Hurricane Katrina
Comprehensive Policies and Procedures Are Needed to Ensure Appropriate Use of and Accountability for International Assistance Gao ID: GAO-06-460 April 6, 2006In response to Hurricane Katrina, countries and organizations donated to the United States government cash and in-kind donations, including foreign military assistance. The National Response Plan establishes that the Department of State (DOS) is the coordinator of all offers of international assistance. The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security (DHS) is responsible for accepting the assistance and coordinating its distribution. In light of widespread congressional and public interest in U.S. agencies' accountability in receiving and distributing assistance to hurricane victims, this report is one of several initiated under the authority of the Comptroller General to review the federal government's response to Hurricane Katrina. It examines (1) the amount and use of internationally donated cash, and (2) the extent to which federal agencies have adequate policies and procedures to ensure proper accountability for the acceptance and distribution of that assistance.
Because the U.S. government had not received such substantial amounts of international disaster assistance before, ad hoc procedures were developed to accept, receive and distribute the cash and in-kind assistance. Understandably, not all procedures would be in place at the outset to provide a higher level of accountability. The Administration recognized the need for improvement in its recent report on lessons learned from Hurricane Katrina. GAO was able to track the cash donations received to designated U.S. Treasury accounts or disbursed. In the absence of policies, procedures, and plans, DOS developed an ad hoc process to manage $126 million in foreign cash donations to the U.S. government for Hurricane Katrina relief efforts. As cash donations arrived, a National Security Council (NSC)-led interagency working group was convened to make policy decisions about the use of the funds. FEMA officials told GAO they had identified and presented to the working group a number of items that the donated funds could be spent on. The NSC-led interagency working group determined that use of those donated funds, once accepted by FEMA under the Stafford Act, would be more limited than the wider range of possible uses available if the funds were held and then accepted under the gift authorities of other agencies. In October 2005, $66 million of the donated funds were spent on a FEMA case management grant, and as of March 16, 2006, $60 million remained undistributed in the DOS-designated account at the Treasury that did not pay interest. Treasury may pay interest on funds accepted by FEMA under the Stafford Act. According to DOS, an additional $400 million in international cash donations could arrive. It is important that cash management policies and spending plan options are considered and in place to deal with the forthcoming donations so that the purchasing power of the donated cash is maintained for relief and reconstruction. FEMA and other agencies did not have policies and procedures in place to ensure the proper acceptance and distribution of in-kind assistance donated by foreign countries and militaries. In-kind donations included food and clothing. FEMA and other agencies established ad hoc procedures. However, in the distribution of the assistance to FEMA sites, GAO found that no agency tracked and confirmed that the assistance arrived at their destinations. Also, lack of procedures, inadequate information up front about the donations, and insufficient coordination resulted in the U.S. government agreeing to receive food and medical items that were unsuitable for use in the United States and storage costs of about $80,000. The procedures also allowed confusion about which agency was to accept and provide oversight of foreign military donations. DOD's lack of internal guidance regarding the DOS coordinating process resulted in some foreign military donations that arrived without DOS, FEMA, or DOD oversight.
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Director: Team: Phone:GAO-06-460, Hurricane Katrina: Comprehensive Policies and Procedures Are Needed to Ensure Appropriate Use of and Accountability for International Assistance
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Report to Congressional Committees:
April 2006:
Hurricane Katrina:
Comprehensive Policies and Procedures Are Needed to Ensure Appropriate
Use of and Accountability for International Assistance:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-460]:
GAO Highlights:
Highlights of GAO-06-460, a report to congressional committees:
Why GAO Did This Study:
In response to Hurricane Katrina, countries and organizations donated
to the United States government cash and in-kind donations, including
foreign military assistance. The National Response Plan establishes
that the Department of State (DOS) is the coordinator of all offers of
international assistance. The Federal Emergency Management Agency
(FEMA) within the Department of Homeland Security (DHS) is responsible
for accepting the assistance and coordinating its distribution. In
light of widespread congressional and public interest in U.S. agencies‘
accountability in receiving and distributing assistance to hurricane
victims, this report is one of several initiated under the authority of
the Comptroller General to review the federal government‘s response to
Hurricane Katrina. It examines (1) the amount and use of
internationally donated cash, and (2) the extent to which federal
agencies have adequate policies and procedures to ensure proper
accountability for the acceptance and distribution of that assistance.
What GAO Found:
Because the U.S. government had not received such substantial amounts
of international disaster assistance before, ad hoc procedures were
developed to accept, receive and distribute the cash and in-kind
assistance. Understandably, not all procedures would be in place at the
outset to provide a higher level of accountability. The Administration
recognized the need for improvement in its recent report on lessons
learned from Hurricane Katrina.
GAO was able to track the cash donations received to designated U.S.
Treasury accounts or disbursed. In the absence of policies, procedures,
and plans, DOS developed an ad hoc process to manage $126 million in
foreign cash donations to the U.S. government for Hurricane Katrina
relief efforts. As cash donations arrived, a National Security Council
(NSC)-led interagency working group was convened to make policy
decisions about the use of the funds. FEMA officials told GAO they had
identified and presented to the working group a number of items that
the donated funds could be spent on. The NSC-led interagency working
group determined that use of those donated funds, once accepted by FEMA
under the Stafford Act, would be more limited than the wider range of
possible uses available if the funds were held and then accepted under
the gift authorities of other agencies. In October 2005, $66 million of
the donated funds were spent on a FEMA case management grant, and as of
March 16, 2006, $60 million remained undistributed in the DOS-
designated account at the Treasury that did not pay interest. Treasury
may pay interest on funds accepted by FEMA under the Stafford Act.
According to DOS, an additional $400 million in international cash
donations could arrive. It is important that cash management policies
and spending plan options are considered and in place to deal with the
forthcoming donations so that the purchasing power of the donated cash
is maintained for relief and reconstruction.
FEMA and other agencies did not have policies and procedures in place
to ensure the proper acceptance and distribution of in-kind assistance
donated by foreign countries and militaries. In-kind donations included
food and clothing. FEMA and other agencies established ad hoc
procedures. However, in the distribution of the assistance to FEMA
sites, GAO found that no agency tracked and confirmed that the
assistance arrived at their destinations. Also, lack of procedures,
inadequate information up front about the donations, and insufficient
coordination resulted in the U.S. government agreeing to receive food
and medical items that were unsuitable for use in the United States and
storage costs of about $80,000. The procedures also allowed confusion
about which agency was to accept and provide oversight of foreign
military donations. DOD‘s lack of internal guidance regarding the DOS
coordinating process resulted in some foreign military donations that
arrived without DOS, FEMA, or DOD oversight.
What GAO Recommends:
GAO makes recommendations designed to improve the policies, procedures,
planning, and oversight of international cash and in-kind donations to
the U.S. government in response to disasters. DOD and DHS generally
agreed with GAO‘s recommendations and cited actions being taken.
www.gao.gov/cgi-bin/getrpt?GAO-06-460.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Davi M. D'Agostino, (202)
512-5431, or McCoy Williams, (202) 512-9095.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Foreign Countries Donated Millions in Cash, But Policies, Procedures,
and Plans Were Not in Place:
Policies and Procedures Were Lacking in the Acceptance and Distribution
of in-Kind Donations, Including Foreign Military Donations:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: Comments from the Department of Homeland Security:
Appendix IV: GAO Contacts and Staff Acknowledgments:
Related GAO Products:
Table:
Table 1: International Cash Donations Received and Used - Key Dates:
Figures:
Figure 1: Overview of Process Developed to Receive International Cash
Donations:
Figure 2: Overview of Process Developed for Accepting, Receiving, and
Distributing In-Kind Donations:
Figure 3: Foreign Donated MREs in Storage as of November 9, 2005:
Figure 4: Overview of Process Developed for the Acceptance and Receipt
of Foreign Military Assistance:
Abbreviations:
CBP: U.S. Customs and Border Protection:
DOD: Department of Defense:
DHS: Department of Homeland Security:
DOS: Department of State:
FDA: Federal Drug Administration:
FEMA: Federal Emergency Management Agency:
NRP: National Response Plan:
NSC: National Security Council:
OFDA: Office of Foreign Disaster Assistance:
USAID: United States Agency for International Development:
USDA: United States Department of Agriculture:
Letter April 6, 2006:
Congressional Committees:
Hurricane Katrina struck in August 2005, devastating the Gulf coast of
the United States, causing billions of dollars in damage, and
dislocating thousands of residents. Government at all levels--local,
state, and federal--struggled to respond to the magnitude of the event.
As the storm's devastation and destruction were viewed around the
world, many foreign countries offered both cash and in-kind donations,
including foreign military donations to the United States.[Footnote 1]
For the first time in its history, the U.S. government welcomed
international offers of assistance to this degree.
The framework for managing domestic events is the National Response
Plan (NRP).[Footnote 2] The NRP establishes that the Department of
State (DOS) is the coordinator of all offers of international
assistance. In the aftermath of the hurricane, Federal Emergency
Management Agency (FEMA) officials told us that they convened an
interagency meeting to determine how the international assistance would
be managed. Shortly after this meeting the DOS created a Hurricane
Katrina Task Force. Through the task force, DOS provided information
about the offers to the FEMA, within the Department of Homeland
Security (DHS), and DOS communicated with the countries offering
assistance regarding what items would be accepted by the U.S.
government.[Footnote 3] FEMA utilized the Stafford Act[Footnote 4] to
accept some of the assistance. FEMA was responsible for coordinating
the distribution of the international assistance and ensuring that it
was distributed as intended. In carrying out these responsibilities,
FEMA requested support from other federal agencies, using a process
known as mission assignment. In the aftermath of Hurricane Katrina,
FEMA requested that the Office of Foreign Disaster Assistance (OFDA),
an organization within the U.S. Agency for International Development
(USAID), manage all logistics/operations support to coordinate the
international in-kind assistance for FEMA. DOD was involved in the
receipt of foreign military donations.
The National Security Council (NSC) also had a role to play in the
federal response to the hurricane. In the NRP section that discusses
the principal organizational elements, issues that require policy
adjudication or that fall outside the Secretary of Homeland Security's
areas of authority---as defined by the Homeland Security Act,[Footnote
5] the Stafford Act, and other relevant statues, Executive Orders, and
directives---are elevated for resolution through the Homeland Security
Council and the NSC system. In the case of Hurricane Katrina, the NSC
convened an interagency working group to decide how the donated funds
would be used.
FEMA had responsibility to safeguard the international assistance and
to ensure that it was used as intended. In other words, FEMA was
accountable to ensure that offers of assistance were acceptable for
consumption and use and, if so, were properly received and distributed.
Additionally in our opinion, when FEMA asks other agencies for
assistance through its mission assignment process, FEMA is to maintain
adequate oversight of the agencies' management of the assistance,
particularly since FEMA will reimburse the agencies for providing
assistance. The countries that provided the United States with
assistance did not stipulate specific uses for their donations.
Nevertheless, the United States often stipulates conditions regarding
how the assistance we provide to foreign countries should be used, and
for Hurricane Katrina DOS recognized that it had a responsibility to
maintain accountability and transparency with regard to the use of the
cash donations.
In light of widespread congressional and public interest in U.S.
agencies' accountability in receiving and distributing assistance to
hurricane victims, this report is one of several to review the events
and aftermath surrounding Hurricane Katrina initiated under the
statutory authority provided to the Comptroller General of the United
States. Our objectives were to determine (1) the amount of cash that
was donated by foreign countries, and the extent to which it had been
used to assist in the relief efforts, and (2) the extent to which those
federal agencies with responsibilities regarding the international
assistance offered to the United States had policies and procedures in
place to ensure the appropriate accountability for the acceptance and
distribution of in-kind donations, including foreign military
donations.
To achieve these objectives, we reviewed legislation and other
guidance, including the NRP, and met with key officials from DOS, DHS,
DOD, USAID, Department of Treasury (Treasury), U.S. Department of
Agriculture (USDA), and Food and Drug Administration (FDA) within the
Department of Health and Human Services. In addition, we collected and
reviewed relevant data, including lists of items offered and received,
and letters of acceptance from the agencies. We determined that the
data used were sufficiently reliable for the purposes of this report.
We conducted our review from October 2005 through February 2006 in
accordance with U.S. generally accepted government auditing standards.
For additional details on our scope and methodology, see appendix I.
Results in Brief:
The U.S. government had never before received such large amounts of
international disaster assistance, and ad hoc procedures were developed
to manage the acceptance and distribution of the assistance. It is
understandable that not all procedures would be in place at the outset
to ensure full accountability of the assistance. We were able to track
the funds received and disbursed to those held in designated U.S.
Treasury accounts. In the absence of policies, procedures, and plans,
DOS developed an ad hoc process to manage the cash donations flowing to
the U.S. government from other countries to assist in Hurricane Katrina
relief efforts. Through this process, $126 million was donated to the
U.S. government from 36 foreign countries and international
organizations without restrictions, which DOS recorded in a designated
account at the U.S. Treasury to hold the funds. FEMA had identified an
account that earned interest in which to accept and hold the
international cash donations. However, as cash donations arrived, an
NSC-led interagency working group was convened to make policy decisions
about the use of the funds.[Footnote 6] FEMA officials told us they had
identified and presented to the working group a number of items that
the donated funds could be spent on. The NSC-led interagency working
group determined that use of those donated funds, once accepted by FEMA
under the Stafford Act, would be more limited than the wider range of
possible uses available if the funds were held until their ultimate use
was determined and accepted under the gift authorities of other
agencies. By September 21, about $115 million had been received. In
October 2005, $66 million of the donated funds were accepted by FEMA
under the Stafford Act and spent on a case management grant to provide
case workers to help 100,000 households affected by Hurricane Katrina
identify their needs and direct them to available assistance. As of
March 16, 2006, $60 million remained undistributed in the DOS
designated account at the Treasury that does not pay interest.[Footnote
7] As explained below, Treasury can pay interest on funds accepted by
FEMA under the Stafford Act. Because Treasury did not have statutory
authority to pay interest on the funds held in the DOS account, the
purchasing power of those funds held in that account have diminished
due to inflation. Although it is understandable that procedures were
not in place at the outset, given that an additional $400 million or
more in potential international donations are outstanding and could
materialize, it is important that cash management policies and plans be
put in place to deal with the forthcoming donation so that the
purchasing power of the donated cash is maintained.
FEMA, OFDA, and DOD lacked sufficient policies and procedures prior to
this disaster to adequately ensure the acceptance and distribution of
in-kind donations, which includes such things as food, blankets,
medical items, and foreign military donations such as ships and diving
teams. This lack of guidance, as well as inadequate information up
front about the nature and content of foreign offers of in-kind
assistance, and insufficient advance coordination before items entered
the United States resulted in food and medical items, such as Meals
Ready to Eat (MREs) and medical supplies, that arrived and did not meet
USDA or FDA standards and thus could not be distributed in the United
States. That said, these agencies created ad hoc policies and
procedures to reasonably account for the assistance in most cases. For
example, although FEMA requested that USAID/OFDA manage the receipt and
distribution of the international assistance that arrived in the United
States, the ad hoc procedures did not include confirmation of receipt
of the donated goods at FEMA distribution sites. USAID/OFDA's mission
is to deliver assistance in foreign countries and thus it did not have
guidance on how to deliver assistance in the United States.
Nevertheless, we found that USAID/OFDA recorded the type and amount of
assistance as it arrived, and it reasonably accounted for the
assistance, particularly given the lack of information on the manifests
and the large quantity of goods arriving within a short time. However,
we noted the ad hoc procedures did not include internal controls that
would have provided more agency oversight and assurance that the
assistance was used as intended. Neither agency had a system to track
the assistance and confirm its arrival at those sites. Thus, FEMA could
not provide us evidence that it had determined or confirmed that the
assistance arrived at these sites. According to Standards for Internal
Control in the Federal Government, policies and procedures help provide
this oversight and are necessary to manage agency activities. These
policies and procedures were lacking because the agencies did not
anticipate that the United States would be receiving this assistance.
Further, FEMA's initial list of items that could be used was not
specific and DOS did not respond to FEMA's requests for more specific
information about the foreign offers. As a result, the U.S. government
received food and medical assistance, MREs and medical supplies, that
did not meet USDA or FDA standards and thus could not be distributed
and had to be stored. In addition to the storage fees of about $80,000
consequently incurred, there are diplomatic ramifications for rejecting
foreign countries' donations after their arrival. For receiving foreign
military donations for disaster relief, DOS established a process to
coordinate with FEMA and DOD. FEMA and DOD apparently each assumed the
other agency had accepted these donations under their respective gift
authorities; however it is unclear whether either agency did so. As a
result, even for the foreign military donations that were vetted
through the DOS process, it is unclear whether either agency accepted
these donations or maintained oversight of these donations and knew how
they were eventually used. In addition, while some foreign military
donations were coordinated through DOS, we learned that in other cases,
some foreign military donations--we were unable to determine the
amount--arrived directly at a military base without being coordinated
through DOS. This occurred in part because DOD lacked internal policies
and procedures for managing foreign military donations intended for use
in the United States. For foreign military shipments that were not
vetted through the task force, DOS, FEMA, and DOD officials could not
provide us with information regarding the amount or type of foreign
military donations received, and as a result, we were not able to
confirm that they were used as intended.
Officials from DOS, FEMA, and DOD acknowledged the need for delineated
policies and procedures to manage international assistance in the event
that the United States receives international assistance in the future.
As called for by The Federal Response To Hurricane Katrina: Lessons
Learned,[Footnote 8] officials from DOS, FEMA, and DOD told us that by
June 1, 2006, they will provide policies and procedures for managing
international assistance to the Homeland Security Council. We make six
recommendations that focus on specific areas for agencies with a role
in international assistance to develop in the National Response Plan or
other appropriate plan. Our recommendations complement the
administration's recommendations, but are more specific in some areas
such as the management of cash donations. In commenting on a draft of
this report, DOD and DHS generally agreed with our recommendations,
while DOS and Treasury did not comment on the recommendations. We
received technical comments from DOS, DOD, USAID/OFDA, FEMA, FDA, and
USDA, which we incorporated as appropriate.
Background:
Historically, governments worldwide--including that of the United
States--have provided areas stricken by major disasters with aid in the
recovery process. Unlike many other countries, the U.S. government has
previously neither asked for nor accepted disaster assistance directly
from foreign countries, choosing instead to direct offers of assistance
to nongovernmental organizations such as the Red Cross. However, on
August 29, 2005, Hurricane Katrina struck the coasts of Louisiana,
Mississippi, and Alabama, causing billions of dollars in damage, and 3
days afterward the federal government, through the DOS announced
worldwide assistance would be accepted. As of December 31, 2005, 76
countries and international organizations, such as UNICEF, donated $126
million in cash to the U.S. government; various types of in-kind
donations, such as food, clothing, and blankets; and foreign military
goods and services, such as the use of ships and diving teams. Seven
countries donated both cash and in-kind items.
There are several federal legislative and executive provisions that
support preparation for and response to emergency situations. The
Robert T. Stafford Disaster Relief and Emergency Assistance Act (the
Stafford Act)[Footnote 9] primarily establishes the programs and
processes for the federal government to provide major disaster and
emergency assistance to states, local governments, tribal nations,
individuals, and qualified private nonprofit organizations. FEMA has
responsibility for administering the provisions of the Stafford Act.
When and if natural disasters or terrorist attacks occur within the
United States, the National Response Plan (NRP), released in December
2004 by DHS, provides federal agencies with a framework to coordinate
federal support to states and localities in need. The NRP works on a
tiered request system, according to which requests for assistance flow
from localities to states to the federal government when or if local
and state resources are exhausted. However, under the NRP, the federal
government--DHS--can in certain cases declare a catastrophic incident
and provide assistance without waiting for requests for assistance.
According to the NRP, as events occur and shortcomings are identified,
FEMA is responsible for updating the plan. In the NRP section that
discusses the principal organizational elements, issues that require
policy adjudication or that fall outside the Secretary of Homeland
Security's areas of authority---as defined by the Homeland Security
Act,[Footnote 10] the Stafford Act, and other relevant statues,
Executive Orders, and directives---are elevated for resolution through
the Homeland Security Council[Footnote 11] and the National Security
Council system. In the case of Hurricane Katrina, the NSC led an
interagency working group to decide how the donated funds would be
used.
The Stafford Act also provides the President or his delegate with the
authority to accept and use gifts or donations in furtherance of the
purposes of the Stafford Act.[Footnote 12] FEMA, as the President's
delegate, utilized this provision to accept international in-kind
donations for the Hurricane Katrina recovery efforts. FEMA, through its
mission assignments to other agencies, directed the use of the
assistance to response efforts. Various other agencies have gift
authorities, including DOS and DOD. However, an agency's gift authority
typically restricts the acceptance of gifts or donations to those
activities that are within the accepting agency's mission. For the
purposes of Hurricane Katrina, FEMA--through the Stafford Act--accepted
donations for the response and recovery efforts.
Pursuant to Homeland Security Presidential Directive 5, the Secretary
of Homeland Security is the principal federal official for domestic
incident management, and the Secretary of State is charged with the
responsibility to coordinate international activities related to the
prevention, preparation, response, and recovery from a domestic
incident within the United States.[Footnote 13] Further, the Secretary
of State and Secretary of Homeland Security are to establish
appropriate relationships and mechanisms for cooperation and
coordination between their two departments. In the case of Hurricane
Katrina, DOS, through a Hurricane Katrina Task Force, coordinated the
acceptance of foreign monetary and nonmonetary assistance on behalf of
the U.S. government and DHS (FEMA), respectively. The Task Force
consisted of representatives from DOS and USAID/OFDA.
The NRP designates 15 Emergency Support Functions that identify
specific disaster responses and the organizations that have significant
roles in responding to the disasters. Two key annexes apply to
international disaster assistance. The International Coordination
Support annex provides guidance on carrying out responsibilities for
international coordination in support of the government's response to
an Incident of National Significance. Under this annex, DOS is charged
with coordinating requests for foreign assistance based on needs
conveyed by DHS or other federal agencies. DOS facilitates
communication with foreign governments on behalf of the United States
that can assist and/or support response, mitigation, and recovery
efforts and acts as an intermediary for requests and foreign offers of
assistance to the U.S. government. The NRP also includes a Financial
Management Annex. This annex requires federal agencies to use proper
federal financial principles, policies, and regulations, and management
controls to ensure proper accountability of funds. To safeguard the
assets, agencies can use the Comptroller General's Standards for
Internal Controls in the Federal Government.[Footnote 14] These
standards provide federal agencies with the framework necessary to
establish internal controls and thus safeguard and monitor assets and
inventory to prevent waste, loss, or unauthorized use.
USDA and FDA were also involved in the Hurricane Katrina relief effort.
USDA is responsible for regulating the importation of animals and
animal-derived materials to ensure that exotic animal and poultry
diseases are not introduced into the United States, as well as to
ensure that imported meat, poultry, or egg products are fit for human
consumption.[Footnote 15] FDA regulates the importation of foods
(except for certain meats and poultry products), drugs (human, animal,
and biological), cosmetics, medical devices and radiation emitting
devices, as defined in the Federal Food, Drug, and Cosmetic
Act.[Footnote 16] For conventional operations, USDA and FDA are
notified by U.S. Customs and Border Protection (CBP) prior to the
import of food items or medical supplies in order to ensure that the
items are acceptable for receipt in the United States.[Footnote 17]
The ad hoc processes to accept, receive, and distribute international
assistance varied depending on the type of assistance being offered.
However, whether the assistance was in the form of cash, or in-kind
donations, including foreign military donations, offers were supposed
to be initially coordinated through the DOS Hurricane Katrina Task
Force. However, we noted that not all foreign assistance was
coordinated through DOS. For example, an unknown quantity of in-kind
assistance came to the United States directly from foreign militaries.
On September 15, 2005, the President ordered a comprehensive review of
the federal government's response to Hurricane Katrina. The
administration released its report, The Federal Response To Hurricane
Katrina: Lessons Learned, on February 23, 2006. The report contained
125 recommendations, one of which requires DOS and DHS to lead an
interagency effort to develop procedures for reviewing, accepting, or
rejecting any offers of international assistance for a domestic
catastrophic incident, including a mechanism to receive, disburse, and
audit any cash assistance. Officials from DOS, FEMA, and DOD told us
that by June 1, 2006, they will provide policies and procedures for
managing international assistance to the Homeland Security Council. Our
report complements the findings in the administration's report.
Foreign Countries Donated Millions in Cash, But Policies, Procedures,
and Plans Were Not in Place:
In the absence of policies, procedures, and plans, DOS developed an ad
hoc process to manage the cash donations flowing to the U.S. government
from other countries to address Hurricane Katrina relief
efforts.[Footnote 18] Through this process, $126 million was donated to
the U.S. government which DOS recorded in a designated account at the
U.S. Treasury to hold the funds. An NSC-led interagency working group
was established to make policy decisions about the use of the funds.
FEMA officials told us they had identified and presented to the working
group a number of items that the donated funds could be spent on. Once
accepted by FEMA under the Stafford Act, donated funds would be limited
to use on activities in furtherance of the Act. The working group
wanted greater flexibility in the use of the donated funds, and thus
held the funds pending the group's determination as to which agency or
agencies should ultimately accept and use the monies. By September 21,
2005 about $115 million had been received and in October 2005, $66
million of the donated funds were accepted by FEMA and spent on a case
management grant. As of March 16, 2006, $60 million remained
undistributed in the DOS-designated account at the Treasury that does
not pay interest.[Footnote 19] As discussed previously, undistributed
funds accepted by FEMA under the Stafford Act and recorded at Treasury
can receive interest.[Footnote 20] Because DOS expects additional cash
donations to be received, it is important that cash management policies
and spending plans are in place to deal with the forthcoming donations
so that the purchasing power of the donated cash is maintained.
Ad Hoc Procedures Allowed Reasonable Accountability for Cash Donations:
For offers of cash assistance, the DOS Hurricane Katrina Task Force
developed ad hoc procedures to track and account for amounts offered
and received as events evolved. Ad hoc procedures were necessary
because specific policies and procedures for handling international
cash donations to the federal government had not been developed. The
DOS Hurricane Katrina Task Force evaluated each monetary offer by
working with foreign donors to determine whether there were any
specific restrictions or conditions associated with the offers. In
making their donations, foreign donors did not generally place
restrictions or conditions on amounts pledged. DOS also encouraged
governments and private foreign donors to direct their cash
contributions to the Red Cross and other organizations. Additionally,
DOS coordinated with other federal agencies to determine whether any
U.S. government sanctions imposed on a donating country prevented the
acceptance of its offer.[Footnote 21] Once an offer was accepted on
behalf of the U.S. government, DOS provided the donor with instructions
on how to wire transfer the funds to a designated Department of the
Treasury account maintained at the Federal Reserve Bank of New York
specifically for DOS.[Footnote 22] In other cases, countries and
private citizens wrote checks to the U.S. government that were
deposited and routed to the same account following normal operating
procedures. Figure 1 below shows the process developed to receive cash
donations.
Figure 1: Overview of Process Developed to Receive International Cash
Donations:
[See PDF for image]
[End of figure]
As of December 31, 2005, DOS reported that $126 million had been
donated by 36 countries and international organizations. Our review
noted that although DOS's procedures were ad hoc, they did ensure the
proper recording of international cash donations that have been
received to date, and we were able to reconcile the funds received with
those held in the designated DOS account at Treasury. DOS expects that
additional donations could come in from several countries including
$400 million in pledged oil products from a foreign country. DOS
officials told us that the foreign country's governing body must
approve the donation before this pledge can be executed and that the
country intends to monetize--convert to cash--the oil products if and
when its governing body approves the donation.
Cash Donation Management Policies, Procedures, and Plans Not in Place:
In the absence of international cash donation management policies,
procedures, and plans, an NSC-led interagency working group was
established to determine uses for the international cash donations. In
October 2005, $66 million of the donated funds had been accepted by
FEMA under the Stafford Act and used for a Hurricane Katrina relief
grant. As of March 16, 2006 the other $60 million from international
donations remained undistributed.[Footnote 23] We were told that the
NSC-led interagency working group did not transfer the funds to FEMA
because it wanted to retain the flexibility to spend the donated funds
on a wider range of assistance than is permitted under the Stafford
Act. During this period and while deliberations were ongoing, the funds
were kept in a DOS account that did not pay interest, thereby
diminishing the purchasing power of the donated funds and losing an
opportunity to maximize the resources available for relief. Under the
Stafford Act, FEMA could have held the funds in an account that can pay
interest, but Treasury lacks the statutory authority to credit these
DOS-held funds with interest. If there are dual goals of flexibility
and maintaining purchasing power, there are a number of options that
could be considered.
Table 1 below shows the dates of key events in the receipt and
distribution of the international cash donations according to
documentation received and interviews with DOS and FEMA officials.
Table 1: International Cash Donations Received and Used - Key Dates:
Date: August 29, 2005;
Event: Hurricane Katrina hit Gulf Coast Region.
Date: September 2, 2005;
Event: DOS Hurricane Katrina Task Force Established.
Date: September 3, 2005;
Event: DOS provides deposit instructions to diplomatic and consular
posts for foreign cash donations.
Date: September 6, 2005;
Event: FEMA identified account that can earn interest.
Date: September 21, 2005;
Event: About $115 million in foreign donations received.
Date: September 23, 2005;
Event: FEMA presented items the funds could have been spent on.
Date: October 20, 2005;
Event: DOS transferred $66 million to FEMA.
Date: October 28, 2005;
Event: FEMA awarded case management services grant to United Methodist
Committee on Relief.
Date: February 28, 2006;
Event: $60 million in remaining donations undistributed.
Date: March 16, 2006;
Event: Memorandum of Agreement signed between DOS and Department of
Education to spend remaining $60 million.
Source: GAO analysis.
[End of table]
In early September 2005, FEMA officials had identified an account at
the U.S. Treasury for recording international cash donations and had
developed a number of potential uses for the donations that would help
meet relief needs of the disaster. By September 21, 2005, about $115
million in foreign cash donations had been received. In its input to
the NSC-led interagency working group, dated September 22, 2005, DOS
recognized that every effort should be made to disburse the funds to
provide swift and meaningful relief to Hurricane Katrina victims
without compromising needed internal controls to ensure proper
management and effective use of the cash donations and transparency.
FEMA officials told us that on September 23, 2005, they had identified
and proposed to the NSC-led interagency working group that the
international cash donations could be spent on the following items for
individuals and families affected by Hurricane Katrina: social services
assistance, medical transportation, adapting homes for medical and
handicap needs, job training and education, living expenses, building
materials, furniture, and transportation. In responding to our draft
report, a DHS official said that at the next meeting of the interagency
working group on October 7, 2005, FEMA, at NSC's request, presented a
more detailed description of certain potential activities, including a
proposal to finance case management services for households affected by
Hurricane Katrina. On October 20, 2005, with the NSC-led interagency
working group consensus, DOS transferred to FEMA $66 million of the
international donations for the purpose of financing case management
services for up to 100,000 such households. These services will provide
case workers to help individual households define what their needs are
and to obtain available assistance. On October 28, 2005, FEMA awarded a
$66 million 2-year case management grant to the United Methodist
Committee on Relief. With these funds, the United Methodist Committee
on Relief will lead and manage a national consortium consisting of 10
primary organizations that will provide case management services to
victims of Hurricane Katrina.[Footnote 24]
As of February 2006, the remaining $60 million had not been released,
pending the NSC-led interagency working group determination as to which
agency or agencies should ultimately accept and use the remaining
funds. The NSC-led interagency working group set various parameters for
using the funds, including that the funds should be used for "bricks
and mortar" projects, such as buildings that provide tangible evidence
of how contributions were used. We were told that the NSC-led
interagency working group determined that use of those funds, once
accepted by FEMA under the Stafford Act, would be more limited than the
wider range of possible uses available if the funds were held until
their ultimate use was determined and then accepted under the gift
authorities of other agencies.
DOS and FEMA officials told us that for the remaining $60 million in
donated funds, the NSC-led interagency working group was considering a
series of proposals received from various entities, both public and
private. At the time of our review, a member of the NSC-led interagency
working group told us they had agreed that the vital needs of schools
in the area would be an appropriate place to apply the donations and
they were working with the Department of Education to finalize
arrangements to provide funding to meet those needs. FEMA officials
told us that under the Stafford Act, they could use donated funds for
projects such as rebuilding schools, but projects for new school
buildings are not consistent with Stafford Act purposes unless
replacing a damaged one. Also, according to a DHS official, the Act
would have required that receiving entities match FEMA funds for these
purposes. However, because of the devastation, the entities would have
difficulty matching FEMA funds, which in essence limited FEMA from
doing these types of projects. According to DHS, FEMA considered
whether it would be useful for donated funds to contribute to the non-
federal share for applicants having trouble meeting the non-federal
share, but would need legislative authority to use it to match federal
funds. We contacted NSC to further discuss these matters; however, NSC
did not respond to our requests for a meeting. On March 16, 2006, DOS
and the Department of Education signed a Memorandum of Agreement
regarding the use of $60 million of the international cash donations.
We did not review the details of this agreement.
Advance planning is very important given that outstanding pledges of
$400 million or more that DOS officials indicated will likely be
received. While acknowledging that the U.S. government has never
previously had occasion to accept such large amounts of international
donations for disaster relief, going forward, advance planning is a
useful tool to identify potential programs and projects prior to the
occurrence of an event of such magnitude. The administration's report
The Federal Response To Hurricane Katrina: Lessons Learned, released on
February 23, 2006, recognized that there was no pre-established plan
for handling international donations and that implementation of the
procedures developed was a slow and often frustrating process. The
report includes recommendations that DOS should establish before June
1, 2006, an interagency process to determine appropriate uses of
international cash donations, and ensure timely use of these funds in a
transparent and accountable manner, among others. DOS officials
recognized that the ad hoc process needed to be formalized and planned
to develop such procedures by June 1, 2006.
While the NSC-led interagency working group was reviewing various
proposals on the further use of the funds beyond the initial $66
million, the remaining $60 million was being held in a DOS account at
the U.S. Treasury that does not pay interest. Treasury lacks the
statutory authority to credit these DOS-held funds with interest. Since
these funds have not yet been used, their purchasing power has
diminished due to inflation. If these funds had been placed in an
account that could be credited with interest to offset the erosion of
purchasing power, the amount of funds available for relief and recovery
efforts would have increased while decision makers determined how to
use them. The U.S. government would be responsible for paying the
interest if these funds were held in an account at the Treasury that
can earn interest.
Although the Stafford Act does not apply to the donated funds
maintained in the DOS account at Treasury, the Stafford Act does
provide that excess donated funds may be placed in Treasury securities,
and the related interest paid on such investments would be credited to
the account. This Stafford Act provision applies only to donated funds
that have been accepted by FEMA. Had the foreign monetary donations
been placed in Treasury securities, we estimate that by February 23,
2006, the remaining funds for relief efforts would have increased by
nearly $1 million.[Footnote 25] Although Treasury lacks the authority
to invest the foreign monetary donations received by DOS, the FEMA
account does permit the government to protect the purchasing power of
foreign monetary donations.
As noted previously, outstanding pledges totaling over $400 million
could be received in the near future. Advanced planning and procedures
for the decision-making process in the disbursement of funds is
important so that this money can be utilized for disaster relief in a
timely manner or be placed in an account to earn interest for the
benefit of relief and reconstruction efforts while decisions are being
made on how to spend the funds. When developing policies, procedures,
and plans to provide the flexibility given by leaving the international
donations in the DOS account, it is important that consideration also
be given to strategies that can help maintain the purchasing power of
the international donations. If the goal is to maintain both their
purchasing power and flexibility, then among the options to consider
are seeking statutory authority for DOS to record the funds in a
Treasury account that can pay interest similar to donations accepted
under the Stafford Act, or to allow DOS to deposit the funds in an
existing Treasury account of another agency that can pay interest
pending decisions on how the funds would be used.[Footnote 26]
Policies and Procedures Were Lacking in the Acceptance and Distribution
of in-Kind Donations, Including Foreign Military Donations:
The agencies having responsibilities regarding international assistance
did not have policies and procedures in place to ensure the acceptance
and distribution of in-kind donations, including foreign military
donations, received from 43 countries and international organizations.
With little guidance, DOS, FEMA, OFDA, and DOD created ad hoc policies
and procedures in an effort to provide the assistance to victims as
quickly as possible. However, we did note areas in which the ad hoc
procedures were missing internal controls to ensure sufficient agency
oversight of the assistance and to ensure that the assistance was used
as intended. For example, the lack of guidance, inadequate information
up front about the nature and content of foreign offers of in-kind
assistance, and insufficient advance coordination before acceptance
resulted in food and medical items, such as Meals Ready to Eat (MREs)
and medical supplies, that arrived and did not meet USDA or FDA
standards and thus could not be distributed in the United States. Also,
the ad hoc procedures allowed for confusion about which agency--FEMA or
DOD--accepted and was responsible for oversight of foreign military
donations.
Process Developed for Accepting, Receiving, and Distributing In-Kind
Donations:
For offers of in-kind assistance, FEMA worked in close coordination
with the DOS Task Force to determine whether it should accept the
offers.[Footnote 27] Specifically, FEMA provided the Task Force with a
list of supplies the agency could use to assist in recovery efforts.
The Task Force compared the offers of assistance against a list of
needed supplies provided by FEMA.[Footnote 28] As matches were
identified by the Task Force, DOS relayed a message to the donor that
the offer would be accepted on behalf of the United States for use in
Hurricane Katrina relief efforts.
Once a message of acceptance was relayed to the foreign country or
international organization donating the in-kind assistance, the Office
of Foreign Disaster Assistance was tasked by FEMA with the
responsibility of providing logistical support for physical receipt of
the donation. USAID/OFDA coordinated with DOD-Northern Command to
establish a location that could be used to receive international
donations. The location had to be both accessible to numerous flights
delivering supplies and in close proximity to the areas devastated by
Hurricane Katrina, and USAID/OFDA and DOD-Northern Command determined
that the Little Rock Air Force Base best qualified for these criteria.
Accordingly, USAID/OFDA coordinated with foreign donors for in-kind
donations to arrive in Little Rock, Arkansas, where agency personnel
would unload donations and, upon request from FEMA, forward the
donations to a distribution point.
Figure 2 below shows the process developed for accepting, receiving,
and distributing in-kind donations.
Figure 2: Overview of Process Developed for Accepting, Receiving, and
Distributing In-Kind Donations:
[See PDF for image]
[End of figure]
Lack of Guidance Regarding the Tracking and Confirmation of Receipt for
International Assistance:
In the absence of guidance, USAID/OFDA created a database to track the
assistance as it arrived. We found, under the circumstances, that
USAID/OFDA reasonably accounted for the assistance, especially given
the lack of manifest information and the amount of assistance that was
arriving within a short time. Compounding difficulties in USAID/OFDA's
ability to record the assistance as it arrived were planes that arrived
from the North Atlantic Treaty Organization for which the organization
would not provide reliable manifest information.
Internal controls, such as a system to track that shipments are
received at intended destinations, provides an agency with oversight,
and for FEMA in this case, they help ensure that international
donations are received at FEMA destination sites. On September 14,
2005, FEMA and USAID/OFDA agreed that USAID/OFDA would track the
assistance from receipt through final disposition. However, the system
USAID/OFDA created did not include confirming that the assistance was
received at the FEMA distribution sites. In part, USAID/OFDA did not
set up these procedures on its own in this situation because USAID/OFDA
had never distributed assistance within the United States as its
mission is to deliver assistance in foreign countries. FEMA officials
told us that they assumed USAID/OFDA had these controls in place. FEMA
and USAID/OFDA officials could not provide us with evidence that
confirmed that the assistance sent to distribution sites was received.
Without these controls in place to ensure accountability for the
assistance, FEMA does not know if all or part of these donations were
received at FEMA distribution sites. Had USAID/OFDA created a system to
track the items transported through receipt at distribution sites and
had FEMA overseen the USAID/OFDA process, FEMA would be able to
determine the extent to which all or part of the foreign assistance was
received at the FEMA distribution sites.
Lack of Guidance Resulted in the Arrival of Food and Medical Items that
Could Not be Used:
The lack of guidance, inadequate information up front about foreign
offers of in-kind assistance and insufficient advance coordination
before agreeing to receive it, resulted in food and medical items, such
as MREs and medical supplies, that came into the United States and did
not meet USDA or FDA standards and thus could not be distributed in the
United States. The food items included MREs from five countries.
Because of the magnitude of the disaster, some normal operating
procedures governing the import of goods were waived. According to USDA
and FDA officials, under normal procedures, entry documents containing
specific information which are filed with CBP, are transmitted to USDA
and FDA for those agencies' use in determining if the commodities are
appropriately admissible into the United States. Based on U.S. laws and
regulations, the agencies then determine whether the items to be
imported meet U.S. standards. CBP authorized suspension of some normal
operating procedures for the import of regulated items like food and
medical supplies without consultation or prior notification to USDA or
FDA.[Footnote 29] Thus, USDA and FDA had no involvement in the decision-
making process for regulated product donations, including MREs and
medical supplies before the United States agreed to receive them.
FEMA notified USDA and FDA on approximately September 4, 2005, that
food and medical supplies were received by the U.S. government and
approved by CBP for entry into the United States. However, FEMA
officials told us that they did not accept MREs from one country even
though these MREs were shipped and stored in the warehouse along with
the MREs from the other countries. On approximately September 4, the
items were either in route or had already arrived at the staging area
in Little Rock, Arkansas. The USDA and FDA then sent personnel to
Little Rock to inspect the donations. Simultaneously, USAID/OFDA
personnel, unaware that some of these donations would not be eligible
for distribution and trying to expedite provision of relief supplies,
forwarded approximately 220,000 MREs to distribution points. When
USAID/OFDA officials became aware that the MREs they distributed were
not approved by the USDA, they recalled the items back to Little Rock,
Arkansas, pending USDA inspection.
According to USDA inspectors, they determined that a number of the MREs
donated to the United States contained meat and poultry products from
countries that, based on U.S. regulations,were excluded from exporting
meat to the United States. According to USDA, the MREs from one country
were banned because of concerns regarding Bovine Spongiform
Encephalopathy (BSE) meat contamination,[Footnote 30] or because the
MREs originated in countries lacking food inspection systems equivalent
to those in the United States. In addition, FDA found that many of the
medical supplies received in Little Rock were not approved for use in
the United States because they were either labeled with instructions in
a language other than English or stored under conditions that were
deemed unsanitary. Both USDA and FDA, based on regulations intended to
protect public health, prevented distribution of some international
donations.
Per FEMA guidance, USAID/OFDA received 359,600 rations of MREs that
could not be distributed within the United States. USAID/OFDA, on
behalf of FEMA, has been storing the MREs and medical supplies at a
private warehouse in Little Rock, Arkansas, until DOS and FEMA
determine what to do with them. As of February 1, 2006, FEMA and
DOS[Footnote 31] had paid the warehouse $62,000, with an additional
$17,600 contract pending for the month of February. In addition to the
storage cost, there is an unquantifiable cost in the diplomatic impact
of rejecting foreign donations after they have been received. DOS has
arranged for some of the MREs to be shipped to foreign countries in
need and DOS officials told us that the receiving countries will be
paying the shipping costs. As of February 3, 2006, approximately 40
percent of the 359,600 rations of MREs have been forwarded to two other
countries. The DOS plans to forward an additional 21 percent to other
countries by February 28, 2006.[Footnote 32] While the disposition of
the remaining 40 percent of the MREs and the medical supplies still
stored in the private warehouse is uncertain, DOS will continue to pay
storage fees. The following picture displays the numerous pallets of
MREs stored in Little Rock, Arkansas as of November 9, 2005.
Figure 3: Foreign Donated MREs in Storage as of November 9, 2005:
[See PDF for image]
[End of figure]
The costs for FEMA's receipt and later storage of the MREs and medical
supplies that were not distributed for the disaster were attributable
in part to the lack of policies and procedures needed to guide it
through the process of coordinating and accepting international in-kind
assistance. First, our review noted that FEMA's list of items that
could be used for disaster relief that was provided to DOS was very
general and did not provide any exceptions, for example about contents
of MREs. Also, DHS commented on our report that FEMA repeatedly
requested from DOS additional information about the foreign items being
offered to determine whether or not they should be accepted and DOS did
not respond. Had FEMA supplied DOS officials with more detailed
information early on about what could be accepted and what could not be
ultimately distributed, and had DOS requested and received additional
details from potential donors on the nature and contents of the
assistance such as MREs, they might have prevented the unusable
products from coming into the United States. FEMA officials told us
that in the event of another disaster of this size, they would
coordinate with USDA, FDA, and other agencies as required to avoid
similar problems.
Policies and Procedures Were Lacking in the Oversight of Foreign
Military Donations:
In the absence of policies and procedures, DOS, FEMA, and DOD created
ad hoc policies and procedures to manage the receipt and distribution
of foreign military goods and services; however, this guidance allowed
for confusion about which agency had oversight of these donations.
Also, there were no controls or procedures to assure that all foreign
military donations were vetted through the DOS process. The offers of
foreign military assistance included, for example, the use of
amphibious ships and diver salvage teams.
For foreign military donations, the DOS Hurricane Katrina Task Force
coordinated with FEMA and DOD, through Northern Command, to determine
whether the offer of assistance could be utilized. Northern Command
reviewed the offers of assistance and compared them against the mission
assignments it received from FEMA that included such tasks as clearing
ports and waterways of debris. If Northern Command believed the foreign
militaries' offers of assistance could be utilized to accomplish a
mission assignment, the command coordinated the receipt of the
assistance with the foreign donor. Figure 4 below shows the process
developed for acceptance and receipt of foreign military assistance.
Figure 4: Overview of Process Developed for the Acceptance and Receipt
of Foreign Military Assistance:
[See PDF for image]
[End of figure]
The ad hoc procedures, however, allowed confusion about which agency--
DOD or FEMA--was to formally accept the foreign military assistance and
therefore, each agency apparently assumed the other had done so under
their respective gift authorities. It is unclear whether FEMA or DOD
accepted or maintained oversight of the foreign military donations that
were vetted through the DOS task force. A FEMA official told us that
they were unable to explain how the foreign military donations were
used because FEMA could not match the use of the donations with mission
assignments it gave Northern Command. Establishing accountability is an
important internal control activity to help ensure that there is an
organization to account for the goods and services and that they are
used as intended. While we have found no evidence to suggest that any
of the foreign military goods or services were not used as intended,
establishing and maintaining oversight provides more assurance that
these donations were used as intended.
Moreover, FEMA and Northern Command officials told us of instances in
which foreign military donations arrived in the United States that were
not vetted through the DOS task force. For example, we were told of
foreign military MREs that were shipped to a military base and
distributed directly to hurricane victims. Having policies and
procedures in place would have instructed federal officials to
coordinate all foreign military offers of assistance through the DOS
task force which would work with FEMA and DOD to determine the best use
for the items. DOD officials acknowledged the need for policies and
procedures and are trying to establish policies and procedures to
manage international assistance. When we asked about shipments that
were not vetted through the task force, neither DOS, FEMA, nor DOD
officials could provide us information on the type, amount, or use of
these donations. As a result, we can not determine if these items of
assistance were safeguarded and used as intended.
Conclusions:
We recognize that since the United States government had never before
received such substantial amounts of international disaster assistance,
DOS, FEMA, OFDA, and DOD needed to create ad hoc procedures to manage
the acceptance and distribution of the assistance as best they could.
Going forward, it will be important to have in place clear policies,
procedures, and plans on how international cash donations are to be
managed and used, which would enhance the accountability and
transparency of these funds. In addition, there is a need to consider
whether international donations should be treated on the same basis as
Stafford Act donations for the purpose of Treasury crediting interest
to such donations. Since this was the first time international
donations were accepted, this situation was not contemplated. If the
goal is to maintain both purchasing power and flexibility, then among
the options to consider are seeking statutory authority for DOS to
record the funds in a Treasury account that can pay interest, or to
allow DOS to deposit the funds in an existing Treasury account of
another agency that can pay interest pending decisions on how the funds
would be used. In addition, focusing immediate attention on the
potentially forthcoming donations of $400 million, as well as the $60
million in presently available funds, would be prudent.
With respect to the donations of food and medical supplies, we agree
that normal procedures should be waived to expedite recovery efforts
when necessary; however, food and medical supplies are essential in any
disaster and the health and safety of the public should be considered
when accepting food and medical assistance from the international
community. Moreover, the failure to track in-kind donations after they
were loaded onto trucks resulted in a lack of assurance that all of the
international assistance FEMA accepted was safeguarded, and used as
intended. The need to have proper knowledge, acceptance, and oversight
of foreign military donations is equally important.
Recommendations for Executive Action:
As mentioned previously, in February 2006, the administration issued
its report on the federal response to Hurricane Katrina and the lessons
learned in that response. In the report, the administration made 125
recommendations, including several to improve the management of
international donations. Specifically, DOS and DHS are required to lead
an interagency effort to improve the management of international
donations, which includes developing procedures for reviewing,
accepting, or rejecting any offers as well as developing a mechanism to
receive, disburse, and audit any cash donations. To help ensure that
the cognizant agencies fulfill their responsibility to account for and
effectively manage foreign donations and maintain adequate internal
controls over government resources, we recommend that the Secretary,
Department of Homeland Security, in consultation with the Secretary,
Department of State, establish within the National Response Plan--or
other appropriate plans--clearly delineated policies and procedures for
the acceptance, receipt, and distribution of international assistance.
As the agencies develop and implement the administration's
recommendations, we believe they should also incorporate the following
actions and procedures into their guidance.
* Develop policies, procedures, and plans to help ensure international
cash donations for disaster relief and assistance are accepted and used
appropriately as needed.
* Consider cash management options as discussed in the conclusions
section above and place international cash donations in an account that
would pay interest while decisions are pending on their use to maintain
the purchasing power of those donations.
* Maintain oversight of foreign donated in-kind assets by tracking them
from receipt to disbursement, to reasonably ensure that assistance is
delivered where it is intended.
* Establish plans for the acceptance of foreign-donated items that
include coordinating with regulatory agencies, such as USDA and FDA, in
advance, in order to prevent the acceptance of items that are
prohibited from distribution in the United States, regardless of
waivers that might be established to expedite the importing of foreign
assistance; these plans should also include DOS obtaining information
on acceptable or unacceptable items in order to communicate to the
international community what is needed or what can not be accepted.
We also recommend that the Secretary of Defense, in consultation with
the Secretaries of State and Homeland Security, take the following two
actions:
* Establish within the National Response Plan or other appropriate
plans--clearly delineated policies and procedures to ensure that
foreign military offers of assistance for domestic disasters are
coordinated through the DOS to ensure they are properly accepted and
safeguarded and used as intended.
* Develop and issue internal DOD guidance to commanders on the agreed-
upon process to coordinate assistance through DOS.
Agency Comments and Our Evaluation:
We asked the Secretaries of Defense, Homeland Security, State, and
Treasury to comment on our draft. We also asked USDA, FDA, and
USAID/OFDA to provide comments. DOD and DHS generally agreed with our
recommendations and provided written comments on a draft of this
report, included at appendixes II and III, respectively. We received
technical comments from DOS, DOD, USAID/OFDA, FEMA, FDA, and USDA which
we incorporated as appropriate.
DOD agreed with the recommendations pertaining to it and suggested that
we adjust the wording of the recommendation that procedures be
developed to assure that foreign military donations be routed through
DOS. We adjusted the recommendation based on DOD's suggestion. In its
technical comments, DOD also suggested specific information on the
process to coordinate international offers of assistance through DOS,
including ensuring that the offers match U.S. requirements, meet U.S.
standards, and are received at the right locations. These specifics may
be considered as the agencies develop policies, procedures, and plans
for the management of future international assistance.
DHS generally agreed with our recommendations and noted that, in some
cases, actions were already underway to address the recommendations.
Regarding our recommendation to develop policies, procedures, and plans
for international cash donations for disaster relief to assure they are
accepted and used appropriately as needed, DHS noted that, in
coordination with Treasury and the Office of Management and Budget, it
is already developing a system to manage such donations. DHS also
agreed with our recommendation regarding cash management options that
would maintain the purchasing power of the cash donations while
decisions are pending on their use. DHS added that this recommendation
was consistent with what FEMA did during Hurricane Katrina, pointing
out that on September 6, 2005, FEMA established an interest bearing
account to hold international funds and began identifying programs and
needs that would not be eligible for FEMA assistance but could benefit
from monetary donations. DHS also agreed that FEMA should maintain
oversight of foreign donated in-kind assets to the distribution points.
DHS noted that FEMA and USAID/OFDA agreed that it was USAID/OFDA's
responsibility to track incoming international donations. We
acknowledge this agreement, but note in our report, however, that the
in-kind donations were not tracked to the final distribution points
with confirmation that they arrived and note that USAID/OFDA and FEMA
could not provide evidence that this had been accomplished. We
clarified the report in this regard. DHS agreed with our recommendation
regarding the need to coordinate with regulatory agencies such as USDA
and FDA in advance to prevent the receipt of items that could not be
distributed in the United States. DHS noted that FEMA coordinated with
these agencies during Hurricane Katrina, and made constant requests to
DOS to obtain more information from the donors about the donations to
determine whether or not they could be properly accepted. We agree that
more specificity is needed about the nature and content of items the
United States can accept and foreign nations are offering through DOS
channels, such as MREs, and reflected DHS's comment in the final
report. Without such information, it may not be possible to undertake
appropriate coordination with regulatory agencies such as USDA and FDA
and make a sound determination as to whether the items should be
accepted and could be used in the United States before they arrive. DHS
also agreed that all foreign military offers of assistance for domestic
disasters should be coordinated through DOS for official acceptance or
denial. However, we continue to believe that clear procedures are
needed regarding which agency--FEMA or DOD--accepts and maintains
oversight of such donations in advance. We adjusted our draft report to
reflect the apparent confusion over the acceptance of foreign military
donations.
We also received technical comments from DOS, DOD, USAID/OFDA, FEMA,
FDA, and USDA, which we incorporated as appropriate.
We are sending copies of this report to the Secretaries of Homeland
Security, Defense, and State and interested congressional committees.
We will also make copies available to others upon request. In addition,
the report will be available at no charge on the GAO Web site at
http://www.gao.gov.
Please contact Davi M. D'Agostino at (202) 512-5431 or [Hyperlink,
dagostinod@gao.gov] or McCoy Williams at (202) 512- 9095 or [Hyperlink,
williamsm1@gao.gov] if your staff have any questions concerning this
report. Contact points for our Offices of Congressional Relations and
Public Affairs may be found on the last page of this report. GAO staff
who made major contributions to this report are listed in appendix IV.
Signed by:
Davi M. D'Agostino, Director:
Defense Capabilities and Management:
Signed by:
McCoy Williams, Director:
Financial Management and Assurance:
List of Congressional Committees:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Tom Davis:
Chairman:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
[End of section]
Appendixes:
Appendix I: Scope and Methodology:
To meet our objectives for this report we relied on information
gathered through our visits and interviews with key personnel within
the Department of State's (DOS) Hurricane Katrina Task Force; Office of
the General Counsel for the DOS; Department of Homeland Security (DHS)
Inspector General; Office of the General Counsel for Federal Emergency
Management Agency (FEMA); FEMA Response Division; FEMA Recovery
Division; Office of the Chief Financial Officer for FEMA;
FEMA/Financial and Acquisitions Management Division; FEMA/Grants
Management Division; United States Agency for International Development
(USAID)/Office of Foreign Disaster Assistance (OFDA); OFDA/Response
Alternatives for Technical Services; Office of the Assistant Deputy
Under Secretary of Defense; Office of the Assistant Secretary of
Defense; Northern Command (NORTHCOM)/Joint Staff Logistics;
NORTHCOM/Joint Staff Civil Affairs; NORTHCOM/Political Advisor;
Department of Treasury (Treasury)/Cash Accounting; Treasury/Chief
Systems Integrity Division; Food and Drug Administration (FDA); and
United States Department of Agriculture (USDA)/Food Safety and
Inspection Service. We conducted our work in Washington, D.C; Little
Rock, Arkansas; Colorado Springs, Colorado, and New York, New York,
from October 2005 through February 2006, in accordance with generally
accepted government auditing standards. DOS and FEMA officials told us
the National Security Council (NSC) had established an interagency
working group that had a role in determining how the international cash
donations were to be used. We contacted NSC to discuss its role in
managing the international cash donations; however, NSC did not respond
to our request for a meeting.
To determine the amount of cash that was donated by foreign countries
and the extent to which it has been used to assist hurricane victims,
we gathered information from interviews with DOS, FEMA, and Treasury.
To assess the reliability of foreign cash donations received by the
U.S. government from the date Hurricane Katrina hit the United States
until December 31, 2005, we talked with DOS, FEMA, and Treasury
officials to gain an understanding of the procedures followed in
recording the funds. We also validated $123,611,143, which is 97.8
percent of the Hurricane Katrina collections reflected in the
Department of Treasury records by comparing to supporting documentation
such as Treasury wire transfers and DOS check receipt documents. We
also traced the transfer of $66 million in funds from DOS to FEMA. We
determined the data were sufficiently reliable for the purpose of this
report. To obtain an understanding of the oversight controls over
FEMA's-2 year case management grant, we interviewed officials from
FEMA/Grants Management Division, the United Methodist Committee on
Relief, and DHS Office of Inspector General, as well as reviewed
pertinent documents such as the grant proposal and agreement. We also
contacted the NSC to discuss why an interagency working group and not
FEMA was used to manage the donated cash and the process by which they
established the parameters governing how the cash was to be used. NSC
did not respond to our requests for a meeting.
To determine the extent to which those federal agencies with
responsibilities regarding the international assistance offered to the
United States had policies and procedures in place to ensure the
appropriate accountability for the acceptance and distribution of in-
kind donations, including foreign military donations, we relied on
information gathered during interviews with officials from DOS, DHS,
DOD, USDA, and FDA. We reviewed the National Response Plan
International Coordination Support Annex and Financial Management
Annex; Robert T. Stafford Act; Homeland Security Presidential Directive
5; Federal Food, Drug, and Cosmetic Act; and 9 CFR 94.18 to determine
the responsibilities of federal agencies. We also obtained, reviewed,
and analyzed the Memorandum of Agreement between the Department of
State and The Department of Homeland Security; a FEMA-created
international assistance flow chart and processes document; a NORTHCOM-
created international donations flowchart; USAID Commodity Dispatch
Procedures; and FDA Import Procedures to assist in understanding the
roles of federal agencies. We reviewed and analyzed summaries of
international assistance received; instructional and acceptance cables
from the Department of State; instructions provided to FEMA accountants
for recording in-kind donations; and USAID Commodity Dispatch
Procedures for FEMA to call forward international donations from the
arrival site in Little Rock, Arkansas. To assess the reliability of
data provided, we talked with knowledgeable agency officials about the
data provided and reviewed relevant documentation. We visited Smart
Choice Delivery warehouse in Little Rock, Arkansas to discuss and
observe the international Meals-Ready-to-Eat that were stored in the
facility. We obtained and reviewed the contract between the Office of
Foreign Disaster Assistance and Smart Choice Delivery. In addition, we
interviewed representatives from the American Red Cross and the United
Nations International Children's Fund in order to understand the
process and procedures of leading non-governmental agencies that are
experienced in accepting non-monetary donations.
[End of section]
Appendix II: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
POLICY:
2000 DEFENSE PENTAGON:
WASHINGTON, DC 20301-2000:
Ms. Davi M. D'Agostino:
Director, Defense Capabilities and Management:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, DC 20548:
Dear Ms. D'Agostino:
This is the Department of Defense (DoD) response to the GAO draft
report, `HURRICANE KATRINA: Comprehensive Policies and Procedures are
Needed to Ensure Appropriate Use of and Accountability for
International Assistance,' dated March 23, 2006, (GAO Code 350767/GAO-
06-450).
I am forwarding the Department's comments on the draft report
recommendations for the Under Secretary of Defense for Policy who has
approved the comments at enclosure one.
Recommended technical changes that were identified are at enclosure
two.
Sincerely,
Signed by:
Chris King, COL, USA:
Senior Military Assistant to the Under Secretary of Defense for Policy:
Enclosures:
1. DoD comments:
2. Technical changes:
GAO DRAFT REPORT - DATED MARCH 23, 2006 GAO CODE 350767/GAO-06-460:
"HURRICANE KATRINA: Comprehensive Policies and Procedures are Needed to
Ensure Appropriate use of and Accountability for International
Assistance,"
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION: 1: The GAO recommended that the Secretary of Defense,
consultation with the Secretaries of State and Homeland Security
establish within the National Response Plan or other appropriate plans
clearly delineated policies and procedures to ensure that foreign
military offers of assistance for domestic disasters are routed through
the Department of State to ensure they are safeguarded and used as
intended. (Page 29/GAO Draft Report):
DOD RESPONSE: Concur with comments. The phrase "routed through" should
be changed to "coordinated with". State did establish a process to
coordinate with FEMA and DoD. (Page 5/GAO Draft Report).
RECOMMENDATION: 2: The GAO recommended that the Secretary of Defense,
in consultation with the Secretaries of State and Homeland Security
develop and issue internal DoD guidance to commanders on the agreed
upon process to route assistance through the Department of State. (Page
29/GAO Draft Report):
DOD RESPONSE: Concur with comments. The word "route" should be changed
to "coordinate". State did establish a process to coordinate with FEMA
and DoD. (Page 5/GAO Draft Report):
[End of section]
Appendix III: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
March 31, 2006:
Davi M. D'Agostino:
Director, Defense Capabilities and Management and Financial Management
and Assurance:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Ms. D'Agostino:
Re: Draft Report GAO-06-460, Hurricane Katrina: Comprehensive Policies
and Procedures are Needed to Ensure Appropriate Use of and
Accountability for International Assistance:
Thank you for the opportunity to review the draft report. The following
represents the Department of Homeland Security response to the
recommendations contained in GAO's draft report.
On the content of the draft GAO report, DHS would like to make four
points. First, FEMA was extremely proactive. Within 24 hours after the
U.S. Government declared that we were accepting all international
offers of assistance in principle, FEMA initiated the mission
assignment to the U.S. Agency for International Development's (USAID)
Office of Foreign Disaster Assistance (OFDA). OFDA effectively managed
the operations and logistics for the international donations that FEMA
accepted during Hurricane Katrina. FEMA also brought together the
agencies and components with expertise in handling international
resources (e.g. Department of State (DOS), USAID/OFDA, Customs and
Border Protection (CBP), Department of Defense (DOD), and Health and
Human Services (HHS)) to develop an ad-hoc mechanism for processing the
offers DOS was receiving. Second, FEMA ensured accountability of
international donations by requesting that USAID/OFDA track all
international donations accepted by FEMA. With their daily status
reports, USAID/OFDA demonstrated that they were tracking donations and
maintaining accountability. Third, it was FEMA's highest priority to
ensure that international donations accepted into the United States
were safe. This was demonstrated by FEMA requesting CBP assistance and
ensuring resources that did not meet U.S. regulations were not
distributed. Fourth, although FEMA incorporated DOD into the ad-hoc
mechanism, FEMA only had oversight over donations that were accepted
under FEMA's gift acceptance authority, not donations that were
accepted or received through military-to-military channels.
The following are DHS' responses to GAO's recommendations.
Recommendation: Develop policies, procedures, and plans to help ensure
international cash donations for disaster relief and assistance are
accepted and used appropriately as needed.
Response: Concur. DHS is already developing a system to manage
international cash donations working in coordination with the
Department of Treasury and Office of Management and Budget (OMB).
Recommendation: Consider cash management options as discussed in the
conclusions section and place international cash donations in an
account that would pay interest while decisions are pending on their
use to maintain the purchasing power of those donations.
Response: Concur. Recommendation is consistent with what FEMA did
during Hurricane Katrina. On September 6, 2005, FEMA established an
interest bearing account to hold international funds and began
identifying programs and needs that would not be eligible for FEMA
assistance but could benefit from monetary donations.
Recommendation: Maintain oversight of foreign donated in-kind assets by
tracking them from receipt to disbursement, to reasonably assure that
assistance is delivered where it is intended.
Response: Generally concur. FEMA is in agreement with this
recommendation if the term disbursement refers to FEMA's responsibility
of ensuring that international in-kind donations are tracked from the
point that USAID receives the donations and transports them to a
federal staging area or a non-federal entity (e.g. state distribution
center). Per normal procedures, FEMA will keep a record of receipt of
items received at a federal staging area. Moreover, per normal
procedures, FEMA will track the distribution of commodities to the
point they are physically delivered to one of our state/local partners
or organizations. From this point forward, it is not FEMA's
responsibility to track the disbursement of in-kind donations as that
responsibility is transferred to the state/local partner or
organization that received the goods for distribution in the field.
It is important to note that during and in the aftermath of Hurricane
Katrina, FEMA made considerable efforts to ensure that international
donations were tracked:
1) USAID/OFDA provided FEMA with daily status reports on international
donations.
2) FEMA and USAID/OFDA agreed that it was USAID/OFDA's responsibility
to track incoming international in-kind donations.
3) FEMA kept records when FEMA took receipt of international in-kind
donations from USAID/OFDA.
Recommendation: Establish plans for the acceptance of foreign donated
items that include coordinating with regulatory agencies, such as USDA
and FDA in advance in order to prevent the acceptance of items that are
prohibited from distribution in the United States, regardless of
waivers that might be established to expedite the importing of foreign
assistance; these plans should also include DOS obtaining information
on acceptable or non acceptable items in order to communicate to the
international community what is needed or what can not be accepted.
Response: Generally concur. Recommendation is consistent with what FEMA
did during Hurricane Katrina. FEMA made constant requests to DOS to
obtain more information on international donations in order to
determine whether or not these donations could or could not be formally
accepted and integrated into our response operations. FEMA also took
every precaution to ensure that international donations were safe to be
distributed in the United States.
Recommendation: Establish within the National Response Plan or other
appropriate plans, clearly delineated policies and procedures to ensure
that foreign military offers of assistance for domestic disasters are
routed through the DOS to ensure they are safeguarded and used as
intended.
Response: Concur. It is important to coordinate all offers or donations
from foreign governments and/or foreign military organizations through
DOS for official acceptance or denial and to ensure appropriate
diplomatic considerations.
Recommendation: Develop and issue internal Department of Defense (DOD)
guidance to commanders on the agreed upon process to route assistance
through DOS.
Response: Concur. For international donations accepted under FEMA gift
acceptance authority, it is FEMA's understanding that DOD will
coordinate through the international donation mechanism, which is being
developed by the inter-agency working group.
Sincerely,
Signed by:
Steven J. Pecinovsky:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix IV: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Davi M. D'Agostino (202) 512-5431 McCoy Williams (202) 512-9095:
Acknowledgments:
In addition to those named above, Kay Daly, Kate Lenane, Charles
Perdue, Jay Spaan, Lorelei St James, Pamela Valentine, Cheryl Weissman,
and Leonard Zapata made key contributions to this report.
[End of section]
Related GAO Products:
Hurricane Katrina: Status of the Health Care System in New Orleans and
Difficult Decisions Related to Efforts to Rebuild It Approximately 6
Months After Hurricane Katrina. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-576R]. Washington, D.C.: March 28, 2006.
Agency Management of Contractors Responding to Hurricanes Katrina and
Rita. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-461R].
Washington, D.C.: March 15, 2006.
Hurricane Katrina: GAO's Preliminary Observations Regarding
Preparedness, Response, and Recovery. [Hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-442T]. Washington, D.C.: March
8, 2006.
Emergency Preparedness and Response: Some Issues and Challenges
Associated with Major Emergency Incidents. [Hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-467T]. Washington, D.C.:
February 23, 2006.
Disaster Preparedness: Preliminary Observations on the Evacuation of
Hospitals and Nursing Homes Due to Hurricanes. [Hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-443R]. Washington, D.C.:
February 16, 2006.
Investigation: Military Meals, Ready-To-Eat Sold on eBay. [Hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-410]. Washington, D.C.:
February 13, 2006.
Expedited Assistance for Victims of Hurricanes Katrina and Rita: FEMA's
Control Weaknesses Exposed the Government to Significant Fraud and
Abuse. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-403T].
Washington: D.C., February 13, 2006.
Statement by Comptroller General David M. Walker on GAO's Preliminary
Observations Regarding Preparedness and Response to Hurricanes Katrina
and Rita. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-365R].
Washington, D.C., February 1, 2006.
Federal Emergency Management Agency: Challenges for the National Flood
Insurance Program. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-
335T]. Washington, D.C.: January 25, 2006.
Hurricane Protection: Statutory and Regulatory Framework for Levee
Maintenance and Emergency Response for the Lake Pontchartrain Project.
GAO-06-322T. Washington, D.C.: December 15, 2005.
Hurricanes Katrina and Rita: Provision of Charitable Assistance. GAO-
06-297T. Washington, D.C.: December 13, 2005.
Army Corps of Engineers: History of the Lake Pontchartrain and Vicinity
Hurricane Protection Project. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-244T]. Washington, D.C.: November 9, 2005.
Hurricanes Katrina and Rita: Preliminary Observations on Contracting
for Response and Recovery Efforts. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-246T]. Washington, D.C.: November 8, 2005.
Hurricanes Katrina and Rita: Contracting for Response and Recovery
Efforts. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-235T].
Washington, D.C.: November 2, 2005.
Federal Emergency Management Agency: Oversight and Management of the
National Flood Insurance Program. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-183T]. Washington, D.C.: October 20, 2005.
Federal Emergency Management Agency: Challenges Facing the National
Flood Insurance Program. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-174T]. Washington, D.C.: October 18, 2005.
Federal Emergency Management Agency: Improvements Needed to Enhance
Oversight and Management of the National Flood Insurance Program.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-119]. Washington,
D.C.: October 18, 2005.
Army Corps of Engineers: Lake Pontchartrain and Vicinity Hurricane
Projection Project. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-
05-1050T]. Washington, D.C.: September 28, 2005.
Hurricane Katrina: Providing Oversight of the Nation's Preparedness,
Response, and Recovery Activities. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-05-1053T]. Washington, D.C.: September 28, 2005.
[End of section]
(350767):
FOOTNOTES
[1] In-kind donations are non-cash items such as food, clothing,
blankets, and tents that were donated by foreign countries to the U.S.
government. Foreign military donations came directly from foreign
militaries to the United States and included such items as the use of
amphibious ships, divers, and pumps.
[2] The NRP assigns various agencies with lead roles and supporting
roles during a disaster. The role that an agency would play depends on
the nature of the disaster.
[3] Not all offers of assistance were accepted by the U.S. government.
For example, one country made an offer of cash that the United States
did not accept, due to ongoing U.S. sanctions against that country.
[4] Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42
U.S.C. §§ 5121-5206 (2000); see § 5201 (b).
[5] Homeland Security Act of 2002, Pub. L. No. 107-296 (2002).
[6] The working group included representatives from DOS, FEMA, DHS,
NSC, and the Office of Management and Budget. Treasury officials also
told us they participated in the group's initial meeting.
[7] On March 16, 2006, DOS and the Department of Education signed a
Memorandum of Agreement regarding the use of $60 million of the
international cash donations. We did not review the details of this
agreement.
[8] The White House, The Federal Response To Hurricane Katrina: Lessons
Learned (Washington, D.C.: Feb. 23, 2006).
[9] 42 U.S.C. §§ 5121-5206.
[10] Homeland Security Act of 2002, Pub. L. No. 107-296 (2002).
[11] The Homeland Security Council ensures the coordination of all
homeland security-related activities among executive departments and
agencies and promotes the effective development and implementation of
all homeland security policies.
[12] 42 U.S.C. § 5201(b).
[13] Homeland Security Presidential Directive 5, "Management of
Domestic Incidents" (February 2003).
[14] GAO, Standards for Internal Controls in the Federal Government,
GAO/AIMD 00-21.3.1 (Washington, D.C.: November 1999).
[15] 7 U.S.C. §§ 8301-8317.
[16] 21 U.S.C. § 381.
[17] FEMA noted in its technical comments that manifest data for
military planes does not go to CBP and USDA.
[18] Our scope did not include foreign assistance that was not provided
to the federal government, such as foreign donations made directly to
Hurricane Katrina victims, local governments, states, or institutions.
[19] On March 16, 2006, DOS and the Department of Education signed a
Memorandum of Agreement regarding the use of $60 million of the
international cash donations. We did not review the details of this
agreement.
[20] Section 5201(b) of Title 42, U.S.C. states, in part, that "At the
request of the President or his delegate, the Secretary of the Treasury
may invest and reinvest excess monies in the fund. Such investments
shall be in public debt securities with maturities suitable for the
needs of the fund and shall bear interest rates determined by the
Secretary of the Treasury, taking into consideration current market
yields on outstanding marketable obligations of the United States of
comparable maturities. The interest on such investments shall be
credited to, and form a part of, the fund."
[21] For example, the U.S. government declined one foreign country's
offer of monetary assistance due to ongoing U.S. sanctions.
[22] Treasury assigns various types of account symbols (accounts) to
agencies for the purposes of classifying receipt, appropriation,
deposit, trust, and other funds. These accounts are assigned based on
the nature and characteristics of the transactions they support.
[23] On March 16, 2006, DOS and the Department of Education signed a
Memorandum of Agreement regarding the use of $60 million of the
international cash donations. We did not review the details of this
agreement.
[24] FEMA plans to oversee case management grant activities and
expenses to ensure the grant's objective is met. Additionally, the DHS
Office of Inspector General (IG) has initiated an audit of the case
management grant to provide independent oversight throughout the
grant's existence.
[25] Interest computed based on an estimated average annual yield of 5
percent for Treasury Government Account Series from October 21, 2005,
to February 23, 2006.
[26] DHS noted in technical comments on a draft of this report that it
would not subsequently transfer donated funds to another agency for
purposes other than carrying out the Stafford Act.
[27] The DOS Task Force included representatives from DOS and
USAID/OFDA.
[28] FEMA tasked USAID/OFDA to work with DOS to determine whether
specific offers were accepted and needed.
[29] In order to respond to the specific threat to human life and
national interests posed by the major disaster existing in Louisiana,
Mississippi, and Alabama, the Commissioner of U.S. Customs and Border
Protection authorized Port Directors and Directors of Field Operations
to close temporarily any Customs office or port of entry or take any
other lesser action that may be necessary to respond to the Katrina
Disaster. This action was taken pursuant to 19 U.S.C. § 1318(b)(2) and
19 U.S.C. § 1322(b).
[30] 9 C.F.R. 94.18.
[31] As of December 13, 2005, the Department of State provided funding
for payment of the private warehouse in Little Rock, Arkansas from
FEMA. The Department of State, through USAID, has amended the contract
to extend to February 28, 2006.
[32] DOS officials commented that all MREs will be removed from the
warehouse by March 31, 2006.
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