Emergency Preparedness
Federal Funds for First Responders Gao ID: GAO-04-788T May 13, 2004The terrorist attacks of September 11, 2001, highlighted the critical role first responders play at the state and local level when a disaster or emergency strikes. In fiscal years 2002 and 2003, Congress appropriated approximately $13.9 billion for domestic preparedness. A large portion of these funds were for the nation's first responders to enhance their ability to address future emergencies, including potential terrorist attacks. These funds are primarily to assist with planning, equipment purchases, training and exercises, and administrative costs. They are available to first responders mainly through the State Homeland Security Grant Programs and Urban Area Security Initiative grants. Both programs are administered through the Department of Homeland Security's Office for Domestic Preparedness. In this testimony, GAO addressed the need to balance expeditious distribution of first responder funds to states and localities with accountability for effective use of those funds and summarized major findings related to funding distribution delays and delays involving funds received by local governments, as presented in reports issued by the Department of Homeland Security Office of Inspector General and the House Select Committee on Homeland Security. The testimony incorporated supporting evidence on first-responder funding issues based on ongoing GAO work in selected states.
The reports of the Department of Homeland Security Office of Inspector General (OIG) and the House Select Committee on Homeland Security examined the distribution of funds to states and localities. Both reports found that although there have been delays in getting federal first-responder funds to local governments and first-responder agencies, the grant management requirements, procedures, and processes of the Office for Domestic Preparedness (ODP) were not the principal cause. According to the OIG's report, in fiscal years 2002 and 2003, ODP reduced the time required to provide on-line grant application guidance to states, process grant applications, and make grant awards. For example, for fiscal year 2002 grants, it took 292 days, on average, from the time the grant legislation was enacted to the awarding of grants to states. For fiscal year 2003 grants, the total cycle was reduced to 77 days, on average. According to the reports, most states met deadlines for subgranting first-responder funds to local jurisdictions. The fiscal year 2003 State Homeland Security Grant Programs and Urban Area Security Initiative required states to transfer 80 percent of first-responder grant funds to local jurisdictions within 45 days of the funds being awarded by ODP. Most states met that deadline by counting funds as transferred when states agreed to allocate a specific amount of the grant to a local jurisdiction, the OIG's report found. The House Select Committee staff concurred. And in the three states GAO examined, states certified they had allocated funds to local jurisdictions within the 45-day period. Delays in allocating grant funds to first responder agencies are frequently due to local legal and procedural requirements, the OIG's report found. State and local governments sometimes delayed delivery of fiscal year 2002 grant funds, for example, because governing and political bodies within the states and local jurisdictions had to approve and accept the grant funds. GAO's work indicated a similar finding. In one state GAO reviewed, roughly four months elapsed from the date the city was notified that grant funds were available to the date when the city council voted to accept the funds. Both reports GAO reviewed found that state and local procurement processes have, in some cases, been affected by delays resulting from specific procurement requirements. While some states purchase first-responder equipment centrally for all jurisdictions, in some instances, those purchases are made locally and procurement may be delayed by competitive bidding rules, among other things. It is important to note that those who manage homeland security grants to states and local governments must balance two sometimes competing goals: (1) getting funds to states and localities expeditiously and (2) assuring that there is appropriate planning and accountability for the effective use of the funds.
GAO-04-788T, Emergency Preparedness: Federal Funds for First Responders
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Testimony Before the Subcommittee on Economic Development, Public
Building and Emergency Management, House Committee on Transportation
and Infrastructure:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 12:00 p.m. EDT:
Thursday, May 13, 2004:
EMERGENCY PREPAReDNESS:
Federal Funds for First Responders:
Statement of William O. Jenkins, Jr., Director,
Homeland Security and Justice Issues:
GAO-04-788T:
GAO Highlights:
Highlights of GAO-04-788T, a report to Subcommittee on Economic
Development, Public Buildings, and Emergency Management, House
Committee on Transportation and Infrastructure
Why GAO Did This Study:
The terrorist attacks of September 11, 2001, highlighted the critical
role first responders play at the state and local level when a disaster
or emergency strikes. In fiscal years 2002 and 2003, Congress
appropriated approximately $13.9 billion for domestic preparedness. A
large portion of these funds were for the nation‘s first responders to
enhance their ability to address future emergencies, including
potential terrorist attacks. These funds are primarily to assist with
planning, equipment purchases, training and exercises, and
administrative costs. They are available to first responders mainly
through the State Homeland Security Grant Programs and Urban Area
Security Initiative grants. Both programs are administered through the
Department of Homeland Security‘s Office for Domestic Preparedness.
In this testimony, GAO addressed the need to balance expeditious
distribution of first responder funds to states and localities with
accountability for effective use of those funds and summarized major
findings related to funding distribution delays and delays involving
funds received by local governments, as presented in reports issued by
the Department of Homeland Security Office of Inspector General and the
House Select Committee on Homeland Security. The testimony incorporated
supporting evidence on first-responder funding issues based on ongoing
GAO work in selected states.
What GAO Found:
The reports of the Department of Homeland Security Office of Inspector
General (OIG) and the House Select Committee on Homeland Security
examined the distribution of funds to states and localities. Both
reports found that although there have been delays in getting federal
first-responder funds to local governments and first-responder
agencies, the grant management requirements, procedures, and processes
of the Office for Domestic Preparedness (ODP) were not the principal
cause. According to the OIG‘s report, in fiscal years 2002 and 2003,
ODP reduced the time required to provide on-line grant application
guidance to states, process grant applications, and make grant awards.
For example, for fiscal year 2002 grants, it took 292 days, on average,
from the time the grant legislation was enacted to the awarding of
grants to states. For fiscal year 2003 grants, the total cycle was
reduced to 77 days, on average.
According to the reports, most states met deadlines for subgranting
first-responder funds to local jurisdictions. The fiscal year 2003
State Homeland Security Grant Programs and Urban Area Security
Initiative required states to transfer 80 percent of first-responder
grant funds to local jurisdictions within 45 days of the funds being
awarded by ODP. Most states met that deadline by counting funds as
transferred when states agreed to allocate a specific amount of the
grant to a local jurisdiction, the OIG‘s report found. The House Select
Committee staff concurred. And in the three states GAO examined, states
certified they had allocated funds to local jurisdictions within the
45-day period.
Delays in allocating grant funds to first responder agencies are
frequently due to local legal and procedural requirements, the OIG‘s
report found. State and local governments sometimes delayed delivery of
fiscal year 2002 grant funds, for example, because governing and
political bodies within the states and local jurisdictions had to
approve and accept the grant funds. GAO‘s work indicated a similar
finding. In one state GAO reviewed, roughly four months elapsed from
the date the city was notified that grant funds were available to the
date when the city council voted to accept the funds.
Both reports GAO reviewed found that state and local procurement
processes have, in some cases, been affected by delays resulting from
specific procurement requirements. While some states purchase first-
responder equipment centrally for all jurisdictions, in some instances,
those purchases are made locally and procurement may be delayed by
competitive bidding rules, among other things.
It is important to note that those who manage homeland security grants
to states and local governments must balance two sometimes competing
goals: (1) getting funds to states and localities expeditiously and (2)
assuring that there is appropriate planning and accountability for the
effective use of the funds.
www.gao.gov/cgi-bin/getrpt?GAO-04-788T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Wiiliam O. Jenkins, Jr.
at (202) 512-8777 or jenkinswo@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss federal funding for first
responders. The events of September 11, 2001, spotlighted the critical
role that the nation's first responders play in responding to and
mitigating the effects of a terrorist attack. In fiscal years 2002 and
2003, Congress appropriated nearly $13.9 billion for domestic
preparedness programs. The largest sources of federal funds for first
responders were the State Homeland Security Grant Programs (in fiscal
year 2002 called the State Domestic Preparedness Program), distributed
to states[Footnote 1] using a formula that provides each state a base
amount plus additional funds based on population, and the Urban Area
Security Initiative Grants, distributed to selected urban areas based
on such factors as population density, critical infrastructure, and
potential threats. These monies were generally available for planning,
equipment, exercises, training, and administrative costs.
My statement provides:
* A brief discussion of some basic issues associated with using first
responder funds effectively.
* The major findings reported recently by the Department of Homeland
Security (DHS) Office of Inspector General[Footnote 2] (OIG) and the
House Select Committee on Homeland Security[Footnote 3] (House Select
Committee) on the reasons for delays in distributing first responder
funds to local governments and delays in using those funds once
received.
* Some examples from our work in three states that support the findings
in these two reports. Our work to date has provided no information that
would contradict the major findings of these two reports.
Scope and Methodology:
GAO is currently conducting several reviews related to first responder
grants. One of these reviews, to be published within the next few
weeks, addresses issues of coordinated planning and the use of federal
grant funds for first responders in the National Capitol Region, which
encompasses the District of Columbia and 11 surrounding jurisdictions.
Another effort is focused on intergovernmental efforts to manage fiscal
year 2002 and 2003 grants administered by the Office for Domestic
Preparedness (ODP) within the Department of Homeland Security (DHS).
Because much of our work in this area is ongoing and our findings
remain preliminary, my testimony today will focus principally on the
major findings of the reports on preparedness funding issued by the DHS
OIG and the House Select Committee, supplemented by some examples from
our work in four selected locations in three states. Our analysis
focused on three ODP grant programs: the State Domestic Preparedness
Grant Program of fiscal year 2002, with $315,440,000 in appropriations,
and the fiscal year 2003 State Homeland Security Grant Programs, Parts
I and II, with appropriations of $566,295,000 and $1,500,000,000,
respectively. The purpose of this work was to document the flow of
selected fiscal year 2002 and 2003 grant monies from ODP to local
governments and the time required to complete each step in the process.
In doing this work, we met with state and local officials in each state
and obtained and reviewed federal, state, and local documentation. We
did this work between December 2003 and February 2004 in accordance
with generally accepted government auditing standards.
Background:
In recent months, the Conference of Mayors, members of Congress, and
others have expressed understandable concerns about delays in the
process by which congressional appropriations for first responders
reach the local fire fighter, police officer, or other first responder.
The reports by DHS OIG and the House Select Committee examined the
distribution of homeland security grant funding to states and local
governments to understand what obstacles--if any--prevent the
expeditious flow of grant funding from the federal government to state
and local governments.
In March 2003, ODP was moved from the Department of Justice to the DHS.
In fiscal years 2002 and 2003, ODP managed about $3.5 billion under 16
separate grant programs. Generally, states and local grant recipients
could use these funds for some combination of training, new equipment,
exercise planning and execution, general planning efforts, and
administration. The largest of these grants were the State Homeland
Security Grant Programs and the Urban Area Security Initiative grants.
In both grant programs, states may retain 20 percent of total state
grant funding but must distribute the remaining 80 percent to local
governments within the state.
Issues Associated With Using First Responder Funds Effectively:
Before discussing some of the issues that have been raised about the
distribution of federal grant funds to first responders, I would like
briefly to discuss some basic issues associated with using those funds
effectively.
A key goal of first responder funding should be developing and
maintaining the capacity and ability of first responders to respond
effectively to and mitigate incidents that require the coordinated
actions of first responders. These incidents encompass a wide range of
possibilities, including daily auto accidents, truck spills, and fires;
major natural disasters such as floods, hurricanes, and earthquakes; or
a terrorist attack that involves thousands of injuries. Effectively
responding to such incidents requires well-planned, well-coordinated
efforts by all participants. Major events, such as natural disasters or
terrorist attacks, may require the coordinated response of first
responders from multiple jurisdictions within a region, throughout a
state or among states. Thus, it follows that developing a coordinated
plan for such events should generally involve participants from the
multiple jurisdictions that would be involved in responding to the
event. However, a major challenge in administering first responder
grants is balancing two goals: (1) minimizing the time it takes to
distribute grant funds to state and local first responders and (2)
ensuring appropriate planning and accountability for effective use of
the funds.
In fiscal years 2002 and 2003, at least 16 federal grants were
available for first responders, each with somewhat different
requirements. Previously, we have noted that substantial problems occur
when state and local governments attempt to identify, obtain, and use
the fragmented grants-in-aid system to meet their needs.[Footnote 4]
Such a proliferation of programs leads to administrative complexities
that can confuse state and local grant recipients. Congress is aware of
the challenges facing grantees and is considering several bills that
would restructure first responder grants.
Basic Steps in Distributing State Homeland Security Grant Funds:
Much of the concern about delays in distributing federal grant funds to
local first responders has involved the State Homeland Security grants
which are distributed to states on the basis of a formula. Each state
received 0.75 percent of the total grant appropriation, with the
remaining funds distributed according to state population.
There are a number of sequential steps common to the distribution of
ODP State Homeland Security Grants from ODP to the states and from the
states to local governments. They include the following:
1. Congress appropriates funds.
2. ODP issues grant guidance to states.
3. State submits application, including spending plans, to ODP.
4. ODP makes award to states noting any special conditions that must be
cleared before the funds can be used.
5. State meets and ODP lifts special conditions, if applicable.
6. State subgrants at least 80 percent of its funds to local
governments.
7. Local governments purchase equipment directly or through the state.
8. Local governments submit receipts to the state for reimbursement.
9. State draws down grant funds to reimburse local governments.
The total time required to complete these steps is dependent upon ODP
requirements and state and local laws, requirements, regulations, and
procedures. Generally, the DHS OIG report and the report of the House
Select Committee on Homeland Security found similar causes of delays in
getting funds to local governments and first responder agencies. These
included delays in completing state and local planning requirements and
budgets; legal requirements for the procedures to be used by local
governments in accepting state grant allocations; the need to establish
procedures for the use of the funds, such as authority to buy equipment
and receive reimbursement later; and procurement requirements, such as
bidding procedures. Generally, neither the IG report nor the House
Select Committee report found that the delays were principally due to
ODP's grant management procedures and processes.
ODP Grant Awards to the States:
Both the DHS OIG report and the House Select Committee report found
that ODP's grant applicant process was not a major factor in delaying
the distribution of funds to states. The DHS OIG found that in fiscal
years 2002 and 2003, ODP reduced the time it took to make on-line grant
application guidance and applications available to states, process
grant applications, and award the grants to states after applications
were submitted. The DHS OIG found that the total number of days from
grant legislation enacted to award of grants to states declined from on
average 292 days for fiscal year 2002 grants to on average 77 days for
fiscal year 2003 grants. For the three states we examined, we found
that the time between the enactment of the appropriation and ODP's
award of the grant to these states declined from 8 months in fiscal
year 2002 to 3 months for fiscal year 2003 State Homeland Security
Grant Program, Part I, and 2 months for fiscal year 2003 State Homeland
Security Grant Program, Part II.
One factor that did delay the states' ability to use ODP grant funds
was the imposition of special conditions. In fiscal years 2002 and
2003, ODP imposed special conditions for the state homeland security
formula grants if the state had failed to adequately complete one of
the requirements of the grant application. For example, in fiscal years
2002 and 2003, to receive funding states had to submit detailed budget
worksheets to identify how grant funds would be used for equipment,
training, and exercises. To accelerate the grant distribution process,
ODP would award funds to states that had not completed the budget
detail worksheets, with the special condition that states and locals
would be essentially unable to use the funds until the required budgets
were submitted and approved. Thus, the time it took to lift the special
conditions was largely dependent upon the time it took state and local
governments to submit the required documentation. States could not
begin to draw down on the grant funds until the special conditions were
met. In one state we reviewed, ODP notified the state of the special
conditions on May 28, 2003, and the conditions were removed on August
6, 2003, after the state had met those conditions. In another state,
ODP notified the state of the special conditions on September 13, 2002,
and the conditions were removed on March 18, 2003.
ODP imposed special conditions on both the fiscal year 2002 State
Domestic Preparedness Grant Program and the fiscal year 2003 State
Homeland Security Grant Program, Part I, but not on the State Homeland
Security Grant Program, Part II.
State Awards to Local Governments:
After ODP makes its initial award, the state must subgrant at least 80
percent of its grant award to local units of government. In fiscal year
2003, the states had to certify to ODP within 45 days that they had
made these subgrants.[Footnote 5] The subgrant entities and procedures
can vary with each state, making it hard to generalize about this phase
of the distribution process. In our work, we found that some states
subgranted the funds to the county level, while another subgranted to
regional task forces composed of several counties. Subgrantees also
varied in their procedures to distribute funds to local governments.
Some subgrantees managed the grant process themselves, while others
chose to pass funds further down, to a county or city within the
jurisdictional area.
Most States Met Deadline for Subgranting Funds But Some Local
Jurisdictions Were Not Prepared to Spend Funds:
As reported by the DHS OIG, Congress adopted appropriation language for
the fiscal year 2003 State Homeland Security Grant, Part II, that
required states to transfer 80 percent of first responder grant funds
to local jurisdictions within 45 days of the funds being awarded by
ODP. This requirement was included in the appropriation bill to ensure
that states pass funds down to local jurisdictions quickly, and ODP
incorporated this requirement into its grant application guidance.
However, according to the DHS OIG report, this action had a limited
effect because most states met the 45-day deadline by counting funds as
transferred when the states agreed to allocate a specific amount of the
grant to a local jurisdiction, even if the state had not determined how
the funds would be spent or when contracts for goods and services would
be let. Additionally, many states and local jurisdictions delayed
spending of prior year grant funds in order to meet the fiscal year
2003 requirement. The House Select Committee staff also reported that
nearly all states met this 45-day requirement with respect to 2003
funding as of February 2004, but noted that this may not reflect the
actual availability of funds for expenditures by local jurisdictions.
The committee report cited the example of Seattle, Washington. While it
had been awarded $30 million in May 2003, Seattle received
authorization to spend these funds only shortly before the April 2004
release of the committee's report. In the three states we examined, we
also found that states had certified they had allocated funds to local
jurisdictions within the required 45-day period.
Various Local Legal and Procedural Requirements Took Time:
According to the DHS OIG, state and local governments were sometimes
responsible for delaying the delivery of fiscal year 2002 grant funds
to first responders because various governing and political bodies
within the states and local jurisdictions had to approve and accept the
grant funds. Six out of the 10 states included in the DHS OIG's sample
reported that their own state's review and approval process was one of
the top three reasons that the funds had not been spent by the time the
report was published. For example, one of three states for which data
were available took 22 days to accept ODP's award and 51 days to award
a subgrant to one of its local jurisdictions; the local jurisdiction
did not accept the grant for another 92 days. Another state took 25
days to accept ODP's grant award and up to 161 days to award the funds
to its local jurisdictions. Local jurisdictions then took up to 50 days
to accept the awards.
Our work showed similar results. One city was notified on July 17, 2003
that grant funds were available for use, but the city council did not
vote to accept the funds until November 7, 2003.
The House Select Committee reported that, in over half of the states
they reviewed, local jurisdictions had not submitted detailed spending
plans to the states prior to the time the states had transferred grant
funds to them. Specifically, they found that often times, even though a
reasonable estimate of the available award amount was available months
earlier, many local jurisdictions waited to initiate their planning
efforts until they were officially notified of their grant awards.
Because ODP imposed special conditions in some grant years, these local
jurisdictions, therefore, could not begin to draw down funds until they
provided the detailed budget documentation, outlining how the funds
would be spent, as required by ODP.
For the fiscal year 2002 statewide homeland security grants, local
jurisdictions and state agencies were required to prepare, submit, and
receive approval of detailed budget work sheets that specifically
accounted for all grant funds provided. This specific detailing of
items included not only individual equipment items traditionally
accounted for as long-term capital equipment, but also all other items
ordinarily recorded in accounting records as consumable items, such as
disposable plastic gloves, that usually need not be accounted for
individually. Preparing this detailed budget information took time on
the part of local jurisdictions to prepare and for the states and ODP
to review and approve.
Since the first round of fiscal year 2003 state homeland security
grants, ODP has not linked the submission and approval of detailed
budget information to the release of grant funds. ODP required the
submission and approval of the same detailed budget worksheets for the
fiscal year 2003 statewide grants, but did not condition the release of
funds on their submission and approval. For the fiscal year 2004
grants, ODP still requires the submission of detailed budget work
sheets by local jurisdictions to the state, but not to ODP, for its
approval.
The DHS OIG also found that there were numerous reasons for delays in
spending grant funds. Some were unavoidable and others they found to be
remediable. In general, the DHS OIG found identifying the highest
priority for spending grant funds to be a difficult task. Most states
the DHS OIG visited were not satisfied with the needs analysis that
they had done prior to September 11, 2001. Some states took the time to
update their homeland security strategies, and one state delayed fiscal
year 2002 grant spending until it had completed a new strategy using
ODP's fiscal year 2003 needs assessment tool. The DHS OIG also found
little consistency in how the states manage the grant process. The
states used various methods for identifying and prioritizing needs and
allocating grant funds. States may rely on the work of regional task
forces, statewide committees, county governments, mutual aid groups, or
local fire and police organizations to identify and prioritize grant
spending.
Both the DHS OIG report and House Select Committee report noted that
state and local procurements have, in some cases, been affected by
delays resulting from specific procurement requirements. Some states
purchase equipment centrally for all jurisdictions, while others sub-
grant funds to local jurisdictions that make their own purchases. In
these latter instances, local procurement regulations can affect the
issuance of equipment purchase orders. The House Select Committee
report discussed how state and local procurement processes and
regulations could slow the expenditure of grant funds. For example, in
Kentucky, an effort was taken to organize bidding processes for
localities and to provide them with pre-approved equipment and services
lists. However, state and local laws require competitive bidding for
any purchases above $20,000, a requirement that can delay actual
procurements. Moreover, if bids had been requested for a proposal and
those bid specifications were not met, then the bidding process must
start over again. As Kentucky's Emergency Managing Director explained,
"There is a process and procedure that must be gone through before
localities can actually spend the funds, and the state has not
identified funds that are exempt from these local rules of procedure
that are in place.":
In one of the jurisdictions for which we obtained documentation, we
also found that procurement regulations may require that funds be
available prior to the issuance of equipment purchase orders. This
requirement took from June 18, 2003 to September 4, 2003 before
purchase orders could be issued. In the individual jurisdictions in the
three states for which we obtained documentation we also found that
some apparent delays in obligating grant funds resulted from the time
normally required by local jurisdictions to purchase and contract for
items, to prepare requests for proposals, evaluate them once received,
and have purchase orders approved by legal departments and governing
councils and boards. In one case, the time between the city
controller's release of funds to the issuance of the first purchase
order was about 3 months, from September 4, 2003, to December 15, 2003.
Conclusion:
The reports by the DHS OIG and by the Select Committee, as well as the
preliminary work we have undertaken, support the conclusion that local
first responders may not have anticipated the natural delays that
should have been expected in the complex process of distributing
dramatically increased funding through multiple governmental levels
while maintaining procedures to ensure proper standards of
accountability at each level. The evidence available suggests that the
process is becoming more efficient and that all levels of government
are discovering and institutionalizing ways to streamline the grant
distribution system. These increased efficiencies, however, will not
continue to occur unless federal, state, and local government each
continue to examine their processes for ways to expedite funding for
the equipment and training needed by the nation's first responders. At
the same time, it is important that the quest for speed in distributing
funds does not hamper the planning and accountability needed to ensure
that the funds are spent on the basis of a comprehensive, well-
coordinated plan to provide first responders with the equipment,
skills, and training needed to be able to respond quickly and
effectively to a range of emergencies, including, where appropriate,
major natural disasters and terrorist attacks.
Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions that you or other members of the subcommittee may have.
FOOTNOTES
[1] Funds are also distributed to the District of Columbia, Puerto
Rico, and the four territories.
[2] Department of Homeland Security: Office of Inspector General, An
Audit of Distributing and Spending "First Responder" Grant Funds, OIG-
04-15 (Washington, D.C.: Mar. 2004).
[3] House Select Committee On Homeland Security, An Analysis of First
Responder Grant Funding, (Washington, D.C.: April 2004).
[4] See U.S. General Accounting Office, Homeland Security: Reforming
Federal Grants to Better Meet Outstanding Needs, GAO-03-1146T
(Washington, D.C.: Sept. 3, 2003).
[5] For fiscal year 2004 grants, states were allowed 60 days.
