Panel Urges Unclogging Pipeline for Security Funds

State and local officials are asking Congress and the Bush administration to cut through red tape that has kept states from spending billions of federal dollars allocated since the Sept. 11 attacks to bolster homeland security defenses from coast to coast.

Recommendations, submitted at week’s end to the federal Homeland Security Department by a task force of governors, mayors and other officials chaired by Massachusetts Gov. Mitt Romney (R), would allow states and localities to receive money with less scrutiny and spend it on a wider range of uses than now allowed under strict federal guidelines.

Only $850 million of more than $6 billion allocated in the past three fiscal years to state and local governments by the Department of Homeland Security has actually reached the front lines. The recipients have contracted with vendors to spend another $2.5 billion, leaving about $3 billion of allocated funds unspent.

States mostly have used the money to buy equipment designed to help them cope with an attack. New York, for example, purchased a “WMD (Weapons of Mass Destruction) trailer” for each of its counties, providing mobile access to a range of resources a community might need to respond to a terrorist attack.

But states complain that regulations designed in some cases to protect against fraud and abuse have made it tough for them to obtain funds already allocated or receive reimbursement for actions actually taken. Pennsylvania, for example, had spent 98 percent of its grant award by last fall but had only been able to draw down 8 percent of its federal funding reimbursement.

Some critics say the problems stem mainly from political debate over allocations of funds; others insist the problem is due more to a complicated and poorly defined grant system the states must navigate. In March, Homeland Security Secretary Tom Ridge heeded the chorus of complaints by asking the task force to examine the problem and offer recommendations on restructuring the sluggish bureaucracy.

“There are a lot of things you can do from Washington, D.C.” Ridge said last week. “But you can’t secure the whole country from here.”

In one of its key recommendations, the task force suggested that Congress give state and local governments more flexibility to pay overtime with federal grant money if the federal government identifies a local threat — such as when Texas oil refineries were notified recently of threats, or Ohio officials were warned of threats to a local shopping mall.

That would respond to the complaint that states and localities can only use federal dollars to pay overtime for first responders when the national threat level is raised to orange or red.

The task force also asks Congress to let states and localities draw down and hold federal dollars for up to 120 days as they work out contracts to purchase security equipment or other work. Federal statute now requires funds to be spent within three to five days of the time state or local governments get the money a window that the task force members said is too small and stymies the purchase of equipment and supplies. The more generous time frame would be effective for a year.

“We have the ultimate Catch-22: we can’t get it (equipment) until the money is actually in the account, and they won’t give us the money until we buy it,” Romney said.

Still, Romney noted that federal, state and local officials should proceed with caution as they look to accelerate the distribution of funds by rolling back or altering regulations meant to keep tabs on federal dollars.

The release of the recommendations coincided with a debate in Congress over whether to restructure the allocation of state and local homeland security funding to target money more at areas deemed a high risk and rely less on population.

The National Governors Association quickly came out in support of the task force recommendations.

Even so, homeland security officials say they are unsure whether they will pursue some or all of the proposals, or in what time frame. In any case they acknowledged it was likely congressional approval would be required to implement some changes.

The task force also found that:

• States and localities should focus more on preventing terrorist attacks rather than just on preparing to respond to them. 
• National standards for grant management including a set of best practices — should be established. State and local governments are often overwhelmed and inadequately staffed to deal with the complex federal grant system. 
• States should establish multi-state consortia to increase their purchasing efficiency. 
• Communication gaps have existed among federal, states and local government about the distribution of grant funds. 
• The need to rapidly procure and deploy homeland security-related equipment conflicts with state and local purchasing regulations. 
• Local jurisdictions have unrealistic expectations given the amount of funding available. 
• Equipment backlogs and vendor delays have slowed the distribution of funds.