A pair of reports on the state’s Homeland Security department released late last month is indicative of a lack of oversight that potentially puts Arizonans at risk, a Republican lawmaker says.
“They can’t tell us what we’re spending money on and now we know why: they don’t know where it’s being spent,” Rep. Jonathan Paton, R-30, said.
He said a report from the Arizona Department of Transportation’s Office of the Inspector General is particularly troubling because it highlights serious shortcomings in the oversight of nearly $178 million in federal homeland security grant money the state has disbursed since 2001.
The report, which was finalized June 1 but not publicly released until late August, found the Office of Homeland Security does not have any written policies or procedures to evaluate proposed projects and the office has not documented what analyses were performed before granting approval to projects.
It also found a lack of detail on some project proposals, including justification for the funds requested and line-item budget information explaining how the money will be spent.
“When budget detail is lacking,” Inspector General Peter Francis wrote, “it becomes more difficult to determine if costs are reasonable and appropriate, and to know for certain how the funds will specifically be used…
“By contrast, other federal and state grant programs typically have a more formal process for reviewing sub-grantee proposals.”
Mr. Francis wrote that other programs usually have written procedures to ensure consistent information is provided for project requests, a review process by staff, documentation of decisions and reporting requirements by sub-grantees.
Federal grant guidelines also require that states, acting as the primary grant recipient, monitor how the grant money is used by sub-grantees to ensure that it is spent correctly. The report pointed out that Arizona’s homeland security program has lacked such a monitoring component since its inception, though such a process is being developed.
Homeland Security office: Changes have begun
Julie Mason, a spokeswoman for the Office of Homeland Security, said the reports have been “very helpful” in determining shortcomings in the grant procedures and said the office has already begun implementing changes to formalize the processes and increase documentation where it was lacking.
“This has been a great opportunity for us to take a step back and see what’s worked and how to improve the grant process,” she said. “It’s nice to have someone from the outside step in and make recommendations.”
She added that Arizona has always been on the cutting edge of homeland security spending in the nation, an important feat since the state shares an international border with Mexico.
Mike Haner, a spokesman for Governor Napolitano, said the governor asked for a top-to-bottom review of the Office of Homeland Security and said she is committed to fixing any problems identified by the reports.
“Any time that there is a question about the procedures and process we’re [using to distribute] homeland security grants, we need to have controls in place to ensure they’re going for their intended purpose,” he said.
The Inspector General report also noted a lack of communication between the Office of Homeland Security and the Department of Emergency Management. Although Homeland Security Director Frank Navarette is also the director of Emergency Management, the report says he is only paid by OHS and does not have the time to serve as director of both agencies. Thus, DEM is effectively run by an emergency management official appointed by the adjutant general, who heads the Department of Emergency and Military Affairs.
The second report was completed Aug. 11 by the state’s General Accounting Office. It examines 16 grant disbursements — 10 of which were brought to light in a May Arizona Republic story — and found no evidence that any of them “were fraudulent, wasteful or abusive.”
Among the expenditures the report cleared are $93,733 on wrought-iron fencing around a police complex in Flagstaff; $93,000 to survey and map inaccessible areas of Gila County; $11,030 paid to a consultant to assess renovations to some Gila County buildings; and plume modeling computer software in Colorado City.
Mr. Paton called the GAO report a “whitewash.”
“That’s what you get when you do your own audit — you get the results you want,” he said.
Auditor General’s report looms
An Auditor General’s report on the Office of Homeland Security currently under way should echo the results of the Inspector General’s report, Mr. Paton said. He said he will make adding legislative accountability to the department a top priority next session. Currently, regional advisory committees gather local grant requests and funnel those they approve to the Office of Homeland Security for final approval.
“I’m going to be introducing legislation to require that Homeland Security funding be put through the appropriations process of the Legislature,” he said. “If it gets a veto, I think it should go to the ballot and I think the people will agree with me.
“When something [disastrous] happens, the public is not going to call up a regional council to complain. They’re going to call us.”
Though he would be open to the agency adopting written procedures for disbursing money in the meantime, Mr. Paton says that is only a stop-gap measure and it doesn’t provide any real accountability.
“That’s a good start, but I think that the whole idea that there’s a huge chunk of money going to a vital government function that’s outside the purview of the Legislature is just outrageous,” he said.