This paper presents the modeling approach, methodologies, and initial results of setting up a multi-layer, hierarchical information management system (IMS) for the smart grid. The IMS allows its users to analyze the data collected by multiple control and communication networks to characterize the states of the smart grid. Abnormal, corrupted, or erroneous measurement data and outliers are detected and analyzed to identify whether they are caused by random equipment failures, human error, or tampering. Data collected from different information networks are crosschecked for data integrity based on redundancy, dependency, correlation, or cross-correlations, which reveal the interdependency between data sets. A hierarchically structured reasoning mechanism is used to rank possible causes of an event to enable system operators to proactively respond or provide mitigation recommendations to remove or neutralize the threats. The model satisfactorily identifies the cause of an event and significantly reduces the need to process myriads of data.