| U. S. federal agencies require states to perform annual grant audits using U. S. Office of Management and Budget (OMB) A-133 regulations. Research shows that state auditors overstate their degree of federal legal compliance, understate exposure to fraud, and overstate their use of internal controls. Less well understood are the descriptive categories that explain why certain federal grants incur compliance issues and what federal agencies can do to help states improve their controls. Federalism as a political theory, generally posits that states and federal agencies share enforcement responsibility, served as the theoretical framework. The purpose of this grounded theory study was to develop a theory that explained the Homeland Security Grant Program (HSGP) processes and from which reasons for inefficiencies and suggested remediation could be proposed. Data consisted of audit reports, stakeholder interviews, and other documents from the Department of Homeland Security (DHS) and the OMB. Data were analyzed for emerging concepts using constant comparative analysis. A model emerged of HSGP as a delivery system that produces fewer specific items for which funding is provided to state and local governments than current DHS policy requires. Current practice is an issue because it has resulted in a high potential for audit disagreement and fraud. Remediation steps that DHS can take include improving its sanction policy, creating model procedures, targeting more funding to best practices, and providing more training to recipient agencies. Implications for positive social change include more effective local delivery of specific DHS targeted security activities, which can result in developing communities that are more resilient to natural and manmade disasters. |
