The Office of the Inspector General (OIG) at the Department of Homeland Security (DHS) has determined that FEMA’s grant closeout program should be subject to a full audit after delays, inconsistencies and weaknesses were discovered.
OIG carried out a risk assessment of FEMA’s grant closeout process, as required by the Grants Oversight and New Efficiency (GONE) Act of 2016.
OIG identified risks in three broad categories associated with FEMA’s grant closeout process.
Unreliable Systems of Record: DHS policy requires that information technology be acquired and maintained to allow for the achievement of mission objectives. Past OIG audits have revealed deficiencies with FEMA’s various information technology systems. For example, OIG’s report FEMA’s Longstanding IT Deficiencies Hindered 2017 Response and Recovery Operation, from August 2019, detailed how FEMA information technology systems lacked functionality necessary to accomplish mission tasks, including non-integrated systems that did not support efficient data tracking and exchange. OIG concluded this lack of systems integration prevented efficient tracking and management of individual grants.
FEMA uses various systems to manage and monitor grant closeouts, including:
- Non-Disaster Grants Management System (ND Grants)
- Grants Reporting Tool (GRT)
- Emergency Management Mission Integrated Environment (EMMIE)
- National Emergency Management Information System (NEMIS)
- Mitigation Electronic Grants Management System (MT-eGrants)
- Assistance to Firefighters Grants Management System (AFG eGrants)
However, during the fieldwork for the risk assessment, OIG found these systems were not always reliable. FEMA officials explained they could not rely on these systems because of data integrity issues. Also, as OIG stated in its August 2019 report, FEMA indicated the various systems the agency was using were not integrated. To compensate, FEMA used various external databases and spreadsheets to manually monitor grant closeouts.
Information from these manual processes was also used to prepare GONE Act reports. For example, FEMA’s financial management system, the agency’s only system that includes all of its grants from its various grant programs, does not provide a grant’s period of performance (POP) date for all of FEMA’s grants. A grant’s POP date was the basis provided by the GONE Act for determining whether the grant needed to be reported. To obtain the POP dates for the other grants, FEMA had to use a variety of sources, including its various program-specific grant management systems, manually prepared spreadsheets, and locally maintained databases.
Lack of Integration in Grant Closeout Policies and Guidance: The Comptroller General establishes internal control standards for Federal programs and processes. These standards stipulate management should effectively communicate to personnel the policies and procedures of a program so personnel can implement the control activities for their assigned responsibilities. OIG found FEMA did not have standardized integrated processes or policies for grant closeout across all grant programs. Rather, the policies and guidance varied depending on the specific grant program.
Delays in Grant Closeout and Deobligation of Funds: Federal regulations require agencies close out Federal awards once they have determined the award recipients have completed the applicable administrative actions and required work.
Additionally, recipients of awards made after December 24, 2014 must liquidate all obligations within 90 days after the end of the period of performance, unless the awarding agency has authorized an extension or a program statute specifying a different liquidation period exists. In 2017, DHS reported 878 open grants totaling more than $116 million that had been expired for at least 2 years. In its 2018 update, DHS reported it had reduced those numbers to 73 grants totaling nearly $65 million. In both years, the majority of those grants were awarded by FEMA.
Further, in September 2019, OIG noted multiple instances when recipients for completed grants did not submit closeout requests timely, and FEMA did not pursue those requests. This resulted in many grants not being closed out within a reasonable timeframe.
OIG acknowledged that FEMA has initiated improvements to its grant closeout processes, but maintains that significant risks remain. Consequently, OIG will coordinate with FEMA about a future full audit of the grant closeout processes.