Pursuant to a congressional request, GAO examined the circumstances surrounding the decrease in appropriations for the Federal Emergency Management Agency's (FEMA) Disaster Relief Fund and the actions taken to help prevent a recurrence.

GAO found that: (1) FEMA expected a decrease in the Disaster Relief Fund's appropriations, since Congress did not appropriate any money for the fund for fiscal year (FY) 1991; (2) in February 1991, FEMA advised the Office of Management and Budget (OMB) that a supplemental appropriation was needed to cover its 1991 obligations; (3) OMB informed FEMA that the uncertainty, variation, and lack of timeliness of the FEMA estimate prevented responsible budgeting; (4) by June 1991, FEMA determined the estimated additional funds it needed and submitted a FY 1991 supplemental request and an amendment to its FY 1992 budget request; (5) FEMA notified appropriation committees that without a supplemental appropriation for FY 1991, the fund would need an $800 million appropriation for FY 1992; (6) uncertainties involved in estimating the frequency and severity of future disasters did not allow for accurate budget estimates; (7) although FEMA issued guidance to its field offices on how to provide more timely data, it did not issue any guidance on steps that should be taken to collect more accurate data; and (8) FEMA did not receive the 1991 supplemental appropriation until December 1991, and as a result, it suspended federal disaster assistance to many states and communities.