The state of New Mexico receives money from the federal government in the form of grants to help pay for defeating threats from terrorists, preparing for potential catastrophes and prosecuting criminal cases that arise on the southwest border where national security challenges are exceptional compared to what other areas of the country may face. Unfortunately, state officials in New Mexico keep having to pay the money back after poor management problems with the funds are identified. In early 2006 a report revealed that New Mexico was forced to return $130,000 to the Department of Homeland Security from a fund for domestic preparedness. The money was spent on purchases that were not permitted by grant rules including “salaries, fringe benefits, travel, supplies, and other costs,” according to an audit obtained through a public records request. That report and others were not available online previously but are now posted here. Then later in the year, the U.S. Justice Department’s inspector general questioned the state’s use of more than $1 million it received under the Southwest Border Prosecution Initiative, a special program aimed at helping Arizona, California, Texas and New Mexico carry out criminal court cases at the state and local level. Many of the involved prosecutions are initiated by regional drug trafficking and organized crime task forces made up of multiple law enforcement agencies. Federal auditors found that $769,000 worth of expenses claimed under the initiative covered the cost of cases that weren’t eligible. Another $286,000 was excessively reimbursed to New Mexico due to inaccurate cost calculations, a report shows, and $42,000 more in charges couldn’t be adequately explained with available documents. The following year in 2007, New Mexico still owed an estimated $260,000 back to the federal government as a result of the findings. The state’s Department of Public Safety responded in both instances by promising better oversight practices and to return funds for charges that were determined to be unallowable. “Future expenditures will be scrutinized to assure payments are within the guidelines of the program and are properly supported,” the department vowed. “Employees will be trained in grant compliance and accountability.” Officials had complained in the past that they didn’t have enough staffers and resources to handle many of the administrative responsibilities, including carrying out a full inventory of preparedness gear purchased with grant funds, which is critical since responders need to know the location of rescue equipment, for instance, in the event of an emergency. Though it took time, some of the issues cited in audits were resolved to a limited degree, records show. New Mexico state lawmakers in 2007 created a new cabinet-level Department of Homeland Security and Emergency Management where many grant-related duties were transferred after a confusing mix of offices for years shared the handling of various readiness and recovery tasks. The border prosecution grant was shifted completely to an office of district attorneys. More problems were disclosed in 2008, however. A wildfire that led to the evacuation of 1,000 New Mexico residents in Albuquerque and a loss of power for 16,000 people triggered $1.7 million worth of federal assistance from FEMA during the summer of 2003. When auditors working for the Department of Homeland Security’s inspector general showed up later, state officials couldn’t verify “a significant amount of the costs,” because key documents were missing such as invoices and payroll records. More than $800,000 in costs claimed by what was then New Mexico’s Office of Emergency Management were ultimately questioned, according to a September 2008 report. The document shows that the United States Forest Service, which helps battle blazes, may share some of the responsibility, a problem we noted in our profile of Montana. But answers about the spending from New Mexico administrators weren’t contained in the report due to “ongoing disaster activity” elsewhere in the state at that time. Our attempts to obtain detailed records from New Mexico demonstrating how it’s used federal anti-terrorism grants in recent years didn’t gain much traction. The state office in charge of them initially turned over an 11-page document that’s extremely light on specifics. (The city of Roswell, for instance, received nearly $1.4 million from various 2004 grant programs, but there’s no description at all of what happened to it.) Follow-up calls and e-mails for better-quality documents went nowhere until late 2009 when the state agreed to give us more information, though it still had not arrived at deadline. Meanwhile, the director of homeland security and emergency management for New Mexico, Tim Manning, has since become a deputy administrator for national preparedness at FEMA under Barack Obama. The House Homeland Security Committee held a hearing in October of 2009 to find out why FEMA officials had still not developed an objective tool to demonstrate how $29 billion in anti-terrorism and readiness grants so far have brought the nation greater security. Here’s what Manning had to say: “Intuitively, we could answer the question ‘Are we better prepared?’ with a ‘yes.’ We could validly point to the amount and type of equipment that has been purchased, the physical security improvements that have been made, and the planning and training improvements that have occurred, and conclude that we are better prepared. … However, intuitive conclusions are not good enough. DHS and FEMA are committed to answering questions of preparedness with a greater degree of accuracy. … ‘Are we prepared?’ and ‘Are we better prepared?’ are questions that we have wrestled with throughout the history of these grant programs. In the end, the answer to these questions will be found in rigorous analysis and the development of precise metrics which will enable us to connect dollars spent to results achieved and ultimately to improvements in preparedness.”

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G.W. Schulz is a reporter for Reveal, covering security, privacy, technology and criminal justice. Since joining The Center for Investigative Reporting in 2008, he's reported stories for NPR, KQED,, The Dallas Morning News, the Chicago Tribune, the San Francisco Chronicle, Mother Jones and more. Prior to that, he wrote for the San Francisco Bay Guardian and was an early contributor to The Chauncey Bailey Project, which won a Tom Renner Award from Investigative Reporters and Editors in 2008. Schulz also has won awards from the California Newspaper Publishers Association and the Society of Professional Journalists’ Northern California Chapter. He graduated from the University of Kansas and is based in Austin, Texas.