Disaster Relief Fund

Information the Federal Emergency Management Agency (FEMA) provides monthly to Congress on estimated remaining costs for past disasters is neither accurate nor timely. Headquarters and regional offices could not agree on the amounts of funds obligated to date, and differences totaled nearly $250 million. FEMA headquarters staff responsible for reconciling differences initially failed to determine the cause and make needed corrections. It is difficult to estimate the number, severity, and timing of future disasters. FEMA uses the five-year annual average level of obligations for past disasters and allows the five-year annual average decline at a constant rate (eight months) during the fiscal year. A better way to estimate the cost and timing of future disasters would be for FEMA to use actual monthly data on the estimated costs of disasters that have occurred during the last five years. FEMA's recent efforts to expedite closeout of its funding activities for past disasters have had a significant impact on FEMA's rate of obligating disaster funds. At the end of 1997, FEMA closed funding activities for past disasters; yet 419 old disasters remained open with projected costs to FEMA of more than $3 billion.

GAO noted that: (1) problems with both the accuracy and timeliness of the information FEMA provides monthly to Congress on estimated remaining costs for past disasters; (2) FEMA's headquarters staff relies on data provided by its regional offices to produce a monthly report to Congress on funding requirements for past disasters; (3) however, as of the end of August 1999, for a third of all past disasters, GAO found that staff from headquarters and regional offices disagreed on the amount of funds obligated to date; (4) collectively, differences, in reported obligations between headquarters and regional staff totalled nearly $250 million--with headquarters reporting obligation amounts that were $18 million higher than regions reported obligations; (5) obligation amounts reported by regional staff were both higher and lower than amounts reported by headquarters staff, and FEMA officials could not tell GAO which amounts were correct; (6) when regional offices questioned the accuracy of the data, FEMA headquarters staff responsible for reconciling discrepancies initially failed to determine the cause and make the needed corrections; (7) instead, FEMA used the inaccurate data to report on remaining costs for past disasters; (8) in addition, because of the time needed to assemble and analyze the data, the information on remaining costs in the monthly report is based on obligation data that are 4 to 6 weeks old; (9) FEMA officials acknowledge that data problems exist and have taken steps to correct them; (10) FEMA can improve its approach for estimating the timing and cost of disasters anticipated to occur during the remainder of the current fiscal year and in the forthcoming fiscal year; (11) FEMA's recent initiatives designed to expedite the closeout of its funding activities for past disasters has had a significant impact on FEMA's rate of obligating disaster relief funds; (12) in particular, the formation of three teams of staff from FEMA's Office of Financial Management, referred to as "closeout teams," to facilitate the closure of funding activity for disasters occurring from fiscal years 1989 through 1997 increased FEMA's obligations and recoveries for past disasters considerably; (13) at the end of September 1997, 419 old disasters, with a projected remaining cost to FEMA of over $3 billion, remained open; and (14) it is less clear what impact other FEMA initiatives, such as setting goals to provide disaster funding more quickly, are having on the Fund's requirements because sufficient time has not elapsed to measure their effectiveness.

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.

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