FEMA manages two significant assistance programs: the individual assistance program and the public assistance program, respectively. The Federal Emergency Management Agency (FEMA) is an agency of the United States Department of Homeland Security, initially created by Presidential Reorganization Plan No. While on-the-ground support of disaster recovery efforts is a major part of FEMA's charter, the agency provides state and local governments with experts in specialized fields and funding for rebuilding efforts and relief funds for infrastructure by directing individuals to access low interest loans, in conjunction with the Small Business Administration.
The Federal Emergency Management Agency (FEMA) obligated $12.7 billion from the Disaster Relief Fund (DRF) for its administrative costs from fiscal years 2004 through 2013 and has taken some steps to reduce and better control these costs. From fiscal years 2004 through 2013, FEMA obligated $1.7 billion to reimburse grantees (states) and subgrantees (localities) for administrative costs related to Public Assistance (PA) grants, and its 2007 policy change has led to additional complexity and workload for FEMA and its grantees.
FEMA leads federal efforts to respond to and recover from disasters, and provides grants to states and localities through the DRF. This report addresses the extent to which DRF funds were obligated to cover (1) FEMA's administrative costs for major disasters during fiscal years 2004 through 2013, and the steps FEMA has taken to control these costs, and (2) Grantee and subgrantee administrative costs for PA grants, and the impact FEMA's 2007 policy changes had on PA program administrative costs reimbursements. GAO recommends that FEMA (1) develop an integrated plan to better control and reduce its administrative costs for major disasters, (2) assess the costs versus the benefits of tracking FEMA administrative costs by DRF program, and (3) clarify the agency's guidance and minimum documentation requirements for direct administrative costs. Comments: As of October 2015, FEMA continues to develop an integrated plan to control and reduce administrative costs for major disaster declarations. Recommendation: To increase the efficiency and effectiveness of processes related to administrative costs for major disasters, the FEMA Administrator should develop an integrated plan to better control and reduce FEMA's administrative costs for major disasters. Comments: As of August 2015, FEMA continues to assess the costs versus the benefits of tracking administrative costs by program.
Recommendation: To increase the efficiency and effectiveness of processes related to administrative costs for major disasters, the FEMA Administrator should assess the costs versus the benefits of tracking FEMA's administrative cost data for major disasters by Public Assistance, Individual Assistance, Hazard Mitigation, and Mission Assignment, and if feasible, track this information.
Comments: As of August 2015, FEMA is evaluating its direct administrative costs (DAC) pilot program for Hurricane Sandy recovery operations in New York City.
Recommendation: To increase the efficiency and effectiveness of processes related to administrative costs for major disasters, the FEMA Administrator should clarify the agency's guidance and minimum documentation requirements for direct administrative costs claims by grantees and subgrantees of the Public Assistance program.


Fugate identifies a host of challenges facing his agency and the national emergency response network.
Individual Assistance can include low-interest loans, income tax relief, cash grants, unemployment assistance, and crisis counseling.
In addition to this, FEMA provides funds for training of response personnel throughout the United States and its territories as part of the agency's preparedness effort. FEMA's 2007 rule was intended to simplify and clarify the method FEMA uses to reimburse grantees and subgrantees for certain costs incurred for administering PA grants.
For each major disaster, funds can be obligated from the DRF to cover administrative costs—the costs of providing and managing disaster assistance—for FEMA, states, tribes, localities, and certain nonprofits, among others.
GAO analyzed FEMA's administrative costs data and policies and PA guidance for administrative cost reimbursements; and interviewed FEMA, state, and local officials. According to FEMA officials, the Disaster Administrative Cost Integrated Project Team has been working over the past several months to analyze FEMA's historic administrative costs, identify cost drivers, document and evaluate the delivery of disaster assistance, set cost targets by disaster, and establish an improved framework to standardize the way FEMA does business. According to FEMA officials, this project requires connecting multiple disparate data sources.
Joaquin could reach the Carolinas on Sunday, and Virginia has already declared a state of emergency ahead of potential landfall. FEMA's average administrative cost percentages for major disasters during the 10 fiscal years 2004 to 2013 doubled the average during the 10 fiscal years 1989 to 1998. However, according to FEMA, the 2007 rule led to an unexpectedly high rate of claims for direct administrative costs. FEMA has identified some, but not yet all of the data which needs to be integrated in order to be able to track administrative costs by program area. According to FEMA, if successful, results from this program could inform the development of additional guidance or regulatory modification and similar approaches could be applied in future disasters. The PA Program provides: assistance for debris removal, implementation of emergency protective measures, permanent restoration of infrastructure, and encourages protection from future damage by providing assistance for hazard measures during the recovery process.


The governor of the state in which the disaster occurs must declare a state of emergency and formally request from the president that FEMA and the federal government respond to the disaster.
FEMA recognized that administrative costs have increased and has taken steps intended to better control and reduce these costs, such as setting a goal in its recent strategic plan to lower these costs, and creating administrative cost targets. Grantee, subgrantee, and FEMA officials told GAO that FEMA policies and guidance do not adequately specify the requirements for determining reasonableness, eligibility, and supporting documentation to support reimbursement of direct administrative costs. The first data which needs to be connected to FEMA's financial data will come from the Deployment Tracking System (DTS). For current and other past disasters, FEMA will provide clarifying guidance on DAC claims and documentation requirements. FEMA also provides these services for territories of the United States, such as Puerto Rico.
However, FEMA does not require these targets be met, and GAO found that had FEMA met its targets, administrative costs could have been reduced by hundreds of millions of dollars.
Clarifying the agency's guidance and minimum documentation requirements would help grantees and subgrantees submit, and FEMA review requests for administrative costs reimbursement. FEMA has a contract in place to connect data from DTS to the Enterprise Data Warehouse, which will allow that information to be imported into the Automated Common Operating Picture (COP).
GAO also found that FEMA lacks an integrated plan with time frames and milestones to hold senior officials accountable for achieving its goals to reduce and more effectively control costs. FEMA reports that it is in the process of identifying the remaining data that needs to be connected and the costs associated with connecting that data.
In addition, GAO found that FEMA does not track administrative costs by major disaster program, such as Individual or Public Assistance, and has not assessed the costs versus the benefits of tracking such information.



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