This document is our review of the Federal Contributions Program of the Office of Civil and Defense Mobilization (OCDM), Executive Office of the President. Our review has shown that OCDM administered the Federal Contributions Program in a manner which resulted in the expenditure of Federal funds for equipment and other facilities which the States and their political subdivisions acquired primarily for their normal governmental activities rather than for civil defense as intended by the Congress, Much of the equipment for which the Federal Government contributed half the cost was purchased by the applicants to meet their normal requirements, and, under these circumstances, there is doubt that OCDM's administration of the program resulted in the increased civil defense capability intended by the Congress, We are recommending that future approvals of civil defense projects be suspended until adequate criteria can be developed for governing the eligibility of the various program categories, that approved applications be reviewed in the light of these criteria , and that, where pertinent, ineligible portions be canceled. Certain programs should be discontinued unless their need for civil defense purposes can be clearly demonstrated. Our review has also shown procedural inadequacies which resulted in (a) approvals of projects for normal needs rather than for civil defense needs, (b) improper payments to State and local governments, (c) dual Federal financing for generators under two assistance programs, and (d) unnecessary advances of several millions of dollars of Federal funds. OCDM did not require sufficient documentation for determining whether claims submitted for payment were proper and did not make comprehensive continuing reviews of program activities.

The intent of the Congress is that items approved under the Federal Contributions Program should be for civil defense and over and above the normal requirements of the applicants. Although OCDM has demonstrated its recognition pf this Intent in its manuals, regulations, and correspondence, our review has shown that its administration of the program has resulted in the expenditure of Federal funds for items which States and political subdivisions acquired primarily for their normal governmental activities rather than for civil defense. The program, in operation since 1951, was Instrumental in stimulating the acquisition or construction of many civil defense items by the States and their political subdivisions. However, our review of project applications for items for which the Federal share amounted to about $8.4 million showed that applications with a Federal share amounting to about $5-2 million were primarily for items which were not over and above the normal requirements of the States and their political subdivisions. The $5.2 million represents about 62 percent of the dollar amount of the project applications reviewed. In its administration of the program over the years, OCDM relied primarily on the applicants' certifications and did not develop standards or criteria for use by its regional offices for consistent, independent determinations as to whether requests were over and above the applicants* normal requirements. Many of the items, for which the Federal Government contributed half the cost, were purchased by the applicants to meet their normal requirements and, under these circumstances, there is doubt that OCDM's administration of the program resulted in the increased civil defense capability Intended by the Congress.