This is the accessible text file for CG Speech GAO-06-1033CG 
entitled 'Accountability for Disaster Assistance: Learning From the 
Past to Plan for the Future' which was released on June 20, 2006. 

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Presentation by The Honorable David M. Walker: 

Comptroller General of the United States: 

Accountability for Disaster Assistance: Learning From the Past to Plan 
for the Future: 

Speech before the Austrian Court of Audit: 

Vienna, Austria: 

June 20, 2006: 

United States Government Accountability Office: 


When I spoke on tsunami relief a year ago in Jakarta, little did I 
realize that my own country would soon be struck by a disaster of 
historic proportions. Just last fall, two back-to-back hurricanes 
struck the city of New Orleans and the coastal region along the Gulf of 

I visited Banda Aceh soon after the tsunami hit. I'll never forget 
seeing acres and acres of rubble and debris. Only an occasional 
building or tree was left standing. Everything else had been swept 
away. Within minutes, thousands had died or been made homeless. 

Following Hurricanes Katrina and Rita, I toured communities in 
Louisiana and Mississippi and relocation centers in Texas. To be frank, 
the devastation in some places was as bad as anything I'd seen in 
Indonesia. Tidal surges had ripped buildings from their foundations and 
smashed them to pieces. While the death toll was much lower than in 
South Asia, hundreds of thousands people were forced to flee their 
homes. Many families are still displaced. 

In New Orleans and elsewhere, just as in Banda Aceh, help arrived too 
slowly in many cases. A number of sick and elderly people survived the 
storm only to succumb afterward to harsh conditions and a lack of 
medical attention. In some of the relocation centers, I was the first 
federal official that evacuees and responsible local officials had 
encountered. And this was two weeks after the storms had passed 

What was hard to believe was that this situation was occurring in the 
United States, one of the wealthiest countries on earth. My 
government's lack of preparedness was a shock and a disappointment to 
many Americans, including me. 

Many U.S. officials seemed to have little or no appreciation for the 
lessons of history. The simple fact is that every nation is vulnerable 
to earthquakes, hurricanes, droughts, and other acts of nature. These 
events have happened throughout history and they'll continue to happen. 

Natural disasters fall into a category of important issues that know no 
geographic or political boundaries. And this brings me to my main theme 
this morning. To successfully tackle these challenges, partnering among 
nations on both a bilateral and a multilateral basis will be essential. 
We must join forces with each other and apply our collective knowledge, 
experience, and expertise to solve shared problems. And, at its heart, 
that's what this conference is all about. 

So, a year and a half after the tsunami swept across the beaches of 
South Asia and East Africa, where do things stand? The current numbers 
on the catastrophe are sobering indeed. More than 230,000 people in 12 
countries are dead or presumed dead. Upward of 1.7 million people have 
been displaced. And property damage exceeds $10 billion. 

On the other hand, the world has rallied to address the related 
challenges. Citizen and corporate donors, national governments, and 
international organizations have pledged more than $13 billion to help 
get affected individuals and communities back on their feet. In May of 
last year, my government authorized nearly a billion dollars in tsunami 
aid. Some of this money went for immediate needs, such as food, 
shelter, and medicine. Other funds will go to long-term reconstruction 

As accountability professionals, our job is to help ensure that aid 
money is well spent, intended recipients are well served, and funds are 
protected from waste, fraud, and abuse. Tsunami relief and 
reconstruction is an important test case for our organizations. By 
earning the confidence of the international community, we will have a 
constructive and continuing role to play. 

This morning, I'd like to talk about the progress we've made in 
ensuring accountability over disaster relief funds. In particular, I'm 
going to discuss recent GAO reports on tsunami relief to South Asia and 
hurricane relief to the U.S. Gulf Coast. Then I'm going to discuss the 
need for governments and supreme audit institutions (SAI) to join 
together, share their expertise, and develop new approaches and 
solutions to complex issues. Finally, I'm going to talk about 
additional steps we can take to assure the world that donations are 
being well spent. 

A year ago in my speech in Jakarta, I urged the international auditing 
community to work together to account for the aid money flowing to 
South Asia and East Africa. I argued three key principles would be 
essential: incentives, transparency, and accountability. 

Incentives ensure that public officials follow prescribed procedures 
and spend funds appropriately. Examples would include segregating 
relief funds from normal accounts, creating a strong governance 
structure, establishing strong internal controls, and carrying out risk 
assessments to monitor and test various activities. Another key 
incentive is sound procurement standards and regulations, which are 
particularly important when it comes to contracting activities. 
Transparency is simply public reporting on the receipt, obligation, and 
spending of funds. This could take the form of printed reports or even 
Internet postings. Accountability should encompass the regularity 
(compliance), economy, efficiency, and effectiveness dimensions. 
Accountability requires both financial and performance audits of 
disaster assistance efforts. Both civil and criminal sanctions should 
be available and be used in appropriate circumstances. 

So, what progress has been made when it comes to incentives, 
transparency, and accountability? For answers, I'm going to turn to 
recent work from my own agency, the U.S. Government Accountability 

At GAO, overseeing responses to natural disasters is nothing new. In 
the late 1990s, massive hurricanes struck Central America, the 
Caribbean, and the state of Florida. Since then, GAO has been 
monitoring reconstruction efforts in those regions. 

Recent GAO work in two areas seems particularly relevant to this 
conference. The first area is the U.S. government's response to 
Hurricane Katrina. The second area is the Agency for International 
Development's (USAID) reconstruction efforts in South Asia. 

Let me speak first about our Hurricane Katrina work. GAO now has a 
large and growing body of work on our federal government's relief, 
recovery, and rebuilding efforts. In fact, we have nearly 40 different 
jobs under way in this area. GAO's preliminary observations on 
preparedness, response, and recovery issues paint a mixed picture. 

At the federal, state, and local levels, a few government agencies came 
through with flying colors. But many agencies fell far short of 
expectations. This situation was particularly disturbing given that GAO 
identified many of the same response problems back in 1993 following 
Hurricane Andrew. These included shortcomings in vital areas like 
emergency communications, supplies, and equipment. 

Again, it seems that the lessons of history fell on deaf ears. I'm 
reminded of the famous remark from the philosopher George Santayana, 
"Those who cannot remember the past are condemned to repeat it." 

Many factors contributed to the disappointing results following 
Katrina, including poor coordination among various levels of 
government. But inadequate incentives, transparency, and accountability 
mechanisms were clearly a major factor. 

So far, Congress has appropriated $68 billion to assist victims and 
rebuild the Gulf Coast, with more to follow. Unfortunately, GAO, 
working with the Inspectors General and state and local auditors, has 
chronicled a litany of internal control breakdowns. These breakdowns 
led to the misuse of huge amounts of taxpayer dollars. 

For example, GAO identified extensive questionable payments. In one 
instance, an individual obtained more than $100,000 by using multiple 
addresses and fake personal identifications. GAO also found that some 
victims had used their emergency assistance money for questionable 
subsistence purchases like firearms and even wedding rings. A recent 
GAO report estimates that out of $6.3 billion in assistance payments, 
fraudulent or improper payments totaled between $600 million and $1.4 
billion. That's as much as one fifth of the aid money paid out! 

On the other hand, my government's National Finance Center (NFC) is a 
case study in sound preparation for natural disaster. NFC provides a 
range of payroll, accounting, and related services to many federal 
agencies, including GAO. Despite its location in the heart of New 
Orleans, NFC stayed up and running. Why? It evaluated its risks and 
established backup locations as an internal control measure. When the 
storm struck, management was ready and the center carried out its 
mission without a hitch. Hundreds of thousands of federal workers were 
paid on time and accounting services continued uninterrupted. 

GAO's results are preliminary, but a key lesson is already clear: 
Planning ahead makes a difference. 

First, during natural disasters, it's critically important that 
leadership roles are clearly defined and effectively communicated. 

Second, national response plans need to be clear and consistent and 
employ common sense. A "business-as-usual" approach just won't cut it. 

Third, if government is to be ready when it's needed most, strong 
advance planning, training, and exercise programs are vital. 

Fourth, decision making based on sound risk management approaches is 
needed to build a nation's response capabilities. Such decision making 
should take into account current and expected budgetary constraints. 

It's also clear that our federal government will be working for some 
time with state and local governments to rebuild the Gulf Coast. What's 
needed now is consensus on where and how much to rebuild, who should 
pay for it, and the oversight to ensure that taxpayer dollars are spent 

Unfortunately, shortcomings in government preparedness are widespread. 
Just this month, GAO warned that the tsunami alert system for the West 
Coast of the United States is ineffective. It turns out this system 
cannot transmit messages to some high-risk coastal areas. Also, the 
system has sent out too many false alerts, which has created public 

Now, I'd like to speak about GAO's recent report on reconstruction 
efforts by USAID in Indonesia and Sri Lanka. USAID plans to spend 
nearly $500 million in these two countries to restore roads, bridges, 
schools, and other infrastructure. 

GAO did raise concerns about cost increases for materials, labor, and 
fuel for USAID's infrastructure projects. On the other hand, USAID 
seems to be taking seriously the need for appropriate incentives, 
transparency, and accountability mechanisms. 

Among other things, USAID has increased financial and technical 
oversight for its tsunami recovery projects. For financial oversight, 
USAID is arranging for a concurrent audit of its major road project in 
Aceh Province. For technical oversight, USAID has added staff to 
oversee major construction projects and has sought additional 
engineering expertise from another U.S. agency. 

Another goal has been to strengthen accountability at the local level. 
For example, USAID is providing technical assistance and training to 
help Indonesian auditors track how various Indonesian ministries are 
handling donor funds. In the case of Sri Lanka, USAID has hired a 
consultant to work with the Sri Lankan Office of the Auditor General. 
USAID also supports the Sri Lankan commission investigating allegations 
of bribery and corruption. 

Whenever possible, individuals in charge of program execution need to 
think about partnering for progress. SAIs should do the same on both a 
bilateral and multilateral basis. After all, in the 21st century, we 
must reach across institutional, geopolitical, and ideological lines to 
address common challenges. 

GAO has taken this lesson to heart. In our Hurricane Katrina work, 
we've matrixed internally, coordinating experts from across GAO to add 
value and reduce risks on various assignments. We've found that a more 
collaborative, integrated approach to doing our work yields positive 

Partnering externally has also been important. On our hurricane work, 
GAO has been working with a range of domestic entities to strengthen 
accountability and avoid duplication of effort. I'd include here 
various Offices of Inspector General as well as selected state and 
local auditors. On tsunami oversight, we've been closely coordinating 
with international entities. These include the Inspector General at 
USAID, our SAI counterparts in both Indonesia and Sri Lanka, and 
various other International Organization of Supreme Audit Institutions 
(INTOSAI) members. 

The larger a natural disaster is, the greater the need for partnering 
among key players from many countries and many organizations. When it 
comes to relief money, SAIs should join forces to ensure that funds are 
spent efficiently and effectively. This is equally true for immediate 
relief and long-term reconstruction efforts. 

The INTOSAI task force, chaired by Saskia Stuiveling, the Auditor 
General of the Netherlands, has sought to mobilize the international 
auditing community on this very issue. I want to commend Saskia for her 
leadership in helping to build capacity, ensure accountability, and 
bring greater transparency to the distribution of tsunami relief and 
reconstruction money. These efforts embody the goals and values in 
INTOSAI's new strategic plan. 

In collaboration with the World Bank, the Asia Development Bank, and 
the United Nations, the task force is exploring a potentially powerful 
new tool to enhance the transparency of tsunami relief and 
reconstruction funds. Specifically, the geographic information system, 
or GIS, can take data from a specific location and display it visually 
on an electronic map. This could include data on infrastructure, 
demographics, or even land ownership. GIS also allows users to layer 
data from various sources on a single map. 

GAO has successfully used GIS on several of our past jobs. In the case 
of tsunami funds, GIS could allow auditors to visually track the use of 
donor assistance on the ground. Imagine being able to click a button 
and regularly monitor progress on a highway project or a new water 

So what is the agenda going forward? Clearly, elected officials should 
make full use of SAIs to oversee the use of immediate aid--temporary 
shelter, food and water, and cash. But in the long term, a sustained, 
coordinated strategy is necessary to ensure that funds are not wasted 
as roads, clinics, and other infrastructure are rebuilt. I'm hopeful 
that as SAIs in recipient countries build their capacities, we'll see 
national governments become more responsible stewards of donor funds. 

SAIs will need to do risk assessments and partner with those on the 
ground to target limited resources. As we've learned from Katrina, 
contingency planning is essential. Individuals in charge of 
reconstruction projects must take into account the likelihood of cost 
overruns and changes to planning schedules. Adequate security is also 
key. For example, immediately after the hurricane, civil unrest in New 
Orleans prevented contractors from entering hard-hit areas. This 
delayed the delivery of vital assistance to many victims. 

To establish effective overall oversight, governments will need to 
partner with nongovernment organizations, such as private sector audit 
firms. These firms can help evaluate the progress of government 
agencies and institutions like the Red Cross, the Red Crescent, and the 
World Health Organization in meeting their objectives. 

From tsunamis to droughts, to earthquakes, to global flu pandemics, our 
world is marked by a dreadful certainty that we can't stop natural 
disasters. At most, we can hope to get out of harm's way. But it is in 
our power to prepare for what will happen again at some point in the 

From rebuilding Banda Aceh to rebuilding New Orleans, success depends 
on a strong set of incentives, transparency, and accountability 
mechanisms. Without them, funds will be squandered, those in need will 
go wanting, and government credibility will suffer. We've seen 
improvements to internal controls over the distribution of aid money, 
but we can't afford to become complacent. 

Partnering for progress will be a key to future success. I'd encourage 
you to look to your right and to your left. Because the person sitting 
next to you may just have the answers you are looking for here in 

Thank you for your attention. 

On the Web: 

Web site: [Hyperlink,]: 


Paul Anderson, Managing Director, Public Affairs,, 
(202) 512-4800, U.S. Government Accountability Office, 441 G Street NW, 
Room 7149, Washington, D.C. 20548: 


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