WASHINGTON - The car bomb in Times Square a month ago didn't explode, but it did ignite a high-profile spat over federal anti-terror funding for New York, a fight that re-emerged Thursday in a New York City Council hearing.

Without naming her, New York Police Commissioner Ray Kelly took a shot at Homeland Security Secretary Janet Napolitano for her implied suggestion last month that New York is sitting on unspent grants.

But according to experts, officials and records, New York spends federal homeland funds at an agonizingly slow pace and delays can be found at every level of government, from Washington on down.

Money being allocated

Kelly said his department has obligated every dollar and criticized DHS for taking more than a year and a half to release grant funds. But he conceded the city "procurement process is lengthy and complex."

That describes the experience of federal homeland security funds across the state.

Under the federal grants' original two- to three-year deadlines for completion, New York agencies and nonprofit groups already should be done with, or wrapping up, all projects funded by the $380 million DHS funneled through the state in 2006 and 2007.

But so far they've spent just $192 million - three quarters of 2006 grants and a fifth of 2007 grants, records show.

And they're just beginning to spend another $728 million in federal homeland security grants from 2008 and 2009.

It's not that Kelly and officials statewide aren't working on the grants, which fund projects that include hardening transit tunnels and broadcasting public safety reminders. Records show they are - from planning projects to completing the work.

It's that each grant takes two to three years, and often much longer, from start to finish.

The road begins with a grant application the DHS inspector general in March called redundant and time-consuming. Then DHS announces the grant awards. At that point, local officials know they'll get funds.

Yet, their projects still must win another round of DHS approvals for design, environmental impact and the go-ahead to tap the funds. The Government Accountability Office last year said that takes months, even years.

Then local officials hit their own speed bumps as they bid and award the contracts - and get OKs from New York's attorney general and comptroller - a state official said.

And the officials must spend their own local money upfront - getting approval to do that often creates another delay - and complete the work before they can get a reimbursement check from DHS.

"There's a lot of money in the pipeline," said James Sherry, acting director of the state Office of Homeland Security. "And believe or not, as much money as government spends, it doesn't spend it quite as quickly as people think."

The pace of spending varies. Nassau County has spent about half of its $7.5 million in 2006 and 2007 DHS grants. Suffolk County has spent about two thirds of its $7.8 million.

Spending was slowest on transit security grants, a concern cited by Napolitano in her May 14 letter to Rep. Peter King (R-Seaford).

DHS later said New York area transportation agencies have collected just $44 million of the $474 million of the transit security grants awarded them over the past four years.

King says feds at fault

King blames DHS for holding up approvals for local officials to use the transit funds.

Records show that at the time of Napolitano's letter DHS still hadn't given the final approval for $238 million.

But in the next week, DHS suddenly approved $134 million of that, leaving $104 million from last year under review. Why the quick release? All a DHS spokeswoman would say was, "Once projects are approved, funds are released on a rolling basis."

"Both sides are a little right and both sides are a little wrong," said Michael Greenberger, director of the University of Maryland's Center for Health and Homeland Security.

In fact, DHS took an average of 20 months to make transit security funds available, the GAO said. So DHS extended 2006 and 2007 grants' three-year deadlines by 12 to 18 months.

As for the added layers of New York State and local red tape, "You're not going to throw away the rules and regulations that prevent fraud, misuse and abuse," said consultant Michael Balboni, a former New York homeland security chief.

Some local officials don't spend or seek DHS funds as quickly as they should, a state official said. New York's Homeland Security Office even holds a quarterly "unspent funds" meeting to determine who needs to be prodded.

Yet homeland security officials say they do not worry so much about the pace of spending as about its continuity. Sherry said, "Public security is enhanced by sustained funding."

With Anthony M. DeStefano

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