Disaster Assistance

The Federal Emergency Management Agency (FEMA) is expected to spend more than $7 billion to help people recover from the 1994 Northridge earthquake. About 12 percent, or $143 million, of FEMA's temporary housing assistance to 400,000 households was distributed via an expedited process known as "Fast Track." Under Fast Track, FEMA issued checks to applicants before conducting physical inspections of their homes to verify their eligibility. Fast Track recipients were advised that in cashing their check, they were confirming that their application was correct and that they would use the money only for disaster-related emergency housing needs, rent for alternative housing, or repairs. FEMA spent another $32 million on crisis-counseling services for earthquake victims suffering mental stresses. This report examines (1) the authority and rationale for the Fast Track process; (2) what FEMA's experience with the Fast Track process in Northridge was and whether the process was influenced by the Office of Inspector General's recommendations; (3) the advantages and disadvantages of the Fast Track process, including the payment amounts that FEMA earmarked for recovery and later recovered and the reasons for ineligibility; and (4) FEMA's criteria and process for providing crisis-counseling funds and ensuring their use for authorized purposes. This report also provides information on other federal disaster assistance programs that help victims before determining their eligibility.

GAO noted that: (1) the legislation authorizing FEMA's temporary housing assistance has no explicit provision for a process such as Fast Track; (2) however, as FEMA concluded, the act gives the agency wide latitude in providing expeditious assistance for disaster victims; (3) FEMA's rationale in implementing the Fast Track process following the Northridge earthquake was to assist the largest number of disaster victims in the shortest possible amount of time; (4) in implementing the process, FEMA experienced operational difficulties including the inconsistent application of criteria when designating zip codes; (5) because of these errors, not all Northridge victims in similar circumstances were treated the same; (6) FEMA also experienced constraints with the computer software used to process applications; (7) these difficulties, combined with an enormous volume of applications for assistance and FEMA's decisions on applicants' eligibility for payments made under both the regular and Fast Track processes, may have contributed to FEMA's provision of housing assistance beyond actual needs; (8) FEMA has not developed written guidance for implementing the Fast Track process, even though FEMA's Inspector General recommended establishing formal procedures after the Fast Track process's first (and only other) use in 1992; (9) a principal advantage of the Fast Track process is that it provides temporary housing assistance grants for some applicants more quickly than would the regular process; (10) according to FEMA officials involved in the response to the Northridge earthquake, Fast Track provided an intangible benefit by demonstrating to the victims and the general public that help was actually on the way; (11) a principal disadvantage to Fast Track is the relative loss of control over the disbursement of federal funds and the subsequent need to recover ineligible payments; (12) FEMA ultimately designated for recovery 6.7 percent ($9.6 million of $143 million) of the temporary housing assistance provided under the Fast Track process for 3,856 Northridge earthquake applicants; (13) FEMA provides crisis-counseling funding for screening and diagnosing individuals, short-term crisis counseling, community outreach, consultation, and educational services; and (14) for funds provided after the Northridge earthquake, FEMA officials said that they visited all service providers and that center officials evaluated their accounting procedures and controls and found them to be satisfactory.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: