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The DHS inspector general released an important and timely report on Tuesday, entitled "Progress in Developing the National Asset Database." The report chronicles the difficulties that DHS has faced in developing a usable national inventory of critical infrastructure, and helps explain some of the shortcomings in the recent homeland security grant allocation decisions, which were based to a certain degree on the information in this database. The report describes the process by which DHS worked with states to build the asset database, and provides a detailed breakdown of the 77,069 assets in it by type, as shown in the chart below: It then discusses some of the limitations of the current database, noting that it does not assign criticality rankings to the assets in the database; in other words, the database implies that the Brooklyn Bridge or Hoover Dam have the same value to the nation as the least significant asset included in the database. And what are some of those low-caliber assets? The report provides a sampling, and oh what a list it is:

Old MacDonald’s petting zoo Mall at Sears Bean Fest Nix’s Check Cashing Amer. Society of Young Musicians Trees of Mystery Car Dealerships Kennel Club and Poker Room Historical Bok Sanctuary 4 Cs Fuel and Lube DPW Landfill Kangaroo Conservation Center Assyrian American Association [state] Right to Life Committee Association for the Jewish Blind [university] Insect Zoo Bourbon Festival Theological Seminary Jay’s Sporting Goods Nestle Purina Pet food Plant Auto Shop Veterinary Clinic Groundhog Zoo Sweetwater Flea Market High Stakes Bingo Petting Zoo [state] Community College [a] Restaurant Frontier Fun Park [a] Travel Stop Mule Day Parade Beach at End of [a] Street Amish Country Popcorn [a] Pepper and Herb Company Psychiatry Behavioral Center Order of Elks National Memorial Ice Cream Parlor Bakery & Cookie Shop Inn Donut Shop Sears Auto Center Wine and Coffee Co. Sports Club Casket Company Bass Pro Shop Muzzle Shoot Enterprise Several Wal-Marts Property Owners Associations Apple and Pork Festival Rolls Royce Plant Pepsi Bottlers Yacht Repair Business Anti-Cruelty Society Tackle Shop Elevator Company Center for Veterinary Medicine American Legion UPS Store Heritage Groups Parcel Shop YMCA Center Brewery Mail Boxes Etc Night clubs

These were assets which were submitted by states as lists of their critical infrastructure in 2004 and 2005, with little quality control to date. And they aren't anomalies. The report notes that the state of Indiana has 8,591 assets on the list - 50% more than NY (5,867) and nearly triple the number of assets that California submitted (3,457). The state of New Mexico apparently contains 73% of the critical assets in IT sector nationwide, according to the database. New York has only 2% of the nation's banking & finance assets - trailing North Dakota & Missouri. Indiana has more tall buildings than Illinois, home to skyscraper city Chicago. And so on. The chart on page 51 of the report provides the complete state-by-state breakdown. The report also notes an equally serious problem: the fact that the database does not adequate account for distributed, system-level assets (e.g. food supply systems, energy & telco grids, etc.), which creates the risk of a bias in favor of protecting fixed assets in the nation's infrastructure protection activities. It mentions that efforts are underway to improve the database and prioritize assets within it, but these efforts are incomplete. And it concludes with a set of recommendations about how to improve the database:

1. Define, and systematically examine, out-of-place or “extremely insignificant” assets, and determine which of those assets should remain in the NADB. Consider redesignating low-value assets remaining in the NADB.
2. Provide state homeland security advisors the opportunity to (a) review their previously submitted assets (with the taxonomy if necessary) that they believe fall within the definition of “extremely insignificant” and (b) recommend to DHS whether to retain them.
3. For ongoing and future data calls, clarify the guidance states should follow for what data to submit, and how DHS intends to use that data.
4. Identify and evaluate key milestones for the NADB and ensure that they are accurately captured in the NIPP.

I've described the DHS grant system as being at risk to the "garbage-in, garbage-out" problem in its allocation processes since the beginning of the year. This report provides another point of confirmation that the quality of the data used to make DHS grant decisions is subpar, and perhaps explains some of the oddities in the funding decisions for the State Homeland Security Grant Program in 2006. Some of the states who were apparently "asset inflators" made out very well in the discretionary segment of the SHSGP (money left over after the allocation of state minimums) this year, notably Nebraska, North Dakota, and Missouri. Perhaps this is a coincidence; but given the black box nature of this allocation process, and the well-documented flaws in the UASI allocations, I'm inclined to think that it's not. Update (7/12): The New York Times has fun with the report. Update 2 (7/12): A good story on the report at GCN.