Homeland Security
Reforming Federal Grants to Better Meet Outstanding Needs Gao ID: GAO-03-1146T September 3, 2003The challenges posed in strengthening homeland security exceed the capacity and authority of any one level of government. Protecting the nation calls for a truly integrated approach bringing together the resources of all levels of government. The Council on Foreign Relations study--Emergency Responders: Drastically Underfunded, Dangerously Unprepared--states that in the aftermath of the September 11 attacks, the United States must prepare based on the assumption that terrorists will strike again. Although it acknowledges the nation's preparedness has improved, the Council's report highlights gaps in preparedness including shortfalls in personnel, equipment, communications, and other critical capabilities. Given the many needs and high stakes, it is critical that the design of federal grants be geared to fund the highest priority projects with the greatest potential impact for improving homeland security. This testimony discusses possible ways in which the grant system for first responders might be reformed.
The federal grant system for first responders is highly fragmented, which can complicate coordination and integration of services and planning at state and local levels. In light of the events of September 11, 2001 and the establishment of the Department of Homeland Security, the 108th Congress faces the challenge of redesigning the homeland security grant system. In so doing, Congress must balance the needs of our state and local partners in their call for both additional resources and more flexibility with the nation's goals of attaining the highest levels of preparedness. Given scarce federal resources, appropriate accountability and targeting features need to be designed into grants to ensure that the funds provided have the best chance of enhancing preparedness. Addressing the underlying fragmentation of grant programs remains a challenge for our federal system in the homeland security area. Several alternatives might be employed to overcome problems fostered by fragmentation in the federal aid structure, including consolidating grant programs through block grants, establishing performance partnerships, and streamlining planning and administrative requirements. Grant programs might be consolidated using a block grant approach, in which state and local officials bear the primary responsibility for monitoring and overseeing the planning, management, and implementation of activities financed with federal grant funds. While block grants devolve authority for decisions, they can be designed to facilitate accountability for national goals and objectives. Congress could also choose to take a more hybrid approach that would consolidate a number of narrowly focused categorical programs while retaining strong standards and accountability for discrete federal performance goals. One example of this model involves establishing performance partnerships, exemplified by the initiative of the Environmental Protection Agency in which states may voluntarily enter into performance agreements with the agency's regional offices covering the major federal environmental grant programs. Another option would be to simplify and streamline planning and administrative requirements for the grant programs. Whatever approach is chosen, it is important that grants be designed to target funds to states and localities with the greatest need, discourage the replacement of state and local funds with federal funds, and strike the appropriate balance between accountability and flexibility.
GAO-03-1146T, Homeland Security: Reforming Federal Grants to Better Meet Outstanding Needs
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Testimony:
Before the Subcommittee on Terrorism, Technology and Homeland Security,
Committee on the Judiciary, U.S. Senate:
For Release on Delivery Expected at 2:15 p.m., EDT Wednesday, September
3, 2003:
Homeland Security:
Reforming Federal Grants to Better Meet Outstanding Needs:
Statement of Paul L. Posner, Managing Director Federal Budget Issues
and Intergovernmental Relations, Strategic Issues:
GAO-03-1146T:
GAO Highlights:
Highlights of GAO-03-1146T, a report to Subcommittee on Terrorism,
Technology and Homeland Security, Committee on the Judiciary, U.S.
Senate
Why GAO Did This Study:
The challenges posed in strengthening homeland security exceed the
capacity and authority of any one level of government. Protecting the
nation calls for a truly integrated approach bringing together the
resources of all levels of government. The Council on Foreign
Relations study”Emergency Responders: Drastically Underfunded,
Dangerously Unprepared”states that in the aftermath of the September
11 attacks, the United States must prepare based on the assumption
that terrorists will strike again. Although it acknowledges the
nation‘s preparedness has improved, the Council‘s report highlights
gaps in preparedness including shortfalls in personnel, equipment,
communications, and other critical capabilities. Given the many needs
and high stakes, it is critical that the design of federal grants be
geared to fund the highest priority projects with the greatest
potential impact for improving homeland security. This testimony
discusses possible ways in which the grant system for first responders
might be reformed.
What GAO Found:
The federal grant system for first responders is highly fragmented,
which can complicate coordination and integration of services and
planning at state and local levels. In light of the events of
September 11, 2001 and the establishment of the Department of Homeland
Security, the 108th Congress faces the challenge of redesigning the
homeland security grant system. In so doing, Congress must balance the
needs of our state and local partners in their call for both
additional resources and more flexibility with the nation‘s goals of
attaining the highest levels of preparedness. Given scarce federal
resources, appropriate accountability and targeting features need to
be designed into grants to ensure that the funds provided have the
best chance of enhancing preparedness.
Addressing the underlying fragmentation of grant programs remains a
challenge for our federal system in the homeland security area.
Several alternatives might be employed to overcome problems fostered
by fragmentation in the federal aid structure, including consolidating
grant programs through block grants, establishing performance
partnerships, and streamlining planning and administrative
requirements. Grant programs might be consolidated using a block grant
approach, in which state and local officials bear the primary
responsibility for monitoring and overseeing the planning, management,
and implementation of activities financed with federal grant funds.
While block grants devolve authority for decisions, they can be
designed to facilitate accountability for national goals and
objectives.
Congress could also choose to take a more hybrid approach that would
consolidate a number of narrowly focused categorical programs while
retaining strong standards and accountability for discrete federal
performance goals. One example of this model involves establishing
performance partnerships, exemplified by the initiative of the
Environmental Protection Agency in which states may voluntarily enter
into performance agreements with the agency‘s regional offices
covering the major federal environmental grant programs. Another
option would be to simplify and streamline planning and administrative
requirements for the grant programs. Whatever approach is chosen, it
is important that grants be designed to target funds to states and
localities with the greatest need, discourage the replacement of state
and local funds with federal funds, and strike the appropriate balance
between accountability and flexibility.
What GAO Recommends:
We do not make recommendations in this testimony; however, if Congress
chooses to reform the grant system we have provide options including
consolidating grant programs through block grants, establishing
performance partnerships, and streamlining planning and administrative
requirements.
www.gao.gov/cgi-bin/getrpt?GAO-03-1146T.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Paul L. Posner at
(202) 512-9573 or posnerp@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to be here today to discuss issues
critical to successful federal leadership of, assistance to, and
partnership with state and local governments to enhance homeland
security. As you know, the challenges posed in strengthening homeland
security exceed the capacity and authority of any one level of
government. Protecting the nation against these unique threats calls
for a truly integrated approach, bringing together the resources of all
levels of government.
There is a great deal of room for improvement in how the federal
government provides assistance to state and local governments to
enhance their levels of preparedness for terrorist acts. We testified
earlier this year that the federal grant system for first responders is
highly fragmented and that the fragmented delivery of federal
assistance can complicate coordination and integration of services and
planning at state and local levels.[Footnote 1]
The Council on Foreign Relations report rightly points out that in the
aftermath of the September 11 attacks, the United States must plan and
prepare on the assumption that terrorists will strike again.[Footnote
2] Given the many needs and high stakes involved, it is all the more
important that the structure and design of federal grants be geared to
fund the highest priority projects with the greatest potential impact
for improving homeland security. Sustaining support for the necessary
funding over the longer term will ultimately depend on rationalizing
our grant system to streamline and simplify overlapping programs,
promote appropriate targeting, and ensure accountability for the
results achieved with scarce federal resources. Accountability needs to
be built in on the front end, not after the funds are expended. Now is
the time for policymakers to step back and rationalize the structure
and design of first responder grant programs to improve their potential
effectiveness.
Today, I would like to start by providing a perspective on the
Council's report on the preparedness of first responders throughout the
nation. I will then focus on the system of homeland security grants and
explain how the system continues to be highly fragmented, potentially
resulting in duplication and overlap among federal programs. Finally, I
would like to focus on grants design options to improve targeting,
fiscal accountability, and results through the intergovernmental
homeland security partnership.
This testimony draws upon our wide-ranging ongoing and completed work
on federal grants management issues, grant reform efforts, homeland
security, and performance management initiatives. We conducted our work
in accordance with generally accepted government auditing standards.
Background:
The Council on Foreign Relations study sets the stage for rethinking
the federal role in assisting communities prepare for homeland
security. Although acknowledging that the nation's preparedness has
improved, the Council's report highlights some of the significant gaps
in preparedness including shortfalls in personnel, equipment,
communications, and other critical capabilities in local services.
The Council's report attempts to fill a void by estimating unmet needs
for emergency responders. The Council's 5-year estimate of
approximately $98 billion across all levels of government was developed
in concert with The Concord Coalition and the Center for Strategic and
Budgetary Assessments. It was based on data made available by
professional associations and others in the areas of fire service,
urban search and rescue, hospital preparedness, public health,
emergency 911 systems, interoperable communications, emergency
operations centers, animal/agricultural emergency response, emergency
medical services systems, emergency management planning and
coordination, and emergency response regional exercises. However, the
report clearly states that it does not include estimates for certain
costs such as overtime for training and other estimated needs in
several critical mission areas, such as the needs of police forces,
because national police organizations were unable to provide the
information.
The total estimate is characterized in the report as being very
preliminary and imprecise given the absence of comprehensive national
preparedness standards. As the report itself acknowledges, the analysis
is intended to foster national debate by focusing on the baseline of
preparedness and steps needed to promote higher levels of readiness.
The report performs a service in beginning an important dialogue on
defining standards to assess readiness and recommends the development
of a better framework and procedures to develop more precise estimates
of national requirements and needs. The report concludes that the basis
for funding decisions would be improved by agreement on a more detailed
and systematic methodology to determine national requirements grounded
in national standards defining emergency preparedness.
We at GAO have not evaluated the methodology used in the Council's
report. However, we have issued a report evaluating needs assessments
performed by other agencies in the area of public infrastructure. That
report highlights best practices that may prove useful if used by the
Department of Homeland Security or other public or private entities in
analyzing homeland security preparedness needs in the future.[Footnote
3] The practices used by these agencies to estimate funding needs
varied widely, but we were able to benchmark their assessments against
best practices used by leading public and private organizations. They
also reflect requirements that the Congress and the Office of
Management and Budget have placed on federal agencies that are aimed at
improving capital decisionmaking practices.
Among these best practices for infrastructure, there are several that
might be considered useful and relevant when conducting homeland
security capability assessments. For example, some agencies'
assessments focus on resources needed to meet the underlying missions
and performance goals. This type of results-oriented assessment is
based on the actions needed to attain specific outcomes, rather than
being simply a compilation of all unmet needs regardless of their
contribution to underlying outcomes and goals. Assessments might also
consider alternative approaches to meeting needs for cost effectiveness
such as reengineering existing processes and improving collaboration
with other governments and the private sector. Best-practice agencies
use cost-benefit analysis to include only those needs for which
benefits exceed costs; in cases where benefits are difficult to
quantify, assessments could include an analysis that compares
alternatives and recommends the most cost-effective (least-cost) option
for achieving the goal. Some agencies also rank projects based on
established criteria such as cost-effectiveness, relative risk, and
potential contribution to program goals. Finally, we found that best-
practice agencies have a process to independently review the quality of
data used to derive estimates.
Fragmentation in Homeland Security Grants for First Responders:
GAO's work over the years has repeatedly shown that mission
fragmentation and program overlap are widespread in the federal
government and that crosscutting program efforts are not well
coordinated. As far back as 1975, GAO reported that many of the
fundamental problems in managing federal grants were the direct result
of the proliferation of federal assistance programs and the
fragmentation of responsibility among different federal departments and
agencies.[Footnote 4] While we noted that the large number and variety
of programs tended to ensure that a program is available to meet a
defined need, we found that substantial problems occur when state and
local governments attempt to identify, obtain, and use the fragmented
grants-in-aid system to meet their needs. Such a proliferation of
programs leads to administrative complexities that can confuse state
and local grant recipients. Like GAO, Congress is aware of the
challenges facing grantees in the world of federal grants management.
In 1999, it passed the Federal Financial Assistance Management
Improvement Act (P.L. 106-107), with the goal of improving the
effectiveness and performance of federal financial assistance programs,
simplify federal financial assistance application and reporting
requirements, and improve the delivery of services to the public.
The 108TH Congress faces the challenge to redesign the nation's
homeland security grant programs in light of the events of September
11, 2001 and the establishment of the Department of Homeland Security
(DHS). In so doing, Congress must balance the needs of our state and
local partners in their call for both additional resources and more
flexibility with the nation's goals of attaining the highest levels of
preparedness. At the same time, we need to design and build in
appropriate accountability and targeting features to ensure that the
funds provided have the best chance of enhancing preparedness.
Funding increases for combating terrorism have been dramatic and
reflect the high priority that the administration and Congress place on
this mission. As the Council's report observes, continuing gaps in
preparedness may prompt additional funds to be provided. The critical
national goals underlying these funding increases bring a
responsibility to ensure that this large investment of taxpayer dollars
is wisely applied. We recently reported on some of the management
challenges that could stem from increased funding and noted that these
challenges--including grants management--could impede the
implementation of national strategies if not effectively
addressed.[Footnote 5]
GAO has testified before on the development of counter-terrorism
programs for state and local governments that were similar and
potentially duplicative.[Footnote 6] Table 1 shows many of the
different grant programs that can be used by first responders to
address the nation's homeland security.[Footnote 7] To illustrate the
level of fragmentation across homeland security programs, we have shown
in table 1 the significant features for selected major assistance
programs targeted to first responders. As the table shows, substantial
differences exist in the types of recipients and the allocation methods
for grants addressing similar purposes. For example, some grants go
directly to local first responders such as firefighters while at least
one goes to state emergency management agencies and another directly to
state fire marshals. The allocation methods differ as well--some are
formula grants while the others involve discretionary decisions by
federal agency officials on a project basis. Grant requirements differ
as well--DHS' Assistance to Firefighters Grant has a maintenance of
effort requirement (MOE) while the State Fire Training Systems Grant
has no similar requirement.
Table 1: Characteristics of Selected Homeland Security Grant Programs:
Grant: State Homeland Security Grant Program; Federal Agency: ODP/ DHS;
Grantee: State and local units of government; MATCH: No; MOE:
No; Funding Formulas And Cost Sharing Provisions: FY2003
allocations determined by using a base amount of .75 percent of the
total allocation to the states (including D.C. and Puerto Rico) and .25
percent of the total allocation for the territories, with the balance
of funds being distributed on a population-share basis.
Grant: Emergency Management Performance Grants; Federal Agency: FEMA/
DHS; Grantee: State and local units of government; MATCH: Yes; MOE:
No; Funding Formulas And Cost Sharing Provisions: For each state,
a target allocation is derived by calculating the same proportion of
available funds as the state received the prior year; A matching
requirement is calculated for each state. Each recipient's cost share
percentage will increase by 1 percent over the prior year until the 50/
50 level is reached.
Grant: Urban Areas Security Initiative; Federal Agency: ODP/DHS;
Grantee: Selected cities and states chosen by the Secretary of DHS;
MATCH: No; MOE: No; Funding Formulas And Cost Sharing
Provisions: Funds distributed according to formula--a combination of
current threat estimates, critical assets within the urban area,
population and population density--that is a weighted combination of
each factor, the results for which are ranked and used to calculate the
proportional allocation of resources.
Grant: Urban Areas Security Initiative -Transit System Security Grant
Program; Federal Agency: ODP/DHS; Grantee: Selected mass transit
systems chosen by the Secretary of DHS; MATCH: No; MOE: No;
Funding Formulas And Cost Sharing Provisions: Non-supplanting
certification required.
Grant: Urban Areas Security Initiative - Port Security Grant Program;
Federal Agency: ODP/DHS; Grantee: State and local government entities
and commercial companies to enhance security at selected ports; MATCH:
No; MOE: No; Funding Formulas And Cost Sharing Provisions:
Non-supplanting certification required.
Grant: First Responder Counter-Terrorism Assistance; Federal Agency:
FEMA/DHS; Grantee: Fire and emergency first responders; law enforcement
personnel with operational and/or incident management
responsibilities; MATCH: No; MOE: No; Funding Formulas And
Cost Sharing Provisions: None.
Grant: State Fire Training Systems Grants (National Fire Academy
Training Grants); Federal Agency: FEMA/DHS; Grantee: Representatives
from the 50 State Fire Training Systems; MATCH: No; MOE: No;
Funding Formulas And Cost Sharing Provisions: None.
Grant: Hazardous Materials Assistance Program; Federal Agency: FEMA/
DHS; Grantee: States, locals, tribes, territories, State Emergency
Response Committees, and Local Emergency Planning Commissions; MATCH:
No; MOE: No; Funding Formulas And Cost Sharing Provisions:
None.
Grant: Hazardous Material Training Program; Federal Agency: FEMA/DHS;
Grantee: Tribal government; MATCH: Yes; MOE: No; Funding Formulas
And Cost Sharing Provisions: Matching requirement of 20 percent can be
satisfied with cash or third party in-kind contribution.
Grant: Assistance to Firefighters Grant; Federal Agency: FEMA/DHS;
Grantee: Fire departments in the states. An Emergency Management
Services unit can apply if the unit is under the auspices of a fire
department.; MATCH: Yes; MOE: Yes; Funding Formulas And Cost Sharing
Provisions: Applicants who protect a population of 50,000 or less must
provide a nonfederal cost-share of not less than 10 percent of the
total award. Applicants who protect a population of 50,000 or more must
provide a nonfederal cost-share of not less than 30 percent of the
total award; This program also has a maintenance-of-effort
requirement.
Grant: Edward Byrne Memorial State and Local Law Enforcement Assistance
(Byrne Formula Grant Program); Federal Agency: Bureau of Justice
Assistance in the Office of Justice Programs, Department of Justice
(DOJ); Grantee: State and local units of government; MATCH: Yes; MOE:
Yes; Funding Formulas And Cost Sharing Provisions: Each participant
state receives a base amount of $500,000 or .25 percent of the amount
available for the program, whichever is greater, with the remaining
funds allocated to each state on the basis of the state's relative
share of total U.S. population; Match for the formula grant programs
will be provided for on a project-by-project basis, statewide basis,
unit-of-government basis, or a combination of the above; The Act
restricts the use of funds for supplanting state and local funds and
land acquisition.
Grant: Local Law Enforcement Block Grants Program; Federal Agency:
Bureau of Justice Assistance in the Office of Justice Programs, DOJ;
Grantee: State and local units of government; MATCH: Yes; MOE: Yes; Funding
Formulas And Cost Sharing Provisions: The federal funds may not exceed
90 percent of the total costs of a program; Federal funds may not be
used to supplant state and local funds.
Grant: Public Safety Partnership and Community Policing Grants (COPS);
Federal Agency: Office of Community Oriented Policing Services, DOJ;
Grantee: State and local units of government; MATCH: Yes; MOE: No;
Funding Formulas And Cost Sharing Provisions: Some grants, such as for
hiring and the Schools Grant Program, require no local percentage
match. Other awards generally are made for 75 percent of allowable
project costs.
Grant: Law Enforcement Assistance - FBI Field Police Training; Federal
Agency: FBI/DOJ; Grantee: All authorized municipal, county, local and
state criminal justice personnel; MATCH: No; MOE: No; Funding
Formulas And Cost Sharing Provisions: None.
Grant: State and Local Anti-Terrorism Training; Federal Agency: Bureau
of Justice Assistance in the Office of Justice Programs, DOJ; Grantee:
State and local law enforcement and prosecution authorities; MATCH:
No; MOE: No; Funding Formulas And Cost Sharing Provisions:
None.
Grant: Emergency Management Institute --Resident Educational Program;
Federal Agency: FEMA/DHS; Grantee: Individuals who need emergency
management training and are assigned to an emergency management
position in State, local, or tribal government; MATCH: No; MOE:
No; Funding Formulas And Cost Sharing Provisions: None.
Grant: Emergency Operations Centers; Federal Agency: FEMA/DHS; Grantee:
States, D.C. and territories. Local governments may receive assistance
as subgrantees to the state; MATCH: Yes; MOE: No; Funding Formulas
And Cost Sharing Provisions: Funds awarded in two phases. In Phase 1,
each state will be allocated $50,000 with no matching for an initial
assessment of hazards, vulnerabilities and risk. Phase 2 grants used to
address the most immediate deficiencies including modification, new
construction and retrofitting facilities has a 50 percent nonfederal
matching.
Grant: CDC - Investigations & Technical Assistance; Federal Agency:
CDC/HHS; Grantee: States, political subdivisions of states, local
health authorities, and organizations with specialized health interests
may apply; MATCH: No; MOE: No; Funding Formulas And Cost
Sharing Provisions: None.
Grant: Public Health and Social Services Emergency Fund--Bioterrorism
Hospital Preparedness Program; Federal Agency: Health Resources and
Services Administration/HHS; Grantee: Federal agencies, state and local
governments, and other service providers in areas impacted; MATCH:
No; MOE: No; Funding Formulas And Cost Sharing Provisions:
None.
Grant: Interoperable Communications Equipment; Federal Agency:
Emergency Preparedness and Response Directorate/DHS; Grantee: Local
governments nominated by state or territory government.; MATCH: Yes;
MOE: No; Funding Formulas And Cost Sharing Provisions: Grant awards
required a 25 percent nonfederal matching. The match does not need to
be a cash match.
Grant: Community Emergency Response Teams (CERT); Federal Agency: FEMA/
DHS; Grantee: States, D.C. and territories. Local governments may
receive assistance as subgrantees to the state.; MATCH: No; MOE:
No; Funding Formulas And Cost Sharing Provisions: States
(including D.C. and Puerto Rico) and territories will be allocated a
base amount of .75 percent and .25 percent respectively of the total
amount available. The remaining funds will be allocated according to
population and added to the base.
Source: Catalogue of Federal Domestic Assistance, August 2003;
Congressional Research Service reports.
[End of table]
Table 2 shows that considerable potential overlap exists in the
activities that these programs support--for example, funding for
training is provided by most grants in the table and several provide
for all four types of needs.
Table 2: Overlap and Duplication in Selected Homeland Security Grant
Programs:
Grant: State Homeland Security Grant Program (SHSGP); Equipment: Yes;
Training: Yes; Exercises: Yes; Planning: Yes.
Grant: Emergency Management Performance Grants (EMPG); Equipment:
No; Training: Yes; Exercises: Yes; Planning: Yes.
Grant: Urban Areas Security Initiative; Equipment: Yes; Training: Yes;
Exercises: Yes; Planning: Yes.
Grant: Urban Areas Security Initiative - Transit System; Equipment:
Yes; Training: Yes; Exercises: Yes; Planning: Yes.
Grant: Urban Areas Security Initiative - Port Security Grant Program;
Equipment: Yes; Training: Yes; Exercises: Yes; Planning: No.
Grant: First Responder Counter-Terrorism Assistance; Equipment:
No; Training: Yes; Exercises: No; Planning.
Grant: State Fire Training Systems Grants (National Fire Academy
Training Grants); Equipment: No; Training: Yes; Exercises: No;
Planning: No.
Grant: Hazardous Materials Assistance Program; Equipment: No;
Training: Yes; Exercises: Yes; Planning: Yes.
Grant: Hazardous Material Training Program; Equipment: No;
Training: Yes; Exercises: No; Planning: No.
Grant: Assistance to Firefighters Grant; Equipment: Yes; Training: Yes;
Exercises: Yes; Planning: Yes.
Grant: Edward Byrne Memorial State and Local Law Enforcement
Assistance (Byrne Formula Grant Program); Equipment: Yes; Training:
Yes; Exercises: Yes; Planning: Yes.
Grant: Local Law Enforcement Block Grants Program (LLEBG); Equipment:
Yes; Training: Yes; Exercises: No; Planning: Yes.
Grant: Public Safety Partnership and Community Policing Grants (COPS);
Equipment: No; Training: Yes; Exercises: No; Planning: No.
Grant: Law Enforcement Assistance - FBI Field Police Training;
Equipment: No; Training: Yes; Exercises: No; Planning: No.
Grant: State and Local Anti-Terrorism Training; Equipment: No;
Training: Yes; Exercises: No; Planning: No.
Grant: Emergency Management Institute Resident Educational Program;
Equipment: No; Training: Yes; Exercises: No; Planning: No.
Grant: Emergency Operations Centers; (Facilities grant to encourage
development/retrofitting of centers); Equipment: No; Training:
No; Exercises: No; Planning: No.
Grant: Centers for Disease Control - Investigations & Technical
Assistance; Equipment: No; Training: No; Exercises: No;
Planning: Yes.
Grant: Public Health and Social Services Emergency Fund--Bioterrorism
Hospital Preparedness Program; Equipment: Yes; Training: Yes; Exercises: Yes;
Planning: Yes.
Grant: Interoperable Communications Equipment; Equipment: Yes; Training:
No; Exercises: No; Planning: No.
Grant: Community Emergency Response Teams (CERT); Equipment: Yes;
Training: Yes; Exercises: No; Planning: No.
Source: Catalogue of Federal Domestic Assistance, August 2003;
Congressional Research Service reports.
[End of table]
The fragmented delivery of federal assistance can complicate
coordination and integration of services and planning at state and
local levels. Homeland security is a complex mission requiring the
coordinated participation of many federal, state, and local government
entities as well as the private sector. As the national strategy issued
by the administration last summer recognizes, preparing the nation to
address the new threats from terrorism calls for partnerships of many
disparate actors at many levels in our system.[Footnote 8] Within local
areas, for example, the failure of local emergency communications
systems to operate on an interoperable basis across neighboring
jurisdictions reflects coordination problems within local regions.
Local governments are starting to assess how to restructure
relationships along contiguous local entities to take advantage of
economies of scale, promote resource sharing, and improve coordination
on a regional basis. Our previous work suggests that the complex web of
federal grants used to allocate federal aid to different players at the
state and local level may continue to reinforce state and local
fragmentation.
Some have observed that federal grant restrictions constrain the
flexibility state and local officials need to tailor multiple grants to
address state and local needs and priorities. For example, some local
officials have testified that rigid federal funding rules constrain
their flexibility and cannot be used to fund activities that meet their
needs. We have reported that overlap and fragmentation among homeland
assistance programs fosters inefficiencies and concerns in first
responder communities. State and local officials have repeatedly voiced
frustration and confusion about the:
burdensome and inconsistent application processes among programs. We
concluded that improved coordination at both federal and state and
local levels would be promoted by consolidating some of these first
responder assistance programs.[Footnote 9]
Rationalizing the First Responder Grant System:
Using grants as a policy tool, the federal government can engage and
involve other levels of government and the private sector in enhancing
homeland security while still having a say in recipients' performance
and accountability. The structure and design of these grants will play
a vital role in determining success and ensuring that scarce federal
dollars are used to achieve critical national goals.
Consolidating Grants:
Addressing the underlying fragmentation of grant programs remains a
challenge for our federal system in the homeland security area. Several
alternatives have been pursued in the past to overcome problems
fostered by fragmentation in the federal aid structure. I will discuss
three briefly here - block grants, performance partnerships, and
streamlining planning and administrative requirements.
Block grants are one way Congress has chosen to consolidate related
programs. Block grants currently are used to deliver assistance in such
areas as welfare reform, community development, social services, law
enforcement, public health, and education. While such initiatives often
involved the consolidation of categorical grants, block grants also
typically devolve substantial authority for setting priorities to state
or local governments. Under block grants, state and local officials
bear the primary responsibility for monitoring and overseeing the
planning, management, and implementation of activities financed with
federal grant funds. Accordingly, block grant proposals generally call
for Congress to make a fundamental decision about where power and
authority to make decisions should rest in our federal system for a
particular program area.
While block grants devolve authority for decisions, they can and have
been designed to facilitate some accountability for national goals and
objectives. Since federal funds are at stake, Congress typically wants
to know how federal funds are spent and what state and local
governments have accomplished. Indeed, the history of block grants
suggests that the absence of national accountability and reporting for
results can either undermine continued congressional support or prompt
more prescriptive controls to ensure that national objectives are being
achieved.[Footnote 10]
Given the compelling national concerns and goals for homeland security,
Congress may conclude that the traditional devolution of responsibility
found in a pure block grant may not be the most appropriate approach.
Congress might instead choose a hybrid approach--what we might call a
"consolidated categorical" grant which would consolidate a number of
narrower categorical programs while retaining strong standards and
accountability for discrete federal performance goals. State and local
governments can be provided greater flexibility in using federal funds
in exchange for more rigorous accountability for results.
One example of this model involves what became known as "performance
partnerships," exemplified by the initiative of the Environmental
Protection Agency (EPA). Under this initiative, states may voluntarily
enter Performance Partnership Agreements with EPA regional offices
covering the major federal environmental grant programs. States can
propose to use grants more flexibly by shifting federal funds across
programs but they are held accountable for discrete or negotiated
measures of performance addressing EPA's national performance goals.
This approach has allowed states to use federal funds more flexibly and
support innovative projects while increasing the focus on results and
effectiveness. However, in 1999 we reported that the initiative had
been hampered by an absence of baseline data against which
environmental improvements could be measured and the inherent
difficulty in quantifying certain results and linking them to program
activities.[Footnote 11]
The challenge for developing performance partnerships for homeland
security grants will be daunting because the administration has yet to
develop clearly defined federal and national performance goals and
measures. We have reported that the initiatives outlined in the
National Strategy for Homeland Security often do not provide
performance goals and measures to assess and improve preparedness at
the federal or national levels. The strategy generally describes
overarching objectives and priorities but not measurable outcomes. The
absence of such measures and outcomes at the national level will
undermine any effort to establish performance based grant agreements
with states. The Council on Foreign Relations report recommends
establishing clearly defined national standards and guidelines in
consultation with first responders and other state and local officials.
Another alternative to overcome grant fragmentation is the
simplification and streamlining of administrative and planning
requirements. In June 2003, the Senate Governmental Affairs Committee
passed a bill (S. 1245, The Homeland Security Grant Enhancement Act of
2003) intended to better coordinate and simplify homeland security
grants. The bill would establish an interagency committee to coordinate
and streamline homeland security grant programs by advising the
Secretary of DHS on the multiple programs administered by federal
agencies. The interagency committee would identify all redundant and
duplicative requirements to the appropriate committees of Congress and
the agencies represented in the interagency committee. The bill also
establishes a clearinghouse function within the Office for State and
Local Government Coordination for grant information that would gather
and disseminate information regarding successful state and local
homeland security programs and practices. The bill seeks to streamline
the application process for federal assistance and to rationalize and
better coordinate the state and local planning requirements. The bill
provides for a comprehensive state plan to address the broad range of
emergency preparedness functions currently funded from separate
programs with their own separate planning requirements.
A statewide plan can be used as a tool to promote coordination among
federal first responder programs that continue to exist as separate
funding streams. One option could be to require recipients of federal
grants for homeland security within each state to obtain review and
comment by the central state homeland security agency to attest to
consistency with the statewide plan.
Whatever approach is chosen, it is important that grants be designed to
(1) target the funds to states and localities with the greatest need,
(2) discourage the replacement of state and local funds with federal
funds, commonly referred to as "supplantation," with a maintenance-of-
effort requirement that recipients maintain their level of previous
funding, and (3) strike a balance between accountability and
flexibility.[Footnote 12]
Targeting:
As Congress goes forward to consider how to design a grant system to
promote a stronger federal, state, local and regional partnership to
improve homeland security, it faces some of the traditional dilemmas in
federal grant design. One is targeting. How do you concentrate funds in
the places with the highest risks? A proclivity to spread money around,
unfortunately, may provide less additional net protection while
actually placing additional burdens on state and local governments.
Given the significant needs and limited federal resources, it will be
important to target to areas of greatest need. The formula for the
distribution of any new grant could be based on several considerations,
including relative threats and vulnerabilities faced by states and
communities as well as the state or local government's capacity to
respond to a disaster. The Council on Foreign Relations report
recommends that Congress establish a system for allocating scarce
resources based on addressing identified threats and vulnerabilities.
The report goes on to say that the federal government should consider
factors such as population and population density, vulnerability
assessments, and the presence of critical infrastructure within each
state as the basis for fund distribution.
By comparing three of the grants listed in table 2, one can see
differences in the way funds have been allocated thus far. For example,
under the State Homeland Security Grant Program allocations are
determined by using a base amount of .75 percent of the total
allocation to each state (including the District of Columbia and Puerto
Rico) and .25 percent of the total to the territories. The balance of
the funds goes to recipients on a population-share basis. In contrast,
the Urban Area Security Initiative funds are distributed according to a
formula from the Department of Homeland Security as being a combination
of weighted factors including current threat estimates, critical assets
within the urban area, population and population density--the results
of which are ranked and used to calculate the proportional allocation
of resources. For Byrne Grants, each participant state receives a base
amount of $500,000 or .25 percent of the amount available for the
program, whichever is greater, with the remaining funds allocated to
each state based on the state's relative share of the total U.S.
population.
Supplantation and Sustainability:
A second dilemma in federal grant design involves preventing fiscal
substitution or supplantation. In earlier work, we found that
substitution is to be expected in any grant and, on average, every
additional federal grant dollar results in about 60 cents of
supplantion.[Footnote 13] We found that supplantation is particularly
likely for block grants supporting areas with prior state and local
involvement. However, our work on the Temporary Assistance to Needy
Families block grant found that a strong maintenance of effort
provision can limit states' ability to supplant[Footnote 14] since
recipients can be penalized for not meeting a maintenance of effort
requirement.
It seems obvious to say that grant recipients should maintain the
effort they were making prior to receiving the grant and use the grant
to add to, rather than replace, their own contribution. However, since
September 11, 2001, many local jurisdictions have taken it upon
themselves to take the initiative to dramatically increase their own-
source funding in an effort to enhance security. Should the federal
grant system now penalize them by locking in their increased spending
levels and at the same time reward state and local governments that
have taken a "wait and see" attitude concerning enhancing security?
This is one of the design dilemmas that Congress will need to address
to ensure that scarce federal resources in fact are used to promote
increased capability.
A third challenge is sustainability. Local governments think of
sustainability as keeping the federal spigot permanently turned on.
They may argue that the urgent needs they face will drive out the
important needs of enhanced homeland security without continued federal
aid. However, from a broader, national perspective there is an
expectation that the responsibility for sustaining homeland security
responsibility would at least be shared by all levels of government
since state, local, and regional governments receive benefits from
these grants in addition to the national benefit of improving homeland
security.
Several options can be considered to further shared fiscal
responsibility. A state and local match could be considered to reflect
both the benefits received by state and local taxpayers from
preparedness as well as to encourage the kind of discipline and
responsibility that can be elicited when a government's own funds are
at stake. An additional option--the "seed money" approach--could be to
lower the federal match over time to encourage ownership, support, and
long term sustainability at the state and local level for funded
activities. However, at their best grants can stimulate state and local
governments to enhance their preparedness to address the unique threats
posed by terrorism. Ideally, grants should stimulate higher levels of
preparedness and avoid simply subsidizing local functions that are
traditionally state or local responsibilities. The literature on
intergovernmental management suggests that federal money can succeed in
institutionalizing a commitment to aided goals and purposes over time
within states and communities, as professional administrators and
clients of these programs take root and gain influence within local
political circles.[Footnote 15]
Accountability and Flexibility:
Ultimately, the sustainability of government funding can be promoted by
accountability provisions that provide clear and transparent
information on results achieved from the intergovernmental partnership.
At the federal level, experience with block grants shows that grant
programs are sustainable if they are accompanied by sufficient
performance and accountability information on national outcomes to
enable them to compete for funding in the congressional appropriations
process. Accountability can be performance and results oriented to
provide focus on national goals across state and local governments
while providing for greater flexibility for those governments in
deciding how best to meet those goals.
Last summer, the Administration released a national strategy for
homeland security that placed emphasis on security as a shared national
responsibility involving close cooperation among all levels of
government. We noted at the time that the national strategy's
initiatives often did not provide a baseline set of performance goals
and measures for homeland security.[Footnote 16] Then and now--over a
year later--the nation does not have a comprehensive set of performance
goals and measures against which to assess and upon which to improve
prevention efforts, vulnerability reduction, and responsiveness to
damage and recovery needs at all levels of government. We still hold
that given the need for a highly integrated approach to the homeland
security challenge, national performance goals and measures for
strategy initiatives that involve both federal and nonfederal actors
may best be developed in a collaborative way involving all levels of
government and the private sector. At this point, there are few
national or federal performance standards that can be defined, given
the differences among states and lack of understanding of what levels
of preparedness are appropriate given a jurisdiction's risk factors.
The Council on Foreign Relations recommended that national standards be
established by federal agencies in such areas as training,
communications, and response equipment, in consultation with
intergovernmental partners.
Communications is an example of an area for which standards have not
yet been developed, but various emergency managers and other first
responders have highlighted that standards are needed. State and local
government officials often report that there are deficiencies in their
communications capabilities, including the lack of interoperable
systems. The national strategy recognizes that it is crucial for
response personnel to have and use equipment, systems, and procedures
that allow them to communicate. Therefore, the strategy calls for a
national communication plan to establish protocols (who needs to talk
to whom), processes, and national standards for technology acquisition.
Need for Integrated Approaches from State and Local Partners:
Just as the federal government needs to rationalize its grant system
for first responders, state and local governments are also challenged
to streamline and better coordinate their efforts. As pointed out in
the recent report from the Century Foundation,[Footnote 17] ultimately
the nation's homeland defense will be critically dependent on the
ability of state and local governments to act to overcome barriers to
coordination and integration. The scale of homeland security threat
spills over conventional boundaries of political jurisdictions and
agencies. Effective response calls on local governments to reach across
boundaries to obtain support and cooperation throughout an entire
region or state.
Promoting partnerships among key players within each state and even
across states is vital to addressing the challenge. States and local
governments need to work together to reduce and eliminate barriers to
achieving this coordination and regional integration. The federal
government is, of course, a key player in promoting effective
preparedness and can offer state and local governments assistance
beyond grant funds in such areas as risk management and intelligence
sharing. The Office for State and Local Government Coordination has
been established within DHS to facilitate close coordination with state
and local first responders, emergency services and governments. In
turn, state and local governments have much to offer in terms of
knowledge of local vulnerabilities and resources, such as local law
enforcement personnel, available to respond to threats in their
communities.
Local officials emphasized the importance of regional coordination.
Regional resources, such as equipment and expertise, are essential
because of proximity, which allows for quick deployment, and experience
in working within the region. Large-scale or labor-intensive incidents
quickly deplete a given locality's supply of trained responders. Some
cities have spread training and equipment to neighboring municipal
areas so that their mutual aid partners can help. We found in our work
last year that to facilitate emergency planning and coordination among
cities in metropolitan areas officials have joined together to create
task forces, terrorism working groups, advisory committees and Mayors'
caucuses. Cities and counties have used mutual aid agreements to share
emergency resources in their metropolitan areas. These agreements may
include fire, police, emergency medical services, and hospitals and may
be formal or informal. These partnerships afford economies of scale
across a region. In events that require a quick response, such as a
chemical attack, regional agreements take on greater importance because
many local officials do not think that federal and state resources can
arrive in sufficient time to help.
Forging regional arrangements for coordination is not an easy process
at the local level. The federal government may be able to provide
incentives through the grant system to encourage regional planning and
coordination for homeland security. Transportation planning offers one
potential model for federal influence that could be considered. Under
federal law, Metropolitan Planning Organizations are established to
develop regionally based transportation plans from which, generally,
projects that are to be federally funded must be selected.
Conclusion:
Improving the partnership among federal and nonfederal officials is
vital to achieving important national goals. The task facing the nation
is daunting and federal grants will be a central vehicle to improve and
sustain preparedness in communities throughout the nation. While
funding increases for combating terrorism have been dramatic, the
Council's report reflects concerns that many have about the adequacy of
current grant programs to address the homeland security needs.
Ultimately, the "bottom line" question is: What impact will the grant
system have in protecting the nation and its communities against
terrorism? At this time, it is difficult to know since we do not have
clearly defined national standards or criteria defining existing or
desired levels of preparedness across the country. Our grant structure
is not well suited to provide assurance that scarce federal funds are
in fact enhancing the nation's preparedness in the places most at risk.
There is a fundamental need to rethink the structure and design of
assistance programs, to streamline and simplify programs, improve
targeting, and enhance accountability for results. Federal, state, and
local governments alike have a stake in improving the grant system to
reduce burden and tensions and promote the level of security that can
only be achieved through effective partnerships. The sustainability and
continued support for homeland security initiatives will rest in no
small part on our ability to demonstrate to the public that scarce
public funds are in fact improving security in the most effective and
efficient manner.
This concludes my prepared statement. I would be pleased to answer any
questions you or the members of the subcommittee may have at this time.
(450255):
FOOTNOTES
[1] U.S. General Accounting Office, Federal Assistance: Grant System
Continues to Be Highly Fragmented , GAO-03-718T (Washington, D.C.: Apr.
29, 2003).
[2] Report of an Independent Task Force Sponsored by the Council on
Foreign Relations, Emergency Responders: Drastically Underfunded,
Dangerously Unprepared (New York, NY: 2003).
[3] U.S. General Accounting Office, U.S. Infrastructure: Agencies'
Approaches to Developing Investment Estimates Vary, GAO-01-835
(Washington, D.C.: July 20, 2001).
[4] U.S. General Accounting Office, Fundamental Changes Are Needed in
Federal Assistance to State and Local Governments, GAO/GGD-75-75
(Washington, D.C.: Aug. 19, 1975).
[5] U.S. General Accounting Office, Combating Terrorism: Funding Data
Reported to Congress Should Be Improved, GAO-03-170 (Washington, D.C.:
Nov. 26, 2002).
[6] U.S. General Accounting Office, Combating Terrorism:
Intergovernmental Partnership in a National Strategy to Enhance State
and Local Preparedness, GAO-02-547T (Washington, D.C.: Mar. 22, 2002).
[7] While the selected grant programs listed in table 1 could be placed
into the categories used in the Council's report, we have not reviewed
the methodology used by the Council to make its budgetary estimates.
[8] The White House, Office of Homeland Security, National Strategy for
Homeland Security (Washington, D.C.: July 16, 2002).
[9] U.S. General Accounting Office, Combating Terrorism: Selected
Challenges and Related Recommendations, GAO-01-822 (Washington, D.C.,
Sept. 20, 2001).
[10] U.S. General Accounting Office, Block Grants: Increases in Set-
Asides and Cost Ceilings Since 1982, GAO/HRD-92-58FS (Washington, D.C.:
July 27, 1992).
[11] U.S. General Accounting Office, Environmental Protection:
Collaborative EPA-State Effort Needed to Improve New Performance
Partnership System, GAO/RCED-99-171 (Washington, D.C.: June 21, 1999).
[12] The Rockefeller Institute of Government, The Role of "Home" in
Homeland Security: The Federalism Challenge--The Challenge for State
and Local Governments, Symposium Series Number 2 (Albany, New York:
March 24, 2003).
[13] U.S. General Accounting Office, Federal Grants: Design
Improvements Could Help Federal Resources Go Further, GAO-AIMD-97-7
(Washington, D.C.: Dec. 18, 1996).
[14] U.S. General Accounting Office, Welfare Reform: Challenges in
Maintaining a Federal-State Fiscal Partnership, GAO-01-828
(Washington, D.C.: Aug. 10, 2001).
[15] See Paul Peterson, Barry Rabe, and Kenneth Wong, When Federalism
Works (Washington, D.C., Brookings Institution, 1985).
[16] U.S. General Accounting Office, Homeland Security: Effective
Intergovernmental Coordination is Key to Success, GAO-02-1013T
(Washington, D.C.: Aug. 23, 2002).
[17] Kettl, Donald F., The States and Homeland Security: Building the
Missing Link, The Century Foundation's Homeland Security Project
Working Group on Federalism Challenges, (New York, New York: 2003).
