Budget Issues
FEMA Needs Adequate Data, Plans, and Systems to Effectively Manage Resources for Day-to-Day Operations Gao ID: GAO-07-139 January 19, 2007Much of the Federal Emergency Management Agency's (FEMA) funding is provided in supplemental appropriations when a disaster is declared, but funds to staff, manage, and operate other FEMA programs and underlying support functions--what GAO refers to as its day-to-day operations--compete with other Department of Homeland Security (DHS) and federal priorities for limited resources. In this environment, FEMA must strategically plan for and manage its day-to-day operations to ensure they efficiently and effectively support the agency's disaster relief mission. To analyze this issue, GAO examined resource trends and management related to FEMA's day-to-day operations from fiscal year 2001 through fiscal year 2005.
FEMA experienced near-constant organizational change from fiscal years 2001 through 2005 that caused considerable flux in FEMA's resources. During this period, the most significant change occurred in March 2003 when FEMA transitioned from an independent agency to a component of the newly created DHS. From the beginning of fiscal year 2003 through fiscal year 2005, a significant number of programs and their associated funding moved into and out of FEMA. Although the amounts nearly balanced, the movement was disruptive to operations and created uncertainty about the availability of resources. FEMA also contributed to DHS start-up costs and ongoing expenses, which reduced funds available for FEMA's operating expenses. Though FEMA would have incurred some of these costs as an independent agency, evidence suggests that FEMA may have been assessed a disproportionate amount relative to several larger DHS entities. While all of this affected resources for FEMA's day-to-day operations, the extent cannot be fully understood because FEMA does not have adequate information on how resources are aligned with those operations. Such information could be used to improve planning and management and provide greater accountability to Congress and the public. Although these shifting resources created challenges, the way FEMA managed its existing resources compounded problems. Notably, FEMA lacks a strategic workforce plan and related human capital strategies--such as succession planning or a coordinated training effort--which are integral to managing resources. They enable an agency to define staffing levels, identify the critical skills needed to achieve its mission, and eliminate or mitigate gaps between current and future skills and competencies. FEMA also lacks business continuity plans for its day-to-day operations, which puts support for the disaster-relief mission at increased risk. Even FEMA staff's strong sense of mission is no substitute for a plan and strategies for action.
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
January 2007:
Budget Issues:
FEMA Needs Adequate Data, Plans, and Systems to Effectively Manage
Resources for Day-to-Day Operations:
Budget Issues:
GAO-07-139:
GAO Highlights:
Highlights of GAO-07-139, a report to congressional committees
Why GAO Did This Study:
Much of FEMA‘s funding is provided in supplemental appropriations when
a disaster is declared, but funds to staff, manage, and operate other
FEMA programs and underlying support functions”what GAO refers to as
its day-to-day operations”compete with other Department of Homeland
Security (DHS) and federal priorities for limited resources. In this
environment, FEMA must strategically plan for and manage its day-to-day
operations to ensure they efficiently and effectively support the
agency‘s disaster relief mission. To analyze this issue, GAO examined
resource trends and management related to FEMA‘s day-to-day operations
from fiscal year 2001 through fiscal year 2005.
What GAO Found:
The Federal Emergency Management Agency (FEMA) experienced near-
constant organizational change from fiscal years 2001 through 2005 that
caused considerable flux in FEMA‘s resources. During this period, the
most significant change occurred in March 2003 when FEMA transitioned
from an independent agency to a component of the newly created DHS.
From the beginning of fiscal year 2003 through fiscal year 2005, a
significant number of programs and their associated funding moved into
and out of FEMA. Although the amounts nearly balanced, the movement was
disruptive to operations and created uncertainty about the availability
of resources.
Figure: Programs and Associated Funding That Moved into and out of FEMA
from March 1, 2003 through Fiscal Year 2005 (in Millions of Dollars):
[See PDF for Image]
Source: GAO analysis of FEMA data.
[End of Figure]
FEMA also contributed to DHS start-up costs and ongoing expenses, which
reduced funds available for FEMA‘s operating expenses. Though FEMA
would have incurred some of these costs as an independent agency,
evidence suggests that FEMA may have been assessed a disproportionate
amount relative to several larger DHS entities. While all of this
affected resources for FEMA‘s day-to-day operations, the extent cannot
be fully understood because FEMA does not have adequate information on
how resources are aligned with those operations. Such information could
be used to improve planning and management and provide greater
accountability to Congress and the public.
Although these shifting resources created challenges, the way FEMA
managed its existing resources compounded problems. Notably, FEMA lacks
a strategic workforce plan and related human capital strategies”such as
succession planning or a coordinated training effort”which are integral
to managing resources. They enable an agency to define staffing levels,
identify the critical skills needed to achieve its mission, and
eliminate or mitigate gaps between current and future skills and
competencies. FEMA also lacks business continuity plans for its day-to-
day operations, which puts support for the disaster-relief mission at
increased risk. Even FEMA staff‘s strong sense of mission is no
substitute for a plan and strategies for action.
What GAO Recommends:
GAO recommends that FEMA take steps to better manage resources for its
day-to-day operations, including collecting data that enables managers
to monitor progress and support resource priorities, using leading
practices to develop a strategic workforce plan, and developing
business continuity plans. In carrying out these recommendations, FEMA
should work with Congress to ensure that the information it provides is
sufficient for use in oversight activities.
DHS and OMB staff provided technical comments on a draft of this
report, which we incorporated where appropriate.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-139].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Susan J. Irving, (202)
512-9142, irvings@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Organizational Changes Created Uncertainty about the Availability of
Resources, but FEMA Lacked Adequate Data to Understand the Effect on
Day-to-Day Operations:
FEMA's Lack of Strategic Management Tools Compounded Problems It Faced
in Coping with Shifting Resources:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Analysis of Resources for Day-to-Day Operations:
Appendix II: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Summary of FEMA's Regular and Supplemental Appropriations for
Fiscal Years 2001 to 2005:
Table 2: FEMA Organizational Changes, Fiscal Years 2001-2003:
Table 3: Illustration of Three Entities' Share of DHS FTEs, Funding,
and Assessments for the DHS WCF for Fiscal Year 2005:
Figures:
Figure 1: Programs and Associated Funding That Moved into and out of
FEMA from March 1, 2003 through Fiscal Year 2005 (in Millions of
Dollars):
Figure 2: Trends in Annual Funding for FEMA's Non-DRF Operations,
Fiscal Years 2001-2005:
Figure 3: Trends in FTEs for FEMA's Non-DRF Operations, Fiscal Years
2001-2005:
Figure 4: Estimate of Funding for FEMA's Day-to-Day Operations, Fiscal
Years 2001-2005:
Figure 5: Estimate of Actual FTEs for FEMA's Day-to-Day Operations,
Fiscal Years 2001-2005:
Abbreviations:
CORE: Cadre of On-call Response/Recovery Employees:
DHS: Department of Homeland Security:
DRF: Disaster Relief Fund:
DSA: Disaster Support Activity:
EP&R: Emergency Preparedness and Response:
FEMA: Federal Emergency Management Agency:
FTE: full-time equivalent:
MMRS: Metropolitan Medical Response System:
ODP: Office of Domestic Preparedness:
OMB: Office of Management and Budget:
ONP: Office of National Preparedness:
PFT: permanent full-time:
SES: Senior Executive Service:
WCF: Working Capital Fund:
United States Government Accountability Office:
Washington, DC 20548:
January 19, 2007:
The Honorable Robert C. Byrd:
Chairman:
Committee on Appropriations:
United States Senate:
The Honorable Judd Gregg:
Ranking Minority Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
United States Senate:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable David R. Obey:
Chairman:
Committee on Appropriations:
House of Representatives:
The mission of the Federal Emergency Management Agency (FEMA) is to
lead the nation in mitigating, responding to, and recovering from major
domestic disasters, both natural and man-made, including terrorist
incidents. Budgeting for FEMA's mission is inherently difficult because
the number, severity, and timing of disasters are unknown. In
recognition of this fact, a large portion of FEMA's funding is provided
in emergency supplemental appropriations when a disaster is declared,
and Congress has provided FEMA with the authority to hire additional
nonpermanent staff and to leverage support from other agencies quickly.
In contrast, funds to staff, manage, and operate other FEMA programs
and underlying support functions--which we refer to in this report as
its day-to-day operations--are requested in the President's annual
budget and, therefore, compete with other Department of Homeland
Security (DHS) and federal priorities for resources.[Footnote 1]
Although there are obvious reasons to distinguish between funding for
disasters and for day-to-day operations, it is important to recognize
that day-to-day operations affect FEMA's ability to deal effectively
and as efficiently as possible with disasters. In this report we
examined resources related to FEMA's day-to-day operations from fiscal
year 2001 through fiscal year 2005 and asked the following:
1. What were resource trends for FEMA's day-to-day operations?
2. How did FEMA manage its resources for day-to-day operations?
To address these objectives, we reviewed and analyzed fiscal years 2001
to 2005 budgetary and personnel data from the President's budget, FEMA
operating plans, FEMA and DHS budget documents, and budget and full-
time equivalent (FTE) employee summary tables provided by FEMA. To
assess its reliability, we compared FEMA's budget and personnel data
with data in the President's budget. However, to make information
comparable for the President's fiscal year 2004 budget request, the
Office of Management and Budget (OMB) restructured fiscal years 2002
and 2003 budget data to reflect changes that occurred with the creation
of DHS in 2003. Because our review called for a more detailed
presentation than what was available in the President's budget, we
relied on FEMA's data. In addition, we analyzed personnel and training
information and reviewed FEMA's workforce planning contract. We
determined that FEMA's budgetary and personnel data were sufficiently
reliable for purposes of providing background information and showing
general trends. We interviewed staff in FEMA's Office of Budget,
officials from the Offices of Plans and Programs, Training, and
Procurement, as well as program managers and staff from the Mitigation,
Response, Recovery, and Human Resources Divisions. We did not interview
FEMA regional managers because FEMA headquarters staff had primary
responsibility for the resource allocations and programs that we
examined. Therefore, we determined that our scope was sufficient and
did not materially affect our findings. At DHS we interviewed staff
from the DHS Budget Office, the Office of Financial Management, and the
Office of the Inspector General. At OMB, we interviewed Resource
Management Office staff with budget and oversight responsibilities for
DHS and FEMA about the start-up of DHS and the role of OMB's Planning
Transition Office for the Department of Homeland Security. This
engagement was conducted under the Comptroller General's authority from
November 2005 until October 2006 in accordance with generally accepted
government auditing standards.
Results in Brief:
Organizational changes caused considerable flux in FEMA's resources
from fiscal years 2001 through 2005. However, resource trends for day-
to-day operations could not be fully understood from available data.
Changes in FEMA's structure and responsibilities occurred multiple
times in this period. FEMA underwent several reorganizations in fiscal
years 2001 and 2002, but the most significant change occurred in March
2003 when FEMA transitioned from an independent agency to a component
of the newly created DHS. From the beginning of fiscal year 2003
through fiscal year 2005, over $1.3 billion in new or significantly
expanded programs came into FEMA, while programs with funding of nearly
$1.5 billion were transferred from FEMA. Although these changes nearly
balance in dollar terms, they mask the disruption in operations and
uncertainty about the availability of resources that accompanied the
nearly constant change. FEMA officials described challenges in
responding to these changing responsibilities and shifting resources
with roughly the same number of FTE employees.[Footnote 2] At the same
time, as a component of DHS, FEMA contributed to departmental start-up
costs and departmental expenses, which reduced funds available for
FEMA's operating expenses. Even though some of these costs would have
been incurred if FEMA had been an independent agency, DHS billing
notifications for fiscal year 2005 indicated that FEMA may have been
assessed a disproportionate amount relative to several larger DHS
entities. Unquestionably these factors affected resources at FEMA, but
the extent to which they affected resources for FEMA's day-to-day
operations cannot be fully understood because FEMA lacks adequate
information on resources associated with its day-to-day operations. For
example, FEMA lacks adequate data on reallocations of resources among
programs, projects, and activities, on staffing levels, and, for some
grant programs, on how much has been allocated. If FEMA collected such
data, it could be used for improved planning and management, and
greater accountability to Congress and the public.
Although shifting resources caused by its transition to DHS created
challenges for FEMA, the agency's management of existing resources
compounded these problems. FEMA lacks some of the basic management
tools that help an agency respond to changing circumstances. Most
notably, FEMA lacks a strategic workforce plan and related human
capital strategies--such as succession planning or a coordinated
training effort. Such tools are integral to managing resources, as they
enable an agency to define staffing levels, identify the critical
skills needed to achieve its mission, and eliminate or mitigate gaps
between current and future skills and competencies. In addition, FEMA
lacks business continuity plans for its day-to-day operations. Since
FEMA operates somewhat like a volunteer fire department in that all
personnel can be called on to respond to disasters and none are
assigned exclusively to day-to-day operations, having plans outlining
which of these operations are critical and how they will be maintained
when the agency is in disaster relief mode becomes much more important.
FEMA officials told us that nondisaster programs are maintained on an
ad hoc basis when permanent staff are deployed and that the agency does
not have provisions for continuing programs when program managers are
called into response duties. Without an understanding of who holds a
mission-critical position for day-to-day operations and what minimum
level of staffing is necessary even during disaster response, business
continuity and support for the disaster-relief mission are put at
increased risk. Even FEMA staff's strong sense of mission, which was
apparent in our interviews, is no substitute for a plan and strategies
for action.
In this report, we make a series of recommendations to help FEMA better
track its resources for day-to-day operations, identify current and
future staffing needs through workforce planning, ensure leadership
capacity through training and development, and maintain business
continuity when a disaster is declared. We also recommend that the
Secretary of Homeland Security direct the Director of FEMA to work with
Congress in carrying out these recommendations to help ensure FEMA
provides sufficient information to enable Congress to conduct its
oversight role.
We requested comments on a draft of this report from the Secretary of
Homeland Security. DHS did not provide formal comments on the draft
report but did provide technical comments, which we incorporated where
appropriate. OMB staff also provided technical comments on an excerpt
of the draft that referred to our discussion with OMB; we incorporated
these where appropriate.
Background:
In response to concerns about the lack of a coordinated federal
approach to disaster relief, President Carter established FEMA by
Executive Order in 1978 to consolidate and coordinate emergency
management functions in one location. FEMA absorbed the Federal
Insurance Administration, the National Fire Prevention and Control
Administration, the National Weather Service Community Preparedness
Program, the Federal Preparedness Agency of the General Services
Administration, the Federal Disaster Assistance Administration
activities from the Department of Housing and Urban Development, and
civil defense responsibilities from the Defense Department's Defense
Civil Preparedness Agency. Between 1979 and 2003, FEMA's
responsibilities expanded to include emergency management for human-
made and technological disasters, such as managing the off-site
consequence of accidents at nuclear power plants, hazardous materials
emergency management, chemical weapons disposal, and hazardous material
disaster mitigation initiatives.
In 2003, FEMA became a component of the Emergency Preparedness and
Response (EP&R) Directorate in the newly created DHS. Much like its
FEMA predecessor, EP&R's mission was to help the nation to prepare for,
mitigate the effects of, respond to, and recover from
disasters.[Footnote 3] While FEMA moved intact to DHS and most of its
operations became part of the EP&R Directorate, some of its functions
were moved to other organizations within DHS. In addition, functions
that were formerly part of other agencies were incorporated into the
new EP&R organization. Once in the department, FEMA's preparedness
functions were transferred over 2 years to other entities in
DHS,[Footnote 4] reducing its mission responsibilities. However, recent
legislation transferred many preparedness functions back to
FEMA.[Footnote 5] Today, once again, FEMA's charge is to lead the
nation's efforts to prepare for, protect against, respond to, recover
from, and mitigate against the risk of natural disasters, acts of
terrorism, and other man-made disasters, including catastrophic
incidents.
FEMA funding is provided in both regular and supplemental
appropriations. FEMA's Disaster Relief Fund (DRF), which supports a
wide range of programs in response to presidentially declared
disasters, receives an annual regular appropriation that is based on
the 5-year average for direct disaster activity, excluding
extraordinary events. Supplemental funding is requested if funds in the
regular appropriation are not sufficient to respond to specific
presidentially declared disasters. The amount of this funding varies
depending on the number and severity of disasters (see table 1 below
for a summary of FEMA's regular and supplemental appropriations from
fiscal years 2001 to 2005). In its regular annual appropriations FEMA
receives not only some funding for its DRF but also funding to provide
for day-to-day agency operations, including financial management, human
resources, procurement, policy direction, and administration of FEMA
programs.[Footnote 6] Some programs that provide funding, such as
grants to state and local governments--and not to FEMA operations--are
funded in these appropriations as well.
Table 1: Summary of FEMA's Regular and Supplemental Appropriations for
Fiscal Years 2001 to 2005:
Millions of dollars.
Regular Disaster Relief Fund appropriations;
Fiscal year: 2001: $293.6;
Fiscal year: 2002: $611.1;
Fiscal year: 2003: $773.4;
Fiscal year: 2004: $1,767.5;
Fiscal year: 2005: $2,042.4.
Other regular appropriations;
Fiscal year: 2001: 839.8;
Fiscal year: 2002: 921.9;
Fiscal year: 2003: 2,552.9;
Fiscal year: 2004: 1,525.9;
Fiscal year: 2005: 1,046.8.
Supplemental Disaster Relief Fund appropriations;
Fiscal year: 2001: 4,383.1;
Fiscal year: 2002: 8,007.6;
Fiscal year: 2003: 1,925.3;
Fiscal year: 2004: 2,245.0;
Fiscal year: 2005: 66,385.0.
Other supplemental appropriations;
Fiscal year: 2001: 0.0;
Fiscal year: 2002: 531.4[A];
Fiscal year: 2003: 86.3[B];
Fiscal year: 2004: 0.0;
Fiscal year: 2005: 100.0[C].
Source: GAO presentation of FEMA data.
[A] This supplemental funding was for the following activities: $210
million for fire grants; $25 million for preparedness; $10 million for
the Winter Olympics; $225.4 million for fire grants, the existing
national urban search and rescue system, and interoperable
communications equipment; and $61 million for Cerro Grande Fire Claims.
[B] This supplemental funding was for the Liberty Shield.
[C] This supplemental funding was for the National Disaster Medical
System.
[End of table]
Similar to FEMA's funding arrangement, most of its employees are hired
to perform work related to a specific, presidentially declared
disaster. The majority of FEMA's workforce is comprised of nonpermanent
employees with various terms (from 120 days to 4 years), who are paid
out of the DRF. As with the funding for the DRF, the number of these
employees can fluctuate in response to the number and severity of
disasters.[Footnote 7] The remainder of FEMA's workforce is comprised
of about 2,100 permanent full-time (PFT) employees, who are paid
primarily out of FEMA's nondisaster relief fund accounts. FEMA also
uses contractors to administer some of its programs, but FEMA does not
track data on the level of contract support it receives.
Certain nonpermanent staff, known as the Cadre of On-call Response/
Recovery Employees (CORE), perform functions similar to those performed
by PFT employees.[Footnote 8] Although paid from the DRF account, the
CORE work alongside PFT employees in headquarters and the regions in
both program offices and support functions, such as human resources and
IT, and both CORE and PFT employees can be deployed to respond to
disasters.
Organizational Changes Created Uncertainty about the Availability of
Resources, but FEMA Lacked Adequate Data to Understand the Effect on
Day-to-Day Operations:
To better understand resource trends for FEMA's day-to-day operations,
information about aggregate resource trends should be viewed in the
context of organizational changes, priorities, and the movement of
resources within FEMA and DHS. However, FEMA lacks adequate information
on the resources associated with its day-to-day operations. Without
such data, FEMA cannot strategically plan for and invest in these
operations, which are necessary for fulfilling its disaster-relief
mission. Moreover, it cannot ensure accountability to Congress and the
public that these resources were used efficiently, effectively, or for
the highest priorities.
FEMA's Responsibilities Were in Flux, Which Created Uncertainty about
the Availability of Resources:
Even prior to its transition to DHS, FEMA was undergoing organizational
change. In response to domestic terrorist incidents in the 1990s--such
as the bombings of the World Trade Center in New York City in 1993 and
the Alfred P. Murrah federal building in Oklahoma City in 1995--federal
efforts to focus on preparedness against terrorist attacks increased.
This led to the first of several organizational changes between fiscal
years 2001 and 2003, as shown in table 2.
Table 2: FEMA Organizational Changes, Fiscal Years 2001-2003:
2001: Before 9/11: The President created an Office of National
Preparedness within FEMA;
FEMA underwent an agencywide reorganization to streamline service
delivery;
2001: After 9/11: FEMA's new Office of National Preparedness was
assigned increased responsibility for working with first responder
agencies;
2002: FEMA underwent another reorganization that split preparedness
functions from readiness and response;
2003: FEMA became part of the newly created Department of Homeland
Security (DHS).
Source: GAO presentation of information from FEMA, the DHS Office of
the Inspector General, and past GAO work.
[End of table]
Recognizing a need for greater coordination among federal agencies in
responding to a terrorist attack, the President created the Office of
National Preparedness (ONP) within FEMA in May 2001 to provide
leadership in the coordination and facilitation of all federal efforts
to assist state and local emergency management and emergency response
organizations. Specifically, FEMA was to assist with planning,
training, equipment, and exercises necessary to build and sustain
capability to respond to any emergency or disaster. FEMA also underwent
an agencywide reorganization in 2001 to streamline the agency and
devote more employee effort to service delivery by bringing together
programs that shared complementary missions. FEMA's Preparedness,
Training, and Exercises Directorate merged with its Response and
Recovery Directorate and became the Readiness, Response, and Recovery
Directorate. FEMA also created the External Affairs and Administration
and Resource Planning Directorates.
The terrorist attacks of September 11, 2001 prompted additional changes
at FEMA. FEMA led the federal response to aid victims of the September
11 attacks and afterward took on a growing role in promoting emergency
preparedness, largely focused on preparedness for future terrorist
attacks. FEMA's ONP was assigned increased responsibility for working
with first responders, such as police, fire, emergency medical, and
public health personnel, to ensure that they were trained and equipped
to deal with weapons of mass destruction. FEMA underwent another
reorganization in fiscal year 2002, when the Readiness, Response, and
Recovery Directorate that was created in fiscal year 2001 was split
into the National Preparedness Division and the Response and Recovery
Division.
In March 2003, FEMA--which had been an independent agency since its
inception--became part of the newly created DHS. In accordance with the
Homeland Security Act of 2002 and subsequent determination orders
issued by OMB, FEMA's assets and responsibilities were transferred to
DHS's EP&R Directorate. The Undersecretary of EP&R assumed the
responsibilities of the Director of FEMA, and EP&R retained use of the
name FEMA. Many of the changes in FEMA's resources from 2003 to 2005
can be attributed to FEMA's transfer to DHS and its shifting
organizational responsibilities, as shown in figure 1 below.
Figure 1: Programs and Associated Funding That Moved into and out of
FEMA from March 1, 2003 through Fiscal Year 2005 (in Millions of
Dollars):
[See PDF for image]
Source: GAO analysis of FEMA data.
[End of figure]
In total, over $1.3 billion in funding for new or significantly
expanded programs came into FEMA between the beginning of fiscal year
2003 and fiscal year 2004, and nearly $1.5 billion left FEMA by fiscal
year 2005. Although the movement of programs and their associated
funding in and out of FEMA nearly balanced in dollar terms, this masks
the amount of change and the challenges described by FEMA officials as
the organization, with roughly the same number of FTE employees,
responded to its increased responsibilities, only in most cases to have
them taken away later. In the transition to DHS in fiscal year 2003,
for instance, FEMA gained over $513 million in new programs from HHS.
However, by fiscal year 2005, two of these programs and most of the
associated funding were transferred out of FEMA: the Strategic National
Stockpile was transferred back to HHS and the MMRS was transferred to
another component of DHS, leaving in FEMA just $34 million of the more
than $513 million in public health programs that had been transferred
to FEMA less than 2 years before.
FEMA also had most of its terrorism-related programs transferred to
DHS. In the transition, nearly $998.9 million in existing FEMA
preparedness programs that were deemed to be terrorism-related were
transferred from FEMA to the Office of Domestic Preparedness (ODP) in
DHS. Most of what remained in FEMA was not considered homeland security-
related,[Footnote 9] a designation based on the National Strategy for
Homeland Security and used by the administration and OMB to evaluate
funding priorities.[Footnote 10] Since the September 11, 2001 terrorist
attacks, the administration's guidance for preparation of agency budget
submissions has encouraged agencies to hold nonhomeland security,
nondefense funding level.[Footnote 11] For fiscal years 2003 through
2005 the President's budget requests for most of FEMA's programs have
been consistent with this policy.
In addition to resource fluctuations associated with its changing
responsibilities, some FEMA resources were transferred to establish a
departmental structure at DHS. OMB requested that a total of $125
million be transferred from component entities for DHS start-up costs.
Of this $125 million, FEMA's share was $32 million. OMB officials
involved with the DHS transition said OMB reviewed the relative size of
agency budgets and staffing levels, their levels of unobligated
balances, and the services they received from their parent departments
to get a sense of the components' appropriate relative share of the
start-up costs. Yet, according to our analysis of a letter from OMB to
the Chairman of the Senate Committee on Appropriations dated December
20, 2002, FEMA paid about the same amount as each of the other three
larger contributing agencies, which transferred entities such as the
Immigration and Naturalization Service, Transportation Security
Administration, Coast Guard, U.S. Customs Service, and U.S. Secret
Service.[Footnote 12]
After DHS was established, additional payments that FEMA made to
support ongoing departmental operations also affected its resources. In
the period after Hurricane Katrina, the FEMA director who had served
through the storm publicly claimed that FEMA's resources were
compromised as a result of being "taxed" by DHS. Although that
individual is no longer at FEMA, this claim was repeated by current
FEMA officials with whom we spoke.[Footnote 13] These assessments were
actually payments made to DHS's Working Capital Fund (WCF), a type of
intragovernmental revolving fund that agencies use to support services
that are shared across the agency. The DHS WCF supports a number of
activities--including payroll, governmentwide mandated service
activities (such as e-government initiatives), and software licensing,
many of which FEMA would have had to pay for as an independent agency.
In fact, FEMA had a WCF when it was an independent agency before it
transferred to DHS. In the transfer, FEMA's WCF became DHS's WCF.
WCF billing notifications for fiscal year 2005--the first year for
which sufficient data are available--do indicate that FEMA may have
been assessed a disproportionate amount for the WCF compared to several
larger entities in DHS. According to the WCF billing notifications and
DHS officials, the WCF assessments for that year were based on the
number of FTE employees in an entity, the amount of funding that DHS
defined as an entity's "discretionary budget,"[Footnote 14] or how
frequently an entity used a particular service. The entity with the
largest percentage of FTEs was the Transportation Security
Administration. The entity with the largest percentage of DHS
discretionary budget was the U.S. Coast Guard. Table 3 below shows for
fiscal year 2005 the share of FEMA, Transportation Security
Administration, and U.S. Coast Guard FTEs and discretionary funding
relative to DHS as a whole, the percent that each organization was
assessed for fiscal year 2005 relative to the total amount assessed by
the WCF, and the percent of the organization's discretionary funding
that the assessment represented.
Table 3: Illustration of Three Entities' Share of DHS FTEs, Funding,
and Assessments for the DHS WCF for Fiscal Year 2005:
DHS entity: Emergency Preparedness and Response (FEMA);
Percent of DHS FTEs used for billing purposes: 1.9;
Percent of DHS discretionary funding used for billing purposes: 2.08;
percent of total WCF assessment: 6.19;
Percent of WCF assessment relative to entity's discretionary budget:
3.88.
DHS entity: Transportation Security Administration;
Percent of DHS FTEs used for billing purposes: 38.2;
Percent of DHS discretionary funding used for billing purposes: 14.14;
percent of total WCF assessment: 6.96;
Percent of WCF assessment relative to entity's discretionary budget:
0.64.
DHS entity: U.S. Coast Guard;
Percent of DHS FTEs used for billing purposes: 4.8;
Percent of DHS discretionary funding used for billing purposes: 27.24;
percent of total WCF assessment: 5.45;
Percent of WCF assessment relative to entity's discretionary budget:
0.26.
Source: GAO analysis of DHS data.
[End of table]
As the table shows, FEMA paid more than the entity with the largest
percentage of DHS's discretionary budget--the U.S. Coast Guard--and
nearly the same amount as the DHS entity with the largest percentage of
DHS's FTEs--the Transportation Security Administration. According to
our analysis of the WCF billing notifications, items that were based on
usage or participation (i.e., are not simply correlated with number of
FTEs or amount of discretionary funding) could have accounted for up to
$15.8 million of FEMA's $18.7 million assessment. However, a closer
examination of what DHS labeled algorithms shows that the way usage or
participation was factored into the calculations in many cases was not
straightforward; it was often based on a combination of unweighted
variables, some of which related to the number of FTEs or the amount of
funding. This again raises questions about how assessments actually
were determined.[Footnote 15] Because a number of usage charges
actually related to FTEs or funding, it is unlikely that an agency with
a workforce and budget the size of FEMA's could have used the same
amount of resources as its much larger counterparts.
A DHS official acknowledged that finding the "right size" of the
different components' assessments has been an ongoing challenge and
that the WCF algorithms are being improved to ensure fairness and
equity. Several FEMA officials with whom we spoke confirmed that the
process has improved and attributed this in part to congressional
oversight of the WCF.
FEMA program officials said that FEMA's share of DHS start-up costs and
its assessment for the WCF directly affected the level of service they
were able to provide from fiscal years 2004 to 2005. Several officials
said that the WCF assessments in particular contributed to a hiring
freeze. FEMA reported in its Fiscal Year 2005 Mid-Year Budget Review
report to DHS that it froze hiring for over 500 positions in September
2004 to ensure availability of funding for all onboard staff. DHS
clarified that the hiring freeze was temporary--lasting only until
January 2005--and was instituted primarily to allow FEMA to complete a
baseline staffing review and implement its Position Management program.
Nonetheless, nearly all of the FEMA program officials that we spoke
with said that this hiring freeze made it difficult to run existing
programs or contributed to delays in implementing new programs. In
addition, FEMA officials said that the hiring freeze further compounded
the effects of the increases in attrition that began after the
September 11, 2001 terrorist attacks.
Resource Trends for FEMA's Day-to-Day Operations from Fiscal Year 2001
to 2005 Cannot Be Fully Understood, Because FEMA Lacks Adequate Data:
Organizational changes unquestionably affected resources at FEMA, but
the extent to which they affected resources for FEMA's day-to-day
operations cannot be fully understood because FEMA lacks adequate
information on the resources associated with such operations. To ensure
that FEMA's day-to-day operations are efficiently and effectively
supporting the agency's disaster relief mission, FEMA must
strategically plan for and manage these functions. Simply having data
about transactions or decisions is not enough; strategic planning and
management requires data and tools that would enable FEMA to identify
the resources associated with its day-to-day operations. However, FEMA
lacks adequate data in a number of areas, including reallocations of
resources among programs, projects, and activities, staffing levels,
and, in some cases, FEMA appropriations allocated for grant programs.
Not only would such data help FEMA better manage its day-to-day
resources, but, as we have previously reported,[Footnote 16] having
sufficient information on resource investments, such as budget
documents combined with performance data, provides a valuable tool to
assist members of Congress in their oversight responsibilities.
Throughout all the organizational changes one thing that remained
consistent was that the level of management and oversight of FEMA's
resources once appropriations had been enacted was minimal. For
example, although reprogramming actions--shifts in resources within an
appropriation between offices, divisions, or activities that occur
during the fiscal year--affect resource availability, FEMA does not
capture data in a way that makes it practical to analyze reprogramming
trends. According to FEMA staff, a financial auditing firm had reached
the same conclusions when it tried to perform an analysis of
reprogramming actions several years earlier. A FEMA official said
budget analysts receive between 500 and 1,000 reprogramming requests
every year. However, this official said that budget analysts do not
assess the appropriateness of a reprogramming request; they simply
check requests against FEMA's apportionment to ensure that the funding
is available and that the request complies with applicable rules and
laws. Once approved, FEMA captures information about reprogramming
actions on a transaction-by-transaction basis in its financial
management system, which is not equipped to provide trend information
about reprogrammings in the aggregate.[Footnote 17] Without this
information, FEMA cannot know whether reprogramming decisions made
during the year have gone for the highest organizational priorities or
determine definitively what resources support day-to-day operations.
While FEMA is not required by law to aggregate its reprogramming data,
nothing prevents FEMA from developing additional aggregations of data
for management purposes, particularly in light of its unique operating
and funding environment.
FEMA not only lacked useful information on funding changes that
occurred during the year, but until fiscal year 2005 it was also unable
to produce accurate information on the number of positions it had and
where they were located in the organization. Despite improvements in
the information that is available, FEMA still uses multiple and
disparate systems, managed by different offices, to gather information
about its staff levels. The Budget Office maintains FTE data; the Human
Resources Division maintains data about the number of "onboard"
employees and separations; and the Office of Plans and Programs
maintains the "Manpower Database" to track the number of positions and
their location in the organization.
Moreover, FEMA does not have a positive definition of which activities
constitute its day-to-day operations--FEMA has categorized much of what
it does on a day-to-day basis simply as "nondisaster," even though many
of those activities are necessary to support its disaster relief
mission. As a result, FEMA could not provide information that was
sufficient to allow us to accurately report on the resources associated
with its day-to-day operations. When asked by the DHS Office of the
Inspector General and later by us to identify the resources associated
with its operations, FEMA divided its annual funding and FTE data into
three categories--operating expenses, other FEMA programs, and
DRF.[Footnote 18] The FEMA Budget Office presented the summary data as:
(1) "FEMA without DRF" (the sum of operating expenses and other FEMA
programs), (2) DRF, and (3) total. Because DRF funding is primarily
available only in response to a specific, presidentially declared
disaster, we attempted to use the "FEMA without DRF"--or "non-DRF"--
data as a proxy for day-to-day operations. However, the non-DRF
category presents an inaccurate picture of FEMA's day-to-day operations
for two reasons. First, it includes some funding, such as for grants,
that is not available to FEMA for its day-to-day operations because
FEMA distributes it to states and local governments. Neither FEMA's
Budget Office nor the program offices responsible for grants
administration were able to separate out the amount of funding
allocated for grants from other operating expense funding provided in
the same account. In these cases, rather than demonstrating that
consideration had been given to how much of the resources available for
day-to-day operations should be used instead to fund grants, FEMA could
only report on how much had been obligated for grants, subsidies, and
other contributions. Second, the non-DRF data leaves out a key
component of FEMA's day-to-day operations--the Disaster Support
Activity (DSA). Although part of the DRF, the DSA provides funding for
ongoing capabilities, such as training, that are not readily
attributable to any one specific declared disaster. FEMA has deemed
these support expenditures essential to providing (1) timely disaster
response, (2) responsive customer service, and (3) cost-effective
program management and delivery. (See app. I for more details.) Without
a clear understanding of the resources associated with its day-to-day
operations, FEMA lacks the data that would enable it to identify areas
that are working well, opportunities for improvement and, ultimately,
where best to invest resources.
FEMA's Lack of Strategic Management Tools Compounded Problems It Faced
in Coping with Shifting Resources:
FEMA Lacks a Strategic Workforce Plan:
A strategic workforce plan is integral to defining the appropriate
level of staffing, identifying the critical skills needed to achieve
the mission, and eliminating gaps to prepare the agency for future
needs. Strategic workforce planning, also called human capital
planning, helps an organization align its staffing with its current and
emerging mission and programmatic goals. This includes developing long-
term strategies for acquiring, developing, and retaining an
organization's total workforce, including full-and part-time federal
staff and contractors. This is especially important in a dynamic
environment in which the need for changing technologies and skills are
coupled with constrained budgets.
In the wake of Hurricane Katrina, considerable attention was given to
the fact that FEMA had been under its authorized staffing level for
several years,[Footnote 19] but FEMA has not developed a strategic
workforce plan, and therefore cannot demonstrate that the authorized
FTE level and positions are appropriate. FEMA did not have a strategic
workforce plan at any time between fiscal years 2001 and 2005 and it
did not know until January 2005 how many positions it had or where they
were located in the organization. At that time, FEMA inventoried its
existing positions and used that information to establish a "baseline"
for the number and type of positions in the agency. Although FEMA
officials said this baseline represented the organization's staffing
needs, in fact it was only the number of positions in the organization
at that point in time and did not represent an assessment of the
agency's composition and needs. In addition, this baseline does not
include any information about the size or composition of its contractor
workforce--which FEMA officials said is a growing component of the
organization's total workforce. Furthermore, FEMA's authorized FTE
levels may not be realistic as funding has become more constrained.
OMB's most recent budget formulation guidance directed all federal
agencies to review their authorized FTE levels to bring them in line
with available funding.
We are not the first to note FEMA's lack of a strategic workforce plan.
In 2001, FEMA received an unsatisfactory rating for Human Capital
initiatives in the President's Management Agenda scorecard, OMB's
assessment of the management of federal agencies. The scorecard
results, published in the Fiscal Year 2003 Budget of the United States
Government, noted that FEMA lacked a strategy for linking human capital
to fiscal resources and agency goals and that FEMA needed to develop a
workforce-restructuring plan that addressed how the agency will attract
and retain personnel with the skills to perform core agency functions
including program oversight and analysis. In 2004, OPM recommended that
FEMA develop a comprehensive human capital plan, including a thorough
workforce analysis that establishes staffing levels aligned with FEMA's
mission, goals, and organizational objectives. Most recently, the Post-
Katrina Emergency Reform Act of 2006 included a provision that requires
FEMA to develop a strategic workforce plan within 6 months of enactment
of the act.
FEMA included workforce planning as a priority in its 2003 to 2008
Strategic Plan and, in September 2005, FEMA awarded a 1-year contract
to a consulting firm to help the agency with the technical aspects of
developing its workforce plan. However, FEMA's workforce planning
efforts have not been conducted in accordance with leading practices in
this area. As we have previously reported, the first step in strategic
workforce planning is to set strategic direction,[Footnote 20] but
according to FEMA officials, the workforce planning effort is being
conducted without such a perspective. Instead, it is being conducted
from the bottom up, division by division. A FEMA official told us that
the instability created by FEMA's frequent reorganizations has made
strategic workforce planning difficult. Instead of identifying mission-
critical needs, the agency began workforce planning in divisions of
FEMA that were relatively stable, that is, those that were less likely
to be reorganized. FEMA's goal is to complete two divisions per year,
with a goal of covering the entire agency by 2009. However, one
official speculated that ongoing changes at DHS and FEMA may delay the
completion of plans for all divisions. Although this approach may seem
pragmatic, it is more likely to result in plans that meet the immediate
needs of individual divisions rather than produce an integrated, long-
term strategy for the entire agency.
As part of a workforce planning effort, we have noted in previous work
that agencies should develop human capital strategies--including
succession planning, training, and staff development--to eliminate gaps
between the future and current skills and competencies needed for
mission success.[Footnote 21] FEMA, however, lacks a succession plan
and does not have a coordinated or strategic approach to employee
training or development.
FEMA Has Not Engaged in Succession Planning:
Succession planning--a process by which organizations identify,
develop, and select their people to ensure an ongoing supply of
successors who are the right people, with the right skills, at the
right time for leadership and other key positions--is especially
important for organizations that are undergoing change.[Footnote 22] In
fact, according to one participant at a GAO forum on mergers and
transformation, private sector experience with mergers and acquisitions
is that over 40 percent of executives in acquired companies leave
within the first year and 75 percent within the first 3 years.[Footnote
23] Though FEMA's experience was less dramatic, succession planning was
described as nonexistent and several officials cited the lack of
succession planning as the agency's weakest link. Many FEMA managers
described the loss of institutional knowledge when senior employees
left in the transition to DHS and how those Senior Executive Service
(SES) and other managers that remained often covered vacant positions,
performing more than one job at a time. From fiscal year 2002--the last
year that FEMA was an independent agency--through fiscal year 2005,
FEMA lost over 25 percent of its permanent SES employees. As SES
employees generally represent the most experienced and senior segment
of the federal workforce, they are critical to leadership continuity,
institutional knowledge, and expertise. Nor was there an experienced
mid-level cadre to mitigate these losses: 16 percent of FEMA's career
GS-15 staff were new to their positions in fiscal year 2004. Although
turnover was to be expected, FEMA must recruit key talent to limit the
effect of these departures.
In addition to helping FEMA replace people who have left or are leaving
in the near term, succession planning is important as a forward-looking
exercise to ensure that FEMA can respond to emerging human capital
challenges (e.g., the predicted federal retirement wave). Like the rest
of the government, FEMA faces the possibility of losing a significant
percentage of staff--especially at the managerial and leadership
levels--to retirement. About a third of FEMA's SES and GS-15 leaders
were eligible to retire in fiscal year 2005, and OPM data projects that
this percentage will increase to over half by the end of fiscal year
2010.[Footnote 24] This increases the importance of thinking about what
knowledge, skills, and abilities are important--simply replacing staff
without thought would miss a chance to set direction for the future.
FEMA Does Not Have a Coordinated or Strategic Approach to Employee
Training or Development for Its Permanent Full-Time Employees:
We have previously reported that agencies need to invest resources,
including time and money, to ensure that employees have the
information, skills, and competencies they need to work effectively in
a rapidly changing and complex environment.[Footnote 25] However,
FEMA's training and development programs are not designed to ensure
this because FEMA does not have a coordinated or strategic approach to
training and development programs for its PFT staff. For example,
FEMA's training requirements are not aligned with reported needs. FEMA
training officials identified training in human resources management,
financial management, and subject matter expertise as the areas of
greatest need for the agency, but FEMA's training requirements do not
reflect these. In addition, FEMA does not prioritize funding to ensure
that the most important training needs are addressed first. We were
told that training funds are generally available on a first-come, first-
served basis.
Moreover, FEMA does not have an integrated system to track employee
training and, therefore, no way of reliably tracking the cost of
training, who has received it, or how successful it has been. As a
result, it is extremely difficult for the agency to monitor the
development of critical skills and competencies in its employees, have
accurate and reliable data to document the total costs of training
efforts, or assess how training and development efforts contribute to
improved performance and greater capacity to meet new and emerging
challenges.
FEMA Does Not Have Business Continuity Plans for Its Day-to-Day
Operations:
FEMA operates much like a volunteer fire department in that all FEMA
employees are expected to be on call during disaster response and no
FEMA personnel are exclusively assigned to its day-to-day operations.
While the volunteer fire department model may work in addressing a
short-term incident, FEMA staff can be deployed for weeks or months.
This makes planning for business continuity management (e.g.,
identifying which day-to-day operations must continue and how they will
be staffed) a paramount concern.[Footnote 26] However, FEMA does not
have guidelines on what constitutes a mission-critical position and has
not conducted an assessment of what minimum level of support is
necessary. As a result, it has no guidelines for which personnel either
cannot be deployed or can be deployed only if sufficiently trained
backups are available--although DHS Office of the Inspector General
staff said that payroll and facilities support have been left intact
during disasters. FEMA officials told us that nondisaster programs are
maintained on an ad hoc basis when permanent staff are deployed and the
agency does not have provisions for continuing programs when program
managers are called into response duties.
Some FEMA managers told us that the lack of such planning has
negatively affected day-to-day operations during disaster response
efforts. An official from one program branch told us that the branch
has had as few as one or two staff members left to run it when 80
percent were called to work on disaster operations in either the field
or headquarters. To provide a contingency backup for one program, FEMA
established contractor-supported Regional Management Centers in each
region. Officials explained they could not have a $50 million program
shut down every time a disaster occurs. However, the existence of these
centers does not prevent the slowing down of operations during a
disaster since there are functions contractors cannot perform. Only
federal employees can set policy, sign contracts, or disburse grant
funding. Without an understanding of who holds a mission-critical
position for day-to-day operations and an assessment of what minimum
level of support is necessary, it is unlikely that managers or
employees can be held accountable for day-to-day operations and the
probability of failure in providing necessary support for the disaster-
relief mission goes up.
Conclusions:
Whether FEMA is a part of DHS or an independent entity, more attention
needs to be paid to its day-to-day operations. This is an organization
that not only has to deal with the repercussions of the prior year's
hurricane season and the cumulative workload of other earlier disasters
while preparing for future disasters, but also during the period of our
review had been reorganized four times in 3 years, assumed significant
responsibilities for preparedness activities that were subsequently
transferred out, and inherited an assortment of programs from other
agencies, some of which were gone within a year. In this environment,
anything seen as "nondisaster" was likely to get less attention. Since
most of FEMA's day-to-day operations--even those necessary to support
disaster relief activities--are considered "nondisaster" by FEMA, day-
to-day operations were likely to suffer. Without a vision of what day-
to-day operations should be and how they contribute to achieving the
disaster-related mission, FEMA is more likely to continue to react
rather than manage its way through future changes. Even FEMA staff's
strong sense of mission, which was apparent in our interviews, is no
substitute for a plan and strategies for action.
FEMA's piecemeal efforts to address the management challenges we
highlighted are unlikely to produce desired results. These challenges
are not new to FEMA and are not just the result of becoming a component
of DHS. In 2001, FEMA was scored as unsatisfactory in all five areas of
the President's Management Agenda. To make progress, FEMA is going to
have to change the way it does business. In this report we have
suggested some first steps. They include developing meaningful
management reports that allow FEMA to consider tradeoffs in resources
for day-to-day operations, a strategic workforce plan that identifies
skills needed now and informs hiring in the future, training guidelines
and requirements tailored to critical mission needs, a clear business
continuity plan for when staff are deployed, and systems that can help
FEMA operate more efficiently and effectively. Implementing such
changes will not only improve the information available for planning
and management, but they will also provide greater accountability to
Congress and the public.
Recommendations for Executive Action:
We recommend that the Secretary of Homeland Security direct the
Director of FEMA to take the following actions:
* Define what resources--staff and funding--are associated with FEMA's
day-to-day operations, link the investment of these resources to
achievement of its disaster relief mission, and collect sufficient data
in a way that enables managers to monitor progress and support resource
priorities for these operations.
* In responding to the strategic workforce planning requirements
included in the Post-Katrina Emergency Reform Act of 2006, Pub. L. No.
109-295 Title VI, apply the key principles of strategic workforce
planning discussed in our report on such planning efforts (GAO-04-39),
including:
* establishing strategic direction;
* assessing the number of employees and critical skills that FEMA
needs;
* conducting succession planning to identify, develop, and select
people to ensure an ongoing supply of successors; and:
* establishing training and development requirements and tracking
systems to ensure that staff have the necessary training to carry out
their day-to-day and disaster response functions.
* Develop business continuity plans for the day-to-day operations to
ensure that critical program functions are maintained at a sufficient
level when PFT employees are called to respond to a disaster. These
plans should include clear guidelines on who holds a mission-critical
position at headquarters and, therefore, either cannot be deployed for
disaster-relief efforts or needs to have alternates designated to
provide backup in their absence. FEMA should consider formally cross-
training and preparing ancillary workforce members (e.g., contractors,
employees in other job titles/descriptions, retirees) to maintain daily
functionality in the presence of anticipated staffing shortages when a
disaster strikes.
* In carrying out these recommendations, FEMA should work with Congress
to ensure that FEMA has provided Congress with the information
necessary to conduct its oversight role. Specifically, FEMA should work
with Congress to ensure that its financial information is sufficient
for use in the following oversight activities:
* facilitating an understanding of the agency's operations;
* informing the development, analysis, and debate of alternative
policies;
* supporting a historical perspective from which to evaluate future
plans, budgets, and spending proposals;
* assessing FEMA's accountability for actual results when compared to
budgets; and:
* evaluating program costs.
Agency Comments:
We requested comments on a draft of this report from the Secretary of
Homeland Security. DHS did not provide formal comments on the draft
report but did provide technical comments, which we incorporated where
appropriate. OMB staff also provided technical comments on an excerpt
of the draft that referred to our discussion with OMB; we incorporated
these where appropriate.
We are sending copies of this report to the Secretary of Homeland
Security, the Director of OMB, the Director of FEMA, and other
interested parties. We will also make copies available to others upon
request. In addition, the report will be available at no charge on
GAO's Web site at [Hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report please
contact me at (202) 512-9142 or irvings@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff making key contributions to
this report are listed in appendix II.
Signed by:
Susan J. Irving:
Director, Federal Budget Issues:
[End of section]
Appendix I: Analysis of Resources for Day-to-Day Operations:
Given its mission, much of what the Federal Emergency Management Agency
(FEMA) does is defined by disasters, and FEMA has largely divided its
operating world into two categories--disaster and nondisaster. In this
division, much of what FEMA does on a day-to-day basis is categorized
as "nondisaster." This masks the fact that many of these operations are
essential to preparing the agency to carry out its disaster relief
mission. When asked by the Department of Homeland Security (DHS) Office
of the Inspector General and later by GAO to identify the resources
associated with its operations, FEMA divided its annual funding and
full-time equivalent (FTE) data into three categories--operating
expenses, other FEMA programs, and Disaster Relief Fund (DRF).[Footnote
27] The FEMA Budget Office presented the summary data as: (1) "FEMA
without DRF" (the sum of operating expenses and other FEMA programs),
(2) DRF, and (3) total. Because DRF funding is primarily available only
in response to a specific, presidentially declared disaster, we
attempted to use the "FEMA without DRF"--or "non-DRF"--data as a proxy
for day-to-day operations. However, the non-DRF presents an inaccurate
picture of FEMA's day-to-day operations. Using this data skews FEMA's
resource trends, because resources not associated directly with its
operations, such as grants, cannot be disaggregated and resources from
the DRF that are associated with its day-to-day operations are not
included.
Figure 2 below illustrates this point. If the non-DRF data are used as
a measure of day-to-day operations, it appears that FEMA's funding for
these operations rose significantly from fiscal year 2002 to 2003 and
declined sharply from fiscal year 2003 to 2004--with the most dramatic
decline occurring in operating expenses. Over this same period, as
shown in figure 3, corresponding FTEs remained fairly level.
Figure 2: Trends in Annual Funding for FEMA's Non-DRF Operations,
Fiscal Years 2001-2005:
[See PDF for image]
Source: GAO presentation of FEMA data.
Note: FEMA's summary data for "FEMA without DRF" did not include other
supplemental funding or funding for programs that were transferred out
of FEMA at any point over this period. However, we added funding for
these items back in to their appropriate category to present a more
accurate picture of FEMA's actual funding for "operating expenses" and
"other FEMA programs" over this time period.
[End of figure]
Figure 3: Trends in FTEs for FEMA's Non-DRF Operations, Fiscal Years
2001-2005:
[See PDF for image]
Source: GAO presentation of FEMA data.
Note: FEMA's summary data did not include FTEs from fiscal years 2001
to 2003 for two programs that were transferred out of FEMA in fiscal
year 2003--the Inspector General and the Working Capital Fund. However,
we added the FTE for these programs back in to the figure to present a
more accurate picture of FEMA's actual FTEs for "operating expenses"
and "other FEMA programs" over this time period.
[End of figure]
The non-DRF funding category presents an inaccurate picture of
resources for FEMA's day-to-day operations for two reasons. First, it
includes funding, such as grants, that is not available to FEMA for its
day-to-day operations because FEMA provides it to states and local
governments. Much of the fluctuation seen in figure 2 can actually be
attributed to changes in grant programs and associated funding that
occurred through organizational changes--rather than funding increases
and decreases for the same set of activities. For example, when FEMA's
Fire Grants program grew by $595 million between fiscal years 2002 and
2003, and then left FEMA by fiscal year 2004, under FEMA's
categorization this appeared as an increase in operational funds in
2003 and a decrease in 2004. In fact, those resources were passed on in
the form of grants, mostly to state and local governments, and, except
for the administration of the grants, should have had little--certainly
much less than shown--effect on FEMA's resource trends for its day-to-
day operations. Second, this presentation leaves out a key component of
FEMA's day-to-day operations--the Disaster Support Activity (DSA).
Although part of the DRF, the DSA provides funding for ongoing
capabilities, such as training, that are not readily attributable to
any one specific declared disaster.[Footnote 28] FEMA itself has deemed
these support expenditures essential to providing (1) timely disaster
response, (2) responsive customer service, and (3) cost-effective
program management and delivery. Since the non-DRF funding category
includes grant resources, which are not spent by FEMA, but excludes
funding for DSA, which clearly supports day-to-day functions, this
category does not present an accurate picture of FEMA's day-to-day
resources.
If FEMA were to create a definition of day-to-day operations that
addresses these issues, changes in FEMA's resource trends might appear
less dramatic. In figure 4 below, we used the non-DRF data provided by
FEMA, added funding for DSA, and excluded funding for readily
identifiable grants (i.e., those that are authorized in separate
appropriation accounts). We were unable to back out grants that were in
appropriations accounts that included both grant and other funds,
because neither FEMA's Budget Office nor the program offices
responsible for grants administration were able to tell us how much
funding was allocated for grants separately from other operating
expense funding provided in the same account. In these cases, rather
than demonstrating that consideration had been given to how much of the
resources available for day-to-day operations should be used instead to
fund grants, FEMA could only report on how much had been obligated for
grants, subsidies, and other contributions.
Using this definition, funding for FEMA's operating expenses and DSA
appears fairly constant, while funding for FEMA's other programs rose
in fiscal years 2002 and 2003 and declined in fiscal year 2005. During
this same period, as shown in figure 5, FEMA's FTEs for those day-to-
day operations also remained relatively constant.
Figure 4: Estimate of Funding for FEMA's Day-to-Day Operations, Fiscal
Years 2001-2005:
[See PDF for image]
Source: GAO analysis FEMA data.
[End of figure]
Figure 5: Estimate of Actual FTEs for FEMA's Day-to-Day Operations,
Fiscal Years 2001-2005:
[See PDF for image]
Source: GAO analysis of FEMA data.
[End of figure]
[End of section]
Appendix II: GAO Contact and Staff Acknowledgments:
GAO Contact:
Susan J. Irving, (202) 512-9142 or irvings@gao.gov:
Acknowledgments:
In addition to the contact named above, Denise Fantone, Tiffany Tanner,
Amy Rosewarne, Brian Friedman, and Heather Hill made significant
contributions to this report. Thomas Beall, Carlos Diz, William
Doherty, Kevin Jackson, Hannah Laufe, John Mingus, and Gregory Wilmoth
also provided key assistance.
FOOTNOTES
[1] The President's budget request also includes some funding for the
Disaster Relief Fund (DRF). This request is based on current DRF
balances and estimates of past and future funding requirements for
responding to presidentially declared disasters.
[2] FTE is a measure of employment used by the federal government to
calculate the total number of regular straight-time hours worked by
employees divided by the number of compensable hours applicable to each
fiscal year.
[3] The Robert T. Stafford Disaster Relief and Emergency Assistance
Act, as amended, (Pub. L. No. 93-288), known as the Stafford Act,
constitutes the statutory authority for most federal disaster response
activities, especially as they pertain to FEMA and FEMA programs. This
act authorizes the President to issue a "major disaster" declaration to
provide a wide range of federal aid to states determined to be
overwhelmed by hurricanes or other disasters. FEMA is tasked with
coordinating the response under the Stafford Act.
[4] From enactment of the Homeland Security Act of 2002 in November
2002 to September 2005, 11 preparedness functions or authorities were
transferred from FEMA. In October 2005, FEMA's remaining preparedness
functions were transferred to DHS's new Preparedness Directorate, which
was created to consolidate preparedness assets from across DHS,
facilitate grants, and oversee nationwide preparedness efforts.
[5] Post-Katrina Emergency Management Reform Act of 2006, Pub. L. No.
109-295, Title VI.
[6] FEMA administers a mix of programs in the four areas of emergency
management--Preparedness (now known as Readiness), Mitigation,
Response, and Recovery. These programs include the predisaster
mitigation, flood mitigation, map modernization, National Flood
Insurance, and public health programs.
[7] From fiscal years 2001 to 2005, the following numbers of FTE
employees were paid out of the DRF: fiscal year 2001 = 2,521; fiscal
year 2002 = 2,865; fiscal year 2003 = 3,289; fiscal year 2004 = 3,330;
fiscal year 2005 = 5,458.
[8] According to FEMA officials, the CORE was developed in the early
1990s to improve management of administrative overhead in the DRF and
to make disaster relief operations more efficient. The number of CORE
FTE employees at FEMA from fiscal years 2001 to 2005 was as follows:
fiscal year 2001 = 706; fiscal year 2002 = 733; fiscal year 2003 = 732;
fiscal year 2004 = 730; fiscal year 2005 = 685.
[9] Homeland Security encompasses those activities that are focused on
combating terrorism and occur within the United States and its
territories. According to the Budget of the U.S. Government, not all
activities carried out by DHS constitute homeland security funding
(e.g., response to natural disasters, Coast Guard search and rescue
activities).
[10] The National Strategy for Homeland Security, which was published
by the Office of Homeland Security in July 2002, is available at
[Hyperlink, http://www.whitehouse.gov/homeland/book/] (downloaded Oct.
4, 2006).
[11] Since 2003, the President's budget requests for discretionary
funding for nonhomeland security, nondefense programs have increased an
average of 2.82 percent per year, while the President's requests for
discretionary funding for Homeland Security and Department of Defense
programs have increased an average of 4.62 percent per year.
[12] The Department of Justice was to transfer $30 million from the
Immigration and Naturalization Service; the Department of
Transportation was to transfer $25 million from the Transportation
Security Administration and $3.5 million from the Coast Guard; the
Department of the Treasury was to transfer $30 million from the U.S.
Customs Service and $4.5 million from the U.S. Secret Service.
[13] Although the term "tax" was used by officials, we use assessment
to describe charges to DHS organizations for centralized services.
[14] DHS determined what constituted "discretionary budget." This
distinction is not synonymous with funding that is considered
discretionary based on its distinction as such in an appropriation act.
For example, FEMA received $1,146,800,000 in non-DRF funding (including
supplemental funding) for fiscal year 2005, but DHS determined that its
discretionary funding for the purposes of WCF assessments was
$480,649,000.
[15] For example, the explanation given for the DHS's Chief Procurement
Officer's Strategic Sourcing Initiative charge was that it was based on
actual usage of several variables. However, the algorithm for that
particular charge was stated as: "Average of Component Percentage (of
Percentage Share of each of three key measures: # of acquisition
personnel, dollar volume, # of transactions) X initiative Amount
Required = Contribution per component." The number of acquisition
personnel would be constrained by FTEs and the dollar volume of
transactions would be constrained by the budget. Furthermore, since the
"initiative Amount Required" is not a straightforward number, it is
hard to replicate the calculation for any component.
[16] GAO, Congressional Oversight: FAA Case Study Shows How Agency
Performance, Budgeting, and Financial Information Could Enhance
Oversight, GAO-06-378 (Washington, D.C.: Mar. 8, 2006).
[17] FEMA maintains a paper trail on reallocation requests for 3 years,
but does not have a process or mechanism for analyzing this
information.
[18] From fiscal year 2001 to fiscal year 2003, FEMA's operating
expenses consisted of funding from its Salaries and Expenses account
and its Emergency Management Planning and Assistance account. In fiscal
years 2004 and 2005, funding from the following accounts made up FEMA's
operating expenses: Office of the Under Secretary, Preparedness
Mitigation Response and Recovery, and Administrative and Regional
Operations. In fiscal year 2005, the following accounts composed FEMA's
"other programs" Pre-Disaster Mitigation, Flood Mitigation Fund,
National Flood Insurance Fund, Emergency Food and Shelter, Disaster
Assistance Direct Loan Program Account, Public Health Programs, and
Flood Map Modernization. FEMA also reported data on its supplemental
funding in two categories--DRF and Other. FEMA received supplemental
DRF funding every year of our review, while other supplemental funding
was provided only in fiscal years 2002, 2003, and 2005.
[19] Reports issued by the U.S. Senate, the U.S. House of
Representatives, the White House, and the DHS Office of the Inspector
General all pointed to staffing shortages at FEMA as affecting the
agency's ability to achieve its mission in the wake of Hurricane
Katrina. Many of the FEMA officials that we spoke with also pointed to
staffing as a primary challenge at the agency.
[20] As we reported in Human Capital: Key Principles for Effective
Strategic Workforce Planning, GAO-04-39 (Washington, D.C.: Dec. 11,
2003), the steps of the strategic workforce planning process are as
follows: (1) set strategic direction, (2) conduct a workforce gap
analysis, (3) develop workforce strategies to fill the gaps, and (4)
evaluate and revise strategies. Throughout the process, it is important
to have the involvement of management and employees.
[21] See GAO-04-39.
[22] For more information about succession planning, see GAO, Human
Capital: Succession Planning and Management Is Critical Driver of
Organizational Transformation, GAO-04-127T (Washington, D.C.: Oct. 1,
2003).
[23] GAO, Highlights of a GAO Forum, Mergers and Transformation:
Lessons Learned for a Department of Homeland Security and Other Federal
Agencies, GAO-03-293SP (Washington, D.C.: Nov. 14, 2002), p. 9.
[24] Projected retirement eligibility rates as of the end of fiscal
year 2010 assume that everyone onboard at the end of fiscal year 2005
stays employed at FEMA until September 30, 2010. The eligibility rates
would drop as eligible staff retired between October 1, 2005 and
September 30, 2010.
[25] For additional information on training and development efforts,
please see GAO, Human Capital: A Guide for Assessing Strategic Training
and Development Efforts in the Federal Government, GAO-04-546G
(Washington, D.C.: Mar. 1, 2004).
[26] The goal of business continuity management is to keep operations
running in the event of a disruption to normal business processes. As a
program, it includes activities such as planning, risk analysis,
providing backup facilities, succession plans, and impact assessments.
[27] From fiscal year 2001 to fiscal year 2003, FEMA's operating
expenses consisted of funding from its Salaries and Expenses account
and its Emergency Management Planning and Assistance account. In fiscal
years 2004 and 2005, funding from the following accounts made up FEMA's
operating expenses: Office of the Under Secretary, Preparedness
Mitigation Response and Recovery, and Administrative and Regional
Operations. In fiscal year 2005, the following accounts composed FEMA's
"other programs" Pre-Disaster Mitigation, Flood Mitigation Fund,
National Flood Insurance Fund, Emergency Food and Shelter, Disaster
Assistance Direct Loan Program Account, Public Health Programs, and
Flood Map Modernization. FEMA also reported data on its supplemental
funding in two categories--DRF and Other. FEMA received supplemental
DRF funding every year of our review, while other supplemental funding
was provided only in fiscal years 2002, 2003, and 2005.
[28] The following activities are part of disaster support: Fixed
Processing and Storage; Response Readiness; Recovery and Mitigation;
Information Systems; Training; Disaster Support Operations; Disaster
Dependent Management.
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