Refine port grants, IG says

DHS Inspector General report: Review of the Port Security Grant Program

The current structure of the federal government's port security grant program is compromising the Homeland Security Department's ability to target funding where it's most needed, the department's inspector general said this week.

In a newly released report that reviewed the $560 million awarded to more than 1,200 projects, Richard Skinner, the inspector general, said the port security grant program's impact "is less apparent, and its purpose and goals require refinement."

For example, Skinner said the program initially did not incorporate the Maritime Transportation Security Act (MTSA) of 2002, a nationwide security mandate that came into existence five months after the first round of grants. The port security grant program started in summer 2002 and is administered by the Transportation Security Administration in collaboration with the U.S. Coast Guard and the Transportation Department's Maritime Administration.

While the program is competitive in nature with limited eligibility, the MTSA has a fair and equitable distribution process that provides more money to more entities and for a variety of different needs. MTSA also has a cost-sharing requirement with the eligible entity while the port security grant program has no cost-sharing requirement.

TSA's grant program was altered to incorporate some MTSA requirements. That's a problem because MTSA requirements place a heavy burden on compliance. Coast Guard officials determined about 12,300 facilities and vessels would have to absorb $7.3 billion during 10 years to implement those required security plans. TSA's program only defrayed some MTSA related costs, such as those for fences, cameras, access controls and others.

"However, once these needs are met, TSA's limited program with its governing provisions will not be suitable to meet the needs of regulated port facilities and vessels, especially when personnel and other recurring costs become the predominant cost for the maritime industry," Skinner writes.

The report also pointed out limited use of the distributed funds. For example, of the $515 million awarded after the first three rounds of the competitive grant program, which took place between June 2002 and December 2003, grant recipients only spent $107 million, or 21 percent, as of Sept. 30, 2004. In other words, the majority of projects to improve port security haven't been completed.

The program funded projects "despite dubious scores by evaluators against key criteria, raising questions about the merits of several hundred projects," Skinner writes in the report. "Frequently, headquarters and field reviewers did not agree about the eligibility or merit of projects and did not consistently document their rationale for recommending or not recommending funding."

Reviewers also had a short deadline to evaluate, rate and rank projects. They also did not have the benefit of utilizing the Information Analysis and Infrastructure Protection Directorate's list of national critical infrastructure and major assets, an initiative officials finished in 2004.

The report outlined 12 recommendations, including to what extent the program should integrate MTSA requirements and incorporate IAIP's critical infrastructure data to evaluate proposed projects.

Other recommendations include changing the weighting of evaluation criteria with greater emphasis on those that would reduce critical vulnerabilities and stopping the practice of funding doubtful projects, which are projects that don't meet a certain threshold.