Hurricane Katrina:

Comprehensive Policies and Procedures Are Needed to Ensure Appropriate Use of and Accountability for International Assistance

GAO-06-460: Published: Apr 6, 2006. Publicly Released: Apr 6, 2006.

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In response to Hurricane Katrina, countries and organizations donated to the United States government cash and in-kind donations, including foreign military assistance. The National Response Plan establishes that the Department of State (DOS) is the coordinator of all offers of international assistance. The Federal Emergency Management Agency (FEMA) within the Department of Homeland Security (DHS) is responsible for accepting the assistance and coordinating its distribution. In light of widespread congressional and public interest in U.S. agencies' accountability in receiving and distributing assistance to hurricane victims, this report is one of several initiated under the authority of the Comptroller General to review the federal government's response to Hurricane Katrina. It examines (1) the amount and use of internationally donated cash, and (2) the extent to which federal agencies have adequate policies and procedures to ensure proper accountability for the acceptance and distribution of that assistance.

Because the U.S. government had not received such substantial amounts of international disaster assistance before, ad hoc procedures were developed to accept, receive and distribute the cash and in-kind assistance. Understandably, not all procedures would be in place at the outset to provide a higher level of accountability. The Administration recognized the need for improvement in its recent report on lessons learned from Hurricane Katrina. GAO was able to track the cash donations received to designated U.S. Treasury accounts or disbursed. In the absence of policies, procedures, and plans, DOS developed an ad hoc process to manage $126 million in foreign cash donations to the U.S. government for Hurricane Katrina relief efforts. As cash donations arrived, a National Security Council (NSC)-led interagency working group was convened to make policy decisions about the use of the funds. FEMA officials told GAO they had identified and presented to the working group a number of items that the donated funds could be spent on. The NSC-led interagency working group determined that use of those donated funds, once accepted by FEMA under the Stafford Act, would be more limited than the wider range of possible uses available if the funds were held and then accepted under the gift authorities of other agencies. In October 2005, $66 million of the donated funds were spent on a FEMA case management grant, and as of March 16, 2006, $60 million remained undistributed in the DOS-designated account at the Treasury that did not pay interest. Treasury may pay interest on funds accepted by FEMA under the Stafford Act. According to DOS, an additional $400 million in international cash donations could arrive. It is important that cash management policies and spending plan options are considered and in place to deal with the forthcoming donations so that the purchasing power of the donated cash is maintained for relief and reconstruction. FEMA and other agencies did not have policies and procedures in place to ensure the proper acceptance and distribution of in-kind assistance donated by foreign countries and militaries. In-kind donations included food and clothing. FEMA and other agencies established ad hoc procedures. However, in the distribution of the assistance to FEMA sites, GAO found that no agency tracked and confirmed that the assistance arrived at their destinations. Also, lack of procedures, inadequate information up front about the donations, and insufficient coordination resulted in the U.S. government agreeing to receive food and medical items that were unsuitable for use in the United States and storage costs of about $80,000. The procedures also allowed confusion about which agency was to accept and provide oversight of foreign military donations. DOD's lack of internal guidance regarding the DOS coordinating process resulted in some foreign military donations that arrived without DOS, FEMA, or DOD oversight.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Department of State, Department of Homeland Security and Federal Emergency Management Agency plan to develop international cash donations procedures to focus on agencies effectively managing and accounting for cash donations and swiftly moving funds to agencies.

    Recommendation: As DHS and DOS develop and implement the administration's recommendations, they should incorporate the following actions and procedures into their guidance: (1) develop policies, procedures, and plans to help ensure international cash donations for disaster relief and assistance are accepted and used appropriately as needed; (2) consider cash management options and placed international cash donations in an account that would pay interest while decisions are pending on their use to maintain the purchasing power of those donations; (3) maintain oversight of foreign donated in-kind assets by tracking them from receipt to disbursement, to reasonably ensure that assistance is delivered where it is intended; and (4) establish plans for the acceptance of foreign-donated items that include coordinating with regulatory agencies, such as USDA and FDA, in advance, in order to prevent the acceptance of items that are prohibited from distribution in the United States, regardless of waivers that might be established to expedite the importing of foreign assistance; these plans should also include DOS obtaining information on acceptable or unacceptable items in order to communicate to the international community what is needed or what can not be accepted.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: Hurricane Katrina struck in August 2005, devastating the Gulf coast of the United States, causing billions of dollars in damage, and dislocating thousands of residents. As the storm's devastation and destruction were viewed around the world, many foreign countries offered both cash and in-kind donations to the United States. For the first time in its history, the U.S. government welcomed international offers of assistance to this degree. The framework for managing domestic disaster is the Department of Homeland Security's (DHS) National Response Plan (NRP). The NRP establishes that the Department of State (DOS) is the coordinator of all offers of international assistance. In the absence of advance planning, a National Security Council (NSC)-led interagency working group was convened to make policy decisions about the use of the funds. In April 2006, we reported that the U.S. government had not conducted advance planning for the use of international cash donations offered in response to a disaster affecting the United States and we concluded that it is important for spending plans to be in place to deal with forthcoming donations. We recommended that the Secretary of DHS in consultation with the Secretary of DOS, develop and implement policies and procedures to help ensure international cash donations for disaster relief and assistance are used appropriately as needed. To address our recommendation, a steering group consisting of DOS, DHS, the Federal Emergency Management Agency, and the Office of Foreign Disaster Assistance developed a document entitled "Procedures for Foreign Cash Donations Offered In Response to a Disaster Affecting the United States" dated June 22, 2007. This document establishes guidelines on the use of foreign cash donations. Specifically, the document provides lists of response needs that historically have not been met by the federal government through standing program authorities. Additionally, if there is no suitable unaddressed response needs, the document establishes the federal government entities responsible for identifying long term recovery needs and deciding which specific recovery projects are to be funded by foreign cash donations accepted by the U.S. government. The guidance addresses our recommendation and provides a means for swift and meaningful use of the international cash donations for the relief of disaster victims.

    Recommendation: In a February 2006 report, the administration made 125 recommendations, including several to improve the management of international donations. Specifically, DOS and DHS are required to lead an interagency effort to improve the management of international donations, which includes developing procedures for reviewing, accepting, or rejecting any offers as well as developing a mechanism to receive, disburse and audit any cash donations. To help ensure that the cognizant agencies fulfill their responsibility to account for and effectively manage foreign donations and maintain adequate internal controls over government resources, the Secretary, Department of Homeland Security, in consultation with the Secretary, Department of State, should establish within the National Response Plan--or other appropriate plans--clearly delineated policies and procedures for the acceptance, receipt and distribution of internal assistance.

    Agency Affected: Department of Homeland Security

  3. Status: Closed - Implemented

    Comments: Department of State, Department of Homeland Security and FEMA plan to develop international cash donation procedures that focus on agencies effectively managing and accounting for cash donations and swiftly moving funds to agencies.

    Recommendation: In a February 2006 report, the administration made 125 recommendations, including several to improve the management of international donations. Specifically, DOS and DHS are required to lead an interagency effort to improve the management of international donations, which includes developing procedures for reviewing, accepting, or rejecting any offers as well as developing a mechanism to receive, disburse and audit any cash donations. To help ensure that the cognizant agencies fulfill their responsibility to account for and effectively manage foreign donations and maintain adequate internal controls over government resources, the Secretary, Department of Homeland Security, in consultation with the Secretary, Department of State, should establish within the National Response Plan--or other appropriate plans--clearly delineated policies and procedures for the acceptance, receipt and distribution of internal assistance.

    Agency Affected: Department of State

  4. Status: Closed - Implemented

    Comments: We recommended that DOD develop and issue internal DOD guidance to commanders on the agreed-upon process to coordinate assistance through DOS. DOD agreed with the recommendations pertaining to it and suggested that we adjust the wording of the recommendation that procedures be developed to assure that foreign military donations be routed through DOS. We adjusted the recommendation based on DOD's suggestion. In its technical comments, DOD also suggested specific information on the process to coordinate international offers of assistance through DOS, including ensuring that the offers match U.S. requirements, meet U.S. standards, and are received at the right locations. In September 2007, an interagency working group that included DOD and was lead by the Departments of State and Homeland Security, issued an International Assistance System Concept of Operations. This document establishes policies and procedures for managing the flow of international resources under the National Response Framework. An August 2006 message from the Chairman, Joint Chiefs of Staff to the services and combatant commanders informed them that since the National Response Plan (now Framework) designates the State Department as the primary federal agency to coordinate all offers of assistance from foreign countries, all offers received by DOD are to be referred to the State Department, which has developed the International Assistance System (and associated Concept of Operations). We believe that these actions, although primarily taken by DHS and the Department of State rather than DOD, address the intent of our recommendation.

    Recommendation: The Secretary of Defense, in consultation with the Secretaries of State and Homeland Security, should develop and issue internal DOD guidance to commanders on the agreed-upon process to coordinate assistance through DOS.

    Agency Affected: Department of State

  5. Status: Closed - Implemented

    Comments: We recommended that the Secretary of Defense, in consultation with the Secretaries of State and Homeland Security, establish within the National Response Plan or other appropriate plans clearly delineated policies and procedures to ensure that foreign military offers of assistance for domestic disasters are coordinated through the DOS to ensure they are properly accepted and safeguarded and used as intended. DOD agreed with the recommendation and suggested that we adjust the wording of the recommendation that procedures be developed to assure that foreign military donations be routed through DOS. We adjusted the recommendation based on DOD's suggestion. In its technical comments, DOD also suggested specific information on the process to coordinate international offers of assistance through DOS, including ensuring that the offers match U.S. requirements, meet U.S. standards, and are received at the right locations. In January 2008, DHS issued an International Coordination Support Annex to the National Response Framework that superseded the National Response Plan. This annex specifically lists the Department of State as the coordinating agency, with DOD as a cooperating one, which follows GAO's recommendation. In a subsection titled "Military-to-Military, Defense-to-Defense," it states that "For a domestic response there should be no support falling within the military-to-military category without coordination with DOS" and that "any foreign military wishing to provide direct support should offer assistance through DOS, with DOD knowledge." We believe that these actions, although ultimately taken by DHS rather than DOD, address the intent of our recommendation.

    Recommendation: The Secretary of Defense, in consultation with the Secretaries of State and Homeland Security, should establish within the National Response Plan or other appropriate plans--clearly delineated policies and procedures to ensure that foreign military offers of assistance for domestic disasters are coordinated through the DOS to ensure they are properly accepted and safeguarded and used as intended.

    Agency Affected: Department of Homeland Security

  6. Status: Closed - Implemented

    Comments: Hurricane Katrina struck in August 2005, devastating the Gulf coast of the United States, causing billions of dollars in damage, and dislocating thousands of residents. As the storm's devastation and destruction were viewed around the world, many foreign countries offered both cash and in-kind donations to the United States. For the first time in its history, the U.S. government welcomed international offers of assistance to this degree. The framework for managing domestic disaster is the Department of Homeland Security's (DHS) National Response Plan (NRP). The NRP establishes that the Department of State (DOS) is the coordinator of all offers of international assistance. In the absence of advance planning, a National Security Council (NSC)-led interagency working group was convened to make policy decisions about the use of the funds. In April 2006, we reported that the U.S. government had not conducted advance planning for the use of international cash donations offered in response to a disaster affecting the United States and we concluded that it is important for spending plans to be in place to deal with forthcoming donations. We recommended that the Secretary of DHS in consultation with the Secretary of DOS, develop and implement policies and procedures to help ensure international cash donations for disaster relief and assistance are used appropriately as needed. To address our recommendation, a steering group consisting of DOS, DHS, the Federal Emergency Management Agency, and the Office of Foreign Disaster Assistance developed a document entitled "Procedures for Foreign Cash Donations Offered In Response to a Disaster Affecting the United States" dated June 22, 2007. This document establishes guidelines on the use of foreign cash donations. Specifically, the document provides lists of response needs that historically have not been met by the federal government through standing program authorities. Additionally, if there is no suitable unaddressed response needs, the document establishes the federal government entities responsible for identifying long term recovery needs and deciding which specific recovery projects are to be funded by foreign cash donations accepted by the U.S. government. The guidance addresses our recommendation and provides a means for swift and meaningful use of the international cash donations for the relief of disaster victims.

    Recommendation: As DHS and DOS develop and implement the administration's recommendations, they should incorporate the following actions and procedures into their guidance: (1) develop policies, procedures, and plans to help ensure international cash donations for disaster relief and assistance are accepted and used appropriately as needed; (2) consider cash management options and placed international cash donations in an account that would pay interest while decisions are pending on their use to maintain the purchasing power of those donations; (3) maintain oversight of foreign donated in-kind assets by tracking them from receipt to disbursement, to reasonably ensure that assistance is delivered where it is intended; and (4) establish plans for the acceptance of foreign-donated items that include coordinating with regulatory agencies, such as USDA and FDA, in advance, in order to prevent the acceptance of items that are prohibited from distribution in the United States, regardless of waivers that might be established to expedite the importing of foreign assistance; these plans should also include DOS obtaining information on acceptable or unacceptable items in order to communicate to the international community what is needed or what can not be accepted.

    Agency Affected: Department of Defense

 

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