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Streamlining of Administrative Activities and Federal Financial Assistance Functions in the Office of Justice Programs and the Office of Community Oriented Policing Services
Report No. 03-27
Office of the Inspector General
|U.S. Department of Justice
Office of Community Oriented Policing Services (COPS)
|VIA FACSIMILE and U.S. MAIL|
|TO:||Guy K. Zimmerman
Assistant Inspector General for Audit
Office of the Inspector General
Office of Community Oriented Policing Services
|Date:||June 27, 2003|
|Subject:||Draft Audit Report on Streamlining of Administrative Activities and Federal Financial Assistance Functions in the Office of Justice Programs and the Office of Community Oriented Policing Services|
This memorandum is in response to the Office of the Inspector General's (OIG ) above-referenced draft audit report dated May 7, 2003. The COPS Office thanks the OIG for the opportunity to respond to the auditors' recommendations:
Since January 2002, the OIG has conducted an audit that included a detailed review of the grant functions and administrative activities of each of the COPS Office's divisions. The purpose of the audit was to determine if operational efficiency could be increased by streamlining any such functions and activities. After this extensive audit, we are pleased that the OIG found no overlap or inefficiencies within the COPS Office pertaining to our organizational structure, grant programs and administrative activities. Moreover, the OIG acknowledges the COPS Office's comprehensive automated grant management system that can be used to track all phases of the grant process, from application through closeout. Indeed, the draft audit report confirms what we hear anecdotally on a daily basis - that the COPS Office is an efficient, streamlined, customer-oriented operation that quickly responds to emerging issues faced by state, local and tribal law enforcement agencies across the nation.
Since its creation in 1994, the COPS Office has provided assistance to nearly 13,000 of the nation's approximately 18,000 law enforcement agencies to implement community policing, through awards of nearly 35,000 grants. The COPS Office has invested $9.6 billion to add officers to the nation's streets and schools, enhance crime-fighting technology, support crime prevention initiatives, and provide training and technical assistance, an investment that has had a real effect on communities across America. We welcome the OIG 's observations about how our operations could be even better. The draft audit report makes only two recommendations: first, for the COPS Office and OJP to develop and implement a method of coordination to eliminate potential duplication of effort in awards made to the same grantee for similar purposes, and, second, to continue developing our on-line grant application capabilities.
However, while overall the draft audit report reflects positively on the COPS Office, we would like to put certain points raised by the OIG about our programs and our relationship with OJP into context. As discussed in detail below, first, when put in perspective of the overall grant-making responsibilities of the COPS Office, the COPS Office cannot be characterized as continually relying on OJP to perform COPS services. Rather, as shown below, it would be more accurate to say that the COPS Office has accomplished its mission by, in part, collaborating in discrete areas with OJP (as well as with other offices in the Department of Justice and other Federal agencies). Utilizing available, pre-existing resources of other agencies - rather than reinventing the wheel - makes for cost-effective, quick, and maximum use of existing Federal government resources.
Second, OJP's LLEBG program and COPS hiring and technology grants fulfill different, but very complementary, law enforcement needs. Thus, rather than concluding on page v of the draft report that the Department's assistance programs are "fragmented," and result in "reduced efficiency and higher costs," the COPS Office believes that the offices' programs are complementary and have resulted in cost-effective and customer-friendly services, as shown below.
II. The COPS Office's Collaboration With OJPThe draft audit report, pages 7- 12, indicates that the COPS Office "has continually relied upon OJP to perform services related to the administration of COPS Office activities." The OIG states that such reliance began at the inception of the COPS program, and grew to include both a reimbursable agreement with OJP for certain financial systems and a "pass-through" of certain funds to OJP to administer. It is true that COPS seeks innovative, efficient ways to maximize our resources and achieve our goals. It is also true that this includes utilizing existing resources where appropriate. However, while the use of certain aspects of OJP 's existing structure has contributed to the COPS Office's ability to successfully reach our goals, OJP 's assistance should be put in context of the COPS Office's extensive operations.
A. The COPS Office's Initial Grant Programs
On pages 7-8 of the draft audit report, the OIG indicates that the COPS Office initially "relied" on OJP to award grants under the COPS program. However, to put OJP 's role in awarding COPS' initial grants into perspective, two weeks after the COPS Office was created in September 1994, OJP awarded 392 Phase I grants based on applications remaining from OJP 's previous Police Hiring Supplement grant program. Thereafter, within its first three months of operation, the COPS Office issued its first grant applications, for the COPS FAST and AHEAD law enforcement hiring programs. Within its first seven months of operation, the COPS Office then announced over 7,000 awards in those programs to state, local and tribal law enforcement agencies to hire sworn officers. In the nine years since then, COPS has made over $9 billion in grants.
This impressive, successful start-up earned the COPS Office's deserved reputation as an agency that quickly and pro-actively provides Federal assistance in an efficient, customer-oriented manner. OJP 's contribution of 392 grants represented six percent of the 7,000 COPS grants awarded in the program's first fiscal year, and one percent of the 35,000 grants awarded in total. While an important contribution, when put into perspective, it should not fairly be characterized as OJP performing the COPS Office's functions for us.
B. The COPS Office's Reimbursable Agreement with OJP
Pages 7 and 8 - 10 of the draft audit report indicate that the COPS Office has "continually turned" to OJP for services related to the COPS program through a reimbursable agreement. However, each year this list of services is reassessed and modified based on any changes implemented by either office.1 Since the beginning of our program, the utilization of OJP 's services by the COPS Office has decreased.
Currently, most of the services that the COPS Office obtains from OJP can be generally characterized as systems costs and accounting services related to the payment of COPS grant funds. Specifically, when the COPS Office was created, it was determined that using OJP 's grant payment system would be more cost effective than creating a separate system. However, the use of OJP 's payment system, while certainly significant, should be put into perspective with all of the other significant financial activities for which the COPS Office is responsible.
The COPS Office performs all other necessary financial services related to the COPS program, including budget reviews, obligating funds, monitoring the validity of grant obligations, providing nationwide training to grantees in their financial responsibilities, monitoring grantee financial reporting for all active grants, resolving excess cash and local match issues, processing grant withdrawals and closeouts, resolving rejected transactions so that the monthly payment file from OJP can be loaded into the Department's Financial Management Information System (FMIS), reconciling erroneous grant postings after the file is loaded, obtaining repayments from overpaid grantees, and reclassifying all open grant obligations at the end of the fiscal year. Furthermore, the COPS Office serves as liaison to the Trust Fund audit, which is a multi-phased annual audit of the COPS Office's financial statements and internal controls.
This use of a reimbursable agreement to obtain a discrete service from another agency is an acceptable practice within the Federal government to encourage the reduction of costs and redundant systems. For example, rather than create costly individual systems, both the COPS Office and the OIG use the Department's pre-existing working capital fund services, a revolving fund used by the Department to finance services provided to Department components on a reimbursable basis. Thus, both the OIG and the COPS Office, in a prudent use of our funds, pay the Department reimbursable fees for such services as accounting, employee drug testing, the use of FMIS, and health unit services.
Likewise, the COPS Office's use of OJP 's payment system reduces costs for the taxpayer and inconvenience for the grantees. Portraying the COPS Office's use of OJP's existing payment system as inefficient is antithetical to the intent of the intent of the Economy Act, which encourages agencies to use the services of other agencies in order to be more efficient and save costs. It also contradicts the Federal Financial Assistance Streamlining Act, which encourages agencies to simplify, standardize, and streamline grant-making business practices.
C. COPS Funds Passed Through to OJP
On pages 7 and 10 - 12 of the draft audit report, the OIG indicates that the COPS Office transfers portions of its appropriated funds to OJP to administer, and that in most cases OJP assumes full responsibility for the management and administration of these funds. However, almost all of the funds that the COPS Office passes through to OJP are so mandated by Congress in the COPS Office's annual appropriations language, a practice that began in FY 1999.2 In FY 2002, the mandatory pass-through funds totaled $361.9 million. An example of a mandatory pass-through for FY 2002 was the Police Corps program, which was funded at $14,435,000.3 The appropriation from Congress required that the Police Corps funds be transferred to OJP to administer.
A discretionary way in which the COPS Office passes funds through to OJP to administer is in the category of "earmarks." Earmarks are legislative directives in the appropriations laws that dictate how to spend certain portions of funds appropriated within larger funding programs. However, the practice of passing through discrete earmarks to the other office is mutual, and is done for the purpose of promoting customer service and grantee convenience. The offices (COPS and OJP) pass through earmarked funds to each other when a grant project either continues a project previously administered by the other office, or specifically fits within an existing program of that office.
An example of this type of pass-through by the COPS Office would be specific earmarked grant awards within the Safe Schools Initiative (SSI).4 In FY 2002, COPS passed through $9,531,000 in earmarked funds to OJP for specific SSI projects because OJP had previously administered those projects. Similarly, an example of OJP passing earmarked funds through to the COPS Office would be an award made to Triad, which is a partnership among the American Association of Retired Persons (AARP), the International Association of Chiefs of Police, and the National Sheriffs' Association to help ensure senior safety, including the addressing of domestic violence issues and senior fraud prevention. Another example is the pass-through from OJP to the COPS Office for the South Carolina Law Enforcement Division's establishment of a Computer Crimes Center to provide South Carolina with a single clearinghouse for reporting, training, investigative assistance, and prosecution of high technology crimes. In FY 2003, these two OJP pass-throughs of funding to the COPS Office totaled over $4.2 million. In each of these cases, the result is that the grantee now has seamless administration of its Federal assistance and one-stop grant administration for that project.
The COPS Office also provides funds to OJP in situations that we would not categorize as OJP administration of COPS funds. Rather, the projects are jointly managed and funded by both the COPS Office and OJP. An example is the $2 million contribution to support the Comprehensive Indian Resources for Community and Law Enforcement (CIRCLE) program in FY 2001. The CIRCLE program was an initiative in which COPS partnered with OJP to provide comprehensive funding to tribes, designed to empower American Indian communities to more effectively fight crime, violence, and substance abuse. In this manner, both OJP and the COPS Office collaborate and join our resources to address areas of mutual concern and expertise.5
D. Comparison of the COPS Office's Costs to Manage and Administer Grants
On pages vi and 12 - 13 of the draft audit report, the OIG finds that the COPS Office's management and administration (M&A) costs per grant administered are lower than those of OJP. However, the OIG also found that our M&A costs per program dollar are higher than those of OJP. The COPS Office was not able to obtain a list of all the factors that the OIG considered to support its calculation, but it appears that the OIG reached its conclusion by comparing the COPS Office's M&A costs in one fiscal year to the amount of COPS grants awarded in that year. Based on this analysis, the OIG calculated that the COPS Office's M&A costs per program dollar were higher than four percent.
However, the COPS Office believes that the more appropriate calculation would be to compare M&A costs in one fiscal year to the entirety of the work that the COPS Office performs, rather than just choosing to single out one task, such as the amount of grants awarded each year. The COPS Office currently has over $8 billion in grant awards outstanding, representing over 32,000 grants. We manage, maintain, and monitor that extensive grant portfolio - a significant amount of responsibility - in addition to awarding new grants each year. Thus, while new appropriations of COPS program dollars did decrease from 1999 to 2002, the total cumulative amount of program dollars administered by the COPS Office continues to increase annually. Any calculation of the costs needed to manage our work must take into consideration the totality of our work, and not just the grants we award each year. Based on the comparison of our annual M&A costs to the management of $8 billion in active grants, the actual percentage of M&A costs per program dollar is less than one-half of one percent - approximately only 0.39 percent.
The OIG appears to assume that personnel costs should decrease if the amount of grant funding awarded each year decreases. While the COPS Office has, in fact, reduced its M&A to program dollar ratio over the years, it would be imprudent for a program managing over $8 billion in active grants to further reduce personnel costs while continuing to effectively safeguard Federal funds. Even as newly appropriated program dollars have decreased, the increasing workload to maintain active grants, provide adequate customer service, programmatically and financially monitor grants for compliance, and close expired grants eliminates the prudence of further reducing M&A costs.
Furthermore, looking-only to the amount of grants awarded in a given year does not take into account the work required for new program implementation and application processing. Regardless of the amount of grants awarded in a given fiscal year, the COPS Office still receives an overwhelming number of applications that must be given substantial review. In FY 2000 alone, COPS awarded $637.7 million in grant funding, but received more than 5,000 applications requesting funding totaling almost $994 million. Each application must be thoroughly processed, reviewed, and evaluated to ensure fair funding decisions.
E. Purposes of COPS Grants and OJP Grants
On pages v, viii, and 13 - 15 of the draft audit report, the OIG determines that COPS grants for hiring law enforcement personnel and purchasing equipment and technology and OJP 's LLEBG program overlap in purpose. However, in actuality, there are two important distinctions between the two programs.
First, while funds from both COPS and OJP assist state, local, and tribal law enforcement, COPS grants are unique because every grant dollar awarded by the COPS Office must, by statute, be used to advance community oriented policing, a strategy credited with reducing crime and the fear associated with crime and with building trust between law enforcement and citizens. In addition, funds under the COPS Office hiring programs support three years of officer salaries to advance community policing. In contrast, while a grantee can choose to use OJP LLEBG funds to support community policing activities if the grantee so desires, it is not a requirement that recipients of LLEBG funds must engage in community oriented policing. In addition, LLEBG grants are one-year grants.
Second, potential grantees are selected for awards from different pools, under different funding criteria. OJP LLEBG funds are awarded through the states and are not available to many of the local law enforcement agencies that the COPS Office can fund directly. Specifically, the LLEBG program is a formula program based on a jurisdiction's number of UCR Part I violent crimes reported to the FBI.6
In contrast, all state, local, federally recognized tribal, and public law enforcement agencies, as well as jurisdictions serving special populations (e.g., transit, university, public housing, schools, and natural resources), are eligible to apply directly to the COPS Office for funding. In addition, jurisdictions wishing to establish new police agencies are eligible to apply for COPS hiring and technology grants.
The OIG provided us with only three situations that it discovered during its audit to support its conclusion that COPS hiring and technology grants and OJP's LLEBG program result in duplication. As set forth below, however, the COPS Office respectfully submits that a closer review of each situation demonstrates that grantees are in fact making complementary use of different funding sources to add to, but not duplicate, the same crucial law enforcement purpose.
The complementary use of COPS and OJP funding described in the examples above is not at all atypical. According to the National Evaluation of the COPS Program - Title 1 of the 1994 Crime Act, a research report issued by the Urban Institute, grantees use multiple funding streams from both OJP and the COPS Office in a complementary manner in order to implement a local vision of policing. While the OIG states that Congress created what the OIG sees as "duplicative grant programs," the Urban Institute confirms that American law enforcement agencies prefer administering DOJ grants from multiple sources, as opposed to receiving funds from a "monopoly grant program," because of the increased variety of funding options available to address law enforcement needs. The demonstrated success of the separate COPS and OJP grant programs has certainly been recognized.
Nevertheless, prior to this audit the COPS Office already had a practice of informally coordinating with OJP on a variety of other matters. Accordingly, in furtherance of our practice of mutual collaboration and coordination, both offices agree to formalize our coordination by, first, comparing program descriptions as soon as they become available in the fiscal year to identify programs that contain the same allowable uses and, second, if necessary as a result of the first step, ensuring that the relevant program managers from each office coordinate on a case-by-case basis to guarantee that duplicative awards are not made to the same grantee for the same purpose. Both offices are confident that this method for coordination will best allow us to identify at the earliest possible time any potential overlap.
III. Capability to Apply for COPS Grants On-Line
On pages v, viii, 7, and 15, the draft audit report indicates that the COPS Office has not developed a capability for applicants to submit grant applications on-line, and that doing so will streamline the grant application process and make applications available to grant managers more quickly and speed up the approval and award process.
Beginning in 2001, to further enhance customer service and to satisfy the requirements of Public Law 106-107, the COPS Office began using the Internet to streamline the delivery and management of COPS funding to law enforcement. To maximize the benefit of on-line grant functions for COPS grantees, the COPS Office decided to first focus on post-grant award activities. The COPS Office currently manages nearly 32,000 active grants made to nearly 13,000 law enforcement agencies. To best benefit those agencies, the COPS Office first developed on-line options for grant management functions such as submitting progress reports and notifying the COPS Office of changes to a grantee's government and law enforcement executives. By prioritizing post-award functions, the COPS Office first used its on-line capabilities to provide streamlined, efficient grant management tools to the majority of its customers. Indeed, the OIG positively recognized these achievements, stating that "COPS has made several post-award functions available on-line such as allowing grantees to provide information on grant progress using the 'COPS Count' and performing accounting maintenance functions."
With regard to our on-line grant application process, in addition to the customer service benefit of first addressing post-award activity, the COPS Office scheduled the development of its on-line grant application process to best coincide with the government-wide electronic funding application system being developed under the leadership of the Office of Management and Budget (0MB) and the U.S. Department of Health and Human Services (DHHS) E-Grants Program Office. The COPS Office's development of on-line applications is within all legal requirements for E-government activities, such as the P.L. 106-107 initiatives managed by OMB, and is on target for the OMB's implementation of government-wide on-line grant applications. Prior to the initiation of this audit, nearly two years ago the COPS Office created and filled a senior-level E-Grants Program Management Officer position to facilitate all our on-line efforts, including the development of on-line grant applications. In addition, officials of the COPS Office continue to represent COPS on numerous pm-award, post-award and audit oversight working groups in coordination with 26 Federal grant-making agencies to stay abreast of future P.L. 106-107 proposed policy guidelines and streamlining implementation. Among other things, the COPS Office has:
Moreover, to underscore the need to coordinate on-line application efforts, the 0MB formally announced the development of a government-wide electronic application system that all Federal grant-making agencies will be required to use once it becomes fully operational. By having focused first on post-award activity, the COPS Office is now in the best position to implement an on-line grant application strategy in cooperation with, and not in duplication of, the various B-grants efforts currently underway government-wide.
Thus, as recognized by the OIG, the COPS Office had already been developing an on-line grant application system prior to the audit, and we agree with the OIG's finding that we will continue to prioritize our plans to do so.
Although the COPS Office is taking active and timely steps to implement on-line grant applications, any indication that the COPS Office needs to "speed up the grant approval and award process" would be misplaced. The COPS Office has had a reputation for being an efficient, effective, and customer-oriented agency beginning from the 1994 start of the program. Specifically, in the beginning of the program, the one-page application used for the initial grant initiatives issued by the COPS Office not only represented an innovative and streamlined approach to grant-making, but was also very successful in allowing agencies to expand their community policing efforts quickly, without compromising the quality and thoroughness of the grant application and award process.
Additional benefits were felt by smaller agencies that historically lacked the resources to devote to the writing of extensive Federal grant applications. As a result, thousands of these smaller agencies were able to apply for grants, thereby expanding their community policing efforts. According to the Urban Institute, "[t]he COPS Office devoted substantial effort to making the application process simple in comparison to other law enforcement grant programs ... [by]any objective standard, the COPS Office succeeded in simplifying the application form." Additionally, the Urban Institute reported that, "[o]verall, satistaction with COPS Office staff was high, and largely unrelated to the size or type of the [grantee] agency ... 90% of funded agencies said that the COPS staff had been helpful, and 84% said their COPS contact was easy to reach."
The COPS Office's customers continue to express their overwhelming satisfaction with the efficiency and service provided by COPS. As recently as June 2003, the U.S. Conference of Mayors stated the following:
The COPS Office enjoys a unique relationship with state and local law enforcement and does a superb job of providing vital funding, quickly and efficiently, to local communities, and is cited by mayors and police chiefs as a model federal agency.
Previously, in June 1999, the U.S. Conference of Mayors stated that "[t]he Department Justice and the COPS Office have done a superb job of administering the COPS program so that funds are quickly and efficiently made available to local communities." Similarly, in Congressional testimony in December 2001, the National Sheriffs' Association testified that "the COPS Office is user friendly. It makes applying for grants significantly easier and much less intimidating. The direct connection that COPS has with law enforcement allows it to be effective and meet its goals."
IV. Current Status of Prior Audits
The OIG raises two prior audits involving the COPS Office: First, the OIG's April 1999 report of COPS grantees and, second, the July 1999 audit of COPS. Again, these three-year-old audits should be put into context with subsequent facts and events.
First, the OIG's April 1999 audit report sought to summarize individual initial findings from OIG audits conducted in 1997 and 1998 of 149 grantees. The initial findings did not "conclude" that the grantees incurred unallowable costs, supplanted, failed to provide timely grant reports or to plan to retain the officers after the grants ended, or committed any other grant violations. Rather, the OIG made initial findings, which are in the nature of allegations of possible violations. Those allegations, or findings, are then subject to a complete investigation and final resolution with each audited grantee before the allegations can be considered substantiated, if in the end they can be.
In order to determine if the OIG's characterization that its April 1999 findings meant that a "significant number of jurisdictions audited" were in grant violation, the Department of Justice contracted a former judge to act as an independent arbiter in a process called the audit resolution committee. The role of the arbiter was to conduct an impartial review of the OIG's findings and determine if it were true that the grantees were guilty of grant violations. The arbiter conducted an in-depth review of a random sample of OIG audits by reviewing the OIG's position, the grant terms and conditions, and the grantee's position to determine whether the grantee was in compliance with the grant terms and conditions at the time of the audit.
After an exhaustive six-month review, the arbiter issued a lengthly opinion finding that, in almost 40 percent of the sampled audit findings, the grantee was not in violation of the grant condition as found by the OIG. Rather, the grantee was actually in compliance with the grant. Moreover, in the specific area of supplanting, the arbiter determined the in 67 percent of the OIG audits tested, where the OIG alleged that the grantee had violated the supplanting provision, the grantee was in fact in compliance with teh supplanting provision. Both the OIG and the Department of Justice accepted the independent arbiter's decisions as final and in April 1999, reported it to Congress. See Office of the Inspector General Semiannual Report to Congress (October 1, 1999 - March 31, 2000); Attorney General's Semiannual Management Report to Congress (October 1, 1999 - March 31, 2000).
While we rely on OIG audits of grantees as part of our overall monitoring and compliance strategy and devote substantial resources to resolving the audits, the audit resolution committee process proved that OIG audits are not indicative of COPS grantee compliance rates. Rather, only after the findings have been completely investigated can a decision be made as to whether a grantee is in compliance. In fact, the Inspector General himself confirmed this when testifying before Congress in March 2002, stating that one "could not statistically extrapolate" the results of an even larger group of grantee audits (330) to the entire population of COPS grants.
Second, the status of the OIG's July 1999 audit of the internal management and administration of the COPS grant program is not completely set forth. All of the recommendations included in the July 1999 report were closed by the OIG by June 2000. The OIG officially closed the report three years ago, based on the fact that the COPS Office and OJP had fully addressed all of the audit recommendations for improving the management of the COPS program. There are no continuing issues from the three-year-old audit.
These prior audit reports therefore are not indicative of COPS grantee compliance rates or of the COPS Office's current comprehensive monitoring and compliance strategy. The COPS Office's compliance program ranges from progress reports, desk reviews, and financial reviews to on-site monitoring visits and audits. All COPS divisions participate in ensuring grantee compliance and we commit a significant amount of resources to safeguarding Federal dollars. When it is determined that a grantee has violated the terms and conditions of its grant, the COPS Office takes enforcement action against the grantee, including obtaining the repayment of misspent grant funds.
V. Response to Audit Recommendations
Recommendation 1: Develop and implement a method of coordination to identify proposed programs and grants that have similar purposes and eliminate any duplication of effort to ensure that awards are not made to the same grantee for similar purposes.
The COPS Office and OJP agree to a two-step coordination process as follows:
Recommendation 2: Continue to develop an on-line application system for COPS grants that will allow potential grantees to complete grant applications on-line and that supports the downloading of on-line application data directly to the COPS Management System for processing.
In light of the fact that COPS was developing an on-line application system prior to this audit, the COPS Office agrees to continue to develop an on-line application system for COPS grants. Accordingly, the COPS Office requests closure of Recommendation #2.
On the basis of the above information, the COPS Office considers the subject report closed as it pertains to the COPS Office and requests written acceptance of this determination from your office. If you have any questions regarding this response, please contact me at (202) 616-2888.
Regional Audit Manager
Atlanta Regional Audit Office
Office of the Inspector General
Director, Audit Liaison Office
Justice Management Division