A published report says an internal audit at the U.S. Department of Homeland Security has found that funds to protect the nation's ports have been spent without sufficiently focusing on the most vulnerable facilities.

A New York Times story published Sunday says the department's inspector general has concluded that the spending policy could compromise the nation's ability to defend against terrorist attacks.

The audit found that considerable money spent on many smaller ports should have gone to larger, more vital ports in cities like Los Angeles and New York, which receive most of the goods coming into the country, making them prime targets for terrorists.

The newspaper also says the audit found that less than a quarter of $517 million the Department of Homeland Security awarded in grants between 2002 and 2003 had been spent as of last September.