	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 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. The fragmented delivery of federal assistance can complicate coordination  and integration of services and planning at state and local levels. 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. 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. While block grants devolve authority for decisions, they can and have been  designed to facilitate some accountability for national goals and objectives. 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. 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. 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. The federal government may be able to provide incentives  through the grant system to encourage regional planning and coordination  for homeland security.
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.