Homeland Security Spending Marked by Waste, Shoddy Oversight

Thursday, Sept. 10, 2009 | Soon after hijackers obliterated the World Trade Center towers eight years ago, Marin County received more than $100,000 in surveillance equipment to keep its water treatment system safe from a terrorist attack.

But four years after the funds were awarded, state authorities found more than $67,000 worth of the gear still boxed in its original packaging.

It had never been used.

The rest of the homeland security money went toward an alarm system to protect remote tank and pump sites. Because of the region’s hilly terrain, the system didn’t even work.

The Marin County example is not an isolated one. Under the state’s open-records laws, California Watch found scores of instances of wasteful spending, purchasing violations, error-prone accounting and shoddy oversight at agencies across the state during the years immediately following 9/11.

California Watch, a new unit started by the nonprofit Center for Investigative Reporting, examined thousands of pages of documents from 160 monitoring reports written by state homeland security officials who visited cities and counties across California to inspect equipment and grant records for compliance with federal guidelines.

Among the findings:

• Inspectors identified more than $15 million in questionable costs. The Lincoln Police Department in Placer County spent $47,000 on computer software designed to analyze crime reports so officials could better apply resources but, like Marin County, never used what they bought.
• Cities and agencies bought things with grant money that would not make California a safer place. One county tried to use anti-terrorism funds for a lawnmower but it was blocked at the last minute. Another county succeeded in buying a big-screen television.
• Scores of cities and agencies failed to keep adequate records on how they spent the money. In some cases, the poor record keeping resulted in thousands of dollars worth of overpayments to local agencies. In other cases, agencies were unable to find where they stored their own equipment.
• Communities repeatedly bought large and small-ticket items without seeking competitive bids. Federal procurement rules designed to protect the taxpayer weren’t used on millions of dollars in new communications systems, night-vision goggles and bomb-disposal robots.

The chaos that surrounded homeland security grant spending in California raises new questions about safeguards as Washington proceeds to directly hand the state and those same communities an estimated $465.2 million in economic stimulus funds for public safety programs as part of President Obama’s attempt to save the nation’s beleaguered economy.

Like homeland security grants, lawmakers and the president want the recovery package to be spent as quickly as possible.

Government auditors say that even now the Department of Homeland Security can’t gauge how much the grants have made America safer. Local officials and other experts, meanwhile, worry a lack of oversight could lead to the same types of mistakes with the stimulus package that plagued anti-terrorism funding.

“The guidance we get from Sacramento is not always clear on what we’re supposed to do,” said Tony Richno, deputy director of the Modoc County Office of Emergency Services. “It’s very difficult to comply and sometimes the rules are unreasonable.”

Brendan Murphy, director of grants management for the California Emergency Management Agency, said several areas of the state have improved their handling of federal funds. He said that site inspections done by his office are resulting in fewer negative findings.

“You see communities that might have been struggling a few years ago,” Murphy said. “They’re not struggling anymore, or are at least doing better.”

Many states did not carry out required oversight, and California only began doing site visits at cities and counties in 2006 — years after much of the money had been distributed. That meant problems with the grants languished before state inspectors eventually uncovered them.

The Golden State has frequently outpaced the rest of the nation in total dollars awarded due to its size and attractions — from the Golden Gate Bridge to Disneyland to the Los Angeles International Airport. California has taken in at least $1.9 billion between 2003 and 2009 from major grant programs.

Not All Money Well Spent

Many grant beneficiaries had no problems managing the money they received and met the expectations of the federal government. State inspectors reviewed about $550 million in spending and found that much of it was spent properly. But not all of it.

Colusa County, a quiet agricultural community in the Central Valley with 21,000 people, sought reimbursement for a $321 Toro lawn mower, records show. Ten stretchers costing a total of $3,100 also were bought by the county with 2002 grant funds. But when inspectors arrived in 2007, the items were being stored in the original packaging. An official there said the stretchers are now ready for immediate deployment.

The 8,900-student Sonoma State University bought a 40-inch, $2,300 plasma TV, which the school told inspectors would be used for “training preparations in terrorism.” Campus police Chief Nate Johnson said the television is actually mounted in the school’s tightly quartered emergency operations center so his staff can watch CNN and other newscasts during disasters.

The emergency services head for Marin County, Chris Godley, said local grant managers were often inadequately trained and attended only brief classes offered by the state on how to control the money. Unlike other programs, he added, the federal government allowed just a small percentage of antiterrorism funds to be used for administrative expenses, which made them more difficult to manage.

“It probably costs us $40,000 to administer a $500,000 grant,” he said. “Most other grants allow more, but Congress wanted to make sure this money was spent on the street for first responders.”

Los Angeles County Didn’t Follow Rules

Questionable and improper spending wasn’t limited to smaller communities.

Officials in Los Angeles County spent $20,000 on a Chevrolet Monte Carlo, $1,500 on a shotgun safe from the “Homeland Security Safe Co.” and $3,558 on 70 replica firearms, none of which were permitted under grant guidelines.

Spokesman Ken Kondo of the county’s Office of Emergency Management said local authorities approved the vehicle — a sport coupe used by the sheriff’s terrorism unit. Inspectors, however, considered it to be an inappropriate use of homeland security funds.

“When something became disallowed, the state didn’t want the money back,” Kondo said. “They wanted us to spend it on something else that is allowable.”

State officials in charge of the grants have not required even simple invoices before reimbursing local governments with antiterrorism money, according to a U.S. Inspector General report released in March. Instead, the state relied on promises from local bureaucrats about how the money was being spent, believing it could eventually check on the claims later during site visits. Yet those site visits didn’t commence until 2006 n long after many of the grants were spent, federal auditors found.

Double Billing Reaches $257,000

California Watch found that careless accounting led to other communities receiving more in cash than they deserved.

Agencies sought reimbursement for the same items twice — totaling at least $257,460 in double-billing. The excess payments were eventually corrected. The city of Oakland was forced to return more than $92,000 from the 2004 Urban Area Security Initiative. That error wasn’t discovered until the spring of 2007.

Monterey County was reimbursed for one $7,642 line item and then attempted to get paid a second time before state officials figured out what occurred.

Several communities could have benefited from earlier monitoring and told the state as much. Employee turnover occurred so frequently that local grant managers didn’t know what their predecessors had done. They struggled to answer questions from auditors.

Monterey County’s grants administrator Bertha Simpson said the state didn’t previously track reimbursement requests by category, such as equipment and training, so Sacramento officials weren’t always aware what they were paying for. That began to change once the site visits occurred, she said.

“I don’t ever want to go through that again.”

California Watch, a voiceofsandiego.org media partner, is a new reporting unit of the nonprofit Center for Investigative Reporting. Last year, CIR began examining the effectiveness of America’s homeland security efforts in partnership with the Center for Public Integrity. To read the full-length version of this story go to www.californiawatch.org.