In response to the September 11th terrorist attacks, the U.S. Department of Justice (DOJ), Office of Justice Programs (OJP) awarded Montgomery County, Maryland (the grantee) $8,551,000 under the State and Local Emergency Preparedness Program. Funding was provided to the grantee to: (1) unify and improve their command and information infrastructure supporting emergency communications, emergency/disaster operations, and transportation management; (2) enhance mobile command and bomb-threat capabilities; (3) increase the capability to monitor and react to potential mass-casualty or bio-terrorism incidents; and (4) enhance the exchange of data related to criminal activity. Our audit concentrated on, but was not limited to, the inception of the grant through August 31, 2004.

We reviewed the grantee’s accounting records and reports submitted to OJP to determine whether the grantee adhered to financial and administrative conditions of the grant award and if costs charged to the grant were allowable, supported, and in accordance with applicable laws, regulations, guidelines, and terms and conditions of the agreement.

We found that the grantee generally complied with OJP grant requirements. Our audit revealed that controls over the accounting process and records relating to the grant were adequate. We determined that costs claimed for reimbursement were allowable, supported, and in accordance with applicable laws, regulations, guidelines, and terms and conditions of the grant. However, we found that the grantee’s accounting system does not categorize grant expenditures by the federal award budget categories. The budget management specialist that is responsible for grant administration tracks the expenditures against the grant budget manually, and relies on program personnel to identify the expenditures by budget type. Based on our review, we identified $128,751 in expenditures that were not attributed to specific budget categories. Although we did not identify any budget deviations, if the grantee does not monitor expenditures against the federal budget categories, deviations from the approved budget may occur.