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United States General Accounting Office: 


Before the Subcommittee on Government Efficiency, Financial 
Management, and Intergovernmental Relations, Committee on Government 
Reform, House of Representatives: 

For Release on Delivery: 
Expected at 10:00 am PST: 
Tuesday, April 2, 2002: 	 

Combating Terrorism: 

Intergovernmental Cooperation in the Development of a National 
Strategy to Enhance State and Local Preparedness: 

Statement of Patricia A. Dalton: 
Director, Strategic Issues: 

Mr. Chairman and Members of the Subcommittee: 

I appreciate the opportunity to be here in San Francisco to discuss 
issues critical to successful federal leadership of, assistance to, 
and partnerships with state and local governments in the area of 
preparedness for terrorist events. As you know, Mr. Chairman, federal, 
state, and local governments have a shared responsibility in preparing 
for catastrophic terrorist attacks. But the initial responsibility 
falls upon local governments and their organizations—such as police, 
fire departments, emergency medical personnel, and public health 
agencies—which will almost invariably be the first responders to such 
an occurrence. For its part, the federal government historically has 
principally provided leadership, training, and funding assistance. In 
the aftermath of the September 11th attacks, for instance, about one-
quarter of the $40 billion Emergency Response Fund was dedicated to 
homeland security, including funds to enhance state and local 
government preparedness. 

Because the national security threat is diffuse and the challenge is 
highly intergovernmental, national policymakers must formulate 
strategies with a firm understanding of the interests, capacity, and 
challenges facing those governments in addressing these issues. My 
comments today are based on a body of GAO's work on terrorism and 
emergency preparedness and policy options for the design of federal 
assistance,[Footnote 1] as well as on our review of many other 
studies.[Footnote 2] In addition, we draw on ongoing work for this 
subcommittee; pursuant to your request we have begun a review to 
examine the preparedness issues confronting state and local 
governments in a series of case studies. We will examine the state and 
local perspective on these issues and thereby help the Congress and 
the executive branch to better design and target programs and 

In my testimony, I reiterate GAO's call, expressed in numerous reports 
and testimonies over the past years, for development of a national 
strategy that will improve national preparedness and enhance 
partnerships between federal, state, and local governments to guard 
against terrorist attacks. The creation of the Office of Homeland 
Security under the leadership of Tom Ridge is an important and 
potentially significant first step. We recognize that the President, 
in his proposed 2003 budget, has announced that the Office of Homeland 
Security will propose such a plan later this year. As it comes 
together, we believe that key aspects of this strategy should include: 

* A definition and clarification of the appropriate roles and 
responsibilities of federal, state, and local entities. Our previous 
work has found fragmentation and overlap among federal assistance 
programs. Over 40 federal entities have roles in combating terrorism, 
and past federal efforts have resulted in a lack of accountability, a 
lack of a cohesive effort, and duplication of programs. As state and 
local officials have noted, this situation has led to confusion, 
making it difficult to identify available federal preparedness 
resources and effectively partner with the federal government. 

* The establishment of goals and performance measures to guide the 
nation's preparedness efforts. The Congress has long recognized the 
need to objectively assess the results of federal programs. For the 
nation's preparedness programs, however, outcomes of where the nation 
should be in terms of domestic preparedness have yet to be defined. 
Given the recent and proposed increases in preparedness funding as 
well as the need for real and meaningful improvements in preparedness, 
establishing clear goals and performance measures is critical to 
ensuring both a successful and a fiscally responsible effort. 

* A careful choice of the most appropriate tools of government to best 
implement the national strategy and achieve national goals. The choice 
and design of policy tools, such as grants, regulations, and 
partnerships, can enhance the government's capacity to (1) target 
areas of highest risk to better ensure that scarce federal resources 
address the most pressing needs, (2) promote shared responsibilities 
by all parties, and (3) track and assess progress toward achieving 
national goals. 

Since the attacks of September 11th, we have seen the nation unite and 
better coordinate preparedness efforts among federal, state, and local 
agencies, as well as among private businesses, community groups, and 
individual citizens. Our challenge now is to build upon this initial 
response to further improve our preparedness in a sustainable way that 
creates both short- and long-term benefits. We applaud the 
subcommittee's interest in addressing this issue now and urge that it 
continue its efforts to oversee the efficiency and effectiveness of 
these key intergovernmental relationships to define and best achieve 
the necessary level of national preparedness. 


Because of such emergencies as natural disasters, hazardous material 
spills, and riots, all levels of government have had some experience 
in preparing for different types of disasters and emergencies. 
Preparing for all potential hazards is commonly referred to as the 
"all-hazards" approach. While terrorism is a component within an all-
hazards approach, terrorist attacks potentially impose a new level of 
fiscal, economic, and social dislocation within this nation's 
boundaries. Given the specialized resources that are necessary to 
address a chemical or biological attack, the range of governmental 
services that could be affected, and the vital role played by private 
entities in preparing for and mitigating risks, state and local 
resources alone will likely be insufficient to meet the terrorist 

Some of these specific challenges can be seen in the area of 
bioterrorism. For example, a biological agent released covertly might 
not be recognized for a week or more because symptoms may only appear 
several days after the initial exposure and may be misdiagnosed at 
first. In addition, some biological agents, such as smallpox, are 
communicable and can spread to others who were not initially exposed. 
These characteristics require responses that are unique to 
bioterrorism, including health surveillance, epidemiologic 
investigation, laboratory identification of biological agents, and 
distribution of antibiotics or vaccines to large segments of the 
population to prevent the spread of an infectious disease. The 
resources necessary to undertake these responses are generally beyond 
state and local capabilities and would require assistance from and 
close coordination with the federal government. 

National preparedness is a complex mission that involves a broad range 
of functions performed throughout government, including national 
defense, law enforcement, transportation, food safety and public 
health, information technology, and emergency management, to mention 
only a few. While only the federal government is empowered to wage war 
and regulate interstate commerce, state and local governments have 
historically assumed primary responsibility for managing emergencies 
through police, firefighters, and emergency medical personnel. 

The federal government's role in responding to major disasters is 
generally defined in the Stafford Act,[Footnote 3] which requires a 
finding that the disaster is so severe as to be beyond the capacity of 
state and local governments to respond effectively before major 
disaster or emergency assistance from the federal government is 
warranted. Once a disaster is declared, the federal government-—
through the Federal Emergency Management Agency (FEMA)—-may reimburse 
state and local governments for between 75 and 100 percent of eligible 
costs, including response and recovery activities. 

There has been an increasing emphasis over the past decade on 
preparedness for terrorist events. After the nerve gas attack in the 
Tokyo subway system on March 20, 1995, and the Oklahoma City bombing 
on April 19, 1995, the United States initiated a new effort to combat 
terrorism. In June 1995, Presidential Decision Directive 39 was 
issued, enumerating responsibilities for federal agencies in combating 
terrorism, including domestic terrorism. Recognizing the vulnerability 
of the United States to various forms of terrorism, the Congress 
passed the Defense Against Weapons of Mass Destruction Act of 1996 
(also known as the Nunn-Lugar-Domenici program) to train and equip 
state and local emergency services personnel who would likely be the 
first responders to a domestic terrorist event. Other federal 
agencies, including those in the Department of Justice, Department of 
Energy, FEMA, and Environmental Protection Agency, have also developed 
programs to assist state and local governments in preparing for 
terrorist events. 

The attacks of September 11, 2001, as well as the subsequent attempts 
to contaminate Americans with anthrax, dramatically exposed the 
nation's vulnerabilities to domestic terrorism and prompted numerous 
legislative proposals to further strengthen our preparedness and 
response. During the first session of the 107th Congress, several 
bills were introduced with provisions relating to state and local 
preparedness. For instance, the Preparedness Against Domestic 
Terrorism Act of 2001, which you cosponsored, Mr. Chairman, proposes 
the establishment of a Council on Domestic Preparedness to enhance the 
capabilities of state and local emergency preparedness and response. 

The funding for homeland security increased substantially after the 
attacks. According to documents supporting the president's fiscal year 
2003 budget request, about $19.5 billion in federal funding for 
homeland security was enacted in fiscal year 2002.[Footnote 4] The 
Congress added to this amount by passing an emergency supplemental 
appropriation of $40 billion dollars.[Footnote 5] According to the 
budget request documents, about one-quarter of that amount, nearly 
$9.8 billion, was dedicated to strengthening our defenses at home, 
resulting in an increase in total federal funding on homeland security 
of about 50 percent, to $29.3 billion. Table 1 compares fiscal year 
2002 funding for homeland security by major categories with the 
president's proposal for fiscal year 2003. 

Table 1: Homeland Security by Major Funding Categories for Fiscal Year 
2002 and Proposed for Fiscal Year 2003: 

Dollars in millions: 

Major funding category: Supporting first responders; 
FY 2002 enacted: $291; 
Emergency supplemental: $651; 
FY 2002 total: $942; 
The president's FY 2003 budget request: $3,500. 

Major funding category: Defending against biological terrorism; 
FY 2002 enacted: $1,408; 
Emergency supplemental: $3,730; 
FY 2002 total: $5,138; 
The president's FY 2003 budget request: $5,898. 

Major funding category: Securing America's borders; 
FY 2002 enacted: $8,752; 
Emergency supplemental: $1,194; 
FY 2002 total: $9,946; 
The president's FY 2003 budget request: $10,615. 

Major funding category: Using 21st century technology for homeland 
FY 2002 enacted: $155; 
Emergency supplemental: $75; 
FY 2002 total: $230; 
The president's FY 2003 budget request: $722. 

Major funding category: Aviation security; 
FY 2002 enacted: $1,543; 
Emergency supplemental: $1,035; 
FY 2002 total: $2,578; 
The president's FY 2003 budget request: $4,800. 

Major funding category: DOD homeland security; 
FY 2002 enacted: $4,201; 
Emergency supplemental: $689; 
FY 2002 total: $4,890; 
The president's FY 2003 budget request: $6,815. 

Major funding category: Other non-DOD homeland security; 
FY 2002 enacted: $3,186; 
Emergency supplemental: $2,384; 
FY 2002 total: $5,570; 
The president's FY 2003 budget request: $5,352. 

Major funding category: Total; 
FY 2002 enacted: $19,536; 
Emergency supplemental: $9,758; 
FY 2002 total: $29,294; 
The president's FY 2003 budget request: $37,702. 

Source: FY 2003 president's budget document, "Securing the Homeland, 
Strengthening the Nation." 

[End of table] 

A National Strategy Is Needed to Guide Our Preparedness Efforts	We 
have tracked and analyzed federal programs to combat terrorism for 
many years and have repeatedly called for the development of a 
national strategy for preparedness. We have not been alone in this 
message; for instance, national commissions, such as the Gilmore 
Commission, and other national associations, such as the National 
Emergency Management Association and the National Governors 
Association, have advocated the establishment of a national 
preparedness strategy. The attorney general's Five-Year Interagency 
Counterterrorism Crime and Technology Plan, issued in December 1998, 
represents one attempt to develop a national strategy on combating 
terrorism. This plan entailed a substantial interagency effort and 
could potentially serve as a basis for a national preparedness 
strategy. However, we found it lacking in two critical elements 
necessary for an effective strategy: (1) measurable outcomes and (2) 
identification of state and local government roles in responding to a 
terrorist attacks[Footnote 6] 

In October 2001, the president established the Office of Homeland 
Security as a focal point with a mission to develop and coordinate the 
implementation of a comprehensive national strategy to secure the 
United States from terrorist threats or attacks. While this action 
represents a potentially significant step, the role and effectiveness 
of the Office of Homeland Security in setting priorities, interacting 
with agencies on program development and implementation, and 
developing and enforcing overall federal policy in terrorism-related 
activities is in the formative stages of being fully established. 

The emphasis needs to be on a national rather than a purely federal 
strategy. We have long advocated the involvement of state, local, and 
private-sector stakeholders in a collaborative effort to arrive at 
national goals. The success of a national preparedness strategy relies 
on the ability of all levels of government and the private sector to 
communicate and cooperate effectively with one another. To develop 
this essential national strategy, the federal role needs to be 
considered in relation to other levels of government, the goals and 
objectives for preparedness, and the most appropriate tools to assist 
and enable other levels of government and the private sector to 
achieve these goals.[Footnote 7] 

Roles and Missions of Federal, State, and Local Entities Need to Be 

Although the federal government appears monolithic to many, in the 
area of terrorism prevention and response, it has been anything but. 
More than 40 federal entities have a role in combating and responding 
to terrorism, and more than 20 federal entities in bioterrorism alone. 
One of the areas that the Office of Homeland Security will be 
reviewing is the coordination among federal agencies and programs. 
Concerns about coordination and fragmentation in federal preparedness 
efforts are well founded. Our past work, conducted prior to the 
creation of the Office of Homeland Security, has shown coordination 
and fragmentation problems stemming largely from a lack of 
accountability within the federal government for terrorism-related 
programs and activities. There had been no single leader in charge of 
the many terrorism-related functions conducted by different federal 
departments and agencies. In fact, several agencies had been assigned 
leadership and coordination functions, including the Department of 
Justice, the Federal Bureau of Investigation, FEMA, and the Office of 
Management and Budget. We previously reported that officials from a 
number of agencies that combat terrorism believe that the coordination 
roles of these various agencies are not always clear. The recent 
Gilmore Commission report expressed similar concerns, concluding that 
the current coordination structure does not provide the discipline 
necessary among the federal agencies involved. 

In the past, the absence of a central focal point resulted in two 
major problems. The first of these is a lack of a cohesive effort from 
within the federal government. For example, the Department of 
Agriculture, the Food and Drug Administration, and the Department of 
Transportation have been overlooked in bioterrorism-related policy and 
planning, even though these organizations would play key roles in 
response to terrorist acts. In this regard, the Department of 
Agriculture has been given key responsibilities to carry out in the 
event that terrorists were to target the nation's food supply, but the 
agency was not consulted in the development of the federal policy 
assigning it that role. Similarly, the Food and Drug Administration 
was involved with issues associated with the National Pharmaceutical 
Stockpile, but it was not involved in the selection of all items 
procured for the stockpile. Further, the Department of Transportation 
has responsibility for delivering supplies under the Federal Response 
Plan, but it was not brought into the planning process and 
consequently did not learn the extent of its responsibilities until 
its involvement in subsequent exercises. 

Second, the lack of leadership has resulted in the federal 
government's development of programs to assist state and local 
governments that were similar and potentially duplicative. After the 
terrorist attack on the federal building in Oklahoma City, the federal 
government created additional programs that were not well coordinated. 
For example, FEMA, the Department of Justice, the Centers for Disease 
Control and Prevention, and the Department of Health and Human 
Services all offer separate assistance to state and local governments 
in planning for emergencies. Additionally, a number of these agencies 
also condition receipt of funds on completion of distinct but 
overlapping plans. Although the many federal assistance programs vary 
somewhat in their target audiences, the potential redundancy of these 
federal efforts warrants scrutiny. In this regard, we recommended in 
September 2001 that the president work with the Congress to 
consolidate some of the activities of the Department of Justice's 
Office for State and Local Domestic Preparedness Support under FEMA. 
[Footnote 8] 

State and local response organizations believe that federal programs 
designed to improve preparedness are not well synchronized or 
organized. They have repeatedly asked for a one-stop "clearinghouse" 
for federal assistance. As state and local officials have noted, the 
multiplicity of programs can lead to confusion at the state and local 
levels and can expend precious federal resources unnecessarily or make 
it difficult for them to identify available federal preparedness 
resources. As the Gilmore Commission report notes, state and local 
officials have voiced frustration about their attempts to obtain 
federal funds and have argued that the application process is 
burdensome and inconsistent among federal agencies. 

Although the federal government can assign roles to federal agencies 
under a national preparedness strategy, it will also need to reach 
consensus with other levels of government and with the private sector 
about their respective roles. Clearly defining the appropriate roles 
of government may be difficult because, depending upon the type of 
incident and the phase of a given event, the specific roles of local, 
state, and federal governments and of the private sector may not be 
separate and distinct. 

A new warning system, the Homeland Security Advisory System, is 
intended to tailor notification of the appropriate level of vigilance, 
preparedness, and readiness in a series of graduated threat 
conditions. The Office of Homeland Security announced the new warning 
system on March 12, 2002. The new warning system includes five levels 
of alert for assessing the threat of possible terrorist attacks: low, 
guarded, elevated, high, and severe. These levels are also represented 
by five corresponding colors: green, blue, yellow, orange, and red. 
When the announcement was made, the nation stood in the yellow 
condition, in elevated risk. The warning can be upgraded for the 
entire country or for specific regions and economic sectors, such as 
the nuclear industry. 

The system is intended to address a problem with the previous blanket 
warning system that was used. After September 11th, the federal 
government issued four general warnings about possible terrorist 
attacks, directing federal and local law enforcement agencies to place 
themselves on the "highest alert." However, government and law 
enforcement officials, particularly at the state and local levels, 
complained that general warnings were too vague and a drain on 
resources. To obtain views on the new warning system from all levels 
of government, law enforcement, and the public, the United States 
Attorney General, who will be responsible for the system, provided a 
45-day comment period from the announcement of the new system on March 
12th. This provides an opportunity for state and local governments as 
well as the private sector to comment on the usefulness of the new 
warning system, and the appropriateness of the five threat conditions 
with associated suggested protective measures. 

Performance and Accountability Measures Need to Be Included in 
National Strategy: 

Numerous discussions have been held about the need to enhance the 
nation's preparedness, but national preparedness goals and measurable 
performance indicators have not yet been developed. These are critical 
components for assessing program results. In addition, the capability 
of state and local governments to respond to catastrophic terrorist 
attacks is uncertain. 

At the federal level, measuring results for federal programs has been 
a longstanding objective of the Congress. The Congress enacted the 
Government Performance and Results Act of 1993 (commonly referred to 
as the Results Act). The legislation was designed to have agencies 
focus on the performance and results of their programs rather than on 
program resources and activities, as they had done in the past. Thus, 
the Results Act became the primary legislative framework through which 
agencies are required to set strategic and annual goals, measure 
performance, and report on the degree to which goals are met. The 
outcome-oriented principles of the Results Act include (1) 
establishing general goals and quantifiable, measurable, outcome-
oriented performance goals and related measures, (2) developing 
strategies for achieving the goals, including strategies for 
overcoming or mitigating major impediments, (3) ensuring that goals at 
lower organizational levels align with and support general goals, and 
(4) identifying the resources that will be required to achieve the 

A former assistant professor of public policy at the Kennedy School of 
Government, now the senior director for policy and plans with the 
Office of Homeland Security, noted in a December 2000 paper that a
preparedness program lacking broad but measurable objectives is 
unsustainable.[Footnote 9] This is because it deprives policymakers of 
the information they need to make rational resource allocations, and 
program managers are prevented from measuring progress. He recommended 
that the government develop a new statistical index of preparedness, 
[Footnote 10] incorporating a range of different variables, such as 
quantitative measures for special equipment, training programs, and 
medicines, as well as professional subjective assessments of the 
quality of local response capabilities, infrastructure, plans, 
readiness, and performance in exercises. Therefore, he advocated that 
the index should go well beyond the current rudimentary milestones of 
program implementation, such as the amount of training and equipment 
provided to individual cities. The index should strive to capture 
indicators of how well a particular city or region could actually 
respond to a serious terrorist event. This type of index, according to 
this expert, would then allow the government to measure the 
preparedness of different parts of the country in a consistent and 
comparable way, providing a reasonable baseline against which to 
measure progress. 

In October 2001, FEMA's director recognized that assessments of state 
and local capabilities have to be viewed in terms of the level of 
preparedness being sought and what measurement should be used for 
preparedness. The director noted that the federal government should 
not provide funding without assessing what the funds will accomplish. 
Moreover, the president's fiscal year 2003 budget request for $3.5 
billion through FEMA for first responders-—local police, firefighters, 
and emergency medical professionals—-provides that these funds be 
accompanied by a process for evaluating the effort to build response 
capabilities, in order to validate that effort and direct future 

FEMA has developed an assessment tool that could be used in developing 
performance and accountability measures for a national strategy. To 
ensure that states are adequately prepared for a terrorist attack, 
FEMA was directed by the Senate Committee on Appropriations to assess 
states' response capabilities. In response, FEMA developed a self-
assessment tool—the Capability Assessment for Readiness (CAR)—that 
focuses on 13 key emergency management functions, including hazard 
identification and risk assessment, hazard mitigation, and resource 
management. However, these key emergency management functions do not 
specifically address public health issues. In its fiscal year 2001 CAR 
report, FEMA concluded that states were only marginally capable of 
responding to a terrorist event involving a weapon of mass 
destruction. Moreover, the president's fiscal year 2003 budget 
proposal acknowledges that our capabilities for responding to a 
terrorist attack vary widely across the country. Many areas have 
little or no capability to respond to a terrorist attack that uses 
weapons of mass destruction. The budget proposal further adds that 
even the best prepared states and localities do not possess adequate 
resources to respond to the full range of terrorist threats we face. 

Proposed standards have been developed for state and local emergency 
management programs by a consortium of emergency managers from all 
levels of government and are currently being pilot tested through the 
Emergency Management Accreditation Program at the state and local 
levels. Its purpose is to establish minimum acceptable performance 
criteria by which emergency managers can assess and enhance current 
programs to mitigate, prepare for, respond to, and recover from 
disasters and emergencies. For example, one such standard is the 
requirement that (1) the program must develop the capability to 
direct, control, and coordinate response and recovery operations, (2) 
that an incident management system must be utilized, and (3) that 
organizational roles and responsibilities shall be identified in the 
emergency operational plans. 

Although FEMA has experience in working with others in the development 
of assessment tools, it has had difficulty in measuring program 
performance. As the president's fiscal year 2003 budget request 
acknowledges, FEMA generally performs well in delivering resources to 
stricken communities and disaster victims quickly. The agency performs 
less well in its oversight role of ensuring the effective use of such 
assistance. Further, the agency has not been effective in linking 
resources to performance information. FEMA's Office of Inspector 
General has found that FEMA did not have an ability to measure state 
disaster risks and performance capability, and it concluded that the 
agency needed to determine how to measure state and local preparedness 

Appropriate Tools Need to Be Selected for Designing Assistance: 

Since September 11th, many state and local governments have faced 
declining revenues and increased security costs. A survey of about 400 
cities conducted by the National League of Cities reported that since 
September 11th, one in three American cities saw their local 
economies, municipal revenues, and public confidence decline while 
public-safety spending is up. Further, the National Governors 
Association estimates fiscal year 2002 state budget shortfalls of 
between $40 billion and $50 billion, making it increasingly difficult 
for the states to take on expensive, new homeland security initiatives 
without federal assistance. State and local revenue shortfalls coupled 
with increasing demands on resources make it more critical that 
federal programs be designed carefully to match the priorities and 
needs of all partners—federal, state, local, and private. 

Our previous work on federal programs suggests that the choice and 
design of policy tools have important consequences for performance and 
accountability. Governments have at their disposal a variety of policy 
instruments, such as grants, regulations, tax incentives, and regional 
coordination and partnerships, that they can use to motivate or 
mandate other levels of government and private-sector entities to take 
actions to address security concerns. 

The design of federal policy will play a vital role in determining 
success and ensuring that scarce federal dollars are used to achieve 
critical national goals. Key to the national effort will be 
determining the appropriate level of funding so that policies and 
tools can be designed and targeted to elicit a prompt, adequate, and 
sustainable response while also protecting against federal funds being 
used to substitute for spending that would have occurred anyway. 


The federal government often uses grants to state and local 
governments as a means of delivering federal programs. Categorical 
grants typically permit funds to be used only for specific, narrowly 
defined purposes. Block grants typically can be used by state and 
local governments to support a range of activities aimed at achieving 
a broad national purpose and to provide a great deal of discretion to 
state and local officials. Either type of grant can be designed to (1) 
target the funds to states and localities with the greatest need, (2) 
discourage the replacement of state and local funds with federal 
funds, commonly referred to as "supplantation," with a maintenance-of-
effort requirement that recipients maintain their level of previous 
funding, and (3) strike a balance between accountability and 
flexibility. More specifically: 

* Targeting: The formula for the distribution of any new grant could 
be based on several considerations, including the state or local 
government's capacity to respond to a disaster. This capacity depends 
on several factors, the most important of which perhaps is the 
underlying strength of the state's tax base and whether that base is 
expanding or is in decline. In an August 2001 report on disaster 
assistance, we recommended that the director of FEMA consider 
replacing the per-capita measure of state capability with a more 
sensitive measure, such as the amount of a state's total taxable 
resources, to assess the capabilities of state and local governments 
to respond to a disaster.[Footnote 11] Other key considerations 
include the level of need and the costs of preparedness. 

* Maintenance-of-effort: In our earlier work, we found that 
substitution is to be expected in any grant and, on average, every 
additional federal grant dollar results in about 60 cents of 
supplantation.[Footnote 12] We found that supplantation is 
particularly likely for block grants supporting areas with prior state 
and local involvement. Our recent work on the Temporary Assistance to 
Needy Families block grant found that a strong maintenance-of-effort 
provision limits states' ability to supplant.[Footnote 13] Recipients 
can be penalized for not meeting a maintenance-of-effort requirement. 

* Balance accountability and flexibility: Experience with block grants 
shows that such programs are sustainable if they are accompanied by 
sufficient information and accountability for national outcomes to 
enable them to compete for funding in the congressional appropriations 
process. Accountability can be established for measured results and 
outcomes that permit greater flexibility in how funds are used while 
at the same time ensuring some national oversight. 

Grants previously have been used for enhancing preparedness and recent 
proposals direct new funding to local governments. In recent 
discussions, local officials expressed their view that federal grants 
would be more effective if local officials were allowed more 
flexibility in the use of funds. They have suggested that some funding 
should be allocated directly to local governments. They have expressed 
a preference for block grants, which would distribute funds directly 
to local governments for a variety of security-related expenses. 

Recent funding proposals, such as the $3.5 billion block grant for 
first responders contained in the president's fiscal year 2003 budget, 
have included some of these provisions. This matching grant would be 
administered by FEMA, with 25 percent being distributed to the states 
based on population. The remainder would go to states for pass-through 
to local jurisdictions, also on a population basis, but states would 
be given the discretion to determine the boundaries of substate areas 
for such a pass-through—that is, a state could pass through the funds 
to a metropolitan area or to individual local governments within such 
an area. Although the state and local jurisdictions would have 
discretion to tailor the assistance to meet local needs, it is 
anticipated that more than one-third of the funds would be used to 
improve communications; an additional one-third would be used to equip 
state and local first responders, and the remainder would be used for 
training, planning, technical assistance, and administration. 


Federal, state, and local governments share authority for setting 
standards through regulations in several areas, including 
infrastructure and programs vital to preparedness (for example, 
transportation systems, water systems, public health). In designing 
regulations, key considerations include how to provide federal 
protections, guarantees, or benefits while preserving an appropriate 
balance between federal and state and local authorities and between 
the public and private sectors (for example, for chemical and nuclear 
facilities). In designing a regulatory approach, the challenges 
include determining who will set the standards and who will implement 
or enforce them. Five models of shared regulatory authority are: 

* fixed federal standards that preempt all state regulatory action in 
the subject area covered; 

* federal minimum standards that preempt less stringent state laws but 
permit states to establish standards that are more stringent than the 

* inclusion of federal regulatory provisions not established through 
preemption in grants or other forms of assistance that states may 
choose to accept; 

* cooperative programs in which voluntary national standards are
formulated by federal and state officials working together; and; 

* widespread state adoption of voluntary standards formulated by quasi-
official entities. 

Intergovernmental Partnerships and Regional Coordination
Any one of these shared regulatory approaches could be used in 
designing standards for preparedness. The first two of these 
mechanisms involve federal preemption. The other three represent 
alternatives to preemption. Each mechanism offers different advantages 
and limitations that reflect some of the key considerations in the 
federal-state balance. 

Tax Incentives: 

To the extent that private entities will be called upon to improve 
security over dangerous materials or to protect vital assets, the 
federal government can use tax incentives to encourage and enforce 
their activities. Tax incentives are the result of special exclusions, 
exemptions, deductions, credits, deferrals, or tax rates in the 
federal tax laws. Unlike grants, tax incentives do not generally 
permit the same degree of federal oversight and targeting, and they 
are generally available by formula to all potential beneficiaries who 
satisfy congressionally established criteria. 

Intergovernmental Partnerships and Regional Coordination: 

Promoting partnerships between critical actors (including different 
levels of government and the private sector) facilitates the 
maximizing of resources and also supports coordination on a regional 
level. Partnerships could encompass federal, state, and local 
governments working together to share information, develop 
communications technology, and provide mutual aid. The federal 
government may be able to offer state and local governments assistance 
in certain areas, such as risk management and intelligence sharing. In 
turn, state and local governments have much to offer in terms of 
knowledge of local vulnerabilities and resources, such as local law 
enforcement personnel, available to respond to threats and emergencies 
in their communities. 

The importance of readily available urban search and rescue was 
highlighted in the Loma Prieta earthquake in October 1989 that 
collapsed the Cypress section of the Nimitz Freeway in Oakland and 
structures in San Francisco and Santa Cruz. In late 1989, the 
Governor's Office of Emergency Services developed a proposal to 
enhance urban search and rescue capabilities in California, and the 
cornerstone of this proposal was the development of multidiscipline 
urban search and rescue task forces to be deployed in the event of 
large-scale disasters. A parallel effort was undertaken by FEMA at 
that time to upgrade urban search and rescue efforts nationwide. 
FEMA's national urban search and rescue response teams provide a 
framework for structuring local emergency personnel into integrated 
disaster response task forces. FEMA has 28 urban search and rescue 
teams, with 8 of those teams positioned in California. Twenty of 
FEMA's 28 teams were deployed to New York in the aftermath of the 
tragedy, and five teams were deployed to Washington to help in search 
and rescue efforts at the Pentagon. 

Since the events of September 11th, a task force of mayors and police 
chiefs has called for a new protocol governing how local law 
enforcement agencies can assist federal agencies, particularly the 
FBI, given the information needed to do so. As the United States 
Conference of Mayors noted, a close working partnership of local and 
federal law enforcement agencies, which includes the sharing of 
intelligence, will expand and strengthen the nation's overall ability 
to prevent and respond to domestic terrorism. The USA Patriot Act 
provides for greater sharing of intelligence among federal agencies. 
An expansion of this act has been proposed (S.1615, H.R. 3285) that 
would provide for information sharing among federal, state, and local 
law enforcement agencies. In addition, the Intergovernmental Law 
Enforcement Information Sharing Act of 2001 (H.R. 3483), which you 
sponsored Mr. Chairman, addresses a number of information-sharing 
needs. For instance, this proposed legislation provides that the 
United States Attorney General expeditiously grant security clearances 
to governors who apply for them, and state and local officials who 
participate in federal counterterrorism working groups or regional 
terrorism task forces. 

Local officials have emphasized the importance of regional 
coordination. Regional resources, such as equipment and expertise, are 
essential because of proximity, which allows for quick deployment, and 
experience in working within the region. Large-scale or labor-
intensive incidents quickly deplete a given locality's supply of 
trained responders. Some cities have spread training and equipment to 
neighboring municipal areas so that their mutual aid partners can 
help. These partnerships afford economies of scale across a region. In 
events that require a quick response, such as a chemical attack, 
regional agreements take on greater importance because many local 
officials do not think that federal and state resources can arrive in 
sufficient time to help. 

Mutual aid agreements provide a structure for assistance and for 
sharing resources among jurisdictions in response to an emergency. 
Because individual jurisdictions may not have all the resources they 
need to respond to all types of emergencies, these agreements allow 
for resources to be deployed quickly within a region. The terms of 
mutual aid agreements vary for different services and different 
localities. These agreements may provide for the state to share 
services, personnel, supplies, and equipment with counties, towns, and 
municipalities within the state, with neighboring states, or, in the 
case of states bordering Canada, with jurisdictions in another 
country. Some of the agreements also provide for cooperative planning, 
training, and exercises in preparation for emergencies. Some of these 
agreements involve private companies and local military bases, as well 
as local government entities. Such agreements were in place for the 
three sites that were involved on September 11th— New York City, the 
Pentagon, and a rural area of Pennsylvania—and provide examples of 
some of the benefits of mutual aid agreements and of coordination 
within a region. 

With regard to regional planning and coordination, there may be 
federal programs that could provide models for funding proposals. In 
the 1962 Federal-Aid Highway Act, the federal government established a 
comprehensive cooperative process for transportation planning. This 
model of regional planning continues today under the Transportation 
Equity Act for the 21st century (TEA-21, originally ISTEA) program. 
This model emphasizes the role of state and local officials in 
developing a plan to meet regional transportation needs. Metropolitan 
Planning Organizations (MPOs) coordinate the regional planning process 
and adopt a plan, which is then approved by the state. 

Mr. Chairman, in conclusion, as increasing demands are placed on 
budgets at all levels of government, it will be necessary to make 
sound choices to maintain fiscal stability. All levels of government 
and the private sector will have to communicate and cooperate 
effectively with each other across a broad range of issues to develop 
a national strategy to better target available resources to address 
the urgent national preparedness needs. Involving all levels of 
government and the private sector in developing key aspects of a 
national strategy that I have discussed today—a definition and 
clarification of the appropriate roles and responsibilities, an 
establishment of goals and performance measures, and a selection of 
appropriate tools—is essential to the successful formulation of the 
national preparedness strategy and ultimately to preparing and 
defending our nation from terrorist attacks. 

This completes my prepared statement. I would be pleased to respond to 
any questions you or other members of the subcommittee may have.
For further information about this testimony, please contact me at 
(202) 512-6737, Paul Posner at (202) 512-9573, or JayEtta Hecker at 
(202) 5122834. Other key contributors to this testimony include Jack 
Burriesci, Matthew Ebert, Colin J. Fallon, Thomas James, Kristen 
Sullivan Massey, Yvonne Pufahl, Jack Schulze, and Amelia Shachoy. 

[End of section] 

Related GAO Products: 

Homeland Security: 

Homeland Security: Challenges and Strategies in Addressing Short- and
Long-Term National Needs. [hyperlink,]. Washington, D.C.: November 
7, 2001. 

Homeland Security: A Risk Management Approach Can Guide Preparedness 
Efforts. [hyperlink,]. 
Washington, D.C.: October 31, 2001. 

Homeland Security: Need to Consider VA's Role in Strengthening Federal 
Preparedness. [hyperlink,]. 
Washington, D.C.: October 15, 2001. 

Homeland Security: Key Elements of a Risk Management Approach. 
[hyperlink,]. Washington, 
D.C.: October 12, 2001. 

Homeland Security: A Framework for Addressing the Nation's Issues. 
[hyperlink,]. Washington, 
D.C.: September 21, 2001. 

Combating Terrorism: 

Combating Terrorism: Considerations for Investing Resources in 
Chemical and Biological Preparedness. [hyperlink,]. Washington, D.C.: October 
17, 2001. 

Combating Terrorism: Selected Challenges and Related Recommendations. 
[hyperlink,]. Washington, D.C.: 
September 20, 2001. 

Combating Terrorism: Actions Needed to Improve DOD's Antiterrorism 
Program Implementation and Management. [hyperlink,]. Washington, D.C.: September 
19, 2001. 

Combating Terrorism: Comments on H.R. 525 to Create a President's 
Council on Domestic Preparedness. [hyperlink,]. Washington, D.C.: May 9, 

Combating Terrorism: Observations on Options to Improve the Federal 
Response. [hyperlink,]. 
Washington, D.C.: April 24, 2001. 

Combating Terrorism: Comments on Counterterrorism Leadership and 
National Strategy. [hyperlink,]. Washington, D.C.: March 27, 

Combating Terrorism: FEMA Continues to Make Progress in Coordinating 
Preparedness and Response. [hyperlink,]. Washington, D.C.: March 20, 

Combating Terrorism: Federal Response Teams Provide Varied 
Capabilities; Opportunities Remain to Improve Coordination. 
[hyperlink,]. Washington, D.C.: 
November 30, 2000. 

Combating Terrorism: Need to Eliminate Duplicate Federal Weapons of 
Mass Destruction Training. [hyperlink,]. Washington, D.C.: March 
21, 2000. 

Combating Terrorism: Observations on the Threat of Chemical and 
Biological Terrorism. [hyperlink,]. Washington, D.C.: 
October 20, 1999. 

Combating Terrorism: Need for Comprehensive Threat and Risk 
Assessments of Chemical and Biological Attack. [hyperlink,].
Washington, D.C.: September 7, 1999. 

Combating Terrorism: Observations on Growth in Federal Programs. 
Washington, D.C.: June 9, 1999. 

Combating Terrorism: Analysis of Potential Emergency Response 
Equipment and Sustainment Costs. [hyperlink,]. Washington, D.C.: June 
9, 1999. 

Combating Terrorism: Use of National Guard Response Teams Is Unclear. 
[hyperlink,]. Washington, 
D.C.: May 21, 1999. 

Combating Terrorism: Observations on Federal Spending to Combat 
Terrorism. [hyperlink,]. Washington, D.C.: 
March 11, 1999. 

Combating Terrorism: Opportunities to Improve Domestic Preparedness 
Program Focus and Efficiency. [hyperlink,]. Washington, D.C.: 
November 12, 1998. 

Combating Terrorism: Observations on the Nunn-Lugar-Domenici Domestic 
Preparedness Program. [hyperlink,]. Washington, D.C.: 
October 2, 1998. 

Combating Terrorism: Threat and Risk Assessments Can Help Prioritize 
and Target Program Investments. [hyperlink, Washington, D.C.: April 
9, 1998. 

Combating Terrorism: Spending on Governmentwide Programs Requires 
Better Management and Coordination. [hyperlink,]. Washington, D.C.: 
December 1, 1997. 

Public Health: 

Bioterrorism: The Centers for Disease Control and Prevention's Role in 
Public Health Protection. [hyperlink,]. Washington, D.C.: November 
15, 2001. 

Bioterrorism: Review of Public Health and Medical Preparedness. 
[hyperlink,]. Washington, 
D.C.: October 10, 2001. 

Bioterrorism: Public Health and Medical Preparedness. [hyperlink,].
Washington, D.C.: October 10, 2001. 

Bioterrorism: Coordination and Preparedness. [hyperlink,]. Washington, D.C.: October 5, 

Bioterrorism: Federal Research and Preparedness Activities. 
[hyperlink,]. Washington, D.C.: 
September 28, 2001. 

Chemical and Biological Defense: Improved Risk Assessments and 
Inventory Management Are Needed. [hyperlink,]. Washington, D.C.: September 
28, 2001. 

West Nile Virus Outbreak: Lessons for Public Health Preparedness. 
[hyperlink,]. Washington, 
D.C.: September 11, 2000. 

Need for Comprehensive Threat and Risk Assessments of Chemical and 
Biological Attacks. [hyperlink,]. Washington, D.C.: 
September 7, 1999. 

Chemical and Biological Defense: Program Planning and Evaluation 
Should Follow Results Act Framework. [hyperlink,]. Washington, D.C.: 
August 16, 1999. 

Combating Terrorism: Observations on Biological Terrorism and Public 
Health Initiatives. [hyperlink,]. Washington, D.C.: 
March 16, 1999. 

Disaster Assistance: 

Disaster Assistance: Improvement Needed in Disaster Declaration
Criteria and Eligibility Assurance Procedures. [hyperlink,]. 
Washington, D.C.: August 31, 2001. 

Federal Emergency Management Agency: Status of Achieving Key Outcomes 
and Addressing Major Management Challenges. [hyperlink,]. Washington, D.C.: July 9, 

FEMA and Army Must Be Proactive in Preparing States for Emergencies. 
[hyperlink,]. Washington, D.C.: 
August 13, 2001. 

Budget and Management: 

Results-Oriented Budget Practices in Federal Agencies. [hyperlink,]. Washington, D.C.: August 

Managing for Results: Federal Managers' Views on Key Management Issues 
Vary Widely across Agencies. [hyperlink,]. Washington, D.C.: May 2001. 

Determining Performance and Accountability Challenges and High Risks. 
[hyperlink,]. Washington, 
D.C.: November 2000. 

Managing for Results: Using the Results Act to Address Mission 
Fragmentation and Program Overlap. [hyperlink,]. Washington, D.C.: August 
29, 1997. 

Government Restructuring: Identifying Potential Duplication in Federal 
Missions and Approaches. [hyperlink,]. Washington, D.C.: June 
7, 1995. 

Government Reorganization: Issues and Principals. [hyperlink,]. Washington, D.C.: 
May 17, 1995. 

Grant Design: 

Grant Programs: Design Features Shape Flexibility, Accountability, and 
Performance Information. [hyperlink,]. Washington, D.C.: June 
22, 1998. 

Federal Grants: Design Improvements Could Help Federal Resources Go 
Further. [hyperlink,]. 
Washington, D.C.: December 18, 1996. 

Block Grants: Issues in Designing Accountability Provisions. 
[hyperlink,]. Washington, 
D.C.: September 1, 1995. 

[End of section] 


[1] See attached listing of related GAO products. 

[2] These studies include the Advisory Panel to Assess Domestic 
Response Capabilities for Terrorism Involving Weapons of Mass 
Destruction, Third Annual Report (Arlington, VA: RAND, Dec. 15, 2001) 
and the United States Commission on National Security/21st Century, 
Road Map for Security: Imperative for Change, February 15, 2001. 

[3] The Robert T. Stafford Disaster Relief and Emergency Assistance 
Act, (P.L. 93-288) as amended establishes the process for states to 
request a presidential disaster declaration. 

[4] "Securing the Homeland, Strengthening the Nation." For the 
complete document, see the Web site: [hyperlink,]. 

[5] 2001 Emergency Supplemental Appropriations Act for Recovery from 
and Response to Terrorist Attacks on the United States, (P.L. 107-38). 

[6] See U.S. General Accounting Office, Combating Terrorism: Linking 
Threats to Strategies and Resources, [hyperlink,] (Washington, D.C.: 
July 26, 2000). 

[7] Another important aspect of enhancing state and local preparedness 
is risk management. Risk management is an important tool for 
prioritizing limited resources in the face of uncertain threats. For 
more information on risk management, see U.S. General Accounting 
Office, Homeland Security: Risk Management Can Help Us Defend Against 
Terrorism, [hyperlink,] 
(Washington, D.C.: October 31, 2001). 

[8] U.S. General Accounting Office, Combating Terrorism: Selected 
Challenges and Related Recommendations, [hyperlink,] (Washington, D.C.: September 
20, 2001). 

[9] Richard A. Falkenrath, The Problems of Preparedness: Challenges 
Facing the U. S. Domestic Preparedness Program (Cambridge, Mass: John 
F. Kennedy School of Government, Harvard University, December 2000). 

[10] It was recommended that this index be classified so as to avoid 
calling attention to the country's most vulnerable areas. 

[11] U.S. General Accounting Office, Disaster Assistance: Improvement 
Needed in Disaster Declaration Criteria and Eligibility Assurance 
Procedures, [hyperlink,] 
(Washington, D.C.: August 31, 2001). 

[12] U.S. General Accounting Office, Federal Grants: Design 
Improvements Could Help Federal Resources Go Further, [hyperlink,] (Washington, D.C.: December 
18, 1996). 

[13] U.S. General Accounting Office, Welfare Reform: Challenges in 
Maintaining a Federal-State Fiscal Partnership, [hyperlink,] (Washington, D.C.: August 10, 

[End of section]