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Gov. Bill Ritter on Thursday scrapped the state’s scattered homeland-security structure as “inadequate … to handle a serious terror incident in Colorado.”

In its place, Ritter created a structure with strict financial controls and a homeland-security adviser reporting directly to him.

The overhaul of the state’s homeland-security program comes after years of investigation, criticism and warnings from state lawmakers, Colorado auditors and federal officials.

“We inherited a system that is broken and in need of repair, and Gov. Ritter has made fixing this a top priority,” said Evan Dreyer, the governor’s spokesman.

Under Ritter’s predecessor, Republican Bill Owens, homeland-security duties were divided among state agencies and suffered intense criticism.

Ritter, a Democrat, said he planned to hire two high-profile former state employees to run the operation. Retired Colorado National Guard Maj. Gen. Mason Whitney will become the governor’s homeland security coordinator, and former state Auditor Joanne Hill, who oversaw an audit that was highly critical of the Owens administration’s handling of homeland-security money, will monitor financial matters.

Whitney begins a one-year term Aug. 1. He will be paid $120,000. Hill’s one-year term begins Sept. 1. She will be paid $107,000.

The Ritter administration began a review of homeland-security matters after the former Denver prosecutor took office in January. That review concluded that the current structure was inadequate to protect residents.

In addition to Whitney and Hill, Ritter hired Kent Smiley, a safety official for the city and county of Denver, to oversee the state’s “continuity of government” programs. The programs are designed to maintain basic government services in the event of a disaster or terrorist incident. He will start Aug. 1.

Whitney’s chief duty will be to continue the Ritter team’s review of homeland-security programs and make recommendations for the appropriate long- term structure, Dreyer said.

The review and ongoing federal audits “have identified continued flaws in the administration of the programs,” Ritter said in a statement.

Dreyer said those issues are related to the structure of the state’s homeland-security efforts, the management of federal grants and the deployment of personnel in cases of emergency.

In announcing the changes, the Ritter administration also called the state’s previous handling of federal homeland-security grants “flawed.”

Owens declined to comment.

Michael Beasley, director of the Colorado Department of Local Affairs under Owens, could not be reached for comment late Thursday. That department handled federal security grants.

In 2005, while Hill was state auditor, auditors discovered that Colorado had mishandled federal funds and provided inadequate oversight.

Federal officials later threatened to withhold funding until the state resolved issues related to expenses for a new emergency-response center. The state has repaid the $1.5 million demanded by the federal government, Dreyer said.

Nearly two years ago, Owens rejected a bipartisan state Senate panel’s unanimous recommendation to unite homeland-security efforts in one department. In a written response issued in August 2005, Owens said the senators showed a “pervasive lack of understanding” of the state’s homeland-security efforts.

Dan Grossman, a former Democratic state senator from Denver, said the Owens administration had “burned a lot of bridges” with its political handling of homeland-security matters.

“I think that it is a terrific move on the part of the Ritter administration,” Grossman said, “to finally start taking this seriously … and bring more accountably to the function.”

Staff writer Mark P. Couch can be reached at 303-954-1794 or mcouch@denverpost.com.

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