Disaster Recovery
FEMA's Public Assistance Grant Program Experienced Challenges with Gulf Coast Rebuilding Gao ID: GAO-09-129 December 18, 2008The devastation caused by the 2005 Gulf Coast hurricanes presented the nation with unprecedented rebuilding challenges. The Federal Emergency Management Agency's (FEMA) Public Assistance (PA) grant program is a key tool for providing funds to support recovery, including rebuilding public schools, roads, and utilities. GAO was asked to examine the amount of PA grants FEMA has provided for rebuilding the Gulf Coast; challenges in the day-to-day operation of the PA program; and human capital challenges; as well as actions taken to address them. Toward this end, GAO reviewed relevant laws, PA regulations and procedures, and analyzed data from FEMA's National Emergency Management Information System. GAO also interviewed federal officials from FEMA and the Department of Homeland Security's (DHS) Office of the Federal Coordinator for Gulf Coast Rebuilding as well as more than 60 officials from state government and eight localities in Louisiana and Mississippi.
Funding for PA grants related to the 2005 Gulf Coast hurricanes is already more than $11 billion, surpassing that of any previous disaster, and will likely be higher than FEMA's total cost estimate of $13.2 billion. About 90 percent of these funds have gone to the states of Louisiana and Mississippi, about half of which have passed from the states to grant applicants to date. GAO identified challenges in the following broad areas, many of which contributed to slowing down rebuilding projects. (1) Project Development: Challenges in the development of PA projects included difficulties determining the amount of damage that was disaster-related, using PA program flexibilities to rebuild in a way that meets postdisaster needs, assessing project scope including whether to repair or replace damaged structures, estimating project costs, and having sufficient resources to initiate projects. For example, assessing the damage to New Orleans's water and sewer system was complicated by the difficulty distinguishing disaster-related from preexisting damage. Estimating the cost of PA projects presented special challenges because of unusual market conditions for labor and materials in the postdisaster economy. (2) Information Sharing and Tracking: GAO identified challenges in sharing information among federal, state, and local participants in the PA process as well as in tracking the status of projects. For example, in Louisiana, information sharing was made more difficult in the absence of an effective document-sharing system and because key FEMA and state officials who review PA applications are located in different cities. (3) Project Approvals and Appeals: FEMA's approval decisions on some projects were reversed after applicants had already moved ahead with construction. In addition, decisions on appeals were often not made within required time frames due to the large number of rebuilding projects. (4) Human Capital: Human capital challenges at all levels of government underlie many of the above challenges and also slowed rebuilding projects. Shortages of experienced and knowledgeable staff were particularly problematic during the initial stages of rebuilding. FEMA's early reliance on temporary rotating staff did not provide the level of continuity needed for the complex demands of Gulf Coast rebuilding. Among the actions DHS has taken to address these challenges are the finalization of a PA catastrophic disaster recovery concept plan that recognizes the need to more easily tailor projects to meet postdisaster conditions; the development of new management information systems to better track and manage projects and increase the transparency of PA funding; and the creation of a credentialing program for employees.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-09-129, Disaster Recovery: FEMA's Public Assistance Grant Program Experienced Challenges with Gulf Coast Rebuilding
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Report to the Committee on Homeland Security and Governmental Affairs,
U.S. Senate:
United States Government Accountability Office:
GAO:
December 2008:
Disaster Recovery:
FEMA's Public Assistance Grant Program Experienced Challenges with Gulf
Coast Rebuilding:
GAO-09-129:
GAO Highlights:
Highlights of GAO-09-129, a report to the Committee on Homeland
Security and Governmental Affairs, U.S. Senate.
Why GAO Did This Study:
The devastation caused by the 2005 Gulf Coast hurricanes presented the
nation with unprecedented rebuilding challenges. The Federal Emergency
Management Agency‘s (FEMA) Public Assistance (PA) grant program is a
key tool for providing funds to support recovery, including rebuilding
public schools, roads, and utilities.
GAO was asked to examine the amount of PA grants FEMA has provided for
rebuilding the Gulf Coast; challenges in the day-to-day operation of
the PA program; and human capital challenges; as well as actions taken
to address them. Toward this end, GAO reviewed relevant laws, PA
regulations and procedures, and analyzed data from FEMA‘s National
Emergency Management Information System. GAO also interviewed federal
officials from FEMA and the Department of Homeland Security‘s (DHS)
Office of the Federal Coordinator for Gulf Coast Rebuilding as well as
more than 60 officials from state government and eight localities in
Louisiana and Mississippi.
What GAO Found:
Funding for PA grants related to the 2005 Gulf Coast hurricanes is
already more than $11 billion, surpassing that of any previous
disaster, and will likely be higher than FEMA‘s total cost estimate of
$13.2 billion. About 90 percent of these funds have gone to the states
of Louisiana and Mississippi, about half of which have passed from the
states to grant applicants to date. GAO identified challenges in the
following broad areas, many of which contributed to slowing down
rebuilding projects.
* Project Development. Challenges in the development of PA projects
included difficulties (1) determining the amount of damage that was
disaster-related, (2) using PA program flexibilities to rebuild in a
way that meets post-disaster needs, (3) assessing project scope
including whether to repair or replace damaged structures, (4)
estimating project costs, and (5) having sufficient resources to
initiate projects. For example, assessing the damage to New Orleans‘s
water and sewer system was complicated by the difficulty distinguishing
disaster-related from preexisting damage. Estimating the cost of PA
projects presented special challenges because of unusual market
conditions for labor and materials in the post-disaster economy.
* Information Sharing and Tracking. GAO identified challenges in
sharing information among federal, state, and local participants in the
PA process as well as in tracking the status of projects. For example,
in Louisiana, information sharing was made more difficult in the
absence of an effective document-sharing system and because key FEMA
and state officials who review PA applications are located in different
cities.
* Project Approvals and Appeals. FEMA‘s approval decisions on some
projects were reversed after applicants had already moved ahead with
construction. In addition, decisions on appeals were often not made
within required time frames due to the large number of rebuilding
projects.
* Human Capital. Human capital challenges at all levels of government
underlie many of the above challenges and also slowed rebuilding
projects. Shortages of experienced and knowledgeable staff were
particularly problematic during the initial stages of rebuilding.
FEMA‘s early reliance on temporary rotating staff did not provide the
level of continuity needed for the complex demands of Gulf Coast
rebuilding.
Among the actions DHS has taken to address these challenges are the
finalization of a PA catastrophic disaster recovery concept plan that
recognizes the need to more easily tailor projects to meet post-
disaster conditions; the development of new management information
systems to better track and manage projects and increase the
transparency of PA funding; and the creation of a credentialing program
for employees.
What GAO Recommends:
GAO makes several recommendations to the Secretary of Homeland Security
including to direct FEMA to improve information sharing within the PA
process and to further enhance continuity and communication when staff
rotate on and off PA projects. In commenting on a draft of this report
DHS generally agreed with our recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-09-129]. For more
information, contact Stanley J. Czerwinski at (202) 512-6806 or
czerwinskis@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Cost and Scope of PA for Gulf Coast Rebuilding Is Very Large and Will
Likely Increase:
Challenges in the Day-to-Day Operation of the PA Program Slowed
Rebuilding:
Human Capital Challenges Contributed to Delays:
Conclusions:
Recommendations for Executive Action:
Agency Comments:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Department of Homeland Security:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: FEMA-Reported Number of Projects (Which Include Versions)
Compared to Numbers of Unique Project Worksheets:
Table 2: Number of Preparers Working on Large Permanent Work PA
Projects:
Figures:
Figure 1: Overview of the Public Assistance Process:
Figure 2: Comparison of Total PA Funds for Selected Large Disasters:
Figure 3: Louisiana and Mississippi Federal PA Dollars Available:
Figure 4: Public Assistance Funds Paid to Applicants in Louisiana and
Mississippi:
Figure 5: FEMA's Public Assistance Appeal Process:
Abbreviations:
EMMIE: Emergency Management Mission Integrated Environment:
FEMA: Federal Emergency Management Agency:
GOHSEP: Governor's Office of Homeland Security and Emergency
Preparedness:
MEMA: Mississippi Emergency Management Agency:
NEMIS: National Emergency Management Information System:
PA: Public Assistance:
PKEMRA: Post-Katrina Emergency Management Reform Act of 2006:
Stafford Act: Robert T. Stafford Disaster Relief and Emergency
Assistance Act:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
December 18, 2008:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The size and scope of the devastation caused by the 2005 Gulf Coast
hurricanes presented the nation with unprecedented rebuilding
challenges, and an example of how catastrophic events can overwhelm the
capacity of federal, state, and local resources in both response and
recovery. More than 3 years after the disaster and as the Gulf Coast
again undertakes recovery efforts in the wake of Hurricanes Ike and
Gustav, critical aspects of recovery, such as rebuilding the
infrastructure of state and local schools, roads, and utilities,
continue to require federal, state, and local government involvement.
You asked us to examine the federal government's support of state and
local efforts to restore Gulf Coast public infrastructure and
facilities through the Federal Emergency Management Agency's (FEMA)
Public Assistance (PA) grant program. The PA program funds both
emergency work projects, such as debris removal, and permanent work
projects, such as the restoration of damaged buildings, roads, and
public utilities. In response to your request, we report on: (1) the
amount of PA grants FEMA has provided, or plans to provide, for
rebuilding the Gulf Coast; (2) challenges federal, state, and local
governments experienced in the day-to-day operation of the PA program,
especially in developing projects, sharing and tracking project
information, and making key project decisions, and the actions that
have been taken to address these challenges; and (3) the human capital
challenges and successes federal, state, and local governments
experienced with the program during Gulf Coast rebuilding and the
actions taken to address them.
To conduct our review we obtained and reviewed PA regulations and
procedures and interviewed federal officials from FEMA, the Department
of Homeland Security's (DHS) Office of the Inspector General, and
Office of the Federal Coordinator for Gulf Coast Rebuilding. We also
obtained and analyzed PA data from FEMA's National Emergency Management
Information System (NEMIS) providing information on projects including
cost estimates, status of projects, and project location. Further, to
obtain information on the experiences of state and local officials
involved in the implementation of the PA program, we interviewed more
than 60 state and local officials from eight localities in Louisiana
and Mississippi. These two states were most affected by the 2005 Gulf
Coast hurricanes and were the focus of our review.[Footnote 1] We
interviewed and obtained information from key state grantees and local
applicants who had knowledge of, experience with, or a leadership role
in the PA program in these two states. For more information on our
scope and methodology see appendix I. We conducted this performance
audit from August 2007 through November 2008 in accordance with
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
Results in Brief:
Due to the massive size and unprecedented scope of the devastation
caused by the 2005 Gulf Coast hurricanes, federal funding for PA grants
is already more than $11 billion, surpassing that of any previous
disaster. The final cost will likely exceed FEMA's estimate of $13.2
billion because this figure does not reflect additional projects that
have yet to be approved, and the final cost for projects already
approved may be higher than the agency's initial estimates. Moreover,
the true cost of the PA program in the Gulf Coast is unknown since FEMA
does not track its administrative expenses by program, and these costs
are likely to be significant. The vast majority of PA funding made
available to the Gulf Coast states has gone to Louisiana and
Mississippi, and most of this has been dedicated to large rebuilding
projects. To date, about half of all funds provided to these two states
have been passed along to local entities. One reason for this is that
the state often reimburses local entities for large rebuilding projects
after work is performed, which can take many years to complete. Another
is that, at times, the funding process has been slowed because of
challenges in developing projects, sharing information, and making
decisions regarding project approvals and appeals discussed below.
Finally, as is the case with overall cost, the number of PA projects in
the Gulf Coast is also very large. However, we found the way FEMA
reports on this specific metric to Congress and the public is
potentially misleading. Specifically, the figure provided in PA data
reports regularly issued by the agency does not represent the number of
unique PA projects, but also includes revisions that have been made to
these projects, which roughly doubles the number reported.
Federal, state, and local officials told us that they experienced a
wide range of challenges in the day-to-day operation of the PA program,
many of which were magnified because of the sheer number of rebuilding
projects following the 2005 Gulf Coast hurricanes. These challenges
related to three broad areas: developing projects, sharing information,
and making key project decisions. In addition, human capital challenges
at the federal, state, and local level underlie many of these day-to-
day operational difficulties.
First, we identified several challenges involving the process of
developing PA projects which, at times, contributed to delays and
increased costs particularly for many large permanent work projects.
These included difficulties in: (1) determining the amount of damage
that was actually disaster-related, (2) using PA program flexibilities
to rebuild to the post-disaster needs of PA grant applicants, (3)
assessing project scope and deciding whether to repair or rebuild, (4)
estimating project costs, and (5) obtaining resources to initiate
projects. For example, estimating the cost of rebuilding projects was
made particularly difficult because of the unusual labor and material
costs of the post-disaster economy. Low cost estimates required the
reassessment of damage later in the project development process,
resulting in delays. Also, many cash-strapped localities lost their
revenue base following the disaster and faced challenges in initiating
rebuilding projects, resulting in project delays, particularly since
the PA program is geared toward reimbursement after construction. For
each of these challenges, the scope of the damage and the magnitude of
the rebuilding that followed the 2005 Gulf Coast hurricanes
considerably worsened the effect.
Second, because the PA process is complex and requires collaboration
among federal, state, and local officials, effective sharing of project
information is especially important. We identified challenges to
sharing project information among intergovernmental participants during
project development, and limitations in how the status of projects is
tracked. For example, PA applicants in Louisiana told us of the need to
repeatedly resubmit estimates, receipts, and invoices due to the lack
of an effective system for sharing such documentation. In contrast, in
Mississippi, participants used a secure online accounting system to
manage and share supporting documentation. Also, information sharing
was made more challenging in Louisiana because key officials from FEMA
and the state agency responsible for reviewing and approving PA
applications were not located in the same city. In Mississippi, state
and local officials administered the program from the same facilities,
which they said had multiple benefits for information sharing including
facilitating regular meetings on project development issues. In
addition, FEMA does not routinely track project status after funds are
made available to the state and before project closeout, nor does it
obtain information by specific building site. While we recognize that
this approach toward tracking PA projects may be appropriate for most
disasters, in this case such information is important due to the high
level of interest from Congress and the public in following the
progress of Gulf Coast rebuilding.
Third, FEMA's approach to making decisions regarding project approvals
and appeals also presented challenges to moving forward with
rebuilding. For example, in some cases after applicants received
approval for their projects from FEMA and had already moved ahead with
construction, the agency decided to reconsider and ultimately reverse
its decision. As a result of these reversals, some applicants told us
that they were hesitant to move forward on other projects. Further,
decisions on project appeals were sometimes not made within the time
frames required under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act (Stafford Act).
Human capital challenges at the federal, state, and local level
underlie many of the difficulties we identified in the day-to-day
operation of the PA program after the 2005 Gulf Coast hurricanes. Given
the magnitude of these hurricanes, it is not surprising that all of the
federal, state, and local officials with whom we spoke reported
challenges associated with inadequate human capital capacity,
especially early on in the recovery. As a result, FEMA and the states
relied upon inexperienced staff to implement the PA program in
Mississippi and Louisiana. Many of these inexperienced staff received
abbreviated, or in some cases no, training on important PA processes,
which affected their ability to effectively implement the program. For
example, many FEMA staff responsible for developing projects were not
trained on the cost-estimating method that FEMA preferred. In addition,
limitations in local human capital capacity--especially early on in the
recovery--hindered staff ability to actively participate in key aspects
of the PA process including conducting damage assessments and preparing
the significant documentation required during project development.
Federal, state, and local human capital challenges at times slowed
project development due to the lack of staff to conduct damage
assessments and scope projects. The lack of continuity in FEMA staffing
during project development also hindered rebuilding progress. FEMA's
reliance on temporary rotating staff did not provide the level of
continuity needed for the complex, long-term demands of Gulf Coast
rebuilding. For example, in the absence of reliable electronic access
to the case management files, rotating staff did not always document
information and decisions about specific projects, which delayed
project development because applicants then had to repeat discussions
with their new FEMA representatives or provide duplicate documentation.
Applicants also reported that there was often no notice of when a new
FEMA representative was assigned to their projects and no "hand off"
meeting with all parties to share project information. While several
applicants told us that staff continuity has improved, challenges in
this area early in the recovery process slowed the progress of
rebuilding projects.
In response to challenges in the day-to-day operation of the PA program
on the Gulf Coast and to the human capital issues underlying many of
these, FEMA is taking several actions. FEMA's Public Assistance
Catastrophic Disaster Recovery Concept Plan, finalized in May 2008,
recognizes the need for PA regulations to allow applicants to more
easily tailor projects to meet post-disaster needs. In addition, the
plan recognizes the need for FEMA, the state, and the applicant to
develop more comprehensive damage descriptions in order to reduce
conflicts regarding project cost estimates later in the process. FEMA
officials told us that both of these efforts, along with a range of
other initiatives related to the plan, are in development or underway
and are expected to be complete by March 2009. FEMA managers in
Transitional Recovery Offices in Mississippi and Louisiana have taken
steps to more effectively gather and report on the status of PA
projects. In addition, FEMA, working with the Office of the Federal
Coordinator for Gulf Coast Rebuilding, established a transparency
initiative in February of 2008 to make detailed information available
on a publicly accessible Web site regarding selected buildings and
projects in the Gulf Coast receiving PA funds. Furthermore, FEMA
officials are also taking steps to improve national data collection
through a new information-management system, called the Emergency
Management Mission Integrated Environment (EMMIE), which, according to
agency officials, will provide better tracking and management of PA
projects for future disasters.
FEMA has responded to challenges associated with project approval
decisions by improving the timeliness of appeal decisions after
creating a special appeals team in March 2006 dedicated to helping
resolve a backlog of appeals. The agency also made changes to the
appeals process within Louisiana so that an applicant's appeal is not
reviewed by the same office that made the project decision in the first
place, but rather by an appeals team outside of FEMA's Louisiana
office. In response to human capital challenges, according to FEMA
officials, the agency is using a cadre of more experienced staff to
administer the PA program. Further, FEMA officials reported that they
have implemented changes during recovery from the 2005 Gulf Coast
hurricanes, which they recently institutionalized during the recovery
of Hurricanes Gustav and Ike. These changes included recruiting and
hiring more long-term staff to function as a single point of contact
for these disasters. State and local officials in the Gulf Coast report
that staff support from FEMA has improved. Finally, to help address
concerns about the lack of continuity among staff, FEMA's Transitional
Recovery Office in Louisiana has begun to use a team approach to
sharing project information so that no one staff person is solely
responsible for retaining knowledge about a specific project.
To help DHS improve the operation of the Public Assistance grant
program and build on some of the actions it has taken to date, we
recommend that the Secretary of Homeland Security direct the
Administrator of FEMA to take several actions to incorporate lessons
learned from FEMA's experiences on the Gulf Coast by: (1) improving
reporting on PA grants by better defining information presented in
FEMA's regular reports to Congress and the public and by providing the
number of unique PA projects in addition to the data currently reported
by the agency; (2) improving collaboration and information sharing
within the PA process by identifying and disseminating practices that
facilitate more effective communication among federal, state, and local
entities communicating and tracking PA project information; (3)
developing protocols to improve information and document sharing among
FEMA staff who rotate on and off projects; and (4) communicating the
timing of expected FEMA staff rotations to applicants directly affected
by those staffing changes.
We provided a draft of this report to the Secretary of Homeland
Security for comment and DHS generally agreed with our recommendations.
The department also provided technical comments, which we incorporated
where appropriate. DHS's written response is provided in appendix II.
We also provided drafts of relevant sections of this report to state
and local officials involved in the specific PA examples cited in this
report. We incorporated their comments as appropriate.
Background:
The Stafford Act defines FEMA's role during response and recovery after
a major disaster.[Footnote 2] One of the principal programs that FEMA
operates to fulfill its role is the PA program. Under the program, FEMA
provides grants to state and local government agencies, Indian tribes,
authorized tribal organizations, and specific types of nonprofit
organizations. In this process, one of FEMA's key objectives is to
maintain proper management controls, thereby creating a climate of
stewardship and accountability in the use of federal funds.
As in the case of many federal grant programs, FEMA provides funds to a
state government, which, in turn, passes these funds along to a local
grant applicant. Unlike a typical federal grant program, there are no
caps on the amount of funding an applicant can receive under the PA
program as long as the project meets eligibility requirements.[Footnote
3] The PA program categorizes funds into broad groups: emergency work
(such as debris removal or emergency protective measures to preserve
life and property) and permanent work (such as repairing and replacing
damaged buildings, utilities, roads and bridges, recreational
facilities, and water-control facilities).
PA is a complex and multistep grant program administered through a
partnership between FEMA and the state grantee. In Gulf Coast recovery,
the role of Louisiana's state grantee was initially carried out by the
Governor's Office of Homeland Security and Emergency Preparedness
(GOHSEP). In January 2008, Louisiana's Governor assigned the Louisiana
Recovery Authority as the lead state agency working with FEMA on
recovery operations. In Mississippi, this role is carried out by the
Mississippi Emergency Management Agency (MEMA). The program is
structured to provide financial assistance while ensuring a high level
of accountability and control over spending. Thus, it entails an
extensive paperwork and review process based upon a number of specific
eligibility rules that outline the types of damage that can be
reimbursed by the federal government and steps that federal, state, and
local governments must take in order to document eligibility.
After a disaster, FEMA typically works with the affected state
government to set up a field office at or near the disaster site to
administer PA grants. FEMA staffing usually consists of (1) permanent
full or part-time employees, (2) nonpermanent reserve staff,[Footnote
4] and (3) technical-assistance contractors. In addition, the field
office is staffed by the affected state's emergency management
personnel. In general, the majority of FEMA staff assigned to the field
office consists of nonpermanent reserve staff and can be used in any
capacity, depending upon their skills, and are typically deployed for
shorter-term assignments (i.e., 90 to 120 days). Technical-assistance
contractors typically provide assistance in specialized areas such as
structural, mechanical, and civil engineering.
Federal, state, and local officials each play a significant role in
carrying out many of the steps of the PA funding process (see fig. 1).
In this process, the state is the official "grantee," while the local
government or equivalent entity is the "subgrantee" or "applicant" that
ultimately receives the funding. After a disaster is declared, FEMA and
state representatives brief applicants on the program, and FEMA assigns
a Public Assistance Coordinator as well as Project Officers and
technical specialists to assist the applicant through the PA funding
process. After determining that the applicant and type of facility are
eligible for funding, FEMA, the state, and the applicant work together
to develop a project worksheet describing the scope of work and
estimated cost. As part of FEMA's approval process, the agency also
conducts historical and environmental reviews.
FEMA generally defines a project in its 2007 Public Assistance Guide as
a logical grouping of work that will be funded as a unit. Under this
definition, a project may cover work for one damage site (e.g., all of
the damage to a single school) or for similar types of damage that one
contractor may repair at various locations (e.g., all sewer pump
stations in a city). The Stafford Act provides a simplified procedure
for smaller projects whose cost estimate is under a certain dollar
threshold.[Footnote 5]
After FEMA approves a project, funds are obligated--that is, they are
made available--to the state grantee, which, in turn, passes the funds
along to applicants.[Footnote 6] For large projects, funds are
generally distributed to applicants on a reimbursable basis after
project work is completed, although PA program rules allow applicants
to receive PA funds from states earlier under certain conditions. For
small projects, funds are provided up front to the applicant based on
FEMA's approval of the project's cost estimate.
The cost estimate or scope of work may change after project approval
when new information comes to light. For example, if an applicant
discovers that the actual costs for a project are higher than FEMA's
estimate, the applicant may apply to FEMA for additional funds.
However, if the actual cost is lower than FEMA's estimate, the
applicant will receive only the actual costs incurred. In another
example, FEMA may approve the scope of work for repairing damage to
part of a wall or ceiling, but when an applicant seeks bids to repair
the damage a contractor might conclude the entire wall or ceiling must
be replaced in order to maintain the integrity of the building. Under
these circumstances, a scope of work and cost adjustment might be
approved by FEMA.
Figure 1: Overview of the Public Assistance Process:
[Refer to PDF for image]
This figure is an illustration of an overview of the Public Assistance
Process. The following process is depicted:
1. President declares disaster;
2. State briefs applicant (FEMA may join briefing);
3. Applicant submits request for public assistance to state;
4. State reviews and submits application for public assistance to FEMA;
5. FEMA, state, and applicant have kick off meeting to discuss
projects;
6. FEMA, state, and applicant conduct site inspection and began project
worksheet formulation;
7. FEMA, state, and applicant draft version of the project worksheet;
8. Applicant submits supporting documentation for project worksheet
estimate to state;
9. State reviews and submits supporting documentation for project
worksheet estimate to FEMA.
10. FEMA reviews and approves project worksheet; (For projects over $1
million, additional review by Congress;
[Steps 8, 9, and 10 in the process may be repeated]
11. FEMA obligates funds to state 9Applicant may file appeal[A]);
12. State monitors and inspects projects;
13. State disperses obligated funds to applicant[B];
14. Applicant receives funds and distributes to contractors as work is
completed;
[Steps 12, 13, and 14 in the process may be repeated]
15. Applicant submits eligible large project cost documentation;
16. State reviews eligible large project cost documentation;
17. FEMA reviews eligible large project cost documentation and adjusts
obligations as necessary;
[Steps 15, 16, and 17 in the process may be repeated]
18. Process closed out.
Source: GAO analysis of FEMA information.
[A] See fig. 5 for PA appeals process description.
[B] Partial payments may be made to the applicant during the execution
of the projects. For small projects (equal to or under $55,500), the
state may disburse the federal share at this step.
[End of figure]
In October 2006 Congress passed the Post-Katrina Emergency Management
Reform Act of 2006 (PKEMRA) which, among other changes, reorganized
FEMA, elevated FEMA's position within DHS, and increased FEMA's
independence.[Footnote 7] PKEMRA gave FEMA new human capital
authorities and responsibilities, including requiring FEMA to develop a
strategic plan on human capital, authorizing recruitment and retention
bonuses for difficult-to-fill positions, and providing for the
professional development of FEMA employees through rotations within
DHS. Further, FEMA was to establish a Surge Capacity Force of trained
individuals prepared to respond to disasters. PKEMRA also made specific
changes to the Public Assistance program such as authorizing incentives
for the timely closing of PA projects and making educational nonprofit
facilities eligible for PA funds. PKEMRA also authorizes FEMA to
conduct a PA pilot program intended to reduce the cost, increase the
flexibility, and expedite the provision of assistance. FEMA established
new procedures under the pilot program and waived certain Stafford Act
provisions and PA regulations for the purposes of the program.
To respond to the 2005 Gulf Coast hurricanes the federal government has
already committed a historically high level of resources--more than
$126 billion as of August 2008. More than half of this assistance was
directed to emergency assistance and meeting shorter-term needs arising
from the hurricanes, such as relocation assistance, emergency housing,
immediate levee repair, and debris removal efforts. FEMA's PA grant
program is a significant federal tool to support longer-term recovery
efforts. One year after the disaster, the Brookings Institution
estimated that approximately $35 billion of the federal resources had
been provided to support longer-term rebuilding efforts. In addition to
the PA program, other examples of federal longer-term rebuilding
assistance include the U.S. Department of Housing and Urban
Development's Community Development Block Grant program primarily to
help rebuild homes and apartments; the U.S. Department of
Transportation's funding for roads, bridges, and aviation facilities;
U.S. Small Business Administration's low-cost disaster loan program;
and tax incentives and relief for hurricane victims and small
businesses through the Gulf Opportunity Zone Act.[Footnote 8]
Cost and Scope of PA for Gulf Coast Rebuilding Is Very Large and Will
Likely Increase:
Federal funding for the PA program in the Gulf Coast has already
surpassed that of any previous disaster, and the total cost will likely
be higher than FEMA's estimate. Costs are likely to increase because
the agency's estimate of the total PA cost does not reflect additional
projects that have yet to be approved or the final costs for already-
approved projects, which may be higher than FEMA's original estimates.
In addition, FEMA's estimates do not include its own administrative
costs for the PA program. As in the case of costs, the number of PA
projects in the Gulf Coast is unprecedented but FEMA's reporting to
Congress and the public on the number of total projects may have been
misleading. As of September 2008, about 90 percent of PA funding made
available to the Gulf Coast states has gone to Louisiana and
Mississippi primarily for large permanent rebuilding projects. Within
these two states, about half of this funding has been provided to local
PA applicants to date. This is because many large projects take several
years to complete and PA generally reimburses applicants after work is
complete, as well as the challenges that will be discussed later in
this report.
Cost for the PA Program in the Gulf Coast Has Surpassed Any Previous
Disaster, and Is Likely to Increase Further:
As of September 2008, FEMA had made $11.1 billion available to PA
applicants in the Gulf Coast. FEMA estimates that PA funding in the
Gulf Coast will reach approximately $13.2 billion, surpassing all
previous disasters, but final costs will likely be even higher. The PA
program accounts for a substantial amount of the federal assistance
committed to longer-term rebuilding efforts in the Gulf Coast region.
Already, FEMA's estimate for the PA program in the Gulf Coast has
greatly surpassed PA funding for any prior disaster, including the $4.8
billion of federal PA funds spent for the 9/11 terrorist attacks on the
World Trade Center (see fig. 2). Furthermore, total PA funding will
likely be higher than FEMA's estimate because: (1) some projects, not
yet approved, are not reflected in FEMA's total; and (2) the cost of
some projects already reflected in FEMA's recent estimate may turn out
to be higher once FEMA has refined the scope and costs of these
projects. For example, FEMA has already significantly increased its
estimate of total cost from its projections of July 2007, when it
estimated total spending of $10.3 billion. The gap between this
estimate and FEMA's September 2008 estimate of $13.2 billion indicates
that anticipated PA funding increased by $2.9 billion in the
intervening 14 months.
Figure 2: Comparison of Total PA Funds for Selected Large Disasters:
[Refer to PDF for image]
This figure is a vertical bar graph depicting the following data:
Disaster: Hurricane Andrew (1993);
PA Funds: $0.8 billion.
Disaster: Northridge earthquake (1994);
PA Funds: $4.4 billion.
Disaster: 9/11 terrorist attack, WTC (2001);
PA Funds: $4.8 billion.
Disaster: Florida hurricanes (2004);
PA Funds: $2.5 billion.
Disaster: Hurricanes Katrina and Rita (2005);
PA Funds: $11.1 billion.
Source: FEMA data.
Note: This graphic is in nominal dollars and is not adjusted for
inflation. All above data are as of April 30, 2008, except for the
figure for the 2005 Gulf Coast hurricanes, which is current up to
September 11, 2008. The "Florida hurricanes" refers to Hurricanes
Charley, Frances, Ivan, and Jeanne, as well as Tropical Storm Bonnie.
[End of figure]
In order to understand the entire cost of the PA program to the federal
government, it is necessary to account for administrative costs as
well. FEMA's estimate captures some of the administrative costs
incurred by applicants and states.[Footnote 9] However, for a full
accounting, it is also necessary to consider the cost to FEMA for its
administration of the program. Given the large number of contract staff
and FEMA employees involved in administering the program, these
expenses are likely extensive. For example, during 2006, staffing for
field locations in Louisiana and Mississippi exceeded 3,500 staff. FEMA
provided us with the cost for contractors supporting the administration
of the PA program in the Gulf Coast as $1.7 billion through April 2008.
However, other administrative expenses such as FEMA salaries, travel
allowances, and overhead are unknown because the agency estimates such
costs centrally, rather than by program.
Large Rebuilding Projects in Louisiana and Mississippi Account for the
Vast Majority of PA Funds Made Available to Gulf Coast States:
As of September 2008, the states of Louisiana and Mississippi have
received about 90 percent of all PA funds distributed to the four Gulf
Coast states. Specifically, Louisiana and Mississippi have received
$7.2 billion and $2.9 billion respectively, while Texas has received
$919 million and Alabama has received $116 million. (See fig. 3 for
dollars made available to Louisiana and Mississippi for each PA
category of damage.) The vast majority of the funding in Louisiana and
Mississippi has gone toward large projects, even though small projects
greatly outnumber larger projects. For instance, there were 23,886
projects in Louisiana and Mississippi funded for less than $55,600
whose total value equaled $222 million. On the other hand, 321 projects
funded for $5 million or more had a total value of $5.2 billion.
Figure 3: Louisiana and Mississippi Federal PA Dollars Available:
[Refer to PDF for image]
This figure is a multiple vertical bar graph depicting the following
data:
Louisiana and Mississippi Federal PA Dollars Available (dollars in
millions):
Emergency work: Debris removal, Louisiana: $1,171;
Emergency work: Debris removal, Mississippi: $708.
Emergency work: Proactive measures, Louisiana: $1,943;
Emergency work: Proactive measures, Mississippi: $377.
Permanent work: Roads and bridges, Louisiana: $89;
Permanent work: Roads and bridges, Mississippi: $62.
Permanent work: Water control facilities, Louisiana: $37;
Permanent work: Water control facilities, Mississippi: $1.
Permanent work: Public buildings, Louisiana: $2,860;
Permanent work: Public buildings, Mississippi: $600.
Permanent work: Public utilities, Louisiana: $289;
Permanent work: Public utilities, Mississippi: $819.
Permanent work: Recreational or other, Louisiana: $124;
Permanent work: Recreational or other, Mississippi: $142.
Administrative work: State management, Louisiana: $76;
Administrative work: State management, Mississippi: $97.
Source: GAO analysis of FEMA data as of July 2008.
[End of figure]
Of the four states affected by the 2005 Gulf Coast hurricanes,
Louisiana and Mississippi have disbursed relatively the least amount of
funding for projects (51 percent and 53 percent respectively). However,
they are also the states with the largest amount of funding going
toward permanent rebuilding projects, which can take several years to
complete, and thus reimburse. For example, in Louisiana, PA applicants
have received 77 percent of the $3.2 billion made available to the
state for emergency work, while they have only received 29 percent of
the $3.8 billion made available to the state for permanent rebuilding.
Mississippi has a similar distribution of funds (see fig. 4). While
there has been some concern about why more of these funds have not been
distributed to applicants, there are at least two key reasons for this
distribution of funds. Since the bulk of PA program dollars are
distributed as reimbursements to the applicant, the applicant typically
does not receive full funding for projects until costs have been
incurred--even though FEMA has already made these funds available to
the state. Most funds for emergency projects have already been passed
along to applicants. However, permanent rebuilding projects can take
several years to complete, so a significant portion of funds for these
projects have not been passed on to applicants. Additional factors
contributing to this gap include some of the operational challenges
that we identify later in this report.
Figure 4: Public Assistance Funds Paid to Applicants in Louisiana and
Mississippi:
[Refer to PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Public Assistance Funds Paid to Applicants in Louisiana and
Mississippi:
Louisiana: Emergency work;
Funds available to the state: $3.2 billion;
Funds paid to applicant: $2.5 billion.
Louisiana: Permanent work;
Funds available to the state: $3.8 billion;
Funds paid to applicant: $1.1 billion;
Louisiana: Total funds;
Funds available to the state: $7.2 billion;
Funds paid to applicant: $3.7 billion.
Mississippi: Emergency work;
Funds available to the state: $1.1 billion;
Funds paid to applicant: $1.0 billion.
Mississippi: Permanent work;
Funds available to the state: $1.7 billion;
Funds paid to applicant: $0.5 billion.
Mississippi: Total funds;
Funds available to the state: $2.9 billion;
Funds paid to applicant: $1.5 billion.
Source: FEMA data.
Note: Data are from FEMA's September 2008 Global Report on Public
Assistance in the Gulf Coast.
[End of figure]
Number of PA Projects in the Gulf Coast Is Very Large, but FEMA's
Reporting of This May Be Misleading:
As in the case of overall costs, the number of PA projects in the Gulf
Coast is very large. The number of projects in the Gulf Coast, as
reported by FEMA, is projected to be more than 81,000, with Louisiana
alone accounting for more than 44,000. According to FEMA, the average
number of projects for major disasters occurring between October 1998
and January 2007 was just over 700.
Although there is no question that the number of Gulf Coast rebuilding
projects is very large, the figure reported by FEMA in its status
report to Congress and the public may be misleading. This is because
the figure does not represent the number of unique PA projects, but
rather, includes the number of changes (or "versions") that have been
made to project worksheets. Our analysis of the number of projects in
Mississippi and Louisiana--the two states with the vast majority of
projects--showed that in arriving at its total number of projects, FEMA
often counted projects 2 or 3 times and in some cases project were
counted as many as 11 times. Overall, FEMA's decision to include
multiple versions in its external reports roughly doubled the total
number of projects (see table 1).
FEMA officials acknowledged that reporting on the total number of
project changes might be misleading but noted that this can be a useful
measure of FEMA workload because it captures the effort involved in
preparing multiple versions. In addition, FEMA officials noted that
they were reluctant to change reporting metrics because they believed
such a change might confuse users of the reports. We agree with FEMA
that continued reporting of the total number of project changes can be
useful--both as a measure of the projects being processed by the agency
and to provide continuity with previous data reports. However, it is
not clear why it is necessary to continue reporting this figure under
the potentially misleading label of "number of projects," nor why
information on the actual number of unique projects is not also
provided in the agency's regular PA data reports. As of November 2008,
these reports only included the total number of project versions and
not the number of unique projects.
Table 1: FEMA-Reported Number of Projects (Which Include Versions)
Compared to Numbers of Unique Project Worksheets:
Louisiana; Number of Project Worksheets as reported by FEMA (includes
all versions): 44,476;
Number of unique PWs: 21,462;
Difference: 23,014.
Mississippi; Number of Project Worksheets as reported by FEMA (includes
all versions): 22,303;
Number of unique PWs: 10,895;
Difference: 11,408.
Source: GAO analysis of FEMA National Emergency Management Information
System data as of July 2008.
[End of table]
Challenges in the Day-to-Day Operation of the PA Program Slowed
Rebuilding:
Federal, state, and local officials experienced a variety of challenges
in the day-to-day operation of the PA program in rebuilding the Gulf
Coast. These included challenges in developing projects, sharing and
communicating project information, and making and appealing project
decisions. These challenges resulted in slowing rebuilding progress.
These difficulties were exacerbated by the amount of damage from the
2005 Gulf Coast hurricanes and the sheer number of rebuilding projects
initiated in their wake.
Challenges with Developing Projects Slowed Rebuilding and, at Times,
Increased Costs:
Rebuilding projects faced significant challenges during project
development and start up, which slowed down rebuilding projects and, at
times, increased costs. A critical step in the PA process is the
completion of a project worksheet, which documents eligible work and
estimated cost. Large rebuilding projects typically involve some
modifications in finalizing the scope of eligible work and determining
related costs through the creation of subsequent "versions" of the
original project worksheet.[Footnote 10] For example, modifications
resulting in a new version may occur when, after initial building
repairs begin, additional damage is discovered. In the Gulf Coast large
PA projects faced several challenges during the project development and
start up process including difficulties in: (1) determining how much of
the damage was disaster related, (2) assessing project scope including
the decision to repair or replace structures, (3) estimating project
costs in the post-disaster environment, (4) using program flexibilities
to rebuild to post disaster needs, and (5) obtaining resources to
initiate projects. Sometimes several of these challenges were
encountered in a single project, thereby magnifying their effect. In
response to some of these challenges, FEMA, the Office of the Federal
Coordinator for Gulf Coast Rebuilding and the states of Louisiana and
Mississippi have taken a variety of actions and plan to do more.
Difficulties Determining Disaster-Related Damage:
For many rebuilding projects on the Gulf Coast, it took time to make
determinations regarding the amount of damage structures received as a
direct result of the 2005 Gulf Coast hurricanes and distinguishing this
from nondisaster related damage. This task has been complicated by a
number of factors including the overall scope of the damage caused by
the hurricanes, the large number of rebuilding projects, and the fact
that some applicants lacked records to document the predisaster
condition of buildings and infrastructure. The PA program will not
reimburse applicants for damage to buildings or infrastructure that was
the responsibility of the applicant to repair prior to a disaster (such
as deferred maintenance) or protect against after a disaster (such as
the failure to patch a damaged roof to prevent further damage to a
building's interior).
Identifying the amount of damage that already existed before the
hurricanes has been especially difficult, particularly for large
infrastructure projects such as roads and water lines. FEMA officials
noted that water lines were particularly difficult to assess because
much of the damage was underground. FEMA conducted extensive
inspections in order to make eligibility determinations for many of
these projects, and these determinations took time to work through. In
addition, disagreements between applicants and FEMA, as well as changes
to project scope decisions contributed to slowing down project
development. For example, although much of the New Orleans water and
sewer system sustained damage as a result of the disaster, FEMA and
city officials had difficulty agreeing on the amount of damage due to
the storm as opposed to that due to deferred maintenance. New Orleans
officials stated they had valid records on the condition of the city's
water and sewer lines up to January 2005--approximately 9 months before
the Hurricane Katrina. Given this gap in records, FEMA began a review
of the entire system for disaster-related damage and inspected roughly
46,000 leaks by July 2007. The agency funded the installation of flow
meters and data-logging devices to assist in determining the location
of leaks. FEMA concluded that in about 80 percent of the cases, it
could not determine whether a leak had existed prior to the 2005 Gulf
Coast hurricanes or whether it was caused by the hurricanes. In an
effort to resolve this issue, FEMA, the state, and the New Orleans
Sewer and Water Board entered into a memorandum of understanding
agreeing to engage a third-party contractor to perform a damage
assessment and propose restoration alternatives. According to FEMA
officials, the agency has since reimbursed the applicant for those
leaks that were identified as being caused by the hurricanes.
Post-disaster damage also complicated project development. Under the PA
program, in order for post-disaster damage to be covered it must be
directly related to the disaster, such as damage to roads from heavy
trucks hauling away debris, or certain cases of mold in buildings.
[Footnote 11] In addition, reasonable protective measures by the
applicant could not have prevented this damage from occurring.
Therefore, decisions on project eligibility took additional time to
sort out post-storm-related damage. For example, PA inspectors sought
to determine whether applicants protected their buildings well enough
to secure them from post-storm damage such as rain or from thieves who
stole copper pipes for their salvage value.
In St. Bernard Parish, roughly 2 years passed before FEMA and parish
field inspection teams completed identification of PA-eligible damage
to approximately 2,500 blocks of local streets. The parish had no
records to document the condition of its streets prior to the 2005 Gulf
Coast hurricanes, so according to state officials, FEMA inspections
were performed on each parish street in an attempt to distinguish
predisaster damage from that caused directly as a result of the
hurricanes. In addition, FEMA and St. Bernard Parish officials
disagreed over the standards FEMA used to determine eligibility, which
further prolonged the project-development process. In contrast,
Jefferson Parish did not encounter similar challenges with
distinguishing predisaster damage from damage directly related to the
hurricanes. This is because the parish maintained a road repair-
management information system (including a road-maintenance plan) prior
to the disaster that enabled the parish to identify preexisting road
conditions to FEMA officials, thereby helping to expedite their road-
repair projects.
Difficulties Using Program Flexibilities to Rebuild in a Way That Meets
Post-disaster Needs:
The PA program typically provides funds to restore buildings,
equipment, or infrastructure back to their condition, location, and
function before the disaster. The program does permit changes from how
things were prior to the disaster--through alternate and improved
projects--but these approaches typically come with restrictions in
funding.[Footnote 12] Since many PA applicants in the Gulf Coast found
that the population of their neighborhoods changed significantly from
pre-Katrina levels, it was important for their rebuilding projects take
into account the new conditions. In order to do this, localities often
needed time to develop and obtain agreement on broader recovery plans,
which provide a coordinated approach to rebuilding their communities.
According to FEMA officials, the Stafford Act was not designed for the
level of project reconfiguration necessary for post-Katrina rebuilding.
For example, given post-disaster population changes and educational
needs, Louisiana's Recovery School District officials sought
flexibility in rebuilding schools as well as the number of students
attending each school. Typically, the approval for an alternate or
improved project designation is done on a site-by-site basis.
Accordingly, FEMA officials initially sought rebuilding decisions from
the school district on a campus-by-campus basis to move ahead with
project development. However, it took time for school district
officials to devise a plan for rebuilding its large school system given
the changing demographic pattern of returning school age children and
the need to consider community input. These officials also wanted to
consider how much money FEMA would allow for damages when making its
final planning decisions. However, FEMA could not determine how much PA
money would be available until they were informed of the school
district's project development decisions. Recovery School District
officials devised an interim short-term plan to help ensure that school
campuses opened as quickly as possible. These challenges, coupled with
pressures to open schools in time for the school year, led to FEMA
funding approximately $70 million in temporary modular facilities. FEMA
and school district officials ultimately are working together to
resolve differences in developing the project by moving towards a
systemwide approach to rebuilding schools to address Louisiana's post-
disaster needs rather than developing projects on a campus-by-campus
basis.
St. Bernard Parish government also faced challenges with replacing
equipment to address post-disaster needs. The parish lost almost all of
its vehicles and equipment as a result of the disaster, but local
officials reported that state PA officials only allowed one-for-one and
in-kind replacements. For example, St. Bernard Parish officials claimed
that the state required them to replace one of their damaged 1988 Ford
Crown Victoria police cruisers with the same make, model, and year.
Instead, the officials wanted to use the total value of the damaged
equipment to purchase a smaller number of vehicles appropriate for
their current and future needs. It took many months to work through the
applicable rules in order to address the parish's concerns. FEMA
officials told us that they ultimately utilized the PA program's
improved-project option to provide funds from the replacement value of
older vehicles toward the purchase of new vehicles. As part of this
process, the Office of the Federal Coordinator for Gulf Coast
Rebuilding entered into a correspondence with St. Bernard Parish
officials in fall 2007 with the intent of expediting project
development offering a dedicated team to provide specialized assistance
to resolve this issue. This effort was part of a broader initiative by
the Federal Coordinator, along with FEMA, to reach out to local
officials in selected hard-hit areas to identify their top five
priority PA projects.
FEMA plans to incorporate some project development flexibilities into
its regular practices. For instance, FEMA's Public Assistance
Catastrophic Disaster Recovery Concept Plan, finalized in May 2008,
recognizes the need for PA regulations to allow applicants to more
easily tailor projects to meet post-disaster needs. In September 2008,
FEMA officials informed us that policies to address this issue as well
as a range of other initiatives related to the plan are in development
and are expected to be complete by March 2009.
Difficulties Assessing Project Scope, Including Whether to Repair or
Replace Damaged Structures:
Under PA rules, if a facility is 50 percent or more damaged, the
program will fund its replacement value. This "50 percent rule" is
important because the applicant stands to receive significantly more
money when this damage threshold is crossed. Because of the size and
complexity of the damage caused by the 2008 Gulf Coast hurricanes,
making the determination to repair or replace could be particularly
difficult. This challenge was more evident in Louisiana as FEMA and
state officials noted that the damage generally involved flooding and
wind damage so that most buildings were not completely destroyed, as
was the case with much of the damage in Mississippi.
In St. Bernard Parish local officials had plans to consolidate its
seven separate wastewater (and sewer) treatment plants prior to the
2005 Gulf Coast hurricanes in order to meet EPA compliance rules, among
other things. When parish officials developed project worksheets for
the wastewater treatment plants, they wanted to structure the projects
so that PA funds could be used to accomplish this goal, rather than
rebuilding a system that they planned to decommission. Although the
parish plan to consolidate its wastewater treatment plants was not
contingent upon whether the individual plants qualified for replacement
rather than repair, these decisions affected whether the parish would
receive enough funding to build the consolidated wastewater treatment
facility. Initial assessments led FEMA to determine that the facilities
were not sufficiently damaged to qualify for funds to pay for the
replacement of the plants, but just for their repair. According to
parish officials, the parish sought a reassessment of the damage and
after FEMA recalculated costs, they determined that two out of the
seven water treatment sites were, in fact, eligible for full
replacement, while the other five qualified for the cost of repairs. As
project issues were being discussed, heavy trucks were used to pump and
haul sewage as an interim measure until the system was repaired. These
trucks were needed to operate for a much longer-than-expected period of
time resulting in a considerable cost as well as damage to the parish's
roads. These temporary measures have already cost the federal
government more than $60 million. St. Bernard Parish officials estimate
that, had they been able to move ahead with their original plans, it
would have taken about 1½ years for the new consolidated facility to
become operational. More than 2 years have passed since the project was
proposed and rebuilding has not yet begun.
Another example of the challenges related to difficulties in
determining whether to repair or replace damaged structures involves
New Orleans's public schools. Over 3 years after the disaster, damaged
school buildings under Louisiana's Recovery School District agency are
still being assessed to determine whether they qualify for replacement
funding. According to Recovery School District officials, in some
cases, this determination was reached after the school district already
paid for architectural plans to renovate rather than replace the school
facility, thereby incurring extra expenses and further slowing
rebuilding.[Footnote 13] School district officials told us that working
through repair versus replacement eligibility for the 122 school
campuses under their control will be a very long process if delays in
assessment continue. For example, the Fannie C. Williams Elementary
School in New Orleans was initially assessed by FEMA as being less than
50 percent damaged, therefore not qualifying it for replacement. After
the Recovery School District hired an architectural and engineering
firm to reassess the damage, FEMA agreed to change its original
determination and the school qualified for replacement funding.
Difficulties Estimating Project Costs:
During Gulf Coast recovery, state and local officials reported that
FEMA's cost-estimating methods often undervalued the cost of
rebuilding, and, in many cases project estimates were conducted very
early in the project-development process before knowing the full extent
of the damage. Developing accurate cost estimates is particularly
important for alternate and improved projects. This is because these
projects rebuild the structure to be different from its predisaster
condition, but project payouts are capped at an amount estimated to
restore the structure to its predisaster condition. In contrast, in
projects that ultimately restore structures to predisaster conditions
there is no funding cap because the actual costs of rebuilding will be
funded, if reasonable.
According to federal and state officials, it was difficult to develop
rebuilding estimates because of uncertain labor and material costs
after the storms. To better address these types of situations FEMA
developed a methodology called Cost Estimating Format. This methodology
provides a uniform method of estimating costs for permanent large
projects and includes consideration of both direct costs (i.e.,
materials) and indirect costs (i.e., safety and security measures,
storage and staging, insurance, and other overhead). However, according
to senior FEMA officials, many agency staff had not been trained to use
this methodology in the aftermath of the 2005 Gulf Coast hurricanes. A
study contracted by FEMA of major disasters occurring between April and
October 2007 found that about 70 percent of FEMA staff and 50 percent
of technical assistance contractors were not trained on the Cost
Estimating Format that FEMA recommended for use in developing estimates
for projects.
In addition, FEMA, state, and local officials reported that cost
estimates were often made very early in the project-development process
before knowing the full extent of the damage. FEMA officials noted that
the earlier in the process that a cost estimate is developed, the
greater the likelihood that the estimate will be inaccurate since these
early estimates may not factor in all of the damage that exists. These
officials told us that early estimates typically cover only obvious
damage since conducting detailed investigations of damage shortly after
a major disaster can be difficult. For example, upon further
investigation of a roof, damage to the underlying flashing and
underpinnings may be discovered that was not recognized during FEMA's
initial inspection. FEMA officials stated that project officers were
focused on developing as many project worksheet estimates as they could
to facilitate the project development process. There were trade-offs,
however, in developing early estimates.
Applicants reported that low cost estimates, resulting from challenges
cited above, contributed to delays in project development until these
estimates were revised. According to testimony by the former Acting
Director of the Louisiana GOHSEP before the Subcommittee on Disaster
Recovery in July 2007, many PA rebuilding projects were underestimated
by millions of dollars. For example, out of the 23 cases he cited, the
estimated amount was less than the lowest bid that the applicant
received for the work by a factor of 1.5 to 10 times.
Because of low cost estimates, applicants were sometimes hesitant to
move forward on projects for fear that they may owe more than FEMA
would ultimately reimburse them for, despite the fact that PA rules
allow for reimbursements for large projects to be above the original
estimates if costs are reasonable. When FEMA agrees that actual repair
or rebuilding costs would significantly vary from their original
estimate, the agency updates the project scope or estimated cost by
creating a new version of the project worksheet. However, state and
local officials reported that it sometimes took several months for FEMA
to make agreed-upon changes to project worksheets--including revised
cost estimates--and applicants were responsible for covering these
costs in the meantime.
Louisiana applicants faced an additional challenge with moving forward
on projects because they reported that state law requires that
applicants identify 100 percent of their funding for projects before
they can enter into contracts to rebuild. These applicants reported
that gaps between PA estimates and contractor bids delayed rebuilding
projects since they were not able to identify 100 percent the project's
funding. FEMA officials in Mississippi noted that they increased
project worksheet cost estimates by about 20 percent to compensate for
low project cost estimates.
FEMA's PA Catastrophic Disaster Recovery Concept Plan proposes that the
agency, the state, and the applicant take steps to more effectively
develop comprehensive damage descriptions in order to reduce conflicts
regarding project cost estimates later in the process. Toward this end,
the plan acknowledges the importance of deploying sufficient resources
to promote rapid completion of damage assessments including funding for
technical assistance to applicants. According to FEMA officials, some
steps related to improving damage assessments, such as developing a
catalog of assessment methodologies, have been completed. However, an
additional task relating to this issue is still underway, and other
follow-on activities relating to the plan have yet to start.
Insufficient Resources to Initiate Projects:
State and local officials in Louisiana and Mississippi told us that
factors such as insufficient resources for up-front project costs and
contractors delaying work until they were paid also led to project
delays. Some of these challenges have been addressed during the course
of recovery.
Applicants reported challenges in covering substantial up-front costs
for project development such as the costs of hiring architectural and
engineering firms and associated human capital costs to prepare
documentation for PA requirements. Local officials told us that they
often needed to hire an architectural and engineering firm to document
the scope of damage and subsequent work to fully justify funding of
projects. However, in some cases, applicants did not have the resources
to hire an architectural and engineering firm without first obtaining
initial PA funding for the project. Also, some applicants reported that
they lacked funds to pay for staff to prepare PA documents needed to
request PA funding. Local officials noted that provisions in the PA
program that provide up-front funding can be quite burdensome to
applicants. According to FEMA officials, FEMA designed an initiative to
fund professional technical resources to support local recovery
efforts.
Initiating projects was a special challenge in Louisiana. For example,
New Orleans city officials reported that their economy was stagnant for
weeks after the storm, which led to reduced city revenues. Furthermore,
their ability to raise money was limited due to low credit ratings, and
they were unable to borrow funds to cover the costs of maintaining the
city's staff or paying for expenses such as architecture and
engineering activities as cited above. As a result, many critical
rebuilding projects were not started for several months. In another
example, a senior St. Bernard Parish official reported facing delays
until the parish identified funding provided from other recovery
funding sources to cover architecture and engineering costs for PA
projects. Specifically, the officials reported using $8.9 million that
they received from insurance refunds to pay for some of the
architecture and engineering work necessary to initiate critical PA
projects, such as the sewer system.
In addition, officials in Louisiana reported that applicants were
concerned about their ability to afford PA cost-share requirements when
this requirement was still in place, contributing to project delays.
The PA program typically requires a 75 percent federal and 25 percent
state cost share.[Footnote 14] Shortly after the storms the federal
government adjusted this match for the Gulf Coast states to 90 percent
federal and 10 percent state for Gulf Coast recovery,[Footnote 15] and
this matching requirement was removed in 2007--15 months after the
disaster was declared.[Footnote 16] Having enough resources to cover PA
cost-share requirements was less of a challenge in Mississippi as
officials in that state reported that state legislation allowed the
state to bond up to $200 million for three coastal counties. As a
result, applicants were better able to move forward with rebuilding
without hesitations associated with their inability to meet PA cost-
share obligations.
Further, officials from several parishes reported that due to their
reliance on state reimbursements--which some claimed were slow--they
did not have the resources to pay contractors, some of whom threatened
to sue for nonpayment. FEMA officials stated that PA rules are flexible
enough to provide some funding up front, if the state chooses to do so,
and states can make arrangements to pay for phases of projects, as they
are completed, rather than being reimbursed for the completed project
at the end. Further, in February 2008, Louisiana initiated a program to
streamline payments to applicants to provide more rapid disbursement of
PA funds. Louisiana's "Express Pay System" allows an applicant to
submit a reimbursement request with the required supporting
documentation and receive payment within 10 to 14 business days, rather
than 45 to 60 business days as was the case for the previous process.
We found that applicants from Mississippi used some of PA's funding
flexibilities, which state and local officials said were critical to
their ability to move ahead on projects without delay. Senior officials
from MEMA and the Governor's Office of Recovery and Renewal said that
the state's approach to providing up-front funding was possible because
state laws allow them to advance up to 75 percent of PA project funds
to applicants, and FEMA worked with the state to advance funding. In
addition, according to a state official, Mississippi law does not
prevent local governments from bidding out projects before they have
identified or received 100 percent of their funding. As a result of the
funding flexibility that Mississippi had, MEMA and FEMA established an
agreement for the state to provide funding for initiating projects and
reimbursement throughout the phases of rebuilding work. As an example,
MEMA paid applicants 90 days before their next contractor payment was
due for phases of rebuilding. Using this method, MEMA funded up to the
first 85 percent of the project's cost, while applicants were
responsible for funding the remaining 15 percent until they received
full FEMA reimbursement.
More recently, in 2008, Louisiana began to implement similar PA funding
flexibilities. Specifically, the state initiated a revolving fund for
the City of New Orleans that can be used by applicants to fund initial
PA project costs. While applicants reported that this initiative has
improved their ability to move projects along, this initiative began 2½
years after recovery started, and the revolving fund only provides
assistance to New Orleans.
Finally, in June 2007 FEMA began implementation of a pilot program,
required by PKEMRA, which provides participants with funding up front
rather than through the reimbursement of actual costs. This program is
not available for recovery projects relating to the 2005 Gulf Coast
hurricanes. Applicants participating in the pilot receive payment for
the entire estimated cost of the project, up to $500,000, for either
emergency or permanent work projects. If the actual cost of the project
is lower than this amount, the applicant may keep the extra funds for
other projects or approved uses. If the actual cost is higher, the
applicant must pay the difference.
After being in operation for over a year, FEMA officials told us that
participants have been reluctant to use the program for permanent work
projects. Out of 2,725 projects in the pilot as of September 2008 only
140, or less than 1 percent, were coded as being for permanent work.
[Footnote 17] These officials attributed this to reluctance on the part
of participants to having to make up the difference if their project
comes in higher than originally estimated, and to giving up their right
to appeal, which they are required to do under the terms of the pilot.
While these terms also apply to emergency work projects participating
in the pilot, this was thought to be less of a concern because such
projects were generally more straight-forward and presented fewer
uncertainties than large permanent work projects. PKEMRA requires FEMA
to submit a report to Congress on the results of the pilot by March 31,
2009.
Challenges in Sharing and Tracking Project Information:
Because the PA process is complex and requires collaboration among
federal, state, and local officials, effective sharing of project
information is particularly important. We identified challenges to
sharing project information between federal, state, and local officials
during project development, and limitations in tracking the status of
projects. Challenges in the first area were more prevalent in Louisiana
than in Mississippi because of the information-sharing strategies used.
Taken together, limitations in these areas slowed PA project
development and contributed to additional human capital burdens for
local governments. In response, FEMA has taken several steps to improve
sharing information and project tracking.
Barriers to Sharing Project Information among Federal, State, and Local
Officials:
In Louisiana, federal, state, and local officials involved in the PA
program reported facing challenges in effectively sharing critical
operational information about projects including documents used to
support scope and cost estimates, such as receipts, invoices, and
facility assessments. This situation was made worse because key federal
and state officials responsible for reviewing and approving
documentation were not primarily located in the same place. Typically,
FEMA colocates with state grantees in order to facilitate information
sharing. In Louisiana, FEMA had some staff located in important areas
throughout the state. However, we found that the state grantee
conducted its work primarily from Baton Rouge while FEMA's Transitional
Recovery Office was based in New Orleans--approximately 80 miles away.
Given that key staff from FEMA and the state were located in different
cities, it was particularly important for them to ensure effective
sharing of project information. Although Louisiana and FEMA employed
the use of a Web-based system to track the status of PA project
funding, it did not facilitate the day-to-day exchange of documents
related to project development.
Due to this lack of effective information-sharing, some local officials
told us that they had to frequently submit the same documentation to
the state of Louisiana and FEMA because it was not shared between the
agencies. In some cases, this slowed project development because
applicants needed to reproduce critical project documents. Federal and
state officials acknowledged that they faced difficulties in sharing
project information and that documents were sometimes lost during the
exchange between their agencies.
In Mississippi, federal, state, and local officials adopted strategies
that helped to facilitate the sharing of PA project information. For
example, following the disaster, FEMA's Mississippi Transitional
Recovery Office and the state grantee were located in the same office
complex in Biloxi, Mississippi, and officials from these agencies were
are also positioned throughout the state. They reported that this
colocation had multiple benefits for information sharing and exchange,
including the timely sharing of critical documents and facilitation of
daily meetings on project-development issues. In addition to
colocating, FEMA and Mississippi state officials used PA funding to
secure an on-line accounting system that made operational documents
associated with projects readily available to all parties. According to
state and local officials, the state contracted with an accounting firm
that worked hand-in-hand with applicants to regularly scan and transmit
documentation on architecture and engineering estimates, contractor
receipts, and related materials from this Web-based system. As a
result, FEMA and the state had immediate access to key documents that
helped them to make project approval decisions. Further, local
officials reported that this information-sharing tool, along with
contractor staff from an accounting firm, helped to relieve the
documentation and resulting human capital burdens that applicants faced
during project development.
Limitations in Tracking of Project Status:
Typically, FEMA only tracks the status for rebuilding projects up to
when the agency makes funds available to the state and at the end of
the process, when FEMA reconciles approved cost estimates with an
actual project's cost.[Footnote 18] While we recognize that this
approach toward tracking PA projects may be appropriate for most
disasters, the high level of interest from Congress and the public
regarding the status of Gulf Coast rebuilding--including information on
the construction of specific projects--highlights the need for this
type of information.
Providing such information on project status presented FEMA with two
challenges. First, information on rebuilding status between the point
when funds are made available to the state and cost reconciliation is
not tracked by FEMA's NEMIS database. NEMIS data are derived from
information collected in project worksheets, which capture the
estimates for individual rebuilding projects. Second, FEMA does not
track information by specific rebuilding site, but rather, by project
worksheet, which may encompass multiple buildings or partial rebuilding
sites. Because of this there was no easy way to provide updates on
specific PA projects, such as a school or police station, to interested
parties.
To address the first challenge, FEMA and state officials in Mississippi
and Louisiana have made efforts to more effectively gather and report
on the status of PA projects. They developed databases to maintain more
complete information on the status of PA projects. Although this effort
has been labor-intensive because of the need to use multiple
information sources, these officials said that they have been able to
generate reports on whether applicants have received PA funds that were
made available to the state as well as on the status of construction
for PA projects. The latter involves tracking construction bids,
groundbreaking, and other stages of rebuilding. As a result, PA
managers reported that they have been able to respond to stakeholder
and applicant requests for information on project status. For example,
FEMA reported that it developed a separate database, which provided
FEMA and state officials with visibility on flexible funding PA grant
options used by applicants--such as alternate or improved projects--in
order to keep applicants informed of FEMA and GOHSEP activities and
decisions related to these types of projects. According to FEMA
officials, these types of tools may not be necessary in smaller
disasters, but have proved to be useful in tracking long-term
rebuilding efforts in the Gulf Coast.
To address the second challenge, the Office of the Federal Coordinator
for Gulf Coast Rebuilding, working with FEMA, established a
transparency initiative in February 2008. This Web-based information
sharing effort provides detailed information about selected buildings
and types of projects in the Gulf Coast receiving PA funds and makes
this information available to the public by sector. For example, the
Web site provides information on whether specific New Orleans schools
are open or closed and how much federal funding is available for each
school site. To do this, FEMA and the Office of the Federal Coordinator
worked with the state and local applicants as well as spreadsheets
maintained by PA project officers in the field to obtain the necessary
data. Although labor-intensive, these officials said it has been very
useful to a wide range of stakeholders including the general public.
FEMA officials told us they are taking steps that will improve national
data collection. For example, FEMA has piloted a new information
management system, called the Emergency Management Mission Integrated
Environment (EMMIE), which, according to agency officials, will provide
better tracking and management of PA projects. According to these
officials, the agency has incorporated stakeholder feedback into system
development to respond to some of the data-collection challenges faced
in Gulf Coast rebuilding. EMMIE will allow FEMA staff, state grantees,
and applicants to perform PA grant-management activities online,
including allowing applicants to apply for, view the status of, and
manage their grants. Although EMMIE promises considerable additional
functionality, its use by state and local governments is optional. FEMA
plans to convert NEMIS information on the 2005 Gulf Coast hurricanes
into EMMIE once the system is fully deployed in 2009.
Challenges Involving Key Project Decisions Contributed to Delays in
Moving Projects Forward:
PA applicants rely on FEMA project-approval decisions to make key
repair or rebuilding decisions of their own; however, both applicants
and FEMA officials told us that the agency's decisions were
occasionally reversed. This led to hesitancy on the part of some
applicants in moving forward on other projects. In addition, some
applicants expressed concerns about the timeliness of FEMA's appeal
process and that it was not perceived as being independent.
Project Approval Decisions Were Sometimes Reversed:
On some occasions, FEMA changed project-approval decisions after
applicants moved ahead on their projects based on these decisions,
resulting in additional expenses for the applicant. According to a
senior FEMA official, both program staff and auditors from the Office
of Inspector General may change project approval decisions if they
determine that an earlier decision was incorrect, that is, if the
project funding decision was legally ineligible. A senior FEMA official
told us that, in these cases, the agency has no choice but to change
its funding decision. In other situations, decisions were changed
because a FEMA official later disagreed with an earlier interpretation
of a PA program rule by another FEMA representative. These decisions
were in areas that FEMA had some discretion, that is, when FEMA rules
allowed for more than one rule interpretation. The official noted that
this happened more during the recovery from the 2005 Gulf Coast
hurricanes than in other disasters. According to the official there
were cases when FEMA staff made incorrect project-scope or cost-
estimating decisions for which applicants were ultimately held
responsible. In these cases FEMA may deobligate funding even after
construction had started. For example, there were cases when FEMA
changed its decision on whether a building qualified for replacement
funding rather than repair funding, to the detriment of the applicant.
FEMA and local officials reported that as a result of occasional
reversals of FEMA decisions and guidance, applicants were sometimes
hesitant to move forward on other projects.
Lack of Timeliness and Perceived Independence of Appeals Process:
State and local officials in Louisiana and Mississippi expressed
concern about the timeliness and perceived independence of the project
appeals process. Applicants may appeal project decisions if they
disagree with FEMA's decisions on project eligibility, scope of damage,
or cost estimates. FEMA regulations outline the time frame for
applicants to file an appeal and for the state and FEMA to respond to
applicant appeals (see fig. 5). However, applicants reported that
project appeal decisions were often not made within the time frames
required under the Stafford Act. FEMA officials told us that the
extraordinary large numbers of PA projects led to a large number of
applicant appeals. Also, some applicants said that they were not
provided with information on the status of their appeal from either the
state or FEMA. Finally, applicants also expressed concerns about the
independence of FEMA officials making appeals determinations since in
Louisiana appeals were reviewed by the same office that made the
decision being appealed in the first place--which some applicants
perceived to be a conflict of interest.
Figure 5: FEMA's Public Assistance Appeal Process:
[Refer to PDF for image]
This figure is an illustration of FEMA's Public Assistance Appeal
Process, as follows:
FEMA makes project decision;
Does applicant accept decision?
If yes: no appeal;
If no: Applicant files appeal to state within 60 days;
The state reviews the appeal and forwards a recommendation to FEMA
within 60 days (Additional information is gathered from applicant if
needed);
A FEMA regional administrator reviews applicant appeal and state
recommendation and makes a decision within 90 days (Additional
information is gathered from applicant if needed);
Does FEMA regional administrator approve applicant‘s appeal?
If yes: no appeal;
If no: Applicant may file second appeal to state within 60 days;
The state reviews the appeal and forwards a recommendation to FEMA
within 60 days (Additional information is gathered from applicant if
needed);
FEMA headquarters reviews applicant appeal and state recommendation and
makes a final decision within 90 days (Additional information is
gathered from applicant if needed).
Source: GAO analysis of FEMA information.
[End of figure]
FEMA has taken steps to improve the timeliness of appeal decisions as
well as perceptions about the lack of independence in FEMA's appeal
process. Specifically, in March 2006 the FEMA region responsible for
settling appeals from Louisiana designated a special team of dedicated
staff to help address the backlog of appeals. In addition, FEMA has
made changes to the appeals process within Louisiana so that an
applicant's appeal is not reviewed by the same office that made the
project decision in the first place, but rather by an independent
appeals team outside of the agency's Louisiana office. According to
FEMA officials, appeals following most disasters are not reviewed by
the same office that made the decision about the project in the first
place, but rather by the FEMA regional office responsible for the
disaster. These officials told us that because of the size of the
Louisiana Transitional Recovery Office and the number of projects it
handled, the agency had initially tasked this office with the appeals
review function rather than the regional official located in Texas.
Human Capital Challenges Contributed to Delays:
Human capital challenges at the federal, state, and local level
underlie many of the operational difficulties faced during Gulf Coast
rebuilding. During the initial phases of rebuilding, shortages of staff
with the right skills and abilities, as well as the lack of continuity
among rotating staff, contributed to delays in developing PA projects
in Louisiana and Mississippi.
Federal Human Capital Challenges:
It is not surprising that a disaster with the effect of the 2005 Gulf
Coast hurricanes would strain the PA program's human capital capacity.
We have previously reported that FEMA did not have the human capital
capacity it needed to implement PA in the wake of the 1989 Loma Prieta
earthquake, which was considerably smaller in size and scope than the
2005 hurricanes.[Footnote 19] In the Gulf Coast, FEMA's human capital
challenges included not initially having enough staff to effectively
implement the PA program and, then, when the programs was staffed up,
not having staff with the right experience, knowledge, and abilities.
The agency has taken some steps to address these challenges, which
state and local officials told us have resulted in improvements.
It took time for FEMA to provide sufficient numbers of PA staff to meet
the large need in the wake of the 2005 Gulf Coast hurricanes. According
to FEMA officials, their staffing approach is generally adequate for
most disasters, which typically require 75-100 staff. However, given
the unprecedented size and scope of the damage caused by the 2005
storms, FEMA needed to deploy a far larger number of people to
administer the PA program than it typically used. For example, during
2006, the year with largest number of PA staff assigned to Louisiana
and Mississippi, the agency deployed more than 3,500 people. FEMA had
not previously staffed its transitional recovery offices at such high
levels.
According to senior FEMA officials, even when FEMA's staff levels were
sufficient, their inexperience and limited training presented
significant challenges to their ability to effectively administer the
program in Gulf Coast. Many of the more-experienced FEMA staff were
still actively working on recovery efforts related to the 2004 Florida
hurricanes, or needed time off after recently working on other
disasters. Senior FEMA officials told us that at least 50 percent of
FEMA staff working in the Gulf Coast, especially technical assistance
contractors, did not have any PA program experience or adequate
training prior to being assigned to the Gulf Coast. These officials
stated that, as a cost-benefit decision, FEMA does not require its
contractors to take PA training prior to a disaster, but the agency
typically provides some training on the PA program to staff right
before they are deployed to a specific disaster.[Footnote 20] In
addition, the agency lacked sufficient numbers of experienced PA
employees to fully review all of the project decisions made by less-
experienced staff, especially early in the recovery. Senior FEMA
officials involved in the administration of the program noted that
closer supervision of these inexperienced staff might have reduced the
number of problems encountered later on, but conditions after the 2005
Gulf Coast hurricanes made such supervision difficult.
We have previously identified insufficient training of PA staff as a
challenge and have reported on the importance of having FEMA employees
appropriately trained in the application of relevant PA policies and
information systems. We recommended that FEMA implement a credentialing
program to help ensure that staff who make program and cost eligibility
decisions meet minimum standards.[Footnote 21] Recently, FEMA adopted
an agencywide credentialing program that would identify the skills and
abilities needed for key positions as well as the amount of training,
mentoring, and experience necessary to obtain proof of these skills. In
December 2008, FEMA officials reported that they completed development
of this program and expect to conduct field testing in early fiscal
year 2009.
Federal, state, and local officials reported that FEMA's use of
inexperienced staff resulted in changing or inaccurate decisions that
slowed down the project development process, especially during early
recovery efforts. For example, FEMA officials reported that
inexperienced staff sometimes misinterpreted PA program rules, such as
promising that the agency would fund the replacement of a fleet of
vehicles under conditions not allowed under the Stafford Act. Further,
some staff also lacked experience and training in technical subjects
that were important during project development, including how to assess
certain types of damage requiring specialized skills such as road and
water system damage. Officials from almost all of the localities
included in our review reported that advice provided by FEMA staff was,
at times, changed or incorrect, and that this not only contributed to
slower project development, but sometimes resulted in applicants
spending funds on projects that FEMA later determined would not be
reimbursed.
According to federal, state, and local officials many of the human
capital challenges experienced in the earlier days after the 2005 Gulf
Coast hurricanes have improved. However, lessons learned in the
aftermath of these storms provide an opportunity for a discussion of
the appropriate resource level and staff capacity in the event of a
future catastrophic disaster. In this regard, FEMA's Strategic Human
Capital Plan, issued in May 2008, sets a goal to determine the proper
number and type of employees required to staff FEMA's various
organizations, including the directorate in charge of the PA program.
State and Local Human Capital Challenges:
Given the intergovernmental nature of the PA program, FEMA relies on
state and local efforts for its successful implementation. As such,
having adequate human capital capacity at the state and local level
also plays a key role in successfully developing rebuilding projects.
However, as was the case with the federal government, Louisiana and
Mississippi initially lacked the human capital capacity to administer
the PA program during recovery from the 2005 Gulf Coast hurricanes. In
addition, local applicants initially lacked the staff to fully
participate as partners in the program. As with FEMA's challenges, it
is understandable that state and local entities would not have the
human capital capacity to address this disaster given the sheer number
of rebuilding projects. Early on, Louisiana and Mississippi state
offices administering the PA program had insufficient staff to carry
out their respective roles; however, later the states obtained the
assistance that they needed from various sources. As with the federal
experience, staff had to be quickly trained, resulting in some staff
not having the expertise to effectively assist applicants. Further,
local governments in Louisiana and Mississippi reported that their own
human capital resources were limited because of the disaster, thus,
further constraining their ability to fully participate in the PA
process.
In Louisiana, officials from GOHSEP reported that they only had four
staff to administer the program when Hurricane Katrina occurred. As a
result, they hired contractors to process grants and obtained support
from Louisiana's Office of the Legislative Auditor to assist in
conducting up-front document and eligibility reviews. Although the
Office of Legislative Auditor established a dedicated team to assist
the state with PA project reviews, the office only consisted of a small
number of staff to review thousands of project worksheets.
Similarly, Mississippi officials reported facing staff shortages until
they received contractor assistance using PA funds. A senior official
from MEMA reported that they only had eight state employees dedicated
to their initial response to the 2005 Gulf Coast hurricanes. According
to the official, the state received federal PA funding in order to hire
qualified PA contract staff and an accounting firm to assistant
applicants through the complex PA process since state staff alone could
not effectively administer the program. Officials from MEMA and the
Mississippi Transitional Recovery Office reported that state
contractors were knowledgeable about disaster recovery, but
inexperienced with PA program rules. Therefore, they had to be trained
quickly before going into the field.
Local officials reported that their own human capital resources were
also limited because of the disaster, contributing to challenges in
moving through the PA funding process. Local governments in Mississippi
and Louisiana reported that they laid off many of their staff
immediately after the hurricanes, which made it difficult to provide
enough staff to assist FEMA in surveying all of the damage sites as
well as respond to the significant documentation requirements during
project development. For example, according to New Orleans officials,
because the city was severely cash-strapped after the disaster, many
employees, including capital-projects staff, were laid off. This
compromised the ability of the city to provide staff to effectively
survey the damage to all city buildings, including the architectural
and engineering staff needed to assess damage and oversee projects.
Other local governments in Louisiana and Mississippi described similar
challenges with addressing extensive project-management duties that
applicants are required to fulfill under PA program rules. Federal
officials agreed that limitations in applicants' human capital capacity
were a major challenge during the PA funding process. They highlighted
that when any level of government can not adequately fulfill its role
within the PA process, the associated projects almost always have
difficulties.
Lack of Continuity during Project Development:
The lack of staff continuity during project development also
contributed to rebuilding delays. According to several federal, state,
and local officials, a succession of FEMA staff were involved in the
preparation of many of these projects and faced difficulties with
sharing project information as they rotated on and off a project,
resulting in a lack of continuity. Officials from all of the localities
with whom we spoke noted that FEMA staff assigned to assist them
rotated frequently (e.g., every 60 or 90 days) often without providing
advance notice that they were leaving.[Footnote 22] GAO analysis of
NEMIS data supports the idea that a succession of staff were often
involved in the development of large PA projects (see table 2). This
situation, especially early-on in the recovery effort, resulted in a
loss of knowledge of project-specific information because of a lack of
effective strategies to share this information. For example, because
rotating staff did not always document FEMA's decisions or advice or
share project-specific information with staff taking their place,
applicants often had to restart negotiations about project eligibility
and cost determinations with their new FEMA representative. In many
cases, applicants reported that replacement staff changed agreements
that previous staff had made with them or requested information that
had previously been provided. However, many applicants noted that this
issue has improved recently and that staff were working with them for
longer periods of time. In addition, FEMA officials told us that have
developed ways to share project information among rotating staff.
Table 2: Number of Preparers Working on Large Permanent Work PA
Projects:
Number of project preparers per large permanent project: One preparer;
Louisiana: Number of projects: 2,178;
Louisiana: Percent: 53;
Mississippi: Number of projects: 726;
Mississippi: Percent: 50.
Number of project preparers per large permanent project: Two preparers;
Louisiana: Number of projects: 1,260;
Louisiana: Percent: 31;
Mississippi: Number of projects: 508;
Mississippi: Percent: 35.
Number of project preparers per large permanent project: Three
preparers;
Louisiana: Number of projects: 505;
Louisiana: Percent: 12;
Mississippi: Number of projects: 168;
Mississippi: Percent: 12.
Number of project preparers per large permanent project: Four or more
preparers;
Louisiana: Number of projects: 163;
Louisiana: Percent: 4;
Mississippi: Number of projects: 45;
Mississippi: Percent: 3.
Source: GAO analysis of FEMA NEMIS data as of July 2008.
Note: The phrase "one preparer" indicates only one staff member
prepared the project worksheet. Categories showing that two or more
preparers worked on a project indicates that one staff started on a
project but then was replaced by a succession of one or more different
staff.
[End of table]
State and local officials reported that the lack of continuity in FEMA
staffing resulted in delays and changing project decisions. This was
due to two reasons: (1) applicants had to spend additional time
familiarizing the new FEMA staff with the project, and (2) FEMA staff
rotating onto the project sometimes provided different interpretations
of program rules. For example, according to a senior Plaquemines Parish
official, parish staff spent a significant amount of time familiarizing
10 different FEMA PA representatives with project details--7 during the
first several months of recovery--and replacement staff differed in
their interpretations of PA processes and procedures.
The lack of continuity was further complicated by challenges with
information and document sharing among FEMA staff rotating on and off
projects. Federal, state, and local officials reported that there was a
lack of documentation of the rationale behind project decisions,
further contributing to continuity problems. One FEMA official told us
that part of the challenge with maintaining continuity was due to
difficulties staff encountered when trying to access the case-
management files used to track information about projects from a remote
location. In the absence of reliable electronic access to the case
management files, this official suggested that staff could maintain
notebooks on applicant projects and pass them on to replacement staff.
Several local officials also reported that there was often no notice of
when a new FEMA PA representative was assigned to their projects and no
"hand off" meeting with all parties present to share project
information. These officials said that such a meeting could have saved
time and effort that federal, state, and local officials spent on
readdressing issues, and may have reduced the number of times
previously agreed-upon decisions were changed. Difficulties ensuring
continuity during disaster recovery efforts are not new. We have
previously reported that the lack of continuity presented challenges to
the effectiveness of the PA program during recovery efforts following
the Loma Prieta earthquake of 1989.[Footnote 23]
FEMA officials acknowledged that lack of continuity, especially in the
first year after the disaster, caused some project disruptions but
these were unavoidable given the magnitude of the event. According to
these officials, insufficient numbers of experienced staff necessitated
the rotation of FEMA personnel. In addition, FEMA transferred staff who
were otherwise willing to continue working with the same communities on
the Gulf Coast in order to avoid subjecting them to possible income tax
increases that would affect personnel deployed for a year or more under
the federal tax code. FEMA officials told us that, in Louisiana, they
are taking steps toward providing additional continuity in PA staffing.
For example, FEMA's Transitional Recovery Office has started to employ
a team approach to help address this issue so that no individual staff
person is the only one responsible for retaining knowledge about a
specific project. Further, the officials reported that they have
implemented changes during recovery from the 2005 Gulf Coast
hurricanes, which they recently institutionalized during the recovery
of Hurricanes Gustav and Ike. These changes included recruiting and
hiring more long-term staff to function as a single point of contact
for these disasters, resulting in what they believe is greater
accountability for staff, reductions in rotations and roll-offs, and
sustained institutional knowledge among resident policy and decision
makers. While increasing the stability of staff is a very important
step in addressing limitations in project continuity, it is also
important for FEMA to develop methods to more effectively share
important project information between staff whenever staff rotation is
necessary and to communicate expectations about staff rotations with
applicants.
Conclusions:
The huge size and unprecedented scope of the devastation caused by
Hurricanes Katrina and Rita created very difficult conditions for all
involved in the recovery of the Gulf Coast, and the challenges
described in this report must be understood in this context. Since the
storms, FEMA has approved tens of thousands of PA grants making
available more than $11 billion for the rebuilding and repair of public
buildings and physical infrastructure--a scale of assistance unmatched
by any previous U.S. disaster. Given this level of assistance, FEMA
plays an important role in helping to ensure fiscal accountability to
the American taxpayer.
FEMA has faced a wide range of challenges in administering PA grants
including difficulties related to developing projects, barriers to
sharing information, and shortcomings in some of its project decision
processes. For example, we found cases where PA information was not
effectively shared among federal, state, and local entities directly
involved in the process as well as others including Congress and the
public. Furthermore, when FEMA reverses a key decision it has
previously made, such as the approval to rebuild instead of repair a
structure, it can have a negative effect on an applicant who may have
already moved forward on the project. Human capital limitations at the
federal, state, and local level underlie many of these operational
difficulties as well as present challenges of their own. For example,
while it may have been impossible to avoid rotation of FEMA staff given
the magnitude of the 2005 Gulf Coast hurricanes, the agency did not
take sufficient steps to ensure that continuity of knowledge about
projects was maintained as staff came and went.
Some of these challenges were familiar to FEMA, having been identified
by us and others in the past, but often the magnitude of the 2005 Gulf
Coast hurricanes considerably worsened their effect. In addition, FEMA
has encountered a whole set of new challenges related to applying the
PA program to a catastrophic disaster and the unique needs associated
with rebuilding entire communities in the wake of such an event. For
example, the agency has wrestled with how to adapt a program
traditionally focused on restoring buildings and infrastructure back to
predisaster conditions, to circumstances on the Gulf Coast where the
reality of significant demographic change may have fundamentally
changed the need for such structures in those locations.
In order to operate, the PA program relies on a partnership involving
FEMA, state governments, and local entities. Therefore, it is critical
for the agency to look for ways to foster constructive and
collaborative relationships with other key participants. We found that
some of FEMA's policies and practices--particularly reversal of project
decisions and the lack of transparency in FEMA's decisions--may work
against efforts to achieve effective collaboration. Because of the
active role that state and local governments must play in the PA
process, it is also important for states and locals to have the
capacity needed to carry out their role in the process. Similar to the
federal experience, state and local governments in both Louisiana and
Mississippi initially lacked the necessary human capital capacity to
administer the program. Given the significant human capital challenges
involved in rebuilding after a major disaster, it would benefit state
and local governments to now consider approaches to help ensure that
they have, or have plans to develop or access, staff with the right mix
of skills needed to carry out their role in the PA process.
Some of the rebuilding challenges encountered following the 2005 Gulf
Coast hurricanes may be faced again as Texas, Louisiana, and Alabama
recover from the recent devastation caused by Hurricanes Ike and
Gustav. Accordingly, opportunities exist now to take steps to further
refine the PA program to better address these challenges as the current
recovery continues on the Gulf Coast and in advance of future
disasters. FEMA has already taken steps toward this end, which state
and local officials report are improving the implementation of the
program in the Gulf Coast. It is important that FEMA continues to
institutionalize these lessons by taking action to ensure that changes
are made to program polices and procedures, and then appropriately
disseminated. The challenges faced by the PA program in the Gulf Coast
also highlight some broader issues regarding the way the federal
government approaches rebuilding. At your request, we are beginning a
review of these issues including whether there may be a need for more
fundamental changes to the Stafford Act when providing funds to help
communities rebuild after catastrophes. This is among the many issues
that face Congress as the nation works to strengthen the United States'
ability to recover from the next catastrophic event.
Recommendations for Executive Action:
To help DHS improve the operation of the PA grant program and build on
some of the actions taken to date, we recommend that the Secretary of
Homeland Security direct the Administrator of FEMA to take the
following four actions:
* Improve PA reporting by better defining information presented in
FEMA's periodic reports to Congress and the public; specifically
provide the number of unique PA projects in addition to figures that
include changes to projects.
* Improve information sharing within the PA process by identifying and
disseminating practices that facilitate more effective communication
among federal, state, and local entities, including the development of
tools that promote document sharing such as Mississippi's online
accounting system.
* Strengthen continuity among staff involved in administering the PA
program by:
- developing protocols to improve information and document sharing
among FEMA staff, such as requiring that staff maintain a record of
project decisions to share with rotating staff, or by more broadly
adopting a team approach so that more than one individual is aware of
the details of specific projects, and:
- communicating the timing of expected FEMA staff rotations to
applicants directly affected by those staffing changes.
Agency Comments:
On October 29, 2008, we provided a draft of this report to the
Secretary of Homeland Security for comment. We received written
comments on December 11, 2008. In its written comments, which appear in
appendix II, DHS generally agreed with our recommendations. In
addition, the department provided technical clarifications that we
incorporated where appropriate. We also provided drafts of relevant
sections of this report to state and local officials involved in the
specific PA examples cited in this report. We incorporated their
comments as appropriate.
We will provide copies of this report to other interested congressional
committees, the Secretary of Homeland Security, the FEMA Administrator,
and state and local officials we contacted for this review. In
addition, this report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov].
If you have any questions about this report, please contact me on (202)
512-6806 or at czerwinskis@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. Key contributors to this report are listed in
appendix III.
Signed by:
Stanley J. Czerwinski:
Director, Strategic Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
We focused our review on Louisiana and Mississippi because these two
states accounted for 90 percent of all Public Assistance (PA) funding
made available to Gulf Coast states. We selected localities within
these two states based upon (1) the amount of PA funding they were
expected to receive, (2) whether local officials reported experiencing
challenges or successes during PA program implementation, or (3)
whether the locality had been identified by others as experiencing
significant challenges or successes during PA program implementation.
Accordingly, we included the following localities from Louisiana in our
review: the City of New Orleans, St. Bernard Parish, Plaquemines
Parish, and Jefferson Parish. Similarly, we included the following
localities from Mississippi in our review: Waveland, Bay St. Louis,
Gulfport, and D'Iberville.
To address our first objective, we obtained and analyzed funding data
from September 2005 though September 2008 from the Federal Emergency
Management Agency's (FEMA) Global Reports on Public Assistance in the
Gulf Coast, and for September 2005 though July 2008 from FEMA's
National Emergency Management Information System (NEMIS). NEMIS data
included project information on project cost, the status of project
development, and project type and location. We assessed the reliability
of the data by performing standard electronic testing of the data,
comparing published funding reports to raw data from the NEMIS
database, as well as interviewing FEMA officials with responsibility
for both data sources. Where we identified discrepancies in the sources
of data, we note this in our report. However, we found that the data
sources were comparable and sufficiently reliable for our purposes. We
did not independently verify the validity of these data.
To address objectives two and three, we relied primarily on interviews
with key officials and corroborated this evidence with NEMIS data,
documents provided by PA applicants, the states of Louisiana and
Mississippi, and FEMA. Further, we obtained and reviewed FEMA documents
such as FEMA guidance for applicants and staff, the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (Stafford Act),
regulations, policies, and procedures and observed damaged sites in
several locations in Louisiana and Mississippi. We also reviewed past
GAO and Department of Homeland Security Inspector General reports on
the PA program or Gulf Coast recovery. As our primary source of
evidence, we interviewed and obtained information from a variety of
sources in the Gulf Coast and Washington, D.C. At the federal level, we
interviewed officials and obtained information from FEMA, the
Department of Homeland Security's Office of the Inspector General, and
the Office of the Federal Coordinator for Gulf Coast Rebuilding. We
also interviewed and obtained documentation from state and local
officials in Louisiana and Mississippi. We did not choose a
representative sample of officials to interview, but rather, chose
individuals based upon their knowledge, experience, or leadership role
in the PA program in these two states. We did not observe the PA
funding processes in operation.
* In Louisiana, at the state level, we interviewed and obtained
documentation from officials in the Governor's Office of Homeland
Security and Emergency Preparedness (GOHSEP), which was the official PA
grantee for the state, with responsibility for partnering with FEMA to
administer the grant to local entities. We also interviewed and
obtained information from the Louisiana Recovery Authority, which was
the policy advisor for Gulf Coast rebuilding and, as of January 2008,
became the state's lead agency working with FEMA on recovery
operations, including PA; the Office of the Legislative Auditor, which
assisted in the reviewing of PA grant applications; and the State
Department of Education, which was a major applicant in the PA process.
At the local level, we interviewed and obtained documentation from PA
applicants from the City of New Orleans and from St. Bernard,
Plaquemines, and Jefferson Parishes.[Footnote 24]
* In Mississippi, at the state level, we spoke with the Mississippi
Emergency Management Agency (MEMA), which was the official PA grantee
for the state, with responsibility for partnering with FEMA to
administer the grant to local entities; the Governor's Office of
Recovery and Renewal, which acted as a policy advisor on Gulf Coast
rebuilding; and the Joint Committee on Performance and Evaluation and
Expenditure Review, which is an audit organization of the Mississippi
state legislature that has previously assessed implementation of the PA
program. At the local level, we spoke with city officials who were PA
applicants in the cities of Bay St. Louis, Gulfport, Waveland, and
D'Iberville.
We conducted this performance audit from August 2007 through November
2008 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives. We
requested comments on a draft of this report from the Department of
Homeland Security, which are reprinted in appendix II. We also provided
drafts of relevant sections of this report to state and local officials
involved in the specific PA examples cited in this report, and
incorporated their comments as appropriate.
[End of section]
Appendix II: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
December 11, 2008:
Stanley J. Czerwinski:
Director, Strategic Issues:
U.S. Government Accountability Office:
441 G Street. N.W.
Washington. D.C. 20548:
Dear Mr. Czerwinski:
Subject: Department of Homeland Security response for GAO Draft Report
09-129, "Disaster Recovery: FEMA's Public Assistance Grant Program
Experienced Challenges with Gulf Coast Rebuilding"
The Department of Homeland Security (DHS) thanks you for the
opportunity to comment on the Government Accountability Office's (GAO)
Report 09-129, Disaster Recovery: FEMA 's Public Assistance Grant
Program Experienced Challenges with Gulf Coast Rebuilding. Hurricanes
Katrina and Rita presented challenges to FEMA's Public Assistance (PA)
program that had not been encountered during ally other disaster in
history. FEMA has used lessons learned during the response and initial
recovery of these disasters to enhance long-term recovery efforts. In
addition. FEMA has applied resulting programmatic and operational
improvements that have benefited not only our response to a disaster
but also the short-term recovery as well, namely, Hurricanes Gustav and
Ike. While FEMA generally concurs with GAO's report recommendations. we
have already made tremendous strides in overcoming many of the issues
raised. Our responses to GAO's recommendations focus on the importance
of introduction and consistent and continuing development,
implementation, and enhancement of data and reporting resources as it
means to success in the administration of the PA program in the Gulf
and in future disasters wherever in the United States they may occur.
GAO's report identities challenges related to developing projects,
sharing information and making key project decisions. It makes specific
recommendations only regarding sharing information. This letter
addresses these four report areas.
As noted in your report. FEMA was faced with managing unprecedented
numbers of staff. The Gulf Coast response as more than double the cost
of any prior PA disaster. In addition, a total of 3,500 personnel were
deployed as opposed to the average of 75-100. These individuals needed
training and periodic rotation home, situations which led to delays in
providing Public Assistance grants.
Some of FEMAs major criticisms come as a result of slow payments to sub-
grantees. Often delays are the result of the State's unwillingness to
pass on FEMA funds provided to the state via Smartlink. In such cases,
States are often concerned about future audits which may question their
local funding decisions.
Inexperienced staff and resulting errors are the results of our
overwhelming challenges caused by the catastrophic incident. It is not
economically feasible or reasonable to fully staff, train and test to
meet catastrophic situations on a regular basis (when such occurrences
are infrequent). We can, however, prepare remedial plans (expedite
hiring, training, establish quality control, expedite financial
support, provide technical assistance) (e.g. local contractor support).
and activate direct Federal assistance.
Technical comments are included as a separate attachment.
Recommendation: Improve PA reporting by better defining information
presented in FEMA's periodic reports to Congress and the public:
specifically provide the number of unique PA projects in addition to
figures that include changes to projects.
Response: FEMA generally concurs with this recommendation. FEMA PA has
taken a number of productive actions to improve reporting on PA grants.
The single largest of these was to create an integrated
Internal/External Support group (INEXS) within PA. The group is
specifically dedicated to reporting, communications, training, and
information management initiatives.
To augment information presented in FEMA's regular reports, INEXS
developed, maintains and makes available regularly scheduled database
output reports as well as answering requests for specific, time-
sensitive data that provide the status of individual, unique projects.
FEMA databases track detailed infrastructure project-, facility-, or
site-level progress on design completion, bid and award. construction
phase, and status of temporary facilities and permanent repair or
replacement initiatives. Examples of FEMA reporting and database tools
and products include:
* The PA Global Report. which shows detailed staffing. organization,
projections, productivity, and grant awards data disaster-wide and by
Parish. It is available to the public. FEMA staff, and Congress.
* The Interactive Public Website/Global Transparence Initiative, which
tracks projects by neighborhood across the entire Gulf Coast region.
including Louisiana. This Gulf Coast Recovery Office (GCRO)/Office of
Federal Coordinator (OFC)-jointly developed website provides the number
of projects and grant funding by sector. The five sectors include
Education, Health & Hospitals, Public Works, Historic and Cultural,
Public Safety and Criminal Justice. FEMA provides public access to the
transparency website through the FEMA.gov website. Users can access the
website map, click on a community and view project information. The
transparency website is updated weekly by direct interface with FEMA
PA's Project Phase Tool Database that tracks the status of every
project.
* The Project Phase Tool Database (PPT), which provides the
functionality to translate from grant-specific NEMIS data to unique PA
project-specific information. The PPT lists a detailed description,
funding. status and tracking information for every PA project entered
into National Emergency Management Information System (NEMIS). Project
stall can easily sort the PPT by their assigned Applicants and projects
and immediately access a wealth of background information on their
project workload. This is particularly valuable for new staff as they
assimilate into the PA operation and begin service to their Applicants.
The database is updated weekly and is the data repository for the
majority of management and progress reports used by PA staff and
management.
* The PA Expedited Information Response (PAXIR) team, which establishes
protocol for and manages PA's response to information requests from
external sources, including Public and Media Affairs, Intergovernmental
Affairs, GCRO, OFC. FEMA Headquarters, LA Transitional Recovery Office.
Congress and the White House. The team ensures consistent and quality
deliverables in short turnaround times. Its responses provide on-demand
technical and project-specific information in an accessible format,
such as executive summaries and issue papers. Since its inception in
April 2007, PAXIR has responded to over 1,600 inquiries.
In addition to these INEXS reporting and database initiatives, FEMA PA
Operations has narrative and reports specialists assigned to Operations
Groups. By leveraging the tools noted above and applying in-depth
knowledge regarding their Applicant groups. these trained specialists
respond to INEXS requests with specific. timely and accurate
information appropriate for dissemination to the requesting audiences.
As the Katrina/Rita operation progressed, teams of subject matter
experts were created to facilitate the development of certain projects
with particular technical or programmatic concerns. Such teams include
the Cost Estimating Center, Alternate/Improved Projects, 406 Hazard
Mitigation, and Insurance. The Louisiana Governor's Office of Homeland
Security and Emergency Preparedness (GOHSEP) have counterparts working
with these FEMA teams.
Recommendation: Improve information sharing within the PA process by
identifying and disseminating practices that facilitate more effective
communication among federal. state, and local entities. including the
development of tools that promote document sharing such as
Mississippi's online accounting system.
Response: FEMA generally concurs with this recommendation. We agree
that collaboration with the States and local governments and their
participation and active involvement are crucial to the success of the
PA program. The State needs buy-in and to feel as though they are an
integral part of the decision making team. FEMA must be prepared to
compromise, and both parties must he committed to establish goals in
order to successfully meet milestones. In August 2007, the Mississippi
TRO Director initiated the development of a Project Worksheet (PW)
Tracker on-line tool which was shared with GAO in May 2008. The tracker
is a cooperative effort between the State and FEMA to provide the
interim project construction status of projects between funds
obligation and construction completion. While this type tool may not he
necessary in smaller disasters, it is proving extremely useful in the
tracking of long term rebuilding efforts.
FEMA is making concerted efforts to improve collaboration and
information sharing within the PA process by developing and maintaining
project-specific tracking tools and practices. generating reports that
enhance communications with federal, GOHSEP and local entities. FEMA
has created joint FEMA-GOHSEP databases, protocols. and an interactive
website, all three of which significantly enhances collaboration and
information sharing. as well as provides detailed tracking of project
progress. Examples of these initiatives include:
* The Alternate/Improved (A/I) Database, which provides FEMA and GOHSEP
visibility on flexible funding PA grant options exercised by
Applicants. Developed by INEXS and used interactively both by FEMA and
by GOHSEP, the database tracks all A/I requests from the time of
receipt from the Applicant by GOHSEP to the issuance date of a final
decision letter from FEMA. It includes detailed description, finding,
status and tracking information for every A/I project and stores
information that forms the basis of status reports used by FEMA and
GOHSEP to track the progress of each A/I project and to, in turn, help
keep Applicants informed of FEMA and GOHSEP activities and decisions
relevant to their AA projects. The A/I Database is supported by the Al
Guidebook which includes all relevant A/I policies and procedures.
* The PW Versioning Database, which provides detailed, project-specific
information on where an Applicant's version request and related PW
version is in the development process. This INEXS-developed database
was designed to enable joint FEMA-GOHSEP tracking of version request
progress and to help keep Applicants informed of FEMA and GOHSEP
activities and decisions relevant to their PW version requests. The PW
Versioning Database tracks versions requested by GOHSEP" Applicants up
to the point in time when a version is entered into NEMIS and assigned
a NEMIS tracking number. INEXS is currently modifying the database to
divide data entry responsibilities between GOHSEP and FEMA.
* INEXS Training, which develops, administers and delivers joint, on-
site training opportunities for FEMA and GOHSEP Operations. As the
disaster operation evolved, INEXS Training expanded its focus to
include general courses such as PA Operations as well as more
specialized types of training. such as A/I, PW versioning, Grants
Management, and 406 Hazard Mitigation.
Recommendation: Strengthen continuity among staff involved in
administering the PA program by developing protocols to improve
information and document sharing among FEMA staff, such as requiring
that staff maintain a record of project decisions to share with
rotating staff, or by more broadly adopting a team approach so that
more than one individual is aware of the details of specific projects.
Response: FEMA generally concurs with this recommendation. FEMA has
continued its concerted effort to hire and train CORE staff for key
leadership and management positions. The CORE staffing is full time
positions hired for four years or more to provide long-term continuity
in the operation. This staffing approach generates accountability,
reduces rotations and roll-offs. and maintains institutional knowledge
among resident policy and decision makers.
To address continuity issues, FEMA PA regularly offers training courses
(as noted above in the response to Recommendation 2) that are tailored
to the needs of new staff mobilizing to the disaster, on-site staff
transitioning into new assignments. and experienced staff rejoining the
operation following a significant period away from the disaster.
In addition to their primary objectives noted previously in this
letter. INEXS-developed databases and protocols facilitate smooth
transitions among FEMA staff as they assimilate into PA Operations and
as they transition to new project assignments. This is particularly
important because NEMIS Case Management File information is organized
by Applicant rather than by project. Newly assigned staff must have
immediate access to complete and accurate information concerning
project history, issues and backlog. Information housed in the
databases, and the project-based accessibility enabled by the
databases' structures and query capabilities, augments staff access to
information and enhances staff understanding of Applicants and their
projects.
The A/I Database and PW Versioning Database each support aspects of PA
project management as described in the response above to Recommendation
2. In addition, the INXES-developed Meeting Tracker Database (MTD)
provides a record of FEMA interaction with GOHSEP and with Applicants.
This tool is the source of the FEMA/GOHSEP meeting calendar that is
located on the PAKatrinaRita.com intranet site. As well as supporting
meeting and communication management, the MTD supports smooth staff
transitions with its record of key applicant issues, actions and
schedules.
The PAKatrinaRita.com website, created by the Louisiana Transitional
Recovery Office, provides real time information on various aspects of
the disaster including Disaster Specific Guidance. PA Policy and
Guidance, Fact Sheets, Information Sheets, appeals, and time
extensions. This website is available to all FEMA staff and GOHSEP.
Recommendation: Strengthen continuity among staff involved in
administering the PA program by communicating the timing of expected
FEMA staff rotations to applicants directly affected by those staffing
changes.
Response: FEMA generally concurs with this recommendation. FEMA PA is
taking an increasingly deliberate approach to staffing and organizing
in an efficient manner to administer the PA program. The approach has
led to a more stable organizational structure over the past two years,
reducing the need for reorganization and shifting of resources.
The disaster was primarily staffed with Technical Assistance
Contractors (TAC) alter the disaster struck. Although there was a high
turnover of this initial staff, most of the TACs now staffing the
disaster have been here an average of over two years.
Placing and training CORE staff in key PA leadership and management
positions represents a significant investment in human capital. In
addition to reducing the need for staff rotations and enhancing staff
continuity. CORE staff effectively manages the message and impact of
rotations with Applicants directly affected by staff changes. CORE
staff turnover has been minimal and, where possible, transition time
has been built in to minimize the potential impact.
PA Management has made tremendous strides in recruiting and hiring CORE
staff to replace TAC staff as they demobilize from the operation. While
day-to-day PA operations for Hurricanes Katrina and Rita are still
handled primarily by TACs. FEMA has deliberately sought and hired COREs
for the Gustav/Ike operation. The table below demonstrates the increase
in CORE staffing for Gustav/Ike.
PA Management is also filling senior management positions with CORE
staff On both disasters. the highest level of PA management is CORE.
The next level of PA management, including Group Leads, is 100% CORE in
the Gustav/Ike operation and 33% CORE in the Katrina/Rita operation.
CORE:
Katina/Rita: 47;
Gustav/Ike: 49.
DAE:
Katina/Rita: 0;
Gustav/Ike: 11.
TAC:
Katina/Rita: 159;
Gustav/Ike: 82.
PAO/DPAO Level-CORE:
Katina/Rita: 100%;
Gustav/Ike: 100%.
Senior Management-CORE[A]:
Katina/Rita: 33%;
Gustav/Ike: 100%.
[A] includes Group Supervisors and Task Force Leaders
The Department of Homeland Security appreciates the opportunity to
review and provide comments on this draft report. We look forward to
working with you on future homeland security issues.
Sincerely,
Signed by:
Jerald E. Levine:
Director:
Departmental Audit Liaison Office:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Stanley J. Czerwinski, (202) 512-6806, czerwinskis@gao.gov:
Staff Acknowledgments:
Major contributors to this report were Peter Del Toro, Assistant
Director; Latesha Love; and Robert Yetvin. Tyler Duffy, Cynthia Grant,
Adam Shifriss, A.J. Stephens, and Kate Wulff also made key
contributions.
[End of section]
Footnotes:
[1] For purposes of this report, "the 2005 Gulf Coast hurricanes"
refers to Hurricanes Katrina and Rita. Additionally, in this report,
"Gulf Coast" refers to the states of Alabama, Louisiana, Mississippi,
and Texas, but does not include Florida.
[2] 42 U.S.C. § 5121-5207. Under the Stafford Act, the governor of a
state may request a declaration of a major disaster when effective
response and recovery are beyond the capabilities of the state and
affected local governments. See 43 U.S.C. § 5170.
[3] The amount of PA funding is reduced by, among other considerations,
insurance proceeds and, for some projects, the salvage value. Also, in
most disasters, certain matching requirements must be met in order for
applicants to receive PA funding; however, matching requirements were
waived for the 2005 Gulf Coast hurricanes. Finally, funds must be
available in FEMA's Disaster Relief Fund through congressional
appropriations.
[4] Nonpermanent staff, known as the Cadre of On-call Response/Recovery
Employees perform functions similar to those performed by permanent
full-time employees but on an intermittent basis. These staff work
alongside permanent full-time employees in headquarters and the
regions.
[5] See 42 U.S.C. § 5189. In 2005, any project over $55,500 was
considered to be a large project.
[6] While the term "obligated" has a specific meaning in appropriations
law, FEMA uses this term to mean that federal funds are available for
the state grantee to draw down prior to passing them along to an
applicant. Throughout this report, we refer to obligated funds as funds
that are "made available to the states."
[7] Department of Homeland Security Appropriations Act, 2007, Pub. L.
No. 109-295, Post-Katrina Emergency Management Reform Act of 2006,
title VI, 120 Stat. 1355, 1394 (Oct. 4, 2006).
[8] Pub.L.No.109-135,119 stat.2577 (Dec.21,2005).
[9] The Stafford Act provides an allowance for PA applicants to cover
administrative activities such as requesting, obtaining, and
administering PA. This allowance is calculated as a percentage of the
total amount of PA program funds, based on a sliding scale. Some state
administrative activities such as field inspections, damage
assessments, and cost estimates are covered on the basis of a sliding
scale related to the total amount of PA program funds being awarded. In
addition, because of the size of the 2005 Gulf Coast hurricanes, FEMA
created a separate category of funding for state administration
including costs associated with hiring technical assistance
contractors.
[10] Under FEMA's new management information system, changes to project
worksheets will be called "amendments."
[11] Post-disaster damage due to mold had been recognized by FEMA as a
challenge prior to the 2005 Gulf Coast hurricanes. FEMA issued guidance
on mold remediation in 2006 to ensure consistency throughout recovery
efforts.
[12] If an applicant determines that the public welfare would not be
best served by restoring a damaged facility or its function to its
predisaster design, the applicant may apply to FEMA to use the eligible
funds for an "alternate project." 42 U.S.C. § 5172(c); 44 C.F.R. §
206.203(d)(2). Funding of alternate projects may be used for repair or
expansion of other public facilities, to construct new public
facilities, or hazard mitigation measures. Federal funding for
alternative projects is limited to 90 percent (75 percent in the case
of private nonprofit organizations) of the federal share of the
estimated cost of repairing the original damaged facility. FEMA
guidance states that if the actual cost of the alternate project is
less than the 90 percent, then funding will only be up to the actual
cost. Similarly, an "improved project" is any project where the
applicant chooses to make additional improvements to the facility while
making disaster repairs to the predisaster design. 44 C.F.R. §
206.203(d)(1). Federal funding for improved projects is limited to the
federal share of the estimated costs for repairing the damaged facility
to its predisaster design. The additional costs are the responsibility
of the applicant.
[13] In these cases, the Recovery School District had determined that
replacing the school would be advantageous to the community but had not
moved forward on these projects because of cost concerns.
[14] 42 U.S.C. § 5172(b)(1)
[15] See 70 Fed. Reg. 65,927 (Nov. 1, 2005) (Louisiana--Katrina); 70
Fed. Reg. 65,928 (Nov. 1, 2005) (Mississippi--Katrina); 70 Fed. Reg.
70,086 (Nov. 21, 2005) (Louisiana--Rita); 71 Fed. Reg. 50,440 (Aug. 25,
2006) (Texas--Rita); 72 Fed. Reg. 5453 (Feb. 6, 2007) (Alabama--
Katrina).
[16] U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq
Accountability Appropriations Act, 2007, Pub. L. No. 110-28, § 4501,
121 Stat. 112, 156 (May 25, 2007); 72 Fed. Reg. 34,700 (June 25, 2007)
(Alabama-Katrina); 72 Fed. Reg. 34,703 (June 25, 2007) (Louisiana-
Katrina); 72 Fed. Reg. 34,703 (June 25, 2007) (Louisiana-Rita); 72 Fed.
Reg. 34,704 (June 25, 2007) (Mississippi-Katrina); 72 Fed. Reg. 34,705
(June 25, 2007) (Texas-Rita).
[17] A FEMA official told us that some of the data on the pilot program
as of September 2008 may have been miscoded. Accordingly, it is likely
that fewer than 140 permanent work projects had actually taken place
during the reported time frame. The vast majority of pilot projects
were for "force labor accounts," that is, funds that covered the base
wages of state or local government employees involved in emergency work
projects such as clearing debris.
[18] Reconciliation of costs does not apply to improved or alternate
projects. As mentioned previously, funding for improved or alternate
projects is based upon the federal share of eligible costs that would
have been associated with repairing or replacing the damaged facility
to its predisaster design.
[19] In 1992, we reported that FEMA's standard approach for staffing a
disaster recovery effort--reliance on a small number of permanent staff
and large number of rotating temporary staff--did not meet the
requirements of a major disaster, such as the Loma Prieta earthquake.
See GAO, Earthquake Recovery: Staffing and Other Improvements Made
Following Loma Prieta Earthquake, [hyperlink,
http://www.gao.gov/products/GAO/RCED-92-141] (Washington, D.C.: July 30
1992). More recently, the DHS Office of the Inspector General reported
comparable findings in its 2008 report, FEMA's Preparedness for the
Next Catastrophic Disaster (OIG-08-34).
[20] FEMA officials said that requiring contractor staff at the firms
providing technical assistance services to take PA training prior to a
disaster would increase the total costs of the existing contracts by
about $1.5 million and these Technical Assistance Contractors would not
be able to guarantee that staff who participated in the training would
actually be deployed when a disaster struck.
[21] We have previously reported that FEMA lacked sufficient permanent
staff to adequately train and supervise the large number of temporary
staff used for Loma Prieta. See (RCED-92-141). In 2001, we reported
that FEMA had developed, but not implemented, a credentialing program
for PA staff. FEMA cited budgetary constraints as the reason for not
implementing the program; we recommended that the agency assign a
higher priority to implementing the initiative. See Improvement Needed
in Disaster Declaration Criteria and Eligibility Assurance Procedures,
GAO-01-837 (Washington, D.C.: Aug. 31, 2001).
[22] FEMA officials could not provide information on the length of
staff rotations because they do not directly track these data.
[23] We have previously reported that the use of rotating staff was not
effective when rebuilding after the Loma Prieta earthquake because much
of the damage was hidden, complex issues involving building codes often
arose, and months or even years could be required to resolve a case
(GAO/RCED-92-141). Applicants reported that new staff rotating onto the
job would start over examining the damage, reviewing the documentation,
and learning the complexities of the case.
[24] Although St. Tammany Parish met the selection requirement, we did
not interview officials from this parish because the parish was under
litigation with FEMA concerning some of the issues that we discuss in
our report.
[End of section]
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