Senate Homeland Security and Governmental Affairs Subcommittee on Emergency Management, Intergovernmental Relations, and the District of Columbia…

Senate Homeland Security and Governmental Affairs Subcommittee on Emergency Management, Intergovernmental Relations, and the District of Columbia Hearing

Chairman Begich, Ranking Member Paul, and Members of the Subcommittee:

I appreciate the opportunity to testify today about efforts by the Federal Emergency Management Agency (FEMA), a component of the Department of Homeland Security (DHS), to more efficiently lead the nation's efforts to prepare for, respond to, and recover from disasters. We have reported on a broad range of issues related to FEMA's programs and operations over the last decade and currently have ongoing work for this committee evaluating disaster administrative costs and workforce planning, as well as federal catastrophic response efforts, post-disaster mitigation, and states' disaster budgeting practices.

Large disasters are increasingly complex and costly. For example, in fiscal year 2014 Congress appropriated $6.2 billion for FEMA'sDisaster Relief Fund. n1 As we reported in 2012, FEMA obligated over $80 billion in federal assistance for major disasters declared from fiscal years 2004 through 2011. n2 In addition, the increasing number and size of disasters require an increasingly large federal disaster assistance workforce. As we reported in April 2012, FEMA responded to more disasters in fiscal year 2011 than in any other year in its history when FEMA's disaster assistance workforce responded to 124 declared major disasters and emergencies. Then, in October 2012, Hurricane Sandy hit the East Coast and more than 17,000 federal personnel--including more than 7,500 FEMA staff--were deployed as part of one of the largest deployment of personnel ever. For fiscal year 2014, Congress appropriated $1.5 billion for six FEMA preparedness grant programs. n3 As we reported last year, from fiscal years 2002 through 2013, the federal government appropriated about $41 billion to a variety of DHS preparedness grant programs. n4 The larger number and size of disasters have required increasingly complex and costly FEMA operations and processes to prepare for and respond to these events, and increases the importance that FEMA operations are as efficient and effective as possible.

My testimony today discusses our previously published and ongoing work on opportunities to enhance efficiencies in FEMA's operations in the following areas: (1) disaster administrative costs, (2) workforce management, and (3) preparedness grant management.

This statement is based on our prior work issued from November 2008 to May 2014 related to FEMA's disaster administration, human capital management, and preparedness grants and selected updates. n5 To perform the work for these reports, we reviewed key federal documents and efforts such as FEMA's analyses and reports on these issues, analyzed data from FEMA and interviewed FEMA officials, analyzed information collected from other relevant agencies, and visited various locations. Further details on the scope and methodology of our previously issued reports are available within each of the published products. In addition, this statement includes preliminary observations from our ongoing work assessing the rising administrative costs of providing disaster assistance and FEMA workforce management efforts. n6 For the ongoing work, we are reviewing FEMA documents such as its administrative cost analyses and Strategic Human Capital Plan, among other things. We are also conducting our own analyses of FEMA data and interviewing FEMA and select state officials. We shared a copy of the new information in this statement with DHS officials.

The work upon which this testimony is based was conducted in accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Costs of Providing Disaster Assistance Have Increased, but FEMA Has Not Taken Recommended Action to Control Its Administrative Costs

We reported in September 2012 that FEMA's administrative costs had been increasing for all sizes of disasters. n7 According to FEMA, administrative costs include, among other things, the salary and travel costs for its disaster workforce, rent and security expenses associated with establishing and operating its field office facilities, and supplies and information technology support for its deployed staff. In September 2012, based on our analysis of 1,221 small, medium, and large federal disaster declarations during fiscal years 1989 through 2011, we found that the average administrative cost percentage for these disaster declarations doubled from 9 percent in the 1989-to-1995 period to 18 percent in the 2004-to-2011 period, as shown in table 1.

Table 1: Average Administrative Cost Percentages for 1,221 Disaster Declarations during Fiscal Years 1989 through 2011

Fiscal years that declaration was approved Average administrative cost percentage

1989 to 1995 9

1996 to 2003 14

2004 to 2011 18

Source: GAO analysis of Federal Emergency Management Agency data | GAO-14-687T

We also found that the growth in administrative costs occurred for all types of disaster assistance, including those related to providing Individual Assistance, Public Assistance, and assistance for those disasters that provided both Individual Assistance and Public Assistance. n8 As shown in table 2, since fiscal year 1989, administrative cost percentages doubled for disaster declarations with Individual Assistance only, quadrupled for declarations with Public Assistance only, and doubled for declarations with Public Assistance and Individual Assistance.

Table 2: Average Administrative Cost Percentages by Type of Assistance during Fiscal Years 1989 through 2011

Type of Assistance 1989 to 1995 1996 to 2003 2004 to 2011

Individual Assistance 17 27 34

Public Assistance 4 11 16

Individual and Public Assistance 9 14 18

Source: GAO analysis of Federal Emergency Management Agency data | GAO-14-687T

To address these rising costs, FEMA issued guidelines and targets intended to improve the efficiency of its efforts and to help reduce administrative costs. In November 2010, FEMA issued guidance on how to better control administrative costs associated with disaster declarations. The guide noted that incidents of similar size and type had witnessed growing administrative costs for 20 years, and that, in the past, little emphasis had been placed on controlling overall costs. The document provided guidance on how to set targets for administrative cost percentages, plan staffing levels, time the deployment of staff, and determine whether to use "virtual" field offices instead of physical field offices. However, in September 2012, we found that FEMA did not require that this guidance be followed or targets be met because the agency's intent was to ensure that it was providing guidance to shape how its leaders in the field think about gaining and sustaining efficiencies in operations rather than to lay out a prescriptive formula. As a result, we concluded that FEMA did not track or monitor whether its cost targets were being used or achieved.

In September 2012, we also found that in many cases, FEMA exceeded its cost targets for administrative costs. Specifically, based on our analysis of the 539 disaster declarations during fiscal years 2004 through 2011, we found that 37 percent of the declarations exceeded the 2010 administrative cost percentage targets. Specifically:

* For small disaster declarations (total obligations of less than $50 million), FEMA's target range for administrative costs is 12 percent to 20 percent; for the 409 small declarations that we analyzed, 4 out of every 10 had administrative costs that exceeded 20 percent.

* For medium disaster declarations (total obligations of $50 million to $500 million), the target range for administrative costs is 9 percent to 15 percent; for the 111 declarations that we analyzed, almost 3 out of every 10 had administrative costs that exceeded 15 percent.

* For large disaster declarations (total obligations greater than $500 million to $5 billion), the target range for administrative costs is 8 percent to 12 percent; for the 19 large declarations that we analyzed, about 4 out of every 10 had administrative costs that exceeded 12 percent.

As a result, in September 2012, we recommended that FEMA implement goals for administrative cost percentages and monitor performance to achieve these goals. However, as of July 2014, FEMA had not taken steps to implement our recommendation. In December 2013, FEMA officials stated that they are implementing a system called FEMAStat to, among other things, collect and analyze data on the administrative costs associated with managing disasters to enable managers to better assess performance and progress within the organization. As part of the FEMAStat effort, in 2012 and 2013, FEMA collected and analyzed data on the administrative costs associated with managing disasters. However, as of July 2014, FEMA is still working on systematically collecting the data and utilizing them to develop a model for decision making. As a result, it is too early to assess whether this effort will improve the efficiencies or reduce the cost associated with administering assistance in response to disasters.

As part of our ongoing work, we will be reviewing these efforts and working with FEMA to better understand the progress the agency has made in monitoring and controlling its administrative costs associated with delivery of disaster assistance and its efforts to decrease the administrative burden associated with its Public Assistance program.

Opportunities to Increase the Effectiveness of FEMA's Workforce

We have also reported on opportunities to strengthen and increase the effectiveness of FEMA's workforce. More specifically, we previously reported on various FEMA human capital management efforts (as well as human capital management efforts across the federal government) and have made a number of related recommendations for improvement. FEMA has implemented some of these, but others are still underway. Specifically:

* In June 2011, we found that FEMA's Strategic Human Capital Plan did not define critical skills and competencies that FEMA would need in the coming years or provide specific strategies and program objectives to motivate, deploy, and retain employees, among other things. n9 As a result, we recommended that FEMA develop a comprehensive workforce plan that identifies agency staffing and skills requirements, addresses turnover and staff vacancies, and analyzes FEMA's use of contractors. FEMA agreed, and in responding to this recommendation, reported that it had acquired a contractor to conduct an assessment of its workforce to inform the agency's future workforce planning efforts.

* In April 2012, we found that FEMA had taken steps to incorporate some strategic management principles into its workforce planning and training efforts but could incorporate additional principles to ensure a more strategic approach is used to address longstanding management challenges. n10 Further, FEMA's workforce planning and training could be enhanced by establishing lines of authority for these efforts. We also found that FEMA had not developed processes to systematically collect and analyze agencywide workforce and training data that could be used to better inform its decision making. We recommended that FEMA: identify long-term quantifiable mission-critical goals that reflect the agency's priorities for workforce planning and training; establish a time frame for completing the development of quantifiable performance measures related to workforce planning and training efforts; establish lines of authority for agency-wide workforce planning and training efforts; and develop systematic processes to collect and analyze workforce and training data. DHS concurred with all the recommendations and FEMA is still working to address them. For example, in April 2014, FEMA issued a notice soliciting contracting services for a comprehensive workforce structure analysis for the agency. As part of our ongoing review of FEMA's workforce management, we are gathering information on FEMA's other efforts to address our recommendations.

* In May 2012, we reported on the management and training of FEMA Reservists, a component of FEMA's workforce, referred to at that time as Disaster Assistance Employees (DAE). n11 Specifically, we found that FEMA did not monitor how the regions implement DAE policies and how DAEs implement disaster policies across regions to ensure consistency. While FEMA's regional DAE managers were responsible for hiring DAEs, FEMA had not established hiring criteria and had limited salary criteria. Regarding FEMA's performance appraisal system for DAEs, we found that FEMA did not have criteria for supervisors to assign DAEs satisfactory or unsatisfactory ratings. We also found that FEMA did not have a plan to ensure DAEs receive necessary training and did not track how much of the Disaster Relief Fund was spent on training for DAEs. We recommended, among other things, that FEMA develop a plan for how it will better communicate policies and procedures to DAEs when they are not deployed; establish a mechanism to monitor both its regions' implementation of DAE policies and DAEs' implementation of FEMA's disaster policies; establish standardized criteria for hiring and compensating DAEs; and establish a plan to ensure that DAEs have opportunities to participate in training and are qualified. DHS concurred with the recommendations and FEMA has taken steps to address several of them. For example, in June 2012, FEMA implemented a communication strategy with its reservist workforce that included video conferences, a web blog series, and a FEMA weekly bulletin sent to Reservists' personal email addresses, among other things. Also, in October 2012, DHS reported that FEMA had resolved the outstanding issues of inconsistent implementation of DAE policies by centralizing control over hiring, training, equipment, and deployment within a single headquarters-based office. FEMA is working to address our other recommendations, and we will continue to monitor its progress.

* In our March 2013 report, we examined how FEMA's reservist workforce training compared with training of other similar agencies, and the extent to which FEMA had examined these agencies' training programs to identify useful practices. n12 We found that FEMA had not examined other agencies' training programs, and therefore, we recommended that FEMA examine the training practices of other agencies with disaster reservist workforces to identify potentially useful practices; DHS concurred with our recommendation and described plans to address it. As part of our ongoing review, we are gathering information on FEMA's efforts to address our recommendation.

At the request of this committee, we are also currently assessing the impact of workforce management and development provisions in the Post-Katrina Act on FEMA's response to Hurricane Sandy. We also have plans to conduct additional work to assess the impact of a variety of other emergency management related provisions in the Post-Katrina Act (for example, provisions related to FEMA's contracting efforts, information technology systems, and disaster relief efforts). Among other things, the Post-Katrina Act directed FEMA to implement efforts to enhance workforce planning and development, n13 collaborate on developing standards for deployment capabilities, including credentialing of personnel, n14 and establish a surge capacity force (SCF) to deploy to natural and man-made disasters, including catastrophic incidents. n15 Some of these efforts were highlighted during Hurricane Sandy when FEMA executed one of the largest deployments of personnel in its history.

For example, the agency's response to Hurricane Sandy marked the first activation of the DHS SCF, with nearly 2,400 DHS employees deploying to New York and New Jersey to support response and recovery efforts. The agency also launched the new FEMA Qualification System (FQS) on October 1, 2012, just in time for FEMA employees' deployment to areas affected by Hurricane Sandy. In 2012, FEMA also created a new disaster assistance workforce component called the FEMA Corps. Forty-two FEMA Corps teams, consisting of approximately 1,100 members, were deployed to support Hurricane Sandy response and recovery efforts in the fall of 2012.

* FEMA's deployment of its disaster assistance workforce during the response to Hurricane Sandy revealed a number of challenges and, as a result, FEMA is analyzing its disaster assistance workforce structure to ensure the agency is capable of responding to large and complex incidents, as well as simultaneous disasters and emergencies. For example, FEMA reported that: before deployment for Hurricane Sandy, 28 percent of the staffing positions called for by FEMA's force structure analysis were vacant (approximately 47 percent of positions required by the force structure were filled with qualified personnel, and the remaining 25 percent were filled by trainees).

* Deployment of its disaster workforce nearly exhausted the number of available personnel. By November 12, 2012, FEMA had only 355 Reservists (5 percent) available for potential deployment: 4,708 (67 percent) were already deployed to ongoing disasters, and 1,854 (26 percent) were unavailable. n16

* Its plans had not fully considered how to balance a large deployment of personnel and still maintain day-to-day operations.

As part of our ongoing work, we will be evaluating FEMA's efforts to address the challenges identified during the agency's response to Hurricane Sandy and assessing their impact. We will also determine what progress the agency has made in its workforce planning and development efforts.

Opportunities to Increase the Efficiency of Preparedness Grant Administration

In March 2011, we reported on another area of opportunity for FEMA to increase the efficiency of its operations--the management of its preparedness grants. n17 We found that FEMA could benefit from examining its grant programs and coordinating its application process to eliminate or reduce redundancy among grant recipients and program purposes. As we again reported in February 2012, four of FEMA's largest preparedness grants (Urban Areas Security Initiative, State Homeland Security Program, Port Security Grant Program, and Transit Security Grant Program) which have similar goals, fund similar types of projects, and are awarded in many of the same urban areas, have application review processes that are not coordinated. n18

In March 2014 in our annual update to our duplication and cost savings work in GAO's Online Action Tracker, n19 we reported that FEMA has attempted to capture more robust data from grantees during applications for the Port Security Grant Program and the Transit Security Grant Program--because applicants provide project-level data. However, applications for the State Homeland Security Grant Program and Urban Areas Security Initiative do not contain enough detail to allow for the coordinated review across the four grants, according to FEMA officials. FEMA intends to begin collecting and analyzing additional project-level data using a new system called the Non-Disaster Grants Management System (NDGrants). n20 However, FEMA officials said that implementation of NDGrants had been delayed until 2016 because of reduced funding.

While implementing NDGrants should help FEMA strengthen the administration and oversight of its grant programs, a report released by the DHS Office of Inspector General (OIG) in May 2014 n21 identified a number of information control system deficiencies associated with FEMA development and deployment of the NDGrants system that could limit the usefulness of the system. n22 Specifically, the OIG reported NDGrants system deficiencies related to security management, access control, and configuration management. n23 According to the OIG's report, DHS management concurred with the findings and recommendations in the report and plans to work with component management to address these issues. We will continue to monitor FEMA's implementation of the system as part of our annual update for our duplication and cost savings work.

FEMA has proposed, through the President's budget requests to Congress, to consolidate its preparedness grant programs to streamline the grant application process, responding to a recommendation we made in March 2011 by eliminating the need to coordinate application reviews. n24 Specifically, the fiscal years 2013, 2014, and 2015 President's budgets all proposed the FEMA-led National Preparedness Grant Program (NPGP). According to the proposal, FEMA planned to consolidate preparedness grant programs (excluding Emergency Management Performance grants and Fire grants) into a comprehensive NPGP. The NPGP would include four of the largest preparedness grants (Urban Areas Security Initiative, State Homeland Security Program, Port Security Grant Program, and Transit Security Grant Program). Congressional committees, however, expressed concern that the consolidation plan lacked detail, and the NPGP was not approved for either fiscal year 2013 or 2014. n25 Nonetheless, FEMA again proposed the NPGP consolidation approach for 2015 providing additional details such as clarification and revised language relating to governance structures under the proposed program. In responding to questions submitted by the House Committee on Homeland Security's Subcommittee on Emergency Preparedness, Response and Communications in April 2014, FEMA officials reported that the NPGP would help increase the efficiency of preparedness grants by requiring fewer grants notices for staff to issue and fewer grants to award, and reduce processing time and monitoring trips due to the reduction in the number of grantees. If approved in the future, and depending on its final form and execution, we believe a consolidated NPGP could help reduce redundancies and mitigate the potential for unnecessary duplication and is consistent with our prior recommendation.

Chairman Begich, Ranking Member Paul, and members of the subcommittee, this completes my prepared statement. I would be happy to respond to any questions you may have at this time.

n1 Pub. L. No. 113-76, 128 Stat. 5, 263 (2014).

n2 GAO, Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction's Capability to Respond and Recover on Its Own, GAO-12-838 (Washington, D.C.: Sept. 12, 2012).

n3 Pub. L. No. 113-76, 128 Stat. 5, 261 (2014). This is the total amount appropriated to the State and Local Programs account, which includes the State Homeland Security Program, Operation Stonegarden, Urban Areas Security Initiative, Intercity Passenger Rail - Amtrak Program, Port Security Grant Program and Transit Security Grant Program.

n4 This total is based on Congressional Research Service data and our analysis, and includes Firefighter Assistance Grants and Emergency Management Performance Grants. See Congressional Research Service, Department of Homeland Security Assistance to States and Localities: A Summary of Issues for the 111th Congress, R40246 (Washington, D.C.: Apr. 30, 2010).

n5 See the related GAO products list at the end of this statement, and cited throughout this statement.

n6 We plan to issue a report with the results from this work in the fall of 2014.

n7 GAO, Federal Disaster Assistance: Improved Criteria Needed to Assess a Jurisdiction's Capability to Respond and Recover on Its Own, GAO-12-838 (Washington, D.C.: Sept. 12, 2012).

n8 The Individual Assistance program provides for the necessary expenses and serious needs of disaster victims that cannot be met through insurance or low-interest Small Business Administration loans. For example, FEMA may provide temporary housing assistance, counseling, unemployment compensation, or medical expenses incurred as a result of a disaster. The Public Assistance program provides for debris removal; emergency protective measures; and the repair, replacement, or restoration of disaster-damaged, publicly owned facilities and the facilities of certain private nonprofit organizations that provide services otherwise performed by a government agency.

n9 GAO, FEMA: Action Needed to Improve Administration of the National Flood Insurance Program, GAO-11-297 (Washington, D.C.: June 9, 2011). In the aftermath of Hurricane Katrina, the federal government enacted the Post-Katrina Emergency Management Reform Act of 2006 (Post-Katrina Act), expanding FEMA's mission and responsibilities. The Post-Katrina Act was enacted as Title VI of the Department of Homeland Security Appropriations Act, 2007, Pub. L. No. 109-295, 120 Stat. 1355 (2006). Among other things, the Post-Katrina Act required FEMA to develop a strategic human capital plan that includes an assessment of the critical skills and competencies of FEMA's workforce and provide an action plan that includes workforce planning strategies and program objectives to train employees. 5 U.S.C. [Sec.] 10102.

n10 GAO, Federal Emergency Management Agency: Workforce Planning and Training Could Be Enhanced by Incorporating Strategic Management Principles GAO-12-487 (Washington, D.C.: Apr 26, 2012).

n11 G AO, Disaster Assistance Workforce: FEMA Could Enhance Human Capital Management and Training GAO-12-538, (Washington, D.C.: May 25, 2012).

n12 GAO, FEMA Reservists: Training Could Benefit from Examination of Practices at Other Agencies, GAO-13-250R, (Washington, D.C.: Mar. 22, 2013).

n13 5 U.S.C. [Subsec.] 10101-10106; 6 U.S.C. [Subsec.] 414-415.

n14 6 U.S.C. [Sec.] 320.

n15 6 U.S.C. [Sec.] 711.

n16 According to FEMA, the high unavailability rate indicates that new leave policies established for the Reservist Program may not have been fully enforced prior to Hurricane Sandy.

n17 GAO, Government Operations: Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP (Washington, D.C.: Mar.1, 2011).

n18 GAO, Homeland Security: DHS Needs Better Project Information and Coordination among Four Overlapping Grant Programs, GAO-12-303, (Washington, D.C.: Feb. 28, 2012).

n19 See http://www.gao.gov/duplication/action_tracker/FEMA_Grants/action1

n20 GAO 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue GAO-12-342SP, (Washington, D.C., Feb 28, 2012.); annual update posted on March 6, 2014 see http://www.gao.gov/duplication/action_tracker/Homeland_Security_Grants/action1#t=0. NDGrants is a web-based system that supports the grants management lifecycle and is used by external stakeholders and grantees, via a public Web site, to apply for grants and monitor the progress of grant applications and payments and view related reports, and by the FEMA Grants Program Directorate, Program Support Division, via an internal Web site, for reviewing, approving, and processing grant awards.

n21 Department of Homeland Security Office of Inspector General, Information Technology Management Letter for the FY 2013 Department of Homeland Security's Financial Statement Audit, (Washington, D.C.: May 16, 2014).

n22 These deficiencies are based on GAO's Federal Information System Controls Audit Manual (FISCAM), GAO-09-232G, (Washington, D.C.: February 2009).

n23 Security management-controls that provide a framework and continuing cycle of activity for managing risk, developing security policies, assigning responsibilities, and monitoring the adequacy of computer-related security controls. Access control-controls that limit or detect access to computer resources (data, programs, equipment, and facilities) and protect against unauthorized modification, loss, and disclosure. Configuration management-controls that help to prevent unauthorized changes to information system resources (software programs and hardware configurations) and provide reasonable assurance that systems are configured and operating securely and as intended.

n24 GAO, Government Operations: Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue GAO-11-318SP, (Washington, D.C.: Mar 1, 2011.)

n25 S. Rep. No. 112-169, at 113 (2012).

Read this original document at: http://www.hsgac.senate.gov/download/?id=412c0949-4633-4d1e-993c-17ec76c6225a