RICHMOND, Va. (AP) -- Virginia has not used more than $38 million of the $90 million in federal homeland security grants it was given from 2008 through 2010, a federal audit has found.
The audit by the U.S. Department of Homeland Security's Office of Inspector General criticizes Virginia for not dolling out the grant money more quickly to local governments, colleges and other agencies for things like improved communication gear, evacuation planning and other emergency response equipment or training.
It also faults the state for slack oversight and for failing to establish measureable goals to see if the millions in post-September 2001 grants had made the state safer and better prepared for a natural disaster or terrorist attack.
The audit doesn't paint a clear picture because the funds have been allocated, they just haven't been used yet, said Cheryl Lee, grants director for the Virginia Department of Emergency Management, the agency responsible for overseeing the grants.
Many of the grants are for training exercises or assessments that take some time to plan and complete. The grant money is then given to the recipients in the form of a reimbursement, which drags out the process even longer, Lee said.
Lee said all the grants funds will have been spent by next year.
"They didn't find any misuse of funds or any ill intent," Lee said. "My feelings toward the report were very positive. We did have some things that we needed to improve upon, and it wouldn't be an audit if they didn't find those."
The audit was issued last month but posted online by the Inspector General's Office on Wednesday.
Congress has regularly complained about the lack of accountability in the Homeland Security Department's Urban Area Security Initiative grant program, which has doled out billions to help local governments prevent future terrorist attacks and to respond if they do occur. The money is given to the state, which oversees the grants to government and nonprofit agencies.
The inspector general's office found Virginia in compliance in most instances. But it listed seven recommendations, such as developing a comprehensive performance management system and improving policies for monitoring those who receive the grants. It's up to the Federal Emergency Management Agency to make sure Virginia complies with the recommendations.
The audit found that not having measurable goals left the state unable to evaluate the effect of the grant expenditures. It also found that the state had conducted only three onsite oversight visits from 2008 to 2010 and that there were some noncompliance issues that resulted in $660,000 in questionable expenses, including a $104,000 radio equipment purchase that was made without the required competitive bidding.
But the auditors seemed to take particular umbrage to the unspent funds.
"Delays in awarding funds to subgrantees could result in delays for projects intended to increase homeland security and achieve program objectives," the audit said.
It threatened that FEMA could take the funds back if they're not spent.
Virginia's Emergency Management Department responded that it was "unrealistic" that local governments could receive the funds in the 45 days laid out in the grant policies and still adhere to stringent federal and state requirements for spending federal funds. But the department stressed that it had implemented an electronic grants management system to speed up the process and have the funds into grant recipients' hands more quickly.
Lee said that although the audit's findings may look negative, the auditors were looking at the policies in place during the grant period, and that many of those — such as oversight procedures — already have been updated.
"We are much better now in 2012 than we were in 2008, but when we were in 2008 we thought we were good," she said.
But Lee said the department was pleased with the results and would work to correct any remaining issues.
"There's always room for improvement, everybody knows that," she said. "They brought up a lot of good points and things we'll discuss. It's always nice to have somebody come in and look at something from the outside."