The amount of Federal funds being spent on programs and activities to combat terrorism is unknown and difficult to determine. This is for several reasons including the lack of a uniform definition of terrorism and the inclusion of these expenditures within larger categories that do not readily allow separation. A review of eight government agencies was conducted to determine their roles and responsibilities in managing and coordinating resources. Some agencies maintained data on their spending for efforts to combat terrorism, while others had only fragmented information or estimates. Information from key agencies involved in combating terrorism shows that nearly $7 billion was spent for unclassified terrorism-related programs and activities during fiscal year 1997. Although the National Security Council is to coordinate counterterrorism policy issues and the Office of Management and Budget (OMB) is to assess competing funding demands, neither agency is required to regularly collect, aggregate, and review funding and spending data relative to combating terrorism on a crosscutting, government-wide basis. Because government-wide priorities have not been established and funding requirements have not necessarily been validated based on an analytically sound assessment of the threat and risk of terrorist attack, there is no basis to have reasonable assurance that agencies requests are funded through a coordinated and focused approach to implement national policy and strategy; the highest priority requirements are being met; terrorism-related activities and capabilities are not unnecessarily duplicative or redundant; and funding gaps or misallocation have not occurred. It is recommended that the Director, OMB, use data on funds budgeted and spent by agencies to evaluate projects and recommend resource allocation annually. 1 figure, 1 table, 7 footnotes, and 6 appendices