This page lists the most recent reports and testimonies related to disaster preparedness, response and reconstruction issued since October 2006.

Selected reports and testimonies related to disaster preparedness, response and reconstruction issued prior to October 2006 http://gao.gov/docsearch/featured/dprr2.html Sun, 22 Nov 2009 08:22:23 -0500 GAO http://www.gao.gov/images/title_object.jpg http://www.gao.gov/ Feed provided by GAO. Click to visit. http://www.gao.gov/new.items/d09996t.pdf A terrorist's use of a radiological dispersal device (RDD) or improvised nuclear device (IND) to release radioactive materials into the environment could have devastating consequences. The timely cleanup of contaminated areas, however, could speed the restoration of normal operations, thus reducing the adverse consequences from an incident. This testimony examines (1) the extent to which federal agencies are planning to fulfill their responsibilities to assist cities and their states in cleaning up areas contaminated with radioactive materials from RDD and IND incidents; (2) what is known about the federal government's capability to effectively cleanup areas contaminated with radioactive materials from RDD and IND incidents, and (3) suggestions from government emergency management officials on ways to improve federal preparedness to provide assistance to recover from RDD and IND incidents. We also discuss recovery activities in the United Kingdom. This testimony is based on our ongoing review of recovery preparedness issues for which we examined applicable federal laws and guidance; interviewed officials from the Department of Homeland Security (DHS), Federal Emergency Management Agency (FEMA), Department of Energy (DOE), and Environmental Protection Agency (EPA); and surveyed emergency management officials from 13 large cities and their states, as well as FEMA and EPA regional office officials. DHS, through FEMA, is responsible for developing a comprehensive emergency management system to respond to and recover from natural disasters and terrorists attacks, including RDD and IND attacks. The response phase would involve evacuations and providing medical treatment to those who were injured; the recovery phase would include cleaning up the radioactive contamination from an attack in order to permit people to return to their homes and businesses. To date, much federal attention has been given to developing a response framework, with less attention to recovery. Our survey found that almost all cities and states would be so overwhelmed by an RDD or IND incident that they would rely on the federal government to conduct almost all analysis and cleanup activities that are essential first steps towards recovery. However, we found that the federal government has not sufficiently planned to undertake these activities. For example, FEMA has not issued a national disaster recovery strategy or plans for RDD and IND incidents as required by law. Existing federal guidance provides only limited direction for federal agencies to develop their own recovery plans and conduct exercises to test preparedness. Out of over 70 RDD and IND exercises conducted in the last 5 years, only three have included interagency recovery discussions following a response exercise. Although DOE and EPA have experience in the cleanup of small-scale radiation-contaminated areas, their lack of knowledge and capability to apply approaches to address the magnitude of an RDD or an IND incident could increase recovery costs and delay completion. According to anexpert at Idaho National Laboratory, experience has shown that not selecting the appropriate decontamination technologies can generate waste types that are more difficult to remove than the original material and can create more debris requiring disposal--leading to increased costs. Limitations in laboratory capacity to rapidly test thousands of material samples during cleanup, and uncertainty regarding where to dispose of radioactive debris could also slow the recovery process. At least two-thirds of the city, state, and federal respondents expressed concern about federal capability to provide the necessary analysis and cleanup actions to promote recovery after these incidents. Nearly all survey respondents had suggestions to improve federal recovery preparedness for RDD and IND incidents. For example, almost all the cities and states identified the need for a national disaster recovery strategy to address gaps and overlaps in federal guidance. All but three cities wanted additional guidance, for example, on monitoring radioactivity levels, cleanup standards, and management of radioactive waste. Most cities wanted more interaction with federal agencies and joint exercising to test recovery preparedness. Finally, our review of the United Kingdom's preparedness to recover from radiological terrorism showed that that country has already taken actions similar to those suggested by our survey respondents, such as issuing national recovery guidance, conducting a full-scale recovery exercise, and publishing a national handbook for radiation incidents. Mon, 14 Sep 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09796.pdf Concerns over the Department of Homeland Security's (DHS) Federal Emergency Management Agency's (FEMA) provision of temporary housing assistance, including travel trailers at group sites, after the 2005 hurricanes led to the development of the National Disaster Housing Strategy. GAO was asked to assess (1) the challenges households faced in transitioning to permanent housing, (2) the extent to which FEMA measured its performance in closing and transitioning households in group sites, (3) the strategy's effectiveness in defining FEMA's roles and responsibilities for closing and transitioning households in group sites, and (4) the alternatives to travel trailers in group sites and how well the strategy assessed them. GAO reviewed the strategy and interviewed officials from FEMA, state agencies, and selected nonprofit and housing research groups. Households living in FEMA group sites encountered various challenges in transitioning to permanent housing. A significant challenge cited by several reports and officials GAO contacted was the availability of affordable rental housing. Other challenges that were cited included insufficient financing to fund repairs of homes, significantly higher insurance premiums, and the availability of full-time employment to support disaster victims' return to permanent housing. FEMA's overall effectiveness in measuring its performance in closing and transitioning households in group sites was limited because the agency's measures do not provide information on program results that would be helpful in gauging whether the program is achieving its goal. Previously, GAO reported that performance measures should be aligned with program goals and cover the activities that an entity is expected to perform to support the purpose of the program. However, FEMA's performance measures for Katrina and Rita group sites primarily describe program outputs and do not provide information on results, such as the timeliness or efficiency of closing group sites and transitioning households into permanent housing. Having such information could help identify potential problems in meeting goals and could be used to make decisions about resources needed and steps to be taken. The National Disaster Housing Strategy broadly defines FEMA's roles and responsibilities for closing group sites and assisting households with the transition into permanent housing. Although the strategy states that FEMA is responsible for closing group sites and assisting households find permanent housing, the strategy does not reflect the key characteristics of effective national strategies and plans that GAO identified in prior work. For example, the strategy does not explain how FEMA will work with other agencies in closing these sites and transitioning households into permanent housing. A lack of a detailed plan that includes information on the steps FEMA needs to take to assist households with transitioning into permanent housing could lead to delays in the future in helping disaster victims return to more stable and conventional living arrangements. Officials contacted and reports reviewed by GAO identified a number of housing options that could serve as alternatives to travel trailers in group sites--for example, providing rental assistance for existing housing and repairing damaged rental housing. However, FEMA's strategy does not assess alternatives, in part, because evaluations are ongoing. Also, it does not provide clear guidance on the specific temporary housing options that states can use instead of travel trailers while FEMA completes these evaluations. Without more specific information on what these temporary housing options are, including alternatives to travel trailers, state officials will not have the information needed to expedite the selection of temporary housing options. As a result, FEMA and the states may not be fully prepared to quickly respond to the temporary housing needs of those displaced by major disasters. Fri, 28 Aug 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09935t.pdf This testimony discusses the protection of children during disaster recovery and to provide highlights of our July 2009 report entitled Hurricane Katrina: Barriers to Mental Health Services for Children Persist in Greater New Orleans, Although Federal Grants Are Helping to Address Them. The greater New Orleans area has yet to fully recover from the effects of Hurricane Katrina, which made landfall on August 29, 2005. One issue of concern in the recovery is the availability of mental health services for children. In our report, we estimated that in 2008 about 187,000 children were living in the greater New Orleans area--which we defined as Jefferson, Orleans, Plaquemines, and St. Bernard parishes. Many children in the greater New Orleans area experienced psychological trauma as a result of Hurricane Katrina and its aftermath, and studies have shown that such trauma can have long-lasting behavioral, psychological, and emotional effects on children. Poor children in this area may also be at additional risk, because studies have also shown that children who grow up in poverty are at risk for the development of mental health disorders. In 2007 the poverty rate for each of the four parishes in the greater New Orleans area was higher than the national average, and in Orleans and St. Bernard parishes, the rate was at least twice the national average. Experts have found increases in the incidence of depression, post-traumatic stress disorder symptoms, risk-taking behavior, and somatic and psychosomatic conditions in children who experienced the effects of Hurricane Katrina. In addition, children in greater New Orleans may continue to experience psychological trauma because of the slow recovery of stable housing and other factors, such as the recurring threat of hurricanes. Data collected by Louisiana State University (LSU) Health Sciences Center researchers indicate that of the area children they screened in January 2008, 30 percent met the threshold for a possible mental health referral. Although this was a decrease from the 49 percent level during the 2005-06 school year screening, the rate of decline was slower than experts had expected. Experts have previously identified barriers both to providing and to obtaining mental health services for children. Barriers to providing services are those that affect the ability of health care organizations to provide services, such as a lack of providers; and barriers to obtaining services are those that affect the ability of families to gain access to services, such as concerns regarding the stigma often associated with mental health services for children. The devastation to the health care system in greater New Orleans caused by Hurricane Katrina may have exacerbated such barriers. Stakeholder organizations most frequently identified a lack of mental health providers and sustainability of funding as barriers to providing mental health services to children in the greater New Orleans area, and they most frequently identified a lack of transportation, competing family priorities, and concern regarding stigma as barriers to families' obtaining mental health services for children. A range of federal programs are helping to address these barriers, but much of the funding they provide is temporary. Among the 18 stakeholder organizations that participated in our structured interviews, the most frequently identified barrier to providing mental health services was a lack of providers. With regard to families' ability to obtain services for their children, 12 of the 18 organizations identified lack of transportation as a barrier. A range of federal programs address barriers to mental health services for children in the greater New Orleans area by supporting various state and local efforts--including hiring providers, assisting families, and utilizing schools as delivery sites--but much of the funding is temporary. Funding from several HHS programs has been used to transport children to mental health services. Federal programs also provide funding that is used to alleviate conditions that create competing family priorities--including dealing with housing problems, unemployment, and financial concerns--to help families more easily obtain children's mental health services. Louisiana has used federal funds to help support school-based health centers (SBHC), which have emerged as a key approach in the greater New Orleans area to address barriers to obtaining mental health services for children. Tue, 04 Aug 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09811.pdf In the wake of the 2005 Gulf Coast Hurricanes, coordination and collaboration challenges created obstacles during the government's response and recovery efforts. Because of the many stakeholders involved in recovery, including all levels of government, it is critical to build collaborative relationships. Building on GAO's September 2008 report which provided several key recovery practices from past catastrophic disasters, this report presents examples of how federal, state, and local governments have effectively collaborated in the past. GAO reviewed five catastrophic disasters--the Loma Prieta earthquake (California, 1989), Hurricane Andrew (Florida, 1992), the Northridge earthquake (California, 1994), the Kobe earthquake (Japan, 1995), and the Grand Forks/Red River flood (North Dakota and Minnesota, 1997)--to identify recovery lessons. GAO interviewed officials involved in the recovery from these disasters and experts on disaster recovery. GAO also reviewed relevant legislation, policies, and the disaster recovery literature. Effective collaboration among stakeholders can play a key role in facilitating long-term recovery after a catastrophic event. Toward that end, GAO has identified four collaborative practices that may help communities rebuild from the Gulf Coast hurricanes as well as future catastrophic events: (1) Develop and communicate common goals to guide recovery. Defining common recovery goals can enhance collaboration by helping stakeholders overcome differences in missions and cultures. After the Grand Forks/Red River flood, federally-funded consultants convened various stakeholders to develop recovery goals and priorities for the city of Grand Forks. The city used these goals as a basis to create a detailed recovery action plan that helped it to implement its recovery goals. (2) Leverage resources to facilitate recovery. Collaborating groups bring different resources and capacities to the task at hand. After the Northridge earthquake, officials from the Federal Highway Administration and California's state transportation agency worked together to review highway rebuilding contracts, discuss changes, and then approve projects all in one location. This co-located, collaborative approach enabled the awarding of rebuilding contracts in 3 to 5 days--instead of the 26 to 40 weeks it could take using normal contracting procedures. This helped to restore damaged highways within a few months of the earthquake. (3) Use recovery plans to agree on roles and responsibilities. Organizations can collectively agree on who will do what by identifying roles and responsibilities in recovery plans developed either before or after a disaster takes place. Learning from its experiences from the Loma Prieta earthquake, San Francisco Bay Area officials created a plan that clearly identifies roles for all participants in order to facilitate regional recovery in the event of a future disaster. (4) Monitor, evaluate, and report on progress made toward recovery. After the 1995 earthquake, the city of Kobe and the surrounding region established processes to assess and report on recovery progress. These jurisdictions required periodic external reviews over 10 years on the progress made toward achieving recovery goals. As a result of one of these reviews, the city of Kobe gained insight into unintended consequences of how it relocated elderly earthquake victims, which subsequently led to a change in policy. Past recovery experiences--including practices that promote effective collaboration--offer potentially valuable lessons for future catastrophic events. FEMA has taken some steps to facilitate the sharing of such experiences among communities involved in disaster recovery. However, the agency can do more to build on and systematize the sharing of this information so that recovery lessons are better captured and disseminated for use in the future. Fri, 31 Jul 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09900t.pdf This testimony discusses our work on reforms made to the Small Business Administration's (SBA) Disaster Loan Program and the impact those reforms had following recent disasters. SBA plays a critical role in assisting the victims of natural and other declared disasters. SBA provides financial assistance through its Disaster Loan Program to help homeowners, renters, businesses of all sizes, and nonprofits recover from disasters such as earthquakes, hurricanes, and terrorist attacks. Since the agency's inception in 1953, SBA has approved more than $46 billion in disaster loans for homeowners, businesses, and nonprofit organizations. After the 2005 Gulf Coast hurricanes (Katrina, Rita, and Wilma), SBA faced an unprecedented demand for disaster loans, while also being confronted with a significant backlog of applications; therefore, hundreds of thousands of loans were not disbursed in a timely way. Many criticized SBA for what was perceived to be a slow and confusing response to the disasters and one that exposed many deficiencies in the agency's Disaster Loan Program and demonstrated the need for reform. For example, as we stated in our February 2007 report, SBA did not engage in or complete comprehensive disaster plans before the Gulf Coast hurricanes, and this limited logistical disaster planning likely contributed to the initial challenges the agency faced in responding to the 2005 hurricanes. As a result, Congress and SBA agreed that the program needed significant improvements. Since then, SBA has taken several steps to reform its Disaster Loan Program which include creating an online loan application, increasing the capacity of its Disaster Credit Management System (DCMS), and developing a Disaster Recovery Plan (DRP). In June 2008, Congress enacted the Small Business Disaster Response and Loan Improvements Act (Act) to expand steps taken by SBA and require new measures to ensure that SBA is prepared for future catastrophic disasters. While SBA has taken some steps toward implementing the Act, the agency still needs to take additional steps to completely address 8 provisions. According to SBA officials, the agency has not yet completely addressed some provisions that require new regulations because to do so, the agency must make extensive changes to current programs or implement new programs--such as the Immediate and Expedited Disaster Assistance Programs--to satisfy requirements of the Act. These programs, which require participation of private lenders, would be designed to provide businesses with access to short-term loans while they are waiting for long-term assistance. Moreover, as required by the Act, SBA has not issued an update of its comprehensive DRP that reflects recent changes resulting from the Act's requirements, as well as SBA's own reform efforts. Delays in updates to the DRP limit the agency's ability to adequately prepare for and respond to disasters. Also, SBA has not fully addressed the requirement for providing region-specific marketing and outreach and ensuring the information is made available to Small Business Centers (SBDCs) and other local resources. We consistently heard from regional entities, such as SBDCs and emergency management groups, about the need for more up-front information on SBA's Disaster Loan Program and their expected roles and responsibilities in disaster response efforts. By taking such actions, SBA could leverage the efforts and capacity of SBDCs, as well as state and local emergency management agencies, and ensure that it and they will be better prepared for future events, especially in disaster-prone areas. Furthermore, the Act established multiple new reporting requirements and while SBA has addressed some of these, the agency has failed to comply with the Act and issue a first annual report on disaster assistance--which was due in November 2008. Specifically, the Act requires that SBA report annually on the total number of SBA disaster staff, major changes to the Disaster Loan Program (such as changes to technology or staff responsibilities), a description of the number and dollar amount of disaster loans made during the year, and SBA's plans for preparing and responding to possible future disasters. Failure to produce annual reports on schedule can lead to a lack of transparency on the agency's progress in reforming the program. Additionally, 9 provisions set forth in the Act are subject to deadlines, which the agency has had limited success in meeting. The agency also has not developed a plan with expected time frames for addressing the remaining requirements. SBA's not providing reports to Congress and not having an implementation plan in place for addressing the remaining requirements can lead to a lack of transparencyabout the agency's Disaster Loan Program, program improvement, and capacity to reform the program, as well as its ability to adequately prepare for and respond to disasters. SBA's initial response following the 2008 Midwest floods and Hurricane Ike aligned with major components of its DRP, such as infrastructure, human capital, information technology, and communications. Additionally, individuals to whom we spoke affected by both disasters considered the agency's overall performance somewhat positive, but believed the disaster loan process could be improved. Wed, 29 Jul 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09755.pdf After the Small Business Administration (SBA) was widely criticized for its performance following the 2005 Gulf Coast hurricanes, the agency took steps to reform the Disaster Loan Program and Congress enacted the Small Business Disaster Response and Loan Improvements Act of 2008 (Act). GAO was asked to determine (1) the extent to which SBA addressed the Act's requirements, and (2) how SBA's response to major disasters in 2008 aligned with key components of its June 2007 Disaster Recovery Plan (DRP). GAO reviewed the Act, as well as SBA information on requirements addressed and steps taken, including the DRP, various reports to Congress, and policy memoranda. GAO also conducted site visits to areas affected by major 2008 disasters, reviewed SBA's customer satisfaction survey, and obtained the opinions of relevant stakeholders. As of June 2009, SBA met 13 of 26 requirements of the Act, partially addressed 8, and did not take action on 5 which are not applicable at this time. SBA officials told GAO the agency has not yet completely addressed some provisions that require new regulations because to do so, the agency must make extensive changes to current programs or implement new programs. For two requirements that will involve private lenders, SBA plans to implement pilots before finalizing regulations. SBA has not yet addressed the Act's requirements for region-specific marketing and outreach and ensured that Disaster Loan Program information is readily available to regional entities, such as Small Business Development Centers (SBDC). By doing so, SBA could leverage the efforts and capacity of local resources and emergency management groups, and ensure that it and they will be better prepared for future disasters. Also, as of June 2009, SBA had not met deadlines to issue an annual report to Congress or an updated DRP. Failure to do so can lead to a lack of transparency on the agency's progress in reforming the program and limit its ability to adequately prepare for and respond to disasters. Furthermore, SBA did not have an implementation plan for addressing the remaining requirements. SBA's initial response after the 2008 Midwest floods and Hurricane Ike aligned with certain components of its initial DRP, such as using technology and outreach efforts to ensure timely assistance. The individuals GAO interviewed and results from SBA's 2008 Disaster Loan Program Customer Satisfaction Survey provided some positive feedback about SBA's performance following recent disasters. However, interviewees and survey results indicated areas for improvement; in particular, both indicated that application paperwork was burdensome and that the application process needed improvement. SBA officials told GAO that they have been taking steps to improve the application process, but did not provide documentation of such efforts. As a result, it did not appear to have any formal process for identifying problems in the application process and making needed improvements. Wed, 29 Jul 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09563.pdf The greater New Orleans area--Jefferson, Orleans, Plaquemines, and St. Bernard parishes--has yet to fully recover from the effects of Hurricane Katrina. As a result of the hurricane and its aftermath, many children experienced psychological trauma, which can have long-lasting effects. Experts have previously identified barriers to providing and obtaining mental health services for children. The Department of Health and Human Services (HHS) and other federal agencies have supported mental health services for children in greater New Orleans through various programs, including grant programs initiated in response to Hurricane Katrina. GAO was asked to study the federal role in addressing barriers to these services in greater New Orleans. In this report, GAO (1) identifies barriers to providing and to obtaining mental health services for children in greater New Orleans, and (2) describes how federal programs, including grant programs, address such barriers. To do this work, GAO used a structured interview and a written data collection instrument to gather views on barriers from 18 state and local stakeholder organizations selected on the basis of experts' referrals and the organizations' roles in children's mental health. To learn how federal programs address these barriers, GAO reviewed documents from and interviewed federal, state, and local officials involved in providing mental health services to children. GAO's work included a site visit to greater New Orleans. Stakeholder organizations most frequently identified a lack of mental health providers and sustainability of funding as barriers to providing mental health services to children in the greater New Orleans area; they most frequently identified a lack of transportation, competing family priorities, and concern regarding stigma as barriers to families' obtaining services for children. Fifteen of the 18 organizations identified a lack of mental health providers--including challenges recruiting and retaining child psychiatrists and psychologists--as a barrier to providing services to children. Thirteen organizations identified sustainability of funding, including difficulty securing reliable funding sources, as a barrier to providing services. A lack of transportation was most frequently identified--by 12 organizations--as a barrier to families' ability to obtain services for their children. The two second most frequently identified barriers to obtaining services were competing family priorities, such as housing problems and financial concerns, and concern regarding the stigma associated with receiving mental health services. A range of federal programs, including grant programs, address some of the most frequently identified barriers to providing and obtaining mental health services for children, but much of the funding they have supplied is temporary. Several federal programs support state and local efforts to hire or train mental health providers. For example, HHS's Professional Workforce Supply Grant has resulted in recruitment and retention incentives to mental health providers in the greater New Orleans area. Several HHS programs allow funding to be used to transport children to mental health services, including Medicaid and the 2006 Social Services Block Grant (SSBG) supplemental funding provided to Louisiana. However, much of the funding, including that from the Professional Workforce Supply Grant and the supplemental SSBG, is hurricane-related and will no longer be available after 2010. School-based health centers (SBHC) have emerged as a key approach in the area to address barriers to obtaining mental health services for children, and although there is no federal program whose specific purpose is to support SBHCs, state programs have used various federal funding sources to support them. For example, a Louisiana official told us funds from HHS's Maternal and Child Health Services Block Grant and Community Mental Health Services Block Grant support SBHCs in greater New Orleans. SBHCs address the transportation barrier because they are located on school grounds, and they help families by reducing the need for a parent to take time off from work to take a child to appointments. In addition, because SBHCs provide both mental health and other primary care services, the type of service a child receives is not apparent to an observer, which may reduce concern about stigma. In commenting on a draft of this report, HHS provided additional information on mental health services provided in schools other than through SBHCs and emphasized the effect of a lack of stable housing on children's mental health. HHS also provided technical comments. GAO incorporated HHS's comments as appropriate. Mon, 13 Jul 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09588.pdf The greater New Orleans area--Jefferson, Orleans, Plaquemines, and St. Bernard parishes--continues to face challenges in restoring health care services disrupted by Hurricane Katrina. In 2007, the Department of Health and Human Services (HHS) awarded the $100 million Primary Care Access and Stabilization Grant (PCASG) to Louisiana to help restore primary care services to the low-income population. Louisiana gave PCASG funds to 25 outpatient provider organizations in the greater New Orleans area. GAO was asked to study how the federal government can effectively leverage governmental resources to help area residents gain access to primary care services. This report examines (1) how PCASG fund recipients used the PCASG funds to support primary care services in greater New Orleans, (2) how PCASG fund recipients used and benefited from other federal hurricane relief funds that support the restoration of primary care services in the area, and (3) challenges PCASG fund recipients continued to face in providing primary care, and their plans for sustaining services after PCASG funds are no longer available. PCASG fund recipients reported that they used the PCASG funds to hire or retain health care providers and other staff, add primary care services, and open new sites. For example, 20 of the 23 recipients that responded to the GAO survey reported using PCASG funds to hire health care providers, and 17 reported using PCASG funds to retain health care providers. In addition, most of the recipients reported that they used PCASG funds to add primary care services and to add or renovate sites. Recipients also reported that the grant requirements and funding helped them improve service delivery and expand access to care in underserved neighborhoods. Other federal hurricane relief funds helped PCASG fund recipients pay staff, purchase equipment, and expand mental health services to help restore primary care. Eleven recipients received HHS Social Services Block Grant (SSBG) supplemental funds designated by Louisiana for primary care, and two received SSBG supplemental funds designated by Louisiana specifically for mental health care. The funds designated for primary care were used to pay staff and purchase equipment, and the funds designated for mental health care were used to provide a range of services for adults and children, including crisis intervention and substance abuse prevention and treatment. About two-thirds of the PCASG fund recipients benefited from the Professional Workforce Supply Grant incentives. These recipients hired or retained 69 health care providers who received incentives totaling over $4 million to work in the greater New Orleans area. In addition, one PCASG fund recipient expended $7.9 million it received from Louisiana to provide services through the federal Crisis Counseling Assistance and Training Program. PCASG fund recipients continue to face multiple challenges and have various plans for sustainability. Recipients face significant challenges in hiring and retaining staff, as well as in referring patients outside of their organizations, and these challenges have grown since Hurricane Katrina. For example, 20 of 23 recipients that responded to the GAO survey reported hiring was a great or moderate challenge, and among these 20 recipients over three-quarters reported that this challenge had grown since Hurricane Katrina. Six of the 7 recipients that primarily provide mental health services reported that both hiring and retention of providers were great or moderate challenges. Many PCASG fund recipients also reported challenges in referring patients outside their organization for mental health, dental, and specialty care services. Although all PCASG fund recipients have completed or planned actions to increase their ability to be sustainable, it is too early to know whether their various sustainability strategies will be successful. Mon, 13 Jul 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09561.pdf As a result of the unprecedented damage caused by Hurricanes Katrina and Rita in 2005, the federal government, for the first time, funded several disaster case management programs. These programs help victims access services for disaster-related needs. GAO was asked to review (1) steps the federal government took to support disaster case management programs after the hurricanes, (2) the extent to which federal agencies oversaw the implementation of these programs, (3) challenges case management agencies experienced in delivering disaster case management services, and (4) how these programs will inform the development of a federal case management program for future disasters. GAO reviewed relevant laws and guidance, obtained data from two programs, conducted site visits to Louisiana and Mississippi, and interviewed case management providers and officials from federal and state agencies involved in disaster case management. Federal agencies provided more than$209 million for disaster case management services to help thousands of households cope with the devastation caused by Hurricanes Katrina and Rita, but breaks in federal funding adversely affected services to some hurricane victims. The Federal Emergency Management Agency (FEMA) awarded a grant of $66 million for initial case management services provided by Katrina Aid Today (KAT) shortly after the hurricanes made landfall. When this program ended in March 2008, FEMA provided funds for additional programs to continue services. As a result of ongoing budget negotiations between FEMA and Mississippi, the state-managed Disaster Case Management Pilot (DCM-P) program in Mississippi did not begin until August 2008, approximately 2 months after it was scheduled to, and FEMA's DCM-P program in Louisiana was never implemented. Consequently, some victims most in need may not have received case management services. FEMA and the Department of Housing and Urban Development (HUD) provided some oversight of disaster case management programs, but monitoring of KAT was limited and coordination challenges may provide lessons for future disasters. As recovery continued, FEMA and HUD provided additional monitoring of subsequent programs. Coordination challenges contributed to implementation difficulties, such as a lack of timely information sharing. For example, client information provided by FEMA to the Mississippi state agency implementing the DCM-P program was invalid or out-of-date for nearly 20 percent of eligible clients. As a result of incompatible databases and inconsistent outreach efforts, some victims may have received services from multiple agencies while others may not have been reached. Case management agencies experienced challenges in delivering federally-funded disaster case management services due to large caseloads, limited community resources, and federal funding rules. Some case management agencies experienced high turnover, and some case managers had caseloads of more than 100 clients, making it difficult to meet client needs. KAT and HUD data indicated that the most frequently occurring needs among clients included housing and employment, but these resources were limited following the hurricanes. Further, case management agencies saw the ability to provide direct financial assistance for items such as home repair, clothing, or furniture as key to helping victims, yet only one federally funded program allowed case management agencies to use federal funds for direct assistance. FEMA and other agencies are evaluating disaster case management pilot programs to inform the development of a federal disaster case management program for future disasters, but some of the evaluations have limitations. For example, some evaluations will not assess program outcomes, such as whether clients' needs were met. In addition, FEMA did not include stakeholder input in designing its evaluation of multiple pilot programs. According to FEMA officials, the agency does not have a time line for developing the federal disaster case management program. Wed, 08 Jul 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09604.pdf Emergency communications breakdowns undermined response efforts during terrorist attacks in 2001 and Hurricane Katrina in 2005. In response, federal agencies like the Department of Homeland Security (DHS) and Federal Communications Commission (FCC) have increased efforts to enhance emergency communications. This requested report identifies (1) vulnerabilities, if any, to emergency communications systems; (2) federal assistance available or planned to first responders for addressing vulnerabilities or enhancing emergency communications; and (3) challenges, if any, with federal emergency communications efforts. GAO developed six catastrophic disaster case studies, reviewed agency documents, and interviewed public and private sector officials at the national, state, and local levels. Continuity of communications, capacity, and interoperability are primary areas of vulnerability in first responder emergency communications in communities across the country. The destructive nature of catastrophic disasters can disrupt continuity of communications--the ability to maintain communications during and following a disaster. A volcanic mudflow at Mount Rainier, Washington, could destroy infrastructure supporting communications systems. Capacity--a communication system's ability to handle demand, provide coverage, and send different types of information--is also vulnerable in a catastrophic disaster. For example, blind spots, areas outside the range of communications systems, could inhibit response. Lastly, vulnerabilities involving interoperability--the ability to communicate across different organizations and jurisdictions as needed and authorized--remain due to technological and human factors. Federal agencies provide a wide range of assistance intended to help first responders mitigate emergency communications vulnerabilities. GAO grouped available federal assistance into three categories: (1) new guidance and other significant federal efforts; (2) grants and funding; and (3) technical support and federal assets. DHS and other federal agencies have taken strategic steps to enhance emergency communications by issuing key documents like the National Emergency Communications Plan--the first strategic document for improving emergency communications nationwide. Numerous grants are available and are increasingly aligned with recently developed national and state plans. Federal agencies like DHS also offer technical support intended to help mitigate vulnerabilities through planning and on-the-scene assistance. Limited collaboration and monitoring jeopardize federal emergency communications efforts, even as the federal government has taken strategic steps to assist first responders. Federal agencies have demonstrated limited use of some best practices that GAO previously reported as helpful for addressing issues like emergency communications. Delays in establishing the Emergency Communications Preparedness Center, which would help define common goals and mutually reinforcing strategies--two collaboration best practices--undermine the National Emergency Communications Plan's implementation. DHS and FCC have also not applied these practices in FCC's effort to promote a public safety network for emergency communications. Agency officials reported it was either too early or not the agency's responsibility to use these best practices in developing this network. DHS did not submit formal comments to FCC and FCC officials described its proposed network as separate from DHS emergency communications efforts. However, GAO found potential opportunities to align these agencies' efforts. Another collaboration best practice is leveraging resources, which DHS has done in providing emergency communications technical assistance and planning guidance. But efforts have focused on state and local jurisdictions and less on federal agencies, some of which lack formal emergency communications plans. Monitoring is also crucial in helping agencies meet goals. Fri, 26 Jun 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09541.pdf Almost 4 years after the 2005 Gulf Coast hurricanes, the region continues to face daunting rebuilding challenges. To date, $19.7 billion in Community Development Block Grant (CDBG) funds have been appropriated for Gulf Coast rebuilding assistance--the largest amount in the history of the program. GAO was asked to report on (1) how Louisiana and Mississippi allocated their shares of CDBG funds, (2) what difficulties Louisiana faced in administering its housing recovery program, and (3) what human capital challenges Louisiana and Mississippi encountered and the efforts taken to address those challenges. GAO interviewed federal and state officials and reviewed budget data, federal regulations, and state policies and planning documents. Louisiana and Mississippi received the largest shares of CDBG disaster funds and targeted the majority toward homeowner assistance, allocating the rest to economic development, infrastructure, and other projects. Between 2006 and 2008, Louisiana's total allocation devoted to housing increased from 77 to 86 percent while Mississippi's decreased from 63 to 52 percent as the state focused on economic development. With homeowners as the primary focus, Louisiana initially adopted a plan that linked federal funds to home reconstruction and controlled the flow of funds to homeowners, while Mississippi paid homeowners for their losses regardless of their intentions to rebuild. This helped Mississippi avoid challenges that Louisiana would encounter, but with fewer assurances that people would actually rebuild. Louisiana's approach to housing recovery created a program that incorporated certain elements from two different models--compensation and rehabilitation--funded with multiple federal funding streams. While there is no written guidance that distinguishes between the two models, Housing and Urban Development (HUD) explained the major differences. In a rehabilitation model, funds are used explicitly for repairs or reconstruction, requiring site-specific environmental reviews. In contrast, a compensation program disburses funds directly to homeowners for damages suffered regardless of whether they intend to rebuild and does not trigger site-specific environmental reviews. Federal guidance was insufficient to address Louisiana's program and funding designs. Two major problems stemmed from the state's approach. First, HUD and the state disagreed as to whether the incremental disbursement of funds subjected homeowners' properties to environmental reviews. Despite many iterations of the program, HUD ordered a cease and desist of the program, leading the state to abandon its original plans and issue lump-sum payments to recipients. Continual revision and re-submittal of the design contributed to a 12-month evolution of the program. Second, conflicting federal determinations hindered coordination of CDBG and the Federal Emergency Management Agency's (FEMA) Hazard Mitigation Grant Program (HMGP) funds. According to state officials, the Federal Coordinator for Gulf Coast Rebuilding advised them to use most of the HMGP funds to acquire properties through their housing recovery program. FEMA rejected this plan, in part, because it determined that the program gave preference to the elderly. However, HUD is subject to similar legal requirements and did not find the program discriminatory. Louisiana changed its plans and used HMGP funds for a home elevation program. In sum, it took FEMA and the state over a year to reach agreement, delaying assistance to homeowners. In the immediate aftermath of the 2005 hurricanes, Louisiana and Mississippi lacked sufficient capacity to suddenly administer and manage CDBG programs of such unprecedented size. Both states created new offices to direct disaster recovery efforts and hired additional state agency staff and private contractors to implement homeowner assistance programs. Fri, 19 Jun 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09671.pdf GAO's previous work on Hurricanes Katrina and Rita identified fraud, waste, and abuse resulting from a lack of fraud-prevention controls within the Federal Emergency Management Agency's (FEMA) assistance programs. For example, FEMA did not verify the identities or addresses of individuals applying for aid under its Individuals and Households Program (IHP). FEMA also did not verify the eligibility of individuals seeking shelter in FEMA-paid-for hotels and made duplicate payments to individuals who applied multiple times. GAO made numerous recommendations designed to improve these controls. To follow up on this work, GAO conducted undercover tests of the IHP process during the response to Hurricanes Gustav and Ike. This report discusses (1) whether FEMA's controls have improved since Katrina and Rita and (2) issues GAO identified related to the customer service that FEMA provided. GAO submitted bogus applications for disaster assistance, met with FEMA officials, and contacted actual disaster victims to determine their experiences applying for aid. FEMA has significantly improved its fraud prevention controls over disaster assistance. For example, FEMA now conducts identity and address verification on all applications and requires inspections prior to approving rental assistance. In addition, FEMA requires individuals in need of housing assistance to provide valid registration numbers before checking into FEMA-paid-for hotels. FEMA has also taken steps to flag and cancel duplicate registrations for the same disaster. These improvements made it more difficult for GAO to penetrate IHP controls for Hurricanes Gustav and Ike--only 1 of 10 fraudulent applications submitted by GAO received cash payments. However, GAO found flaws in FEMA's controls that still leave the government vulnerable to fraud, waste, and abuse. GAO's undercover tests show that a persistent fraudster can bypass many of these controls by submitting fabricated documents to prove identity or address and, as a result, obtain housing assistance. GAO also received duplicate payments for bogus hotel expenses. In addition, FEMA failed to properly inspect a bogus address GAO used to apply for assistance, ultimately sending GAO multiple checks for thousands of dollars in rental assistance. GAO observed several problems with FEMA's customer service, which made it difficult for many real victims to apply for assistance or obtain shelter in a timely fashion. For example, one of GAO's investigators called nine times over the course of 3 days--several times being put on hold for 20 minutes----before being connected to an operator. Other investigators received incorrect information about the application process. Actual disaster victims confirmed these problems. One applicant reported having to call FEMA at 4 a.m. in order to reach an operator. FEMA cited several factors that contributed to this poor service, including a higher-than-expected call volume and an inability to meet projected call center staffing needs because a contractor failed to provide adequate staffing. Despite these issues, FEMA told GAO that it has made few changes in preparation for the 2009 hurricane season. Fri, 19 Jun 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09551.pdf In December 2003, GAO reported that most of Alaska's more than 200 Native villages were affected to some degree by flooding and erosion (GAO-04-142). Since 2003, state officials have identified the growing impacts of climate change, increasing the urgency of federal and state efforts to identify imminently threatened villages and assess their relocation options. GAO was asked to report on (1) the flooding and erosion threats that Alaska Native villages currently face, (2) the federal programs that are available to assist villages facing potential disasters, (3) the status of village relocation efforts, and (4) how federal assistance to relocating villages is prioritized. GAO interviewed and gathered documentation from federal and state agency officials as well as regional organizations and village representatives. While the flooding and erosion threats to Alaska Native villages have not been completely assessed, since 2003, federal, state, and village officials have identified 31 villages that face imminent threats. The U.S. Army Corps of Engineers' (Corps) March 2009 Alaska Baseline Erosion Assessment identified many villages threatened by erosion, but did not assess flooding impacts. At least 12 of the 31 threatened villages have decided to relocate--in part or entirely--or to explore relocation options. Federal programs to assist threatened villages prepare for and recover from disasters and to protect and relocate them are limited and unavailable to some villages. The Federal Emergency Management Agency has several disaster preparedness and recovery programs, but villages often fail to qualify for them, generally because they may lack approved disaster mitigation plans or have not been declared federal disaster areas. Although there is no single comprehensive proactive federal program to assist villages with their relocation efforts, individual federal agencies can assist villages on specific projects, such as funding the construction or relocation of homes. However, 64 villages do not qualify for affordable housing and relocation assistance from the Department of Housing and Urban Development's Community Development Block Grant program because the federal law governing the program does not recognize unincorporated Alaska Native villages in Alaska's unorganized borough as eligible units of general local government. Of the 12 villages exploring relocation options, Newtok has made the most progress in its relocation efforts. The Newtok Planning Group, formed in 2006 by federal, state, regional, and village partners, has helped to accelerate the relocation process that the village proactively initiated in 1994. The 3 other villages that will likely need to relocate all at once--Kivalina, Shaktoolik, and Shishmaref--have yet to identify sites that federal, state, and village officials agree are safe, sustainable, and desirable for the subsistence lifestyle of the villagers. Eight other villages have begun to gradually migrate to new locations over time or are evaluating options for doing so. In the absence of a lead entity, federal agencies individually prioritize assistance to villages on the basis of their programs' criteria. These criteria do not necessarily ensure that the villages in greatest peril get the highest priority, and although the Corps has assessed erosion threats, there is no lead federal entity to prioritize and coordinate assistance using this information. In 2007, the Newtok Planning Group reported that the lack of designated federal and state lead entities to guide, coordinate, and fund assistance impeded village relocation efforts and created uncertainty regarding the fulfillment of environmental analysis requirements under the National Environmental Policy Act. In 2008, the state designated a lead agency for village relocation assistance, and federal, state, and village officials told GAO that a similar lead federal entity is needed. Lead authority could be provided to an existing agency or commission, or a new entity could be formed for this purpose. Wed, 03 Jun 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09369.pdf Hurricane Katrina was the most destructive disaster in our nation's history and it highlighted gaps in preparedness for a catastrophic disaster. The Federal Emergency Management Agency (FEMA), a component within the Department of Homeland Security (DHS), is the lead federal agency responsible for developing a national preparedness system. The system includes policies and plans as well as exercises and assessments of capabilities across many public and private entities. GAO was asked to assess the extent to which FEMA has (1) developed policies and plans that define roles and responsibilities; (2) implemented the National Exercise Program, a key tool for examining preparedness; (3) developed a national capabilities assessment; and (4) developed a strategic plan that integrates these elements of the preparedness system. GAO analyzed program documents, such as after-action reports, and visited six states located in disaster regions. While the results of these visits are not generalizable, they show how select states carry out their efforts. While most policies (41 of 50) that define roles and responsibilities have been completed, such as the National Response Framework, 68 percent (49 of 72) of the plans to implement these policies, including several for catastrophic incidents, are not yet complete. As a result, the roles and responsibilities of key officials involved in responding to a catastrophe have not been fully defined and, thus, cannot be tested in exercises. The lack of clarity in response roles and responsibilities among the diverse set of responders contributed to the disjointed response to Hurricane Katrina and highlighted the need for clear, integrated disaster preparedness and response policies and plans. Although best practices for program management call for a plan that includes key tasks and their target completion dates, FEMA does not have such a plan. With such a plan, FEMA would be better positioned to ensure that the policies and plans are completed and integrated with each other as intended as well as with other elements of the preparedness system. Since 2007, FEMA has taken actions to implement the National Exercise Program at the federal and state levels by developing, among other things, program guidance and systems to track corrective actions; however, FEMA faces challenges in ensuring that the exercises are carried out consistent with program guidance. For example, the Homeland Security Council (an interagency entity responsible for coordinating homeland security policy) and state participants did not systematically track whether corrective actions had been taken to address deficiencies identified by exercises as called for by program guidance. As a result, FEMA lacks reasonable assurance that entities have taken actions aimed at improving preparedness. FEMA has made progress in developing a system for assessing national preparedness capabilities by, among other things, establishing reporting guidance for state preparedness, but it faces challenges in completing the system and required reports to assess preparedness. While FEMA has developed a project management plan for the new system, the plan does not fully identify milestones and program risks for developing quantifiable metrics necessary for measuring preparedness capabilities. A more complete project plan that identifies milestones and program risks would provide FEMA with greater assurance that it can produce a system to assess capabilities and inform decisions related to improving national preparedness. FEMA's strategic plan for fiscal years 2008-2013 recognizes that each of its components need to develop its own strategic plans that integrate the elements of national preparedness. FEMA's National Preparedness Directorate has yet to develop its strategic plan, but instead plans to use a draft annual operating plan to guide its efforts. This plan does not include all elements of a strategic plan, such as how the directorate will integrate the various elements of the system over time to improve national preparedness. Having a strategic plan would provide FEMA with a roadmap for addressing the complex task of guiding and building a national preparedness system. Thu, 30 Apr 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09411r.pdf In November 2005, the President issued an executive order establishing the Office of the Federal Coordinator for Gulf Coast Rebuilding (OFC) with the broad mission of supporting recovery efforts following Hurricanes Katrina and Rita. Given their vast size and impact, these storms presented unprecedented rebuilding challenges to federal, state, and local officials which, combined with concerns about the lack of coordination in government's initial response to the disaster, precipitated the creation of the Office of the Federal Coordinator. To assist in Congress' ongoing oversight responsibilities of the recovery of the Gulf Coast, Congress asked us to: (1) describe the functions the Coordinator has performed, (2) obtain stakeholder perspectives regarding the office's operation, and (3) provide observations on issues to be considered for moving forward. We provided Congressional staff with summaries of our findings this past February to answer these questions as well as our observations, including extending the term of OFC. We have since updated some of the information in our briefing, using information that has subsequently become available including the President's decision to extend the operations of OFC through September 30, 2009. Fri, 10 Apr 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09433t.pdf Hurricane Katrina severely tested disaster management at the federal, state, and local levels and revealed weaknesses in the basic elements--leadership, capabilities, and accountability--of preparing for, responding to, and recovering from disasters. In its 2006 work on the response to Hurricane Katrina, GAO noted that these elements needed to be strengthened. In October 2006, Congress enacted the Post-Katrina Act to address issues identified in the response to Hurricane Katrina. GAO reported in November 2008 that the Department of Homeland Security (DHS) and the Federal Emergency Management Agency (FEMA) had at least preliminary efforts under way to address most of the provisions, but also identified a number of areas that required further action. This statement discusses select issues within the basic elements related to (1) findings from the response to Hurricane Katrina, (2) provisions of the Post-Katrina Act, and (3) specific actions DHS and FEMA have taken to implement these provisions. GAO's comments are based on GAO products issued from February 2006 through November 2008, and selected updates in March 2009. To obtain updated information, GAO consulted program officials. GAO reported in September 2006 that the experience of Hurricane Katrina showed the need to improve leadership at all levels of government to respond to catastrophic disasters. For example, GAO reported that, in the response to Hurricane Katrina, there was confusion over roles and responsibilities under the National Response Plan, including the roles of the DHS Secretary, the FEMA Administrator, the Principal Federal Official (PFO), and the Federal Coordinating Officer (FCO). The Post-Katrina Act clarified FEMA's mission within DHS and set forth the role and responsibilities of the FEMA Administrator. The act also required that the FEMA Administrator provide a clear chain of command that accounts for these roles. In revising the National Response Plan--now called the National Response Framework--FEMA articulated specific roles for the PFO and FCO, which are described in GAO's November 2008 report. GAO reported in September 2006 that various congressional reports and GAO's own work on FEMA's performance before, during, and after Hurricane Katrina suggested that FEMA's capabilities were insufficient to meet the challenges posed by the degree of damage and the number of hurricane victims. The capabilities issues GAO identified related to, among others, (1) emergency communications, (2) evacuations, (3) logistics, (4) mass care, (5) planning and training, and (6) human capital. The Post-Katrina Act included a variety of provisions that related to these issues. For example, related to emergency communications, the act established an Office of Emergency Communications (OEC) within DHS. GAO reported in November 2008 that, in response to specific responsibilities outlined in its authorizing provision, OEC has been working with Urban Area Working Groups and states to assess gaps in communications infrastructure and to determine technical requirements to enhance interoperable communications systems. GAO reported in February 2006 that accountability mechanisms--specifically, internal controls--were lacking or nonexistent in processing applications for individual and household assistance following Hurricane Katrina, which left the government vulnerable to fraud and abuse. For example, GAO estimated that through February 2006, FEMA made about 16 percent ($1 billion) in improper and potentially fraudulent payments to applicants who used invalid information to apply for disaster assistance. The Post-Katrina Act required the development of a system, including an electronic database, to counter improper payments. GAO reported in November 2008 that FEMA established a process to identify and collect duplicative payments by, among other things, enabling its disaster assistance database to check automatically for duplicate applications. Tue, 17 Mar 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09281.pdf The Internal Revenue Service's (IRS) Business Systems Modernization (BSM) program is a multi-billion-dollar, high-risk, highly complex effort that involves the development and delivery of a number of modernized systems that are intended to replace the agency's aging business and tax processing systems. As required, IRS submitted its fiscal year 2009 expenditure plan in August 2008 to the congressional appropriations committees, requesting $222 million from the BSM account. GAO's objectives in reviewing the expenditure plan were to (1) determine whether it satisfies the applicable legislative conditions, (2) determine IRS's progress in implementing prior expenditure plan review recommendations, and (3) provide additional observations about the plan and the BSM program. To accomplish the objectives, GAO analyzed the plan, reviewed related documentation, and interviewed IRS officials. IRS's expenditure plan satisfies the applicable legislative conditions, which include meeting the Office of Management and Budget's (OMB) capital planning and investment control review requirements, and complying with federal systems acquisition requirements and management practices. IRS has addressed two of GAO's prior recommendations to improve its management capabilities and controls, including a recommendation to develop policies and procedures for developing and managing project requirements. However, work remains in order to fully implement other recommendations: developing long-term plans for completing BSM, including consolidating and retiring legacy systems; developing a quantitative measure of scope; and developing a plan for addressing its various human capital initiatives. GAO's observations about the expenditure plan and the BSM program include the following: IRS continued to implement BSM projects and meet cost and schedule estimates for most deliverables; however, one project milestone experienced a significant cost increase, and two milestones experienced significant schedule delays. In addition, over half of the milestones were reported completed, despite having unaddressed issues. Specifically, reported project costs and completion dates showed that 10 of the 11 milestones were completed within 10 percent of cost estimates and 9 were completed within 10 percent of schedule estimates. However, 6 out of the 10 milestones reported as complete had conditional milestone exits, meaning that they were allowed to proceed to the next milestone with unaddressed issues. Because IRS's guidance does not specify procedures for determining when to grant conditional exits, the process could potentially be used to mask cost and schedule overruns and could result in premature milestone exits, introducing cost, schedule, and performance risks. BSM project releases continue to face significant risks and issues, which IRS is addressing. For example, IRS reports that a release of its new taxpayer information database continues to face schedule risks. Further, IRS recently informed GAO that it had stopped work on releases of two key systems and would re-evaluate them in light of the long-term plans for BSM, which are being revisited and are expected to be defined at a high level by June 2009. While IRS is addressing the risks and issues confronting the BSM program, GAO will continue to monitor these efforts. Security weaknesses continue to affect IRS's modernization environment. As GAO recently reported, IRS continues to have weaknesses in its information security controls. In addition, the Treasury Inspector General for Tax Administration reported that two tax administration systems were deployed with known security vulnerabilities relating to the protection of sensitive data, system access, monitoring of system access, and disaster recovery. Wed, 11 Mar 2009 00:00:00 -0400 http://www.gao.gov/new.items/d09437t.pdf Recovery from major disasters is a complex undertaking that involves the combined efforts of federal, state, and local government in order to succeed. While the federal government provides a significant amount of financial and technical assistance for recovery, state and local jurisdictions work closely with federal agencies to secure and make use of those resources. This testimony describes lessons and insights that GAO has identified from review of past disasters, which may be useful to inform recovery efforts in the wake of Hurricanes Ike and Gustav, as well as disasters yet to come. These lessons come from two reports GAO recently released last fall on disaster recovery. The first draws on the experiences of communities that have recovered from previous major disasters in order to help inform recovery efforts in the wake of Hurricanes Ike and Gustav as well as the 2008 Midwest floods. The second examines the implementation of the Federal Emergency Management Agency's (FEMA) Public Assistance grant program and identifies several actions that the Department of Homeland Security can take to improve operations of that program. These include improving information sharing and enhancing continuity and communication. Commenting on a draft of that report, the department generally agreed with our recommendations. In doing this work, GAO interviewed federal, state, and local officials involved in recovery and reviewed relevant documents, data, and laws. Lessons from past disasters provide a potentially valuable source of information for all levels of government as they seek to meet the many challenges of recovering from a major disaster. For affected state and local jurisdictions, good practices to consider include the following: (1) Creating a clear, implementable, and timely recovery plan can provide communities with a road map for the recovery process. Just 2 months after the 1995 Kobe earthquake in Japan, the city created a recovery plan with these elements. (2) Providing financial and technical capacity facilitates jurisdictions' ability to implement federal disaster programs. For example, loans and technical assistance provided after past disasters helped communities better navigate the wide range of federal disaster programs. (3) Implementing business recovery strategies to minimize business relocations helps small businesses adapt to postdisaster market conditions. For example, to encourage businesses to remain in the city Grand Forks after the 1997 flood, the city forgave loans for businesses that stayed in the city. (4) Adopting a comprehensive approach toward combating fraud, waste, and abuse protects both disaster victims from contractor fraud and public funds from fraudulent applicants. Controls to combat such activities before, during, and after a disaster can deter such activities, including instances of contractor fraud. On the federal level, experiences with FEMA's Public Assistance grant program after the 2005 Gulf Coast hurricanes illustrated a variety of challenges in the day-to-day operation of the program that could be faced again by Gulf Coast states recoveringfrom Hurricanes Ike and Gustav or other disasters in the future. These include the following: (1) Challenges using program flexibilities to respond to the postdisaster needs of grant applicants and determining project scope. For example, applicants reported needing additional flexibility when rebuilding to address significant population changes after the storm. (2) Challenges in sharing information among federal, state, and local officials during project development that at times slowed the process. For example, some applicants in Louisiana told us of the need to repeatedly resubmit key project documents because of the lack of an effective system to share such documentation. Opportunities exist for the federal government to further refine FEMA's Public Assistance grant program to better address these and other challenges as recovery continues on the Gulf Coast and in advance of future disasters. Tue, 03 Mar 2009 00:00:00 -0500 http://www.gao.gov/new.items/d09420r.pdf The National Flood Insurance Program (NFIP) was created in 1968 and currently has more than 5.6 million policyholders that are insured for about $1.1 trillion. The program collects about $2.9 billion in annual premiums. As of January 2009, NFIP owed approximately $19.2 billion to the U.S. Treasury, primarily as a result of loans that the program received to pay claims from the 2005 hurricane season. According to the Federal Emergency Management Agency (FEMA) of the Department of Homeland Security (DHS), which administers the program, this debt is greater than the sum of all previous losses since the program's inception in 1968. While FEMA officials told us that interest payments are estimated to be lower in 2010, as of October 2008, NFIP owed interest payments of $730 million a year to Treasury and has had to borrow more from the Treasury to make these payments. As a result, it is unlikely that NFIP will ever be able to repay the entire debt. Because of NFIP's financial situation, in 2006 GAO placed the program on the high-risk list. In 2008, GAO issued three reports covering issues directly related to NFIP. NFIP is subject to periodic reauthorization and its current authorization has been extended until March 2009. As Congress considers reauthorization of NFIP and potential reforms to the program, Congress asked us to provide a briefing on (1) the percentage and geographic distribution of policyholders that purchase the maximum NFIP coverage, (2) the availability of private commercial and residential flood insurance, (3) the potential effect of adding business interruption coverage to commercial flood insurance, particularly for small and medium-sized businesses, and (4) the challenges and issues surrounding the potential creation of an NFIP loss fund. Approximately 36 percent of NFIP policyholders nationwide buy the maximum amount of insurance that NFIP offers. The percentages vary across states but are highest in southern and coastal states and in areas with high median home values, which are often coastal areas. (The sole exception is the District of Columbia, which has the highest percentage of maximum-coverage policies.) The state with the lowest percentage of maximum-coverage policies is West Virginia, with 4 percent. As well as the District of Columbia, states with a high percentage of these policies include Hawaii (55 percent) and South Carolina (56 percent). The percentage of policies sold at maximum coverage limits appears to be related not to flood losses in a particular state but to property values. For example, in Louisiana and Texas, where cumulative NFIP flood losses have been higher than in most other states but property values are lower, the percentage of policies sold at the maximum coverage limits has remained below the national average. Aggregate information is not available on the precise size of the private flood insurance markets for residential and commercial properties, but according to industry experts these markets are considered relatively small. According to a 2007 study commissioned by FEMA, an estimated 180,000 to 260,000 primary and excess coverage flood insurance policies were in effect. A small number of insurance companies provide private policies, which are generally marketed to wealthy homeowners. Private flood insurance can be significantly more expensive than NFIP insurance for similar levels of coverage. For example, one insurer told us that the cost for a specified level of residential coverage could be as low as $500 from NFIP and as high as $900 from a private insurer. For contents insurance, the cost averages around $350 from NFIP but around $600 in the private market. Private insurers generally market to clients with homes worth at least $1 million--far above NFIP policy limits---and generally sell "excess coverage" above NFIP policy limits. Large companies are the primary purchasers of private commercial flood insurance, and several insurers and industry officials we spoke with said that private flood insurance for small to medium-sized businesses was prohibitively expensive, although no data on the costs were available. According to one insurer, up to 80 percent of private policies provide excess coverage above the NFIP maximum and are purchased together with NFIP policies, and the remaining 20 percent is considered first dollar coverage. Generally, the NFIP policy covers the deductible on the private policy--commercial policies often set the deductible at NFIP policy limits--and some private insurers told us that they would raise their deductible amounts if NFIP raised the coverage limits. Insurers also told us that they generally determined their premium rates using NFIP rates, data, and flood maps as a starting point and adjusting rates upward according to their own risk analysis. Private business interruption coverage for flood damage is expensive and is generally purchased by only large companies. According to industry officials, coverage for small and medium-size businesses is also generally prohibitively expensive. Fri, 27 Feb 2009 00:00:00 -0500 http://www.gao.gov/new.items/d09188r.pdf Natural hazards adversely affect hundreds of thousands of people worldwide each year and cause extensive property damage. In 2007, a year that was not considered an exceptional one for natural hazards, natural hazards caused an estimated 14,600 deaths and $70 billion in property losses. For that year, the insurance industry covered $23.3 billion in losses. In catastrophic loss years, such as 2005--the year that saw Hurricane Katrina--losses can be far greater. Scientific assessments indicate that climate change is expected to alter the frequency and severity of natural hazard events, and as a result, losses can be expected to climb. Given this scenario, examining policies that are used in other countries to reduce the loss of life and property caused by natural hazard events and examining insurance approaches that provide coverage for natural hazard losses can help identify practices in both areas that could benefit the United States. Similarly, given the ongoing challenges facing the United States, international cooperative efforts may provide instructive examples of risk management and disaster reduction. Because of Congressional interest in these areas, GAO was asked to (1) identify policies used by other countries to reduce losses caused by natural hazards; (2) examine the extent of international cooperation among selected countries, including the United States, to mitigate natural hazards; and (3) identify approaches that other industrialized countries use to insure natural hazard risk and regulate insurers. The countries that we studied use a variety of policies to reduce losses from natural hazards that are similar to policies used in the United States. As we have previously reported, mitigation policies, assessing and mapping hazard risk, land use planning, building codes, and public awareness, can be used to reduce the risk of losses from natural hazards. The countries we studied also participate in a variety of international efforts to minimize natural hazard risk. We found that these efforts are consistent with key practices in collaboration that we identified in prior GAO work. The six countries we studied use a variety of approaches to insure natural hazard risk and regulate insurers. Generally, their approaches involve both the government and the private sector. In four countries with government insurance approaches, property insurance policies include natural hazard insurance coverage at a fixed premium, and three of these countries have a government guarantee. All six countries have some type of private insurance approach, and four of these countries offer optional coverage of various natural hazards and have risk-based premiums. Finally, five countries have a centralized (federal-level) agency to regulate the private insurance industry. Three of these government agencies regulate the entire financial services industry--for example, the Australian Prudential Regulation Authority oversees banks, building societies, insurance companies, and other entities. Some of the functions of some of these agencies include authorizing insurance companies to do business, assessing solvency, and determining whether insurance companies comply with regulations. Australia and Germany have private sector-only approaches to insurance, and government involvement in pricing insurance is limited. For example, in Germany, prices are controlled only with respect to the company's overall financial safety and the equal treatment of all policyholders. Mon, 22 Dec 2008 00:00:00 -0500 http://www.gao.gov/new.items/d09129.pdf The devastation caused by the 2005 Gulf Coast hurricanes presented the nation with unprecedented rebuilding challenges. The Federal Emergency Management Agency's (FEMA) Public Assistance (PA) grant program is a key tool for providing funds to support recovery, including rebuilding public schools, roads, and utilities. GAO was asked to examine the amount of PA grants FEMA has provided for rebuilding the Gulf Coast; challenges in the day-to-day operation of the PA program; and human capital challenges; as well as actions taken to address them. Toward this end, GAO reviewed relevant laws, PA regulations and procedures, and analyzed data from FEMA's National Emergency Management Information System. GAO also interviewed federal officials from FEMA and the Department of Homeland Security's (DHS) Office of the Federal Coordinator for Gulf Coast Rebuilding as well as more than 60 officials from state government and eight localities in Louisiana and Mississippi. Funding for PA grants related to the 2005 Gulf Coast hurricanes is already more than $11 billion, surpassing that of any previous disaster, and will likely be higher than FEMA's total cost estimate of $13.2 billion. About 90 percent of these funds have gone to the states of Louisiana and Mississippi, about half of which have passed from the states to grant applicants to date. GAO identified challenges in the following broad areas, many of which contributed to slowing down rebuilding projects. (1) Project Development: Challenges in the development of PA projects included difficulties determining the amount of damage that was disaster-related, using PA program flexibilities to rebuild in a way that meets postdisaster needs, assessing project scope including whether to repair or replace damaged structures, estimating project costs, and having sufficient resources to initiate projects. For example, assessing the damage to New Orleans's water and sewer system was complicated by the difficulty distinguishing disaster-related from preexisting damage. Estimating the cost of PA projects presented special challenges because of unusual market conditions for labor and materials in the postdisaster economy. (2) Information Sharing and Tracking: GAO identified challenges in sharing information among federal, state, and local participants in the PA process as well as in tracking the status of projects. For example, in Louisiana, information sharing was made more difficult in the absence of an effective document-sharing system and because key FEMA and state officials who review PA applications are located in different cities. (3) Project Approvals and Appeals: FEMA's approval decisions on some projects were reversed after applicants had already moved ahead with construction. In addition, decisions on appeals were often not made within required time frames due to the large number of rebuilding projects. (4) Human Capital: Human capital challenges at all levels of government underlie many of the above challenges and also slowed rebuilding projects. Shortages of experienced and knowledgeable staff were particularly problematic during the initial stages of rebuilding. FEMA's early reliance on temporary rotating staff did not provide the level of continuity needed for the complex demands of Gulf Coast rebuilding. Among the actions DHS has taken to address these challenges are the finalization of a PA catastrophic disaster recovery concept plan that recognizes the need to more easily tailor projects to meet postdisaster conditions; the development of new management information systems to better track and manage projects and increase the transparency of PA funding; and the creation of a credentialing program for employees. Thu, 18 Dec 2008 00:00:00 -0500 http://www.gao.gov/new.items/d0981.pdf In August 2005, Hurricane Katrina caused more damage than any other single natural disaster in U.S. history, with Hurricane Rita adding to the devastation. The hurricanes hit some of the most distressed areas in the country. Louisiana and Mississippi had the highest poverty rates in the United States, according to the 2000 U.S. Census. Hurricane Katrina destroyed or made uninhabitable an estimated 300,000 homes, many of which had families with children. In response to this destruction, the Federal Emergency Management Agency (FEMA) provided many affected households with trailers for temporary housing in Louisiana and Mississippi. Those trailers not placed on homeowners' property were located in group sites. Although FEMA's guidance suggests that group sites should be located near existing supermarkets, public transportation, schools, and health care facilities, FEMA officials said the agency was not always able to locate temporary housing in these settings because of the level of destruction and, sometimes, opposition from communities. As of May 2008, several thousand households remained in group sites. Given the number of people who remained in group sites more than 2 years after Hurricane Katrina, GAO was asked to address a range of disaster assistance services and is conducting work looking at case management, housing, health care, and the role of not-for-profit organizations in disaster recovery. This report focuses on the federal government's efforts to assist group site residents with employment, services for families with children, and transportation. Specifically, this report addresses the following key questions: (1) What is known about the number and location of the group sites and their residents? (2) What did the federal government do to assist group site residents with employment, services for families with children, and transportation? (3) What challenges did federal and state agencies face in providing this assistance to group site residents? FEMA located more than 500 group sites, housing over 20,000 households over time, throughout counties in Louisiana and Mississippi. About another 106,000 households received trailers that were placed on their property while repairs were being made to their homes. The majority of group sites had less than 50 households, although some group sites had several hundred households residing in them. Most of the households who were placed in group sites reported that they were renters before the storm. While the majority of individuals who received a FEMA trailer reported being employed, about 65 percent reported less than $20,000 in income. About one-fifth reported no source of income, in some cases, they were unemployed and disabled. While FEMA does not update data on group site residents to reflect current employment status or income levels, some state and FEMA officials we spoke with in early 2008 stated that those who remained in the sites the longest were the hardest to serve people including the elderly, persons with disabilities, and unemployed people. Federal agencies provided assistance to hurricane victims through a variety of programs; group site residents may have received services, but data generally do not distinguish group site residents from other recipients. Federal agencies offered flexibilities within existing programs, distributed additional funding, and created new programs to assist states in providing employment services, services to families with children, and transportation for all eligible hurricane victims. Many of these federal actions were time-limited and available in 2005 and 2006. While federal agencies took actions to help all eligible hurricane victims, we identified only one federal program--LA Moves, a bus service--that specifically targeted group site residents, but services were limited and underutilized. This program started in January 2007, but the retirement of routes began immediately, with only two group sites receiving services as of June 2007. Some state agencies and not-for-profit organizations did provide outreach for other services to group sites. The largest group site, Renaissance Village, had several services offered on-site, including early childhood education programs, after-school programs, employment services, and transit for persons with disabilities, but was unique in this regard, according to some service providers. Federal and state agencies faced challenges obtaining information about group sites and group site residents and having available guidance to determine the type and scope of emergency transportation to fund. Regarding the first challenge, state agencies said they faced challenges in obtaining information from FEMA about group sites or their residents. However, these state officials may not have been aware of or understood FEMA's information sharing guidelines or procedural requirements for requesting data. Regarding the second challenge, FEMA did not have clear guidance or criteria to assist with emergency transportation planning including guidance that defined the types or scope of transit it would fund or criteria for determining the duration of that funding. In the absence of such guidance, FEMA had to make difficult decisions about the extent of its authority to fund transit operations. Thu, 11 Dec 2008 00:00:00 -0500 http://www.gao.gov/new.items/d0959r.pdf On August 29, 2005, and in the ensuing days, Hurricanes Katrina, Rita, and Wilma devastated the Gulf Coast region of the United States. Hurricane Katrina alone affected more than a half million people located within approximately 90,000 square miles spanning Louisiana, Mississippi, and Alabama, ultimately resulted in over 1,600 deaths, and has spawned one of the largest natural disaster relief and recovery operations in U.S. history. Almost 3 years prior to the hurricanes, the Homeland Security Act of 2002 created the Department of Homeland Security (DHS) largely in response to the September 11, 2001, terrorist attacks. The Homeland Security Act merged 22 disparate agencies and organizations into the new department, including the Federal Emergency Management Agency (FEMA). The Homeland Security Act generally charged DHS with securing the homeland against terrorist attacks and carrying out the functions of all transferred entities, including acting as a focal point regarding natural and man-made crises and emergency planning. Hurricane Katrina severely tested disaster management at the federal, state, and local levels and revealed weaknesses in the basic elements of preparing for, responding to, and recovering from any catastrophic disaster. Beginning in February 2006, reports by the House Select Bipartisan Committee to Investigate the Preparation for and Response to Hurricane Katrina, the Senate Homeland Security and Governmental Affairs Committee, the White House Homeland Security Council, the DHS Inspector General, DHS, and FEMA all identified a variety of failures and some strengths in the preparations for, response to, and initial recovery from Hurricane Katrina. The Post-Katrina Emergency Management Reform Act of 2006 (Post-Katrina Act) was enacted to address various shortcomings identified in the preparation for and response to Hurricane Katrina. The act enhances FEMA's responsibilities and its autonomy within DHS. FEMA is to lead and support the nation in a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation. The Post-Katrina Act extends beyond changes to FEMA's organizational and management structure and includes legislative reforms in other emergency management areas that were considered shortcomings during Hurricane Katrina. A September 11, 2007, hearing before the House Subcommittee on Economic Development, Public Buildings, and Emergency Management raised some concerns about the way in which DHS and FEMA were implementing several key directives of the Post-Katrina Act. Given the importance of proper implementation of the act and the need for a unified, coordinated national incident-management system capable of preparing for and responding to natural and man-made disasters, including catastrophic disasters, your committees requested that we perform a review of the implementation of the act's requirements. This letter describes the actions FEMA and DHS have taken in response to the act's provisions, areas where FEMA and DHS must still take action, and any challenges to implementation that FEMA and DHS officials identified during our discussions with them. FEMA and DHS have made some progress in their efforts to implement the act since it was enacted in October 2006. For most of the provisions we examined, FEMA and DHS had at least preliminary efforts underway to address them. However, we have identified a number of areas that still require action, and it is clear that FEMA and DHS have work remaining to implement the provisions of the act. To structure our findings, we analyzed the provisions appearing under each section heading of the Post-Katrina Act and grouped the various sections, as follows: (1) Roles and Responsibilities, (2) Emergency Communications, (3) Disaster Assistance Activities, (4) Disaster Planning and Preparation, (5) Regional Preparedness, (6) Logistics, (7) Contracting, (8) Information Technology, (9) Human Capital, (10) Subject Matter Expertise, (11) Waste, Fraud, and Abuse, and (12) Gulf Coast Recovery. In some cases, a section of the law may be relevant to more than one category--for example, the National Emergency Communications Plan required by the law could have appeared in the Emergency Communications category or in the Disaster Planning and Preparedness category discussed. In some instances, a section of the Post-Katrina Act amends another statute, principally the Homeland Security Act or the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). In such instances, we include both the Post-Katrina Act section and, parenthetically, the section of the amended statute, for example the Homeland Security Act or the Stafford Act. The information in this letter describes the status, as of August 1, 2008, of actions that FEMA and DHS have reported as completed or underway to implement the several hundred discrete provisions of the Post-Katrina Act that we identified. It was beyond the scope of this report to determine whether FEMA and DHS had fully complied with all the provisions of the act or to evaluate the effectiveness--individually or collectively--of the actions that FEMA and DHS have taken to implement the Post-Katrina Act. Thus, the description of an "action taken" for any given provision does not necessarily mean that FEMA or DHS has done all that is necessary to implement that particular provision or that either entity has done so effectively. Similarly, the lack of an "area to be addressed" in a particular section does not signify that DHS and FEMA have completely satisfied the law in that area; rather, they have generally taken some action in that area. Further, where actions to be taken are identified, it is not intended to suggest that once that action is completed, the relevant statutory provision will be fully implemented. Fri, 21 Nov 2008 00:00:00 -0500 http://www.gao.gov/new.items/d0920.pdf The Federal Emergency Management Agency (FEMA), the Department of Homeland Security (DHS) agency that administers the National Flood Insurance Program (NFIP), estimates that subsidized properties--those that receive discounted premium rates that do not fully reflect the properties' actual flood risk--experience as much as five times the flood damage as properties that do not qualify for subsidized rates. Almost one in every four residential policies has subsidized rates that are on average 35-40 percent of the full-risk rate. Unprecedented losses from the 2005 hurricane season and NFIP's periodic need to borrow from the Department of the Treasury to pay flood insurance claims has raised concerns about the impact that subsidized premium rates have on the longterm financial solvency of NFIP. GAO designated NFIP as high-risk in March 2006; as of June 2008, NFIP's debt stood at $17.4 billion. This report (1) provides information on NFIP's inventory of subsidized properties and (2) examines NFIP's current approach to subsidized properties and the advantages and disadvantages of options for reducing the costs associated with these properties. To do this work, GAO analyzed data on policies and claims and collected available data about subsidized properties. GAO also reviewed applicable reports and interviewed relevant agency, state, and private sector officials. In its written comments, DHS expounded upon several topics discussed in this report. While it constitutes a declining percentage of all NFIP policies, the number of properties receiving subsidized premium rates has grown since 1985; by 2007 it was at its highest point in almost 30 years. According to FEMA, this growth resulted from several factors, including a growing number of mortgages with mandatory flood insurance purchase requirements and greater enforcement of these requirements, the longer-than-expected life of the structures that are eligible for subsidies, and increased awareness of the dangers of floods from several major recent disasters and increased NFIP marketing efforts. To date, more than half of the subsidized policies are concentrated in five states with relatively high flood risk--California, Florida, Louisiana, New Jersey, and Texas. Current low participation rates--around 50 percent of single-family homes in high-risk areas--leave room for substantial growth in the number of NFIP policies, many of which would be likely to receive subsidized rates. Because of their relatively high loss experience and lower premium rates, the policies receiving subsidized rates have been a financial burden on the program, with total claims exceeding premiums by $962 million over the period from 1986 through 2004, before the large losses from the 2005 hurricanes. Without changes to the program, the number of subsidized properties will likely continue to grow, increasing the potential for future NFIP operating deficits. As Congress evaluates the impact of subsidized premium rates, it is faced with balancing the public policy goals of charging premium rates that fully reflect actual risks, encouraging broad program participation through affordable rates, and limiting costs to taxpayers. While the current program of propertybased subsidies and voluntary mitigation efforts--steps taken to reduce a property's flood risk such as relocation or elevation--encourages broad program participation, it is unlikely to substantially reduce the adverse financial impact of subsidized properties. GAO identified three options for addressing the financial impact of subsidized properties on the NFIP, each with advantages and disadvantages. One option would be to increase mitigation efforts, including making mitigation mandatory. Mitigation could help reduce flood losses, but the increased funding for such efforts could be high. A second option, eliminating or reducing subsidies, could improve NFIP's financial stability by increasing the number of policies that more accurately reflect the risk of flooding. However, the resulting higher premium rates could reduce NFIP participation and could meet resistance from local communities. A third option would be to target subsidies based on financial need, which could help ensure that only those in need receive subsidies, with the rest paying full-risk rates. However, it could be challenging for FEMA to develop and administer such a program in the midst of ongoing management challenges. While the inherent difficulty in determining premium rates adequate to cover potentially volatile and at times catastrophic flood losses means that the potential for the program to incur future operating deficits will always exist, implementing any or a combination of these options could significantly reduce the adverse financial impact of subsidies on NFIP. Fri, 14 Nov 2008 00:00:00 -0500 http://www.gao.gov/new.items/d0912.pdf Questions about the financial status of the National Flood Insurance Program (NFIP) have increased since the 2005 hurricanes, which left the program with an unprecedented $17.4 billion deficit--a debt that resulted in GAO placing NFIP on its high-risk list in March 2006. Among the concerns are the subsidized rates NFIP must provide for about 25 percent of the policies, mostly for older buildings in high-risk flood zones. And although fully risk-based rates are supposed to reflect actual flood risk, concerns have been raised that they do not. This report evaluates (1) the Federal Emergency Management Agency's (FEMA) process for setting full-risk rates to determine whether it produces rates that accurately reflect the risk of flooding and (2) the process that FEMA uses to set subsidized rates and their effect on the financial condition of NFIP. To do this work, GAO evaluated the NFIP rate model, examined data from FEMA, surveyed relevant literature, and interviewed other relevant agencies and risk-modeling firms. FEMA's method for setting its full-risk rates may not ensure that the rates accurately reflect the actual risk of flood damage. The NFIP model combines estimated flood risk with expected flood damage, but a number of factors may affect the accuracy of the rates the model generates. First, some data inputs are outdated or inaccurate. FEMA relies on flood probabilities from the 1980s and damage estimates that do not fully reflect recent NFIP damage experience. Moreover, while FEMA has made updating its flood maps a priority, most of the maps used in rate setting have not yet been updated. Second, FEMA does not require all properties remapped into higher-risk areas to pay rates based on the new designation. This policy, known as grandfathering, erodes NFIP's ability to charge rates that reflect the risk of flooding. The policy is intended to increase participation, but FEMA does not track the number of grandfathered properties and cannot determine their financial impact on the program. Third, FEMA uses a nationwide rating system that combines flood zones across many geographic areas, so individual policies do not always reflect topographical features that affect flood risk. In fact, some patterns in historical claims and premium data suggest that NFIP's full-risk rates may not always reflect actual flood risk. Collectively, these factors increase the risk that premiums collected on full-risk policies may be insufficient to cover future losses, adding to concerns about NFIP's financial stability. FEMA's rate-setting process for subsidized properties depends in part on the accuracy of the full-risk rates, raising concerns about how these rates are calculated as well. To set subsidized rates, FEMA first subtracts the total amount it expects to collect in full-risk premiums from the average historical loss year--that is, the minimum (target) amount that the program needs to collect from all premiums to cover at least average annual losses, as determined by historical data. The remainder becomes the aggregate target amount the program must collect in subsidized premiums. To set individual subsidized rates, FEMA officials then consider their knowledge of flood risk, previous rate increases for various locations, and statutory limits on increases. The resulting subsidized premiums continue to be a financial strain on the NFIP and contribute to its ongoing financial instability. Evidence suggests that flooding is likely to become more severe in the future, resulting in increased risk exposure, the potential for more catastrophic losses, and ongoing financial instability for the program. Currently, the annual amount that NFIP collects in both full-risk and subsidized premiums is not enough to cover its operating costs, claim losses, and principal and interest payments to the Department of the Treasury, thereby exposing the federal government and ultimately taxpayers to ever-greater financial risks, especially in years of catastrophic flooding. Fri, 31 Oct 2008 00:00:00 -0400 http://www.gao.gov/new.items/d0987.pdf In recent years, global demand for petroleum products such as gasoline and diesel fuel has grown more quickly than the capacity to produce them, creating a tight market. U.S. refiners have been running near capacity, particularly during peak summer demand. In such conditions, unexpected refinery outages can result in price increases that adversely affect consumers. GAO was asked to evaluate (1) the trends in U.S. refinery outages over the last 5 years, in terms of reduced production capacity, frequency, and geographic location, and (2) the federal requirements for reporting outages at U.S. refineries. To evaluate these objectives, GAO obtained and analyzed Energy Information Administration (EIA) and commercial data, and obtained and analyzed federal legislation and policies, and interviewed federal agency, academic, and industry trade group officials. With the exception of impacts beginning in 2005 related to Hurricanes Katrina and Rita, GAO's analyses of commercial data on unplanned and planned refinery outages across the United States generally do not show discernible trends in reduced production capacity or in the frequency and location of outages from 2002 through 2007. GAO's analyses of commercial data from 2002 through 2007 indicate that the hurricanes resulted in two patterns of outages for refiners, depending on whether they were directly affected, specifically: (1) certain refiners that were forced to shut down due to the hurricanes opted to upgrade equipment and perform what maintenance they could during their unplanned outages, thus extending the length of time until the next round of planned outages for maintenance at these refineries; and (2) sometimes refiners not directly effected by the hurricanes deferred planned outages to continue to supply the market, thus partially increasing the need for planned outages in subsequent years as these refiners rescheduled their deferred outages. GAO's regional analyses showed few apparent trends, but some variation in reduced production capacity due to outages across regions, with the Gulf Coast region refineries experiencing a slightly higher rate of outages and related reductions in capacity than refineries in other regions, in part as a result of recurrent extreme weather events. At present, there are no federal requirements for refiners to report planned or unplanned refinery outages, and available data may not allow EIA to adequately ascertain the effects of some outages on prices of petroleum products. EIA collects data on a monthly refinery survey and has used this data to estimate outages. However, GAO found estimating outages using this method has a number of limitations. Among other things, it does not identify whether the outage was planned or unplanned, and it is important to make this distinction because unplanned outages are likely to have a different impact on gasoline prices than planned outages. EIA is independently exploring whether to collect data directly on planned and unplanned outages from refiners, but has not established a time frame to determine if it will collect such data. In addition, in response to the Energy Independence and Security Act of 2007, EIA is preparing to enhance its monitoring of planned outages. EIA officials told GAO they plan to primarily rely on commercial data to perform the mandated semi-annual analyses. However, even if EIA collects or acquires reliable data on refinery outages, the agency lacks other data--such as data on special fuel blends--that could be important for the Department of Energy in meeting its obligations to conduct periodic analyses of the potential impacts of refinery outages on prices of petroleum products. While a full cost/benefit analysis of the merits of collecting additional data was outside the scope of this review, EIA has the authority and expertise to determine and suggest what other information for inclusion on the monthly refiner survey could be helpful in adequately evaluating the potential effects of both planned and unplanned outages on prices of petroleum products. Tue, 07 Oct 2008 00:00:00 -0400 http://www.gao.gov/new.items/d081120.pdf This month, Hurricanes Ike and Gustav struck the Gulf Coast producing widespread damage and leading to federal major disaster declarations. Earlier this year, heavy flooding resulted in similar declarations in seven Midwest states. In response, federal agencies have provided millions of dollars in assistance to help with short- and long-term recovery. State and local governments bear the primary responsibility for recovery and have a great stake in its success. Experiences from past disasters may help them better prepare for the challenges of managing and implementing the complexities of disaster recovery. GAO was asked to identify insights from past disasters and share them with state and local officials undertaking recovery activities. GAO reviewed six past disasters-- the Loma Prieta earthquake in northern California (1989), Hurricane Andrew in south Florida (1992), the Northridge earthquake in Los Angeles, California (1994), the Kobe earthquake in Japan (1995), the Grand Forks/Red River flood in North Dakota and Minnesota (1997), and Hurricanes Katrina and Rita in the Gulf Coast (2005). GAO interviewed officials involved in the recovery from these disasters and experts on disaster recovery. GAO also reviewed relevant legislation, policies, and its previous work. While the federal government provides significant financial assistance after major disasters, state and local governments play the lead role in disaster recovery. As affected jurisdictions recover from the recent hurricanes and floods, experiences from past disasters can provide insights into potential good practices. Drawing on experiences from six major disasters that occurred from 1989 to 2005, GAO identified the following selected insights: (1) Create a clear, implementable, and timely recovery plan. Effective recovery plans provide a road map for recovery. For example, within 6 months of the 1995 earthquake in Japan, the city of Kobe created a recovery plan that identified detailed goals which facilitated coordination among recovery stakeholders. The plan also helped Kobe prioritize and fund recovery projects, in addition to establishing a basis for subsequent governmental evaluations of the recovery's progress. (2) Build state and local capacity for recovery. State and local governments need certain capacities to effectively make use of federal assistance, including having sufficient financial resources and technical know-how. State and local governments are often required to match a portion of the federal disaster assistance they receive. Loans provided one way for localities to enhance their financial capacity. For example, after the Red River flood, the state-owned Bank of North Dakota extended the city of Grand Forks a $44 million loan, which the city used to match funding from federal disaster programs and begin recovery projects. (3) Implement strategies for businesses recovery. Business recovery is a key element of a community's recovery. Small businesses can be especially vulnerable to major disasters because they often lack resources to sustain financial losses. Federal, state, and local governments developed strategies to help businesses remain in the community, adapt to changed market conditions, and borrow funds at lower interest rates. For example, after the Loma Prieta earthquake, the city of Santa Cruz erected large pavilions near the main shopping street. These structures enabled more than 40 local businesses to operate as their storefronts were repaired. As a result, shoppers continued to frequent the downtown area thereby maintaining a customer base for impacted businesses. (4) Adopt a comprehensive approach toward combating fraud, waste, and abuse. The influx of financial assistance after a major disaster provides increased opportunities for fraud, waste, and abuse. Looking for ways to combat such activities before, during, and after a disaster can help states and localities protect residents from contractor fraud as well as safeguard the financial assistance they allocate to victims. For example, to reduce contractor fraud after the Red River flood, the city of Grand Forks established a credentialing program that issued photo identification to contractors who passed licensing and criminal checks. Fri, 26 Sep 2008 00:00:00 -0400 http://www.gao.gov/new.items/d081175t.pdf Voluntary organizations have traditionally played a major role in the nation's response to disasters, but the response to Hurricane Katrina raised concerns about their ability to handle large-scale disasters. This testimony examines (1) the roles of five voluntary organizations in providing mass care and other services, (2) the steps they have taken to improve service delivery, (3) their current capabilities for responding to mass care needs, and (4) the challenges they face in preparing for large-scale disasters. This testimony is based on GAO's previous report (GAO-08-823) that reviewed the American Red Cross, The Salvation Army, the Southern Baptist Convention, Catholic Charities USA, and United Way of America; interviewed officials from these organizations and the Federal Emergency Management Agency (FEMA); reviewed data and laws; and visited four high-risk metro areas--Los Angeles, Miami, New York, and Washington, D.C. The five voluntary organizations we reviewed are highly diverse in their focus and response structures. They also constitute a major source of the nation's mass care and related disaster services and are integrated into the 2008 National Response Framework. The Red Cross in particular--the only one whose core mission is disaster response--has a federally designated support role to government under the mass care provision of this Framework. While the Red Cross no longer serves as the primary agency for coordinating government mass care services--as under the earlier 2004 National Plan--it is expected to support FEMA by providing staff and expertise, among other things. FEMA and the Red Cross agree on the Red Cross's role in a catastrophic disaster, but it is not clearly documented. While FEMA recognized the need to update the 2006 Catastrophic Incident Supplement to conform with the Framework, it does not yet have a time frame for doing so. Since Katrina, the organizations we studied have taken steps to strengthen their service delivery by expanding coverage and upgrading their logistical and communications systems. The Red Cross, in particular, is realigning its regional chapters to better support its local chapters and improve efficiency and establishing new partnerships with local community-based organizations. Most recently, however, a budget shortfall has prompted the organization to reduce staff and alter its approach to supporting FEMA and state emergency management agencies. While Red Cross officials maintain that these changes will not affect improvements to its mass care service infrastructure, it has also recently requested federal funding for its governmental responsibilities. Capabilities assessments are preliminary, but current evidence suggests that in a worst-case large-scale disaster, the projected need for mass care services would far exceed the capabilities of these voluntary organizations without government and other assistance--despite voluntary organizations' substantial resources locally and nationally. Voluntary organizations also faced shortages in trained volunteers, as well as other limitations that affected their mass care capabilities. Meanwhile, FEMA's initial assessment does not necessarily include the sheltering capabilities of many voluntary organizations and does not yet address feeding capabilities outside of shelters. In addition, the ability to assess mass care capabilities and coordinate in disasters is currently hindered by a lack of standard terminology and measures for mass care resources, and efforts are under way to develop such standards. Finding and training more personnel, dedicating more resources to preparedness, and working more closely with local governments are ongoing challenges for voluntary organizations. A shortage of staff and volunteers was most commonly cited, but we also found they had difficulty seeking and dedicating funds for preparedness, in part because of competing priorities. However, the guidance for FEMA preparedness grants to states and localities was also not sufficiently explicit with regard to using such funds to support the efforts of voluntary organizations. Tue, 23 Sep 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08823.pdf Voluntary organizations have traditionally played a major role in the nation's response to disasters, but the response to Hurricane Katrina raised concerns about their ability to handle large-scale disasters. This report examines (1) the roles of five voluntary organizations in providing mass care and other services, (2) the steps they have taken to improve service delivery, (3) their current capabilities for responding to mass care needs, and (4) the challenges they face in preparing for large-scale disasters. To address these questions, GAO reviewed the American Red Cross, The Salvation Army, the Southern Baptist Convention, Catholic Charities USA, and United Way of America; interviewed officials from these organizations and the Federal Emergency Management Agency (FEMA); reviewed data and laws; and visited four high-risk metro areas--Los Angeles, Miami, New York, and Washington, D.C. The five voluntary organizations we reviewed are highly diverse in their focus and response structures. They also constitute a major source of the nation's mass care and related disaster services and are integrated into the 2008 National Response Framework. The Red Cross in particular--the only one whose core mission is disaster response--has a federally designated support role to government under the mass care provision of this Framework. While the Red Cross no longer serves as the primary agency for coordinating government mass care services--as under the earlier 2004 National Plan--it is expected to support FEMA by providing staff and expertise, among other things. FEMA and the Red Cross agree on the Red Cross's role in a catastrophic disaster, but it is not clearly documented. While FEMA recognized the need to update the 2006 Catastrophic Incident Supplement to conform with the Framework, it does not yet have a time frame for doing so. Since Katrina, the organizations we studied have taken steps to strengthen their service delivery by expanding coverage and upgrading their logistical and communications systems. The Red Cross, in particular, is realigning its regional chapters to better support its local chapters and improve efficiency and establishing new partnerships with local community-based organizations. Most recently, however, a budget shortfall has prompted the organization to reduce staff and alter its approach to supporting FEMA and state emergency management agencies. While Red Cross officials maintain that these changes will not affect improvements to its mass care service infrastructure, it has also recently requested federal funding for its governmental responsibilities. Capabilities assessments are preliminary, but current evidence suggests that in a worst-case large-scale disaster, the projected need for mass care services would far exceed the capabilities of these voluntary organizations without government and other assistance--despite voluntary organizations' substantial resources locally and nationally. Voluntary organizations also faced shortages in trained volunteers, as well as other limitations that affected their mass care capabilities. Meanwhile, FEMA's initial assessment does not necessarily include the sheltering capabilities of many voluntary organizations and does not yet address feeding capabilities outside of shelters. In addition, the ability to assess mass care capabilities and coordinate in disasters is currently hindered by a lack of standard terminology and measures for mass care resources, and efforts are under way to develop such standards. Finding and training more personnel, dedicating more resources to preparedness, and working more closely with local governments are ongoing challenges for voluntary organizations. A shortage of staff and volunteers was most commonly cited, but we also found they had difficulty seeking and dedicating funds for preparedness, in part because of competing priorities. However, the guidance for FEMA preparedness grants to states and localities was also not sufficiently explicit with regard to using such funds to support the efforts of voluntary organizations. Thu, 18 Sep 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08985r.pdf In 2005, as a result of Hurricane Katrina, more than 1,600 people lost their lives and more than a million were driven from their homes on the Gulf Coast. Tens of thousands of homes in New Orleans were flooded, many requiring either demolition or gutting before reconstruction. Nearly 3 years later, the New Orleans area still faces significant debris management issues and challenges. For example, the Louisiana Department of Environmental Quality (LDEQ) stated that while the Department of Homeland Security's Federal Emergency Management Agency (FEMA) estimated in July 2008 that it had funded about 16,900 home demolitions, an estimated 6,100 homes remained to be demolished around the New Orleans area. The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) establishes programs and processes for the federal government to provide major disaster and emergency assistance to states, local governments, tribal nations, and others. FEMA has the responsibility for administering the provisions of the Stafford Act, including approving and funding the assistance provided under it. This assistance has been provided to the Gulf Coast under the Department of Homeland Security's National Response Framework (formerly called the National Response Plan). In New Orleans, the U.S. Army Corps of Engineers (Corps of Engineers) was the primary federal agency responsible for providing debris removal and disposal until it concluded its response activities in September 2007. The Environmental Protection Agency (EPA), the coordinator of federal emergency support for oil and hazardous materials releases, also assisted the Corps of Engineers and LDEQ with debris removal and disposal and continues to undertake Katrina response activities, such as monitoring landfill operations. The federal law addressing the management of hazardous and other solid wastes--the Resource Conservation and Recovery Act--addresses nonhazardous solid wastes under subtitle D. The act prohibits "open dumping"--the disposal of solid waste in landfills failing to meet the relevant criteria--and requires state plans to prohibit the establishment of open dumps. RCRA provides EPA with limited authority to address environmental problems at solid waste landfills. The Water Resources Development Act of 2007 directed GAO to address certain activities related to debris management in the wake of Hurricane Katrina. We briefed relevant committee staff on the results of our work on March 6, 2008, and held subsequent discussions with them in March and April 2008. We are following up with this report, which provides more detail on the topics covered in the briefing. This report describes (1) key plans and practices federal and state agencies are currently using to oversee debris removal and disposal in response to Hurricane Katrina in New Orleans, (2) enforcement actions state and federal agencies have taken related to Katrina debris removal and disposal, and (3) actions by LDEQ and EPA in response to potential environmental issues at the Gentilly Landfill in New Orleans. Key plans and practices state and federal agencies are using to oversee and implement debris removal and disposal in response to Hurricane Katrina in New Orleans include (1) a state emergency order covering debris removal and disposal at landfills, currently extended until August 29, 2008; (2) EPA "no action assurance" letters to LDEQ concerning asbestos emissions requirements related to building demolitions; and (3) EPA's asbestos emissions monitoring plan. The state emergency order broadens the state of Louisiana's definition of construction and demolition (C&D) debris. Regarding asbestos practices, since 2006 EPA has not been enforcing certain Clean Air Act regulations for asbestos for homes demolished under government orders. In terms of oversight of debris removal and disposal activities, key practices that LDEQ and EPA are using include surveillance at landfills and other debris sites. The pace of home demolitions, which are now managed by the individual parishes, continues to be slow. As of May 15, 2008, LDEQ had issued 120 enforcement actions for Hurricane Katrina-related violations. Fifty-three of these actions involved solid waste, hazardous waste, or water program actions taken against businesses or individuals who, among other things, improperly disposed of C&D debris at unauthorized sites. In other enforcement actions, LDEQ worked with EPA, the Corps of Engineers, and the Louisiana National Guard in a joint effort to combat illegal dumping activities after the hurricane in an area east of New Orleans called the Almonaster Corridor. One of the landfills highlighted in our report, the Gentilly Landfill, is constructed on top of a former municipal waste landfill. EPA concluded that while there is no way "to protect against future Superfund liability absolutely"--particularly for a landfill--the use of the landfill appeared to be consistent with the types and volumes of wastes for which it was designed and permitted by the state. Finally, we are providing information on (1) the status of the Chef Menteur Landfill in New Orleans, (2) a disaster debris reduction pilot project in St. Bernard Parish that was scaled back prior to its implementation in June 2008, and (3) the effect of a debris provision in the Water Resources Development Act of 2007. First, the Chef Menteur Landfill, which was controversial because of its proximity to a national wildlife refuge and a residential neighborhood, was opened under emergency authority in April 2006 and closed in August 2006. The landfill is currently waiting on, among other things, a Corps of Engineers permit under section 404 of the Clean Water Act, after which final closure activity can commence. Second, EPA conducted a disaster debris reduction pilot in St. Bernard Parish in June 2008. EPA has acknowledged that an error in its risk estimate of the potential health effects of exposure to asbestos related to the pilot was a factor in the decision to exclude regulated asbestos-containing material from the revised pilot. Third, a provision of the Water Resources Development Act prohibits federal funds from being used to reimburse any state or local entity in Louisiana for the disposal of C&D debris in a C&D landfill in Louisiana unless that waste meets the federal definition of that debris. While LDEQ officials acknowledged that the provision has therefore not impacted debris disposal operations, EPA and LDEQ officials emphasized that C&D disposal practices in Louisiana have complied with the provisions of the Water Resources Development Act of 2007. Mon, 25 Aug 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08681r.pdf New Orleans faces many challenges in the aftermath of Hurricane Katrina including the challenge of reestablishing the health care system and hospitals within the system. Hurricane Katrina, which made landfall on August 29, 2005, and the subsequent flooding caused by the failure of the New Orleans levee systems, resulted in the sudden closure, damage, or disruption in services at many of the New Orleans hospitals. On August 1, 2007, officials representing five New Orleans hospitals that have been the main health care providers in the region since the hurricane, testified before the House Committee on Energy and Commerce's Subcommittee on Oversight and Investigations. The officials stated that since the hurricane they have experienced significant operating losses and that they expect the losses to continue. The official from one of the hospitals that was designated to present an overview of the specific problems facing the five hospitals stated in his testimony that the hospitals expected to experience a combined operating loss of $135 million in calendar year 2007. This operating loss estimate was calculated using operating revenue and expense amounts for all five hospitals for January through May 2007 and then annualized for the year. The official also testified that the combined operating loss for the five hospitals would equal $405 million by 2009. The hospital official cited several reasons for operating losses, including increased labor costs and Medicare reimbursements that do not take into account the increased labor costs since the hurricane. The hospital official appealed to Congress for additional federal financial assistance. The subcommittee asked us to review the extent to which Hurricane Katrina adversely affected the hospitals' operating results. To that end, Congress asked us to analyze 1) the operating results of the five hospitals before and after Hurricane Katrina and 2) the factors contributing to changes in hospital operating results and whether those factors would have a continuing impact. Operating results of all five hospitals significantly declined in 2005, the year of Hurricane Katrina, based on the three measures of profitability we used to illustrate differences in the hospitals' operating results before and after the hurricane--operating income or loss, net income or loss, and earnings before interest, depreciation and amortization. However, four out of the five hospitals showed some improvement in their operating results for 2006, 2007, and projected for 2008. For the fifth hospital, the amounts for the three profitability measures for 2007 and projected for 2008 declined from 2005 amounts. In viewing these trends, it is important to consider the amount and timing of special payments that the hospitals received to cover Hurricane Katrina-related losses for 2005 through 2008. These special payments included insurance payments from private insurers for business interruption and property and casualty claims, wage index grants from the Department of Health and Human Services (HHS) to cover some of the increases in labor costs experienced by the hospitals and funds from the state of Louisiana for uncompensated care to cover the increased costs for providing health care to the uninsured. They also included Federal Emergency Management Agency (FEMA) and National Flood Insurance Program (NFIP) reimbursements to cover losses due to flooding and federally declared disasters. Despite the improvements in operating results for four of the five hospitals we examined, the financial position for these four hospitals has weakened, as evidenced by declines in net asset balances since 2004. Such declines indicate that the hospitals have been either using their assets, incurring additional debt to support operations or both. Increased expenses have contributed to changes in hospital operating results since Hurricane Katrina. Increases in operating expenses have generally been greater than increases in operating revenues, thereby negatively affecting operating results. Hospitals have experienced higher labor costs since the hurricane. A nursing shortage and reduction in the physician base and workforce, exacerbated by the hurricane, forced hospitals to hire staff at salaries and wages that were higher than before the hurricane. Generally, revenue from patient services has not kept pace with increased expenses. Hospital officials believe that revenues will continue to lag behind expenses until some of the increased labor costs are covered in Medicare reimbursement rates through changes to the wage index. However, this relief is not fully expected until 2010. Like hospital officials, officials in LDHH believe that increased operating expenses contributed to the decline in hospital operating results and that labor costs were a major driver of decreased operating results. The state health officials developed an estimate and requested $50 million in funding that the five hospitals need to cover operating losses in 2007. Credit analysts with whom we spoke also cited the increase in labor costs as a factor. The analysts said that the decline in hospital operating results since Hurricane Katrina could be a factor in increasing the hospitals' costs of raising funds in the bond market. Thu, 17 Jul 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08913.pdf In 2005, Hurricanes Katrina, Rita, and Wilma devastated the Gulf Coast, destroying wide swaths of housing, key infrastructure, and numerous private businesses. In response, Congress granted the states a wide range of disaster relief, including billions of dollars of grants and tax incentives to revitalize the Gulf Coast. Specifically, the Gulf Opportunity (GO) Zone Act of 2005 (Pub. L. No. 109-135) provided tax incentives to individuals and businesses in certain presidentially declared disaster areas. Congress mandated that GAO review how state and local governments allocated and used federal tax incentives in the act and subsequent legislation. This report (1) identifies tax incentives in the GO Zone Act of 2005 and subsequent legislation for which state and local governments have allocation and oversight responsibilities, (2) describes the procedures state governments use in allocating the tax incentives, including how they plan to monitor compliance with federal laws, and (3) describes how tax incentives have been allocated and for what purposes. To address these objectives, GAO analyzed key documentation from GO Zone states and interviewed state officials, selected local officials, and representatives from private and nonprofit entities. States with GO Zones are responsible for allocating and overseeing the use of four tax incentives in the GO Zone Act of 2005. Alabama, Louisiana, and Mississippi received allocation authority for all four provisions. Florida and Texas each received $3.5 million in GO Zone low-income housing tax credit (LIHTC) authority, but did not receive allocations under the other incentives. With some process variations, the three eligible states with GO Zones generally allocated bond authority on a first-come, first-served basis without consistently targeting the allocations to assist recovery in the most damaged areas. Officials in Louisiana and Mississippi acknowledged that the first-come, first-served approach led to allocating bond authority to less-damaged areas at the start of the program. The five eligible state housing finance agencies used existing processes to award GO Zone LIHTCs, but differed in how they targeted these credits. For all three bond provisions, state officials and bond issuers said the borrower's bond counsel is generally responsible for ensuring that the bonds are compliant with applicable laws when issued. State housing finance agencies plan to use existing procedures to monitor compliance once units are placed in service. As of mid-June 2008, eligible states had allocated 87 percent of the GO Zone private activity bond authority, but bonds issued amount to about 50 percent of the total awarded allocation authority. The bonds issued will be used to finance a wide range of facilities, including manufacturing facilities, utilities, housing, retail facilities, and hotels. State housing finance authorities have awarded 95 percent of the GO Zone LIHTCs. Although few housing units are currently in service, state housing finance agency officials said planned units will be in service by the mandated deadline. GO Zone LIHTC-funded units will address about 17 and 45 percent of the rental housing units with major or severe damage in the states of Louisiana and Mississippi, respectively. The three eligible states with GO Zones used the tax credit bonds and additional advance refundings to varying degrees to provide debt relief. State officials said current economic conditions pose challenges for using both GO Zone bond and LIHTC financing. Wed, 16 Jul 2008 00:00:00 -0400 http://www.gao.gov/new.items/d081003r.pdf Members of the Committee requested that GAO provide additional comments to a number of post-hearing questions after GAO testified before the Subcommittee on Management, Investigations, and Oversight on the Department of Homeland Security's (DHS) Preparedness for Catastrophic Disasters. The responses are generally based on work associated with previously issued GAO products, which were conducted in accordance with generally accepted government auditing standards. Because the responses are based on prior work, we did not obtain comments from DHS. Tue, 15 Jul 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08437.pdf The Federal Emergency Management Agency (FEMA) and its contractors administer and implement the National Flood Insurance Program (NFIP). GAO designated NFIP as a high-risk area in March 2006, and as of December 2007, FEMA owed more than $17.3 billion to the Treasury for hurricane-related losses. Concerns have been raised about the financial condition of NFIP and FEMA's efforts to mitigate losses and monitor NFIP contractors. This report (1) describes statistical and financial trends for NFIP from 1997 through 2006, (2) assesses the extent to which flood-damaged properties were purchased to mitigate risk, and (3) evaluates procedures for monitoring NFIP-related contracts. For this study, GAO analyzed financial and statistical data on the NFIP and its mitigation programs, reviewed documentation of contract monitoring activities, and interviewed FEMA officials and contractors. The number of federal flood insurance policies in force nationwide increased 36 percent from 1997 through 2006, but most homeowners at risk of flooding still lacked such insurance. While average insurance amounts (per policy) increased 78 percent from 1997 through 2006--consistent with rising home values--the average premium decreased 3 percent from 1997 through 2006, likely driven in part by the increase in policies sold in moderate- to low-risk areas. Conversely, loss amounts fluctuated by year, peaking at more than $17.7 billion in 2005. Seventy-nine percent of the funds paid out through NFIP from 1997 through 2006 were for hurricane-related claims, but the percentages in individual years varied widely (correlating with hurricane activity). Finally, the extent of claim payments attributed to repetitive loss properties (those with two or more claims in a rolling 10-year period) increased from 1997 through 2006, from $3.7 billion to nearly $8 billion, with the most significant increases resulting from the 2005 Gulf Coast hurricanes. Because of data limitations, GAO was not able to determine the actual number of properties acquired through FEMA mitigation programs, which are intended to minimize the damage and financial impact of floods. Information on completed mitigation projects (which encompass multiple properties) indicates that about one-third of properties approved for acquisition from 1997 to 2006 were acquired. However, these data are limited because they do not include a count of properties acquired in ongoing projects. Projects may take several years to complete, and FEMA does not report properties acquired until a project is complete. Further, FEMA collected property acquisition data (for completed projects) in an ad hoc manner because FEMA's grants management system lacks the capability to record acquisition data. As a result, FEMA cannot readily determine the extent to which flood-damaged and repetitive loss properties have been acquired through its mitigation programs. Lack of monitoring records, inconsistent application of procedures, and lack of coordination have diminished the effectiveness of FEMA monitoring of NFIP-related contracts. While federal internal control standards state that records should be properly maintained, FEMA did not consistently follow its monitoring procedures for preparing or maintaining monitoring reports and was unable to provide copies of the majority of monitoring reports GAO requested. Further, FEMA offices did not coordinate information and actions relating to contractor deficiencies and payments. In some cases, key officials were unaware of decisions on contractor performance. As a result, FEMA cannot consistently ensure adherence to contract requirements and lacks information critical for effective oversight of key contractors. Given the reliance of NFIP upon contractors, it is important that FEMA have in place adequate controls that are consistently applied to all contracts. Mon, 16 Jun 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08668.pdf Potential terrorist attacks and the possibility of naturally occurring disease outbreaks have raised concerns about the "surge capacity" of the nation's health care systems to respond to mass casualty events. GAO identified four key components of preparing for medical surge: (1) increasing hospital capacity, (2) identifying alternate care sites, (3) registering medical volunteers, and (4) planning for altering established standards of care. The Department of Health and Human Services (HHS) is the primary agency for hospital preparedness, including medical surge. GAO was asked to examine (1) what assistance the federal government has provided to help states prepare for medical surge, (2) what states have done to prepare for medical surge, and (3) concerns states have identified related to medical surge. GAO reviewed documents from the 50 states and federal agencies. GAO also interviewed officials from a judgmental sample of 20 states and from federal agencies, as well as emergency preparedness experts. Following a mass casualty event that could involve thousands, or even tens of thousands, of injured or ill victims, health care systems would need the ability to "surge," that is, to adequately care for a large number of patients or patients with unusual medical needs. The federal government has provided funding, guidance, and other assistance to help states prepare for medical surge in a mass casualty event. From fiscal years 2002 to 2007, the federal government awarded the states about $2.2 billion through the Office of the Assistant Secretary for Preparedness and Response's Hospital Preparedness Program to support activities to meet their preparedness priorities and goals, including medical surge. Further, the federal government provided guidance for states to use when preparing for medical surge, including Reopening Shuttered Hospitals to Expand Surge Capacity, which contains a checklist that states can use to identify entities that could provide more resources during a medical surge. Based on a review of state emergency preparedness documents and interviews with 20 state emergency preparedness officials, GAO found that many states had made efforts related to three of the key components of medical surge, but fewer have implemented the fourth. More than half of the 50 states had met or were close to meeting the criteria for the five medical-surge-related sentinel indicators for hospital capacity reported in the Hospital Preparedness Program's 2006 midyear progress reports. For example, 37 states reported that they could add 500 beds per million population within 24 hours of a mass casualty event. In a 20-state review, GAO found that all 20 were developing bed reporting systems and most were coordinating with military and veterans hospitals to expand hospital capacity, 18 were selecting various facilities for alternate care sites, 15 had begun electronic registering of medical volunteers, and fewer of the states--7 of the 20--were planning for altered standards of medical care to be used in response to a mass casualty event. State officials in GAO's 20-state review reported that they faced challenges relating to all four key components in preparing for medical surge. For example, some states reported concerns related to maintaining adequate staffing levels to increase hospital capacity, and some reported concerns about reimbursement for medical services provided at alternate care sites. According to some state officials, volunteers were concerned that if state registries became part of a national database they might be required to provide services outside their own state. Some states reported that they had not begun work on or completed altered standards of care guidelines due to the difficulty of addressing the medical, ethical, and legal issues involved in making life-or-death decisions about which patients would get access to scarce resources. While most of the states that had adopted or were drafting altered standards of care guidelines reported using federal guidance as they developed these guidelines, some states also reported that they needed additional assistance. Fri, 13 Jun 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08868t.pdf The Homeland Security Act was enacted in November 2002, creating the Department of Homeland Security (DHS) to improve homeland security following the September 11, 2001, terrorist attacks on the United States. The act centralized the leadership of many homeland security activities under a single federal department and, accordingly, DHS has the dominant role in implementing this national strategy. This testimony discusses the status of DHS's actions in fulfilling its responsibilities to (1) establish policies to define roles and responsibilities for national emergency preparedness efforts and prepare for the transition between presidential administrations, and (2) develop operational plans and performance metrics to implement these roles and responsibilities and coordinate federal resources for disaster planning and response. This testimony is based on prior GAO work performed from September 2006 to June 2008 focusing on DHS's efforts to address problems identified in the many post-Katrina reviews. DHS has taken several actions to define national roles and responsibilities and capabilities for emergency preparedness efforts in key policy documents and has begun preparing for the upcoming transition between presidential administrations. DHS prepared initial versions of key policy documents that describe what should be done and by whom (National Response Plan in 2004), how it should be done (the National Incident Management System in 2004) and how well it should be done (the interim National Preparedness Goal in 2005). DHS subsequently developed and issued revisions to these documents to improve and enhance its national-level policies, such as the National Preparedness Guidelines in 2007 which was the successor to the interim National Preparedness Goal. Most recently, DHS developed the National Response Framework (NRF), the successor to the National Response Plan, which became effective in March 2008. This framework describes the doctrine that guides national response actions and the roles and responsibilities of officials and entities involved in response efforts. Clarifying roles and responsibilities will be especially critical as a result of the coming change in administrations and the associated transition of key federal officials with homeland security preparedness and response roles. To cope with the absence of many political appointed executives from senior roles, DHS has designated career executives to carry out specific responsibilities in the transition between presidential administrations and recently provided information to this Committee on its transition plans. To assist in planning to execute an efficient and effective administration transition, DHS has also contracted with the Council for Excellence in Government to identify key roles and responsibilities for the Department and its homeland security partners for responding to disasters during the transition between administrations. DHS is still developing operational plans to guide other federal agencies' response efforts and metrics for assessing federal capabilities. Two essential supplements to the new National Response Framework--response guides for federal partners and an integrated planning system--are still under development. Also, DHS is still establishing a process to measure the nation's overall preparedness based on a list of targeted capabilities and has not yet completed an inventory of all federal response capabilities. The measures and metrics associated with these targeted capabilities are not standards, but serve as guides for planning, training, and exercise activities. However, DHS policy does not direct development of these capabilities to address national priorities for federal agencies. For example, for the national priority to "Strengthen Interoperable and Operable Communications Capabilities" the National Preparedness Guidelines state that communications capabilities are developed to target levels in the states, tribal areas, territories, and designated urban areas that are consistent with measures and metrics established for targeted capabilities; federal agencies' interoperability is not addressed. Wed, 11 Jun 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08768.pdf Hurricane Katrina illustrated that effective preparation and response to a catastrophe requires a joint effort between federal, state, and local government. The Department of Homeland Security (DHS), through the Federal Emergency Management Agency (FEMA), is responsible for heading the joint effort. In January 2008, DHS released the National Response Framework (NRF), a revision of the 2004 National Response Plan (2004 Plan), the national preparation plan for all hazards. In response to the explanatory statement to the Consolidated Appropriations Act of 2008 and as discussed with congressional committees, this report evaluates the extent to which (1) DHS collaborated with non-federal stakeholders in revising and updating the 2004 Plan into the 2008 NRF and (2) FEMA has developed policies and procedures for managing future NRF revisions. To accomplish these objectives, GAO reviewed DHS and FEMA documents related to the revision process, analyzed the relevant statutes, and interviewed federal and non-federal officials who held key positions in the revision process. While DHS included non-federal stakeholders--state, local, and tribal governments, nongovernmental organizations, and the private sector--in the initial and final stages of revising the 2004 Plan into the NRF, it did not collaborate with these stakeholders as fully as it originally planned or as required by the October 2006 Post-Katrina Emergency Management Reform Act (Post-Katrina Act). As the revision process began in 2006, DHS involved both federal and non-federal stakeholders by soliciting and incorporating their input in determining the key revision issues and developing the first draft in April 2007. However, after this first draft was completed, DHS deviated from its revision work plan by conducting a closed, internal federal review of the draft rather than releasing it for stakeholder comment because the draft required further modifications DHS considered necessary. DHS limited communication with non-federal stakeholders until it released a draft for public comment 5 months later on September 10, 2007. The following day, non-federal stakeholders testified at a congressional hearing that DHS had shut them out during that 5-month period. In addition, the Post-Katrina Act required that DHS establish a National Advisory Council (NAC) for the FEMA Administrator by December 2006 to, among other things, incorporate nonfederal stakeholders' input in the revision process. However, FEMA stated the necessary time to select quality NAC members required additional time, and FEMA did not announce the NAC's membership until June 2007. The NAC did not provide comments on a revision draft until one month before DHS publicly released the final NRF in January 2008. FEMA anticipates that the NRF will be revised in the future; however, FEMA does not have policies or procedures in place to guide this process or ensure a collaborative partnership with stakeholders. FEMA has emphasized the importance of partnering with relevant stakeholders to effectively prepare for and respond to major and catastrophic disasters, and the Congress, through the Post-Katrina Act, requires such partnership. In addition, the Standards for Internal Controls in the Federal Government calls for policies and procedures that establish regular communication with stakeholders and monitor performance over time as essential for achieving desired program goals. Furthermore, previous GAO work on the Department of Defense's civil support plans and the administration's national pandemic influenza implementation plan has shown the need for participation of state and local jurisdictions in emergency planning. Especially in view of a new administration, the experience of the previous revision process illustrates the importance of collaborating with stakeholders in revising a plan that relies on them for its successful implementation. While the NRF is published by DHS, it belongs to the nation's emergency response community. Developing such policies and procedures is essential for ensuring that FEMA attains the Post- Katrina Act's goal of partnering with non-federal stakeholders in building the nation's emergency management system, including the periodic review and revision of the NRF. Wed, 11 Jun 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08610.pdf Following the World Trade Center (WTC) attack, the Congress appropriated more than $8 billion to the Department of Homeland Security's (DHS) Federal Emergency Management Agency for response and recovery activities. The Department of Health and Human Services (HHS) received some of this funding to establish health screening and monitoring programs for responders to the disaster and later received additional appropriations to fund treatment. In total, about $369.2 million has been appropriated or awarded for the WTC health programs. GAO previously reported on problems that these programs have had in ensuring the availability of services for all responders. GAO was asked to examine lessons from the WTC health programs that could guide future programs. GAO examined (1) lessons from the programs' experience and (2) HHS actions or plans that incorporate the lessons. GAO interviewed WTC health program officials and other experts and reviewed DHS and HHS documents. GAO identified five important lessons from the experience of the WTC health programs that could help with the development of responder health programs in the event of a future disaster. First, registering all responders during a response to a disaster could improve implementation of screening and monitoring services. Second, designing and implementing screening and monitoring programs that foster the ability to conduct epidemiologic research could improve the understanding of health effects experienced by responders and help determine the need for ongoing monitoring. Third, providing timely mental health screening and monitoring that is integrated with physical health screening and monitoring could improve the ability to accurately diagnose physical and mental health conditions and prevent more serious mental health conditions from developing. Fourth, including a treatment referral process in screening and monitoring programs could improve the ability of responders to gain access to needed treatment. Fifth, making comparable services available to all responders, regardless of their employer or geographic location, could ensure more equitable access to services for responders and help ensure that data collected about responders' health are consistent and comprehensive. HHS has taken steps to facilitate responder registration, but has not developed a department-level plan for responder health programs. HHS's Agency for Toxic Substances and Disease Registry has developed a survey instrument that state and local entities can adopt to register responders and other individuals exposed to a disaster. In a separate effort, HHS's Office of the Assistant Secretary for Preparedness and Response is taking steps to establish a system to register HHS employees and other federal public health and medical personnel who are deployed to a disaster, but it has not completed this effort. HHS has not developed a department-level plan for designing and implementing responder health programs that incorporates the five lessons from the WTC health programs. As a result, HHS has not indicated whether its policies and actions following a disaster or emergency would apply these lessons. Another consequence of not having a plan is that HHS has not described its components' roles and responsibilities for designing and implementing responder health programs. It has not identified which HHS components would be involved in responder health programs, which component would take the lead, how the expertise of various components would be used, or how efforts would be coordinated. In the absence of a department-level plan, HHS's National Institute for Occupational Safety and Health developed a proposal in February 2008 for a project to develop strategies to ensure responder safety and health. While GAO concluded that this proposal is a step in the right direction for addressing responder health issues, it noted that the proposal does not fully address the lessons that have been identified from the WTC health programs. Fri, 30 May 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08504.pdf Disputes between policyholders and insurers after the 2005 hurricanes highlight the challenges of determining the cause and extent of damages when properties are subject to both high winds and flooding. Additionally, insurers want to reduce their exposure in high-risk areas, and state wind insurance programs have grown significantly. H.R. 3121, the Flood Insurance Reform and Modernization Act of 2007, would create a combined federal insurance program with coverage for both wind and flood damage. GAO was asked to evaluate this potential program in terms of (1) what would be required to implement it; (2) the steps the Federal Emergency Management Agency (FEMA) would need to take to determine premium rates that reflect all future costs; and (3) how it could affect policyholders, insurance market participants, and the federal government. To address these questions, GAO analyzed state and federal programs, examined studies of coastal wind insurance issues, and interviewed federal and state regulatory officials as well as industry participants and analysts. FEMA and the National Association of Insurance Commissioners generally agreed with GAO's report findings. FEMA emphasized the challenges it would face in addressing several key issues. FEMA also provided technical comments, which were incorporated as appropriate. To implement a combined federal flood and wind insurance program, FEMA would need to complete certain challenging steps. First, FEMA would need to determine wind hazard prevention standards that communities would have to adopt in order to receive coverage. Second, FEMA would need to adapt existing programs to accommodate wind coverage--for example, the Write Your Own program. Third, FEMA would need to create a new rate-setting process, as the process for setting flood insurance rates is different from what is needed for wind coverage. Fourth, promoting the new program in communities would require that FEMA staff raise awareness of the combined program's availability and coordinate enforcement of the new building codes. Finally, FEMA would need to put staff and procedures in place to administer and oversee the new program while it faces current management and oversight challenges with the National Flood Insurance Program (NFIP). Setting premium rates adequate to cover all the expected costs of flood and wind damage would require FEMA to make sophisticated determinations. For example, FEMA would need to determine how the program would pay claims in years with catastrophic losses without borrowing from the Department of the Treasury. H.R. 3121 would require the program to stop renewing or selling new policies if it needed to borrow funds, effectively terminating the program. It is also unclear whether the program could obtain reinsurance to cover such losses, and attempting to fund losses by building up a surplus would potentially require high premium rates and an unknown number of years without large losses, something over which FEMA has no control. Further, FEMA would need to account for the likelihood that participation would be limited and only the highest-risk properties would be insured. These factors would further increase premium rates and make it difficult to set rates adequate to cover future costs. A federal flood and wind insurance program could benefit some policyholders and market participants but would also involve trade-offs. For example, not requiring adjusters to distinguish between flood and wind damage could reduce both delays in reimbursing participants and the potential for litigation. However, borrowing restrictions could also leave property owners without coverage after a catastrophic event. In addition, the proposed coverage limits are relatively low compared with the coverage that is currently available, potentially leaving some properties underinsured. The program could also reduce the exposure of some insurers by insuring high-risk properties that currently have private sector coverage. However, an unknown portion of the exposure currently held by state wind programs--nearly $600 billion in 2007--could be transferred to the federal government. While H.R. 3121 would require premium rates to be adequate to cover any exposure and restrict borrowing by the program, the potential exists for losses to greatly exceed expectations, as happened with Hurricane Katrina in 2005. This could increase FEMA's total debt, which as of December 2007 was about $17.3 billion. Fri, 25 Apr 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08251.pdf It has been 5 years since the Department of Defense (DOD) established U.S. Northern Command (NORTHCOM) to conduct homeland defense and civil support missions in the United States. Planning operations in the United States poses unique challenges for traditional military planning. GAO was asked to assess (1) the status of NORTHCOM's plans and the challenges it faces in planning and conducting operations, (2) the number, experience, and training of planning personnel, and (3) the extent to which NORTHCOM coordinates with other federal agencies. To do this, GAO reviewed available NORTHCOM plans, compared them to joint operational planning criteria, compared planning staff with those at other commands, and reviewed documentation and mechanisms for interagency coordination. NORTHCOM has completed--or is in the process of revising--all of the major plans it is required to prepare for its homeland defense and civil support missions, but it faces a number of challenges in planning for and conducting these missions. NORTHCOM has completed its nine required plans. However, NORTHCOM does not know whether supporting plans that must be developed by other DOD organizations to assist NORTHCOM are complete because it has only recently begun to develop a process to track and assess these plans. NORTHCOM faces challenges in three key planning areas. First, NORTHCOM has difficulty identifying requirements for capabilities it may need in part because NORTHCOM does not have more detailed information from the Department of Homeland Security (DHS) or the states on the specific requirements needed from the military in the event of a disaster. Second, NORTHCOM has few regularly allocated forces and few capabilities allocated to its plans. DOD could allocate forces to NORTHCOM and assign specific forces to the command's plans, but this would not guarantee that those forces would not have to be deployed elsewhere. However, it would provide DOD and the NORTHCOM commander with a better basis on which to assess the risk that the command would be unable to successfully execute one or more of its missions. Third, NORTHCOM has difficulty monitoring the readiness of military units for its civil support mission because its plans do not specify mission tasks against which units can be assessed. NORTHCOM has undertaken mitigation efforts to address each challenge, and new national planning guidance may further assist NORTHCOM and DOD in addressing the challenges. Nevertheless, NORTHCOM and DOD can take additional actions to reduce the risk from these gaps and reduce the risk due to the overall uncertainty that stems from the nature of its mission. NORTHCOM has an adequate number of planning personnel, and the command is pursuing opportunities to expand the experience and training for staff needed to perform the command's planning function. NORTHCOM's planning staff is filled at over 96 percent of its authorized positions. NORTHCOM's military planning staff receives the same planning training and education as planners in other combatant commands. To draw upon experience in planning and conducting domestic operations, NORTHCOM has integrated National Guard and U.S. Coast Guard personnel into its headquarters staff. NORTHCOM has also developed a curriculum for required mission-related training courses. Although NORTHCOM has taken actions to improve coordination of its homeland defense and civil support plans and operations with federal agencies, it lacks formalized guidance and procedures--such as memorandums of understanding or charters--to help ensure that interagency coordination efforts or agreements that are reached can be fully relied on. This is important because responding to a major disaster in the United States--natural or man-made--is a shared responsibility of many government agencies with states often requiring federal assistance from DHS and DOD. Wed, 16 Apr 2008 00:00:00 -0400 http://www.gao.gov/new.items/d08544r.pdf Many of the approximately 100,000 people who did not evacuate before Hurricane Katrina struck the Gulf Coast in 2005 lacked access to a vehicle. In the aftermath of the storm, questions were raised about how well federal, state, and local governments were prepared to evacuate such transportation-disadvantaged populations. Hurricane Katrina, which ultimately resulted in over 1,300 deaths, also demonstrated difficulties for evacuating hospital patients and nursing home residents and raised questions about the role of the federal government in assisting in such evacuations. While responding to disasters and managing evacuations is largely a state and local responsibility, the federal government can provide assistance when state and local governments are overwhelmed. The federal government also provides grants and technical assistance for disaster preparedness. In January 2008, the Department of Homeland Security (DHS) released the National Response Framework (NRF)--replacing the National Response Plan. Its annexes detail the roles and responsibilities of local, state, and federal agencies during emergencies. The Federal Emergency Management Agency (FEMA), within DHS, is the lead coordinating agency for federal emergency assistance. The NRF details the responsibilities of supporting federal agencies, including the Department of Transportation (DOT), whose responsibilities include coordinating the restoration and recovery of transportation systems and infrastructure, and the Department of Health and Human Services (HHS), whose responsibilities include coordinating public health and medical services. The federal government can provide medical resources, such as emergency medical care and the evacuation of hospital patients during disasters, through the National Disaster Medical System (NDMS), a partnership of DHS, the Department of Defense, the Department of Veterans Affairs, and HHS. Recently, Congress expressed concerns about the extent to which GAO's recommendations have been implemented and asked us to assess the progress these agencies have made in doing so. GAO found that progress implementing our recommendations has been mixed. Of the six recommendations contained in the two reports, two recommendations have been substantially implemented, while three recommendations have been partially implemented, and one recommendation has not been implemented. Tue, 01 Apr 2008 00:00:00 -0400 http://www.gao.gov/new.items/d0822.pdf Catastrophic disasters, such as Hurricane Katrina, may result in trauma and other psychological consequences for the people who experience them. The federal government provides states with funding and other support to help them prepare for and respond to disasters. Because of congressional interest in these issues, GAO examined (1) federal agencies' actions to help states prepare for the psychological consequences of catastrophic disasters and (2) states' experiences obtaining and using grants from the Crisis Counseling Assistance and Training Program (CCP) to respond to the psychological consequences of catastrophic disasters. CCP is a program of the Department of Homeland Security's (DHS) Federal Emergency Management Agency (FEMA). GAO reviewed documents and interviewed program officials from federal agencies and conducted additional work in six states with experience responding to catastrophic disasters: Florida, Louisiana, Mississippi, New York, Texas, and Washington. Federal agencies have awarded grants and conducted other activities to help states prepare for the psychological consequences of catastrophic and other disasters. For example, in fiscal years 2003 and 2004, the Department of Health and Human Services' (HHS) Substance Abuse and Mental Health Services Administration (SAMHSA) provided grants to mental health and substance abuse agencies in 35 states for disaster planning. In 2007, SAMHSA completed an assessment of mental health and substance abuse disaster plans developed by states that received a preparedness grant. SAMHSA found that, for the 34 states with plans available for review, these plans generally showed improvement over those that had been submitted by states as part of their application for its preparedness grant. The agency also identified several ways in which the plans could be improved. For example, about half the plans did not indicate specific planning and response actions that substance abuse agencies should take. Similarly, GAO's review of the plans available from six states found varying attention among the plans to covering substance abuse issues. SAMHSA officials said the agency is exploring methods of determining states' individual technical assistance needs. Other federal agencies--the Centers for Disease Control and Prevention, the Health Resources and Services Administration, and DHS--have provided broader preparedness funding that states may use for mental health or substance abuse preparedness, but these agencies' data-reporting requirements do not produce information on the extent to which states used funds for this purpose. States in GAO's review experienced difficulties in applying for CCP funding and implementing their programs following catastrophic disasters. CCP, a key federal postdisaster response grant program to help states deliver crisis counseling services, is administered by FEMA in collaboration with SAMHSA. State officials said they had difficulty collecting information needed for their CCP applications and experienced lengthy application reviews. FEMA and SAMHSA officials said they have taken steps to improve the application submission and review process. State officials also said they experienced problems implementing their CCPs. For example, they said that FEMA's policy of not reimbursing states and their CCP service providers for indirect costs, such as certain administrative expenses, led to problems recruiting and retaining service providers. Other FEMA postdisaster response grant programs allow reimbursement for indirect costs. A FEMA official said the agency had been considering since 2006 whether to allow indirect cost reimbursement under CCP but did not know when a decision would be made. States also cited difficulties assisting people who needed more intensive crisis counseling services than those traditionally provided through state CCPs. FEMA and SAMHSA officials said they plan to consider options for adding other types of crisis counseling services to CCP, based in part on states' experiences with CCP pilot programs offering expanded crisis counseling services. The officials did not know when they would complete their review and reach a decision. Fri, 29 Feb 2008 00:00:00 -0500 http://www.gao.gov/new.items/d08369.pdf Using lessons from the 2005 Gulf Coast hurricanes, the federal government released the National Response Framework (NRF) in January 2008. This report examines (1) why the primary role for mass care in the NRF shifted from the Red Cross to the Federal Emergency Management Agency (FEMA), and potential issues with implementation, (2) whether National Voluntary Organizations Active in Disasters (NVOAD)--an umbrella organization of 49 voluntary agencies--is equipped to fulfill its NRF role, (3) the extent to which FEMA has addressed issues with mass care for the disabled since the hurricanes, (4) the extent to which major voluntary agencies have prepared to better serve the disabled since the hurricanes, and (5) the extent to which FEMA has addressed issues voluntary agencies faced in receiving Public Assistance reimbursement. To analyze these issues, GAO reviewed the NRF and other documents, and interviewed officials from FEMA, voluntary agencies, and state and local governments. FEMA and the Red Cross agreed that FEMA should be the primary agency for mass care in the NRF because the primary agency should be able to direct federal agencies' resources to meet mass care needs, which the Red Cross cannot do. The shifting roles present several implementation issues. For example, while FEMA has enhanced responsibilities for coordinating the activities of voluntary organizations, it does not currently have a sufficient number of specialized staff to meet this responsibility. NVOAD has characteristics that help it carry out its broad role of facilitating voluntary organization and government coordination, but limited staff resources constrain its ability to effectively fulfill its role in disaster response situations. NVOAD held daily conference calls with its members after Hurricane Katrina, but these calls were not an effective means of sharing information, reflecting the fact that NVOAD had only one employee at the time of Katrina. FEMA has begun taking steps in several areas to improve mass care for the disabled based on lessons learned from the Gulf Coast hurricanes. For example, FEMA hired a Disability Coordinator to integrate disability issues into federal emergency planning and preparedness efforts. However, FEMA has generally not coordinated with a key federal disability agency, the National Council on Disability, in the implementation of various initiatives, as required by the Post-Katrina Emergency Management Reform Act of 2006. The Red Cross has taken steps to improve mass care services for the disabled, but still faces challenges. For example, the Red Cross developed a shelter intake form to assist staff in determining whether a particular shelter can meet an individual's needs. However, Red Cross officials said that some local chapters are still not fully prepared to serve individuals with disabilities. Other voluntary organizations had not identified a need to improve services for individuals with disabilities, and we did not identify concerns with their services. FEMA has partially addressed the issues faced by local voluntary organizations, such as churches, in seeking Public Assistance reimbursement for mass care-related expenses after the hurricanes. At the time of the hurricanes, a key FEMA reimbursement program was not designed for a disaster of Katrina's magnitude, but FEMA has changed its regulations to address this issue. Local voluntary organizations also had difficulty getting accurate information about reimbursement opportunities. Key FEMA staff had not received training on reimbursement policies and sometimes did not provide accurate information, and some of the information on FEMA's Web site was not presented in a user-friendly format. FEMA has not addressed these communication issues. Wed, 27 Feb 2008 00:00:00 -0500 http://www.gao.gov/new.items/d08301.pdf Public Law No. 110-28 directed GAO to review how the Federal Emergency Management Agency (FEMA) develops its disaster cost estimates. Accordingly, GAO addressed the following questions: (1) What is FEMA's process for developing and refining its cost estimates for any given disaster? (2) From 2000 through 2006, how close have cost estimates been to the actual costs for noncatastrophic (i.e., federal costs under $500 million) natural disasters? (3) What steps has FEMA taken to learn from past experience and improve its management of disaster-related resources and what other opportunities exist? To accomplish this, GAO reviewed relevant FEMA documents and interviewed key officials. GAO also obtained and analyzed disaster cost data and determined that they were sufficiently reliable for the purposes of this review. After a disaster is declared, FEMA staff deployed to a joint field office work with state and local government officials and other relevant parties to develop and refine cost estimates. The overall estimate comprises individual estimates for FEMA's assistance programs plus any related tasks assigned to other federal agencies (mission assignments) and FEMA administrative costs. The methods used to develop these estimates differ depending on program requirements including, in some cases, historical knowledge. FEMA officials told GAO that cost estimates are updated on a continuing basis. Decision makers need accurate information to make informed choices and learn from past experience. FEMA officials stated that by 3 months after a declaration estimates are usually within 10 percent of actual costs--which they defined as reasonable. GAO's analysis showed that decision makers did not have cost information within this 10 percent band until 6 months after the disaster declaration. These results cannot be generalized since this comparison could only be made for the 83 (24 percent) noncatastrophic natural disaster declarations for which final financial decisions had been made. Disaster coding issues also hamper FEMA's ability to learn from past experience. For example, in several instances the code for the incident type and the description of the disaster declaration did not match. Officials described several ways in which FEMA has learned from past disasters and improved its management of disaster-related resources. For example, FEMA uses a national average to predict costs for expected applicants for Individual Assistance. FEMA has also taken several actions to professionalize and expand the responsibilities of its disaster comptrollers. Nonetheless, FEMA could further learn from past experience by conducting sensitivity analyses to identify the marginal effect various factors have on causing fluctuations in its estimates. FEMA could improve its management of disaster-related resources by developing standard procedures for staff involved in entering and updating cost estimate data in its database. Fri, 22 Feb 2008 00:00:00 -0500 http://www.gao.gov/new.items/d08243.pdf Major disasters can disrupt transit operations, destroy vehicles and facilities, and impede the ability of people to reach essential relief and medical services and return to their homes and jobs. GAO determined (1) the federal role in assisting transit agencies after a major disaster; (2) the amounts, sources, and uses of federal disaster assistance for transit since 1998; (3) the factors that affected the timeliness and effectiveness of transit assistance after the 2005 Gulf Coast hurricanes; and (4) additional options for providing assistance to transit after a major disaster. GAO reviewed laws, regulations, and guidance; analyzed DOT and FEMA data; and interviewed officials with FEMA, DOT, state and local agencies, and others. The federal government provides transit services and assists transit agencies after a major disaster, primarily through two federal agencies--the Department of Homeland Security's Federal Emergency Management Agency (FEMA) and the Department of Transportation's (DOT) Federal Transit Administration (FTA). FEMA is authorized to provide emergency transportation services under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act). FTA administers federal support for transit but does not have a specific ongoing program or funding to help restore transit after disasters. FEMA and FTA have provided approximately $5.0 billion in disaster assistance to fund transit services and assist transit agencies since 1998, primarily through supplemental appropriations. The agencies provided nearly $4.7 billion to New York City after the terrorist attacks of September 11, 2001, primarily to rebuild destroyed transit infrastructure, and another $232 million after the 2005 Gulf Coast hurricanes, largely to provide transit services for displaced populations. FEMA and FTA have also provided at least $51 million for other disasters since 1998. FEMA's database for its Public Assistance program does not have the capability to sort transit projects from other projects. GAO took steps to identify this funding, but the information presented should be considered minimum amounts. Additional funds may have been dedicated for transit purposes. GAO believes the magnitude of uncertainty is small compared with the $5.0 billion in assistance for transit. After the 2005 Gulf Coast hurricanes, FEMA and FTA faced challenges that impeded both the timeliness and effectiveness of their assistance to transit. Although the Stafford Act authorizes federal assistance to meet emergency needs, neither FEMA nor FTA had mechanisms to provide transit funding immediately after the disasters. FEMA also lacked guidance on the types of transit services it would fund and criteria for determining the duration of funding. As a result, funding approvals after the 2005 Gulf Coast hurricanes took from 1 month to as long as 4 months, and FEMA ended funding even though transit agencies in Louisiana and Mississippi believed that they had continuing needs. Additional options exist--at the state, local, and federal levels--for providing assistance to transit after a major disaster. At the state and local levels, mutual aid agreements between states and others can direct needed resources to transit agencies following a disaster. Existing programs and temporary authorities that Congress had provided to DOT also suggest options, including giving FTA permanent authority to allow transit agencies to use existing grant funds for disaster recovery. As another option, Congress could establish an emergency relief program for FTA, similar to the DOT program for highways, or expand the scope of the highway program to include transit. Such a program could include "quick release"--a mechanism used to approve and release emergency highway funds within 1 to 2 days. Each of these options has advantages, such as expedited release and better targeting of funds, and consequences, such as potentially increased costs to the federal government. Fri, 15 Feb 2008 00:00:00 -0500 http://www.gao.gov/new.items/d08433t.pdf The nation's wildland fire problems have worsened over the past decade. Recent years have seen dramatic increases in the number of acres burned and the dollars spent on preparing for and responding to wildland fires. As GAO has previously reported, a number of factors have contributed to worsening fire seasons and increased firefighting expenditures, including an accumulation of fuels due to past land management practices; drought and other stresses, in part related to climate change; and an increase in human development in or near wildlands. Recent GAO reports have identified shortcomings in the approach to wildland fire management taken by the responsible federal agencies--the Department of Agriculture's Forest Service and four agencies within the Department of the Interior. GAO was asked to testify on agency efforts to (1) develop a cohesive strategy for preparing for and responding to wildland fire, (2) contain federal expenditures related to wildland fire, and (3) improve the processes used to allocate funds for reducing accumulated fuels and to select fuel reduction projects. GAO also is providing preliminary findings from its ongoing review of an interagency budget allocation and planning model known as fire program analysis (FPA). This testimony is based on issued GAO reports, reviews of agency documents related to the development of FPA, and discussions with agency officials. In recent years, GAO has recommended a number of actions federal wildland fire agencies should take to better diagnose the extent of the nation's wildland fire problems and develop a strategic approach for addressing them. The agencies have taken some steps to respond to GAO's recommendations, but have not completed other needed steps. Specifically, the agencies should: (1) recommit to developing a cohesive strategy that identifies options and associated funding to reduce fuels and address wildland fire problems. In several reports dating to 1999, GAO recommended that a cohesive strategy be developed that identifies the available long-term options and associated funding for reducing hazardous fuels and for responding to wildland fires. Such a strategy would assist Congress and the agencies in making informed decisions about effective and affordable long-term approaches to addressing the nation's wildland fire problems. As of January 2008, the agencies had not developed such a strategy and, in fact, had retreated from earlier commitments to do so. (2) Establish clear goals and a strategy to help contain wildland fire costs. In 2007, GAO reported that the agencies had taken several steps to contain wildland fire costs, including developing new decision support tools to help officials select the most appropriate strategy for fighting wildland fires, but lacked clearly defined cost-containment goals and a strategy for achieving them. As a result, we believe managers in the field lacked a clear understanding of the relative importance agency leadership placed on containing costs and were therefore likely to select firefighting strategies without duly considering the costs of suppression. Although the agencies have continued to implement individual cost-containment steps, they still have not developed clear goals or a strategy for achieving them. (3) Continue to improve their processes for allocating fuel reduction funds and selecting fuel reduction projects. Also in 2007, GAO recommended several improvements to the agencies' processes for allocating fuel reduction funds to field units and selecting projects. Specifically, GAO recommended that the agencies use a more systematic allocation process, improve the information they use to make allocation decisions, and clarify the relative importance of the various factors they consider when allocating funds. The agencies are currently taking steps to implement these improvements, although none have yet been completed. In addition, GAO's ongoing review of FPA suggests that the current model, which the agencies expect to complete in June 2008, may not allow the agencies to meet all of the key goals established for FPA. Specifically, preliminary results from GAO's review suggest that the model will not allow the agencies to analyze long-term trade-offs between annual fuel reduction treatments and future expected suppression costs for large fires. GAO intends to conduct a full assessment of FPA once it is completed. Tue, 12 Feb 2008 00:00:00 -0500 http://www.gao.gov/new.items/d08288.pdf Hurricane Katrina caused several breaches in the floodwalls along three drainage canals in New Orleans, contributing to catastrophic flooding. To restore the pre-Katrina level of hurricane-related flood protection, the Army Corps of Engineers (Corps) decided to acquire several large-capacity pumping systems. During the process of acquiring, testing, and installing the pumping systems, issues with the pump contract and operation of the pumping systems came to light, including several identified in a Corps Independent Team Report (ITR). GAO was asked to evaluate the Corps' efforts to (1) develop contract specifications and award the contract, (2) address pumping system performance issues, (3) document contract modifications, and (4) reconcile contract payments. GAO reviewed contract and testing documents, observed the operation of the pumping system, and interviewed officials from the Corps, its consultants and contractors, and the ITR team. Schedule concerns drove the Corps' decisions in developing specifications for the pumping systems and awarding the contract, but the rush to award the contract resulted in deficiencies in key contract provisions. Specifically, the original factory test requirements were ambiguous, there were only limited provisions for on-site testing, and there were no criteria for acceptance of the pumping systems by the government. The Corps conducted an expedited competition to contract for the pumping systems and selected a supplier for contract award based largely on its ability to deliver the pumping systems by the June 1 start of the 2006 Atlantic hurricane season. The Corps and the contractors have addressed and corrected known performance issues with the pumping systems. Concerns included hydraulic motor vibrations, the design of the hydraulic intake line, suspect pipe welds, and lower than expected pumping capacity. The pumping systems were installed prior to correcting these issues because the Corps believed it was better to have some pumping capacity along the drainage canals during the 2006 hurricane season rather than none, despite uncertainty over how much of the pumping system capacity would be available, and for how long, if needed. Between November 2006 and September 2007, the Corps and the contractors completed all of the repairs and reinstalled the pumping systems. Documents that GAO reviewed indicate that, as of September 2007, each pumping system had been successfully tested on site for at least 2 hours, thus providing greater assurance that they will perform as designed. The contract files for the pumping systems contained the required documentation for the type and value of the contract and associated modifications, though, in a number of cases, documentation was inserted in the contract files several months after modifications were issued and only after the ITR reported its findings. While the ITR correctly noted the absence of some required documentation, GAO found that much of the specific documentation cited as missing was not required for the modifications in question because of the nature and value of these modifications. In addition, while the ITR found that it appeared as though the contractor developed the scope of work and pricing for some of the modifications without a subsequent analysis by the Corps, GAO found no instance of this occurring. As of October 31, 2007, the Corps had paid the contractor about $30.5 million of the $33 million contract amount. In a few instances, the Corps made duplicate payments to the contractor. GAO found that these payments were due to Corps mistakes, not inappropriate billing by the contractor. GAO found no other cases of duplicate payments. The Corps plans to adjust for the duplicate payments by deducting the balance from remaining funds, including any incentive payments, owed to the contractor. According to Corps officials, final payment and reconciliation of the contract is expected by early 2008; however, it is unknown to what extent contract or pump performance issues will affect the final amount paid for the contract during the close-out process. Mon, 31 Dec 2007 00:00:00 -0500 http://www.gao.gov/new.items/d0828.pdf Disputes between policyholders and insurers after the 2005 hurricane season highlight the challenges in understanding the cause and extent of damages when properties are subjected to both high winds and flooding. Questions remain over the adequacy of steps taken by the Federal Emergency Management Agency (FEMA) to ensure that claims paid by the National Flood Insurance Program (NFIP) cover only those damages caused by flooding. GAO was asked to evaluate (1) issues that arise when multiple insurance policies provide coverage for losses from a single event, (2) state regulators' oversight of loss adjusters, and (3) information that NFIP collects to assess the accuracy of damage determinations and payments. GAO collected data from FEMA, reviewed reinspection reports and relevant policies and procedures, and interviewed state regulatory officials and others about adjuster oversight and NFIP. Insurance coverage gaps and claims uncertainties can arise when coverage for hurricane damage is divided among multiple insurance policies. Coverage for hurricanes generally requires more than one policy because private homeowners policies generally exclude flood damage. But the extent of coverage under each policy depends on the cause of the damages, as determined through the claims adjustment process and the policy terms that cover a particular type of damage. This process is further complicated when the damaged property is subjected to a combination of high winds and flooding and evidence at the damage scene is limited. Other claims concerns can arise on such properties when the same insurer serves as both NFIP's write-your-own (WYO) insurer and the property-casualty (wind) insurer. In such cases, the same company is responsible for determining damages and losses to itself and to NFIP, creating an inherent conflict of interest. Differences in licensing and training requirements for insurance claims adjusters among states also create uncertainties about adjusters' qualifications. Prior to the 2005 hurricane season, some coastal states had few or no requirements, while others had requirements for most types of adjusters. Further, states can waive their normal oversight requirements after a catastrophic event to help address demand, as they did after Hurricane Katrina. As a result, significant variations can exist in the qualifications of claims adjusters available after a catastrophic event. Strengthened and more uniform state requirements for adjusters could enhance the qualifications of the adjuster force in future catastrophes and improve the quality and consistency of claims adjustments. NFIP does not systematically collect and analyze both wind and flood damage claims data, limiting FEMA's ability to assess the accuracy of flood payments on hurricane-damaged properties. The claims data collected by NFIP through the WYO insurers--including those that sell and service both wind and flood policies on a property--do not include information on whether wind contributed to total damages or the extent of wind damage as determined by the WYO insurer. The lack of this data also limits the usefulness of FEMA's quality assurance reinspection program to reevaluate the accuracy of payments. In addition, the aggregate claims data that state insurance regulators collectively gathered after Hurricanes Katrina and Rita were not intended to be used to assess wind and flood damage claims together on a property- or community-level basis. Further, FEMA program contractors do not have access to WYO insurers' policies, procedures, and instructions that describe to adjusters how wind and flood damages are to be determined when properties are subjected to both perils. FEMA officials stated that they did not have the authority to collect wind damage claims data from insurers. But without the ability to examine claims adjustment information for both the wind and flood damages, NFIP cannot always determine the extent to which each peril contributed to total property damages and the accuracy of the claims paid for losses caused by flooding. Fri, 28 Dec 2007 00:00:00 -0500 http://www.gao.gov/new.items/d08141.pdf U. S. energy needs rest heavily on ship-based imports. Tankers bring 55 percent of the nation's crude oil supply, as well as liquefied gases and refined products like jet fuel. This supply chain is potentially vulnerable in many places here and abroad, as borne out by several successful overseas attacks on ships and facilities. GAO's review addressed (1) the types of threats to tankers and the potential consequences of a successful attack, (2) measures taken to protect tankers and challenges federal agencies face in making these actions effective, and (3) plans in place for responding to a successful attack and potential challenges stakeholders face in responding. GAO's review spanned several foreign and domestic ports, and multiple steps to analyze data and gather opinions from agencies and stakeholders. The supply chain faces three main types of threats--suicide attacks such as explosive-laden boats, "standoff" attacks with weapons launched from a distance, and armed assaults. Highly combustible commodities such as liquefied gases have the potential to catch fire or, in a more unlikely scenario, explode, posing a threat to public safety. Attacks could also have environmental consequences, and attacks that disrupt the supply chain could have a severe economic impact. Much is occurring, internationally and domestically, to protect tankers and facilities, but significant challenges remain. Overseas, despite international agreements calling for certain protective steps, substantial disparities exist in implementation. The United States faces limitations in helping to increase compliance, as well as limitations in ensuring safe passage on vulnerable transport routes. Domestically, units of the Coast Guard, the lead federal agency for maritime security, report insufficient resources to meet its own self imposed security standards, such as escorting ships carrying liquefied natural gas. Some units' workloads are likely to grow as new liquefied natural gas facilities are added. Coast Guard headquarters has not developed plans for shifting resources among units. Multiple attack response plans are in place to address an attack, but stakeholders face three main challenges in making them work. First, plans for responding to a spill and to a terrorist threat are generally separate from each other, and ports have rarely exercised these plans simultaneously to see if they work effectively together. Second, ports generally lack plans for dealing with economic issues, such as prioritizing the movement of vessels after a port reopens. The President's maritime security strategy calls for such plans. Third, some ports report difficulty in securing response resources to carry out planned actions. Federal port security grants have generally been directed at preventing attacks, not responding to them, but a more comprehensive risk-based approach is being developed. Decisions about the need for more response capabilities are hindered, however, by a lack of performance measures tying resource needs to effectiveness in response. Mon, 10 Dec 2007 00:00:00 -0500 http://www.gao.gov/new.items/d087.pdf In recent years, much attention has been focused on the roles that the private sector and federal government play in providing insurance and financial aid before and after catastrophic events. In this context, GAO examined (1) the rationale for and resources of federal and state programs that provide natural catastrophe insurance; (2) the extent to which Americans living in catastrophe-prone areas of the United States are uninsured and underinsured, and the types and amounts of federal payments to such individuals since the 2005 hurricanes; and (3) public policy options for revising the federal role in natural catastrophe insurance markets. To address these questions, GAO analyzed state and federal programs, examined studies of uninsured and underinsured homeowners and federal payments to them, identified and analyzed policy options, and interviewed officials from private and public sectors in both high- and low-risk areas of the United States. GAO also developed a four-goal framework to help analyze the available options. The federal government and some states have developed natural catastrophe insurance programs that supplement or substitute for private natural catastrophe insurance. These programs were created because homeowner coverage for catastrophic events is often not available from private insurers at prices deemed affordable by insurance regulators. Large losses associated with natural catastrophes are some of the biggest exposures that insurers face. Particularly in catastrophe-prone locations, government insurance programs have tended not to charge premiums that reflect the actual risks that homeowners face, resulting in financial deficits. After a resource-depleting disaster, the programs have postfunded themselves through, among other sources, payments from insurance companies and policyholders and appropriations from state and federal taxpayers. Large numbers of Americans are not insured for natural catastrophes. Homeowners may not purchase natural catastrophe insurance because doing so is voluntary and they may not believe that the risk justifies the expenditure. In addition, some homes may be underinsured--that is, not insured for the full replacement value. GAO estimates that the federal government made about $26 billion available to homeowners who lacked adequate insurance in response to the 2005 Hurricanes Katrina, Rita, and Wilma. Given the unsustainable fiscal path of federal and state governments, they will be challenged to maintain their current fiscal role. As Congress reevaluates the role of the federal government in insuring for natural catastrophes, Congress is faced with balancing the often-competing goals of ensuring that citizens are protected and limiting taxpayer exposure. This report examines seven public policy options for changing the federal government's role, including establishing an all-perils homeowner insurance policy, providing reinsurance for state catastrophe funds, and creating a mechanism to provide federal loans for state catastrophe funds. Each option has advantages and disadvantages, especially when weighed against competing public policy goals. For example, establishing an all-perils homeowner policy is a private sector approach that could help create broad participation. But low-income residents living in parts of the United States with high catastrophe risk could require subsidies, resulting in costs to the government. Similarly, federal reinsurance for state programs could lead to broader coverage, but could displace private reinsurance. GAO also identified several policy options for tax-based incentives for insurance companies, homeowners, investors, and state governments. But these options, which could help recipients better address catastrophe risk, could also result in ongoing costs to taxpayers. While some options would address the public policy goals of charging risk-based rates, encourage broad participation, or promote greater private sector participation, these policy goals need to be balanced with the desire to make rates affordable. Mon, 26 Nov 2007 00:00:00 -0500 http://www.gao.gov/new.items/d08106.pdf Hurricane Katrina destroyed or damaged 134,000 homes and 10,000 rental units in Mississippi alone. The Federal Emergency Management Agency (FEMA) in part responded by providing displaced individuals with temporary housing in the form of mobile homes and travel trailers, placed on both private property and at FEMA-constructed group sites. In 2006, FEMA awarded 10 contracts in Mississippi to maintain and deactivate (MD) the housing units and 5 for group site maintenance (GSM). GAO was asked to investigate whether there were indications of fraud, waste, and abuse related to FEMA's oversight of these 15 contracts. GAO analyzed FEMA's issuance of task orders, tested a representative sample of monthly maintenance inspections payments, prepared case studies detailing the costs related to trailers placed at group sites, and investigated improper activity related to the contracts. FEMA's ineffective oversight resulted in an estimated $30 million in wasteful and improper or potentially fraudulent payments to the MD contractors from June 2006 through January 2007 and likely led to millions more in unnecessary spending beyond this period. For example, FEMA wasted as much as $16 million because it did not issue task orders to the contractors with the lowest prices. In addition, GAO estimates that FEMA paid the contractors almost $16 million because it approved improper or potentially fraudulent invoices. This amount includes about $15 million spent on maintenance inspections even though there was no evidence that inspections occurred and about $600,000 for emergency repairs on housing units that do not exist in FEMA's inventory. Furthermore, FEMA's placement of trailers at group sites is leading to excessive costs. FEMA will spend on average about $30,000 on each 280 square foot trailer at a private site through March 2009, the date when FEMA plans to end temporary housing occupancy. In contrast, expenses for just one trailer at the Port of Bienville Park case study site could escalate to about $229,000---the same as the cost of a five bedroom, 2,000 square foot home in Jackson, Mississippi. Part of the reason for this expense is that FEMA placed only eight trailers at the Bienville site. FEMA wastes money when it operates sites with such a small number of trailers because GSM costs are fixed whether a site contains 1 or 50 trailer pads. At Bienville, FEMA spends over $576,000 per year--$72,000 per trailer--just for grounds maintenance and road and fence repair. GAO also found evidence of improper activity related to the contract award process. For example, FEMA awarded GSM contracts to two companies that did not appear to have submitted independent bids, as required. These companies shared pricing information prior to submitting proposals to FEMA and also shared the same president and accountant. Personnel at both companies also misrepresented their job titles and functions, a potential violation of the False Statements Act. In another case, FEMA's contracting officer awarded a $4 million contract to make the temporary housing units disabled-accessible; the contracting officer allegedly had a previous relationship with the awardee's subcontractor. GAO licensed engineers estimated that the work should have only cost about $800,000, or one-fifth of what FEMA ultimately paid. Fri, 16 Nov 2007 00:00:00 -0500 http://www.gao.gov/new.items/d08101r.pdf Since February 2004, we have issued a series of reports detailing how some organizations and individuals, including defense, civilian agency, and General Services Administration (GSA) contractors; tax-exempt (not-for-profit) organizations; and Medicare physicians, abused the federal tax system at the same time they were doing business with or receiving benefits from the federal government. While we performed this work it came to our attention that some organizations and individuals that were recipients of federal grants and other direct assistance were also abusing the tax system. Thus, Congress asked us to perform additional work and report specifically on organizations and individuals that abuse the federal tax system at the same time they receive federal grants or other similar types of federal assistance, known as direct payments for specified use (direct assistance) programs. Based on Congressional request, we completed a forensic audit and related investigations of unpaid federal taxes owed by recipients of the Federal Emergency Management Agency's (FEMA) Individuals and Households Program (IHP) following hurricanes Katrina and Rita. IHP is a federal direct assistance program authorized by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), as amended by the Disaster Mitigation Act of 2000. We conducted our audit of IHP concurrently with our broader audit of federal grant and direct assistance recipients that have unpaid federal taxes, which Congress also requested. We will be reporting the results of that work separately. The specific objectives of our work were to (1) determine, to the extent practical, the estimated magnitude of federal taxes owed by individuals receiving IHP disaster assistance benefit payments following hurricanes Katrina and Rita and (2) provide illustrative examples of abusive or criminal activity related to the federal tax system by IHP recipients with unpaid federal taxes. While about 95 percent of all IHP recipients of disaster relief assistance following hurricanes Katrina and Rita paid their federal taxes, tens of thousands owed federal taxes at the time of the disaster. We identified about 80,000 of the 1.5 million individuals (about 5 percent) who received disaster assistance benefits for hurricanes Katrina and Rita and owed over $700 million combined in unpaid federal taxes prior to those hurricanes. However, our estimates of the taxes owed by these recipients is understated in that we did not include amounts owed by individuals who have not filed tax returns or who have failed to report the full amount of taxes due (referred to as nonfilers and underreporters) and for whom IRS has not determined that specific tax debts are owed. FEMA officials stated that they do not screen disaster applicants for tax debts. FEMA officials stated that there is no law or regulation that requires FEMA to screen IHP applicants prior to providing disaster assistance. The five IHP recipients with which we chose to illustrate abusive and criminal activity related to the federal tax system had tax debts ranging from about $400,000 to over $2 million. Our investigation found that a number of these individuals had a history of failing to file tax returns for several years prior to the hurricane disasters. We also found instances in which IHP recipients attempted to transfer property to avoid IRS seizure. For example, one IHP recipient in the oil and gas industry forged a third party's signature to illegally transfer land. Another IHP recipient, a lawyer, transferred a large quantity of stock to a family member while IRS was taking collection actions against the lawyer. We received written comments on a draft of this report from the Department of Homeland Security (DHS). In its written comments, DHS stated that FEMA's administration of disaster assistance programs to victims of hurricanes Katrina and Rita with tax liabilities was consistent with federal law and policy. As recognized in our draft report, DHS is not required to screen applicants for tax debts. We have reprinted DHS's written comments in their entirety in the enclosure. In addition, IRS and DHS provided technical comments on the draft report, which we incorporated as appropriate. Fri, 16 Nov 2007 00:00:00 -0500 http://www.gao.gov/new.items/d0836.pdf An outbreak of pandemic flu would require close cooperation between the public and private sectors to ensure the protection of our nation's critical infrastructure, such as drinking water and electricity. Because over 85 percent of the nation's critical infrastructure is owned and operated by the private sector, it is vital that both sectors effectively coordinate to successfully protect these assets. The Department of Homeland Security (DHS) is responsible for coordinating a national protection strategy and government and private sector councils have been created as a collaborating tool. GAO was asked to assess how the federal and private sectors are working together at a national level to protect the nation's critical infrastructure in the event of a pandemic, the challenges they face, and opportunities for addressing these challenges. GAO reviewed 5 of the 17 critical infrastructure sectors. These 5 sectors are energy (electricity), food and agriculture, telecommunications, transportation (highway and motor carrier), and water. Federal agencies and the private sector have worked together to (1) develop general pandemic preparedness guidance, such as checklists for continuity of business operations during a pandemic; (2) identify the number of critical workers essential to the critical infrastructure sectors' operations during a pandemic; and (3) conduct pandemic preparedness presentations, workshops, forums, and some exercises. In some instances, the federal and private sectors are working together through sector-specific and cross-sector councils as the primary means of coordinating government and private sector efforts at the national level to protect critical infrastructure. Federal and private sector representatives from the councils in the five sectors reviewed told GAO that they have taken some initial pandemic preparedness actions within their respective sectors. Additionally, each of the sectors is collaborating with DHS and other sector-specific agencies, such as the Environmental Protection Agency, to develop sector-specific pandemic guidance. The federal government and the private sector face several challenges that may impede their efforts to protect the nation's critical infrastructure in the event of a pandemic. Maintaining a focus on pandemic planning efforts is difficult in the face of more immediate priorities, such as responding to outbreaks of foodborne illnesses. Private sector officials are concerned about the lack of clarity on the federal versus state roles in areas such as state border closures and pandemic vaccine distribution. They are also concerned about receiving consistent messages from various government entities providing pandemic-related information. Another challenge is identifying and developing strategies for addressing crucial cross-sector interdependencies that will be important for the continued operation of the nation's economy and society during a pandemic, such as the transportation sector to deliver critical supplies. Obtaining needed investments for training and infrastructure and potential legal and regulatory issues also present challenges. Increased use of the critical infrastructure coordinating councils could help address issues relating to a pandemic. These councils bring together multiple sectors and levels of governments, linking activities between these entities. Despite their potential, the councils' efforts thus far have focused mostly on the development of sector-specific plans to address all hazards. With regard to a pandemic specifically, DHS has used the councils primarily to share information across sectors and government levels rather than to address many of the identified challenges. Because an outbreak could begin at any time, there may be insufficient time and resources to adequately plan and prepare their members for changes in how their sectors may operate and continue to provide essential services during a pandemic. DHS officials acknowledge that they could encourage greater federal and private sector use of the councils and that the councils could be used to initiate and facilitate pandemic preparedness initiatives. DHS, because it is responsible for coordinating national critical infrastructure protection efforts, is well positioned to lead efforts to use these councils to help address these challenges. Wed, 31 Oct 2007 00:00:00 -0400 http://www.gao.gov/new.items/d08212t.pdf Since the early 1990s, growth in the use of the Internet has revolutionized the way that our nation communicates and conducts business. While the Internet originated as a U.S. government-sponsored research project, the vast majority of its infrastructure is currently owned and operated by the private sector. Federal policy recognizes the need to prepare for debilitating Internet disruptions and tasks the Department of Homeland Security (DHS) with developing an integrated public/private plan for Internet recovery. GAO was asked to summarize its report on plans for recovering the Internet in case of a major disruption (GAO-06-672) and to provide an update on DHS's efforts to implement that report's recommendations. The report (1) identifies examples of major disruptions to the Internet, (2) identifies the primary laws and regulations governing recovery of the Internet in the event of a major disruption, (3) evaluates DHS plans for facilitating recovery from Internet disruptions, and (4) assesses challenges to such efforts. A major disruption to the Internet could be caused by a physical incident (such as a natural disaster or an attack that affects key facilities), a cyber incident (such as a software malfunction or a malicious virus), or a combination of both physical and cyber incidents. Recent physical and cyber incidents, such as Hurricane Katrina, have caused localized or regional disruptions but have not caused a catastrophic Internet failure. Federal laws and regulations that address critical infrastructure protection, disaster recovery, and the telecommunications infrastructure provide broad guidance that applies to the Internet, but it is not clear how useful these authorities would be in helping to recover from a major Internet disruption. Specifically, key legislation on critical infrastructure protection does not address roles and responsibilities in the event of an Internet disruption. Other laws and regulations governing disaster response and emergency communications have never been used for Internet recovery. As of 2006, DHS had begun a variety of initiatives to fulfill its responsibility to develop an integrated public/private plan for Internet recovery, but these efforts were not yet comprehensive or complete. For example, the department had developed high-level plans for infrastructure protection and incident response, but the components of these plans that address the Internet infrastructure were not complete. As a result, the risk remained that the government was not adequately prepared to effectively coordinate public/private plans for recovering from a major Internet disruption. Key challenges to establishing a plan for recovering from Internet disruptions include (1) innate characteristics of the Internet that make planning for and responding to disruptions difficult, (2) lack of consensus on DHS's role and when the department should get involved in responding to a disruption, (3) legal issues affecting DHS's ability to provide assistance to restore Internet service, (4) reluctance of many in the private sector to share information on Internet disruptions with DHS, and (5) leadership and organizational uncertainties within DHS. Until these challenges are addressed, DHS will have difficulty achieving results in its role as a focal point for helping the Internet to recover from a major disruption. DHS has made progress in implementing GAO's recommendations by revising key plans in coordination with private industry infrastructure stakeholders, coordinating various Internet recovery-related activities, and addressing key challenges to Internet recovery planning. However, further work remains to complete these activities, including finalizing recovery plans and defining the interdependencies among DHS's various working groups and initiatives. Full implementation of these recommendations should enhance the nation's ability to recover from a major Internet disruption. Tue, 23 Oct 2007 00:00:00 -0400 http://www.gao.gov/new.items/d08171t.pdf Because the safety and economic security of the United States depend in substantial part on the security of its 361 seaports, the United States has a vital national interest in maritime security. The Security and Accountability for Every Port Act (SAFE Port Act), modified existing legislation and created and codified new programs related to maritime security. The Department of Homeland Security (DHS) and its U.S. Coast Guard, Transportation Security Agency, and U.S. Customs and Border Protection have key maritime security responsibilities. This testimony synthesizes the results of GAO's completed work and preliminary observations from GAO's ongoing work related to the SAFE Port Act pertaining to (1) overall port security, (2) security at individual facilities, and (3) cargo container security. To perform this work GAO visited domestic and overseas ports; reviewed agency program documents, port security plans, and post-exercise reports; and interviewed officials from the federal, state, local, private, and international sectors. Federal agencies have improved overall port security efforts by establishing committees to share information with local port stakeholders, taking steps to establish interagency operations centers to monitor port activities, conducting operations such as harbor patrols and vessel escorts, writing port-level plans to prevent and respond to terrorist attacks, testing such plans through exercises, and assessing the security at foreign ports. However, these agencies face resource constraints and other challenges trying to meet the SAFE Port Act's requirements to expand these activities. For example, the Coast Guard faces budget constraints in trying to expand its current command centers and include other agencies at the centers. Similarly, private facilities and federal agencies have taken action to improve security at about 3,000 individual facilities by writing facility-specific security plans, inspecting facilities to ensure they are complying with their plans, and developing special identification cards for workers to prevent terrorists from getting access to secure areas. Federal agencies face challenges trying to meet the act's requirements to expand the scope or speed the implementation of such activities. For example, the Transportation Security Agency missed the act's July 2007 deadline to implement the identification card program at 10 selected ports because of delays in testing equipment and procedures. Federal programs related to the security of cargo containers have also improved as agencies are enhancing systems to identify high-risk cargo, expanding partnerships with other countries to screen containers before they depart for the United States, and working with international organizations to develop a global framework for container security. Federal agencies face challenges implementing container security aspects of the SAFE Port Act and other legislation. For example, Customs and Border Protection must test and implement a new program to screen 100 percent of all incoming containers overseas--a departure from its existing risk-based programs. Tue, 16 Oct 2007 00:00:00 -0400 http://www.gao.gov/new.items/d08118t.pdf The National Flood Insurance Program (NFIP), established in 1968, provides property owners with some insurance coverage for flood damage. The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security is responsible for managing the NFIP. Given the challenges facing the NFIP and the need for legislative reform to ensure the financial stability and ongoing viability of this program, GAO placed the NFIP on its high-risk list in March 2006. This testimony updates past work and provides information about ongoing GAO work on issues including (1) NFIP's financial structure, (2) the extent of compliance with mandatory requirements, (3) the status of map modernization efforts, and (4) FEMA's oversight of the NFIP. Building on our previous and ongoing work on the NFIP, GAO collected data from FEMA to update efforts, including information about claims, policies, repetitive loss properties, and mitigation efforts. The most significant challenge facing the NFIP is the actuarial soundness of the program. As of August 2007, FEMA owed over $17.5 billion to the U.S. Treasury. FEMA is unlikely to be able to pay this debt, primarily because the program's premium rates have been set to cover an average loss year, which until 2005 did not include any catastrophic losses. This challenge is compounded by the fact that some policyholders with structures that were built before floodplain management regulations were established in their communities generally pay premiums that represent about 35 to 40 percent of the true risk premium. Moreover, about 1 percent of NFIP-insured properties that suffer repetitive losses account for between 25 and 30 percent of all flood claims. FEMA is also creating a new generation of "grandfathered" properties--properties that are mapped into higher-risk areas but may be eligible to receive a discounted premium rate equal to the nonsubsidized rate for their old risk designation. Placing the program on a more sound financial footing will involve trade-offs, such as charging more risk-based premiums and expanding participation in the program. The NFIP also faces challenges expanding its policyholder base by enforcing compliance with mandatory purchase requirements and promoting voluntary purchase by homeowners who live in areas that are at less risk. One recent study estimated that compliance with the mandatory purchase requirement was about 75 to 80 percent but that penetration elsewhere in the market was only 1 percent. Since 2004, FEMA has implemented a massive media campaign called "FloodSmart" to increase awareness of flooding risk nationwide by educating everyone about the risks of flooding and encouraging the purchase of flood insurance. While the numbers of policyholders increased following Hurricane Katrina, it is unclear whether these participants will remain in the program as time goes on. The impact of the 2005 hurricanes highlighted the importance of up-to-date flood maps that accurately identify areas at greatest risk of flooding. These maps are the foundation of the NFIP. In 2004 FEMA began its map modernization efforts, and according to FEMA, about 34 percent of maps have been remapped. Completing the map modernization effort and keeping these maps current is also going to be an ongoing challenge for FEMA. Finally, FEMA also faces significant challenges in providing effective oversight over the insurance companies and thousands of insurance agents and claims adjusters who are primarily responsible for the day-to-day process of selling and servicing flood insurance policies. As GAO recommended in a an interim report issued in September 2007, FEMA needs to take steps to ensure that it has a reasonable estimate of actual expenses that the insurance companies incur to help determine whether payments for services are appropriate and that required financial audits are performed. GAO, in its ongoing work, plans to further explore FEMA oversight of the private insurance companies and the cost of selling and servicing NFIP flood policies. Tue, 02 Oct 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071255t.pdf The federal government's long-standing policy has been to use its buying power to maximize procurement opportunities for various types of small businesses. GAO initiated work and completed a report in March 2007 under the Comptroller General's authority describing the extent to which small businesses participated in contracting opportunities related to Hurricane Katrina. This testimony discusses (1) results from the March 2007 GAO report, including the amounts that small and local businesses received directly from federal agencies from contracts related to Hurricane Katrina and the lack of required information in official procurement data systems on subcontracting plans, (2) information from two previous GAO reports regarding the small business advocacy responsibilities of Small Business Administration (SBA) and federal agencies that award contracts, and (3) GAO work on SBA's efforts to advocate for small disadvantaged businesses, and similar efforts by entities within selected agencies. In conducting the studies discussed in this testimony, GAO analyzed agency contract data, reviewed federal acquisition regulations, and interviewed agency procurement officials; we also sent a questionnaire to agency officials regarding Office of Small and Disadvantaged Business Utilization (OSDBU) reporting relationships; reviewed organizational charts and other pertinent information; analyzed relevant laws, legislative history, and court cases; and, updated information on agency actions on our recommendations. Small businesses received 28 percent of the $11 billion in contracts that Department of Homeland Security (DHS), General Services Administration (GSA), Department of Defense (DOD), and the Army Corps of Engineers (Corps) awarded directly for Katrina-related projects. Information on whether DHS and GSA required subcontracting plans was generally not available in the federal government's official procurement database for 70 percent or more of the contracting dollars each agency awarded for activities related to Hurricane Katrina. This database should have contained information on whether or not the agencies required subcontracting plans in these instances. The lack of transparency surrounding much of the agencies' subcontracting data may lead to unwarranted perceptions about how the federal procurement system is working, particularly in terms of the government's stated preference for contracting with small businesses. GAO recommended in its March 2007 report that DHS, GSA, and DOD take steps designed to ensure compliance with federal contracting regulations and more transparently disclose the extent to which subcontracting opportunities are available to small businesses. These agencies generally agreed with GAO's recommendations. GSA has implemented them while DOD and DHS indicate they are in the process of doing so. SBA has governmentwide responsibilities for advocating that federal agencies use small businesses as prime contractors for federal contracts and set goals for and encourage the use of small businesses as subcontractors to large businesses receiving federal contracts. Similarly, within each federal agency there is an OSDBU that plays an advocacy role by overseeing the agency's duties related to contracts and subcontracts with small and disadvantaged businesses. The Small Business Act requires that the OSDBU director be responsible to and report only to agency heads or their deputies. In 2003, GAO reported that 11 of 24 agencies reviewed did not comply with this provision. While most of the agencies disagreed with our conclusion, none of the legal arguments that they raised changed GAO's recommendations. Because the OSDBU directors at these agencies do not have a direct reporting relationship with their agencies' heads or deputies, the reporting relationships potentially limit their role as effective advocates for small and disadvantaged businesses. GAO is presently evaluating SBA's and agency OSDBUs' advocacy efforts. This evaluation includes an assessment of the actions SBA takes to advocate that small disadvantaged businesses receive opportunities to participate as subcontractors under federal prime contracts and encourage that prime contracting goals for these businesses are met. Also, the evaluation addresses selected OSDBUs' actions to advocate for certain small business firms. Wed, 26 Sep 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071078.pdf Extraordinary recent flood events raise serious questions about the solvency of the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA). The NFIP is largely implemented by private insurance companies that sell and service policies and adjust claims under the Write Your Own (WYO) Program. This report, prepared under the authority of the Comptroller General, examines (1) how much FEMA paid the WYO companies in recent years for operating costs and how FEMA determined payment amounts; (2) how FEMA's approach to determining operating costs assures that payments are reasonable estimates of companies' expenses; and (3) how FEMA assures that financial and management controls are in place for the WYO program and operate as intended. To do these assessments, GAO interviewed FEMA and insurance officials, and analyzed statutes, regulations, payment data, methodologies, and audits of WYO companies. FEMA's payments to WYO insurance companies for operating costs ranged from more than a third to almost two-thirds of the total premiums paid by policyholders to the NFIP for fiscal years 2004 through 2006. In fiscal years 2005 and 2006, larger payments to WYO insurance companies were the result of settling an unprecedented number and dollar amount of claims for damages resulting from major hurricanes and flood events including Hurricane Katrina. To determine the amount of these payments, FEMA negotiated payment approaches with insurance industry representatives when it established the current WYO program in 1983 based on industry averages for operating expenses for other lines of insurance (such as homeowners, commercial, and fire), past practice, and discussion. The approach FEMA uses to determine operating costs for WYO insurance companies, rooted in policies negotiated and established about 25 years ago, cannot ensure that payments are based on reasonable estimates of actual expenses because actual expenses incurred by the companies for their services to the NFIP are not considered. Although it has authority to do so, FEMA does not collect data on actual WYO flood insurance expenses that could provide a basis for insuring that the WYO payments are based on a reasonable estimate of actual expenses. FEMA officials said that they have not asked WYO insurance companies to provide expense information due to concerns that the approach would increase FEMA's administrative costs and cause a decline in WYO program participation. However, some data on expenses WYO insurance companies allocate to flood insurance are available. FEMA officials said that they cannot use this information due to reporting inconsistencies. Also, there is some precedent in two similar public-private insurance partnerships for collecting actual expense information. FEMA's decision to rely on long-standing practices does not meet federal internal control standards that agencies be held accountable for, among other things, stewardship of government resources. Biennial financial statement audits--FEMA's primary mechanism to provide assurance that it receives complete and accurate financial management information from the WYO insurance companies--were not performed consistently as required by regulation. FEMA regulations require each participating company to arrange and pay for these audits by independent certified public accounting firms. However, many WYO insurance companies did not comply with the schedule in recent years. For example, for fiscal years 2005 and 2006, 5 of 94 participating companies had biennial financial statement audits performed. FEMA officials said they allowed some companies to delay having the audits done because they were in the process of contracting with new subcontractors to perform their financial reporting responsibilities. Nonetheless, without the required biennial audits, FEMA lacks an appropriate internal control mechanism for effective program oversight. Wed, 05 Sep 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071143r.pdf The Department of Homeland Security's (DHS) Federal Emergency Management Agency (FEMA) provides direct temporary housing assistance in response to disasters primarily through a combination of travel trailers and manufactured homes and for a period of up to 18 months. In 2005, Hurricanes Katrina and Rita devastated much of the housing stock across the Gulf Coast region, leaving thousands of persons in need of temporary housing for lengthy periods. Uncertainty with respect to neighborhood and community recovery and individual and community resistance to the use of travel trailers for extended temporary housing challenged the effectiveness of FEMA's traditional temporary housing options. Recognizing these challenges, Congress, in the Fiscal Year 2006 Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, provided for alternative housing pilot programs in the areas hardest hit by Hurricane Katrina and the other hurricanes of the 2005 season, and appropriated $400 million to DHS for this purpose. To implement this provision of law, FEMA announced a competitive grant program--the Alternative Housing Pilot Program (AHPP)--inviting the five Gulf Coast states (Alabama, Florida, Louisiana, Mississippi, and Texas) to submit proposals for projects that would demonstrate alternatives for housing disaster victims. FEMA convened a panel of officials to evaluate and score the projects. In December 2006, FEMA announced that it was awarding Mississippi up to $281.3 million for two projects, Louisiana up to $74.5 million for one project, Texas up to $16.5 million for one project, and Alabama up to $15.7 million for one project. This report examines (1) the processes FEMA followed for soliciting and evaluating AHPP project proposals, and for selecting projects for funding and determining the funding amounts; (2) how FEMA's processes compare with those of other agencies that carry out similar types of competitive grant programs; and (3) how the group of projects FEMA selected for AHPP funding, as well as other funding options, addresses the goal of identifying alternative forms of disaster housing. FEMA solicited applications for the AHPP based on guidance developed by staff with disaster housing expertise, convened a national evaluation panel to review and score project proposals from the states, and selected projects for funding based on the evaluation panel results and other considerations. Overall, FEMA elected to implement the AHPP as a competitive grants program, and in September 2006 released written guidance to solicit applications and project proposals. According to FEMA officials, the agency restriction of eligible applicants to the five Gulf Coast states was consistent with its understanding of the legislation authorizing the pilot program. In addition to providing information on how states should apply and the deadlines for submitting applications, the guidance went on to explain the five criteria against which FEMA would rate the applications, and how FEMA would ultimately make project selections. To evaluate the 29 distinct project proposals that the states subsequently submitted, FEMA convened a national panel of 11 federal and private sector individuals, whose backgrounds represented a variety of disciplines such as architecture, community recovery, disaster housing operations, and engineering. The panelists scored each project based on the established rating criteria. According to FEMA, 19 of the 29 projects scored competitively, and four of the five states (the exception was Florida) submitted at least one competitive project. To select projects for funding, FEMA designated a selecting official and provided the official with the results of the national evaluation panel, written comments and recommendations from individual panelists, and the written project proposals, including the requested funding amounts for each. To assist the selecting official, FEMA's Deputy Director for Gulf Coast Recovery distilled the panel's results into three options for allocating the available funds; these options called for selecting from as few as 2 to a maximum of 10 competitive projects. According to FEMA, the chosen funding option--partially funding the single highest-scoring project from Alabama, Louisiana, Mississippi, and Texas at 85 percent of the requested funding amounts, and allocating the remaining funding to the next-highest-scoring project, which was submitted by Mississippi--maximized the number of competitive states receiving AHPP awards. According to FEMA, its selection of five projects for AHPP funding helped to identify alternative forms of disaster housing by maximizing the number of competitive states that received grant awards. However, by choosing a different funding option, FEMA could have similarly maximized the number of states receiving grant funding and, at the same time, doubled the number of projects it funded. According to FEMA, the five projects selected for funding offer a number of housing options that will improve upon FEMA's traditional disaster housing in areas such as innovative design, energy efficiency, ease of construction, and community support. However, the DHS Inspector General reported that by choosing to fund only five projects, FEMA did not fund an optimum number of "innovate and creative" disaster housing solutions, citing specifically the example of FEMA's choice to award one project $275 million of the $388 million available.4 We found that evaluation panel members' comments showed similar concerns, as 10 out of 11 panelists recommended partially funding this large project--some at significantly lower levels. While the funding option FEMA chose is consistent with the authorizing legislation, it resulted in fewer housing alternatives to evaluate under the AHPP. Fri, 31 Aug 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07403.pdf The nation has experienced vast losses from natural hazards. The potential for future events, such as earthquakes and hurricanes, demonstrates the importance of hazard mitigation--actions that reduce the long-term risks to life and property from natural hazard events. GAO was asked to examine (1) natural hazards that present a risk to life and property in the United States, areas that are most susceptible to them, factors that may be increasing these risks, and mitigation activities that reduce losses; (2) methods for encouraging and impediments to implementing mitigation activities; and (3) collaborative efforts of federal agencies and other stakeholders to promote mitigation. To address these objectives, GAO collected and analyzed hazard data, reviewed population information, conducted site visits to locations with comprehensive mitigation programs, and collected information from relevant agencies and officials. Natural hazards present risks to life and property throughout the United States. Flooding is the most widespread and destructive of these, resulting in billions of dollars in property losses each year. Hurricanes, earthquakes, and wildland fires also pose significant risks in certain regions of the country. Tornadoes, landslides, tsunamis, and volcanic eruptions can also occur in some areas. Population growth in hazard-prone areas, especially coastal areas, is increasing the nation's vulnerability to losses because more people and property are at risk. Climate change may also impact the frequency and severity of future natural hazard events. A variety of natural hazard mitigation activities exist, which are primarily implemented at the state and local level, and include hazard mitigation planning; strong building codes and design standards; and hazard control structures (e.g., levees). For example, strong building codes and design standards can make structures better able to withstand a hazard event and hazard control structures help protect existing at-risk areas. Public education, financial assistance, and insurance discounts can help encourage mitigation. For example, federal, state, and local governments provide financial assistance to promote mitigation and insurance discounts can encourage the use of mitigation measures. However, significant challenges exist to implementing natural hazard mitigation activities. Some of these challenges include the desire for local economic development--often in hazard-prone areas--which may conflict with long-term mitigation goals and the cost of mitigation may limit the amount of activities that occur. FEMA, other federal agencies, and nonfederal stakeholders have collaborated on natural hazard mitigation, but the current approach is fragmented and does not provide a comprehensive national strategic framework for mitigation. Collaboration typically occurs on a hazard-specific basis, after a disaster, or through informal methods. A comprehensive framework would help define common national goals, establish joint strategies, leverage resources, and assign responsibilities among stakeholders. Wed, 22 Aug 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071079t.pdf The devastation caused by the Gulf Coast hurricanes presents the nation with unprecedented challenges as well as opportunities to reexamine shared responsibility among all levels of government. All levels of government, together with the private and nonprofit sectors, will need to play a critical role in the process of choosing what, where, and how to rebuild. Agreeing on what the costs are, what federal funds have been provided, and who will bear the costs will be key to the overall rebuilding effort. This testimony (1) places federal assistance provided to date in the context of damage estimates for the Gulf Coast, and (2) discusses key federal programs that provide rebuilding assistance to the Gulf Coast states. In doing so, GAO highlights aspects of rebuilding likely to place continued demands on federal resources. GAO visited the Gulf Coast region, reviewed state and local documents, and interviewed federal, state, and local officials. GAO's ongoing work on these issues focuses on the use of federal rebuilding funds and administration of federal programs in the Gulf Coast region. To respond to the Gulf Coast devastation, the federal government has already committed a historically high level of resources--more than $116 billion--through an array of grants, loan subsidies, and tax relief and incentives. A substantial portion of this assistance was directed to emergency assistance and meeting short-term needs arising from the hurricanes, leaving a smaller portion for longer-term rebuilding. To understand the long-term financial implications of Gulf Coast rebuilding, it is helpful to view potential federal assistance within the context of overall estimates of the damages incurred by the region. Some estimates put capital losses at a range of $70 billion to more than $150 billion, while the state of Louisiana estimated that the economic effect on its state alone could reach $200 billion. These estimates raise questions regarding how much additional assistance may be needed to help the Gulf Coast continue to rebuild, and who should be responsible for providing the related resources. Demands for additional federal resources to rebuild the Gulf Coast are likely to continue. The bulk of federal rebuilding assistance provided to the Gulf Coast states funds two key programs--the Federal Emergency Management Agency's Public Assistance (PA) program and the Department of Housing and Urban Development's Community Development Block Grant (CDBG) program. In addition to funding PA and CDBG, the federal government's recovery and rebuilding assistance also includes payouts from the National Flood Insurance Program as well as funds for levee restoration and repair, coastal wetlands and barrier islands restoration, and benefits provided through Gulf Opportunity Zone tax expenditures. As states and localities continue to rebuild, there are difficult policy decisions that will confront Congress about the federal government's continued contribution to the rebuilding effort and the role it might play over the long-term in an era of competing priorities. GAO's ongoing and preliminary work on Gulf Coast rebuilding suggests the following questions: How much could it ultimately cost to rebuild the Gulf Coast and how much of this cost should the federal government bear? How effective are current funding delivery mechanisms--such as PA and CDBG--and should they be modified or supplemented by other mechanisms? What options exist to effectively build in federal oversight to accompany the receipt of federal funds, particularly as federal funding has shifted from emergency response to rebuilding? How can the federal government further partner with state and local governments and the nonprofit and private sectors to leverage public investment in rebuilding? What are the "lessons learned" from the Gulf Coast hurricanes, and what changes need to be made to help ensure a more timely and effective rebuilding effort in the future? Thu, 02 Aug 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071142t.pdf The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security (DHS) faces the simultaneous challenges of preparing for the season and implementing the reorganization and other provisions of the Post-Katrina Emergency Management Reform Act of 2006. The Act stipulated major changes to FEMA that were intended to enhance its preparedness for and response to catastrophic and major disasters. As GAO has reported, FEMA and DHS face continued challenges, including clearly defining leadership roles and responsibilities, developing necessary disaster response capabilities, and establishing accountability systems to provide effective services while protecting against waste, fraud, and abuse. This testimony (1) summarizes GAO's findings on these challenges and FEMA's and DHS's efforts to address them; and (2) discusses several disaster management issues for continued congressional attention. Effective disaster preparedness and response require defining what needs to be done, where and by whom, how it needs to be done, and how well it should be done. GAO analysis following Hurricane Katrina showed that improvements were needed in leadership roles and responsibilities, development of the necessary disaster capabilities, and accountability systems that balance the need for fast, flexible response against the need to prevent waste, fraud, and abuse. To facilitate rapid and effective decision making, legal authorities, roles and responsibilities, and lines of authority at all government levels must be clearly defined, effectively communicated, and well understood. Adequacy of capabilities in the context of a catastrophic or major disaster are needed--particularly in the areas of (1) situational assessment and awareness; (2) emergency communications; (3) evacuations; (4) search and rescue; (5) logistics; and (6) mass care and shelter. Implementing controls and accountability mechanisms helps to ensure the proper use of resources. FEMA has initiated reviews and some actions in each of these areas, but their operational impact in a catastrophic or major disaster has not yet been tested. Some of the targeted improvements, such as a completely revamped logistics system, are multiyear efforts. Others, such as the ability to field mobile communications and registration-assistance vehicles, are expected to be ready for the 2007 hurricane season. The Comptroller General has suggested one area for fundamental reform and oversight is ensuring a strategic and integrated approach to prepare for, respond to, recover, and rebuild after catastrophic events. FEMA enters the peak of the 2007 hurricane season as an organization in transition working simultaneously to implement the reorganization required by the Post-Katrina Reform Act and moving forward on initiatives to address the deficiencies identified by the post-Katrina reviews. This is an enormous challenge. In the short-term, Congress may wish to consider several specific areas for immediate oversight. These include (1) evaluating the development and implementation of the National Preparedness System, including preparedness for natural disasters, terrorist incidents, and an influenza pandemic; (2) assessing state and local capabilities and the use of federal grants to enhance those capabilities; (3) examining regional and multi-state planning and preparation; (4) determining the status and use of preparedness exercises; and (5) examining DHS polices regarding oversight assistance. Tue, 31 Jul 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071124t.pdf 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. While SBA has taken steps to enhance its capacity to respond to potential disasters, the process is ongoing and continued commitment and actions by agency managers are necessary. As of July 2006, SBA officials said that the agency had 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. Further, in June 2007, SBA released a disaster plan. While GAO has not evaluated the process SBA followed in developing its plan, consistent with recommendations in GAO reports, the plan states that SBA is incorporating catastrophe models into its planning process, an effort which appears to be at an early stage. GAO encourages SBA to actively pursue the use of catastrophe models and other initiatives that may further enhance its capacity to better respond to future disasters. Wed, 25 Jul 2007 00:00:00 -0400 http://www.gao.gov/new.items/d071106t.pdf The decennial census is a Constitutionally-mandated activity that produces critical data used to apportion congressional seats, redraw congressional districts, and allocate billions of dollars in federal assistance. The Census Bureau (Bureau) estimates the 2010 Census will cost $11.3 billion, making it the most expensive in the nation's history after adjusting for inflation. This testimony, based primarily on GAO's issued reports and preliminary observations from our ongoing work, discusses the extent to which the Bureau has (1) developed a comprehensive project plan with the most current cost data; (2) incorporated lessons learned from Dress Rehearsal activities; (3) managed automation and technology for the reengineered census; and (4) planned for an accurate census in areas affected by Hurricanes Katrina and Rita. The Bureau is conducting its Dress Rehearsal of the 2010 Census, the last opportunity it will have to test its design under census-like conditions. Given the importance of a successful enumeration and the complexities of enumerating a hard-to-count population in a more technology-dependent census, our message remains that the risks associated with the decennial must be closely monitored, evaluated, and managed. GAO found that the Bureau is developing but has not yet completed a comprehensive project plan that includes milestones, itemized costs, and measurable goals, nor has it updated the 2010 life-cycle cost estimate to reflect current information from testing. Having a comprehensive project plan and updated cost information will allow the Bureau to manage the operations and cost of the decennial census. Moreover, GAO observed technical problems with the handheld computing devices used in the Dress Rehearsal by field staff for address canvassing (in which the Bureau verifies addresses). If the device does not function as expected or needed, little time will be left for the Bureau to take corrective action. In addition, during the LUCA Dress Rehearsal, the Bureau did not fully test software tools intended to reduce burden on participants. Also, the Bureau's level of reliance on automation and technology for the 2010 Census, at an estimated cost of $3 billion, makes effective contractor oversight (of cost, schedule, and technical performance) and risk management activities imperative. Finally, in the Gulf Coast Region, the condition of the changing housing stock is likely to present additional challenges for the address canvassing operation and subsequent operations. However, the Bureau has not finalized plans for modifying the address canvassing operation or subsequent operations in the Gulf Coast region. Tue, 17 Jul 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07809r.pdf The size and scope of the devastation caused by the 2005 Gulf Coast hurricanes presents the nation with unprecedented rebuilding challenges. These storms destroyed wide swaths of housing, infrastructure, and businesses and displaced hundreds of thousands of people from their homes. Today, nearly two years since these hurricanes made landfall, rebuilding efforts are at a critical turning point. The Gulf Coast and the nation are facing the daunting challenges of rebuilding. Our recent work in southern Louisiana and New Orleans confirms that some communities are still without basic needs, such as schools, hospitals, and other infrastructure, while the doors of many businesses remain closed. Over the coming years, perhaps decades, many neighborhoods and communities will need to be rebuilt--some from the ground up. At the same time, major decisions will need to be made regarding a wide range of issues including coastal restoration, levee protection, infrastructure, land use, and economic recovery. Agreeing on what rebuilding will be done, where, how, and--particularly important--who will bear the costs will be key to moving forward with the rebuilding process. To assist Congress in its oversight responsibilities, GAO briefed Congress on several occasions during the past few months on the results of our preliminary work in Louisiana and Mississippi--the two states most directly affected by the 2005 Gulf Coast hurricanes. This letter transmits information provided during those briefings. Specifically, this letter (1) places the federal assistance provided to date in the context of the resources likely needed to rebuild the Gulf Coast; (2) discusses two key federal programs that provide rebuilding assistance to the Gulf Coast states, with an emphasis on the Community Development Block Grant (CDBG) program; (3) describes differences in Louisiana's and Mississippi's approach to using CDBG funds; and (4) provides some observations on planning activities in Louisiana and Mississippi and the role of the federal government in coordinating Gulf Coast rebuilding efforts. While the federal government has provided billions of dollars in assistance to the Gulf Coast, a substantial portion of this aid was directed to short-term needs, leaving a smaller portion for long-term rebuilding. It may be useful to view this assistance in the context of the costs of damages incurred by the region and the resources that may be needed to rebuild. While there are no definitive or comprehensive estimates of costs, the various estimates of aspects of these costs offer a sense of their magnitude. Such estimates raise important questions regarding additional assistance that will be needed to help the Gulf Coast rebuild--including how the assistance will be provided and by whom. To date, the federal government has provided most long-term rebuilding assistance to the Gulf Coast states through two key programs, which follow different funding models. Specifically, FEMA's Public Assistance program provides funding primarily to state and local governments to repair and rebuild damaged public infrastructure for specific projects that meet program eligibility requirements, as defined by the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). The Housing and Urban Development's (HUD) CDBG program, on the other hand, provides funding for neighborhood revitalization and housing rehabilitation activities, affording states broad discretion and flexibility in deciding how to allocate these funds and for what purposes. To date, the affected states have received $16.7 billion in CDBG funding from supplemental appropriations--so far, the largest share of funding specifically targeted to long-term rebuilding. With the vast number of homes that sustained damage in Louisiana and Mississippi, both of these states allocated the bulk of their CDBG funds to homeowner assistance. Restoration of the region's housing and infrastructure is taking place in the context of broader planning and coordination activities. As states and localities begin to develop plans for rebuilding, there are difficult policy decisions Congress will need to make about the federal government's contribution to the rebuilding effort and the role the federal government might play over the long-term in an era of competing priorities. Fri, 29 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07854.pdf The Emergency Management Assistance Compact (EMAC) is a collaborative arrangement among member states that provides a legal framework for requesting resources. Working alongside federal players, including the Federal Emergency Management Agency (FEMA) and the National Guard Bureau, EMAC members deployed an unprecedented level of assistance in response to hurricanes Katrina and Rita. Although EMAC played a critical role in our nation's response to these hurricanes, the magnitude of these events revealed limitations. GAO was asked to (1) examine how the use of EMAC has changed since its inception; (2) assess how well existing policies, procedures, and practices facilitate collaboration; and (3) evaluate the adequacy of the EMAC network's administrative capacity to achieve its mission. GAO examined documents and interviewed officials from 45 federal, state, and local agencies and offices. Since its inception in 1995, the EMAC network has grown significantly in size, volume, and the type of resources it provides. EMAC's membership has increased from a handful of states in 1995 to 52 states and territories today, and EMAC members have used the compact to obtain support for several types of disasters including hurricanes, floods, and the September 11, 2001 terrorist attacks. The volume and variety of resources states have requested under EMAC have also grown significantly. For example, after the September 11, 2001 terrorist attacks, New York requested 26 support staff under EMAC to assist in emergency management operations; whereas, in response to the 2005 Gulf Coast hurricanes, approximately 66,000 personnel--about 46,500 National Guard and 19,500 civilian responders-- were deployed under EMAC from a wide variety of specialties, most of whom went to areas directly impacted by the storms. EMAC, along with its accompanying policies, procedures, and practices, enables its members to overcome differences to achieve a common mission--streamlining and expediting the delivery of resources among members during disasters. While these policies, procedures, and practices have worked well for smaller-scale deployments, they have not kept pace with the changing use of EMAC, sometimes resulting in confusion and deployment delays. The EMAC network has taken steps to address several of these challenges, but additional improvements can be made in a number of areas including clarifying roles and responsibilities of EMAC members and improving existing systems that track resources deployed under EMAC. In addition, a lack of sufficiently detailed federal standards and policies has led to some reimbursement delays and additional administrative burdens. While the EMAC network has developed a basic administrative capacity, opportunities exist for it to further build on and sustain these efforts. The EMAC network has adopted several good management practices, such as using after-action reports to learn from experiences and developing a 5-year strategic plan. However, the EMAC network can enhance its administrative capacity by improving how it plans, measures, and reports on its performance. FEMA provided $2 million to help build this capacity in 2003, but the agreement has recently expired. FEMA and EMAC leadership are in the process of finalizing a new 3-year cooperative agreement. Such an agreement would enhance the EMAC network's ability to support its collaborative efforts. Fri, 29 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07654.pdf Following several hurricanes in 2005, the need to rebuild and repair destroyed and damaged homes and buildings in the Gulf Coast region may create opportunities for making energy efficiency improvements and realizing energy cost savings. While numerous federal agencies are involved in the recovery process, the Department of Housing and Urban Development (HUD) and the Department of Energy (DOE) interact with the states on a regular basis regarding matters of energy efficiency. This report, initiated under the authority of the Comptroller General of the United States, examines (1) the extent of opportunities for incorporating energy efficiency improvements in the Gulf Coast reconstruction, (2) potential challenges to realizing the energy cost savings during the reconstruction, and (3) the role of HUD and DOE in promoting energy efficiency in the rebuilding of the Gulf Coast. GAO limited the scope of its work to Louisiana and Mississippi since these states experienced the majority of the hurricane damage. GAO assessed opportunities for incorporating energy efficiency measures by conducting site visits and interviewing federal, state government officials; home builders; and energy efficiency experts. GAO also worked with a DOE national laboratory to develop energy cost savings estimates. GAO is making no recommendations. Reconstruction in the Gulf Coast creates a significant opportunity for incorporating energy efficiency improvements that could produce long-term energy costs savings in residential and commercial buildings. The sheer magnitude of the reconstruction effort and Louisiana's and Mississippi's recent adoption of more energy-efficient building codes makes this an opportune time for incorporating energy efficiency improvements in the rebuilding efforts. In partnership with a DOE national laboratory, GAO analyzed energy cost savings opportunities and estimated that adopting these newer building codes could reduce residential energy costs in these two states by at least $20 to $28 million per year, depending on the extent of the rebuilding efforts in these states. Furthermore, the analysis also showed that annual energy expenditures for commercial buildings--hospitals, schools, offices, and retail buildings--built to newer energy standards could be about 7 to 34 percent lower than buildings built to older standards. There also are opportunities for consumers to make additional energy efficiency improvements to both building types by replacing old, damaged equipment. There are three substantial challenges to realizing the energy cost savings opportunities presented by the Gulf Coast reconstruction: (1) the shortage of a skilled construction workforce, and specifically, the shortage of workers trained to meet the newer building codes; (2) the lack of trained building code inspectors to ensure compliance with newer building codes in Louisiana and Mississippi; and (3) the difficult financial issues facing consumers, such as the sufficiency of insurance and other compensation payments, that may make decisions about energy efficiency a low priority. States have efforts under way to address many of these challenges and it will take time and sustained commitment for them to be successful. The rebuilding of the Gulf Coast is largely a state and local matter, but HUD and DOE have played a supportive role in promoting energy efficient rebuilding. HUD and DOE have provided financial and educational resources that can encourage energy efficient rebuilding, and both agencies have broader national programs that may support energy efficiency improvements in the rebuilding of the Gulf Coast. HUD has made $16.7 billion in funding available for general rebuilding purposes, such as restoring damaged housing, and allows states to determine how to spend these funds, including using them for energy efficient improvements. HUD also has several national initiatives that may directly improve the energy efficiency of the public housing stock in Gulf Coast states. DOE has sponsored education and training on energy efficiency issues to state and local officials, private industry, and consumers in Louisiana and Mississippi. As part of its nationwide effort to assist all states with energy efficiency initiatives, DOE provides grants to states to design and carry out their own energy efficiency programs. DOE's energy expertise as well as HUD and DOE resources may prove valuable to the states and consumers as they make decisions about energy efficient rebuilding in the Gulf Coast. Tue, 26 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07651.pdf In 2005, Hurricane Katrina's impact on the Gulf Coast included damage to the environment from chemical and hazardous materials releases. Also, the widespread demolition and renovation activities still under way in New Orleans may release asbestos fibers into the air, posing a potential additional health risk. This report, conducted at the Comptroller General's initiative, addresses (1) the Environmental Protection Agency's (EPA) actions to assess and mitigate Katrina's environmental impacts, (2) the extent to which EPA has assurance that public health is protected from asbestos inhalation risks in New Orleans, (3) the extent to which EPA's environmental health risk communications provided useful information to the public, and (4) challenges EPA faces in addressing environmental impacts. Under challenging circumstances, EPA worked with federal and state partners to respond to chemical and oil spills, collect abandoned chemical containers, coordinate recycling of damaged appliances, and collect and recycle electronic waste. EPA also conducted air, water, sediment, and soil sampling; helped assess drinking water and wastewater infrastructures; and issued timely information to the public on a variety of environmental health risks. However, as cleanup continues, EPA's assurance that public health is protected from risks associated with inhalation of asbestos fibers is limited because the agency has not deployed air monitors in and around New Orleans neighborhoods where demolition and renovation activities are concentrated. While EPA took steps to monitor asbestos after the hurricane --for example, more than doubling the number of ambient (outdoor) air monitors and monitoring emissions at debris reduction sites--monitors were not placed in areas undergoing substantial demolition and renovation, such as the Ninth Ward. This is problematic because monitors effectively detect releases of asbestos from demolition activities only if they are located immediately adjacent to demolition sites. Further, many thousands of homes being demolished and renovated by or for individual homeowners are generally not subject to EPA's asbestos emissions standards aimed at limiting releases of fibers into the air. While EPA provided useful environmental health risk information to the public via flyers, public service announcements, and the EPA Web page, the communications were at times unclear and inconsistent on how to mitigate exposure to some contaminants, particularly asbestos and mold. Further, the usefulness of three key reports on EPA's environmental sampling in New Orleans--developed with, among others, the Louisiana Department of Environmental Quality to address potential health risks from exposure to floodwaters, sediments, and air--was limited by a lack of timeliness and insufficient disclosures about EPA's sampling program. For example, EPA did not state until August 2006 that its December 2005 report--which said that the great majority of the data showed that adverse health effects would not be expected from exposure to sediments from previously flooded areas--applied to short-term visits, such as to view damage to homes. Mitigating several challenges EPA faces addressing Hurricane Katrina could better protect the environment in the future. First, EPA did not remove hazardous materials from national wildlife refuges in a timely manner as part of its response in part because disaster assistance funding generally is not used for debris cleanups on federal lands. Second, because states generally have authority over landfill decisions, EPA does not have an effective role in emergency debris disposal decisions that could cause pollution. Finally, lack of clarity in federal debris management plans and protocols precluded the timely and safe disposal of some appliances and electronic waste. Mon, 25 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07683t.pdf This testimony summarizes GAO's October 2006 report on the Department of Homeland Security's (DHS) operations centers--centers run by three DHS components and operating 24 hours a day, 7 days a week, 365 days a year to conduct monitoring and surveillance activities of potential terrorist activities and other crises. Specifically, GAO assessed the extent to which the centers implemented key practices GAO's work has shown will enhance and sustain collaboration. In addition, GAO is aware of Congress's concerns about the performance of certain DHS components with regard to situational awareness during Hurricane Katrina, and the recent efforts made in response to these concerns identified in hurricane after-action studies and reports. Because these efforts to some extent affect DHS's response to the recommendations made in GAO's previous report, this testimony briefly describes some of the steps DHS reported that it has taken to address situational awareness problems Katrina exposed. However, because these actions are relatively new, it is too early to assess how well they are being implemented. The DHS operations centers GAO studied--the Air and Marine Operations Center, the National Targeting Center, the Transportation Security Operations Center, and the National Operations Center--could improve implementation of the key practices GAO identified as having a positive effect on inter-agency collaboration. These key practices include (1) defining common outcomes and joint strategies; (2) assessing each center's needs to leverage resources; (3) defining the roles and responsibilities of the personnel conducting surveillance activities; (4) establishing compatible standards, policies, and procedures for using DHS's primary information sharing network; (5) developing mechanisms to monitor and evaluate results of joint operations; and (6) reinforcing accountability by recognizing joint efforts and outcomes achieved in annual performance plans and reports. The Operations Directorate, established in November 2005 to improve operational efficiency and coordination, provides DHS with an opportunity to more fully implement these key practices by providing guidance to the operations centers. Although GAO recommended that the Directorate provide this guidance, DHS stated that the Directorate does not have control over the component operations centers; therefore, it has not provided guidance to improve collaboration among the centers. According to DHS, it has given priority to fixing issues that affect situational awareness and its ability to respond to national incidents and disasters, such as Hurricane Katrina. The actions in response to Katrina include establishing standard roles and procedures for reporting information during a major incident and creating a Web-based tool to provide a common view of critical information during a crisis. While DHS has not fully responded to GAO's recommendation for implementing key collaborative practices, it maintains that the initiatives it has implemented since Katrina will improve collaboration and create an environment to address the recommendations in the future. Wed, 20 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07736.pdf The Department of Commerce's (Commerce) U.S. Census Bureau (Bureau) seeks updated information on the addresses and maps of housing units and group quarters from state, local, and tribal governments through the Local Update of Census Addresses (LUCA) Program. Prepared under the Comptroller General's authority, this report assesses (1) the status of the LUCA Program, (2) the Bureau's response to prior recommendations by GAO and others and new challenges related to the program, and (3) the Bureau's plans for conducting the program in areas affected by hurricanes Katrina and Rita. GAO reviewed LUCA program documents, met with and surveyed participants in the LUCA Dress Rehearsal, and interviewed Bureau officials and local officials in the Gulf Coast region. The Bureau has conducted its planned LUCA operations in accordance with its published timeline. The Bureau has also taken steps to reduce workloads and burdens and improve training for localities that participate in LUCA--all areas GAO and others had identified as needing improvement. For instance, to reduce participant workload and burden, the Bureau provided a longer period for reviewing and updating LUCA materials; provided options for submitting materials for the LUCA Program; combined the collection of LUCA addresses from two separate operations into one integrated program; and created MTPS, which is designed to assist LUCA Program participants in reviewing and updating address and map data. Also, the Bureau has planned improvements to the 2010 LUCA Program training (i.e., specialized workshops for informational and then technical training) and plans to supplement the workshops with CBT. However, the Bureau faces new challenges. For instance, the Bureau tested MTPS with only one local government. Other local officials we spoke with had problems converting Bureau-provided address files. In addition, the Bureau did not test its CBT software in the LUCA Dress Rehearsal. Additional challenges stem from the damage to the Gulf Coast region caused by hurricanes Katrina and Rita. Officials in localities in hurricane-affected areas questioned their ability to participate in the LUCA Program. The continuous changes in housing stock may hinder local governments' ability to accurately update their address lists and maps. The condition of the housing stock is likely to present additional challenges for the Bureau's address canvassing operation (in which the Bureau verifies addresses) in the form of decreased productivity for Bureau staff, workforce shortages, and issues associated with identifying vacant and uninhabitable structures. The Bureau created a task force to assess the implications of storm-related issues that proposed a number of mitigating actions. However, the Bureau has no plans for modifying the address canvassing operation or subsequent operations in the Gulf Coast region. Thu, 14 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07991t.pdf Disputes between policyholders and property-casualty insurers over coverage from the 2005 hurricane season highlight challenges in determining the appropriateness of claims for multiple-peril events. In particular, events such as hurricanes that can cause both wind and flood damages raise questions about the adequacy of steps taken by the Federal Emergency Management Agency (FEMA) to ensure that claims paid by the National Flood Insurance Program (NFIP) covered only damages caused by flooding. As a result, the Subcommittees asked GAO to provide preliminary views on (1) the information available to and obtained by NFIP through its claims process in determining flood damages for properties that sustained both wind and flood damages, and (2) the information collected by FEMA as part of the NFIP claims reinspection process. GAO collected data from FEMA, reviewed reinspection reports, reviewed relevant policies and procedures, and interviewed agency officials and others knowledgeable about NFIP. NFIP does not collect and analyze both wind and flood damage claims data in a systematic fashion, which may limit FEMA's ability to assess whether flood payments on hurricane-damaged properties are accurate. Instead, NFIP focuses only on the flood claims data to determine whether the amount actually paid on a claim reflects the damages caused by flooding. Flood claims data, collected by NFIP through the write-your-own (WYO) insurers--including those that sell and service both the wind and flood policies--do not include information on total damages to the property from all perils. That is, NFIP does not systematically collect information on wind damages from the WYO insurer when a flood claim is received. FEMA officials state that they do not have authority to collect wind damage claims data from WYO insurers, even when the insurer services both the wind and flood policies on the same property. As a result, for hurricane-damaged properties, such as those damaged by Hurricanes Katrina and Rita, NFIP does not have all the information it needs to ensure that its claims payments were limited to damage caused by flooding. Concerns over the processing of these flood claims are heightened when the same insurance company serves as both NFIP's WYO insurer and the property-casualty (wind) insurer for a given property. In such cases, the same company is responsible for determining damages and losses to itself and to NFIP, creating a potential conflict of interest. The lack of both flood and wind damage data also limits the usefulness of FEMA's quality assurance reinspection program for NFIP flood claims. GAO found that the NFIP reinspection program did not incorporate a means for collecting and analyzing both the flood and wind damage data together in a systematic fashion to reevaluate the extent to which wind and flooding were deemed to have contributed toward damages to the property. Further, we explored whether the wind-related claims data collectively gathered by state insurance regulators would be useful to NFIP to reevaluate damage assessments. We determined that this information would be of limited value to NFIP in reevaluating wind versus flood damage determinations made because such data is not collected in enough geographic detail to match with the corresponding flood claims data on a property- or community-level basis. Without the ability to examine damages caused by both wind and flooding, the reinspection program is limited in its ability to confirm whether NFIP paid only for losses caused by flooding. Tue, 12 Jun 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07908r.pdf To avoid flooding in New Orleans after a rain storm, the city's Sewerage and Water Board pumps rainwater from the city into three drainage canals which then flow unrestricted into Lake Pontchartrain. While critical to prevent flooding from rainfall, these canals are vulnerable to storm surge from Lake Pontchartrain during a hurricane, and consequently are lined with floodwalls along both sides to protect storm surge from overtopping the canals and flooding the city. However, during Hurricane Katrina, several breaches occurred in the canal floodwalls allowing significant amounts of water to enter New Orleans from Lake Pontchartrain. In its efforts to restore pre-Katrina levels of hurricane protection to New Orleans by the June 1st start of the 2006 hurricane season, in late 2005, the U.S. Army Corps of Engineers (Corps) considered strengthening the drainage canal floodwalls but decided to postpone this effort due to cost and time constraints. Instead, the Corps decided to install three interim closure structures (gates) at the points where the canals meet the lake. These gates would be closed during major storm events to prevent storm surge from entering the canals and potentially breaching the canal floodwalls and flooding the city. Due to space constraints along the canals and the limited amount of time it had before the start of the 2006 hurricane season, the Corps decided to procure 34 large-capacity hydraulic pumping systems1 to provide the most pumping capacity possible by June 1, 2006. The Corps acknowledged that its decision to install the gates and provide pumping capacity that was less than what was needed to keep the city dry could result in some flooding by rainfall but believed that the risk from a hurricane-induced storm surge was far greater than the risk of flooding from heavy rainfall. During the process of acquiring, testing, and installing the pumping systems for the drainage canals, many concerns were raised by the media about potential problems with the operation of these pumping systems, and GAO was asked to examine the (1) specifications and requirements of the contract and the basis for selecting the supplier of the pumping systems; (2) concerns identified during factory testing and the Corps' rationale to install the pumping systems in light of the factory test failures; (3) actions the Corps has taken to address the known problems with the pumping systems; and (4) pumping capacity that existed on June 1, 2006, the capacity that currently exists, and the capacity that is planned for the 2007 hurricane season. The Corps' decisions to acquire the 34 hydraulic pumping systems were focused on satisfying its commitment to have pumping capacity on the drainage canals in place by June 1, 2006--the start of the 2006 hurricane season. In order to increase the likelihood that pumping capacity would be in place when needed, the Corps utilized several tools to expedite and streamline the acquisition process. The Corps appears to have had a valid reason for each of the iterative decisions it made at each stage of the procurement process. Factory testing of the pumps occurred from March through May 2006, and revealed several problems with specific components of the pumping systems. As a result of the concerns identified during factory testing, the Corps had no assurance that the pumping systems would operate to capacity when needed. Nevertheless, the pumping systems were installed as planned because the Corps believed that it was better to have some pumping capacity along the drainage canals during the 2006 hurricane season rather than none. Since June 1, 2006, the Corps has continued to take steps to correct known performance problems with the pumping systems, including uninstalling them to make some repairs. On June 1, 2006, the Corps had installed 11 pumping systems, and by July 2006, it had installed 34, although it is uncertain how much of the theoretical capacity of these pumping systems would have worked and for how long. By June 1, 2007, the Corps plans to complete the reinstallation of all 40 pumping systems that have been repaired and each has been tested for between 45 minutes to 2 hours, thus providing greater assurance that they will perform as designed during the upcoming 2007 hurricane season. However, the total planned pumping capacity will still not meet the Sewerage and Water Board's drainage needs to keep the city from flooding during a hurricane when the canal gates are closed. Wed, 23 May 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07850t.pdf Despite substantial federal and state investment, states have had difficulty ensuring the safety, well-being, and permanency of children in foster care. Ensuring these outcomes becomes even more difficult in the event of disasters such as Hurricanes Katrina and Rita, when children and families may become displaced across state lines. This testimony discusses (1) the issues that states reported as most important to resolve now and in the future to improve outcomes for children under their supervision (2) initiatives states reported taking to address these issues and how recent law provides support for additional state efforts and (3) federal action taken to assist states' efforts in developing child welfare disaster plans. This testimony is primarily based on our October 2006 report on state child welfare challenges (GAO-07-75) and our July 2006 report on state child welfare disaster planning (GAO-06-944). The Department of Health and Human Services (HHS) and the Congress took action that addressed our July report recommendations. However, HHS disagreed with our October report recommendation to improve awareness of and access to federal social services by modifying the Catalog of Federal Domestic Assistance or other means. We continue to believe that taking such action would help improve services to children and families. States reported in our survey that inadequate levels of mental health and substance abuse services, the high average number of child welfare cases per worker, and the difficulty finding homes for children with special needs were the most important challenges to resolve in order to improve outcomes for children under states' care. Child welfare officials cited various reasons these challenges existed in their states, such as a lack of funding for family support services and a lack of caseload standards. Over the next 5 years, major challenges for state child welfare systems were cited as serving a growing population of children with special needs or who have been exposed to illegal drugs, and changing demographic trends that will require greater multicultural sensitivity in providing services to some groups of children and their families. States have some initiatives in place to address these challenges, but these initiatives do not always address areas of states' greatest concern. For example, only 4 of 31 states dissatisfied with substance abuse services reported initiatives to improve the level of these services. Similarly, states reported little or no action to address two of the most frequently reported factors underlying the challenge to recruit and retain caseworkers - the administrative burden on caseworkers and effective supervision. Recent law provides additional requirements and funding to help states address these challenges. Some states implemented initiatives under federal demonstration projects, including those to improve substance abuse services and permanent homes for children. However, outcome evaluations of these initiatives have shown mixed results. Several actions have been taken by HHS and the Congress to better ensure that states are prepared to continue child welfare services for children displaced by disaster. Our earlier work showed that although 29 states, plus Puerto Rico, experienced a federally declared disaster in 2005, only 8 of these states reported having a written child welfare disaster plan. Since that time, HHS has updated its guidance to states and provided technical assistance. In addition, the Congress passed the Child and Family Services Improvement Act of 2006, requiring that states have procedures in place concerning how state child welfare agencies would respond in the event of a disaster. The deadline set by HHS for submission of these plans is June 30, 2007. Tue, 15 May 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07835t.pdf As a new hurricane season approaches, the Federal Emergency Management Agency (FEMA) within the Department of Homeland Security (DHS) faces the simultaneous challenges of preparing for the season and implementing the reorganization and other provisions of the Post-Katrina Emergency Management Reform Act of 2006. The Act stipulates major changes to FEMA intended to enhance its preparedness for and response to catastrophic and major disasters. As GAO has reported, FEMA and DHS face continued challenges, including clearly defining leadership roles and responsibilities, developing necessary disaster response capabilities, and establishing accountability systems to provide effective services while protecting against waste, fraud, and abuse. This testimony (1) summarizes GAO's findings on these challenges and FEMA's and DHS's efforts to address them; and (2) discusses several disaster management issues for continued congressional attention. Effective disaster preparedness and response require defining what needs to be done, where and by whom, how it needs to be done, and how well it should be done. GAO analysis following Hurricane Katrina showed that improvements were needed in leadership roles and responsibilities, development of the necessary disaster capabilities, and accountability systems that balance the need for fast, flexible response against the need to prevent waste, fraud, and abuse. To facilitate rapid and effective decision making, legal authorities, roles and responsibilities, and lines of authority at all government levels must be clearly defined, effectively communicated, and well understood. Adequacy of capabilities in the context of a catastrophic or major disaster are needed--particularly in the areas of (1) situational assessment and awareness; (2) emergency communications; (3) evacuations; (4) search and rescue; (5) logistics; and (6) mass care and shelter. Implementing controls and accountability mechanisms helps to ensure the proper use of resources. FEMA has initiated reviews and some actions in each of these areas, but their operational impact in a catastrophic or major disaster has not yet been tested. Some of the targeted improvements, such as a completely revamped logistics system, are multiyear efforts. Others, such as the ability to field mobile communications and registration-assistance vehicles, are expected to be ready for the coming hurricane season. The Comptroller General has suggested one area for fundamental reform and oversight is ensuring a strategic and integrated approach to prepare for, respond to, recover, and rebuild after catastrophic events. FEMA enters the 2007 hurricane season as an organization in transition working simultaneously to implement the reorganization required by the Post-Katrina Reform Act and moving forward on initiatives to address the deficiencies identified by the post-Katrina reviews. This is an enormous challenge. In the short-term, Congress may wish to consider several specific areas for immediate oversight. These include (1) evaluating the development and implementation of the National Preparedness System, including preparedness for natural disasters, terrorist incidents, and an influenza pandemic; (2) assessing state and local capabilities and the use of federal grants to enhance those capabilities; (3) examining regional and multi-state planning and preparation; (4) determining the status and use of preparedness exercises; and (5) examining DHS polices regarding oversight assistance. Tue, 15 May 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07820t.pdf Weather-related events in the United States have caused tens of billions of dollars in damages annually over the past decade. A major portion of these losses is borne by private insurers and by two federal insurance programs-- the Federal Emergency Management Agency's National Flood Insurance Program (NFIP), which insures properties against flooding, and the Department of Agriculture's Federal Crop Insurance Corporation (FCIC), which insures crops against drought or other weather disasters. In this testimony, GAO (1) describes how climate change may affect future weather-related losses, (2) provides information on past insured weather-related losses, and (3) determines what major private insurers and federal insurers are doing to prepare for potential increases in such losses. This testimony is based on a report entitled Climate Change: Financial Risks to Federal and Private Insurers in Coming Decades are Potentially Significant (GAO-07-285) released on April 19, 2007. Key scientific assessments report that the effects of climate change on weather-related events and, subsequently, insured and uninsured losses, could be significant. The global average surface temperature has increased over the past century and climate models predict even more substantial, perhaps accelerating, increases in temperature in the future. Assessments by key governmental bodies generally found that rising temperatures are expected to increase the frequency and severity of damaging weather-related events, such as flooding or drought, although the timing and magnitude are as yet undetermined. Additional research on the effect of increasing temperatures on weather events is expected in the near future. Taken together, private and federal insurers paid more than $320 billion in claims on weather-related losses from 1980 to 2005. Claims varied significantly from year to year--largely due to the effects of catastrophic weather events such as hurricanes and droughts--but have generally increased during this period. The growth in population in hazard-prone areas and resulting real estate development have generally increased liabilities for insurers, and have helped to explain the increase in losses. Due to these and other factors, federal insurers' exposure has grown substantially. Since 1980, NFIP's exposure nearly quadrupled to nearly $1 trillion in 2005, and program expansion increased FCIC's exposure 26-fold to $44 billion. Major private and federal insurers are both exposed to the effects of climate change over coming decades, but are responding differently. Many large private insurers are incorporating climate change into their annual risk management practices, and some are addressing it strategically by analyzing its potential long-term industry-wide impacts. In contrast, federal insurers have not developed and disseminated comparable information on long-term financial impacts. GAO acknowledges that the federal insurance programs are not profit-oriented, like private insurers. Nonetheless, a strategic assessment of the potential implications of climate change for the major federal insurance programs would help the Congress manage an emerging high-risk area with significant implications for the nation's growing long-term fiscal imbalance. Thu, 03 May 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07779t.pdf The decennial census is a Constitutionally-mandated activity that produces data used to apportion congressional seats, redraw congressional districts, and allocate billions of dollars in federal assistance. The Census Bureau (Bureau) estimates the 2010 Census will cost $11.3 billion, making it the most expensive in the nation's history. This testimony discusses the Bureau's progress in preparing for the 2010 Census to (1) implement operations to increase the response rate and control costs; (2) use technology to increase productivity; (3) hire and train temporary staff; and (4) plan an accurate census in areas affected by hurricanes Katrina and Rita. The testimony is based on previously issued GAO reports and work nearing completion in which GAO observed recruiting, hiring, and training practices in the 2006 test, and visited localities that participated in the Local Update of Addresses Dress Rehearsal as well in the Gulf Coast region. The Bureau has made progress towards implementing a re-engineered census design that holds promise for increasing the response rate, thereby controlling the cost of the census while promoting accurate results. The re-engineered design includes a short form only census designed to increase the response rate by about 1 percent and a targeted second mailing, which is expected to increase response by between 7 to 10 percent. Both of these initiatives are new, have been tested, and will be a part of the 2010 Census design. According to Bureau officials, a 1 percent increase in the response rate can save $75 million, making these initiatives critical to the new design. Uncertainty surrounds a keystone to the reengineered census, the mobile computing device (MCD). The MCD allows the Bureau to automate operations and eliminate the need to print millions of paper questionnaires and maps used by census workers to conduct census operations and to assist in managing payroll. The MCD, tested in the 2004 and 2006 census tests, was found to be unreliable. While a contractor has developed a new version of the MCD, the device will not be field tested until next month, leaving little time to correct problems that might emerge during the 2008 Dress Rehearsal. The Bureau faces challenges in recruiting, hiring, and training an estimated 600,000 temporary employees. For example, opportunities exist for the Bureau to hone its recruiting efforts to identify individuals who would be more likely to be effective at census work and willing to work throughout an operation. Also, census workers indicated a need for additional training on reluctant respondents as well as location-specific challenges they encounter. The Bureau must also be prepared to accurately count the population affected by hurricanes Katrina and Rita. The Bureau has contacted local officials in the Gulf Area and is developing a plan that includes workshops and special staffing considerations. Tue, 24 Apr 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07760t.pdf Weather-related events in the United States have caused tens of billions of dollars in damages annually over the past decade. A major portion of these losses is borne by private insurers and by two federal insurance programs-- the Federal Emergency Management Agency's National Flood Insurance Program (NFIP), which insures properties against flooding, and the Department of Agriculture's Federal Crop Insurance Corporation (FCIC), which insures crops against drought or other weather disasters. In this testimony, GAO (1) describes how climate change may affect future weather-related losses, (2) provides information on past insured weather-related losses, and (3) determines what major private insurers and federal insurers are doing to prepare for potential increases in such losses. This testimony is based on a report entitled Climate Change: Financial Risks to Federal and Private Insurers in Coming Decades are Potentially Significant (GAO-07-285) being released today. Key scientific assessments report that the effects of climate change on weather-related events and, subsequently, insured and uninsured losses, could be significant. The global average surface temperature has increased over the past century and climate models predict even more substantial, perhaps accelerating, increases in temperature in the future. Assessments by key governmental bodies generally found that rising temperatures are expected to increase the frequency and severity of damaging weather-related events, such as flooding or drought, although the timing and magnitude are as yet undetermined. Additional research on the effect of increasing temperatures on weather events is expected in the near future. Taken together, private and federal insurers paid more than $320 billion in claims on weather-related losses from 1980 to 2005. Claims varied significantly from year to year--largely due to the effects of catastrophic weather events such as hurricanes and droughts--but have generally increased during this period. The growth in population in hazard-prone areas and resulting real estate development have generally increased liabilities for insurers, and have helped to explain the increase in losses. Due to these and other factors, federal insurers' exposure has grown substantially. Since 1980, NFIP's exposure nearly quadrupled to nearly $1 trillion in 2005, and program expansion increased FCIC's exposure 26-fold to $44 billion. Major private and federal insurers are both exposed to the effects of climate change over coming decades, but are responding differently. Many large private insurers are incorporating climate change into their annual risk management practices, and some are addressing it strategically by assessing its potential long-term industry-wide impacts. In contrast, federal insurers have not developed and disseminated comparable information on long-term financial impacts. GAO acknowledges that the federal insurance programs are not profit-oriented, like private insurers. Nonetheless, a strategic analysis of the potential implications of climate change for the major federal insurance programs would help the Congress manage an emerging high-risk area with significant implications for the nation's growing long-term fiscal imbalance. Thu, 19 Apr 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07579.pdf On June 25, 2006, the Internal Revenue Service (IRS) headquarters building suffered flooding during a period of record rainfall and sustained extensive damage to its infrastructure. IRS officials ordered the closure of the building until December 2006 to allow for repairs to be completed. IRS headquarters officials reported activating several of the agency's emergency operations plans. Within 1 month of the flood, over 2,000 employees normally assigned to the headquarters building were relocated to other facilities throughout the Washington, D.C., metropolitan area. GAO was asked to report on (1) how IRS emergency operations plans address federal guidance related to continuity planning and (2) the extent to which IRS emergency operations plans contributed to the actions taken by IRS officials in response to the flood. To address these objectives, GAO analyzed federal continuity guidance, reviewed IRS emergency plans, and interviewed IRS officials. The IRS headquarters emergency operations plans that GAO reviewed--the headquarters Continuity of Operations (COOP) plan, Incident Management Plan, and three selected business resumption plans--collectively addressed several of the general elements identified within federal continuity guidance for all executive branch departments and agencies. For example, the plans adequately identified the people needed to continue performing essential functions. However, other elements were not addressed or were addressed only in part. Specifically, IRS had two separate lists of essential functions--critical business processes and essential functions for IRS leadership--within its plans, but prioritized only one of the lists. Furthermore, although the COOP plan outlined provisions for tests, training, and exercises, none of the other plans GAO reviewed outlined the need to conduct such activities. While IRS provided overall guidance to its business units on their business resumption plans, the guidance was inconsistent with the federal guidance on several elements, including the preparation of resources and facilities needed to support essential functions and requirements for regular tests, training, and exercises. The IRS Incident Management Plan was particularly useful in establishing clear lines of authority and communications in response to the flooding. Unit-level business resumption plans GAO reviewed contributed to a lesser extent, and the headquarters COOP plan was not activated because of conditions particular to the 2006 flood. Specifically, damage to the building was limited to the basement and subbasement levels, and employees were able to enter the building to retrieve equipment and assets. In addition, alternate work space was available for all employees within a relatively short period, reducing the importance of identifying critical personnel. While its plans helped guide IRS's response to the conditions that resulted from the flood, in more severe emergency events, conditions could be less favorable to recovery. Consequently, unless IRS fills in gaps in its guidance and plans, it lacks assurance that the agency is adequately prepared to respond to the full range of potential disruptions. Mon, 16 Apr 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07574t.pdf The size and scope of the devastation caused by the 2005 Gulf Coast hurricanes presents unprecedented rebuilding challenges. Today, more than a year and a half since the hurricanes made landfall, rebuilding efforts are at a critical turning point. The Gulf Coast must face the daunting challenge of rebuilding its communities and neighborhoods--some from the ground up. This testimony (1) places the federal assistance provided to date in the context of the resources likely needed to rebuild the Gulf Coast, (2) discusses key federal programs currently being used to provide rebuilding assistance, with an emphasis on the Department of Housing and Urban Development's (HUD) Community Development Block Grant (CDBG) program, (3) describes Louisiana's and Mississippi's approach to using CDBG funds, and (4) provides observations on planning activities in Louisiana and Mississippi and the federal government's role in coordinating rebuilding efforts. GAO visited the Gulf Coast region, reviewed state and local documents, and interviewed federal, state, and local officials. While the federal government has provided billions of dollars in assistance to the Gulf Coast, a substantial portion was directed to short-term needs, leaving a smaller portion for longer-term rebuilding. It may be useful to view this assistance in the context of the costs of damages incurred by the region and the resources necessary to rebuild. Some damage estimates have put capital losses at a range of $70 billion to over $150 billion, while the State of Louisiana estimated that the economic impact on its state alone could reach $200 billion. Such estimates raise important questions regarding additional assistance that will be needed to help the Gulf Coast rebuild in the future. To date, the federal government has provided long-term rebuilding assistance to the Gulf Coast through 2 key programs, which follow different funding models. The Federal Emergency Management Agency's public assistance program provides public infrastructure funding for specific projects that meet program eligibility requirements. HUD's CDBG program, on the other hand, provides funding for neighborhood revitalization and housing rehabilitation activities, affording states broad discretion and flexibility. To date, the affected states have received $16.7 billion in CDBG funding from supplemental appropriations--so far, the largest share of funding targeted to rebuilding. With the vast number of homes that sustained damage in Louisiana and Mississippi, each state allocated the bulk of its CDBG funds to homeowner assistance. Louisiana developed an assistance program to encourage homeowners to return to Louisiana and begin rebuilding while Mississippi developed a program to target homeowners who suffered losses due to Katrina's storm surge that were not covered by insurance. As of March 28, 2007, Louisiana has awarded 4,808 grants to homeowners with an average award amount of $74,250. Mississippi has awarded 11,894 grants with an average award amount of $69,669. Restoring the region's housing and infrastructure is taking place in the context of broader planning and coordination activities. In Louisiana and Mississippi, state and local governments are engaged in both short-and long-term planning efforts. Further, the President established a position within the Department of Homeland Security to coordinate and support rebuilding activities at the federal, state, and local levels. As states and localities begin to develop plans for rebuilding, there are difficult policy decisions Congress will need to make about the federal government's contribution to the rebuilding effort and the role it might play over the long-term in an era of competing priorities. Based on our work, we raise a number of questions the Subcommittee may wish to consider in its oversight of Gulf Coast rebuilding. Such questions relate to the costs for rebuilding the Gulf Coast--including the federal government's share, the effectiveness of current funding delivery mechanisms, and the federal government's efforts to leverage the public investment in rebuilding. Thu, 12 Apr 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07698t.pdf In response to Hurricane Katrina, the Departments of Homeland Security (DHS) and Defense (DOD), the General Services Administration (GSA), and the U.S. Army Corps of Engineers (Corps) were responsible for over 90 percent of the federal funds awarded for relief efforts via contracting as of March 2007. GAO initiated work and completed a report under the Comptroller General's authority last month describing the extent to which small businesses participated in these contracting opportunities. This testimony, which summarizes information from that report, discusses (1) the amounts that small and local businesses received directly from contracts with DHS, GSA, DOD, and the Corps for relief and recovery efforts related to Hurricane Katrina and (2) the extent to which small businesses received subcontracts for relief and recovery efforts. Small businesses received a total of 28 percent of the $11 billion in contracting dollars that DHS, GSA, DOD, and the Corps directly awarded in response to Hurricane Katrina between August 2005 and June 2006. DHS awarded the highest dollar amount to small businesses (about $1.6 billion) and GSA awarded the highest percentage of its Katrina-related contracting dollars directly to small businesses (72 percent of about $658 million). Small businesses in Alabama, Mississippi, and Louisiana received 66 percent of the $1.9 billion awarded to businesses in these states. Required information on small business subcontracting was not consistently available in official procurement data systems for the four agencies we reviewed. For example, the systems had no information on whether DHS or GSA required small business subcontracting plans for 70 percent or more of their contracting funds. In addition, the four agencies often did not provide or document reasons for their determinations that plans were not required, even though federal rules require such documentation when prime contracts meet criteria for having these plans. Incomplete information about subcontracting limited GAO's ability to determine the extent to which agencies complied with contracting rules and gave small businesses maximum opportunities to win subcontracts. Thu, 12 Apr 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07412.pdf U.S ports are significant to the U.S. economy, handling more than 2 billion tons of domestic and import/export cargo annually. Since Sept. 11, 2001, much of the national focus on ports' preparedness has been on preventing potential acts of terror, the 2005 hurricane season renewed focus on how to protect ports from a diversity of threats, including natural disasters. This report was prepared under the authority of the Comptroller General to examine (1) challenges port authorities have experienced as a result of recent natural disasters, (2) efforts under way to address these challenges, and (3) the manner in which port authorities plan for natural disasters. GAO reviewed documents and interviewed various port stakeholders from 17 major U.S. ports. Ports, particularly those impacted by the 2005 hurricane season, experienced many different kinds of challenges during recent natural disasters. Of the 17 U.S. ports that GAO reviewed, port officials identified communications, personnel, and interagency coordination as their biggest challenges. Many port authorities have taken steps to address these challenges. Individually, ports have created redundancy in communications systems and other backup equipment and updated their emergency plans. Collectively, the American Association of Port Authorities developed a best practices manual focused on port planning and recovery efforts, as well as lessons learned from recent natural disasters. Even ports that have not experienced problems as a result of recent disasters, but are nonetheless susceptible to disaster threats, have responded to lessons learned by other ports. Additionally, federal maritime agencies, such as the U.S. Coast Guard, the Maritime Administration, and the U.S. Army Corps of Engineers have increased their coordination and communication with ports to strengthen ports' ability to recover from future natural disasters and to build stakeholders' knowledge about federal resources for port recovery efforts. Most port authorities GAO reviewed conduct planning for natural disasters separately from planning for homeland security threats. Unlike security efforts, natural disaster planning is not subject to the same type of specific federal requirements and, therefore, varies from port to port. As a result of this divided approach, GAO found a wide variance in ports' natural disaster planning efforts including: (1) the level of participation in disaster forums, and (2) the level of information sharing among port stakeholders In the absence of appropriate forums and information sharing opportunities among ports, some ports GAO contacted were limited in their understanding of federal resources available for predisaster mitigation and postdisaster recovery. Other ports have begun using existing forums, such as their federally mandated Area Maritime Security Committee, to coordinate disaster planning efforts. Port and industry experts, as well as recent federal actions, are now encouraging an all-hazards approach to disaster planning and recovery. That is, disaster preparedness planning requires that all of the threats faced by the port, both natural (such as hurricanes) and man-made (such as terror events), be considered together. The Department of Homeland Security, which through the Coast Guard oversees the Area Maritime Security Committees, provides an example of how to incorporate a wider scope of activity for ports across the country. Additionally, the Maritime Administration should develop a communication strategy to inform ports of the maritime resources available for recovery efforts. Wed, 28 Mar 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07193.pdf Concerns about the safety and health of workers involved in the response to Hurricane Katrina included their exposure to contaminated floodwaters and injuries from working around debris. The Department of Labor's Occupational Safety and Health Administration (OSHA) is responsible for coordinating federal efforts to protect the safety and health of workers involved in the response to large national disasters. Under the Comptroller General's authority, GAO initiated a number of Katrina-related reviews. For this review, GAO examined (1) what is known about the number of response and recovery workers deployed to the Gulf Coast in response to Hurricane Katrina; (2) the extent to which OSHA tracked injuries and illnesses sustained by these workers; and (3) how well OSHA met the safety and health needs of workers. To address these issues, GAO reviewed reports; analyzed data; interviewed federal, state, and local officials; and conducted site visits. No one, including OSHA,was responsible for collecting information on the total number of response and recovery workers deployed to the Gulf Coast in response to Hurricane Katrina and no one collected it, but 10 federal agencies provided estimates showing that, on October 1, 2005, the agencies had about 49,000 federal workers in the Gulf Coast area. In addition, six of these agencies estimated that their contractors had about 5,100 workers in the area on December 1, 2005, but the other four either did not track the number of workers employed by their contractors or did not employ contractors. Although OSHA was responsible for tracking the injuries and illnesses that federal response and recovery workers sustained during the response to Hurricane Katrina, the agency's efforts to collect it were delayed and it was unable to collect usable information. According to OSHA, the Federal Emergency Management Agency (FEMA) must assign and fund specific responsibilities for each disaster. However, FEMA did not direct OSHA to collect injury and illness data until more than 3 weeks after the hurricane struck. OSHA attempted to collect the data, but the information federal agencies provided were incomplete and unreliable. OSHA and other agencies did track fatalities. They reported nine worker fatalities attributed to work-related accidents: three employees of federal contractors and six nonfederal workers or volunteers. OSHA provided assistance to many response and recovery workers who responded to Hurricane Katrina, but not all workers' safety and health needs were met. OSHA quickly established operations in the Gulf area; intervened in thousands of potentially hazardous situations; and assessed air, water, soil, and noise hazards at many work sites. However, disagreements between OSHA and FEMA about which agency was in charge of providing safety and health assistance to federal agencies and workers and how it would be provided delayed some of OSHA's efforts. Also, some agencies' lack of awareness about the role OSHA plays in a disaster further hindered its ability to provide assistance. As a result, OSHA did not fully meet workers' safety and health needs, particularly their need for training and protective equipment. OSHA also did not coordinate with the Department of Health and Human Services to ensure that workers had needed mental health services, and OSHA was not assigned responsibility for coordinating the needs of nonfederal workers, including state and local agency workers; many immigrants; and volunteers. Wed, 28 Mar 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07356.pdf In 1982, Congress enacted the Coastal Barrier Resources Act. The Coastal Barrier Resources Act, as amended (CBRA), designates 585 units of undeveloped coastal lands and aquatic habitat as the John H. Chafee Coastal Barrier Resources System (CBRS). CBRA prohibits most federal expenditures and assistance within the system that could encourage development, but it allows federal agencies to provide some types of assistance and issue certain regulatory permits. In 1992, GAO reported that development was occurring in the CBRS despite restrictions on federal assistance. GAO updated its 1992 report and reviewed the extent to which (1) development has occurred in CBRS units since their inclusion in the system and (2) federal financial assistance and permits have been provided to entities in CBRS units. GAO electronically mapped address data for structures within 91 randomly selected CBRS units and collected information on federal financial assistance and permits for eight federal agencies. An estimated 84 percent of CBRS units remain undeveloped, while 16 percent have experienced some level of development. About 13 percent of the developed units experienced minimal levels of development--typically consisting of less than 20 additional structures per unit since becoming part of the CBRS, and about 3 percent experienced significant development--consisting of 100 or more structures per unit--since becoming part of the CBRS. According to federal and local officials, CBRA has played little role in the extent of development within the CBRS units that we reviewed because they believe that other factors have been more important in inhibiting development. These include (1) the lack of suitably developable land in the unit; (2) the lack of accessibility to the unit; (3) state laws discouraging development within coastal areas; and (4) ownership of land within the unit by groups, such as the National Audubon Society, who are seeking to preserve its natural state. In units that GAO reviewed where development had occurred, federal and local officials also identified a number of factors that have contributed to development despite the unit's inclusion in the CBRS. These include (1) a combination of commercial interest and public desire to build in the unit, (2) local government support for development, and (3) the availability of affordable private flood insurance. Multiple federal agencies have provided some financial assistance to property owners in CBRS units that is expressly prohibited by CBRA; some assistance allowed under CBRA; and hundreds of permits for federally regulated development activities within the unit. Specifically, four agencies--the Department of Housing and Urban Development, the Department of Veterans Affairs, the Federal Emergency Management Agency, and the Small Business Administration--provided financial assistance, such as flood insurance and loan guarantees, totaling about $21 million that is prohibited by CBRA to property owners in CBRS units. Although most of these agencies had processes in place to prevent such assistance from being provided, they cited problems with inaccurate maps as being a key factor leading to these errors. With regard to financial assistance allowed by CBRA, GAO found that three federal agencies have provided such assistance but did not track how much assistance they provided, so the total extent of this assistance is unknown. With regard to permits issued in CBRS units for federally regulated activities, GAO identified hundreds of permits issued by the Army Corps of Engineers and state agencies authorized to issue permits on behalf of the Environmental Protection Agency. These permits covered various activities such as the construction of piers, the discharge of dredged or fill material into federally regulated waters, and permits associated with water discharges from construction sites or wastewater treatment systems. Mon, 19 Mar 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07285.pdf Weather-related events have cost the nation billions of dollars in damages over the past decade. Many of these losses are borne by private insurers and by two federal insurance programs--the National Flood Insurance Program (NFIP), which insures properties against flooding, and the Federal Crop Insurance Corporation (FCIC), which insures crops against drought or other weather disasters. GAO was asked to (1) describe how climate change may affect future weather-related losses, (2) determine past insured weather-related losses, and (3) determine what major private insurers and federal insurers are doing to prepare for potential increases in such losses. In response, among other things, GAO reviewed key scientific assessments; analyzed insured loss data; and contacted private insurers, NFIP, and FCIC. Key scientific assessments report that the effects of climate change on weather-related events and, subsequently, insured and uninsured losses, could be significant. The global average surface temperature has increased by 0.74 degrees Celsius over the past 100 years and climate models predict additional, perhaps accelerating, increases in temperature. The key assessments GAO reviewed generally found that rising temperatures are expected to increase the frequency and severity of damaging weather-related events, such as flooding or drought, although the timing and magnitude are as yet undetermined. Additional research on the effect of increasing temperatures on weather events is expected in the near future, including a highly anticipated assessment of the state of climate science this year. Taken together, private and federal insurers paid more than $320 billion in claims on weather-related losses from 1980 to 2005. Claims varied significantly from year to year--largely due to the effects of catastrophic weather events such as hurricanes and droughts--but have generally increased during this period. The growth in population in hazard-prone areas and resulting real estate development have generally increased liabilities for insurers, and have helped to explain the increase in losses. Due to these and other factors, federal insurers' exposure has grown substantially. Since 1980, NFIP's exposure quadrupled, nearing $1 trillion in 2005, and program expansion increased FCIC's exposure 26-fold to $44 billion. Major private and federal insurers are both exposed to the effects of climate change over coming decades, but are responding differently. Many large private insurers are incorporating climate change into their annual risk management practices, and some are addressing it strategically by assessing its potential long-term industry-wide impacts. The two major federal insurance programs, however, have done little to develop comparable information. GAO acknowledges that the federal insurance programs are not profit-oriented, like private insurers. Nonetheless, a strategic analysis of the potential implications of climate change for the major federal insurance programs would help the Congress manage an emerging high-risk area with significant implications for the nation's growing fiscal imbalance. Fri, 16 Mar 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07300.pdf The Federal Emergency Management Agency (FEMA) continues to respond to hurricanes Katrina and Rita. GAO's previous work identified suspected fraud, waste, and abuse resulting from control weaknesses associated with FEMA's Individuals and Households Program (IHP) and the Department of Homeland Security's (DHS) purchase card program. Congress asked GAO to follow up on this previous work to determine whether potentially improper and/or fraudulent payments continued to be made. GAO testified on the results of our audit and investigative efforts on December 6, 2006. This report summarizes the results of our follow-up work. In our December 6, 2006, testimony, GAO stated that FEMA made tens of millions of dollars of potentially improper and/or fraudulent payments associated with both hurricanes Katrina and Rita. These payments include $17 million in rental assistance paid to individuals to whom FEMA had already provided free housing through trailers or apartments. In one case, FEMA provided free housing to 10 individuals in apartments in Plano, Texas, while at the same time it sent these individuals $46,000 to cover out-of-pocket housing expenses. In addition, several of these individuals certified to FEMA that they needed rental assistance. FEMA made nearly $20 million in duplicate payments to thousands of individuals who claimed damages to the same property from both hurricanes Katrina and Rita. FEMA also made millions in potentially improper and/or fraudulent payments to nonqualified aliens who were not eligible for IHP. For example, FEMA paid at least $3 million to more than 500 ineligible foreign students at four universities in the affected areas. This amount likely understates the total payments to ineligible foreign students because it does not cover all colleges and universities in the area. FEMA also provided potentially improper and/or fraudulent IHP assistance to other ineligible non-U.S. residents, despite having documentation indicating their ineligibility. Finally, FEMA's difficulties in identifying and collecting improper payments further emphasized the importance of implementing an effective fraud, waste, and abuse prevention system. For example, GAO previously estimated improper and potentially fraudulent payments related to the IHP application process to be $1 billion through February 2006. As of November 2006, FEMA identified about $290 million in overpayments and collected about $7 million. Finally, GAO's work on DHS purchase cards showed continuing problems with property accountability, including items GAO investigated that could not be located 1 year after they were purchased. Thu, 15 Mar 2007 00:00:00 -0400 http://www.gao.gov/new.items/d07395t.pdf The Post-Katrina Emergency Management Reform Act of 2006 stipulates major changes to the Federal Emergency Management Agency (FEMA) within the Department of Homeland Security (DHS) to improve the agency's preparedness for and response to catastrophic disasters. For example, the act establishes a new mission for and new leadership positions within FEMA. As GAO has reported, DHS faces continued challenges, including clearly defining leadership roles and responsibilities, developing necessary disaster response capabilities, and establishing accountability systems to provide effective response while also protecting against waste, fraud, and abuse. This testimony discusses the extent to which DHS has taken steps to overcome these challenges This testimony summarizes earlier GAO work on: (1) leadership, response capabilities, and accountability controls; (2) organizational changes provided for in the Post-Katrina Reform Act; and (3) disaster management issues for continued Congressional attention. GAO reported in the aftermath of Hurricane Katrina that DHS needs to more effectively coordinate disaster preparedness, response, and recovery efforts. GAO analysis showed improvements were needed in leadership roles and responsibilities, development of necessary disaster capabilities, and accountability systems that balance the need for fast, flexible response with the need to prevent waste, fraud, and abuse. To facilitate rapid and effective decision making, legal authorities, roles and responsibilities, and lines of authority at all government levels must be clearly defined, effectively communicated, and well understood. Improved capabilities were needed for catastrophic disasters--particularly in the areas of (1) situational assessment and awareness; (2) emergency communications; (3) evacuations; (4) search and rescue; (5) logistics; and (6) mass care and sheltering. Effectively implementing the provisions of the Post-Katrina Reform Act will address many of these issues, and FEMA has initiated reviews and some actions in each of these areas. But their operational impact in a major disaster has not yet been tested. As a result of its body of work, GAO's recommendations included that DHS (1) rigorously re-test, train, and exercise its recent clarification of the roles, responsibilities, and lines of authority for all levels of leadership; (2) direct that more robust and detailed operational implementation plans support the National Response Plan (NRP); (3) provide guidance and direction for all planning, training, and exercises to ensure such activities fully support preparedness, response, and recovery responsibilities at a jurisdictional and regional basis; (4) take a lead in monitoring federal agencies' efforts to prepare to meet their responsibilities under the NRP and the interim National Preparedness Goal; and (5) use a risk management approach in making its investment decisions. We also recommended that Congress give federal agencies explicit authority to take action to prepare for all types of catastrophic disasters when there is warning. In his oversight letter to Congress, the Comptroller General suggested that one area needing fundamental reform and oversight is ensuring a strategic and integrated approach to prepare for, respond to, recover, and rebuild from catastrophic events. Congress may wish to consider several specific areas for immediate oversight. These include (1) evaluating development and implementation of the National Preparedness System, including preparedness for an influenza pandemic; (2) assessing state and local capabilities and the use of federal grants to enhance those capabilities; (3) examining regional and multi-state planning and preparation; (4) determining the status of preparedness exercises; and (5) examining DHS polices regarding oversight assistance. Fri, 09 Mar 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07205.pdf In response to Hurricane Katrina, the Departments of Homeland Security (DHS) and Defense (DOD), the General Services Administration (GSA), and the U.S. Army Corps of Engineers (Corps) were responsible for 94 percent of the federal funds awarded for relief efforts via contracting as of May 2006. This report, which GAO conducted under the Comptroller General's Authority, describes (1) the amounts that small businesses received from prime contracts with these agencies, (2) the extent of subcontracting, (3) and the extent to which Disadvantaged Business Enterprises (DBEs) received Department of Transportation funds for Katrina-related projects. In conducting this study, GAO analyzed agency contract data, reviewed federal acquisition regulations, and interviewed agency procurement officials. Small businesses received a total of 28 percent of the $11 billion in contracting dollars that DHS, GSA, DOD, and the Corps directly awarded in response to Hurricane Katrina. Local businesses of all sizes in Alabama, Louisiana, and Mississippi received 18 percent, or $1.9 billion of these funds. Small businesses received 66 percent of the $1.9 billion awarded in these states. Required information on small business subcontracting is not consistently available in official procurement data systems for the four agencies. The systems had no information on whether DHS or GSA required subcontracting plans for 70 percent or more of their contracting funds. In addition, when data showed agencies determined that the plans were not required, the four agencies often did not document a reason for their determinations, even though federal rules require such documentation when prime contracts meet criteria for having these plans. Incomplete information about subcontracting limits determining the extent to which agencies complied with contracting rules and gave small businesses maximum opportunities to win subcontracts. DBEs were awarded about 4 percent, or about $53 million, of the almost $1.3 billion the Department of Transportation's Federal Highway Administration funded for Katrina-related contracts in Alabama, Louisiana, and Mississippi between August 1, 2005, and June 30, 2006. These contracts were awarded by the three state departments of transportation. DBEs also received about 10 percent of $24 million that airports in the three states awarded using Federal Aviation Administration funds for Katrina-related contracts. Thu, 01 Mar 2007 00:00:00 -0500 http://www.gao.gov/new.items/d0788.pdf In 2005, Hurricanes Katrina and Rita destroyed thousands of homes and displaced over 1 million people. In light of widespread Congressional and public interest in U.S. agencies' performance in assisting hurricane victims, GAO initiated work under the Comptroller General's authority to examine federal housing assistance. Specifically, this report examines (1) the extent to which the National Response Plan (NRP) clearly described the responsibilities and capabilities of federal agencies and the Red Cross; (2) the extent to which these organizations had plans for providing sheltering and housing assistance; and (3) the perceptions of victims and others regarding the assistance needed and provided. GAO reviewed the NRP and related documents, interviewed Red Cross and federal agency officials and a limited number of storm victims, and convened a group of experts to discuss these issues. In general, the NRP, including its annex covering sheltering and temporary housing (emergency support function no. 6 or ESF-6) clearly described the overall responsibilities of the two primary agencies--the Red Cross and the Federal Emergency Management Agency (FEMA). However, the responsibilities described for the support agencies--the Departments of Agriculture (USDA), Defense, Housing and Urban Development (HUD), Treasury, and Veterans Affairs (VA)--did not, and still do not, fully reflect their capabilities. For example, USDA provided temporary housing for victims, and Treasury acted to make available vacant rental units subsidized through a tax program, but the ESF-6 annex did not reflect these capabilities. Further, the support agencies had not, and have not yet, developed fact sheets laying out their roles and responsibilities, notification and activation procedures, and agency specific authorities, as called for by ESF-6 operating procedures. FEMA's ability to effectively coordinate federal housing assistance was limited because the agency was not aware of the support agencies' full capabilities. The Red Cross and federal agencies generally lacked plans for providing shelter and temporary housing in response to catastrophic disasters such as Hurricanes Katrina and Rita but have since taken some steps to improve their response capabilities. Some ESF-6 support agencies had not developed operational plans for meeting their ESF-6 responsibilities, and while they were ultimately able to contribute much-needed assistance, it was not as timely as it might have been. For example, HUD and VA worked out agreements with FEMA after the storms to provide vacant properties, but it took several months before some were available to victims. HUD, USDA, and VA have formed an informal working group to work out procedural details for providing housing assistance, in order to avoid the need to do so after a disaster event. However, this group is not intended to address the full range of these agencies' responsibilities under ESF-6, and does not have a specific timetable for its activities. The specific needs of victims and their perceptions of the assistance that was provided varied, depending in part on circumstances such as where they were located after the disaster, whether they were homeowners or renters, and whether they had special needs. Most victims were eligible for some form of federal temporary housing assistance--such as rental assistance or a travel trailer--and those we contacted had mixed perceptions of the assistance they received. Our interviews with victims, as well as our expert group, indicate that temporary housing needs include not just shelter, but also access to medical facilities, public transportation, schools, employment opportunities, and other social services--and, particularly for those displaced to distant locations, information about all of these things. Legislation enacted in October 2006 requires a strategy that is to address a number of these ancillary needs for victims of future catastrophic disasters, and FEMA has initiated this effort. Wed, 28 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07357.pdf In December 2004, an earthquake caused a tsunami that devastated several countries in the Indian Ocean region. In May 2005, Congress appropriated $908 million in aid, of which the U.S. Agency for International Development (USAID) is implementing $482 million in recovery projects in many affected countries, including Indonesia and Sri Lanka. This report examines (1) the progress of USAID's program; (2) USAID's financial and technical oversight of its efforts, and risks it faces; and (3) actions taken by the Secretary of State in response to an April 2006 GAO recommendation. Specifically, GAO recommended that State, in its required reports to Congress, provide updated cost estimates and schedules and show the need for additional funding sources, if necessary. GAO examined USAID's signature projects in both countries; reviewed project documents and periodic reports, interviewed USAID officials, and visited project sites in August and October 2006. Although both of its signature projects--one in Indonesia and one in Sri Lanka--are under way, USAID has increased initial cost estimates, reduced or canceled some project activities, and may extend completion dates. As of December 31, 2006, USAID had obligated $140 million (46 percent) and expended $20 million (7 percent) of the $302 million it budgeted for the two signature projects, which consist of the construction of a major road in Indonesia and construction of a bridge and other infrastructure in Sri Lanka. In Indonesia, based on GAO's analysis, estimated construction cost per mile increased by 75 percent--from $1.6 million to $2.7 million; USAID reduced the length of road to be built by over one third--from 150 miles to 91 miles; and the agency may extend the planned completion date to February 2010--5 months later than initially planned. As of January 2007, construction had begun to build 26 miles of road, but USAID had not awarded a contract for construction of the remainder of the road and the government of Indonesia had acquired less than one-fourth of the nearly 3,700 parcels of land needed. In Sri Lanka, USAID increased the estimated costs for its signature project by nearly 40 percent--from $35 million to $48 million. USAID has taken steps to address some difficulties in both countries but continues to face risks that it may not complete the signature projects within cost and schedule estimates, and without reducing the projects' scope, as planned. USAID is carrying out measures that it previously established for financial oversight of reconstruction in Indonesia and Sri Lanka and has taken steps to enhance its technical oversight capacity. For example, USAID is conducting additional concurrent audits of its signature road construction project in Aceh Province, Indonesia, to address concerns about corruption, potential misuse of funds, and completing projects on schedule. To ensure technical oversight, USAID added experienced staff in both countries and acquired additional engineering services through the U.S. Army Corps of Engineers. However, when it began its tsunami assistance programs in early 2005, USAID lacked disaster recovery guidance, including lessons learned from prior disaster reconstruction efforts. These lessons include setting appropriate time frames, conducting thorough cost assessments, and understanding local land tenure systems. USAID continues to face several risks, such as rising costs and delays in land acquisition, that could affect its successful completion of signature projects in Indonesia and Sri Lanka as planned. In response to GAO's April 2006 recommendation, the Secretary of State agreed to provide updated cost estimates and schedules in its required semiannual report. However, State's two reports submitted since GAO made its recommendation show USAID obligations to recipient countries rather than amounts obligated to organizations implementing project activities (in USAID's terminology, "subobligations"). The current reported obligations do not clearly reflect USAID's progress and the reports do not include some risk information and a mitigation strategy for addressing the risks. Wed, 28 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d0767.pdf In February 2006, the Deficit Reduction Act of 2005 (DRA) appropriated $2 billion for certain health care costs related to Hurricane Katrina through Medicaid and the State Children's Health Insurance Program (SCHIP). The Centers for Medicare & Medicaid Services (CMS) was charged with allocating the $2 billion in funding to states directly affected by the hurricane or that hosted evacuees. GAO performed this work under the Comptroller General's statutory authority to conduct evaluations on his own initiative. In this report, GAO examined: (1) how CMS allocated the DRA funds to states, (2) the extent to which states have used DRA funds, and (3) whether selected states--Alabama, Louisiana, Mississippi, and Texas--anticipate the need for additional funds after DRA funds are expended. To conduct this review, GAO reviewed CMS's allocations of DRA funds to all eligible states, focusing in particular on the four selected states that had the highest initial allocation (released by CMS on March 29, 2006). GAO obtained data from Medicaid offices in the four selected states regarding their experiences enrolling individuals, providing services, and submitting claims; collected state Medicaid enrollment data; and analyzed DRA expenditure data that states submitted to CMS. As of September 30, 2006, CMS allocated $1.9 billion of the $2 billion in DRA funding to states. CMS allocated funds to: Category I--the nonfederal share of expenditures for time-limited Medicaid and SCHIP services for eligible individuals affected by the hurricane (32 states); Category II--expenditures for time-limited uncompensated care services for individuals without a method of payment or insurance (8 of the 32 states); and Category III--the nonfederal share of expenditures for existing Medicaid and SCHIP beneficiaries (Alabama, Louisiana, and Mississippi). CMS did not allocate funds to Category IV--for restoration of access to health care. After CMS reconciles states' expenditures with allocations, it will determine how to allocate the unallocated $136 million and unexpended funds from the $1.9 billion allocated to states. Of the $1.9 billion in allocated DRA funds, almost two-thirds of the 32 states that received these funds submitted claims totaling about $1 billion as of October 2, 2006. Claims from Alabama, Louisiana, and Mississippi for Category III accounted for about 85 percent of all claims filed. These initial results are likely to change as states continue to file claims for services. Of the four selected states, Louisiana and Texas raised concerns about their ability to meet future health care needs once the DRA funds are expended. Louisiana's concerns involved managing its Medicaid program across state borders as those who left the state remain eligible for the program. Texas was significantly affected by the number of evacuees seeking services, thus raising concerns among state officials about the state's future funding needs. CMS, Alabama, Louisiana, and Texas commented on a draft of this report. CMS suggested the report clarify the DRA funding categories, reallocation process, and communication strategy with states, especially Louisiana. Louisiana and Texas commented on their ongoing challenges, and Alabama provided technical comments. The report was revised as appropriate. Wed, 28 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07245.pdf Since 1972, Congress has authorized $100 million a year for highway disaster recovery needs through the Federal Highway Administration's (FHWA) Emergency Relief (ER) program. Increasingly, the program's actual costs have exceeded this amount, and Congress has provided additional funding. Because of this fiscal imbalance between program funding and program needs, we reviewed ER under the Comptroller General's authority to determine the (1) total funding, distribution of funds among the states, and disaster events funded; (2) sources of funding provided and financial challenges facing the program; and (3) scope of activities eligible for funding and how the scope of eligible activities has changed in recent years. GAO's study is based on financial data, document analysis, stakeholder interviews, and site visits, among other methods. During the 10-year period of 1997 to 2006, ER provided about $8 billion to states, the District of Columbia, Puerto Rico, American territories, and federal agencies, a total of 56 states and other jurisdictions. About 70 percent of these funds has gone to 5 states--California, Florida, Louisiana, Mississippi, and New York--that have been especially affected by major disaster events, such as Hurricane Katrina. Since 1990, 86 percent of the ER program has been funded through supplemental appropriations as the program's annual demands have exceeded the $100 million annual authorization. Even excluding extraordinary disasters, those exceeding $100 million in eligible damage per event, the program still needed $271 million per year for smaller eligible events. Meanwhile, the program has been authorized at a constant $100 million level since 1972, resulting in the current authorization being worth about one-fourth the authorization level of 1972. Until Hurricane Katrina, Congress funded extraordinary disasters through the Highway Trust Fund, but with Trust Fund balances dwindling, in 2005, Congress designated the General Fund as the source of future ER supplemental funding. But the nation faces a pending fiscal crisis, raising concerns about future use of the General Fund and financial sustainability of the ER program. Despite funding concerns, FHWA does not routinely recapture unused program funds by reviewing the program's state balances to identify potentially unneeded funds. GAO also identified $62 million in potentially unneeded statutory allocations from past disasters that could be recaptured. Activities eligible for ER funding include the repair or reconstruction of highways and roads that are supported by the Federal-aid Highway program, and of roads on federal lands that have suffered serious damage from natural disasters or catastrophic failures due to external causes. ER funds are not intended to replace other federal-aid, state, or local funds to increase capacity, correct nondisaster-related deficiencies, or make other improvements. However, contributing to future financial sustainability concerns is the fact that the scope of eligible activities funded by the ER program has expanded in recent years with congressional or FHWA waivers of eligibility criteria or changes in definitions. As a result, some projects have been funded that go beyond repairing or restoring highways to predisaster conditions--such as the $441 million Devil's Slide project and $811 million I-880 project in California--projects that grew in scope and cost to address environmental and community concerns. Also, Congress and FHWA have expanded eligibility to allow additional types of work, such as a gradual flooding of a lake basin, to be funded. Congress has also directed that in some cases the program fully fund projects rather than requiring a state match. Finally, varying interpretations of what constitutes a damage site have led to inconsistencies across states in FHWA's application of ER eligibility standards. Fri, 23 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07484t.pdf 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. Wed, 14 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07114.pdf The Small Business Administration (SBA) is the federal government's primary provider of disaster loans to businesses, homeowners, and renters. In a previous report (GAO- 06-860), GAO found that SBA's limited information systems planning contributed to delays in processing disaster loans for the victims of the 2005 Gulf Coast Hurricanes (Katrina, Rita, and Wilma). To provide further insight into how SBA's disaster preparedness could be enhanced, this second report, initiated under the Comptroller General's authority, assesses other logistical issues (e.g., staffing and space acquisition) that may have affected the efficiency of the agency's response to the hurricanes. Specifically, this report (1) assesses SBA's logistical planning efforts prior to the Gulf Coast hurricanes and current planning efforts and (2) discusses SBA's outreach services to hurricane victims. GAO reviewed disaster planning reports, interviewed SBA officials, and visited the Gulf Coast region. SBA engaged in limited logistical disaster planning prior to the Gulf Coast hurricanes, which, in retrospect, likely contributed to the initial challenges that the agency faced in processing the related surge in disaster loan applications on a timely basis. GAO reports, reports by other investigative agencies, and disaster management experts have stated that comprehensive planning and the supplementary use of sophisticated techniques (e.g., simulations of varying disaster scenarios) can help organizations prepare for potential disasters and mitigate their effects. However, SBA did not engage in or complete comprehensive disaster plans prior to the Gulf Coast hurricanes, in part, due to the view by headquarters agency officials that such planning yielded limited benefits and that local agency officials were in the best position to estimate logistical requirements. With better planning, available evidence suggests the agency could have been better positioned to provide initial disaster assistance to hurricane victims in an organized and efficient manner. In particular, SBA faced challenges in training and supervising thousands of temporary employees hired to process loan applications, had not taken steps to help ensure additional trained staff would be available, and encountered difficulties in obtaining suitable office space for the expanded workforce. In the wake of the Gulf Coast hurricanes, SBA officials said that they recognized the importance of disaster planning and have initiated a planning process designed to address key areas, which includes cross-training other agency staff to provide disaster assistance and recruiting and training a reserve of potential temporary employees. SBA has also taken steps to expedite the process for disbursing approved disaster loans. However, GAO continues to have concerns about several limitations in SBA's current planning process, including the lack of a timetable for competing key elements of its disaster management plan and the fact that the agency has not assessed whether its disaster plan would benefit from the supplemental use of disaster simulations or catastrophe models. SBA took a variety of steps under trying conditions to inform victims of the Gulf Coast hurricanes about its assistance programs, but several factors may have limited the effectiveness of these outreach efforts. SBA staff members reached out to disaster victims by speaking at about 600 organized events and advertising. However, the effectiveness of SBA's outreach efforts may have been reduced by, among other things, both the extensive damage and victim relocations associated with the hurricanes. According to SBA officials, the agency has initiated an internal review of the outreach that it provided to victims of the Gulf Coast hurricanes and is developing a plan to better provide such outreach in future disasters. Wed, 14 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07219.pdf Hurricanes Katrina and Rita displaced over 1 million people and affected some of the poorest areas of the country. Many of those affected by the hurricanes received federal assistance from the Old Age, Survivors, and Disability Insurance (Social Security), Supplemental Security Income (SSI), Food Stamp, Unemployment Insurance (UI), and Temporary Assistance for Needy Families (TANF) programs beforehand and others were newly eligible after the storms. Under the Comptroller General's authority, GAO assessed the (1) challenges the hurricanes created for programs to take applications and pay benefits, (2) factors that helped or hindered programs' efforts, and (3) areas that warrant further attention and actions being taken to improve programs' disaster response. To do this work, GAO reviewed policies, reports, and plans, and interviewed program officials at the federal level and in Alabama, Florida, Louisiana, Mississippi, and Texas. The mass destruction and displacement of people caused by the hurricanes created new challenges, including an unprecedented demand for services from these five programs. The demand for food stamps and UI benefits, and the disaster assistance they provide, rose sharply. New evacuee policies were created to provide food stamps and TANF assistance to evacuees nationwide. In contrast, Social Security and SSI had a significant increase for replacement benefits, but did not have a large increase in new applications. Disaster plans, flexible service delivery options, and access to contingency funding facilitated response, but not all programs had these elements in place. The federally administered Social Security and SSI programs had service delivery disaster plans in place to meet demand. However, such strategies were sometimes lacking for the state-administered Food Stamp, UI, and TANF programs. Flexible service delivery options such as 800 numbers and Internet application services and debit cards for issuing benefits expedited services. Last, access to contingency funding was key to facilitating disaster response. Gaps remain in preventing improper payments, easing access to services, and improving disaster planning for the state-administered programs, although new efforts hold potential for addressing these areas. Some program officials said they relaxed program rules to better ensure that those in need received aid, which may have increased the risk of improper payments. Program officials are taking actions to address improper payments, although more sharing of information across programs and states would be useful. Regarding access to services, disaster victims sometimes faced difficulties accessing aid from multiple programs, a long-standing problem exacerbated by a disaster. The Department of Health and Human Services (HHS) has begun a promising effort--with links to state program administrators--to improve delivery of human services during disasters. This effort would be strengthened by additional actions, including collecting and disseminating information on service delivery and improper payments during disasters. Finally, to address planning gaps, federal officials are working with states to improve service delivery planning for the Food Stamp and UI programs, although HHS needs to work more systematically with states to assess the need for additional planning for state TANF programs. Wed, 07 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07452t.pdf The Department of Homeland Security (DHS) plays a key role in leading and coordinating--with stakeholders in the federal, state, local, and private sectors--the nation's homeland security efforts. GAO has conducted numerous reviews of DHS management functions as well as programs including transportation and border security, immigration enforcement and service delivery, and disaster preparation and response. This testimony addresses: (1) why GAO designated DHS's implementation and transformation as a high-risk area, (2) management challenges facing DHS, (3) programmatic challenges facing DHS, and (4) actions DHS should take to strengthen its implementation and transformation efforts. GAO designated implementing and transforming DHS as high risk in 2003 because DHS had to transform 22 agencies--several with existing program and management challenges--into one department, and failure to effectively address its challenges could have serious consequences for our homeland security. Despite some progress, this transformation remains high risk. Managing the transformation of an organization of the size and complexity of DHS requires comprehensive planning and integration of key management functions. DHS has made some progress in these areas, but much additional work is required to help ensure success. While DHS has developed a strategic plan, the plan does not link resource requirements to goals and objectives, and its creation did not involve key stakeholders to ensure resource investments target the highest priorities. DHS has also issued guidance and plans to assist management integration on a function by function basis, but lacks a comprehensive management integration strategy with overall goals, a timeline, and a dedicated team to support its integration efforts. The latest independent audit of DHS's financial statements revealed 10 material internal control weaknesses and confirmed that DHS's financial management systems still do not conform to federal requirements. DHS has also not institutionalized an effective strategic framework for information management, and its human capital--the centerpiece of its transformation efforts--and acquisition systems will require continued attention to ensure that DHS allocates its resources efficiently and effectively. Since GAO's January 2005 high-risk update, DHS has taken actions to strengthen program activities. However, DHS continues to face programmatic and partnering challenges. To help ensure that its missions are achieved, DHS must overcome continued challenges related to cargo, transportation, and border security; systematic visitor tracking; efforts to combat the employment of illegal aliens; and outdated Coast Guard asset capabilities. Further, DHS and the Federal Emergency Management Agency need to continue to develop clearly defined leadership roles and responsibilities; necessary disaster response capabilities; accountability systems to provide effective services while protecting against waste, fraud, and abuse; and the ability to conduct advanced contracting for goods and services necessary for emergency response. DHS has not produced a final corrective action plan specifying how it will address its existing management challenges. Such a plan should define the root causes of known problems, identify effective solutions, have management support, and provide for substantially completing corrective measures in the near term. It should also include performance metrics and milestones, as well as mechanisms to monitor progress. It will also be important for DHS to become more transparent and minimize recurring delays in providing access to information on its programs and operations so that Congress, GAO, and others can independently assess its efforts. Wed, 07 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07398t.pdf The Department of Homeland Security (DHS) plays a key role in leading and coordinating--with stakeholders in the federal, state, local, and private sectors--the nation's homeland security efforts. GAO has conducted numerous reviews of DHS management functions as well as programs including transportation and border security, immigration enforcement and service delivery, and disaster preparation and response. This testimony addresses why GAO designated DHS's implementation and transformation as a high-risk area, management challenges facing DHS, programmatic challenges facing DHS, and actions DHS should take to strengthen its implementation and transformation efforts. GAO designated implementing and transforming DHS as high risk in 2003 because DHS had to transform 22 agencies--several with existing program and management challenges--into one department, and failure to effectively address its challenges could have serious consequences for our homeland security. Despite some progress, this transformation remains high risk. Managing the transformation of an organization of the size and complexity of DHS requires comprehensive planning and integration of key management functions. DHS has made some progress in these areas, but much additional work is required to help ensure success. While DHS has developed a strategic plan, the plan does not link resource requirements to goals and objectives, and its creation did not involve key stakeholders to ensure resource investments target the highest priorities. DHS has also issued guidance and plans to assist management integration on a function by function basis, but lacks a comprehensive management integration strategy with overall goals, a timeline, and a dedicated team to support its integration efforts. The latest independent audit of DHS's financial statements revealed 10 material internal control weaknesses and confirmed that DHS's financial management systems still do not conform to federal requirements. DHS has also not institutionalized an effective strategic framework for information management, and its human capital--the centerpiece of its transformation efforts--and acquisition systems will require continued attention to ensure that DHS allocates its resources efficiently and effectively. Since GAO's January 2005 high-risk update, DHS has taken actions to strengthen program activities. However, DHS continues to face programmatic and partnering challenges. To help ensure that its missions are achieved, DHS must overcome continued challenges related to cargo, transportation, and border security; systematic visitor tracking; efforts to combat the employment of illegal aliens; and outdated Coast Guard asset capabilities. Further, DHS and the Federal Emergency Management Agency need to continue to develop clearly defined leadership roles and responsibilities; necessary disaster response capabilities; accountability systems to provide effective services while protecting against waste, fraud, and abuse; and the ability to conduct advanced contracting for goods and services necessary for emergency response. DHS has not produced a final corrective action plan specifying how it will address its existing management challenges. Such a plan should define the root causes of known problems, identify effective solutions, have management support, and provide for substantially completing corrective measures in the near term. It should also include performance metrics and milestones, as well as mechanisms to monitor progress. It will also be important for DHS to become more transparent and minimize recurring delays in providing access to information on its programs and operations so that Congress, GAO, and others can independently assess its efforts. Tue, 06 Feb 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07427t.pdf Over the past two decades, the number of acres burned by wildland fires has increased, often threatening human lives, property, and ecosystems. The cost of responding to wildland fires has also grown, especially as more homes are built in or near wildlands, an area called the wildland-urban interface. Past management practices, including a concerted federal policy in the 20th century of suppressing fires to protect communities and ecosystems, unintentionally resulted in steady accumulation of dense vegetation that can fuel large, intense, and often costly wildland fires. GAO was asked to identify actions that federal wildland fire agencies need to take to help contain federal wildland fire expenditures. GAO has identified these actions in three of its reports addressing fuel reduction and cost-sharing efforts and as part of an ongoing review of federal agencies' efforts to contain wildland fire preparedness and suppression costs for this committee. Specifically, GAO focused on examining agencies' efforts to (1) reduce accumulated fuels and address wildland fire problems, (2) share with nonfederal entities the costs of responding to multijurisdictional fires, and (3) contain the costs of preparing for and responding to wildland fires. Over the past 7 years, GAO has recommended a number of actions federal wildland fire agencies should take to improve their management of wildland fire activities, actions that could also help contain the rising federal expenditures for responding to wildland fires. These agencies--the Forest Service within the Department of Agriculture and land management agencies within the Department of the Interior--concurred with GAO's recommendations but have not completed, or in some cases have not yet begun, needed actions. GAO's ongoing review of federal agencies' efforts to contain wildland fire preparedness and suppression costs has also identified other actions that may be needed. Specifically, the agencies need to: (1) Develop a cohesive strategy that identifies the options and associated funding to reduce fuels and address wildland fire problems. In 1999, to address the problem of excess fuels and their potential to increase the severity of wildland fires and the cost of suppression efforts, GAO recommended that a cohesive strategy be developed that identified the available long-term options and associated funding for reducing these fuels. In 2005 and 2006, because the agencies had not yet developed one, GAO reiterated the need for such a strategy but broadened its focus to better address the interrelated nature of fuel reduction efforts and wildland fire response. GAO also recommended that, as an interim step, the agencies develop a tactical plan outlining the steps and time frames needed for completing a cohesive strategy. As of January 2007, the agencies had not developed either a cohesive strategy or a tactical plan. (2) Clarify their guidance for sharing wildland fire suppression costs with nonfederal entities. In 2006, to address the rising costs of responding to fires that threaten both federal and nonfederal lands and resources, GAO recommended that the federal agencies provide more specific guidance as to when particular cost-sharing methods should be used. The cost-sharing method used can have significant financial consequences for the entities involved--potentially amounting to millions of dollars. As of January 2007, the agencies were updating their guidance on possible cost-sharing methods and when each typically would be used, but it is unclear how the agencies will ensure that the guidance is followed. (3) Establish clear goals, strategies, and performance measures to help contain wildland fire costs. Preliminary findings from GAO's ongoing work indicate that the effectiveness of agencies' efforts to contain costs may be limited because the agencies have not clearly defined their cost-containment goals, developed a strategy for achieving those goals, or developed related performance measures. For these efforts to be effective, the agencies need to integrate cost-containment goals with the other goals of the wildland fire program--such as protecting life and property--and to recognize that trade-offs will be needed to meet desired goals within the context of fiscal constraints. Tue, 30 Jan 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07418t.pdf Hurricanes Katrina and Rita destroyed homes and displaced millions of individuals. While federal and state governments continue to respond to this disaster, GAO has identified significant control weaknesses--specifically in the Federal Emergency Management Agency (FEMA)'s Individuals and Households Program (IHP) and in Department of Homeland Security (DHS)'s purchase card program--resulting in significant fraud, waste, and abuse. In response to the numerous recommendations GAO made, DHS and FEMA have reported on numerous actions taken to address our recommendations. Lessons learned from GAO's prior work can serve as a framework for an effective fraud prevention system for federal and state governments as they consider spending billions more on disaster recovery. These lessons are particularly important because funding that is lost to fraud, waste, and abuse reduces the amount of money that could be delivered to victims in need. Today's testimony will (1) describe key findings from past GAO work and (2) use the results from that work and GAO's other experiences to discuss the importance of an effective fraud, waste and abuse prevention program. Prior GAO audit and investigative work on FEMA's controls over IHP payments and DHS's controls over purchase cards emphasizes one fundamental concept--that fraud prevention is the most effective and efficient means of minimizing fraud, waste, and abuse. GAO estimates that FEMA made about 16 percent or almost $1 billion dollars in improper and potentially fraudulent IHP payments to registrants who applied using invalid information, illustrating what can happen when fraud prevention controls are ineffective. For example, GAO found that FEMA made payments based on bogus damaged addresses, false identities, and identities belonging to federal and state prisoners. These findings highlight the need for effective controls over all types of recovery disbursements. With effective planning, relief agencies should not have to make a choice between speedy delivery of disaster recovery assistance and effective fraud prevention. Finally, GAO's findings of significant control weaknesses in DHS's purchase card program leading to fraud, waste, and abuse further underline the need for an effective framework for fraud prevention, monitoring, and detection. Our work on disaster assistance programs in particular show that preventive controls should be designed to include, at a minimum, a requirement that data used in decision making is validated against other government or third-party sources to determine accuracy. Inspections and physical validation should also be conducted whenever possible to confirm information prior to payment. System edit checks should also be used to identify problems before payments are made. Finally, providing training on fraud awareness is important in stopping fraud before it gets into any type of recovery program. Fraud detection and monitoring is also critical, although more costly and less effective than preventive controls. Key elements of detection include data mining for fraudulent information and performing reviews to establish the accountability of property and funds. The final element of a fraud prevention program is the collection of identified improper payments and the aggressive investigation and prosecution of individuals who commit fraud as a preventive measure for future disasters. These elements are most costly, and collecting money after it has been disbursed is far less effective than up front prevention--FEMA has collected only $7 million of the estimated $1 billion in potential improper and fraudulent IHP payments. Mon, 29 Jan 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07139.pdf Much of the Federal Emergency Management Agency's (FEMA) funding is provided in supplemental appropriations when a disaster is declared, but funds to staff, manage, and operate other FEMA programs and underlying support functions--what GAO refers to as its day-to-day operations--compete with other Department of Homeland Security (DHS) and federal priorities for limited resources. In this environment, FEMA must strategically plan for and manage its day-to-day operations to ensure they efficiently and effectively support the agency's disaster relief mission. To analyze this issue, GAO examined resource trends and management related to FEMA's day-to-day operations from fiscal year 2001 through fiscal year 2005. FEMA experienced near-constant organizational change from fiscal years 2001 through 2005 that caused considerable flux in FEMA's resources. During this period, the most significant change occurred in March 2003 when FEMA transitioned from an independent agency to a component of the newly created DHS. From the beginning of fiscal year 2003 through fiscal year 2005, a significant number of programs and their associated funding moved into and out of FEMA. Although the amounts nearly balanced, the movement was disruptive to operations and created uncertainty about the availability of resources. FEMA also contributed to DHS start-up costs and ongoing expenses, which reduced funds available for FEMA's operating expenses. Though FEMA would have incurred some of these costs as an independent agency, evidence suggests that FEMA may have been assessed a disproportionate amount relative to several larger DHS entities. While all of this affected resources for FEMA's day-to-day operations, the extent cannot be fully understood because FEMA does not have adequate information on how resources are aligned with those operations. Such information could be used to improve planning and management and provide greater accountability to Congress and the public. Although these shifting resources created challenges, the way FEMA managed its existing resources compounded problems. Notably, FEMA lacks a strategic workforce plan and related human capital strategies--such as succession planning or a coordinated training effort--which are integral to managing resources. They enable an agency to define staffing levels, identify the critical skills needed to achieve its mission, and eliminate or mitigate gaps between current and future skills and competencies. FEMA also lacks business continuity plans for its day-to-day operations, which puts support for the disaster-relief mission at increased risk. Even FEMA staff's strong sense of mission is no substitute for a plan and strategies for action. Fri, 19 Jan 2007 00:00:00 -0500 http://www.gao.gov/new.items/d07363r.pdf On December 6, 2006, GAO testified before the Senate Committee on Homeland Security and Governmental Affairs on the results of our audit and investigation of hurricanes Katrina and Rita disaster relief efforts. This letter provides our response to Congress's supplemental question for the record. The testimony indicated that the Federal Emergency Management Agency (FEMA) distributed $20 million under the Individuals and Household Program to individuals who claimed damages for both Hurricane Katrina and Hurricane Rita. Congress asked whether it was our conclusion that the entire $20 million was paid improperly or was the $20 million the amount that potentially was paid improperly. Congress also asked whether we investigated each payment comprising the total $20 million. In December, we testified that about 7,600 individuals submitted duplicate registrations for disaster relief using the same social security numbers and damaged property addresses--once for Hurricane Katrina and once for Hurricane Rita. Through data mining we identified that FEMA paid those individuals nearly $20 million in potentially improper and/or fraudulent payments based on duplicate registrations for the same damaged address. We did not conduct investigations of all payments associated with the approximately 7,600 individuals who submitted disaster relief registrations for both hurricanes. Such investigations would be necessary to determine the extent to which the apparent duplicate payments identified through our data mining represented potentially improper and or fraudulent payments. However, we did select 12 registrations made by 6 individuals for further investigations. Based on those investigations we found that FEMA made duplicate payments to all 6 individuals for damage to the same residence for both hurricanes. For example, in one case the same individual received two payments of $10,500 each to replace the same house, once for Hurricane Katrina and once for Hurricane Rita. It is important to note that our estimate of potentially improper and/or fraudulent assistance payments associated with hurricanes Katrina and Rita is likely understated because it included only those registrations containing the same social security number and damaged address. Our $20 million estimate would be understated to the extent to which there are any duplicate payments made to members of the same household using different social security numbers. According to FEMA, in most cases, payments made as a result of these registrations would also be duplicate-and therefore potentially improper and/or fraudulent-because their policy states households are entitled to one payment for the same damage and/or need. Finally, as we stated in December, the problems we identified in our December testimony, and those that we identified in our earlier testimonies, further emphasize the need for FEMA to put preventive controls in place to minimize fraudulent and improper payments, and to reduce the need for collection actions after the fact. Fri, 12 Jan 2007 00:00:00 -0500 http://www.gao.gov/new.items/d0744.pdf During the evacuation of New Orleans in response to Hurricane Katrina in 2005, many of those who did not own a vehicle and could not evacuate were among the over 1,300 people who died. This raised questions about how well state and local governments, primarily responsible for disaster planning, integrate transportation-disadvantaged populations into such planning. GAO assessed the challenges and barriers state and local officials face; how prepared these governments are and steps they are taking to address challenges and barriers; and federal efforts to provide evacuation assistance. GAO reviewed evacuation plans; Department of Homeland Security (DHS), Department of Transportation (DOT), and other studies; and interviewed officials in five major city and four state governments. State and local governments face evacuation challenges in identifying and locating transportation-disadvantaged populations, determining their needs, and providing for their transportation. These populations are diverse and constantly changing, and information on their location is often not readily available. In addition, these populations' evacuation needs vary widely; some require basic transportation while others need accessible equipment, such as buses with chair lifts. Legal and social barriers impede addressing these evacuation challenges. For example, transportation providers may be unwilling to provide evacuation assistance because of liability concerns. State and local governments are generally not well prepared--in terms of planning, training, and conducting exercises--to evacuate transportation-disadvantaged populations, but some have begun to address challenges and barriers. For example, DHS reported in June 2006 that only about 10 percent of state and about 12 percent of urban area emergency plans it reviewed adequately addressed evacuating these populations. Furthermore, in one of five major cities GAO visited, officials believed that few residents would require evacuation assistance despite the U.S. Census reporting 16.5 percent of car-less households in that major city. DHS also found that most states and urban areas significantly underestimated the advance planning and coordination required to effectively address the needs of persons with disabilities. Steps being taken by some such governments include collaboration with social service and transportation providers and transportation planning organizations--some of which are DOT grantees and stakeholders--to determine transportation needs and develop agreements for emergency use of drivers and vehicles. The federal government provides evacuation assistance to state and local governments, but gaps in this assistance have hindered many of these governments' ability to sufficiently prepare for evacuations. This includes the lack of any specific requirement to plan, train, and conduct exercises for the evacuation of transportation-disadvantaged populations as well as gaps in the usefulness of DHS's guidance. Although federal law requires that state and local governments with mass evacuation plans incorporate special needs populations into their plans, this requirement does not necessarily ensure the incorporation of all transportation-disadvantaged populations. Additionally, while DHS has made improvements to an online portal for sharing related information, this information remains difficult to access because of poor search and organizational functions. Moreover, although the federal government can provide evacuation assistance when state and local governments are overwhelmed, the federal government is not prepared to do so. Amendments to the Stafford Act in October 2006 affirmed that the Federal Emergency Management Agency (FEMA) (an agency within DHS) is responsible for leading and coordinating evacuation assistance. DHS has not yet clarified, in the National Response Plan, the lead, coordinating, or supporting agencies in such cases. Fri, 22 Dec 2006 00:00:00 -0500 http://www.gao.gov/new.items/d07169.pdf In August and September 2005, Hurricanes Katrina and Rita caused unprecedented destruction to property along the Gulf Coast, resulting in billions of dollars of damage claims to the National Flood Insurance Program (NFIP). This report, which we initiated under the authority of the Comptroller General, examines (1) the impact of Hurricanes Katrina and Rita on the NFIP and paid losses by location and property type; (2) the challenges the Federal Emergency Management Agency (FEMA) and others faced in addressing the needs of NFIP claimants and communities; (3) FEMA's methods of monitoring and overseeing claims adjustments; and (4) FEMA's efforts to meet the requirements of the Flood Insurance Reform Act of 2004 to establish policyholder coverage notifications, an appeals process for claimants, and education and training requirements for agents. To conduct these assessments, GAO interviewed FEMA and insurance officials, analyzed claims data, and examined a sample of reports done on the accuracy of claims adjustments. NFIP paid an unprecedented dollar amount for a record number of claims from Hurricanes Katrina and Rita. Congress increased NFIP's borrowing authority with the U.S. Treasury from a pre-Katrina level of $1.5 billion to about $20.8 billion in March 2006, but FEMA will probably not be able to repay this debt on annual premium revenues of about $2 billion. As of May 2006, NFIP had paid approximately 162,000 flood damage claims from Hurricane Katrina and another 9,000 claims from Hurricane Rita. Most paid claims were for primary residences where flood insurance was generally required. FEMA and its private sector partners faced several challenges in processing a record number of flood claims from Hurricanes Katrina and Rita, among them were (1) reaching insured properties in a timely way because of blocked roadways and flood water contamination and (2) identifying badly damaged homes to be inspected in locations where street signs had washed away. Despite these and other obstacles, FEMA reported that over 95 percent of Gulf Coast claims had been closed by May 2006, a time frame comparable to those for closing claims in other, smaller recent floods. To help keep pace with the volume of claims filed, FEMA approved expedited methods for claims processing that were unique to Hurricanes Katrina and Rita. To provide oversight of the claims adjustment process, FEMA's program contractor did quality assurance reinspections of Hurricane Katrina and Rita claims adjustments. FEMA did not adopt our October 2005 recommendation that it select the claims to be reinspected from a random sample of the universe of all closed claims; thus, the results of the reinspections cannot be projected to a universe larger than the 4,316 claims adjustments that were reinspected. FEMA agrees with our prior recommendation and plans to do quality reinspections in future flood events based on a random sample of all claims. FEMA did not analyze the overall results of the quality reinspections for Hurricanes Katrina and Rita. FEMA has made progress but has not fully implemented the NFIP program changes mandated by the Flood Insurance Reform Act. For example, 15 states had adopted minimum education and training requirements for insurance agents who sell NFIP policies, as of October 2006. Fri, 15 Dec 2006 00:00:00 -0500 http://www.gao.gov/new.items/d07252t.pdf Hurricanes Katrina and Rita destroyed homes and displaced millions of individuals. While the Federal Emergency Management Agency (FEMA) continues to respond to this disaster, GAO's previous work identified significant control weaknesses--specifically in FEMA's Individuals and Households Program (IHP) and in the Department of Homeland Security's (DHS) purchase card program--resulting in significant fraud, waste, and abuse. Today's testimony will address whether FEMA provided improper and potentially fraudulent (1) rental assistance payments to registrants at the same time it was providing free housing via trailers and apartments; (2) duplicate assistance payments to individuals who claimed damages to the same property for both hurricanes Katrina and Rita; and (3) IHP payments to non-U.S. residents who did not qualify for IHP. This testimony will also discuss (1) the importance of fraud identification and prevention, and (2) the results of our investigation into property FEMA bought using DHS purchase cards. To address these objectives, GAO data mined and analyzed FEMA records and interviewed city officials, university officials, and foreign students. GAO also traveled to Louisiana and Texas to inspect selected property items and to investigate improper housing payments to individuals living in FEMA-provided housing. FEMA continued to lose tens of millions of dollars through potentially improper and/or fraudulent payments from both hurricanes Katrina and Rita. These payments include $17 million in rental assistance paid to individuals to whom FEMA had already provided free housing through trailers or apartments. In one case, FEMA provided free housing to 10 individuals in apartments in Plano, Texas, while at the same time it sent these individuals $46,000 to cover out-of-pocket housing expenses. In addition, several of these individuals certified to FEMA that they needed rental assistance. FEMA made nearly $20 million in duplicate payments to thousands of individuals who claimed the damages to the same property from both hurricanes Katrina and Rita. FEMA also made millions in potentially improper and/or fraudulent payments to nonqualified aliens who were not eligible for IHP. For example, FEMA paid at least $3 million to more than 500 ineligible foreign students at four universities in the affected areas. This amount likely understates the total payments to ineligible foreign students because it does not cover all colleges and universities in the area. FEMA also provided potentially improper and/or fraudulent IHP assistance to other ineligible non-U.S. residents, despite having documentation indicating their ineligibility. Finally, FEMA's difficulties in identifying and collecting improper payments further emphasized the importance of implementing an effective fraud, waste, and abuse prevention system. For example, GAO previously estimated improper and potentially fraudulent payments related to the IHP application process to be $1 billion through February 2006. As of November 2006, FEMA identified about $290 million in improper payments and collected about $7 million. GAO's previous work on the DHS purchase cards also showed significant problems with property accountability. Of 246 items we investigated that FEMA purchased for hurricane relief efforts using DHS's purchase cards, 85 items--or 34 percent--are still missing and presumed lost or stolen. Wed, 06 Dec 2006 00:00:00 -0500 http://www.gao.gov/new.items/d0727.pdf In 2006, the Internal Revenue Service (IRS) spent about 38 percent of its $10.8 billion budget on processing returns and providing taxpayer assistance. GAO was asked to (1) assess IRS's 2006 filing season performance processing paper and electronically filed tax returns and providing telephone, Web site, and face-to-face assistance relative to 2006 goals and prior years' performance; (2) identify potential cost savings or other improvements; and (3) report on the status of IRS's Taxpayer Assistance Blueprint (TAB). To address these issues, GAO collected relevant information from IRS and other sources, reviewed performance measures and past filing season assessments, and interviewed officials. IRS improved most filing season services in 2006, continuing improvements since 2001. IRS also generated efficiencies from increased electronic filing and benefits for taxpayers through systems modernization. IRS's processing of individual tax returns and refunds improved by most measures, but the growth rate of electronic filing continued to slow in part because of changes to the Free File Program, which reduced the number of taxpayers eligible to use it and the elimination of a program that allowed taxpayers to file via the telephone. Access to IRS's telephone assistors was comparable to last year. The accuracy of responses to telephone inquiries was 90 percent or over in 2006. Use of IRS's Web site increased substantially and IRS reconfigured the site to improve service. Continuing past trends, fewer taxpayers used IRS walk-in sites and more used less-costly volunteer sites. Also, IRS completed Phase I of the TAB, which identified strategic themes for improving taxpayer service; TAB Phase II is expected to be completed by early 2007. With the slowing growth rate in electronic filing, IRS is missing an opportunity to generate additional savings. Federal and state mandates for electronic filing have demonstrated success in increasing electronic filing; however, IRS currently lacks the authority to mandate electronic filing for certain income tax returns such as individual returns filed by paid tax preparers. Using IRS estimates, savings from such a mandate could be on the order of $60 million per year. IRS has another opportunity to generate savings because of excess space at its call sites. However, IRS lacks a strategy for eliminating that space by consolidating call sites. To replace its aging legacy computer system, IRS continues to implement a modernized system for processing tax returns and refunds. However, IRS does not report information on the chief benefit realized to date, faster refund issuance. Such information could be useful for the Congress when making decisions about funding the completion of the individual tax return processing part of the system, estimated by IRS to require at least another $500 million. Wed, 15 Nov 2006 00:00:00 -0500 http://www.gao.gov/new.items/d0764.pdf Historically Black Colleges and Universities (HBCU), which number around 100, undertake capital projects to provide appropriate settings for learning, but many face challenges in doing so. In 1992, Congress created the HBCU Capital Financing Program to help HBCUs fund capital projects by offering loans with interest rates near the government's cost of borrowing. We reviewed the program by considering (1) HBCU capital project needs and program utilization, (2) program advantages compared to other sources of funds and schools' views on loan terms, (3) the Department of Education's (Education) program management, and (4) certain schools' perspectives on and Education's plan to implement loan provisions specifically authorized by Congress in June 2006 to assist in hurricane recovery efforts. To conduct our work, we reviewed applicable laws and program materials and interviewed officials from federal agencies and 34 HBCUs. HBCU officials we interviewed reported extensive and diverse capital project needs, yet just over half of available loan capital ($375 million) has ever been borrowed. About 23 HBCUs have taken steps to participate in the program, and 14 have become borrowers. Education has collected and reported limited data on the program's utilization and has not established performance measures or goals to gauge program effectiveness, though Education officials noted they are developing measures and goals. The HBCU loan program provides access to low-cost capital financing and flexibilities not always available elsewhere, but some loan terms and conditions discourage participation, though school officials said they remain interested in the program. The low interest rate and 30-year repayment period were regarded favorably by participants and nonparticipants alike, and the program makes funds available for a broader range of needs than some federal grant programs. However, the requirement to place in a pooled escrow 5 percent of loan proceeds--an insurance mechanism that reduces federal program costs due to any program borrower's potential delinquency or default--monthly payments versus semiannual ones traditionally available from private sources of loans, and the extent to which some loans have been collateralized could discourage participation. While Education has taken steps to improve the program, significant weaknesses in its management control could compromise the program's effectiveness and efficiency. Education has recently provided schools with both fixed and variable interest rate options, allowed for larger loans, and afforded more opportunities to negotiate loan terms. Also, Education has increased its marketing efforts for the program. However, Education has not established effective management control to ensure that it is (1) communicating with schools in a useful and timely manner, (2) complying with statutory requirements to meet twice each year with an advisory board composed of HBCU experts and properly account for the cost of the program, and (3) monitoring the performance of the program's contractor. Officials from 4 HBCUs in Louisiana and Mississippi told us that in light of the extensive 2005 hurricane damage to their campuses, they were pleased with certain emergency loan provisions but concerned that there would not be sufficient time to take advantage of Education's authority to waive or modify the program provisions. School officials from the 4 schools noted that their institutions had incurred extensive physical damage that was caused by water, wind, and, in one case, fire, and that the full financial impact of the hurricanes may remain unknown for years. Although Education officials told us that they have not yet determined the extent to which the authority under the emergency legislation to waive or modify program provisions for hurricane-affected institutions would be used, the department would be prepared to provide loans to hurricane-affected HBCUs. Wed, 18 Oct 2006 00:00:00 -0400