At the heart of the funding problem is the Cash Management Improvement Act of 1990, which requires federal grant funds to remain in the U.S. Treasury until state and local governments apply for reimbursement. This created a Catch-22 because often state and local governments didn't have the funds on hand to spend on homeland security projects in the first place.
An exemption to the act was recommended by the Task Force on State and Local Homeland Security Funding, which former DHS Director Tom Ridge formed, to help federal funds that aid in the fight against terrorism reach local governments and first responders. The act's exemption was to send money to the states more quickly in fiscal 2005, according to Edwin Rosado, legislative director for the National Association of Counties (NACo).
"Grantees and subgrantees will be allowed to draw down funds 120 days prior to expenditure," Rosado said. "Prior to the current round of funding, state and local governments were mainly reimbursed, and this created a delay in funding reaching state and local first responders. This change in the grant program should expedite the process."
The DHS also combined six grant funding sources into one under the new Office of State and Local Government Coordination and Preparedness (SLGCP) -- the DHS' Office of Domestic Preparedness (ODP) and Office of State and Local Government Coordination (SLGC) were transferred and moved to establish the SLGCP. This grant-funding combination created a sort of "one-stop shop" and streamlined the process, making it easier for state and local governments to get answers and money.
"Having all the funding together allows us to really take a look at and administer those funds, and utilize them in a risk-based method," said James McMahon, director of the New York State Office of Public Security. "The other thing with the funding mechanism is it usually has voluminous requirements; there are always questions that are going to arise. This is not only an attempt to streamline it, but it has allowed one voice and allows us to get a quick response."
Donald Plusquellic -- mayor of Akron, Ohio; member of the Task Force on State and Local Homeland Security Funding; and president of the U.S. Conference of Mayors -- is happy for the improvements, but said more are needed, such as a system that would distribute more funds directly to local governments as the task force recommends.
He said sending the money first to states -- as has been the practice with most grants -- means having 50 distribution systems.
The Urban Area Security Initiative (UASI) grants, which provide local governments with direct funding opportunities, are an exception. Not all cities eligible for USAI grants succeed in receiving the funds they've applied for, however, and there is controversy centering on who is selected to receive UASI funds.
Plusquellic said places like Kissimmee, Fla. -- home to some notable theme parks -- aren't given direct funding, but should be despite being somewhat smaller cities.
As it stands, there are essentially two ways to secure funding: wait for it to trickle down from the state or receive a UASI grant.
Since essentially only 50 cities can operate under the UASI option, it's not relevant on a larger scale, leaving thousands of other counties and cities to deal with the slow-moving disbursement process. For the majority, most funding will go to the states directly and funnel down to the local level. This method has been prone to delay and dispute over how the money should be spent.
Despite the debate, the onus for distribution of funds still lies mostly with the states, according to Marc Short, director of communications for the DHS' SLGCP.
"The governor of each state has designated a State Administrative Agency (SAA) to apply for and administer the funds under [the Homeland Security Grant Program] HSGP. The SAA is the only agency eligible to apply for HSGP funds, and is responsible for obligating HSGP funds to local units of government and other designated recipients."
States must deliver 80 percent of the funding to locals within a 60-day timeline, Short explained, adding that most grants fall into this category.
Assessing Local Risks
The disbursement process, by which the federal government decides how much money to give each state or locality, is a hot debate as well. Previous to this fiscal year, homeland security grants were disbursed based on population density, but future grants will be distributed based on a risk-based assessment, experts say.
A hint of that type of grant award began in fiscal 2005 with 50 UASI grants to high-risk areas, such as New York City, which qualified for increased funding over previous years based on risk.
"We're pleased with the additional funds that went to New York City," McMahon said. "Because of the threat-based areas, we feel New York City is probably the most target-rich environment in the country."
But McMahon said more of the money should be allocated on a risk-based methodology.
"We think the State Homeland Security Program and the Law Enforcement Terrorist Prevention Program should have been on a more threat-based, risk-based distribution," he added.
Those are still distributed based on population density, and changing the formula for distribution is necessary but may be difficult because it would involve changes to the Patriot Act, McMahon said.
"Obviously population density is a main concern," he said. "But there are other factors outside those areas that deal with critical infrastructure and prior events."
The new homeland security secretary, Michael Chertoff, and the new budget could change the mechanisms for funding and distribution. Plusquellic said Chertoff may have a different plan of action -- or even a different view -- on the distribution process in general.
Time will tell.
