Report calls for stronger oversight of homeland security spending

The federal government is throwing more and more money at homeland security, but isn't keeping a close enough eye on where the money is spent, according to a new study published by a right-leaning think tank.

Federal homeland security funding has soared since the Sept. 11 terrorist attacks, rising more than 180 percent from $16.9 billion in fiscal 2001 to a projected $47.7 billion in fiscal 2005, the report by American Enterprise Institute fellow Veronique de Rugy stated. But in the haste to devote more resources to security, federal officials failed to complete rigorous risk assessments and didn't appropriately prioritize spending, according to the report.

Oversight also is lacking, the study found. "The Bush administration has followed a remarkably irresponsible course by requesting many spending increases, often in the name of security, but rarely asking for cuts to programs or agencies," De Rugy wrote.

A substantial portion of homeland security spending takes place outside the Homeland Security Department, the report noted. The Defense, Health and Human Services, Justice and Energy departments understandably receive the most money outside of DHS, De Rugy said.

But other agencies receive significant sums for "more curious" programs, the report stated. For instance, Veterans Affairs gets money to protect patients and staff at medical facilities, and the Agriculture Department receives money to protect the food supply.

"Why all these agencies with new homeland security accounts are getting homeland security funding is not a trivial question, since many of these agencies have suffered from documented mismanagement," De Rugy wrote.

The Homeland Security Department itself spends excessive sums on nonsecurity-related programs, according to the report. President Bush proposed a fiscal 2005 budget of roughly $40.2 billion for DHS, of which slightly more than two-thirds, or $27 billion, is for items falling under the traditional definition of homeland security, the report stated.

"The remaining $13 billion-a significant portion of DHS' budget-finances non-homeland security activities like the Coast Guard's role in maritime rescue and the Federal Emergency Management Agency's Emergency Food and Shelter Program," De Rugy wrote. Last year, the department dedicated $153 million to programs offering food and shelter for the poor, she added.

"Because so much money unrelated to homeland security activities is spend inside DHS, the risk of funding increasing for these activities under the assumption that it services some homeland security purpose may also be high," the report said.

Money channeled to state and local governments, largely in the form of first-responder grants, also has increased from $2.7 billion in 2001 to a projected $5.5 billion in fiscal 2005, De Rugy found. That money would be "best spent on bolstering the ability of federal law enforcement and intelligence services to [apprehend terrorists] instead of subsidizing local fire stations throughout the country," she wrote.

But instead, the grant money is allocated by a formula that doesn't distinguish among regions at a high risk of attack and those in little danger, the study stated. The Virgin Islands, Guam, Northern Mariana Islands and Wyoming receive the highest grant dollars per capita, while New York falls third to last on the list compiled by De Rugy. Washington, D.C., is the only high-risk area that ends up near the top of the list, coming in at number six.

Preliminary versions of intelligence reform legislation contain language designed to better target grants toward areas at high risk of attack. For instance, the House version of the bill (H.R. 10) would change the grant formula to award states a minimum level of funding, equal to 0.25 percent of overall money available in a given year. Beyond that, money would be allocated according to risk. A board would evaluate states' threat levels.

De Rugy termed the House language a "step in the right direction." House and Senate negotiators are still hammering out differences on the intelligence reform legislation.

But not enough attention is paid to how states and localities spend the money they do receive, De Rugy said. Washington, D.C., used homeland security funds to buy leather jackets for the police force, and spent $300,000 in security aid on a "computerized car towing system that the mayor had promised for three years to help combat fraud by private towing companies," she noted.