result, the 

State did not have reasonable assurance that the assets procured with 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 28
 
federal funds were adequately safeguarded to prevent loss, damage, or 

theft of the property. 

Statewide, subgrantees are responsible for managing and safe-guarding 

equipment and property purchased with State Homeland Security Program 

and Urban Areas Security Initiative grant funds. Code of Federal 

Regulations Title 44 § 13.32 (d), Management requirements, establishes 

procedures for managing equipment (including replacement equipment), 

whether acquired in whole or in part with grant funds, and includes the 

following minimum requirements: 

•	 Property inventory records must be maintained and must include 

12 data elements for each item: unit cost, description, source, 

acquisition date, identification number, location, title holder, use, 

condition, percent purchased with federal funds, ultimate 

disposition date, and sales price. 

•	 A physical inventory of the property must be taken and the results 

reconciled with the property records at least every two years. 

•	 A control system must be developed to ensure adequate safeguards 

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

damage, or theft shall be investigated. 

Code of Federal Regulations Title 44 § 13.20 (b) (3) requires that effective 

control and accountability be maintained for all grant and subgrant cash, 

real and personal property, and other assets. Grantees and subgrantees 

must adequately safeguard all such property and must assure that it is used 

solely for authorized purposes. Also, Code of Federal Regulations Title 2 

§ 215.34 (f) (4) requires that a control system be in effect to ensure 

adequate safeguards to prevent loss, damage, or theft of the equipment. In 

the State of Texas, contracts between the grantee and the subgrantees also 

require subgrantees to maintain control and accountability over assets 

acquired with federal funds. 

Inventory records at 8 of the 10 subgrantees we visited did not contain all 

of the required information. Individually, the control log for each of the 

eight noncompliant subgrantees was missing between 1 and 10 of the 

12 data fields with an average of 6 missing data fields. Some subgrantee 

staff responsible for maintaining the inventory control logs told us that 

they were not fully aware of the property management requirements. 

However, the property management requirements were included by 

general reference in the grant agreements between the State and each 

subgrantee. Also, the State Administrative Agency had posted 

information on its web site detailing federal property record keeping 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 29
 
 

requirements. In addition, the State Administrative Agency presented the 

property record keeping requirements at State Homeland Security 

Conferences. 

Without the required property management records, subgrantees cannot 

maintain, safeguard, control, or adequately account for assets procured 

with federal funds. If subgrantees do not have accurate records of existing 

equipment, they cannot make sound management decisions regarding 

what additional equipment they need in the future. 

Recommendations 

We recommend that the Assistant Administrator, Grant Programs 

Directorate, require the Director of the Texas Department of Public 

Safety to: 

Recommendation #12: Enforce the property management 

requirements for equipment purchased with federal funds in 

individual subgrantee contracts. 

Recommendation #13: Require subgrantees that are not in 

compliance to provide a plan to the State to become compliant 

within a specified timeframe. 

Recommendation #14: Include verification of compliance with 

property management requirements during on-site monitoring 

visits to subgrantee locations. 

Management Comments and Auditors’ Analysis 

FEMA concurred with the recommendations (formerly 

recommendations #13, #14, and #15 in the draft report). FEMA 

said that each state is monitored by FEMA to ensure compliance 

with the specific property management requirements cited within 

44 CFR. 

The State concurred with the findings and recommendations. The 

State said that it will reaffirm and enforce the property 

management requirements for equipment purchased with federal 

funds in individual subgrantee contracts. The State also said that 

verification of compliance with property management 

requirements will be accomplished during on-site monitoring visits 

to subgrantee locations. The State said further that 

jurisdictions/agencies found not to be in compliance will be 

The State of Texas’ Management of State Homeland Security Program and 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 30
 
required to provide a plan to the State to become compliant within 

30 days of the finding. 

The comments by FEMA and the State are responsive to the 

recommendation and, if properly implemented, the actions 

identified in the State’s response should address the conditions 

identified during the audit. Within 90 days, the Assistant 

Administrator, Grant Programs Directorate, needs to outline the 

corrective actions and provide a plan to ensure the State’s 

implementation of its proposed corrective actions proceed as 

intended. 

Two Texas Subgrantees Developed Systems That May Be Best 

Practices 

We identified the following two practices in Texas that the Assistant 

Administrator, Grant Programs Directorate, should consider evaluating for 

potential use by other jurisdictions and states: 

•	 The City of Houston developed an emergency medical service 

patient tracking system. The system provides information on 

patients and tracks the patients from the time they arrive in 

Houston from an evacuated location (e.g., New Orleans) or from 

the scene of an incident, to a healthcare facility, through discharge 

from the facility, and to reunification with family or friends. This 

system was designed to avoid serious problems that actually had 

been experienced during major evacuations from hurricanes. 

•	 The Texas State Health and Human Services Department used 

Homeland Security grant funding for a system called the 2-1-1 

Information and Referral and Transportation Assistance Registry 

(Registry). All persons in Texas who may need assistance 

evacuating their homes during a disaster are entered in the 

Registry. The Registry is for people with disabilities, medical 

conditions, or other problems that would impede their ability to 

respond to a mandatory evacuation order because they do not drive 

or have family and friends to help. Across Texas, 2-1-1 Area 

Information Centers assist callers by explaining the Registry 

purpose and process. The Centers capture caller registration data 

in the Registry database. The Registry gives local emergency 

planners a better idea of the numbers of individuals who may need 

assistance and the type of assistance they may need during 

emergencies. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 31
 
Appendix A 

Purpose, Scope, and Methodology 

The purpose of the audit was to determine whether the State of 

Texas 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 the audit was to identify problems and 

solutions that can help the State of Texas better prepare for and 

respond to threats, acts of terrorism, and other hazards. The audit 

further enabled us to answer the following nine researchable 

questions: 

• Were measurable goals developed from plans? 

• Do funded plans link all-hazards capabilities to goals? 

• Were funds and resources distributed based on goals? 

• Does the State accurately measure risk? 

• Does the State measure response capabilities? 

• Can the State demonstrate improved performance? 

• Were grants administered compliantly? 

• Did the State monitor grant programs? 

• What innovative practices can be used by other states? 

The scope of the audit included the State Homeland Security 

Program and Urban Areas Security Initiative grant awards for 

FYs 2006, 2007, and 2008 as described in the Background section 

of this report. 

The audit methodology included work at FEMA Headquarters, 

State of Texas offices, each of the urban areas that received grants, 

and various subgrantee locations. To achieve our audit objective 

we analyzed data, reviewed documentation, and interviewed the 

key state and local officials directly involved in the management 

and administration of the State of Texas’ Homeland Security Grant 

Programs. We conducted site visits and held discussions with 

appropriate officials from state agencies, Councils of 

Governments, Urban Areas, counties, and cities in order to 

determine if program grant funds were expended according to 

grant requirements and State-established priorities. 

In addition to the State Administrative Agency, we contacted the 

following 26 subgrantee organizations. Except for two State 

agencies (which provided information via written responses to our 

questions) we made site visits to each subgrantee organization: 

The State of Texas’ Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 32
 
Appendix A 

Purpose, Scope, and Methodology 

State Agencies: 

•	 Animal Health Commission 

•	 Department of Emergency Management 

•	 Department of Health and Human Services 

•	 Department Information Resources 

•	 Forest Service (written response only) 

•	 National Emergency Response and Rescue Training Center 

(written response only) 

Councils of Government 

•	 Alamo Area 

•	 Capital Area 

•	 North Central Texas 

•	 Coastal Bend 

•	 Houston-Galveston Area 

•	 Rio Grande 

Urban Areas Security Initiative Recipients 

•	 Austin 

•	 Dallas-Fort Worth 

•	 El Paso 

•	 Houston 

•	 San Antonio 

Counties 

•	 Bexar County 

•	 El Paso County 

•	 Harris County 

Cities 

•	 Austin 

•	 Dallas 

•	 El Paso 

•	 Fort Worth 

•	 Houston 

•	 San Antonio 

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. We also visited special 

response teams at various locations. 

The State of Texas’ Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 

Page 33
 
Appendix A 

Purpose, Scope, and Methodology 

We conducted the audit between February 2010 and June 2010, 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. 

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 Texas. 

While the audit was 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 Texas officials. 

The State of Texas’ Management of State Homeland Security Program and 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 34
 
 
 

 

 

Appendix B 

FEMA Management Comments to the Draft Report 

December 2, 2010 

MEMORANDUM FOR: Michael Siviy 

 Director 

Grants Management Division, DHS OIG 

FROM: Elizabeth M. Harman 

 Assistant Administrator 

SUBJECT:	 	 	 Response to Draft OIG: The State of Texas’ Management 

of State Homeland Security and Urban Areas Security 

Initiatives Awarded During Fiscal Years 2006 through 

2008 

Thank you for the opportunity to comment on the subject draft report entitled, “The State 

of Texas’ Management of State Homeland Security and Urban Areas Security Initiatives 

Awarded During Fiscal Years 2006 through 2008”. The findings in the report will be 

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

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

the recommendations raised in this report. 

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

Inspector General during this engagement. 

Attachment 

cc: 	 Annette Hampton, RMBA 

Mildred Lloyd, GPD Audit Liaison 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 35
 
 

 

Appendix B 

FEMA Management Comments to the Draft Report 

Response to the Draft Report: The State of Texas’ Management of State Homeland 
 
 

Security Program and Urban Areas Security Initiatives Grants Awarded During 
 
 

Fiscal Years 2006 through 2008 
 
 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

develop strategic goals and objectives applicable to jurisdictions and first responder 

capabilities that are specific, measurable, achievable, results-oriented, and time limited. 

FEMA Response: FEMA concurs with the recommendation. The Grant Development 

and Administration Division (GD&A) of the Federal Emergency Management Agency’s 

(FEMA) Grant Program Directorate (GPD) approved the state’s Homeland Security 

Strategy revision in January 2010. It is GD&A’s opinion that these revised goals and 

objectives are specific, measurable, achievable, results-oriented and time limited, and will 

serve the state well in its homeland security efforts going forward. Based on the 

resubmitted Homeland Security Strategy, FEMA concludes that this recommendation has 

sufficiently been addressed. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

incorporate the goals and objectives into a statewide system for measuring first 

responder, local jurisdiction, Councils of Government, Urban Area, and State agency 

progress toward achieving the goals and objectives. 

FEMA Response: FEMA may not legally “require” the recommended action. Although 

FEMA GPD may not legally require the grantee to use (or create) a “statewide system”, 

we encourage grantees to measure the progress of their capabilities as part of the State 

Homeland Security Grant Program (SHSP) and the Urban Areas Security Initiative 

(UASI) awards. Thus, FEMA supports the spirit and intent of the OIG’s 

recommendation as it will enhance the state’s ability to measure progress at grantee and 

sub grantee levels. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

include the progress achieved during the decision making process for preparing 

applications and determining allocations of future grant awards. 

FEMA Response: FEMA concurs with the recommendation. As in recommendation #2, 

FEMA encourages grantees to measure the progress of their capabilities as part of the 

SHSP and UASI grants and, if this is done, use this as a basis for making determinations 

on grant allocations to sub grantees. GPD recognizes that the state is making an effort to 

achieve this recommendation already, and GPD is satisfied with the state’s progress as 

demonstrated through the 2009 and 2010 fiscal year grant processes. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 36
 
 

Appendix B 

FEMA Management Comments to the Draft Report 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

develop and implement a process for periodically assessing and improving the 

performance of grant recipients against the goals, expectations, milestones, and work 

tasks described in their respective implementation plans, investment justifications, area 

strategies, and funded project descriptions. 

FEMA Response: FEMA concurs with the recommendation however OIG agreed with 

GD&A at the October 25, 2010 Exit Conference to merge Recommendations 4 and 5 to 

assess performance and monitor accomplishments, according to sub grantee goals and 

objectives. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

expand the scope of monitoring (including on-site monitoring) to include assessments of 

key program performance and progress issues and the identification of potential best 

practices that may warrant communicating to other subgrantees. 

FEMA Response: FEMA concurs with the finding and suggests that recommendations 4 

and 5 be combined as one to avoid implementation duplication and redundancy. On this 

specific issue, GD&A and the OIG were in agreement at the October 25, 2010 Exit 

Conference to merge both of these recommendations. Additionally, and based on the 

FY2010 Monitoring Visit conducted by GD&A, it acknowledges that Texas has 

established a process to identify and document best practices discovered through 

monitoring their sub recipients. GD&A is satisfied with the state’s progress in this regard 

and is confident that by combining both recommendations as one the State will be able to 

provide greater focus and resources in its monitoring protocols, and assess progress and 

performance achieved under currently open SHSP and UASI grants. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

develop and implement procedures, with appropriate controls (such as deadlines), to 

ensure that sub grantees draw down funds in a timely manner. 

FEMA Response: FEMA concurs with the recommendation. FEMA GD&A 

acknowledges that Texas has met all applicable grant program requirements concerning 

draw downs, and there are currently no outstanding compliance issues. To that end, it is 

in the state’s best interest to identify and implement strategies that ensure its sub 

recipients are drawing down grant funds on a regular basis to facilitate accurate reporting 

and 100% grant draw down upon the grant’s expiration. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

coordinate with the Councils of Government in determining the numbers, types, and 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 37
 
 

Appendix B 

FEMA Management Comments to the Draft Report 

locations of special response teams needed in the State in comparison to the numbers, 

types and locations of existing special response teams. 

FEMA Response: FEMA concurs with the recommendation. The state will be better 

positioned to meet its Homeland Security Strategy’s Goal 3 Objective 3.3, Maximize 

Response Capabilities by Expanding the Statewide Regional Response and Mutual Aid 

Network, by coordinating with its sub recipients in an effort to more accurately determine 

current resources, needs, and desired end state/outcomes relating to special response 

teams throughout the state of Texas. Though not cited as a programmatic requirement 

within any current grant guidance under SHSP or UASI, the importance of capabilities 

and needs assessments that address multiple disciplines and agencies can be found 

throughout FEMA’s planning doctrine. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

provide guidance and direction to special response teams concerning standardization of 

equipment, training, exercise, and revalidation needs. including the possible use of 

independent subject matter experts to assess special response team capability and 

readiness. 

FEMA Response: FEMA does not concur with the recommendation to require the State 

to provide guidance and direction for sub recipient special response teams. FEMA 

proposes removing the recommendation to use independent subject matter experts to 

assess special response team capabilities and readiness because the development of sub 

recipient policies and procedures is a State responsibility. Therefore, FEMA defers to the 

State to identify the mechanisms and/or means by which the State will provide guidance 

and direction to the special response teams in the areas of equipment, training, 

standardization, and exercise validation. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

establish a procedure to assess that strategically positioned special response teams are 

equipped, trained, exercised, and validated. 

FEMA Response: FEMA concurs with the intent of the recommendation, however the 

proposed language to replace “assess” with “establish procedures designed to ensure” is a 

more practical approach to identify ways to equip, train, exercise and validate response 

teams. With this revised language, FEMA seeks to reaffirm the responsibilities of State 

Administrative Agencies to ensure that grant program expenditures are made in direct 

support of state or urban area homeland security strategic plans (as applicable) and that 

operational plans, purchases, training, and exercises align to those strategies. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 38
 
 

Appendix B 

FEMA Management Comments to the Draft Report 

ensure that State Agency project proposals are evaluated using the State’s established 

review and approval process. 

FEMA Response: FEMA concurs with the recommendation. GD&A acknowledges the 

need for consistency in review of all grant funded, local, regional and state projects. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

complete the process to enter current and future State Agency projects into the State 

Preparedness Assessment and Reporting Service. 

FEMA Response: FEMA GD&A concurs with the intent of this recommendation as a 

best practice, with the understanding that the state is already compliant with its reporting 

requirements cited within the SHSP and UASI grant program guidance packages. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

ensure that Councils of Government consider the benefits of a risk-based methodology 

when allocating grant funds to local jurisdictions. 

FEMA Response: FEMA may not legally “require” the recommended action. However, 

FEMA supports the spirit and intent of the OIG’s recommendation. FEMA GPD does 

not mandate that grantees administer a specific allocation method in their subaward 

process, and it is therefore up to the state to determine the most effective method of 

allocation, whether to include risk or otherwise, and to advise its sub recipients 

accordingly. 

OIG Recommendation #13: We recommend that the Assistant Administrator, Grant 

Programs Directorate, require the Director of the Texas Department of Public Safety to 

enforce the property management requirements for equipment purchased with federal 

funds in individual sub grantee contracts. 

FEMA Response: FEMA concurs with the recommendation. The Code of Federal 

Regulations Title 44 §13.32 (d), Management requirements, states the minimum 

requirements for managing equipment and replacement equipment purchased with grant 

funds. Each state is monitored by FEMA to ensure compliance with the property 

management requirements cited within 44 CFR. Grantees comply with these standards in 

accordance with the applicable grant terms, conditions and assurances. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

require sub grantees that are not in compliance to provide a plan to the State to become 

compliant within a specified timeframe. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 39
 
 

Appendix B 

FEMA Management Comments to the Draft Report 

FEMA Response: FEMA concurs with the recommendation. The Code of Federal 

Regulations Title 44 §13.32 (d), Management requirements, states the minimum 

requirements for managing equipment and replacement equipment purchased with grant 

funds. Each state is monitored by FEMA to ensure compliance with the property 

management requirements cited within 44 CFR. Grantees must comply with these 

standards in accordance with the applicable grant terms, conditions and assurances. 

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

Programs Directorate, require the Director of the Texas Department of Public Safety to 

include verification of compliance with property management requirements during onsite monitoring visits to sub grantee locations. 

FEMA Response: FEMA concurs with the recommendation. The Code of Federal 

Regulations Title 44 §13.40 Monitoring and reporting program performance, requires 

FEMA grantees to “monitor grant and subgrant supported activities to assure 

compliance with applicable Federal requirements and that performance goals are being 

achieved”. This includes the requirements set forth within §13.32 (d), Management 

requirements, which states the minimum requirements for managing equipment and 

replacement equipment purchased with grant funds. 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 40
 
 

TEXAS DEPARTMENT OF PUBLIC SAFETY

SI05 N. LAMAR BLVD. BOX 4087. AUSllN, TEXAS 7.n).OOO1

_.- ~121424-2000

__,lldp, IlIl' II ps

------ .oI,.lMG.'''''.,.....JII. -.. ....-._

-~ _m~

November 22. 2010 --- -- Ms. Anne L. Richards

Assisun! Inspector General for Audits

OffK:C of Inspector General

U.S. Department of Homeland Security

245 Murray Drive, S.W. Building410

Washington, D.C. 20528

Dear Ms. Richards:

This feller is in answer to yoUT recent rcpon presenting audit results of the Slate of Texas'

management of State Homeland Securit)' Prognun and Urban Areas Security Initiative grants

awarded during Fiscal Years 2006lhrough 2008.

The Slate of Texas concll~ with the 15 recommendations, which, when implemented, will

enhance the effectiveness of the Slate's gnmts management and ovellln usc of grant funds. It

will improve our ability to prepare. protect. respond and recover from acts of terrorism and/or

anyall·ha1.ard.

During the course ofsix months (Feb·Jun 2010). the Fou & COffiplll1y audit team displayed high

professional competeoce and were extremely conscientious and diplomatic during eaeh of their

visits. We appreciate the opportunity lO provide input to your draft findings and hope that we

have offered a response (below) that is helpful in finalizing your report.

Rerommendlltinn #1: Develop strategic goals and objectives applicable to jurisdictions and

first responder capabilities that are specific, measurable, achievable, results-oriented, and time

limited.

Rrrommendation #2: IncorporaLe the goals and objectives into a statewide system for

measuring first responder, local jurisdiction, Councils of Government. Urban Area. and Stale

agency progress toward achieving the goals and objectives.

Recommendation #3: Include the progress achieved during the decision making process for

preparing applications and delennining allocations of future grant funds.

Appendix C 

State of Texas Management Comments to the Draft Report 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 41
 
 

Concur. Texas eagerly awaits FEMA's response to Congressman Cuellar's HR 398 -- the

Redundancy Elimination & Enhanced Pcrfonnaoce for Preparedness Act. recently signed into

law by President Obama, and it looks forward to incorporating the resulting proposed measures

within a

reasonable timeframe into its fUlUre homeland security (HLS) planning and grants management

p........

However, in the meantime. Texas will rely on (I) the outcome goals inherent in the 37

capabilities of the Target Capabilities US! (feL), (2) the Texas risk·based assessment

framework currently being developed (Items 13 &; 14 below). and (3) those homeland security

goals. objectives. priority ac:tions. milestones, and measures already established in (a) the Texas

Homeland Security Strategic Plan, 2010-2015, (b) tbe Texas Depanment of Public Safety (DPS)

Sl11ltcgic Plan, 2010-2015, and (c) investment jUSliflCations (U) of the COOs, UASls and State

agencies.

~. as well as the results renectcd in reportS of the Office of Homeland Security

(OHLS)(Statc Administrative Agency (SAA) Monitors and various aftcr·ac1.ion reviews (AAR),

will assist with future grant decisions.

Recommendation '4: Develop and implement a process for periodically assessing and

improving the performance of grant recipients against the goals. expectations. milestones. and

work laSks described in their respective implementation plans. investment justifications, area.

str,ltcgies, and fuDded project descriptions.

Concur. While performance checks of UASIs are conducted every year by DHS and Texas

OPHLSISAA Monitors, Tcxas is taking additional steps in enhancing the performaoce

improvement process by assigning (I) a senior HLS planner to eac:h of the six DPS regions

(which include 24 COGs and 5 UASls) and two for the 34 sUlte agencies. and (2) a state lead for

each of the 37 items on the Target Capabilities List (TCL). aligning those items and leads with

already existing homeland security-related councils and commitlees.

This will provide the leadership, oversight and assistance required to periodically assess and

improve performance state-wide. In addition, the SAA has becn realigncd undcr tile Office of

HOlIlCland Security (OHLS) and will foml thc basis for a reorganized and expanded HLS

directorate to assist in enhancing the homeland security posture of the State while serving as a

model for the n~tion in collaborativc grants managcmcnt and faithful stcwardship of taxpayer

resources.

Recnmmendlltion #5: Expand the scope of monitoring (including on-site monitoring) to include

assessmcnts of key progr<lm performance and progress issues and the identification of potential

best practices that may warrant communicating to other sub grantees,

Concur. OHLSISAA will establish performance standards to be monitored and include thcmlO

sUD-~ipient agreements (SRA) (authority to monitor). OHL.S!SAA Audit & Compliance wi11

then e)[pand the .scope of on-site monitoring to include programmatic issues. OHLSISAA Audit

& Compliance began sharing best practices among jurisdictions in July of 2010. In addition.

Appendix C 

State of Texas Management Comments to the Draft Report 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 42
 
 

Texas VASls already idelllify and share best practices through the quarterly VASI Council

meetings, hosted by OHLSfSAA, and the Texas UASI Peer-to-Peer Planning Network.

RecommendatiOil #6: Develop and implement procedures, with appropriate controls (such as

deadlines), to ensure that sub grantees draw down funds in a timely manner.

Concur. To maximire the productivity of grant funds, Texas will revise the timeline for grant

expenditures, narrowing the window for COG/UASlfState agency expenditure,~ to give the State

an opportunity to sweep unspent funds and reallocate them, in accordance with the State

homeland security strategic plan, to other, high-priorily gaps and unmct nceds throughout the

State, These changes will be incorporated into a soon-to-be-published policies & procedures

guide for state-wide use, as well as continued allowances, as necessary, for certain large projects,

such as radio systems upgrades, which may require more time due to the requirements of

planning, contract negotiations, and actual build-out of equipmelll,

Recommendation #7: Coordinate with the Councils of Government in determining the

numbers, types, and locations of special response teams needed in the State in comparison to the

numbers, types and locations of existing special response teams.

I~ecommendation #fl: Provide guidance and direction to special response teams concerning

standardi711tion of equipment, training, exercise, and revalidation needs; including the possible

use of independelll subjcct matter experts to assess special response team capability and

readiness.

Recommendation #9: Establish a procedure to assess that strategically positioned special

response teams are equipped, trained, exercised, and validated.

Concur. [n the next update to the Texas Homeland Security Strategic Plan, the OHLS will

address this recommendation and designate a State lead to oversee how special response learns

are established, positioned, equipped, trained, exercised and validated.

In the meantime, be advised that Slate and fcderal policies and procedures are already in place to

support the standardization of equipment. training, exercises and revalidation of various special

response teams, such as;

(I) FEMA Resource Typing guidance;

(2) National Fire Protection Association·s (NFPA) 472 Standards for Competence of

Responders to Ha:r.ardous MaterialsIWeapons of Mass Destruction Incidents, 2008

Edition, adopted by the Texas Commission on Fire Protection (TCFP)

(3) National Tactical Officcrs Association SWAT Standards, supplcmentl,.'d by the Tcxas

Tactical Police Officers Association's SWAT Best Practices publication

(4) National Guidelines for Bomb Technicians, rej!;ularly updated by the FBI

(5) National Stmtegic Plan for U.S. Bomb Squads, annually updated by the National

Bomb Squad Commanders Advisory Board.

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cou'''uv .1;l;""""" ,PAOTIiCTOON

Appendix C 

State of Texas Management Comments to the Draft Report 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 43
 
 

In addition, annual U requests generally reference specifIC changes in guidelines or best practices

to justify proposed purehases of equipment. training or exercises.

Rerommendation'IO: Ensure that Stale Agent:y project proposals an: evaluated using the

State's established review and approval process.

Rerommendation'll: Complete the process to entet" CUm"nt and future Slate Agency projects

into the Stale Prepan.:docss Assessment and Reporting Sefvice.

Concur, Prior-year State agency grants are cunenlly being closed out and, due to financial

tracking requirements, it is not practical to enter" current State projects into SPARS. All 2010

and future State projects will be entered into SPARS and tracked using that system. OHL.SISAA

has opened a competitive call for State agency projects, which will be reviewed, prioritized and

awarded by the Texas Homeland Security Council based on the TeL. risk assessment

framewoclr:, and how well they address the goals and objectives ofthe State HLS SU'ategic Plan.

This methodology is already uDder development and will be introduced to the COGs, UASls and

State agcndes in December 2010. with initial implementation for grants }ocar 2011. In addition,

as part of !heir quarterly reporting, COOs, UASls and Stale agencies will be required to

demonstrate how they use this methodology for allocating homeland security funds to local

jurisdictions. This methodology is based upon the State Pn.-pan:dncss Report (SPR), being

tailored to specific needs of urban and rural areas, and is designed to prom()(e equity,

transparency, and the use of common tools and assessment approaches.

Although the SPR relies on self-reporting, monitoring processes are also being developed to

ensure accuracy of and compliance with what is being reponed. Annual reviews eentric to the

allocation of grants funds. based on the developed methodology, will be conducted in the first

quarter of each subsequent calendar year, beginning in calendar year 2012 (allocations of gr,l.Ot

funding from COGs to local jurisdictions).

Recommendation #13: Enforce the property management requirements for equipment

purchased with federal funds in individual sub grantee contracts.

Recommendation #14: Require sub grantee~ that arc not in compliance to providc a plan to the

State to become compliant within a specified timeframc.

Recommendation#IS Include verification of compliance wilh property management

requirements during on-site monitoring visits to sub grantClllocmions,

Com:ur. Texas will rcaffirm and enforce the property management requirements for equipment

purchased with federal funds in individual sub grantee contracts. Verification of compliance

with

property management requirements will be accomplished during on-site monitoring visits to sub

grantee locations. Jurisdictions/agencies found not 10 be in compliance will be required to

provide a plan to the State to become compliant within 30 days of the finding,

Appendix C 

State of Texas Management Comments to the Draft Report 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 44
 
 

Please let us KnoW if you require I1lO£e information on any of the issues idenlirled in the report.

Again, we welcome your feedback,

Sincerely.

Robert J, Bodisch

Deputy Director. Texas Homeland security

cc: Mr, Marty O'Neill, Fou: & Company

Appendix C 

State of Texas Management Comments to the Draft Report 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

Page 45
 
 

Appendix D 

Organization Chart 

Texas Department of Public Safety 
 
 

Organizational Chart 
 
 

The State of Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

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 Texas’ Management of State Homeland Security Program and 
 
 

Urban Areas Security Initiative Grants Awarded During Fiscal Years 2006 through 2008 
 
 

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, or visit the OIG web site at www.dhs.gov/oig. 

OIG HOTLINE 

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

misconduct relative to department programs or operations: 

• Call our Hotline at 1-800-323-8603; 

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• Email us at DHSOIGHOTLINE@dhs.gov; or 

• Write to us at: 

DHS Office of Inspector General/MAIL STOP 2600, 

Attention: Office of Investigations - Hotline, 

245 Murray Drive, SW, Building 410, 

Washington, DC 20528. 

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