Department of Homeland Security2IAgraveFHRIQVSHFWRUHQHUDO

New Hampshirersquos Management of State Homeland Security Program Grants Awarded During Fiscal Years

2010 Through 2012

OIG-14-93 May 2014

MAY 7 2014

MEMORANDUM FOR Brian E Kamoie

Assistant Administrator Grant Programs Directorate Federal Emergency Management Agency

FROM Anne L Richards

ector General for Audits Assistant Insp SUBJECT New Hampshirersquos Management of State Homeland

Security Program Grants Awarded During Fiscal Years 2010 Through 2012

Attached for your action is our final report New Hampshirersquos Management of State Homeland Security Program Grants Awarded During Fiscal Years 2010 Through 2012 We incorporated the formal comments from the Office of Policy Program Analysis and international Affairs and New Hampshire Department of Safety in the final report The report contains seven recommendations aimed at improving the Federal Emergency Management Agency and New Hampshirersquos management of State Homeland Security Program grants Your office concurred with all of the recommendations Based on information provided in your response to the dra ft report OIG considers recommendation 7 resolved and closed Recommendations 1 and 6 are resolved and open Once your office has fully implemented the recommendations please submit a formal closeout request to us within 30 days so that we may close the recommendations The memorandum should be accompanied by evidence of completion of agreed-upon corrective actions and of the disposition of any monetary amounts The OIG considers recommendations 2 through 5 unresolved and open As prescribed by the Department of Homeland Security Directive 077-01 Follow-up and Resolution for Office of Inspector General Report Recommendations within 90 days of the date of this memorandum please provide our office with a written response that includes your (1) agreement or disagreement (2) corrective action plan and (3) target completion date for each recommendation Also please include information on responsible parties and any other supporting documentation necessary to inform us about the current status of the recommendation Until your response is received and evaluated the recommendations will be considered open and unresolved

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Washington DC 20528 wwwoigdhsgov

MAY 7 2014

MEMORANDUM FOR Brian E Kamoie

Assistant Administrator Grant Programs Directorate Federal Emergency Management Agency

FROM Anne L Richards

ector General for Audits Assistant Insp SUBJECT New Hampshirersquos Management of State Homeland

Security Program Grants Awarded During Fiscal Years 2010 Through 2012

Attached for your action is our final report New Hampshirersquos Management of State Homeland Security Program Grants Awarded During Fiscal Years 2010 Through 2012 We incorporated the formal comments from the Office of Policy Program Analysis and international Affairs and New Hampshire Department of Safety in the final report The report contains seven recommendations aimed at improving the Federal Emergency Management Agency and New Hampshirersquos management of State Homeland Security Program grants Your office concurred with all of the recommendations Based on information provided in your response to the dra ft report OIG considers recommendation 7 resolved and closed Recommendations 1 and 6 are resolved and open Once your office has fully implemented the recommendations please submit a formal closeout request to us within 30 days so that we may close the recommendations The memorandum should be accompanied by evidence of completion of agreed-upon corrective actions and of the disposition of any monetary amounts The OIG considers recommendations 2 through 5 unresolved and open As prescribed by the Department of Homeland Security Directive 077-01 Follow-up and Resolution for Office of Inspector General Report Recommendations within 90 days of the date of this memorandum please provide our office with a written response that includes your (1) agreement or disagreement (2) corrective action plan and (3) target completion date for each recommendation Also please include information on responsible parties and any other supporting documentation necessary to inform us about the current status of the recommendation Until your response is received and evaluated the recommendations will be considered open and unresolved

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Washington DC 20528 wwwoigdhsgov

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Please email a signed PDF copy of all responses and closeout requests to OIGAuditsFollowupoigdhsgov Consistent with our responsibility under the Inspector General Act we will provide copies of our report to appropriate congressional committees with oversight and appropriation responsibility over the Department of Homeland Security We will post the report on our website for public dissemination

Please call me with any questions or your staff may contact John E McCoy II Deputy Assistant Inspector General at (202) 254-4100

Attachment

wwwoigdhsgov 2 OIG-14-ϵϯ

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

TableofContents ExecutiveSummary 1 Background 2 ResultsofAudit 3

ObligationofFunds 3 Recommendations 5 ManagementCommentsandOIGAnalysis5 PassͲthroughorRetentionofGrantFunds6 Recommendation 7 ManagementCommentsandOIGAnalysis8 OnsiteMonitoring 9 Recommendation 9 ManagementCommentsandOIGAnalysis9 InventoryManagement10 Recommendations 11 ManagementCommentsandOIGAnalysis12 PerformanceMeasures 13 Recommendation 14 ManagementCommentsandOIGAnalysis14

Appendixes

AppendixAObjectivesScopeandMethodology16 AppendixBManagementCommentstotheDraftReport18 AppendixCMajorContributorstoThisReport35 AppendixDReportDistribution36

wwwoigdhsgov OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Abbreviations

CFR CodeofFederalRegulations DOS DepartmentofSafety DHS DepartmentofHomelandSecurity FEMA FederalEmergencyManagementAgency

FY fiscalyear GAO GovernmentAccountabilityOffice GMU GrantsManagementUnit ISIP initialstrategyimplementationplan

MOA memorandumofacknowledgement MOU memorandumofunderstanding OIG OfficeofInspectorGeneral SAA stateadministrativeagency SHSP StateHomelandSecurityProgram SPR statepreparednessreport THIRA ThreatandHazardIdentificationandRiskAnalysis

wwwoigdhsgov OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

ExecutiveSummary PublicLaw110Ͳ53ImplementingRecommendationsofthe911CommissionActof 2007requirestheDepartmentofHomelandSecurity(DHS)OfficeoftheInspector General(OIG)toauditindividualstatesrsquomanagementofStateHomelandSecurity ProgramandUrbanAreasSecurityInitiativegrantsThisreportrespondstothe reportingrequirementforNewHampshire TheauditobjectivesweretodeterminewhetherNewHampshiredistributed administeredandspentStateHomelandSecurityProgramgrantfundsstrategically effectivelyandincompliancewithlawsregulationsandguidanceWealsoaddressed theextenttowhichfundsawardedenhancedtheabilityofstategranteestoprevent prepareforprotectagainstandrespondtonaturaldisastersactsofterrorismand othermanmadedisastersTheFederalEmergencyManagementAgency(FEMA) awardedNewHampshireapproximately$146millioninStateHomelandSecurity Programgrantsduringfiscalyears2010through2012 NewHampshirersquosDepartmentofSafetyGrantsManagementUnitensuredthatgrant expendituresforequipmentplanningtrainingexercisesandadministrativeactivities wereallowableandcompliedwithmostgrantrequirementsHowevertheStatecould improvethetimelyawardoffundingtosubgranteesandthepassͲthroughorretention ofgrantfundingforlocalunitsofgovernmentTheStateshouldalsoestablishtimely deadlinesforonsitemonitoringofsubgranteescomplywithregulatoryinventory practicesandmeasureprogressandimprovementsinpreparednessthatresultedfrom grantfunding InadditionFEMAneedstoestablishatimelyreviewandapprovalprocessforgrant extensiondecisionsandensuretheStatersquosothercentrallymanagedgrantsadhereto Federallaws WemadesevenrecommendationstoFEMAwhichwhenimplementedshould strengthengrantprogrammanagementperformanceandoversightFEMAconcurred withalloftherecommendations

wwwoigdhsgov 1 OIGͲ14Ͳ93

Figure1NewHampshireSHSPFundingLevelsFYs2010ndash12

NewHampshireSHSPFunding $7000000

$6000000

$5000000

$4000000

$3000000

$2000000

$1000000

$0 FY2010 FY2011 FY2012

$6613200

$5137205

$2801316

SourceNewHampshireDepartmentofSafety(DOS)

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Background DHSprovidesFederalfundingthroughtheHomelandSecurityGrantProgramtoassist stateandlocalagenciesinpreventingpreparingforprotectingagainstandresponding toactsofterrorismTheStateHomelandSecurityProgram(SHSP)fundsawiderangeof preparednessneedswhichcanincludeplanningorganizationequipmenttrainingand exercises InaccordancewithFEMAgrantguidancetheGovernorofNewHampshiredesignated NewHampshirersquosDepartmentofSafety(DOS)asthestateadministrativeagency(SAA) WithinDOStheGrantsManagementUnit(GMU)isresponsibleformanagingthegrant programinaccordancewithestablishedFederalguidelinesandallocatingfundstolocal regionalandotherstateentities Duringfiscalyears(FYs)2010ndash12FEMAawardedNewHampshireabout$146millionin SHSPgrantfundsTheStatedoesnothaveaFEMAͲdesignatedurbanareaanddoesnot receiveUrbanAreaSecurityInitiativegrantfundsNewHampshirehas10countiesand 8hazardousmaterialsteamsacrosstheStatethatrespondtohazardsmanmadeand naturaldisastersandstateagenciesthatapplyforandreceiveSHSPfundsFigure1 showsNewHampshirersquosSHSPfundinglevelsforFYs2010ndash12TheStatereceivedits highestleveloffundingin2010fundingdeclinedabout$38millioninFY2012

PublicLaw110Ͳ53requiresDHSOIGtoauditindividualStatesrsquomanagementofSHSP grantsThisauditrespondstothereportingrequirementsforNewHampshireAppendix Adescribesitsobjectivesscopeandmethodology

wwwoigdhsgov 2 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

ResultsofAudit GMUensuredthatgrantexpendituresforequipmentplanningtrainingexercisesand administrativeactivitieswereallowableandcompliedwithmostgrantrequirements HoweverGMUdoesnotobligategrantfundstimelyorawardtherequired80percent ofgrantfundingtolocalunitsofgovernmentAdditionallyGMUdoesnothave establisheddeadlinestoconducttimelysitemonitoringofsubgranteescomplywith regulatoryinventorypracticesormeasureprogressandimprovementsinpreparedness TheStatersquosHomelandSecurityGrantReviewCommitteeincludesstatewide stakeholdersexaminesandscoresallgrantapplicationspriortoawardingSHSPfunding tolocalsubgranteesThislengthyprocessexceededtherequired45Ͳdayobligation timeframeleavingsubgranteeswithlimitedtimetospendgrantfundsAsaresult GMUhadtorequestanextensionfromFEMAtoexpendabout$2997786orabout42 percentoftheFY2010award InadditionimprovementinthefollowingareaswillenhancetheStatersquosgrant managementprogram

x Fundingfortrainingandothercentrallymanagedprograms x subgranteemonitoring x propertymanagementandinventorycontrolsand x preparednessprogressandimprovementmeasurement ObligationofFunds

PublicLaw110Ͳ53ImplementingRecommendationsofthe911CommissionAct of2007requirestheStatetoobligate80percentoffundsawardedunderSHSP grantprogramstolocalunitsofgovernmentObligationsmusttakeplacewithin 45daysofreceiptofthefundsAccordingtoFEMArsquosgrantguidancethese obligationscarrythefollowingadditionalrequirements

x Theremustbesomeactiontoestablishafirmcommitmentonthe partoftheawardingentity

x Theactionmustbeunconditionalonthepartoftheawardingentity (ienocontingenciesforavailabilityofSAAfunds)

x Theremustbedocumentaryevidenceofthecommitmentand x Theawardtermsmustbecommunicatedtotheofficialgrantee

InanattempttofulfillthisrequirementtheStatesubmittedtheInitialStrategy ImplementationPlan(ISIP)whichFEMArequestedAnISIPisasnapshotintime

wwwoigdhsgov 3 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

thatshowstheinitialbreakdownoffundsbutdoesnotrepresentafirm unconditionalcommitmenttotheofficialgranteeThereforeeventhoughthe StatesubmittedtheISIPtoFEMAwithin45daysofthegrantawarditdidnot meetthefourobligationrequirements AccordingtoGMUofficialstheHomelandSecurityGrantReviewCommittee dividesSHSPfundingintomultiplesubcategoriesͲhazmattrainingandexercises criticalinfrastructureprotectionmaintenanceinteroperabilityandcompetitive applicationsWiththeexceptionofmaintenanceandcompetitiveapplications GMUallocatessubcategoriesuponawardfromFEMADuringthecompetitive processGMUsendsapplicationsforcompetitiveandmaintenancegrantstoall countiestownsandothereligiblesubgranteesGMUsendsreturned submissionstotheHomelandSecurityGrantReviewCommitteeforscoringand award ThisprocesstookasignificantamountoftimeThereisnotimerequirementfor GMUtobegintheapplicationprocessthereforeitdidnotbegintheprocess untilafterFEMAawardedthegrantAsaresultthecompetitiveapplication processusedupatleastathirdoftheperiodofperformanceWeconcludedthat thisprocessdoesnotcomplywiththe45Ͳdayobligationrequirementand subgranteesmaynothavesufficienttimetousegrantfundstomeettheir approvedpreparednessneedsTable1showstheStatersquosobligationprocessfor FYs2010ndash12

Table1TimelineofGrantPerformanceFYs2010Ͳ12

FiscalYear

2010 PeriodofPerformance

August12010ndash July312013 (36months)

2011 PeriodofPerformance September12011ndash August312014 (36months)

2012 PeriodofPerformance September12012ndash August312014 (24Months)

StateApplication 4172010 6172011 532012 AwardAnnounced 7152010 8232011 6292012 FEMAAwarded 9172010 10062011 8072012

StateAcceptsAward 9272010 10112011 8242012 StateHomelandGrant ReviewCommittee MeetstoAward

CompetitiveGrants

9272011 12122012 5152013

PeriodofPerformance ConsumedbyState

Process

423days 39ofperformance

period

469days 43ofperformance

period

257days 35ofperformance

period SourceFEMAandGMU

wwwoigdhsgov 4 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

GMUrequestedanextensionofitsFY2010grantonApril25201398days beforethecloseoftheperiodofperformanceandpriortothe60Ͳdaydeadline requiredbyFEMArsquosgrantguidanceFEMAdidnotissueagrantadjustment noticeuntilAugust62013extendingthegrantanadditional212daysThis occurredafterthegrantrsquosperiodofperformanceendedonJuly31andall activitiesunderthegrantceased1AlthoughFEMArsquosgrantguidanceincludesa deadlineforrequestingagrantextensionFEMAdoesnothavepoliciesinplace toapprovegrantextensionsinatimelymanner Subgranteeshavelimitedtimetoobligateprocureandspendgrantfunds becauseofGMUrsquoscurrentproceduresGMUanditssubgranteescouldnot properlyprepareforthecloseoftheFY2010grantbecauseofitslengthyaward processandFEMArsquosdelayedresponsetothegrantextensionrequest Recommendations WerecommendthattheAssistantAdministratorGrantProgramsDirectorate Recommendation1 RequiretheNewHampshireGrantsManagementUnittoevaluateand abbreviateitsprocessforapprovingandobligatingsubgranteeawards

ManagementCommentsandOIGAnalysis

FEMArsquosandtheStatersquosresponsestoRecommendation1ndashFEMAconcurred withtherecommendationhowevertheStatedidnotconcurFEMAwillrequire theSAAtoreviewitsobligationandapprovalprocesstoidentifywaysto abbreviatetheprocessandensuresubgranteeshavesufficienttimetoprocure andspendgrantfundsTheStateassertsthatthechartusedbytheOIGis inaccurateTheDOSstatedthatalthoughtheNewHampshireprocessistime consumingtheymetthePL110Ͳ53directivesFEMArequeststhattheOIG considertherecommendationresolvedandopenTheestimatedcompletion dateisJune302014 OIGAnalysisndashFEMArsquosproposedcorrectiveactionsareresponsivetotheintent ofrecommendation1TheStatersquosprocessforobligatingawardstosubgrantees overthegrantperiodofperformancedidnotcomplywiththe45Ͳdayobligation requirementWhiletheStatedisagreedweverifiedthechartweusedis

1TheStateandsubgranteesareallowed90daystocompletecloseoutofthegrantforliquidation reimbursementandsubmittalofrequisitefinancialreportstoFEMA

wwwoigdhsgov 5 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

accurateItsmethodologydiffersfromtheOIGrsquosbecauseitdoesnotincludethe entireperiodofperformanceTheStatersquoscalculationsbeginwiththedateit acceptsFEMArsquosawardwhiletheOIGrsquosbeginswithFEMArsquosperiodof performancedateWecontinuetoaffirmthattheGrantsManagementUnit evaluateandabbreviateitsprocessforapprovingandobligatingsubgrantee awardsThisrecommendationisresolvedandopenuntilFEMArsquosGrantPrograms DirectorateprovidesevidencethatGMUcompletedtheseactions WerecommendthattheAssistantAdministratorGrantProgramsDirectorate Recommendation2 Establishandimplementapolicythatsetsareasonabletimetableforreviewing andmakingadecisiononrequestsbygranteesforgrantextensionstoensure thatgranteeshavesufficienttimetoplanfortheendofagrantsperiodof performance ManagementCommentsandOIGAnalysis

FEMArsquosandtheStatersquosresponsestoRecommendation2ndashFEMAandtheState concurredwithrecommendation2FEMAestablishedapolicyforreviewing andmakingdecisionsongrantextensionrequestsbygranteesThepolicy requirestheGrantsProgramDirectorateExtensionReviewPaneltomeet weeklyFEMArequeststheOIGconsiderthisrecommendationresolvedand closed OIGAnalysisndashFEMArsquosproposedcorrectiveactionsareresponsivetotheintentof recommendation2Howeverthisrecommendationwillremainunresolvedand openpendingreceiptofapolicythatincludesatimeframeformaking determinationsongrantextensionrequests PassͲthroughorRetentionofGrantFunds TheStatedidnotpassthrough80percentoffundingtolocalgovernmentsas requiredbyPublicLaw110Ͳ53TheStatersquosprocessdoesnotallowsubgrantees anopportunitytousefundsforotherprojectsbasedonneedgapassessments InFYs2010and2011GMUawardedtrainingfundstotheStateFireAcademya stateagencytomanagetrainingonbehalfoflocalgovernmentsTheStatedid notalwaysobtainproperwrittenconsentfromlocalgovernmentstoretain fundingontheirbehalfThewrittenconsentobtainedfromlocalentitiesto retainandcentrallymanagetheawardwasnotspecificandnotalwayssignedby authorizedindividuals

wwwoigdhsgov 6 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

PublicLaw110Ͳ53requiresstatestomakeldquonotlessthan80percentofthegrant fundsrdquoavailabletolocalgovernmentsortomakeavailableldquowithconsentofthe localandtribalgovernmentsitemsservicesoractivitieshavingavalueofnot lessthan80percentoftheamountofthegrantrdquoGrantguidancealsomandates thatstatesmustldquopassthroughrdquofundingwhichisdefinedasldquoanobligationon thepartoftheStatestomakefundsavailabletolocalunitsofgovernment combinationsoflocalunitsorotherspecificgroupsororganizationsrdquo InFYs2010and2011GMUawarded$250000and$243292respectivelyto theStateFireAcademytomanagetrainingfundsGMUannouncedtheawards ontheDOScentralwebsiteandconsideredthemlocalawardsthatcontributed tothe80percentpassͲthroughrequirementThegrantsawardedtotheState FireAcademyforcentrallymanagedtrainingdidnotspecifyawardamountsto anylocalgovernmentNordidanylocalgovernmentconsenttothewithholding atthetimeoftheawardAsaresultthefundingfortheawardsdidnotmeetthe passͲthroughrequirementinPublicLaw110Ͳ53 GMUofficialssaidthattheyusedmemorandumsofacknowledgement(MOA)to obtainconsenttomanageandretainfundingforthetrainingonbehalfoflocal governmentsHowevertheMOAsdidnotcontaintheamountortheintended useoffundsasrequiredbyFEMAgrantguidanceAdditionallylocal governmentpersonnelfrequentlyactedoutsidethescopeoftheirauthorityand signedMOAsjustpriortoattendingtrainingAccordingtotheGovernment AccountabilityOfficersquos(GAO)StandardsforInternalControlintheFederal Governmentldquohelliptransactionsandothersignificanteventsshouldbeauthorized andexecutedonlybypersonsactingwithinthescopeoftheirauthorityrdquo2 ThereforeGMUdidnotalwaysobtainproperwrittenconsentfromlocal governmentstoretainfundingontheirbehalf AsaresultthegrantfundsallocatedtotheStateFireAcademytomanage trainingonbehalfoflocalgovernmentsdidnotcomplywithFederalsubaward guidanceSpecificallyGMUdidnotpassthroughthefull80percentofgrant fundingtolocalgovernmentsaffordingthemtheopportunitytousefundsfor otherprojectsbasedontheirownneedgapassessments Recommendation WerecommendthattheAssistantAdministratorGrantProgramsDirectorate

2GAOAIMDͲ00Ͳ2131pp14Ͳ15(November1999)

wwwoigdhsgov 7 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Recommendation3

DirectandensurethattheGrantsManagementUnitcomplieswithFederal requirementsandgrantguidanceasitrelatestosubawardingfundstolocal jurisdictions(80percentpassͲthroughrequirement)orretainingfundswith writtenconsentoflocalsubgrantees

ManagementCommentsandOIGAnalysis

FEMArsquosandtheStatersquosresponsestoRecommendation3ndashFEMAconcurredbut theStatedidnotconcurwithrecommendation3TheStateassertedthatthe OIGstatementinthereportisinaccurateandthatitcomplieswiththe memorandumofunderstanding(MOU)MOArequirementandthe80percent awardingrequirementAccordingtoFEMAitreviewedGMUssubawarding processandbelievesthatGMUcomplieswithFederalrequirementsandgrant guidanceFEMAsaidthatGMUsHomelandSecurityGrantReviewCommittee determinestheallocationsforthe80percentpassͲthroughduringanopen meetingeachgrantcycleGMUpoststhenoticeofallocationavailabilityonthe agencywebsiteandmailsittolocalunitsofgovernment AccordingtoFEMAwhentheStateretainedfundsonbehalfoflocal governmentsGMUdemonstratedthatithasMOUsdocumentinglocal subgranteesrsquoconsentfortheStatetoretainthefundsandGMUhasmetthis requirementeachyearFEMAprovidedGMUsHomelandSecurityGrantReview CommitteeproceduresFYs2010Ͳ12awardsummariesandsampleMOUs whichaccordingtoFEMAdemonstratescompliancewiththerecommendation FEMAbelievestheinformationprovidedsatisfiestheintentofthe recommendationandrequeststheOIGresolveandclosethisrecommendation OIGAnalysisndashWeacknowledgethatGMUrsquosHomelandSecurityGrantReview Committeeheldopenmeetingstodetermineallocationsforthe80percentpassͲ thoughrequirementWereviewedtheadditionalMOUsandMOAsthatFEMA andtheStateprovidedThedocumentsprovideddidnotsatisfytheintentofthe recommendationDocumentsdidnotincludeanawardamountspentonbehalf oflocalgovernmentsanddidnotincludeagreementdatesWeconsiderthis recommendationunresolvedandopenuntilFEMAprovidestheappropriate evidencewhichmeetstherequirementsofPublicLaw110Ͳ53andFEMAgrant guidance

wwwoigdhsgov 8 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

OnsiteMonitoring

GMUhaswrittenpoliciesandproceduresformonitoringsubgranteesbutdoes notestablishdeadlinesforonsitemonitoringGMUofficialssaidtheymonitor subgranteesthroughquarterlyreportsdeskmonitoringandonsitevisitsafter grantcloseoutTitle44oftheCodeofFederalRegulations(CFR)sect1340 MonitoringandReportingProgramPerformancerequiresgranteestooversee subgranteeactivitiestoensurecompliancewithapplicableFederal requirementsAccordingtotheOfficeofManagementandBudgetrsquosCircularAͲ 133ComplianceSupplementJune2012granteesareresponsibleformonitoring subgranteesrsquouseofFederalawardsthroughreportingsitevisitsregularcontact orothermeans AccordingtoGMUofficialsthereisonepartͲtimeinternalauditorconducting onsitemonitoringforallSHSPgrantsGMUrsquosAuditingProceduresrequireonsite visitsdeskauditsandreviewsofselfͲsubmittedquarterlyreportsfrom subgranteesThepolicydoesnotestablishtimeframestoensuretimelyonsite monitoringatgrantcloseoutAGMUofficialsaidthatonsitemonitoringis limitedbyinsufficientstaffhours AtthetimeofourauditGMUhadnotconductedonsitevisitsofFY2010SHSP closedgrantsanddidnothaveascheduleforfuturesitevisitsGMUrequested anextensionfromFEMAfor$250674(71percent)ofitsFY2010allowed managementandadministrationcoststoconductitsrequiredonsitemonitoring WeconcludedthatdelayedonsitemonitoringpreventsGMUofficialsfrom validatingtheresultsofdeskreviewsandquarterlyreportsItalsolimitsGMU officialsrsquoabilitytoensurethatlocalsubgranteescomplywithapplicableFederal requirements Recommendation WerecommendthattheAssistantAdministratorGrantProgramsDirectorate Recommendation4 RequiretheNewHampshireGrantsManagementUnittoestablishaninternal deadlineforsitevisitsduringcloseoutaudits ManagementCommentsandOIGAnalysis

FEMArsquosandtheStatersquosresponsestoRecommendation4ndashFEMAconcurredbut theStatedidnotconcurwithrecommendation4FEMAreviewedGMUs

wwwoigdhsgov 9 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

AuditingProceduresanddetermineditcompliedwith44CFRsect1340GMU conducts100percentcloseoutauditsincludingacloseoutreportonall granteespriortotheendofthegrantsperformanceperiodTheStateasserts thatthereisnositevisitortimelinessrequirementin44CFRsect1340TheState alsoexplainedthattheirinternalauditorpositionisvacantandtheydonot anticipatefillingitduetolackoffundingAsaresulttheStatewillprobably ceasemonitoringthroughsitevisits FEMAprovidedGMUrsquosAuditingProceduresandauditschedulewhich demonstratedcompliancewiththerecommendationFEMAbelievesdocuments providedmeettheintentoftherecommendationandrequestthis recommendationberesolvedandclosed OIGAnalysisndashWeconsiderrecommendation4unresolvedandopenuntil FEMAprovidesevidencethatGMUrsquosAuditingProceduresincludeaninternal deadlineforcompletingsitevisitsduringcloseoutaudits FEMArsquoscorrectiveactionsarenotresponsivetotheintentofthis recommendationFEMAprovidedascheduleofgrantcloseoutvisitsWe reviewedanddeterminedthedocumentsprovideddidnotmeettheintentof therecommendationThescheduleprovidedevidenceofvisitsconductedfor grantyearspriortograntyearsauditedWeaffirmtheneedfortheStateto conductsitevisitstovalidatetheresultsofdeskauditsandotherselfͲsubmitted informationinatimelymanner InadditiontoGMUrsquosAuditingProceduresrequiringonsitevisitstimelycloseout visitsensurecompliancewithapplicableFederalrequirementsAdditionally whiletheStateisconsideringeliminatingmonitoringthroughsitevisittheState receivedagrantextensionformorethanhalfoftheirmanagementand administrationfundswhichcouldfundcloseoutsitevisits InventoryManagement

GMUdoesnotensurethatsubgranteescomplywithFederalrequirementsfor maintaininginventoryrecordsorperformingrequiredbiennialphysicalinventory reconciliationAGMUofficialsaidthattheydelegateinventoryrequirementsto thesubgranteesatthetimeofawardandmonitorinventorycomplianceduring grantcloseoutsitevisitsGMUrsquosgrantguidancerequirescompliancewith FederalinventoryrequirementsTitle44CFRsect1332ͲEquipmentsetsforth proceduresformanagingequipment(includingequipmentreplacement) whetheracquiredinwholeorinpartwithgrantfundsuntildisposition

wwwoigdhsgov 10 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Accordingtotheregulationsgrantrecipientsmustmeetthefollowing requirements x Propertyrecordsmustbemaintainedthatincludeadescriptionofthe

propertyaserialnumberorotheridentificationnumberthesourceof propertyidentificationofwhoholdstitletheacquisitiondatecostof thepropertypercentageofFederalparticipationinthecostofthe propertythelocationuseandconditionofthepropertyandany ultimatedispositiondataincludingthedateofdisposalandsalepriceof theproperty

x Aphysicalinventoryofthepropertymustbetakenandtheresults reconciledwiththepropertyrecordsatleastonceevery2years

x Acontrolsystemmustbedevelopedtoensureadequatesafeguardsto preventlossdamageortheftofthepropertyAnylossdamageortheft shallbeinvestigated

AccordingtoGMUofficialstheyconductanindependentverificationof inventoryduringtheoneonsitemonitoringvisitatgrantcloseoutHowever GMUdoesnototherwiseverifythatsubgranteeskeeprecordsorconduct inventoriesrequiredbytheregulationAGMUofficialsaidoncethecloseout processiscompleteGMUconductsnoadditionalinventoriestoensurethat subgranteesmeetthebiennialinventoryreconciliationrequirement

Withouttherequiredphysicalcontrolandaccountabilityoveritemspurchased withSHSPfundsGMUcannotensuretheauthorizeduseofpropertyItcannot ascertainthesecurityofpropertytopreventlossdamageortheftAfter completionofauditfieldworkaGMUofficialsaidtheyplantoreviseinventory policiesandprocedurestoestablishstrongerinventorycontrolstomeetpartof theFederalrequirements

Recommendations WerecommendthattheAssistantAdministratorGrantProgramsDirectorate

Recommendation5

DirecttheNewHampshireGrantsManagementUnittodevelopandimplement procedurestoensurethatinventoryrecordscomplywith44CFRsect1332

wwwoigdhsgov 11 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Management Comments and OIG Analysis FEMArsquos and the Statersquos responses to Recommendation 5 ndash FEMA concurred and the State partially concurred with recommendation 5 The State asserts that it is a violation of their State Constitution to require local grantees to comply with the inventory requirements of 44 CFR sect1332 without additional funding FEMA reviewed the Statersquos Fixed Assets Inventory Policies and Guidelines for state and local agencies and determined it ensures inventory recordkeeping compliance with 44 CFR sect1332 regulations FEMA requests this recommendation be resolved and closed OIG Analysis ndash We consider recommendation 5 unresolved and open until FEMA provides copies of State implemented policies and procedures that address federal inventory requirements The State requires local grantees to agree to grant terms and conditions before accepting grant funding Included in the terms and conditions are the requirements of 44 CFR sect1332 The policy provided by FEMA used to support the closing of recommendation 5 does not include all of the inventory requirements for items purchased with SHSP funds The policy does not include the following required elements maintenance of property records to include descriptions of the

property a serial number or other identification and physical inventory of property and reconciliation at least every 2 years

We recommend that the Assistant Administrator Grant Programs Directorate

Recommendation 6

Ensure the New Hampshire Grants Management Unit compiles and provides reconciled inventory records for fiscal years 2010ndash12 SHSP to meet Federal requirements

Management Comments and OIG Analysis

FEMArsquos and the Statersquos responses to Recommendation 6 ndash FEMA concurred with the recommendation however the State did not concur The State asserts that it already has a procedure for reconciling inventory FEMA will require the SAA to compile and provide reconciled FYs 2010ndash12 SHSP inventory records in accordance with 44 CFR sect1332 The State also asserts that it should not be required to complete inventory reconciliation until FYs 2010‐12 grants are

wwwoigdhsgov 12 OIG‐14‐93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

closedFEMArequeststhattheOIGconsiderthisrecommendationresolvedand openTheestimatedcompletiondateisJune302014 OIGAnalysisndashWeconsiderFEMArsquosproposedcorrectiveactionsresponsiveto theintentofrecommendation6UntilFEMAprovidesdocumentationthat GMUcompletesaninventoryreconciliationofFYs2010Ͳ12grantyearsthis recommendationisresolvedandwillremainopen PerformanceMeasures

GMUhasnotestablishedperformancemeasurestoassesswhether improvementsachievedwithgrantfundshaveenhancedstategranteesrsquoability topreventprepareforprotectagainstandrespondtoalltypesofhazards Accordingto44CFRsect1340ndashMonitoringandreportingprogramperformance ldquogranteesmustmonitorgrantandsubgrantsupportedactivitiestoassure compliancewithapplicableFederalrequirementsandthatperformancegoals arebeingachievedrdquoAccordingtotheOfficeofManagementandBudgetrsquos CircularAͲ133granteesshouldldquomonitortheactivitiesofsubrecipientsas necessarytoensurethatFederalawardsareusedforauthorizedpurposeshellipand thatperformancegoalsareachievedrdquo HoweverGMUofficialssaidthatFEMAhasneverprovidedthemwithatoolor meanstomeasureperformanceStateHomelandSecurityEmergency ManagementofficialsworkingwithGMUsaidtheyareawarethattheyneedto measureimprovementsbuthavedifficultydoingsoformallyandareworkingto improveinthisareaAdditionallystateofficialssaidtheyhavenotbeenableto usetheannualstatepreparednessreport(SPR)tomeasureannualimprovement becausethetoolhaschangedeachyearFurthermoreanofficialfromFEMArsquos NationalPreparednessDirectorateacknowledgeditispossibleforstatestohave smallprojectsthatmaybeeffectivebuthavelittleornoaffectonthestatersquos scoreforpreparedness DuringFY2012FEMAreleasedguidancerequiringstatestocompleteaThreat andHazardIdentificationandRiskAssessment(THIRA)toidentifyhazardsincore capabilitiesandtoestablishcapabilitytargetsTheTHIRAalongwitharevised annualSPRwouldmeasurethestatesstatusintheseareasHoweverbecause theTHIRAdoesnotestablishabaselinemorethanoneSPRormeasurement wouldberequiredtoshowanymeasurableprogressorimprovementSmall projectimprovementsrequirescaledtoolsorprocessestomeasure improvementwhichmaynotshowasignificantmeasurableimprovement throughastatewideSPR

wwwoigdhsgov 13 OIGͲ14Ͳ93

OFFICE OF INSPECTOR GENERAL Department of Homeland Security

Withoutstandardsandmetricsagainstwhichtomeasureprogressoflargeand smallprojectstheStateisnotabletodetermineimprovementsinemergency preparednessthroughthereceiptofgrantfunding Recommendation WerecommendthattheAssistantAdministratorGrantProgramsDirectorate Recommendation7 Provideguidanceforstatestomeasureprogressinimprovingemergency preparednesseffectivelyandconsistentlyandrequireNewHampshireto developaprocesstomeasureitsprogress ManagementCommentsandOIGAnalysis

FEMArsquosandtheStatersquosresponsestoRecommendation7ndashFEMAconcurred withtherecommendationandtheStatehadnocommentregarding concurrenceFEMAhasalreadyprovidedguidanceandtoolstomeasure progressatthestateandlocallevelsandrequiresgranteestomeasureprogress inimprovingemergencypreparedness AspartoftheNationalPreparednessSystem3FEMAhasdevelopedandis implementingperformanceassessmentsthatmeasureprogresstoward achievingtheNationalPreparednessGoal4 OnAugust292013FEMAreleasedaconsistentmethodologyfordetermining risksintheComprehensivePreparednessGuide201ThreatandHazard IdentificationandRiskAssessment(THIRA)Guide(CPGͲ201)SecondEditionCPGͲ 201detailsafourͲstepprocessjurisdictionscanusetoachievedesiredoutcomes andcapabilitytargetsforeachofthecorecapabilitiesThisapproachallowsa jurisdictiontoestablishitsowncapabilitytargetsbasedontherisks

3TheNationalPreparednessSystemoutlinestheapproachresourcesandtoolsforachievingthe NationalPreparednessGoalThesystemhassixmaincomponentstoimprovepreparednessidentifying andassessingriskestimatingcapabilityrequirementsbuildingandsustainingcapabilitiesplanningto delivercapabilitiesvalidatingcapabilitiesandreviewingandupdatingcapabilities 4TheNationalPreparednessGoalreleasedinSeptember2011isthefirstdeliverablerequiredunder PresidentialPolicyDirective(PPD)8NationalPreparednessThegoalsetsthevisionfornationwide preparednessandidentifiesthecorecapabilitiesandtargetsnecessarytoachievepreparednessacross fivemissionareaslaidoutunderPPD8preventionprotectionmitigationresponseandrecovery

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StartingonDecember312012andannuallythereafterstatesterritoriesand majorurbanareasthatreceiveHomelandSecurityGrantProgramfundsmust submittheirTHIRAstoFEMAInconjunctiontheTHIRAresultscombinedwith theSPRidentifycapabilityneedsgapsandtheprogressofgranteesinclosing thosegapsovertimeFEMAreportstheresultsofthecapabilityassessments annuallyintheNationalPreparednessReport AfterestimatingcapabilityrequirementsthenextcomponentoftheNational PreparednessSystemistobuildandsustaincapabilitiesThissteptiesgrant investmentsdirectlytoneedsandshortfallsWithintheinvestmentjustifications submittedinthegrantapplicationgranteesmustspecificallyidentifycore capabilitiesthepriorityofthosecapabilitiesaswellasthegapsnotedintheir SPRthatinvestmentintendstoaddressInadditiongranteesmustidentifythe specificresultsofeachinvestmentFEMAverifiescompletionofthe investmentprojectsthroughitsprogrammaticmonitoringandtheBiannual StrategyImplementationReport5Becausetheperiodofperformanceforthe HomelandSecurityGrantProgramis2yearsatimelimitissetforcompletionof theprojectoncefunded FEMAaddressedtheOIGrecommendationforstatestoestablishgoalsand objectivesthatarespecificmeasurableachievableresultsͲorientedand timeͲlimitedStatesandterritoriescansystematicallymeasureimprovementsin firstrespondercapabilitiesandstatewidepreparednessbyrequiringthemtouse toolssuchastheTHIRASPRandinvestmentjustificationsStrategyupdatesare encouragedbutnotrequiredbecausetheTHIRASPRandinvestment justificationmethodologyprovidegoalsandassessmentofprogressagainst thosegoals

BasedonthisinformationFEMArequeststhatthisrecommendationberesolved andclosed OIGAnalysisndashFEMArsquoscorrectiveactionsareresponsivetotheintentofthis recommendationWeconsiderthisrecommendationresolvedandclosed

5GranteesaretosubmitBiannualStrategyImplementationReportstoFEMAevery6monthsforthelife oftheawardafinalreportisdueaftertheenddateoftheawardperiodThereportsareFEMArsquosprimary sourceofprogrammaticinformationontheuseofgrantfunds

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AppendixA ObjectivesScopeandMethodology TheDepartmentofHomelandSecurity(DHS)OfficeofInspectorGeneral(OIG)was establishedbytheHomelandSecurityActof2002(PublicLaw107Ͳ296)byamendment totheInspectorGeneralActof1978Thisisoneofaseriesofauditinspectionand specialreportspreparedaspartofouroversightresponsibilitiestopromoteeconomy efficiencyandeffectivenesswithintheDepartment PublicLaw110Ͳ53ImplementingRecommendationsofthe911CommissionActof 2007requiresDHSOIGtoauditindividualstatesrsquomanagementofSHSPgrantsThis reportrespondstothereportingrequirementforNewHampshire TheauditobjectivesweretodeterminewhetherNewHampshiredistributed administeredandspentSHSPgrantfundsstrategicallyeffectivelyandincompliance withlawsregulationsandguidanceWealsoaddressedtheextenttowhichfunds awardedenhancedtheabilityofstategranteestopreventprepareforprotectagainst andrespondtonaturaldisastersactsofterrorismandothermanmadedisasters ThescopeofthisauditincludedareviewoftheplansdevelopedbytheStatetoimprove preparednessandresponsetoalltypesofhazardsgoalsandobjectivessetinthose plansWeevaluatedtheStatersquosmeasurementofprogresstowardthegoalsand assessmentsofperformanceimprovementresultingfromthismeasurement TheHomelandSecurityGrantProgramanditsinterrelatedgrantprogramsfundarange ofpreparednessactivitiesincludingplanningorganizationequipmentpurchase trainingexercisesandmanagementandadministrationcostsHoweverwereviewed onlySHSPfundingequipmentandsupportedprogramsforcompliance ThescopeoftheauditincludedtheSHSPgrantawardsforFYs20102011and2012as shownintable2TheauditmethodologyincludedworkatFEMAheadquartersFEMA RegionINewHampshireofficesandvarioussubgranteelocationsthatreceivedgrants Toachieveourauditobjectivesweanalyzeddatarevieweddocumentationand interviewedkeystateandlocalofficialsdirectlyinvolvedinSHSPmanagementand administration

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Table2NewHampshireHomelandSecurityGrantProgramAwardsFYs2010Ͳ2012

NewHampshireHomelandSecurityGrantProgramAwardsFYs2010through2012

Year FY2010 FY2011 FY2012 Total

State Homeland Security Program

$6613200 $5137205 $2801316 $14551721

SourceFEMA Wesampledgrantawardfilesfromstateagenciesregionalhazardousmaterialsteams countiesandtownsthatreceivedSHSPgrantallocationsinFYs20102011or2012We judgmentallyselectedsubgranteesbasedondollarvaluesexpendedatthetimeof fieldworkWereviewedhighvaluegrantawards(above$250000)medium(between $10000and$50000)andlow(between$5000and$10000)Wealsoselectedfrom diversegeographiclocationswherepossibleTherewerealimitednumberofState subgranteeswithfundingexpendituresWejudgmentallyselectedtwoState subgranteesbasedonhighͲdollarvaluesexpendedatthetimeoffieldworkandrisk indicators Ateachlocationweinterviewedofficialsandrevieweddocumentationsupportingstate andsubgranteemanagementofgrantfundsInadditionweverifiedtheexistenceof selectedequipmentsubgranteesprocuredwithgrantfunds WeconductedthisperformanceauditbetweenAprilandSeptember2013pursuantto theInspectorGeneralActof1978asamendedandaccordingtogenerallyaccepted governmentauditingstandardsThosestandardsrequirethatweplanandperformthe audittoobtainsufficientappropriateevidencetoprovideareasonablebasisforour findingsandconclusionsbaseduponourauditobjectivesWebelievethattheevidence obtainedprovidesareasonablebasisforourfindingsandconclusionsbaseduponour auditobjectives

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AppendixB ManagementCommentstotheDraftReport

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AppendixC MajorContributorstoThisReport AlexanderBestDirector PaulWoodDirector CeciliaCarrollAuditManager ThomasJBobrowskiAuditLead DouglasCampbellProgramAnalyst FalonNewmanͲDuckworthProgramAnalyst HeidiMEinsweilerProgramAnalyst KevinDollosonCommunicationsAnalyst DevonHoustonIndependentReferencer

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AppendixD ReportDistribution

DepartmentofHomelandSecurity Secretary DeputySecretary ChiefofStaff DeputyChiefofStaff GeneralCounsel ExecutiveSecretary DirectorGAOOIGLiaisonOffice AssistantSecretaryforOfficeofPolicy AssistantSecretaryforOfficeofPublicAffairs AssistantSecretaryforOfficeofLegislativeAffairs ChiefPrivacyOfficer FederalEmergencyManagementAgency Administrator AssistantAdministratorGrantProgramsDirectorate FederalEmergencyManagementAgencyAuditLiaison GrantProgramsDirectorateAuditLiaison OfficeofManagementandBudget ChiefHomelandSecurityBranch DHSOIGBudgetExaminer Congress CongressionalOversightandAppropriationsCommitteesasappropriate

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ADDITIONAL INFORMATION

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