CA state audit finds $239 million in unspent DHS grants at risk

Published 18 September 2006

Slow reimbursements to municipalities prevent many from participating; twelve out of thirteen grants examined marred by fraud and irregularities; governor’s report to legislature now seven months late

A tip of the hat to Christian Beckner of the Homeland Security Watch blog. Back in February 2006 he began issuing warnings that California was failing to efficiently distribute $239 million in DHS grants to local municipalities. Now State Auditor Elaine Howle says she agrees in a blistering report. By the end of June, the state had spent less than half of the $954 million of federal homeland security grants it had been awarded since 2001. If the money is not spent, DHS will reclaim it.

The main reason is bureacractic inefficiency: the grants are intended to reimburse cities and counties for equipment purchases, training and other expenses related to disaster preparedness, but the state can be so slow in reimbursing these expenses that some cities cannot afford to continue participating in the plan. To make matters worse, even when the money is spent, authorities found in twelve out of thirteen cases purchases that were “inappropriate” or insufficiently justified in documents. Problems included $427,000 in missing equipment, unaccounted expenses, payroll payments that could not be reconciled with work records, and double-billing. “We believe the state’s organizational structure for ensuring emergency preparedness is not streamlined or well-defined,” Howle said. “If it remains unchanged, this labyrinthine structure could adversely affect emergency response.”

Of note: Beckner reminds us that Governor Arnold Schwarzenegger promised last year to address this problem in a report due to the legislature 1 February 2006. Yet according to Beckner, Schwarzenegger’s “strategic plan” for revamping the grant distribution problem is yet to materialize. Why?

-read more in Ian Hoffman’s Contra Costa Times report ; read the California State Auditor’s report; Christian Beckner’s analysis