According to DOJ officials, the JAG program provides states and localities with federal funds to support all components of the criminal justice system while providing a great deal of flexibility in how they do so. Recovery Act JAG-funded projects may provide services directly to communities or improve the effectiveness and efficiency of criminal justice systems, processes, or procedures. Like non-Recovery Act JAG funds, Recovery Act JAG awards are to be used within the context of seven statutorily established areas. The seven statutorily established areas and examples of how JAG funds may be used within these areas are outlined in table 1 below. Financial Requirements and Internal Controls DOJ requires that all Recovery Act JAG award recipients establish and maintain adequate accounting systems, financial records, and internal controls to accurately account for funds awarded to them and their subrecipients. Award recipients must also ensure that Recovery Act JAG funds are accounted for separately and not commingled with funds from other sources or federal agencies. If a recipient or subrecipient’s accounting system cannot comply with the requirement to account for the funds separately, then the recipient/subrecipient is to establish a system to provide adequate fund accountability for each project that has been awarded. Recipient Reporting and Performance Measurement Requirements All state and local Recovery Act JAG recipients are required to meet both Recovery Act and BJA quarterly reporting requirements. The Recovery Act requires that nonfederal recipients of Recovery Act funds (including recipients of grants, contracts, and loans) submit quarterly reports, which include a description of each project or activity for which Recovery Act funds were expended or obligated, and an estimate of the number of jobs created and the number of jobs retained by these projects and activities. In particular, the Recovery Act requires recipients to report on quarterly activities within 10 days of the end of each quarter. For Recovery Act JAG grants, BJA has added language in the grant awards that requires that grantees meet the federal reporting requirements and provides sanctions if they do not. Because the Recovery Act JAG program includes a pass- through element, SAAs must gather the required data elements for all pass- through recipients during the same 10-day time frame in order to meet their own reporting requirements. Separately, BJA requires that states and those localities receiving their funds directly through DOJ report on their progress in meeting established performance measures related to funded activities. BJA also requires all Recovery Act JAG recipients to submit an annual programmatic report with narrative information on accomplishments, barriers, and planned activities, as well as a quarterly financial status report as required by the Office of Management and Budget (OMB). In early 2010, after a year-long development and initial refinement period, BJA officially launched a new, online Performance Measurement Tool (PMT) to improve upon its previous grants management system and allow online performance measurement data submission. BJA plans to use the PMT to help evaluate performance outcomes in at least 13 grant programs, including Recovery Act JAG. According to the Standards for Internal Control in the Federal Government, activities need to be established to monitor performance measures and indicators. Such controls should be aimed at validating the integrity of performance measures and indicators—in other words, ensuring they are reliably designed to collect consistent information from respondents. BJA is also planning on using the PMT to assess performance measurement data and direct improvement efforts in 5 additional programs by the end of 2010. However, given that grantees were not required to submit their PMT reports until the second quarter of fiscal year 2010, some grantees did not begin submitting their first completed PMT reports until March 2010. BJA requires Recovery Act JAG recipients to use the PMT for quarterly reporting on their status in meeting the Recovery Act JAG program’s 86 individual performance measures, such as percent of staff who reported an increase in skills and percent of Recovery Act JAG-funded programs that have implemented recommendations based on program evaluation. Recipients of Recovery Act JAG funding receive their money in one of two ways—either as a direct payment from BJA or as a pass-through from an SAA—and they reported using their funds primarily for law enforcement and corrections. According to state officials from our sample states, more than half of the funding that localities received as pass-through awards from their SAAs was obligated specifically for law enforcement and corrections support, while about a quarter of the funds that recipients of direct awards received was dedicated exclusively to law enforcement. Regardless of the source, officials in states and localities reported using Recovery Act JAG funds to preserve jobs and activities that without Recovery Act JAG funds would have been cut or eliminated; however, expenditure rates across states in our sample showed considerable variation. BJA allocates Recovery Act JAG funds the same way it allocated non- Recovery Act JAG funds by combining a statutory formula determined by states’ populations and violent crime statistics with a statutory minimum allocation to ensure that each state and eligible territory receives some funding. Under this statutory JAG formula, the total award allocated to a state is derived from two sources, each given equal value: half of the allocation is based on a state’s respective share of the U.S. population, and the other half is based on the state’s respective share of violent crimes, as reported in the Federal Bureau of Investigation’s (FBI) Uniform Crime Report (UCR) Part I for the 3 most recent years for which data are available. Of such amounts awarded to states, 60 percent of a state’s allocation is awarded directly to a SAA in each of the states, and each SAA must in turn allocate a formula-based share of these funds to local entities, which is known as the “pass-through portion.” BJA awards the remaining 40 percent of the state’s allocation directly to eligible units of local government within the state. The eligible units of local governments that receive direct awards from DOJ either get them individually or as part of awards to “disparate” jurisdictions which jointly use correctional facilities or prosecutorial services. In the cases of the disparate jurisdiction awards, to qualify for funds, the units of local government involved must submit a joint application to DOJ and sign a memorandum of understanding (MOU) outlining how they will share funds. They also are to determine amongst themselves which local government will serve as the fiscal agent, and thereby be responsible for reporting to DOJ on behalf of the others and ensuring that all members of the disparate jurisdiction follow applicable federal financial guidance and meet reporting requirements. The following figure illustrates the participation of localities in a disparate jurisdiction award. In the example, High Point city is the fiscal agent and Greensboro city and Guilford County are both subrecipients. The total awards that DOJ allocates directly to units of local government— the 40 percent share—are to be based solely on the local jurisdiction’s proportion of the state’s total violent crime 3-year average based on reports from the FBI’s UCR Part I. Units of local government that could receive $10,000 or more after the Bureau of Justice Statistics (BJS) analyzes the UCR data are eligible for a direct award from DOJ. Funds that could have been distributed to localities through awards of less than $10,000 are grouped together and then provided to the SAA. Under the JAG program, SAAs and direct grant recipient agencies may draw down funds from the Treasury immediately rather than requiring up-front expenditure and documentation for reimbursement. Such funds are required to be deposited into an interest-bearing trust fund and, in general, any interest income that states and localities earn from the funds drawn down is to be accounted for and used for program purposes. Table 2 shows the total allocation of Recovery Act JAG funding across our sample states, including the grant amounts BJA made directly to the SAAs (the 60 percent share); the number of pass-through grants the SAAs made in turn; and the grant amounts and number of grants BJA made directly to localities (the 40 percent share). The 14 states in our sample received $1,033,271,865 in JAG Recovery Act funds, which was more than half of the funds awarded nationwide for the program. Of the total of 1,338 direct awards that DOJ made to localities in the 14 states in our sample, approximately one-third of these direct awards, or 436, went to disparate jurisdictions and are split by agreement among the designated jurisdictions. Under these arrangements, one jurisdiction functions as the prime recipient and fiscal agent who is supposed to be responsible for submitting all programmatic or financial reports on behalf of the disparate group as well as monitoring other neighboring localities’ use of funds on activities covered by the grants. In our sample states, while one-third of the total number of direct grant awards were made to disparate jurisdictions, these arrangements accounted for 72 percent of the funds DOJ awarded directly to local recipients. For example, in Illinois, 100 percent of direct awards were provided to disparate jurisdictions, and in 8 of the other 13 states DOJ awarded more than 70 percent of funds in this manner. Officials we met with in localities that received funds under this type of arrangement reported that they provided varying amounts of oversight in there role as fiscal agent. The DOJ Inspector General has raised the oversight of subgrantee awards as an issue for DOJ’s attention and has recommended that DOJ develop further training for recipients; DOJ concurred with the recommendation. Table 3 summarizes the distribution of direct award funds to disparate jurisdictions in our sample states. The 14 SAAs in our sample received more than $630 million collectively as their share of the Recovery Act JAG funds. JAG statutory provisions require that each state pass-through no less than a specific designated minimum percentage of the funds that they receive as subgrants to localities, municipal governments, and nonprofit organizations. Among our sample states, this mandatory pass-through percentage varied from a high of 67.3 percent in California to a low of 35.5 percent in Massachusetts.