Small Business Administration
Response to the Gulf Coast Hurricanes Highlights Need for Enhanced Disaster Preparedness
Gao ID: GAO-07-484T February 14, 2007
The Small Business Administration (SBA) helps individuals and businesses recover from disasters such as hurricanes through its Disaster Loan Program. SBA faced an unprecedented demand for disaster loan assistance following the 2005 Gulf Coast hurricanes (Katrina, Rita, and Wilma), which resulted in extensive property damage and loss of life. In the aftermath of these disasters, concerns were expressed regarding the timeliness of SBA's disaster assistance. GAO initiated work and completed two reports under the Comptroller General's authority to conduct evaluations and determine how well SBA provided victims of the Gulf Coast hurricanes with timely assistance. This testimony, which is based on these two reports, discusses (1) challenges SBA experienced in providing victims of the Gulf Coast hurricanes with timely assistance, (2) factors that contributed to these challenges, and (3) steps SBA has taken since the Gulf Coast hurricanes to enhance its disaster preparedness. GAO visited the Gulf Coast region, reviewed SBA planning documents, and interviewed SBA officials.
GAO identified several significant system and logistical challenges that SBA experienced in responding to the Gulf Coast hurricanes that undermined the agency's ability to provide timely disaster assistance to victims. For example, the limited capacity of SBA's automated loan processing system--the Disaster Credit Management System (DCMS)--restricted the number of staff who could access the system at any one time to process disaster loan applications. In addition, SBA staff who could access DCMS initially encountered multiple system outages and slow response times in completing loan processing tasks. SBA also faced challenges training and supervising the thousands of mostly temporary employees the agency hired to process loan applications and obtaining suitable office space for its expanded workforce. As of late May 2006, SBA processed disaster loan applications, on average, in about 74 days compared with its goal of within 21 days. While the large volume of disaster loan applications that SBA received clearly affected its capacity to provide timely disaster assistance to Gulf Coast hurricane victims, GAO's two reports found that the absence of a comprehensive and sophisticated planning process beforehand likely limited the efficiency of the agency's initial response. For example, in designing the capacity of DCMS, SBA primarily relied on historical data such as the number of loan applications that the agency received after the 1994 Northridge, California, earthquake--the most severe disaster that the agency had previously encountered. SBA did not consider disaster scenarios that were more severe or use the information available from disaster simulations (developed by federal agencies) or catastrophe models (used by insurance companies to estimate disaster losses). SBA also did not adequately monitor the performance of a DCMS contractor or completely stress test the system prior to its implementation. Moreover, SBA did not engage in comprehensive disaster planning prior to the Gulf Coast hurricanes for other logistical areas, such as workforce planning or space acquisition, at either the headquarters or field office levels. In the aftermath of the Gulf Coast hurricanes, SBA has planned or initiated several measures that officials said would enhance the agency's capacity to respond to future disasters. For example, SBA has completed an expansion of DCMS's user capacity to support a minimum of 8,000 concurrent users as compared with just 1,500 for the Gulf Coast hurricanes. Additionally, SBA initiated steps to increase the availability of trained and experienced disaster staff and redesigned its process for reviewing loan applications and disbursing funds. However, SBA has not established a time line for completing key elements of its disaster management plan, such as cross-training agency staff not typically involved in disaster assistance to provide back up support in an emergency. SBA also has not (1) assessed whether its disaster planning process could benefit from the supplemental use of disaster simulations or catastrophe models and (2) developed a long-term strategy to obtain suitable office space for its disaster staff. While SBA agreed with GAO's report recommendations to address these concerns, it remains to be seen how comprehensive the agency's final disaster plan will be and how the agency will respond to a future disaster.
GAO-07-484T, Small Business Administration: Response to the Gulf Coast Hurricanes Highlights Need for Enhanced Disaster Preparedness
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Hurricanes Highlights Need for Enhanced Disaster Preparedness' which
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Testimony:
Before the Committee on Small Business, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EST:
Wednesday, February 14, 2007:
Small Business Administration:
Response to the Gulf Coast Hurricanes Highlights Need for Enhanced
Disaster Preparedness:
Statement of William B. Shear, Director:
Financial Markets and Community Investment:
GAO-07-484T:
GAO Highlights:
Highlights of GAO-07-484T, a testimony before the Committee on Small
Business, House of Representatives
Why GAO Did This Study:
The Small Business Administration (SBA) helps individuals and
businesses recover from disasters such as hurricanes through its
Disaster Loan Program. SBA faced an unprecedented demand for disaster
loan assistance following the 2005 Gulf Coast hurricanes (Katrina,
Rita, and Wilma), which resulted in extensive property damage and loss
of life. In the aftermath of these disasters, concerns were expressed
regarding the timeliness of SBA's disaster assistance.
GAO initiated work and completed two reports under the Comptroller
General's authority to conduct evaluations and determine how well SBA
provided victims of the Gulf Coast hurricanes with timely assistance.
This testimony, which is based on these two reports, discusses (1)
challenges SBA experienced in providing victims of the Gulf Coast
hurricanes with timely assistance, (2) factors that contributed to
these challenges, and (3) steps SBA has taken since the Gulf Coast
hurricanes to enhance its disaster preparedness.
GAO visited the Gulf Coast region, reviewed SBA planning documents, and
interviewed SBA officials.
What GAO Found:
GAO identified several significant system and logistical challenges
that SBA experienced in responding to the Gulf Coast hurricanes that
undermined the agency‘s ability to provide timely disaster assistance
to victims. For example, the limited capacity of SBA‘s automated loan
processing system”the Disaster Credit Management System
(DCMS)”restricted the number of staff who could access the system at
any one time to process disaster loan applications. In addition, SBA
staff who could access DCMS initially encountered multiple system
outages and slow response times in completing loan processing tasks.
SBA also faced challenges training and supervising the thousands of
mostly temporary employees the agency hired to process loan
applications and obtaining suitable office space for its expanded
workforce. As of late May 2006, SBA processed disaster loan
applications, on average, in about 74 days compared with its goal of
within 21 days.
While the large volume of disaster loan applications that SBA received
clearly affected its capacity to provide timely disaster assistance to
Gulf Coast hurricane victims, GAO‘s two reports found that the absence
of a comprehensive and sophisticated planning process beforehand likely
limited the efficiency of the agency's initial response. For example,
in designing the capacity of DCMS, SBA primarily relied on historical
data such as the number of loan applications that the agency received
after the 1994 Northridge, California, earthquake”the most severe
disaster that the agency had previously encountered. SBA did not
consider disaster scenarios that were more severe or use the
information available from disaster simulations (developed by federal
agencies) or catastrophe models (used by insurance companies to
estimate disaster losses). SBA also did not adequately monitor the
performance of a DCMS contractor or completely stress test the system
prior to its implementation. Moreover, SBA did not engage in
comprehensive disaster planning prior to the Gulf Coast hurricanes for
other logistical areas, such as workforce planning or space
acquisition, at either the headquarters or field office levels.
In the aftermath of the Gulf Coast hurricanes, SBA has planned or
initiated several measures that officials said would enhance the
agency‘s capacity to respond to future disasters. For example, SBA has
completed an expansion of DCMS‘s user capacity to support a minimum of
8,000 concurrent users as compared with just 1,500 for the Gulf Coast
hurricanes. Additionally, SBA initiated steps to increase the
availability of trained and experienced disaster staff and redesigned
its process for reviewing loan applications and disbursing funds.
However, SBA has not established a time line for completing key
elements of its disaster management plan, such as cross-training agency
staff not typically involved in disaster assistance to provide back up
support in an emergency. SBA also has not (1) assessed whether its
disaster planning process could benefit from the supplemental use of
disaster simulations or catastrophe models and (2) developed a long-
term strategy to obtain suitable office space for its disaster staff.
While SBA agreed with GAO‘s report recommendations to address these
concerns, it remains to be seen how comprehensive the agency‘s final
disaster plan will be and how the agency will respond to a future
disaster.
What GAO Recommends:
GAO recommends that SBA take several steps to improve its disaster
preparedness, and SBA agreed with these recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-484T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact William B. Shear at (202)
512-8678 or shearw@gao.gov
[End of section]
Madam Chairwoman and Members of the Committee:
I am pleased to have the opportunity to be here today to discuss the
Small Business Administration's (SBA) response to the 2005 Gulf Coast
hurricanes (Katrina, Rita, and Wilma), which caused more than 1,400
deaths and more than $80 billion of estimated property damages. While
SBA is generally known for the financial support it provides to small
businesses, the agency also plays a critical, if less publicized role,
in assisting the victims of natural and other disasters. Specifically,
SBA provides financial assistance through its Disaster Loan Program to
help homeowners, renters, and businesses of all sizes recover from
disasters such as earthquakes, hurricanes, and terrorist attacks. Due
to the damage associated with the Gulf Coast hurricanes, SBA faced
unprecedented demand for its disaster loan services and, 9 months
following the hurricanes, had approved nearly 150,000 such loans
totaling nearly $10 billion. However, concerns have been expressed that
SBA's response to the hurricanes was slow, leaving many disaster
victims without the timely assistance that they needed.
My statement today is based on two reports that we issued under the
Comptroller General's authority to initiate reviews of federal
programs. The first report, which was released in July 2006, discussed
SBA's planning for and implementation of the Disaster Credit Management
System (DCMS), which the agency uses to process disaster loan
applications.[Footnote 1] The second report, which is being released
today, discusses SBA's disaster planning for other logistical areas,
such as hiring and training a capable workforce and acquiring necessary
office space.[Footnote 2] I note that these reports are part of a
larger effort by GAO to assist Congress in assessing the response of
federal, state, and local agencies to the Gulf Coast hurricanes and to
identify steps that such organizations could take to improve the
provision of assistance and services to the victims of future
disasters.[Footnote 3]
In my testimony, I will discuss (1) challenges SBA experienced in
providing victims of the Gulf Coast hurricanes with timely assistance,
(2) factors that contributed to these challenges, and (3) steps SBA has
taken since the Gulf Coast hurricanes to enhance its disaster
preparedness.
To address these objectives, we visited the Gulf Coast region, reviewed
documents related to SBA's acquisition and implementation of DCMS,
reviewed reports that discuss disaster planning, analyzed relevant SBA
planning documentation, and interviewed disaster planning experts and
SBA officials in headquarters and field offices. We conducted the work
on our reports from November 2005 through January 2007 and in
accordance with generally accepted government auditing standards.
In summary:
* We identified several significant system and logistical challenges
SBA experienced in responding to victims of the Gulf Coast hurricanes
that compromised the agency's ability to provide timely disaster
assistance. First, due to DCMS's limited capacity, the number of staff
who could concurrently access the system to process disaster loans was
restricted. Further, SBA staff who were able to access DCMS often
encountered system outages and slow response times. Second, SBA faced
challenges in training and supervising thousands of mostly temporary
employees hired to process loan applications and encountered
difficulties in obtaining suitable office space for the expanded
workforce. As a result of these and other challenges, SBA averaged
about 74 days to process disaster loan applications, as of late May
2006, compared with the agency's goal of processing applications within
21 days.
* While the unprecedented volume of disaster loan applications clearly
affected SBA's capacity to provide timely assistance to Gulf Coast
hurricane victims, the absence of a comprehensive and sophisticated
planning process beforehand likely limited the efficiency of the
agency's initial response. For example, in designing the maximum user
capacity of DCMS, SBA primarily relied on historical data such as the
number of loan applications that it received after the 1994 Northridge,
California, earthquake--the most severe disaster that the agency had
previously encountered. SBA did not consider any disaster scenarios
that were more severe or use the information available from disaster
simulations or catastrophe models to help design DCMS's
capacity.[Footnote 4] SBA also did not adequately monitor a DCMS
contractor or completely stress test DCMS prior to its implementation.
Moreover, SBA did not engage in comprehensive disaster planning for
other logistical issues, such as workforce or space acquisition
planning, prior to the Gulf Coast hurricanes at either the headquarters
or field office levels.
* In the aftermath of the Gulf Coast hurricanes, SBA has planned or
initiated several measures that officials said would enhance the
agency's capacity to respond to future disasters. For example, SBA
officials said that the agency has completed an expansion of DCMS's
user capacity to support a minimum of 8,000 concurrent users as
compared with 1,500 concurrent users supported for the Gulf Coast
hurricanes. Additionally, SBA initiated measures or established plans
to address the logistical challenges that it faced in responding to the
disasters, such as taking steps to increase the availability of trained
and experienced disaster staff. However, we have also identified
several apparent limitations in SBA' disaster planning process,
including that the agency has not established time lines for completing
key elements of the plan, assessed whether the supplemental use of
simulations and models would enhance the planning process, and
developed a long-term strategy to obtain suitable office space in a
disaster situation.
We recommended in our July 2006 report that SBA take several actions to
enhance DCMS, such as reassessing the system's maximum user capacity in
light of information available from catastrophe risk modeling firms and
disaster simulations. As I discussed earlier, SBA officials said that
DCMS's capacity has been enhanced. We also recommended that SBA
strengthen its DCMS contractor oversight and further stress test the
system. In the report we are releasing today, we recommended, among
other things, that SBA develop time frames for completing key elements
of its disaster management plan. SBA agreed with these recommendations.
However, it remains to be seen how comprehensive the agency's final
disaster management plan will be and how it will help SBA respond to a
future disaster.
Background:
SBA was established by the Small Business Act of 1953 to fulfill the
role of several agencies that previously assisted small businesses
affected by the Great Depression and, later, by wartime competition.
SBA's stated purpose is to promote small business development and
entrepreneurship through business financing, government contracting,
and technical assistance programs. In addition, SBA serves as a small
business advocate, working with other federal agencies to, among other
things, reduce regulatory burdens on small businesses.
SBA also provides low-interest, long-term loans to individuals and
businesses to assist them with disaster recovery through its Disaster
Loan Program--the only form of SBA assistance not limited to small
businesses. Homeowners, renters, businesses of all sizes, and nonprofit
organizations can apply for physical disaster loans for permanent
rebuilding and replacement of uninsured or underinsured disaster-
damaged property. Small businesses can also apply for economic injury
disaster loans to obtain working capital funds until normal operations
resume after a disaster declaration. SBA's Disaster Loan Program
differs from the Federal Emergency Management Agency's (FEMA)
Individuals and Households Program (IHP). For example, a key element of
SBA's Disaster Loan Program is that the disaster victim must have
repayment ability before a loan can be approved whereas FEMA makes
grants under the IHP that do not have to be repaid.[Footnote 5]
Further, FEMA grants are generally for minimal repairs and, unlike SBA
disaster loans, are not designed to help restore the home to its
predisaster condition.
In January 2005, SBA began using DCMS to process all new disaster loan
applications. SBA intended for DCMS to help it move toward a paperless
processing environment by automating many of the functions staff
members had performed manually under its previous system. These
functions include both obtaining referral data from FEMA and credit
bureau reports, as well as completing and submitting loss verification
reports from remote locations.
DCMS's Limited Capacity and Difficulties in Other Logistical Areas
Impeded SBA's Response to the Gulf Coast Hurricanes:
Our July 2006 report identified several significant limitations in
DCMS's capacity and other system and procurement deficiencies that
likely contributed to the challenges that SBA faced in providing timely
assistance to Gulf Coast hurricane victims as follows:
* First, due to limited capacity, the number of SBA staff who could
access DCMS at any one time to process disaster loans was restricted.
Without access to DCMS, the ability of SBA staff to process disaster
loan applications in an expeditious manner was diminished.
* Second, SBA experienced instability with DCMS during the initial
months following Hurricane Katrina, as users encountered multiple
outages and slow response times in completing loan processing tasks.
According to SBA officials, the longest period of time DCMS was
unavailable to users due to an unscheduled outage was 1 business day.
These unscheduled outages and other system-related issues slowed
productivity and affected SBA's ability to provide timely disaster
assistance.
* Third, ineffective technical support and contractor oversight
contributed to the DCMS instability that SBA staff initially
encountered in using the system. Specifically, a DCMS contractor did
not monitor the system as required or notify the agency of incidents
that could increase system instability. Further, the contractor
delivered computer hardware for DCMS to SBA that did not meet contract
specifications.
In the report that we are releasing today, we identified other
logistical challenges that SBA experienced in providing disaster
assistance to Gulf Coast hurricane victims. For example, SBA moved
urgently to hire more than 2,000 mostly temporary employees at its Ft.
Worth, Texas disaster loan processing center through newspaper and
other advertisements (the facility increased from about 325 staff in
August 2005 to 2,500 in January 2006). SBA officials said that ensuring
the appropriate training and supervision of this large influx of
inexperienced staff proved very difficult. Prior to Hurricane Katrina,
SBA had not maintained the status of its disaster reserve corps, which
was a group of potential voluntary employees trained in the agency's
disaster programs. According to SBA, the reserve corps, which had been
instrumental in allowing the agency to provide timely disaster
assistance to victims of the September 11, 2001 terrorist attacks,
shrank from about 600 in 2001 to less than 100 in August 2005.[Footnote
6]
Moreover, SBA faced challenges in obtaining suitable office space to
house its expanded workforce. For example, SBA's facility in Ft. Worth
only had the capacity to house about 500 staff whereas the agency hired
more than 2,000 mostly temporary staff to process disaster loan
applications. While SBA was able to identify another facility in Ft.
Worth to house the remaining staff, it had not been configured to serve
as a loan processing center. SBA had to upgrade the facility to meet
its requirements. Fortunately, in 2005, SBA was also able to quickly
reestablish a loan processing facility in Sacramento, California, that
had been previously slated for closure under an agency reorganization
plan. The facility in Sacramento was available because its lease had
not yet expired, and its staff was responsible for processing a
significant number of Gulf Coast hurricane related disaster loan
applications.
As a result of these and other challenges, SBA developed a large
backlog of applications during the initial months following Hurricane
Katrina. This backlog peaked at more than 204,000 applications 4 months
after Hurricane Katrina. By late May 2006, SBA took about 74 days on
average to process disaster loan applications, compared with the
agency's goal of within 21 days.
Unprecedented Loan Application Volume and SBA's Limited Disaster
Planning Contributed to Challenges in Providing Timely Assistance to
Hurricane Victims:
As we stated in our July 2006 report, the sheer volume of disaster loan
applications that SBA received was clearly a major factor contributing
to the agency's challenges in providing timely assistance to Gulf Coast
hurricane. As of late May 2006, SBA had issued 2.1 million loan
applications to hurricane victims, which was four times the number of
applications issued to victims of the 1994 Northridge, California,
earthquake, the previous single largest disaster that the agency had
faced. Within 3 months of Hurricane Katrina making landfall, SBA had
received 280,000 disaster loan applications or about 30,000 more
applications than the agency received over a period of about 1 year
after the Northridge earthquake.
However, our two reports on SBA's response to the Gulf Coast hurricanes
also found that the absence of a comprehensive and sophisticated
planning process contributed to the challenges that the agency
faced.[Footnote 7] For example, in designing DCMS, SBA used the volume
of applications received during the Northridge, California, earthquake
and other historical data as the basis for planning the maximum number
of concurrent agency users that the system could accommodate. SBA did
not consider the likelihood of more severe disaster scenarios and, in
contrast to insurance companies and some government agencies, use the
information available from catastrophe models or disaster simulations
to enhance its planning process. Since the number of disaster loan
applications associated with the Gulf Coast hurricanes greatly exceeded
that of the Northridge earthquake, DCMS's user capacity was not
sufficient to process the surge in disaster loan applications in a
timely manner.
Additionally, SBA did not adequately monitor the performance of a DCMS
contractor or stress test the system prior to its implementation. In
particular, SBA did not verify that the contractor provided the agency
with the correct computer hardware specified in its contract. SBA also
did not completely stress test DCMS prior to implementation to ensure
that the system could operate effectively at maximum capacity. If SBA
had verified the equipment as required or conducted complete stress
testing of DCMS prior to implementation, its capacity to process Gulf
Coast related disaster loan applications may have been enhanced.
In the report we are releasing today, we found that SBA did not engage
in comprehensive disaster planning for other logistical areas--such as
workforce or space acquisition planning--prior to the Gulf Coast
hurricanes at either the headquarters or field office levels. For
example, SBA had not taken steps to help ensure the availability of
additional trained and experienced staff such as (1) cross-training
agency staff not normally involved in disaster assistance to provide
backup support or (2) maintaining the status of the disaster reserve
corps as I previously discussed. In addition, SBA had not thoroughly
planned for the office space requirements that would be necessary in a
disaster the size of the Gulf Coast hurricanes. While SBA had developed
some estimates of staffing and other logistical requirements, it
largely relied on the expertise of agency staff and previous disaster
experiences--none of which reached the magnitude of the Gulf Coast
hurricanes--and, as was the case with DCMS planning, did not leverage
other planning resources, including information available from disaster
simulations or catastrophe models.
SBA Has Taken Steps to Better Prepare for Future Disasters, but Their
Effectiveness Remains to Be Seen:
In our July 2006 report, we recommended that SBA take several steps to
enhance DCMS, such as reassessing the system's capacity in light of the
Gulf Coast hurricane experience and reviewing information from disaster
simulations and catastrophe models. We also recommended that SBA
strengthen its DCMS contractor oversight and further stress test the
system. SBA agreed with these recommendations. I note that SBA has
completed an effort to expand DCMS's capacity. SBA officials said that
DCMS can now support a minimum of 8,000 concurrent agency users as
compared with only 1,500 concurrent users for the Gulf Coast
hurricanes. Additionally, SBA has awarded a new contract for the
project management and information technology support for DCMS. The
contractor is responsible for a variety of DCMS tasks on SBA's behalf
including technical support, software changes and hardware upgrades,
and supporting all information technology operations associated with
the system.
In the report we are releasing today, we identified other measures that
SBA has planned or implemented to better prepare for and respond to
future disasters. These steps include appointing a single individual to
coordinate the agency's disaster preparedness planning and coordination
efforts, enhancing systems to forecast the resource requirements to
respond to disasters of varying scenarios, and redesigning the process
for reviewing applications and disbursing loan proceeds.[Footnote 8]
Additionally, SBA has planned or initiated steps to help ensure the
availability of additional trained and experienced staff in the event
of a future disaster. According to SBA officials, these steps include
cross-training staff not normally involved in disaster assistance to
provide back up support, reaching agreements with private lenders to
help process a surge in disaster loan applications, and reestablishing
the disaster reserve corps with 750 individuals as of January 2007.
However, the report also discusses apparent limitations we found in
SBA's disaster planning processes. For example, SBA has not established
a time line for completing the key elements of its disaster management
plan, such as cross-training nondisaster staff to provide back up
support. In addition, SBA has not assessed whether the agency could
leverage outside resources to enhance its disaster planning and
preparation efforts, such as information available from disaster
simulations and catastrophe models.[Footnote 9] Finally, SBA had not
established a long-term process to help ensure that it could acquire
suitable office space to house an expanded workforce to respond to a
future disaster.
To strengthen SBA capacity to respond to a future disaster, the report
recommends that SBA:
* develop time frames for completing key elements of the disaster
management plan (and a long-term strategy for acquiring adequate office
space); and:
* direct staff involved in developing the disaster plan to continue
assessing whether the use of disaster simulations or catastrophe models
would enhance the agency's overall disaster planning process.
SBA agreed to implement each of these recommendations. However, it
remains to be seen how comprehensive SBA's final disaster management
plan will be and how effectively the agency will respond to a future
disaster.
Madam Chairwoman, this concludes my prepared statement. I would be
happy to answer any questions at this time.
GAO Contact and Staff Acknowledgments:
For further information on this testimony, please contact William B.
Shear at (202) 512-8678 or Shearw@gao.gov. Contact points for our
Offices of Congressional Affairs and Public Affairs may be found on the
last page of this statement. Individuals making key contributions to
this testimony included Wesley Phillips, Assistant Director; Marshall
Hamlett; Barbara S. Oliver; and Cheri Truett.
FOOTNOTES
[1] GAO, Small Business Administration: Actions Needed to Provide More
Timely Disaster Assistance, GAO-06-860 (Washington, D.C.: July 28,
2006).
[2] GAO, Small Business Administration: Additional Steps Needed to
Enhance Agency Preparedness for Future Disasters, GAO-07-114
(Washington, D.C.: Feb. 14, 2007).
[3] See, for example, GAO, Catastrophic Disasters: Enhanced Leadership,
Capabilities, and Accountability Controls Will Improve the
Effectiveness of the Nation's Preparedness, Response, and Recovery
System, GAO-06-618 (Washington, D.C.: Sept. 6, 2006).
[4] Federal agencies and other organizations have developed assessments
of the potential destructive consequences of varying disaster
scenarios, which are intended to help federal, state, and local
agencies enhance their disaster planning. Moreover, many insurance
companies and state entities that provide catastrophe insurance
coverage currently use computer programs offered by several modeling
firms to estimate the financial consequences of various natural
catastrophe scenarios.
[5] FEMA grants are also not available to businesses.
[6] SBA's disaster reserve corps consists of individuals, including
retirees and students, who have backgrounds in the agency's disaster
assistance programs (e.g., finance and customer support) and who are
willing to work on a temporary basis for the agency in an emergency
situation. Such individuals must agree to relocate within 40 hours of
notification of a disaster situation where their services are required
by SBA.
[7] The report we are issuing today (GAO-07-114) discusses the need for
federal agencies and other organizations to engage in comprehensive
disaster planning based on previous GAO work, reports by other
investigative organizations, and the views of disaster planning
experts.
[8] As described in the report we are issuing today (GAO-07-114), SBA
faced a significant backlog in disbursing the funds associated with
approved disaster loans in July 2006. SBA has redesigned the loan
review and disbursement process in such a way that agency officials
believe disbursement performance has been improved significantly.
[9] SBA has contacted FEMA for more information about a catastrophe
model that FEMA has developed.
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