“DHS uses an evolving risk-based methodology to identify the urban areas eligible for homeland security grants and the amount of funds states and urban areas receive. DHS designed the methodology to measure the relative risk of a given state or urban area using a risk analysis model that defined Risk as the product of Threat times Vulnerability and Consequences (R = T * (V & C) ). Given the uncertainties inherent in risk assessment, the methodology uses a combination of empirical data (e.g., population, asset location) and policy judgment (e.g., the nature of the threat for specific areas and the weights to be assigned to specific variables in the model such as critical infrastructure, population, and population density)”. (GAO, Homeland Security: DHS Improved its Risk-Based Grant Programs’ Allocation and Management Methods, But Measuring Programs’ Impact on National Capabilities Remains a March 11, 2008, p. i) Footnote 9, page 4: “For this formula, DHS defined Threat as international threat of terrorism to locations and critical assets in the United States, Vulnerability as the susceptibility of an area to successful attack, and Consequences as the personal, physical, and economic consequences to an area of a successful attack”. (Ibid, p.4) “Because we have imperfect information for assessing risks, there is a degree of uncertainty in the information used for risk assessments (e.g., what the threats are and how likely they are to be realized). As a result, it is inevitable that assumptions and policy judgments must be used in risk analysis and management. It is important that key decision makers understand the basis for those assumptions and policy judgments and their effect on the results of the risk analysis and the resource decisions based on that analysis”. (Ibid, 5-6) “Since fiscal year 2006, DHS has applied a three-step process which incorporates analyses of risk and effectiveness, to select eligible urban areas and allocate UASI and SHSP funds…: (1) Implementation of a risk analysis model to calculate scores for states and urban areas, defining relative Risk, as the product of Threat, Vulnerability, and Consequences. (2) Implementation of an effectiveness assessment, including a peer review process, to assess and score the effectiveness of the proposed investments submitted by the eligible applicants. (3) Calculation of a final allocation of funds based on states’ and urban areas’ risk scores as adjusted by their effectiveness scores”. (Ibid, p. 6)